File No. 33-7172
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 9 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 9 [X]
(Check appropriate box or boxes.)
DREYFUS STRATEGIC INCOME
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b) of Rule 485
X on January 28, 1994 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a) of Rule 485
on (date) pursuant to paragraph (a) of Rule 485
Registrant has registered an indefinite number of shares of its
beneficial interest under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940. Registrant's Rule
24f-2 Notice for the fiscal year ended October 31, 1993 was filed on
December 23, 1993.
DREYFUS STRATEGIC INCOME
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
1 Cover Page Cover
2 Synopsis 2
3 Condensed Financial Information 2
4 General Description of Registrant 3, 26
5 Management of the Fund 15
6 Capital Stock and Other Securities 26
7 Purchase of Securities Being Offered 15
8 Redemption or Repurchase 21
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-25
13 Investment Objectives and Policies B-2
14 Management of the Fund B-11
15 Control Persons and Principal B-13
Holders of Securities
16 Investment Advisory and Other B-14
Services
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS STRATEGIC INCOME
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
17 Brokerage Allocation B-23
18 Capital Stock and Other Securities B-25
19 Purchase, Redemption and Pricing B-15, B-17
of Securities Being Offered B-21
20 Tax Status *
21 Underwriters B-16
22 Calculations of Performance Data B-24
23 Financial Statements B-33
Items in
Part C of
Form N-1A
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-30
30 Location of Accounts and Records C-37
31 Management Services C-37
32 Undertakings C-37
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS JANUARY 28, 1994
DREYFUS STRATEGIC INCOME
- -------------------------------------------------------------------------------
DREYFUS STRATEGIC INCOME (THE "FUND") IS AN OPEN-END, DIVERSIFIED,
MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL FUND. ITS GOAL IS TO
MAXIMIZE CURRENT INCOME BY INVESTING PRINCIPALLY IN DEBT SECURITIES OF
DOMESTIC AND FOREIGN ISSUERS.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THE FUND'S SHARES ARE SOLD WITH A SALES LOAD. THE FUND ALSO BEARS
CERTAIN COSTS OF ADVERTISING, ADMINISTRATION AND/OR DISTRIBUTION
PURSUANT TO A PLAN ADOPTED IN ACCORDANCE WITH RULE 12B-1 UNDER THE
INVESTMENT COMPANY ACT OF 1940.
--------------
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION), DATED
JANUARY 28, 1994, WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A
FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS
WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS INCORPORATED HEREIN BY
REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT 144 GLENN CURTISS
BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN
TELEPHONING, ASK FOR OPERATOR 666.
--------------
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. THE FUND'S SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL. THE FUND'S SHARE PRICE, YIELD AND INVESTMENT
RETURN FLUCTUATE AND ARE NOT GUARANTEED.
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TABLE OF CONTENTS
PAGE
FEE TABLE............................................... 2
CONDENSED FINANCIAL INFORMATION......................... 2
DESCRIPTION OF THE FUND................................. 3
MANAGEMENT OF THE FUND.................................. 15
HOW TO BUY FUND SHARES.................................. 15
SHAREHOLDER SERVICES.................................... 18
HOW TO REDEEM FUND SHARES............................... 21
SERVICE PLAN............................................ 23
DIVIDENDS, DISTRIBUTIONS AND TAXES...................... 24
PERFORMANCE INFORMATION................................. 25
GENERAL INFORMATION..................................... 26
APPENDIX................................................ 27
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)........................................................... 3.00%
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average daily net assets)
Management Fees.................................................. .60%
12b-1 Fees (distribution and servicing).......................... .27%
Other Expenses................................................... .21%
Total Fund Operating Expenses.................................... 1.08%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
You would pay the following
expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at
the end of each time period: $41 $63 $88 $158
- -------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE
ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
- -------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that investors will bear, directly or indirectly,
the payment of which will reduce investors' return on an annual basis.
Long-term investors could pay more in 12b-1 fees than the economic
equivalent of paying a front-end sales charge. The information in the
foregoing table does not reflect any fee waivers or expense
reimbursement arrangements that may be in effect. Certain Service
Agents (as defined below) may charge their clients direct fees for
effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares"
and "Service Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young, the Fund's independent auditors, whose report thereon appears in
the Fund's Statement of Additional Information. Further financial data and
related notes are included in the Fund's Statement of Additional
Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------------------
1986(1) 1987 1988 1989 1990 1991 1992 1993
------ ------ ------ ------ ------ ------ ------ ------
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year............ $13.50 $13.51 $12.57 $12.94 $13.37 $12.35 $13.44 $14.02
------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net......................... .06 1.19 1.24 1.21 1.18 1.16 1.07 1.01
Net realized and unrealized gain (loss)
on investments............................. -- (.95) .74 .44 (1.02) 1.09 .58 1.41
------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS........... .06 .24 1.98 1.65 .16 2.25 1.65 2.42
------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.......... (.05) (1.18) (1.24) (1.22) (1.18) (1.16) (1.07) (1.01)
Dividends from net realized gain on investments -- -- (.37) -- -- -- -- (.07)
------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS........................ (.05) (1.18) (1.61) (1.22) (1.18) (1.16) (1.07) (1.08)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year.................. $13.51 $12.57 $12.94 $13.37 $12.35 $13.44 $14.02 $15.36
====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN (2) 5.03%(3) 1.74% 16.71% 13.44% 1.32% 18.93% 12.64% 17.93%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average
net assets................................. -- .26% .49% .50% .50.% .72% .85% .84%
Ratio of interest expense and dividends on
securities sold short to average net assets -- .15% .17% .34% .32% .15% -- --
Ratio of net investment income to
average net assets......................... 5.64%(3) 9.40% 9.72% 9.34% 9.24% 8.93% 7.58% 6.83%
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus
Corporation (limited to the expense
limitation provision of the
Management Agreement)...................... 1.50%(3) 1.24% 1.01% 1.00% 1.00% .78% .40% .24%
Portfolio Turnover Rate....................... -- 76.01% 154.73% 93.41% 16.40% 16.08% 72.82% 118.38%
Net Assets, end of year (000's Omitted)....... $1,525 $31,809 $39,058 $41,679 $41,927 $57,336 $149,801 $375,459
- -------------------------
(1) From October 1, 1986 (commencement of operations) to October 31,
1986.
(2) Exclusive of sales charge.
(3) Annualized.
(2)
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
DEBT OUTSTANDING
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
1986(1) 1987 1988 1989 1990 1991 1992 1993
------- ---- ----- ----- ----- ----- ----- -----
Amount of debt outstanding
at end of year (in thousands)....................... -- -- -- $ 650 -- -- -- --
Average amount of debt
outstanding throughout year (in thousands)(2)....... -- $ 460 $ 739 $1,321 $1,408 $1,011 -- --
Average number of shares
outstanding throughout year (in thousands)(3)....... -- 2,077 2,737 3,093 3,260 3,661 -- --
Average amount of debt
per share throughout year........................... -- $ .22 $ .27 $ .43 $ .43 $ .28 -- --
- ------------------------
(1)From October 1, 1986 (commencement of operations) to October 31,
1986.
(2)Based upon daily outstanding borrowings.
(3)Based upon month-end balances.
</TABLE>
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE - The Fund's goal is to maximize current income
by investing principally in debt securities of domestic and foreign issuers.
The Fund's investment objective cannot be changed without approval by
the holders of a majority (as defined in the Investment Company Act of
1940) of the Fund's outstanding voting shares. There can be no assurance
that the Fund's investment objective will be achieved.
MANAGEMENT POLICIES - At least 65% of the Fund's assets will be
invested in debt securities, such as bonds, debentures, notes, mortgage-
related securities, convertible debt obligations and convertible preferred
stocks, of domestic and foreign issuers. See "Certain Portfolio
Securities" below. The issuers of these obligations include governments,
their political subdivisions, agencies or municipalities, and corporations.
It is a fundamental policy of the Fund that at least 95% of these
obligations when purchased by the Fund will have a rating of at least Caa
by Moody's Investors Service, Inc. ("Moody's") or CCC by Standard & Poor's
Corporation ("Standard & Poor's") or will be of comparable quality as
determined by The Dreyfus Corporation. Debt securities rated Baa by
Moody's and BBB by Standard & Poor's Corporation are considered
investment grade obligations which lack outstanding investment
characteristics and may have speculative characteristics as well. Debt
securities rated Caa by Moody's are of poor standing and may be in default
or there may be present elements of danger with respect to principal or
interest. Standard & Poor's typically assigns a CCC rating to debt which
has a current identifiable vulnerability to default and is dependent upon
favorable business, financial and economic conditions to meet timely
payments of interest and repayment of principal. See "Appendix" in the
Fund's Statement of Additional Information. The Fund may invest up to 5%
of its total assets in lower rated securities but may not invest in
obligations rated lower than Ca by Moody's or C by Standard & Poor's
which indicates that no interest is being paid and that the obligations are
in default or have other marked shortcomings. The Fund intends to invest
less than 35% of its net assets in debt securities rated Ba or lower by
Moody's and BB or lower by Standard & Poor's. See "Risk Factors-Lower
Rated Securities" below for a discussion of certain risks. The Fund may
hold securities with ratings higher than those set forth above when the
yield differential between lower rated and higher rated fixed-income
securities narrows and the risk of loss may be reduced substantially with
only a relatively small reduction in yield and also when market or
economic conditions dictate a more defensive strategy. The Fund will be
particularly alert to favorable arbitrage opportunities (such as those
resulting from favorable interest rate differentials) arising from the
relative yields of the various types of securities in which the Fund may
invest and market conditions generally.
The Fund may invest up to 25% of its total assets in the securities of
issuers having their principal business activities in the same industry.
The Fund may invest up to 5% of its total assets in securities of
companies that have been in continuous operation for fewer than three
years.
The Fund may invest up to 30% of its total assets in debt securities of
foreign companies and foreign governments. Among the foreign securities
in which the Fund may invest are the foreign bank obligations described
under "Certain Portfolio Securities," as well as Eurodollar debt
obligations, which are U.S. dollar-denominated debt obligations issued by
foreign issuers, often guaranteed by subsidiaries of domestic companies.
In connection with its purchases of convertible securities, the Fund
from time to time may hold common stock received upon the conversion of
the security. The Fund does not intend to retain the common stock in its
portfolio and will sell it as promptly as it can and in a manner which it
believes will reduce the risk to the Fund of loss in connection with the
sale.
(3)
The Fund may invest in money market instruments consisting of U.S.
Government securities, certificates of deposit, time deposits, bankers'
acceptances, short-term investment grade corporate bonds and other
short-term debt instruments, and repurchase agreements, as described
below under "Certain Portfolio Securities." Under normal market
conditions, the Fund may invest up to 35% of its assets in money market
instruments. However, when The Dreyfus Corporation determines that
adverse market conditions exist, the Fund may adopt a temporary
defensive posture and invest its entire portfolio in money market
instruments. To the extent the Fund is so invested, the Fund's investment
objective may not be achieved.
In an effort to increase total return, the Fund may engage in various
investment techniques such as leveraging, short-selling, options and
futures transactions, currency transactions and lending portfolio
securities, each of which involves risk. See "Risk Factors-Other
Investment Considerations" below.
INVESTMENT TECHNIQUES
LEVERAGE THROUGH BORROWING - The Fund may borrow for investment
purposes. This borrowing, which is known as leveraging, generally will be
unsecured, except to the extent the Fund enters into the reverse
repurchase agreements described below. The Investment Company Act of
1940 requires the Fund to maintain continuous asset coverage (that is,
total assets including borrowings, less liabilities exclusive of
borrowings) of 300% of the amount borrowed. If the 300% asset coverage
should decline as a result of market fluctuations or other reasons, the
Fund may be required to sell some of its portfolio holdings within three
days to reduce the debt and restore the 300% asset coverage, even though
it may be disadvantageous from an investment standpoint to sell
securities at that time. Leveraging may exaggerate the effect on net asset
value of any increase or decrease in the market value of the Fund's
portfolio. Money borrowed for leveraging will be subject to interest costs
which may or may not be recovered by appreciation of the securities
purchased; in certain cases, interest costs may exceed the return received
on the securities purchased. The Fund also may be required to maintain
minimum average balances in connection with such borrowing or to pay a
commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated
interest rate.
Among the forms of borrowing in which the Fund may engage is the
entry into reverse repurchase agreements with banks, brokers or dealers.
These transactions involve the transfer by the Fund of an underlying debt
instrument in return for cash proceeds based on a percentage of the value
of the security. The Fund retains the right to receive interest and
principal payments on the security. At an agreed upon future date, the Fund
repurchases the security at principal, plus accrued interest. In certain
types of agreements, there is no agreed upon repurchase date and interest
payments are calculated daily, often based on the prevailing overnight
repurchase rate. The Fund will maintain in a segregated custodial account
cash, cash equivalents or U.S. Government securities or other high quality
liquid debt securities at least equal to the aggregate amount of its
reverse repurchase obligations, plus accrued interest, in certain cases, in
accordance with releases promulgated by the Securities and Exchange
Commission. The Securities and Exchange Commission views reverse
repurchase transactions as collateralized borrowings by the Fund. These
agreements, which are treated as if reestablished each day, are expected
to provide the Fund with a flexible borrowing tool.
SHORT-SELLING - The Fund may make short sales, which are transactions
in which the Fund sells a security it does not own in anticipation of a
decline in the market value of that security. To complete such a
transaction, the Fund must borrow the security to make delivery to the
buyer. The Fund then is obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement. The price at
such time may be more or less than the price at which the security was
sold by the Fund. Until the security is replaced, the Fund is required to pay
to the lender amounts equal to any dividends or interest which accrue
during the period of the loan. To borrow the security, the Fund also may be
required to pay a premium, which would increase the cost of the security
sold. The proceeds of the short sale will be retained by the broker, to the
extent necessary to meet margin requirements, until the short position is
closed out.
Until the Fund replaces a borrowed security in connection with a short
sale, the Fund will: (a) maintain daily a segregated account, containing
cash or U.S. Government securities, at such a level that (i) the amount
deposited in the account plus the amount deposited with the broker as
collateral will equal the current value of the security sold short
(4)
and (ii) the amount deposited in the segregated account plus the amount
deposited with the broker as collateral will not be less than the market
value of the security at the time it was sold short; or (b) otherwise cover
its short position.
The Fund will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on
which the Fund replaces the borrowed security. The Fund will realize a
gain if the security declines in price between those dates. This result is
the opposite of what one would expect from a cash purchase of a long
position in a security. The amount of any gain will be decreased, and the
amount of any loss increased, by the amount of any premium or amounts in
lieu of interest the Fund may be required to pay in connection with a
short sale.
The Fund may purchase call options to provide a hedge against an
increase in the price of a security sold short by the Fund. When the Fund
purchases a call option it has to pay a premium to the person writing the
option and a commission to the broker selling the option. If the option is
exercised by the Fund, the premium and the commission paid may be more
than the amount of the brokerage commission charged if the security were
to be purchased directly. See "Call and Put Options on Specific Securities"
below.
The Fund anticipates that the frequency of short sales will vary
substantially under different market conditions, and it does not intend
that any specified portion of its assets as a matter of practice, will be in
short sales. However, no securities will be sold short if, after effect is
given to any such short sale, the total market value of all securities sold
short would exceed 25% of the value of the Fund's net assets. The Fund
may not sell short the securities of any single issuer listed on a national
securities exchange to the extent of more than 5% of the value of the
Fund's net assets. The Fund may not sell short the securities of any class
of an issuer to the extent, at the time of the transaction, of more than 5%
of the outstanding securities of that class.
In addition to the short sales discussed above, the Fund also may make
short sales "against the box," a transaction in which the Fund enters into
a short sale of a security which the Fund owns. The proceeds of the short
sale are held by a broker until the settlement date at which time the Fund
delivers the security to close the short position. The Fund receives the net
proceeds from the short sale. The Fund at no time will have more than 15%
of the value of its net assets in deposits on short sales against the box.
CALL AND PUT OPTIONS ON SPECIFIC SECURITIES - The Fund may invest up
to 5% of its assets, represented by the premium paid, in the purchase of
call and put options in respect of specific securities (or groups or
"baskets" of specific securities) in which the Fund may invest. The Fund
may write covered call and put option contracts to the extent of 20% of
the value of its net assets at the time such option contracts are written.
A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security or securities at the
exercise price at any time during the option period. Conversely, a put
option gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security or securities at the exercise price
at any time during the option period. A covered call option sold by the
Fund, which is a call option with respect to which the Fund owns the
underlying security or securities, exposes the Fund during the term of the
option to possible loss of opportunity to realize appreciation in the
market price of the underlying security or securities or to possible
continued holding of a security or securities which might otherwise have
been sold to protect against depreciation in the market price of the
security or securities. A covered put option sold by the Fund exposes the
Fund during the term of the option to a decline in price of the underlying
security or securities. A put option sold by the Fund is covered when,
among other things, cash or liquid securities are placed in a segregated
account with the Fund's custodian to fulfill the obligation undertaken.
To close out a position when writing covered options, the Fund may
make a "closing purchase transaction," which involves purchasing an
option on the same security or securities with the same exercise price
and expiration date as the option which it has previously written on the
security or securities. To close out the position as a purchaser of an
option, the Fund may make a "closing sale transaction," which involves
liquidating the Fund's position by selling the option previously purchased.
The Fund will realize a profit or loss from a closing purchase or sale
transaction depending upon the difference between the amount paid to
purchase an option and the amount received from the sale thereof.
The Fund intends to treat options in respect of specific securities
that are not traded on a national securities
(5)
exchange and the securities underlying covered call options written by the Fund
as illiquid securities. See "Certain Portfolio Securities" below.
The Fund will purchase options only to the extent permitted by the
policies of state securities authorities in states where shares of the Fund
are qualified for offer and sale. The Fund will write put options only on
securities which the Fund wishes to have in its portfolio and where the
Fund has determined, as an investment consideration, that it is willing to
pay the exercise price of the option.
FUTURES TRANSACTIONS - IN GENERAL -The Fund is not a commodity pool.
However, as a substitute for a comparable market position in the
underlying securities and for hedging purposes, the Fund may engage, in
futures and options on futures transactions, as described below.
The Fund may trade futures contracts and options on futures contracts
in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange, or, to
the extent permitted under applicable law, on exchanges located outside
the United States, such as the London International Financial Futures
Exchange and the Sydney Futures Exchange Limited. Foreign markets may
offer advantages such as trading in commodities that are not currently
traded in the United States or arbitrage possibilities not available in the
United States. Foreign markets, however, may have greater risk potential
than domestic markets. See "Risk Factors-Foreign Commodity
Transactions."
The Fund's commodities transactions must constitute bona fide hedging
or other permissible transactions pursuant to regulations promulgated by
the Commodity Futures Trading Commission (the "CFTC"). In addition, the
Fund may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity
options, other than for bona fide hedging transactions, would exceed 5% of
the liquidation value of the Fund's assets, after taking into account
unrealized profits and unrealized losses on such contracts it has entered
into; provided, however, that in the case of an option that is in-the-money
at the time of purchase, the in-the-money amount may be excluded in
calculating the 5%. Pursuant to regulations and/or published positions of
the Securities and Exchange Commission, the Fund may be required to
segregate cash or high quality money market instruments in connection
with its commodities transactions in an amount generally equal to the
value of the underlying commodity.
Initially, when purchasing or selling futures contracts the Fund will be
required to deposit with its custodian in the broker's name an amount of
cash or cash equivalents up to approximately 10% of the contract amount.
This amount is subject to change by the exchange or board of trade on
which the contract is traded and members of such exchange or board of
trade may impose their own higher requirements. This amount is known as
"initial margin" and is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of
the futures position, assuming all contractual obligations have been
satisfied. Subsequent payments, known as "variation margin," to and from
the broker will be made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known
as "marking-to-market." At any time prior to the expiration of a futures
contract, the Fund may elect to close the position by taking an opposite
position at the then prevailing price, which will operate to terminate the
Fund's existing position in the contract.
Although the Fund intends to purchase or sell futures contracts only if
there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any
particular time. Many futures exchanges and boards of trade limit the
amount of fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in a particular contract,
no trades may be made that day at a price beyond that limit or trading may
be suspended for specified periods during the trading day. Futures contract
prices could move to the limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses. If it is
not possible or the Fund determines not to close a futures position in
anticipation of adverse price movements, the Fund will be required to
make daily cash payments of variation margin. In such circumstances, an
increase in the value of the portion of the portfolio being hedged, if any,
may offset partially or completely losses on the futures contract.
However, no assurance can be given that the price of the securities being
hedged will correlate with the price movements in a futures contract and
thus provide an offset to losses on the futures contract.
(6)
In addition, to the extent the Fund is engaging in a futures transaction
as a hedging device, due to the risk of an imperfect correlation between
securities in the Fund's portfolio that are the subject of a hedging
transaction and the futures contract used as a hedging device, it is
possible that the hedge will not be fully effective in that, for example,
losses on the portfolio securities may be in excess of gains on the futures
contract or losses on the futures contract may be in excess of gains on the
portfolio securities that were the subject of the hedge. In futures
contracts based on indexes, the risk of imperfect correlation increases as
the composition of the Fund's portfolio varies from the composition of the
index. In an effort to compensate for the imperfect correlation of
movements in the price of the securities being hedged and movements in
the price of futures contracts, the Fund may buy or sell futures contracts
in a greater or lesser dollar amount than the dollar amount of the
securities being hedged if the historical volatility of the futures contract
has been less or greater than that of the securities. Such "over hedging"
or "under hedging" may adversely affect the Fund's net investment results
if market movements are not as anticipated when the hedge is established.
Successful use of futures by the Fund also is subject to The Dreyfus
Corporation's ability to predict correctly movements in the direction of
the market or interest rates. For example, if the Fund has hedged against
the possibility of a decline in the market adversely affecting the value of
securities held in its portfolio and prices increase instead, the Fund will
lose part or all of the benefit of the increased value of securities which it
has hedged because it will have offsetting losses in its futures positions.
In addition, in such situations, if the Fund has insufficient cash, it may
have to sell securities to meet daily variation margin requirements. Such
sales of securities may, but will not necessarily, be at increased prices
which reflect the rising market. The Fund may have to sell securities at a
time when it may be disadvantageous to do so.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put)
at a specified exercise price at any time during the option exercise period.
The writer of the option is required upon exercise to assume an offsetting
futures position (a short position if the option is a call and a long position
if the option is a put). Upon exercise of the option, the assumption of
offsetting futures positions by the writer and holder of the option will be
accompanied by delivery of the accumulated cash balance in the writer's
futures margin account which represents the amount by which the market
price of the futures contract, at exercise, exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Call options sold by the Fund with respect to futures contracts will be
covered by, among other things, entering into a long position in the same
contract at a price no higher than the strike price of the call option, or by
ownership of the instruments underlying, or instruments the prices of
which are expected to move relatively consistently with the instruments
underlying, the futures contract. Put options sold by the Fund with respect
to futures contracts will be covered in the same manner as put options on
specific securities as described above.
INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE
FUTURES CONTRACTS-The Fund may invest in interest rate futures
contracts and options on interest rate futures contracts as a substitute
for a comparable market position and to hedge against adverse movements
in interest rates.
To the extent the Fund has invested in interest rate futures contracts
or options on interest futures contracts as a substitute for a comparable
market position, the Fund will be subject to the investment risks of
having purchased the securities underlying the contract.
The Fund may purchase call options on interest rate futures contracts
to hedge against a decline in interest rates and may purchase put options
on interest rate futures contracts to hedge its portfolio securities
against the risk of rising interest rates.
The Fund may sell call options on interest rate futures contracts to
partially hedge against declining prices of portfolio securities. If the
futures price at expiration of the option is below the exercise price, the
Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's
portfolio holdings. The Fund may sell put options on interest rate futures
contracts to hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is higher than the exercise price, the Fund will
retain the full amount of the option premium which
(7)
provides a partial hedge against any increase in the price of securities
which the Fund intends to purchase. If a put or call option sold by the Fund
is exercised, the Fund will incur a loss which will be reduced by the
amount of the premium it receives. Depending on the degree of correlation
between changes in the value of its portfolio securities and changes in the
value of its futures positions, the Fund's losses from existing options on
futures may to some extent be reduced or increased by changes in the
value of its portfolio securities.
The Fund also may sell options on interest rate futures contracts as
part of closing purchase transactions to terminate its options positions.
No assurance can be given that such closing transactions can be effected
or that there will be a correlation between price movements in the
options on interest rate futures and price movements in the Fund's
portfolio securities which are the subject of the hedge. In addition, the
Fund's purchase of such options will be based upon predictions as to
anticipated interest rate trends, which could prove to be inaccurate.
FUTURES CONTRACTS BASED ON AN INDEX OF DEBT SECURITIES AND
OPTIONS ON SUCH FUTURES CONTRACTS - The Fund may purchase and sell
futures contracts based on an index of debt securities and options on such
futures contracts to the extent they currently exist and, in the future,
may be developed. At least one exchange trades futures contracts on an
index of long-term municipal bonds, and the Fund reserves the right to
conduct futures and options transactions based on an index which may be
developed in the future to correlate with price movements in certain
categories of debt securities.
The Fund's investment strategy in employing futures contracts based on
an index of debt securities will be similar to that used by it in other
financial futures transactions. The Fund also may purchase and write put
and call options on such index futures and enter into closing transactions
with respect to such options.
CURRENCY FUTURES - The Fund may purchase and sell currency futures
contracts. By selling foreign currency futures, the Fund can establish the
number of U.S. dollars it will receive in the delivery month for a certain
amount of a foreign currency. In this way, if the Fund anticipates a decline
of a foreign currency against the U.S. dollar, the Fund can attempt to fix
the U.S. dollar value of some or all of the securities held in its portfolio
that are denominated in that currency. By purchasing foreign currency
futures, the Fund can establish the number of dollars it will be required to
pay for a specified amount of a foreign currency in the delivery month.
Thus, if the Fund intends to buy securities in the future and expects the
U.S. dollar to decline against the relevant foreign currency during the
period before the purchase is effected, the Fund can attempt to fix the
price in U.S. dollars of the securities it intends to acquire.
FOREIGN CURRENCY TRANSACTIONS - The Fund may engage in currency
exchange transactions either on a spot (i.e., cash) basis at the rate
prevailing in the currency exchange market, or through entering into
forward contracts to purchase or sell currencies. A forward currency
exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which must be more than two days from the
date of the contract, at a price set at the time of the contract. These
contracts are entered into in the interbank market conducted directly
between currency traders (typically commercial banks or other financial
institutions) and their customers.
OPTIONS ON FOREIGN CURRENCY - The Fund may purchase and sell call and
put options on foreign currency for the purpose of hedging against changes
in future currency exchange rates. Call options convey the right to buy the
underlying currency at a price which is expected to be lower than the spot
price of the currency at the time the option expires. Put options convey
the right to sell the underlying currency at a price which is anticipated to
be higher than the spot price of the currency at the time the option
expires. The Fund may use foreign currency options under the same
circumstances that it could use currency forward and futures transactions
as described above. See also "Call and Put Options on Specific Securities"
above.
FUTURE DEVELOPMENTS - The Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other derivative investment which are not presently contemplated
for use by the Fund or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the
Fund's investment objective and legally permissible for the Fund. Before
entering into such transactions or making any such investment, the Fund
will provide appropriate disclosure in its prospectus.
LENDING PORTFOLIO SECURITIES - From time to time, the Fund may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain
transactions. Such loans may not exceed 331/3% of the value of the Fund's
total assets. In connection with such loans, the Fund will receive collater-
(8)
al consisting of cash, U.S. Government securities or irrevocable
letters of credit which will be maintained at all times in an amount equal
to at least 100% of the current market value of the loaned securities. The
Fund can increase its income through the investment of such collateral.
The Fund continues to be entitled to payments in amounts equal to the
interest or other distributions payable on the loaned security and receives
interest on the amount of the loan. Such loans will be terminable at any
time upon specified notice. The Fund might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction
breaches its agreement with the Fund.
FORWARD COMMITMENTS - The Fund may purchase securities on a when-
issued or forward commitment basis, which means that the price is fixed
at the time of commitment, but delivery and payment ordinarily take place
a number of days after the date of the commitment to purchase. The Fund
will make commitments to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. The Fund
will not accrue income in respect of a security purchased on a when-
issued or forward commitment basis prior to its stated delivery date.
Securities purchased on a when-issued or forward commitment basis
and certain other securities held in the Fund's portfolio are subject to
changes in value (both generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a when-issued or forward commitment basis may
expose the Fund to risk because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued or
forward commitment basis can involve the additional risk that the yield
available in the market when the delivery takes place actually may be
higher than that obtained in the transaction itself. A segregated account
of the Fund consisting of cash, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at least equal at all
times to the amount of the when-issued or forward commitments will be
established and maintained at the Fund's custodian bank. Purchasing
securities on a when-issued or forward commitment basis when the Fund
is fully or almost fully invested may result in greater potential
fluctuations in the value of the Fund's net assets and its net asset value
per share.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES - A convertible security is a fixed-income
security, such as a bond or preferred stock, which may be converted at a
stated price within a specified period of time into a specified number of
shares of common stock of the same or different issuer. Convertible
securities are senior to common stock in a corporation's capital
structure, but usually are subordinated to non-convertible debt securities.
While providing a fixed-income stream (generally higher in yield than the
income derivable from a common stock but lower than that afforded by a
non-convertible debt security), a convertible security also affords an
investor the opportunity, through its conversion feature, to participate in
the capital appreciation of the common stock into which it is convertible.
In general, the market value of a convertible security is the higher of
its "investment value" (i.e., its value as a fixed-income security) or its
"conversion value" (i.e., the value of the underlying shares of common
stock if the security is converted). As a fixed-income security, the market
value of a convertible security generally increases when interest rates
decline and generally decreases when interest rates rise. However, the
price of a convertible security also is influenced by the market value of
the security's underlying common stock. Thus, the price of a convertible
security generally increases as the market value of the underlying stock
increases, and generally decreases as the market value of the underlying
stock declines. Investments in convertible securities generally entail less
risk than investments in the common stock of the same issuer.
U.S. GOVERNMENT SECURITIES - Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain
(9)
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of the
agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government-
sponsored agencies and instrumentalities, no assurance can be given that
it will always do so since it is not so obligated by law. The Fund will
invest in such securities only when it is satisfied that the credit risk
with respect to the issuer is minimal.
ZERO COUPON SECURITIES - The Fund may invest in zero coupon U.S.
Treasury securities, which are Treasury Notes and Bonds that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. The Fund also may invest in zero coupon
securities issued by corporations and financial institutions which
constitute a proportionate ownership of the issuer's pool of underlying
U.S. Treasury securities. A zero coupon security pays no interest to its
holder during its life and is sold at a discount to its face value at
maturity. The amount of the discount fluctuates with the market price of
the security. The market prices of zero coupon securities generally are
more volatile than the market prices of securities that pay interest
periodically and are likely to respond to a greater degree to changes in
interest rates than non-zero coupon securities having similar maturities
and credit qualities.
REPURCHASE AGREEMENTS - Repurchase agreements involve the
acquisition by the Fund of an underlying debt instrument, subject to an
obligation of the seller to repurchase, and the Fund to resell, the
instrument at a fixed price, usually not more than one week after its
purchase. The Fund's custodian or subcustodian will have custody of, and
will hold in a segregated account, securities acquired by the Fund under a
repurchase agreement. Repurchase agreements are considered by the staff
of the Securities and Exchange Commission to be loans by the Fund. In an
attempt to reduce the risk of incurring a loss on a repurchase agreement,
the Fund will enter into repurchase agreements only with domestic banks
with total assets in excess of one billion dollars or primary government
securities dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the Fund may invest, and will
require that additional securities be deposited with it if the value of the
securities purchased should decrease below resale price. The Dreyfus
Corporation will monitor on an ongoing basis the value of the collateral to
assure that it always equals or exceeds the repurchase price. Certain
costs may be incurred by the Fund in connection with the sale of the
securities if the seller does not repurchase them in accordance with the
repurchase agreement. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the securities, realization on the
securities by the Fund may be delayed or limited. The Fund will consider
on an ongoing basis the creditworthiness of the institutions with which it
enters into repurchase agreements.
BANK OBLIGATIONS - The Fund may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries of domestic banks, foreign branches
of domestic banks, and domestic and foreign branches of foreign banks,
domestic savings and loan associations and other banking institutions.
With respect to such securities issued by foreign branches of domestic
banks, foreign subsidiaries of domestic banks, and domestic and foreign
branches of foreign banks, the Fund may be subject to additional
investment risks that are different in some respects from those incurred
by a fund which invests only in debt obligations of U.S. domestic issuers.
Such risks include possible future political and economic developments,
the possible imposition of foreign withholding taxes on interest income
payable on the securities, the possible establishment of exchange controls
or the adoption of other foreign governmental restrictions which might
adversely affect the payment of principal and interest on these securities
and the possible seizure or nationalization of foreign deposits.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Time deposits which may be held by the
Fund will not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the Federal Deposit
Insurance Corporation. The Fund will not invest more than 15% of the value
of its net assets in time deposits that are illiquid and in other illiquid
securities.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the
(10)
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER - Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of direct
obligations which, at the time of their purchase, are (a) rated not lower
than Prime-1 by Moody's or A-l by Standard & Poor's, (b) issued by
companies having an outstanding unsecured debt issue currently rated at
least Aa3 by Moody's or AA by Standard & Poor's, or (c) if unrated,
determined by The Dreyfus Corporation to be of comparable quality to
those rated obligations which may be purchased by the Fund.
MORTGAGE-RELATED SECURITIES - The Fund may invest in mortgage-
related securities which are collateralized by pools of mortgage loans
assembled for sale to investors by various governmental agencies, such as
the Government National Mortgage Association and government-related
organizations such as the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation, as well as by private issuers
such as commercial banks, savings and loan institutions, mortgage banks
and private mortgage insurance companies, and similar foreign entities.
The mortgage-related securities in which the Fund may invest include
those with fixed, floating and variable interest rates, those with interest
rates that change based on multiples of changes in interest rates and
those with interest rates that change inversely to changes in interest
rates, as well as stripped mortgage-backed securities which are
derivative multiclass mortgage securities. Stripped mortgage-backed
securities usually are structured with two classes that receive different
proportions of interest and principal distributions on a pool of mortgage-
backed securities or whole loans. A common type of stripped mortgage-
backed security will have one class receiving some of the interest and
most of the principal from the mortgage collateral, while the other class
will receive most of the interest and the remainder of the principal. In the
most extreme case, one class will receive all of the interest (the
interest-only or "IO" class), while the other class will receive all of the
principal (the principal-only or "PO" class). Although certain mortgage-
related securities are guaranteed by a third party or otherwise similarly
secured, the market value of the security, which may fluctuate, is not so
secured. If the Fund purchases a mortgage-related security at a premium,
all or part of the premium may be lost if there is a decline in the market
value of the security, whether resulting from changes in interest rates or
prepayments in the underlying mortgage collateral. As with other
interest-bearing securities, the prices of certain mortgage-backed
securities are inversely affected by changes in interest rates, while
others may not be. However, though the value of a mortgage-related
security may decline when interest rates rise, the converse is not
necessarily true, since in periods of declining interest rates the
mortgages underlying the security are more likely to prepay. For this and
other reasons, a mortgage-related security's stated maturity may be
shortened by unscheduled prepayments on the underlying mortgages, and,
therefore, it is not possible to predict accurately the security's return to
the Fund. Moreover, with respect to stripped mortgage-backed securities,
if the underlying mortgage securities experience greater than anticipated
prepayments of principal, the Fund may fail to fully recoup its initial
investment in these securities even if the securities are rated in the
highest rating category by a nationally recognized statistical rating
organization. In addition, regular payments received in respect of
mortgage-related securities include both interest and principal. No
assurance can be given as to the return the Fund will receive when these
amounts are reinvested. The Fund also may invest in collateralized
mortgage obligations structured on pools of mortgage pass-through
certificates or mortgage loans. Collateralized mortgage obligations will
be purchased only if rated in one of the two highest rating categories by
Moody's or Standard & Poor's, or, if unrated, deemed to be of comparable
quality by The Dreyfus Corporation. For further discussion concerning the
investment considerations involved see "Risk Factors-Other Investment
Considerations" below, and "Investment Objective and Management
Policies-Portfolio Securities-Mortgage-Related Securities" in the Fund's
Statement of Additional Information.
ILLIQUID SECURITIES - The Fund may invest up to 15% of the value of its
net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, certain options traded in
the over-the-counter market and securities used to cover such options,
and certain mortgage-backed securities, such as certain collateralized
mortgage obligations and stripped mortgage-backed securi-
(11)
ties. As to these securities, the Fund is subject to a risk that should
the Fund desire to sell them when a ready buyer is not available at a price
the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected. When purchasing securities that have
not been registered under the Securities Act of 1933, as amended, and are
not readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a lapse
of time between the Fund's decision to sell any such security and the
registration of the security permitting sale. During any such period, the
price of the securities will be subject to market fluctuations. However, if
a substantial market of qualified institutional buyers develops pursuant
to Rule 144A under the Securities Act of 1933, as amended, for certain
unregistered securities held by the Fund, the Fund intends to treat such
securities as liquid securities in accordance with procedures approved by
the Fund's Board of Trustees. Because it is not possible to predict with
assurance how the market for restricted securities pursuant to Rule 144A
will develop, the Fund's Board of Trustees has directed The Dreyfus
Corporation to monitor carefully the Fund's investments in such securities
with particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
CERTAIN FUNDAMENTAL POLICIES - The Fund may: (i) with respect to 75%
of the Fund's assets, invest up to 5% of the value of its total assets in
securities of any one issuer or purchase up to 10% of the voting securities
of any one issuer; (ii) purchase securities of any company having less than
three years' continuous operation (including operations of any
predecessors) if such purchase does not cause the value of the Fund's
investments in all such companies to exceed 5% of the value of its assets;
(iii) borrow money and pledge, mortgage and hypothecate its assets, but
only as stated in this Prospectus and the Fund's Statement of Additional
Information; and (iv) invest up to 25% of its total assets in securities of
issuers in a single industry, provided that, when the Fund has adopted a
temporary defensive posture, there shall be no such limitation on
investments in securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. This paragraph describes fundamental
policies that cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See "Investment Objective and Management
Policies-Investment Restrictions" in the Fund's Statement of Additional
Information.
RISK FACTORS
LOWER RATED SECURITIES - You should carefully consider the relative
risks of investing in the higher yielding (and, therefore, higher risk) debt
securities in which the Fund may invest. These are securities such as
those rated Ba by Moody's or BB by Standard & Poor's or as low as those
rated Ca by Moody's or C by Standard & Poor's. They generally are not
meant for short-term investing and may be subject to certain risks with
respect to the issuing entity and to greater market fluctuations than
certain lower yielding, higher rated fixed-income securities. Securities
rated Ba by Moody's are judged to have speculative elements; their future
cannot be considered as well assured and often the protection of interest
and principal payments may be very moderate. Securities rated BB by
Standard & Poor's are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face major
ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments. Debt securities rated Ca by
Moody's are regarded as speculative in a high degree and are often in
default or have other marked shortcomings. Standard & Poor's typically
assigns a C rating to income bonds on which no interest is being paid. Such
securities, though high yielding, are characterized by great risk. See
"Appendix" in the Fund's Statement of Additional Information for a
general description of Moody's and Standard & Poor's ratings of debt
obligations. The ratings of Moody's and Standard & Poor's represent their
opinions as to the quality of the securities which they undertake to rate.
It should be emphasized, however, that ratings are relative and subjective
and, although ratings may be useful in evaluating the safety of interest
and principal payments, they do not evaluate the market value risk of
these securities. Therefore, although these ratings may be an initial
criterion for selection of portfolio investments, The Dreyfus Corporation
also will evaluate these securities and the ability of the issuers of such
securities to pay interest and principal. The Fund's ability to achieve its
investment objective may be more
(12)
dependent on The Dreyfus Corporation's credit analysis than might be the
case for a fund that invested in higher rated securities. Once the rating of
a portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue to hold
the security.
The market price and yield of bonds rated Ba or lower by Moody's and BB
or lower by Standard & Poor's are more volatile than those of higher rated
bonds. Factors adversely affecting the market price and yield of these
securities will adversely affect the Fund's net asset value. In addition,
the retail secondary market for these bonds may be less liquid than that
of higher rated bonds; adverse conditions could make it difficult at times
for the Fund to sell certain securities or could result in lower prices than
those used in calculating the Fund's net asset value.
The market values of certain lower rated debt securities tend to reflect
individual corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates, and tend to be more sensitive to economic conditions than
are higher rated securities. Companies that issue such bonds often are
highly leveraged and may not have available to them more traditional
methods of financing. Therefore, the risk associated with acquiring the
securities of such issuers generally is greater than is the case with
higher rated securities.
The Fund may invest in zero coupon securities and pay-in-kind bonds
(bonds which pay interest through the issuance of additional bonds), rated
as low as Ca by Moody's and as low as C by Standard & Poor's, which
involve special considerations. These securities may be subject to greater
fluctuations in value due to changes in interest rates than interest-
bearing securities and thus may be considered more speculative than
comparably rated interest-bearing securities. See "Other Investment
Considerations" below, and "Investment Objective and Management
Policies- Risk Factors-Lower Rated Securities" and "Dividends,
Distributions and Taxes" in the Fund's Statement of Additional
Information.
INVESTING IN FOREIGN SECURITIES - In making foreign investments, the
Fund will give appropriate consideration to the following factors, among
others.
Foreign securities markets generally are not as developed or efficient
as those in the United States. Securities of some foreign issuers are less
liquid and more volatile than securities of comparable U.S. issuers.
Similarly, volume and liquidity in most foreign securities markets are
less than in the United States and, at times, volatility of price can be
greater than in the United States. The issuers of some of these securities,
such as foreign bank obligations, may be subject to less stringent or
different regulation than are U.S. issuers. In addition, there may be less
publicly available information about a non-U.S. issuer, and non-U.S. issuers
generally are not subject to uniform accounting and financial reporting
standards, practices and requirements comparable to those applicable to
U.S. issuers.
Because evidences of ownership of such securities usually are held
outside the United States, the Fund will be subject to additional risks
which include possible adverse political and economic developments,
possible seizure or nationalization of foreign deposits and possible
adoption of governmental restrictions which might adversely affect the
payment of principal and interest on the foreign securities or might
restrict the payment of principal and interest to investors located outside
the country of the issuer, whether from currency blockage or otherwise.
Custodial expenses for a portfolio of non-U.S. securities generally are
higher than for a portfolio of U.S. securities.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations. Some currency exchange
costs may be incurred when the Fund changes investments from one
country to another.
Furthermore, some of these securities may be subject to brokerage
taxes levied by foreign governments, which have the effect of increasing
the cost of such investment and reducing the realized gain or increasing
the realized loss on such securities at the time of sale. Income received
by the Fund from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax conventions
between certain countries and the United States, however, may reduce or
eliminate such taxes. All such taxes paid by the Fund will reduce its net
income available for distributions to investors.
FOREIGN CURRENCY EXCHANGE - Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative
(13)
merits of investments in different countries, actual or perceived changes
in interest rates and other complex factors, as seen from an international
perspective. Currency exchange rates also can be affected unpredictably
by intervention by U.S. or foreign governments or central banks or the
failure to intervene or by currency controls or political developments in
the U.S. or abroad.
The foreign currency market offers less protection against defaults in
the forward trading of currencies than is available when trading in
currencies occurs on an exchange. Since a forward currency contract is not
guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
FOREIGN COMMODITY TRANSACTIONS - Unlike trading on domestic
commodity exchanges, trading on foreign commodity exchanges is not
regulated by the CFTC and may be subject to greater risks than trading on
domestic exchanges. For example, some foreign exchanges are principal
markets so that no common clearing facility exists and a trader may look
only to the broker for performance of the contract. In addition, unless the
Fund hedges against fluctuations in the exchange rate between the U.S.
dollar and the currencies in which trading is done on foreign exchanges,
any profits that the Fund might realize in trading could be eliminated by
adverse changes in the exchange rate or the Fund could incur losses as a
result of those changes. Transactions on foreign exchanges may include
both commodities which are traded on domestic exchanges and those
which are not.
OTHER INVESTMENT CONSIDERATIONS - The Fund's net asset value is not
fixed and should be expected to fluctuate. You should purchase Fund shares
only as a supplement to an overall investment program and only if you are
willing to undertake the risks involved.
The use of investment techniques such as short-selling, engaging in
financial futures and options transactions, leverage through borrowing,
purchasing securities on a forward commitment basis and lending
portfolio securities, and the purchase of certain stripped mortgage-
backed securities and zero coupon securities, involves greater risk than
that incurred by many other funds with similar objectives. Using these
techniques may produce higher than normal portfolio turnover and may
affect the degree to which the Fund's net asset value fluctuates.
Portfolio turnover may vary from year to year, as well as within a year.
Under normal market conditions, the Fund's portfolio turnover rate
generally will not exceed 150%. Higher portfolio turnover rates are likely
to result in comparatively greater brokerage commissions. In addition,
short-term gains realized from portfolio transactions are taxable to
shareholders as ordinary income. See "Portfolio Transactions" in the
Statement of Additional Information. The Fund's ability to engage in
certain short-term transactions may be limited by the requirement that,
to qualify as a regulated investment company, the Fund must earn less
than 30% of its gross income from the disposition of securities held for
less than three months. This 30% test limits the extent to which the Fund
may sell securities held for less than three months, effect short sales of
securities held for less than three months, write options expiring in less
than three months and invest in futures contracts, among other strategies.
However, portfolio turnover will not otherwise be a limiting factor in
making investment decisions.
Even though interest-bearing securities are investments which promise
a stable stream of income, the prices of such securities are inversely
affected by changes in interest rates and, therefore, are subject to the
risk of market price fluctuations. The values of fixed-income securities
also may be affected by changes in the credit rating or financial condition
of the issuing entities. See "Lower Rated Securities" above.
No assurance can be given as to the liquidity of the market for certain
mortgage-backed securities, such as collateralized mortgage obligations
and stripped mortgage-backed securities. Determination as to the
liquidity of such securities are made in accordance with guidelines
established by the Fund's Board of Trustees. In accordance with such
guidelines, The Dreyfus Corporation monitors the Fund's investments in
such securities with particular regard to trading activity, availability of
reliable price information and other relevant information.
Federal income tax law requires the holder of a zero coupon security or
of certain pay-in-kind bonds to accrue income with respect to these
securities prior to the receipt of cash payments. To maintain its
qualification as a regulated investment company and avoid liability for
Federal income taxes, the Fund may be required to distribute such income
accrued with respect to these securities and may have to dispose of
portfolio securities under disadvantageous
(14)
circumstances in order to generate cash to satisfy these distribution
requirements.
Investment decisions for the Fund are made independently from those of
the other investment companies advised by The Dreyfus Corporation.
However, if such other investment companies are prepared to invest in, or
desire to dispose of, securities of the type in which the Fund invests at
the same time as the Fund, available investments or opportunities for
sales will be allocated equitably to each investment company. In some
cases, this procedure may adversely affect the size of the position
obtained for or disposed of by the Fund or the price paid or received by the
Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment
adviser. As of December 31, 1993, The Dreyfus Corporation managed or
administered approximately $78 billion in assets for more than 1.9
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the overall authority of the Fund's Trustees in accordance
with Massachusetts law. The Fund's primary investment officer is Barbara
L. Kenworthy. She has held that position since the Fund's inception and has
been employed by The Dreyfus Corporation since 1985. The Fund's other
investment officers are identified under "Management of the Fund" in the
Fund's Statement of Additional Information. The Dreyfus Corporation also
provides research services for the Fund as well as for other funds advised
by The Dreyfus Corporation through a professional staff of portfolio
managers and security analysts.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .60 of 1%
of the value of the Fund's average daily net assets. For the fiscal year
ended October 31, 1993, the Fund paid The Dreyfus Corporation a monthly
fee at the effective annual rate of .52 of 1% of the value of the Fund's
average daily net assets pursuant to undertakings by The Dreyfus
Corporation. From time to time, The Dreyfus Corporation may waive
receipt of its fees and/or voluntarily assume certain expenses of the
Fund, which would have the effect of lowering the Fund's overall expense
ratio and increasing yield to investors at the time such amounts are
waived or assumed, as the case may be. The Fund will not pay The Dreyfus
Corporation at a later time for any amounts it may waive, nor will the
Fund reimburse The Dreyfus Corporation for any amounts it may assume.
The Dreyfus Corporation or its affiliates may pay certain entities,
including banks, an account fee and also a fee in connection with the
servicing of Fund shareholders.
The Fund bears certain costs of distributing Fund shares in accordance
with a plan (the "Service Plan") adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940. See "Fee Table" and "Service Plan."
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are
not insured by the Federal Deposit Insurance Corporation.
Fund shares can be purchased through Dreyfus Service Corporation or
certain financial institutions (which may include banks), securities
dealers and other industry professionals (collectively, "Service Agents")
that have entered into service agreements with Dreyfus Service
Corporation. Share certificates are issued only upon your written request.
No certificates are issued for fractional shares. The Fund reserves the
right to reject any purchase order.
The minimum initial purchase is $2,500, or $1,000 if you are a client of
a Service Agent which has made an aggregate minimum initial purchase
for its customers of $2,500. Subsequent investments must be at least
$500. The initial investment must be accompanied by the Fund's Account
Application. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries, directors of The
Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Fund's
(15)
Board, or the spouse or minor child of any of the foregoing, the minimum
initial investment is $1,000. For full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund account, the
minimum initial investment is $50. The Fund reserves the right to offer
Fund shares without regard to minimum purchase requirements to
employees participating in certain qualified and non-qualified employee
benefit plans or other programs where contributions or account
information can be transmitted in a manner and form acceptable to the
Fund. The Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire, or through the Dreyfus
TeleTransfer Privilege described below. Checks should be made payable to
"The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open
new accounts which are mailed should be sent to The Dreyfus Family of
Funds, P.O. Box 9387, Providence, Rhode Island 02940-9387, together with
your Account Application. For subsequent investments, your Fund account
number should appear on the check and an investment slip should be
enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105, Newark,
New Jersey 07101-0105. For Dreyfus retirement plan accounts, both
initial and subsequent investments should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Neither initial nor subsequent investments should be made by third party
check. Purchase orders may be delivered in person only to a Dreyfus
Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUNE AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information."
Wire payments may be made if your account is in a commercial bank
that is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900119330/Dreyfus
Strategic Income, for purchase of Fund shares in your name. The wire must
include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares is by wire, please call 1-800-645-6561 after completing
your wire payment to obtain your Fund account number. Please include your
Fund account number on the Fund's Account Application and promptly mail
the Account Application to the Fund, as no redemptions will be permitted
until the Account Application is received. You may obtain further
information about remitting funds in this manner from your bank. All
payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check
used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS
"1111."
If an order is received by the Transfer Agent or other agent by the close
of trading on the floor of the New York Stock Exchange (currently 4:00
p.m., New York time) on a business day, Fund shares will be purchased at
the public offering price (i.e., net asset value plus the applicable sales
load set forth below) determined as of the close of trading on the floor of
the New York Stock Exchange on that day. Otherwise, Fund shares will be
purchased at the public offering price determined as of the close of
trading on the floor of the New York Stock Exchange on the next business
day, except where shares are purchased through a dealer as provided
below.
Orders for the purchase of Fund shares received by dealers by the close
of trading on the Floor of the New York Stock Exchange on a business day
and transmitted to Dreyfus Service Corporation by the close of its
business day (normally 5:15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the floor of the New York Stock Exchange on that day. Otherwise, the
orders will be based on the next determined public offering price. It is the
dealers' responsibility to transmit orders so that they will be received by
Dreyfus Service Corporation before the close of its business day.
(16)
The public offering price is the net asset value per share (see
"Determination of Net Asset Value" and "Statement of Assets and
Liabilities" in the Fund's Statement of Additional Information) plus a
sales load as shown below:
TOTAL SALES LOAD
---------------------------------
AS A % OF AS A % OF
OFFERING PRICE NET ASSET VALUE
PER SHARE PER SHARE
-------------- ---------------
AMOUNT OF TRANSACTION
Less than $100,000........................ 3.00 3.10
$100,000 to less than $250,000............ 2.75 2.80
$250,000 to less than $500,000............ 2.25 2.30
$500,000 to less than $1,000,000.......... 2.00 2.00
$1,000,000 and over....................... 1.00 1.00
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with
Dreyfus Service Corporation pertaining to the sale of Fund shares (or
otherwise have a brokerage-related or clearing arrangement with an NASD
member firm or other financial institution with respect to the sale of
Fund shares) may purchase Fund shares for themselves, directly or
pursuant to an employee benefit plan or other program, or for their
spouses or minor children at net asset value, provided that they have
furnished Dreyfus Service Corporation with such information that it may
request from time to time in order to verify eligibility for this privilege.
This privilege also applies to full-time employees of financial
institutions affiliated with NASD member firms whose full-time
employees are eligible to purchase Fund shares at net asset value. In
addition, Fund shares are offered at net asset value to full-time or part-
time employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a
fund advised by The Dreyfus Corporation, including members of the Fund's
Board, or the spouse or minor child of any of the foregoing. Fund shares
purchased in connection with the Dreyfus Managed Portfolio program will
be purchased at net asset value.
Fund shares will be offered at net asset value without a sales load to
employees participating in qualified or nonqualified employee benefit
plans or other programs where (i) the employers or affiliated employers
maintaining such plans or programs have a minimum of 250 employees
eligible for participation in such plans or programs or (ii) such plan's or
program's aggregate initial investment in the Dreyfus Family of Funds or
certain other products made available by Dreyfus Service Corporation to
such plans or programs exceeds one million dollars. The determination of
the number of employees eligible for participation in a plan or program
shall be made on the date that Fund shares are first purchased by or on
behalf of employees participating in such plan or program and on each
subsequent January 1st. Dreyfus Service Corporation may pay dealers a fee
of up to .5% of the amount invested through such dealers in Fund shares at
net asset value by employees participating in such employee benefit plans
or programs. All present holdings of shares of funds in the Dreyfus Family
of Funds by such employee benefit plans or programs will be aggregated to
determine the fee payable with respect to each such purchase of Fund
shares. Dreyfus Service Corporation reserves the right to cease paying
these fees at any time. Dreyfus Service Corporation will pay such fees
from its own funds, other than amounts received from the Fund, including
past profits or any other source available to it.
Fund shares also may be purchased (including by exchange) at net asset
value without a sales load for Dreyfus-sponsored IRA "Rollover Accounts"
with the distribution proceeds from a qualified retirement plan or a
Dreyfus-sponsored 403(b)(7) plan, provided that, at the time of such
distribution, such qualified retirement plan or Dreyfus-sponsored
403(b)(7) plan (a) satisfied the requirements set forth under either clause
(i) or clause (ii) in the preceding paragraph and all or a portion of such
plan's assets were invested in funds in the Dreyfus Family of Funds or
certain other products made available by Dreyfus Service Corporation to
such plans, or (b) invested all of its assets in funds in the Dreyfus Family
of Funds or certain other products made available by Dreyfus Service
Corporation to such plans which funds or other products were sold with a
sales load.
In fiscal 1993, Dreyfus Service Corporation retained $5,455,782 from
sales loads on Fund shares. The full sales load may be reallowed to dealers
by Dreyfus Service Corporation. The dealer reallowance may be changed
from time to time but will remain the same for all dealers. Dreyfus
Service Corporation, at its expense, may pro
(17)
vide additional promotional incentives to dealers that sell shares of
funds advised by The Dreyfus Corporation which are sold with a sales load,
such as the Fund. In some instances, these incentives may be offered only
to certain dealers who have sold or may sell significant amounts of
shares. Dealers receive a larger percentage of the sales load from Dreyfus
Service Corporation than they receive for selling most other funds.
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in
this Prospectus, and, to the extent permitted by applicable regulatory
authority, may charge their clients direct fees for Servicing (as defined
under "Service Plan"). These fees would be in addition to any amounts
which might be received under the Service Plan. Each Service Agent has
agreed to transmit to its clients a schedule of such fees. You should
consult your Service Agent in this regard.
Fund shares are sold on a continuous basis. Net asset value per share is
determined as of the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on each day the New York
Stock Exchange is open for business. For purposes of determining net asset
value per share, options and futures contracts will be valued 15 minutes
after the close of trading on the floor of the New York Stock Exchange. Net
asset value per share is computed by dividing the value of the Fund's net
assets (i.e., the value of its assets less liabilities) by the total number of
shares outstanding. The Fund's investments are valued based on market
value or, where market quotations are not readily available, based on fair
value as determined in good faith by the Board of Trustees. For further
information regarding the methods employed in valuing Fund investments,
see "Determination of Net Asset Value" in the Fund's Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject
you to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
RIGHT OF ACCUMULATION - Reduced sales loads apply to any purchase of
Fund shares, shares of other funds advised by The Dreyfus Corporation
which are sold with a sales load or shares acquired by a previous exchange
of shares purchased with a sales load (hereinafter referred to as "Eligible
Funds") by you and any related "purchaser" as defined in the Statement of
Additional Information, where the aggregate investment, including such
purchase, is $100,000 or more. If, for example, you previously purchased
and still hold shares of the Fund, or of any other Eligible Fund, or
combination thereof, with an aggregate current market value of $90,000
and subsequently purchase shares of the Fund or an Eligible Fund having a
current value of $20,000, the sales load applicable to the subsequent
purchase would be reduced to 2.75% of the offering price. All present
holdings of Eligible Funds may be combined to determine the current
offering price of the aggregate investment in ascertaining the sales load
applicable to each subsequent purchase.
To qualify for reduced sales loads, at the time of a purchase you or your
Service Agent must notify Dreyfus Service Corporation if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if you have
checked the appropriate box and supplied the necessary information on the
Fund's Account Application or have filed an Optional Services Form with
the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may
modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer Privilege, you may
request a Dreyfus TeleTransfer purchase of Fund shares by telephoning 1-
800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents
may impose certain conditions on their clients which are different from
those described in this Prospectus. You should consult your Service Agent
in this regard.
(18)
EXCHANGE PRIVILEGE - The Exchange Privilege enables you to purchase, in
exchange for shares of the Fund, shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds have different
investment objectives which may be of interest to you. The Exchange
Privilege may be exercised twice during the calendar year as described
below. If you desire to use this Privilege, you should consult your Service
Agent or Dreyfus Service Corporation to determine if it is available and
whether any other conditions are imposed on its use.
To use this Privilege, you or your Service Agent acting on your behalf
must give exchange instructions to the Transfer Agent in writing, by wire
or by telephone. If you previously established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-
4060 or, if you are calling from overseas, call 1-401-455-3306. See "How
to Redeem Fund Shares-Procedures." Before any exchange, you must obtain
and should review a copy of the current prospectus of the fund into which
the exchange is being made. Prospectuses may be obtained from Dreyfus
Service Corporation. The shares being exchanged must have a current value
of at least $500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which the exchange
is being made. Telephone exchanges may be made only if the appropriate
"YES" box has been checked on the Account Application, or a separate
signed Optional Services Form is on file with the Transfer Agent. Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically
carried over to the fund into which the exchange is made: Exchange
Privilege, Dreyfus TeleTransfer Privilege and the dividend/capital gain
distribution option (except for the Dreyfus Dividend Sweep Privilege)
selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the Fund from
which you are exchanging were: (a) purchased with a sales load, (b)
acquired by a previous exchange from shares purchased with a sales load,
or (c) acquired through reinvestments of dividends or distributions paid
with respect to the foregoing categories of shares. To qualify, at the time
of your exchange you must notify the Transfer Agent or your Service Agent
must notify Dreyfus Service Corporation. Any such qualification is subject
to confirmation of your holdings through a check of appropriate records.
See "Shareholder Services" in the Fund's Statement of Additional
Information. No fees currently are charged shareholders directly in
connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and Exchange
Commission. The Fund reserves the right to reject any exchange request in
whole or in part. The Exchange Privilege may be modified or terminated at
any time upon notice to shareholders.
With respect to any investor who has exchanged out of the Fund twice
during the calendar year, further purchase orders (including those
pursuant to exchange instructions) relating to any shares of the Fund will
be rejected for the remainder of the calendar year. Management believes
that this policy will enable shareholders to change their investment
program, while protecting the Fund against disruptions in portfolio
management resulting from frequent transactions by those seeking to
time market fluctuations. Exchanges made through omnibus accounts for
various retirement plans are not subject to such limit on exchanges.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE - Dreyfus Auto-Exchange Privilege
enables you to invest regularly (on a semi-monthly, monthly, quarterly or
annual basis), in exchange for shares of the Fund, in shares of other funds
in the Dreyfus Family of Funds of which you are currently an investor. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month according to the
schedule you have selected. Shares will be exchanged at the then current
net asset value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder Services" in
the Statement of Additional Information. The right to exercise this
Privilege may be
(19)
modified or cancelled by the Fund or the Transfer Agent. You may modify
or cancel your exercise of this Privilege at any time by writing to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-
9671. The Fund may charge a service fee for the use of this Privilege. No
such fee currently is contemplated. The exchange of shares of one fund for
shares of another is treated for Federal income tax purposes as a sale of
the shares given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss. For more
information concerning this Privilege and the funds in the Dreyfus Family
of Funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER - Dreyfus-AUTOMATIC Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund
shares are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated by you will
be debited in the specified amount, and Fund shares will be purchased,
once a month, on either the first or fifteenth day, or twice a month, on
both days. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may cancel your
participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 6527, Providence, Rhode Island 02940-6527, or, if for Dreyfus
Retirement Plan accounts, to The Dreyfus Trust Company, Custodian, P.O.
Box 6427, Providence, Rhode Island 02940-6427, and the notification will
be effective three business days following receipt. The Fund may modify
or terminate this Privilege at any time or charge a service fee. No such
fee currently is contemplated.
DREYFUS DIVIDEND SWEEP PRIVILEGE - Dreyfus Dividend Sweep Privilege
enables you to invest automatically dividends or dividends and capital
gain distributions, if any, paid by the Fund in shares of another fund in the
Dreyfus Family of Funds of which you are a shareholder. Shares of the
other fund will be purchased at the then-current net asset value; however,
a sales load may be charged with respect to investments in shares of a
fund sold with a sales load. If you are investing in a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load. If you are investing in a fund
that charges a contingent deferred sales charge, the shares purchased will
be subject on redemption to the contingent deferred sales charge, if any,
applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. For more information concerning
this Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to request a Dividend Sweep Authorization
Form, please call toll free 1-800-645-6561. You may cancel this Privilege
by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. To select a new fund after
cancellation, you must submit a new authorization form. Enrollment in or
cancellation of this Privilege is effective three business days following
receipt. This Privilege is available only for existing accounts and may not
be used to open new accounts. Minimum subsequent investments do not
apply. The Fund may modify or terminate this Privilege at any time or
charge a service fee. No such fee currently is contemplated. Shares held
under Keogh Plans, IRAs or other retirement plans are not eligible for this
Privilege.
DREYFUS PAYROLL SAVINGS PLAN - Dreyfus Payroll Savings Plan permits
you to purchase Fund shares (minimum of $100 per transaction)
automatically on a regular basis. Depending upon your Employer's direct
deposit program, you may have part or all of your paycheck transferred to
your existing Dreyfus account electronically through the Automated
Clearing House system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse
side of the form and return it to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may change the
amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not Dreyfus Service Corporation, The Dreyfus Corporation, the
Fund, the Transfer Agent or any other person, to arrange for transactions
under the Dreyfus Payroll Savings Plan. The Fund may modify or terminate
this Privilege at any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement
plans are not eligible for this Privilege.
(20)
AUTOMATIC WITHDRAWAL PLAN - The Automatic Withdrawal Plan permits
you to request withdrawal of a specified dollar amount (minimum of $50)
on either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be obtained
from Dreyfus Service Corporation. There is a service charge of 50 cents for
each withdrawal check. The Automatic Withdrawal Plan may be ended at
any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
RETIREMENT PLANS - The Fund offers a variety of pension and profit-
sharing plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan
support services also are available. For details, please contact Dreyfus
Group Retirement Plans, a division of Dreyfus Service Corporation, by
calling toll free 1-800-358-5566.
LETTER OF INTENT - By signing a Letter of Intent form, available from
Dreyfus Service Corporation, you become eligible for the reduced sales
load applicable to the total number of Eligible Fund shares purchased in a
13-month period pursuant to the terms and under the conditions set forth
in the Letter of Intent. A minimum initial purchase of $5,000 is required.
To compute the applicable sales load, the offering price of shares you hold
(on the date of submission of the Letter of Intent) in any Eligible Fund that
may be used toward "Right of Accumulation" benefits described above may
be used as a credit toward completion of the Letter of Intent. However,
the reduced sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in
the Letter of Intent for payment of a higher sales load if you do not
purchase the full amount indicated in the Letter of Intent. The escrow will
be released when you fulfill the terms of the Letter of Intent by
purchasing the specified amount. If your purchases qualify for a further
sales load reduction, the sales load will be adjusted to reflect your total
purchase at the end of 13 months. If total purchases are less than the
amount specified, you will be requested to remit an amount equal to the
difference between the sales load actually paid and the sales load
applicable to the aggregate purchases actually made. If such remittance is
not received within 20 days, the Transfer Agent, as attorney-in-fact
pursuant to the terms of the Letter of Intent, will redeem an appropriate
number of shares held in escrow to realize the difference. Signing a Letter
of Intent does not bind you to purchase, or the Fund to sell, the full amount
indicated at the sales load in effect at the time of signing, but you must
complete the intended purchase to obtain the reduced sales load. At the
time you purchase Fund shares, you must indicate your intention to do so
under a Letter of Intent. Purchases pursuant to a Letter of Intent will be
made at the then-current net asset value plus the applicable sales load in
effect at the time such Letter of Intent was executed.
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent, as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value.
The Fund imposes no charges when shares are redeemed directly through
Dreyfus Service Corporation. Service Agents may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request.
The value of the shares redeemed may be more or less than their original
cost, depending on the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY DREYFUS TELETRANSFER OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE
TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH
MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUNE WILL
REJECT REQUESTS TO REDEEM SHARES PURSUANT TO THE DREYFUS TELETRANSFER
PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC ASSET BUILDER
(21)
ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL
NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE,
DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE
ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
The Fund reserves the right to redeem your account at its option upon
not less than 30 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES - You may redeem shares by using the regular redemption
procedure through the Transfer Agent or through the Dreyfus TELETRANSFER
Privilege. Other redemption procedures may be in effect for investors who
effect transactions in Fund shares through Service Agents. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities.
In addition, Dreyfus Service Corporation will accept orders from
dealers with which it has sales agreements for the repurchase of shares
held by shareholders. Repurchase orders received by the dealer prior to the
close of trading on the New York Stock Exchange on a business day and
transmitted to Dreyfus Service Corporation prior to the close of its
business day (normally 5:15 p.m., New York time) are effected at the price
determined as of the close of trading on the floor of the New York Stock
Exchange on that day. Otherwise, the shares will be redeemed at the next
determined net asset value. It is the responsibility of the dealer to
transmit orders on a timely basis. The dealer may charge the shareholder a
fee for executing the order. This repurchase arrangement is discretionary
and may be withdrawn at any time.
You may redeem or exchange Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have
filed an Optional Services Form with the Transfer Agent. If you select the
Dreyfus TELETRANSFER Privilege or exchange privilege, you authorize the
Transfer Agent to act on telephone instructions from any person
representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be
genuine. The Fund will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification, to confirm
that instructions are genuine and, if it does not follow such procedures,
the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent instructions. Neither the Fund nor the Transfer
Agent will be liable for following telephone instructions reasonably
believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a Dreyfus TELETRANSFER redemption or exchange of Fund shares. In
such cases, you should consider using the other redemption procedures
described herein. Use of these other redemption procedures may result in
your redemption request being processed at a later time than it would
have been if Dreyfus TeleTransfer redemption had been used. During the
delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION - Under the regular redemption procedure, you may
redeem shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 6527, Providence, Rhode Island 02940-6527. Redemption requests
for Dreyfus Retirement Plan accounts should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Redemption requests may be delivered in person only to a Dreyfus
Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP"), and the Stock
Exchanges Medallion Program.. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed
under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
(22)
DREYFUS TELETRANSFER PRIVILEGE - You may redeem Fund shares (minimum
$500 per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or
have filed an Optional Services Form with the Transfer Agent. The
proceeds will be transferred between your Fund account and the bank
account designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an Automated
Clearing House member may be so designated. Redemption proceeds will be
on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request or, at your
request, paid by check (maximum $150,000 per day) and mailed to your
address. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account only up to $250,000 within any 30-day period. The Fund reserves
the right to refuse any request made by telephone, including requests
made shortly after a change of address, and may limit the amount involved
or the number of such requests. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to shareholders.
No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-
3306. Shares held under Keogh Plans, IRAs or other retirement plans, and
shares issued in certificate form, are not eligible for this Privilege.
REINVESTMENT PRIVILEGE - You may reinvest up to the number of shares
you have redeemed, within 30 days of redemption, at the then-prevailing
net asset value without a sales load, or reinstate your account for the
purpose of exercising the Exchange Privilege. The Reinvestment Privilege
may be exercised only once.
SERVICE PLAN
Under the Service Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund has undertaken to pay Dreyfus
Service Corporation for advertising, marketing and distributing the Fund's
shares and for servicing Fund shareholders at an annual rate of .25 of 1%
of the value of the Fund's average daily net assets. Under the Service Plan,
Dreyfus Service Corporation may make payments to Service Agents for
administration, for servicing Fund shareholders who are also their clients
and/or for distribution. Dreyfus Service Corporation determines the
amounts to be paid to Service Agents. Service Agents receive such fees in
respect of the average daily value of the Fund's shares owned by
shareholders for whom the Service Agent performs Servicing (as defined
below) or for whom the Service Agent is the dealer or holder of record.
The Service Plan also provides that The Dreyfus Corporation may pay
Service Agents for servicing out of its management fee, its past profits
or any other sources available to it. From time to time, Dreyfus Service
Corporation may defer or waive receipt of fees under the Service Plan
while retaining the ability to be paid by the Fund under the Service Plan
thereafter. The fees payable to Dreyfus Service Corporation under the
Service Plan for advertising, marketing and distributing the Fund's shares
and payments to Service Agents are payable without regard to actual
expenses incurred.
The Fund also bears the costs of preparing and printing prospectuses
and statements of additional information used for regulatory purposes and
for distribution to existing shareholders. Under the Service Plan, the Fund
bears (a) the costs of preparing, printing and distributing prospectuses
and statements of additional information used for other purposes and (b)
the costs associated with implementing and operating the Service Plan
(such as costs of printing and mailing service agreements), the aggregate
of such amounts not to exceed in any fiscal year of the Fund the greater of
$100,000 or .005 of 1% of the value of the Fund's average daily net assets
for such fiscal year. Each item for which a payment may be made under the
Service Plan may constitute an expense of distributing Fund shares as the
Securities and Exchange Commission construes such term under Rule 12b-1.
Expenses under the Service Plan may be carried forward from one year
to another to the extent they remain unpaid. All or a part of any such
amount carried forward will be paid at such time, if ever, as the Board of
Trustees determines to pay it. The Fund will not be charged for interest,
carrying or other finance charges on any unreimbursed distribution or
other expense incurred and not paid in a prior year.
Servicing may include, among other things, one or more of the
following: answering client inquiries regarding the Fund; assisting clients
in changing dividend options, account designations and addresses;
performing sub-accounting; establishing and maintaining shareholder
accounts and records; processing purchase and redemption
(23)
transactions; investing client cash account balances automatically in
Fund shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions
and balances in the client's other accounts serviced by the Service Agent;
arranging for bank wires; and such other services as the Fund may request,
to the extent the Service Agent is permitted by applicable statute, rule or
regulation.
The Glass-Steagall Act and other applicable laws prohibit Federally
chartered or supervised banks from engaging in certain aspects of the
business of issuing, underwriting, selling and/or distributing securities.
Accordingly, banks will be engaged to act as Service Agents only to
perform administrative and shareholder servicing functions. While the
matter is not free from doubt, the Fund's Board of Trustees believe that
such laws should not preclude a bank from acting as a Service Agent.
However, judicial or administrative decisions or interpretations of such
laws, as well as changes in either Federal or state statutes or regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, could prevent a bank from continuing to perform all or a part of
its Servicing activities. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain Fund shareholders and
alternative means for continuing the Servicing of such shareholders would
be sought. In such event, changes in the operation of the Fund might occur
and shareholders serviced by such bank might no longer be able to avail
themselves of any automatic investment or other services then being
provided by such bank. The Fund does not expect that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net investment income
on each day that the New York Stock Exchange is open for business. The
Fund's earnings for Saturdays, Sundays and holidays are declared as
dividends on the preceding business day. Dividends usually are paid on the
last business day of each month and automatically reinvested in additional
Fund shares at net asset value, without a sales load, unless you elect
payment in cash. If you redeem all shares in your account at any time
during the month, all dividends to which you are entitled will be paid to
you along with the proceeds of the redemption. Distributions of net
realized securities gains, if any, generally are declared and paid once a
year, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of
1986, as amended (the "Code"), in all events in a manner consistent with
the Investment Company Act of 1940. The Fund will not make distributions
from net realized securities gains unless capital loss carryovers, if any,
have been utilized or have expired. You may choose whether to receive
distributions in cash or to reinvest such amounts in additional Fund shares
at net asset value without a sales load. All expenses are accrued daily and
deducted before declaration of dividends.
Fund shares begin earning income dividends on the day immediately
available funds ("Federal Funds" (monies of member banks within the
Federal Reserve System which are held on deposit at a Federal Reserve
Bank)) are received by the Transfer Agent in written or telegraphic form.
If a purchase order is not accompanied by remittance in Federal Funds,
there may be a delay between the time the purchase order becomes
effective and the time the shares purchased start earning dividends. If
your payment is not made in Federal Funds, it must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which
are not members of the Federal Reserve System may take considerably
longer to convert into Federal Funds.
Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains and gains
from the sale or other disposition of market discount bonds, paid by the
Fund are subject to Federal income tax as ordinary income, whether
received in cash or reinvested in additional Fund shares. Dividends paid by
the Fund generally will not qualify for the dividends received deduction
allowable to certain U.S. corporations. Distributions from net realized
long-term securities gains of the Fund, if any, generally are taxable as
long-term capital gains for Federal income tax purposes if the shareholder
is a citizen or resident of the United States, whether such distributions
are received in cash or reinvested in additional Fund shares. The Code
provides that the net capital gain of an individual generally will not be
subject to Federal income tax at a rate in excess of 28%. Dividends and
distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and gains
from the sale or other disposition of market discount bonds, paid by the
Fund to a for-
(24)
eign investor generally are subject to U.S. nonresident withholding
taxes at the rate of 30%, unless the foreign investor claims the benefit of
a lower rate specified in a tax treaty. Distributions from net realized
long-term securities gains paid by the Fund to a foreign investor as well
as the proceeds of any redemptions from a foreign investor's account,
regardless of the extent to which gain or loss may be realized, generally
will not be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described below,
unless the foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions is mailed
to you annually. You also will receive periodic summaries of your account
which will include information as to dividends and distributions from
securities gains, if any, paid during the year.
The Code provides for the "carryover" of some or all of the sales load
imposed on Fund shares, if you exchange your Fund shares for shares of
another fund advised by The Dreyfus Corporation within 91 days and such
other fund reduces or eliminates its otherwise applicable sales load
charge for the purpose of the exchange. In this case, the amount of your
sales load charge for Fund shares, up to the amount of the reduction of the
sales load charge on the exchange, is not included in the basis of your Fund
shares for purposes of computing gain or loss on the exchange, and instead
is added to the basis of the fund shares received on the exchange.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains of the Fund and the
proceeds of any redemption, regardless of the extent to which gain or loss
may be realized, paid to a shareholder if such shareholder fails to certify
either that the TIN furnished in connection with opening an account is
correct, or that such shareholder has not received notice from the IRS of
being subject to backup withholding as a result of a failure to properly
report taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines that a shareholder's TIN is incorrect or if a
shareholder has failed to properly report dividend and interest income on
your Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund qualified for the fiscal
year ended October 31, 1993 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification
is in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income taxes to the extent its earnings
are distributed in accordance with applicable provisions of the Code. In
addition, the Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment
income and capital gains.
You should consult your tax adviser regarding specific questions as to
Federal, state and local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on several
bases, including current yield, average annual total return, and/or total
return.
Current yield refers to the Fund's annualized net investment income per
share over a 30-day period, expressed as a percentage of the maximum
offering price per share at the end of the period. For purposes of
calculating current yield, the amount of net investment income per share
during that 30-day period, computed in accordance with regulatory
requirements, is compounded by assuming that it is reinvested at a
constant rate over a six-month period. An identical result is then assumed
to have occurred during a second six-month period which, when added to
the result for the first six months, provides an "annualized" yield for an
entire one-year period. Calculations of the Fund's current yield may
reflect absorbed expenses pursuant to expense limitations in effect. See
"Management of the Fund."
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased
with an initial payment of $1,000 and that the investment was redeemed
at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return
is expressed as a percentage rate which, if applied on a compounded
annual basis, would result in the
(25)
redeemable value of the investment at the end of the period.
Advertisements of the Fund's performance will include the Fund's average
annual total return for one, five and ten year periods, or for shorter time
periods depending upon the length of time during which the Fund has
operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
maximum offering price per share at the beginning of the period.
Advertisements may include the percentage rate of total return or may
include the value of a hypothetical investment at the end of the period
which assumes the application of the percentage rate of total return.
Total return may also be calculated by using the net asset value per share
at the beginning of the period instead of the maximum offering price per
share at the beginning of the period. Calculations based on the net asset
value per share do not reflect the deduction of the sales load which, if
reflected, would reduce the performance quoted.
Performance will vary from time to time and past results are not
necessarily representative of future results. Investors should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other
investment companies using a different method of calculating
performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Moody's Bond Survey Bond Index, Lehman
Brothers Municipal Bond Index, Morningstar, Inc. and other industry
publications.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust under the
laws of the Commonwealth of Massachusetts pursuant to an Agreement
and Declaration of Trust (the "Trust Agreement") dated July 24, 1985, and
commenced operations on October 1, 1986. The Fund is authorized to issue
an unlimited number of shares of beneficial interest, par value $.001 per
share. Each share has one vote.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed
by the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Fund.
Thus, the risk of a shareholder's incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations, a possibility which management
believes is remote. Upon payment of any liability incurred by the Fund, the
shareholder paying such liability will be entitled to reimbursement from
the general assets of the Fund. The Trustees intend to conduct the
operations of the Fund in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Fund. As
described under "Management of the Fund" in the Fund's Statement of
Additional Information, the Fund ordinarily will not hold shareholder
meetings; however, shareholders under certain circumstances may have
the right to call a meeting of shareholders for the purpose of voting to
remove Trustees.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561. In New York City, call 1-718-895-1206; on Long
Island, call 794-5200.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY
PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
(26)
APPENDIX
The average distribution of investments in corporate bonds by ratings
for the fiscal year ended October 31, 1993, calculated monthly on a dollar
weighted basis, was as follows:
MOODY'S INVESTORS STANDARD & POOR'S
SERVICE, INC. OR CORPORATION PERCENTAGE
----------------- ----------------- ----------
Aaa AAA 20.49%
Aa AA 10.17
A A 25.68
Baa BBB 30.47
Ba BB 10.42
B B .95
Caa CCC .13
Unrated Unrated 1.69
-------
100.00%
=======
The actual distribution of the Fund's corporate bond investments by
ratings on any given date will vary. In addition, the distribution of the
Fund's investments by ratings as set forth above should not be considered
as representative of the Fund's future portfolio composition.
Included under the Unrated category are securities comprising 1.69%,
while unrated, have been determined by The Dreyfus Corporation to be of
comparable quality to securities rated Ba/BB.
(27)
DREYFUS STRATEGIC INCOME
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 28, 1994
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Strategic Income (the "Fund"), dated January 28, 1994, as it may
be revised from time to time. To obtain a copy of the Fund's Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or call the following numbers:
Outside New York State -- Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
(Outside New York City -- Call Collect)
On Long Island -- Call 794-5200
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . B-11
Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . B-15
Service Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . B-17
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . B-18
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . B-21
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . B-22
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . B-23
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . B-24
Information About the Fund . . . . . . . . . . . . . . . . . . . . . . B-25
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . . . . . . B-26
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-27
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . B-33
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . B-46
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund."
Portfolio Securities
Mortgage-Related Securities
Government Agency Securities. Mortgage-related securities issued by
the Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are
guaranteed as to the timely payment of principal and interest by GNMA and
such guarantee is backed by the full faith and credit of the United States.
GNMA is a wholly-owned U.S. Government corporation within the Department of
Housing and Urban Development. Ginnie Maes also are supported by the
authority of GNMA to borrow funds from the U.S. Treasury to make payments
under its guarantee.
Government-Related Securities. Mortgage-related securities issued by
the Federal National Mortgage Association ("FNMA") include FNMA Guaranteed
Mortgage Pass-Through Certificates (also known as "Fannie Maes") which are
solely the obligations of FNMA and are not backed by or entitled to the
full faith and credit of the United States. FNMA is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are
guaranteed as to timely payment of principal and interest by FNMA.
Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates
(also known as "Freddie Macs" or "Pcs"). FHLMC is a corporate
instrumentality of the United States, created pursuant to an Act of
Congress, which is owned entirely by Federal Home Loan Banks. Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Banks
and do not constitute a debt or obligation of the United States or of any
Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment
of interest, which is guaranteed by FHLMC. FHLMC guarantees either
ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When FHLMC does not guarantee timely payment of
principal, FHLMC may remit the amount due on account of its guarantee of
ultimate payment of principal at any time after default on an underlying
mortgage, but in no event later than one year after it becomes payable.
Bank Obligations
Domestic commercial banks organized under Federal law are supervised
and examined by the Comptroller of the Currency and are required to be
members of the Federal Reserve System and to be insured by the Federal
Deposit Insurance Corporation (the "FDIC"). Domestic banks organized under
state law are supervised and examined by state banking authorities but are
members of the Federal Reserve System only if they elect to join. In
addition, state banks whose certificates of deposit ("Cds") may be
purchased by the Fund are insured by the Bank Insurance Fund administered
by the FDIC (although such insurance may not be of material benefit to the
Fund, depending upon the principal amount of the Cds of each bank held by
the Fund) and are subject to Federal examination and to a substantial body
of Federal law and regulation. As a result of Federal or state laws and
regulations, domestic branches of domestic banks generally are required,
among other things, to maintain specified levels of reserves, and are
limited in the amounts which they can loan to a single borrower and are
subject to other regulation designed to promote financial soundness.
However, not all such laws and regulations apply to foreign branches of
domestic banks.
Obligations of foreign branches of domestic banks, foreign
subsidiaries of domestic banks and foreign branches of foreign banks, such
as Cds and time deposits ("Tds"), may be general obligations of the parent
banks in addition to the issuing branches, or may be limited by the terms
of a specific obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks. These risks
include foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on
the obligations, foreign exchange controls and foreign withholding and
other taxes on interest income. Foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory requirements that
apply to domestic banks, such as mandatory reserve requirements, loan
limitations, and accounting, auditing and financial recordkeeping
requirements. In addition, less information may be publicly available
about a foreign branch of a domestic bank or about a foreign bank than
about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent banks in addition to the issuing branches or may
be limited by the terms of a specific obligation and by Federal or state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may or may not be subject to reserve
requirements imposed by the Federal Reserve System or by the state in which
the branch is located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of its assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state.
The deposits of Federal and State Branches generally must be insured by the
FDIC if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of Cds
and Tds issued by foreign branches of domestic banks, foreign subsidiaries
of domestic banks, foreign branches of foreign banks or domestic branches
of foreign banks, the Manager carefully evaluates such investments on a
case-by-case basis.
The Fund may purchase Cds issued by banks, savings and loan
associations and similar institutions with less than $1 billion in assets,
whose deposits are insured by the FDIC, provided the Fund purchases any
such CD in a principal amount of not more than $100,000, which amount would
be fully insured by the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the FDIC. Interest payments on such a CD
are not so insured. The Fund will not own more than one such CD per such
issuer.
Municipal Obligations
Municipal obligations are debt obligations issued by states,
territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities,
or multistate agencies or authorities. While in general, municipal
obligations are tax exempt securities having relatively low yields as
compared to taxable, non-municipal obligations of similar quality, certain
issues of municipal obligations, both taxable and non-taxable, offer yields
comparable and in some cases greater than the yields available on other
permissible Fund investments. Municipal obligations generally include debt
obligations issued to obtain funds for various public purposes as well as
certain industrial development bonds issued by or on behalf of public
authorities. Municipal obligations are classified as general obligation
bonds, revenue bonds and notes. General obligation bonds are secured by
the issuer's pledge of its faith, credit and taxing power for the payment
of principal and interest. Revenue bonds are payable from the revenue
derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other specific revenue
source, but not from the general taxing power. Industrial development
bonds, in most cases, are revenue bonds and generally do not carry the
pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes
are short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a bond sale,
collection of taxes or receipt of other revenues. Municipal obligations
include municipal lease/purchase agreements which are similar to
installment purchase contracts for property or equipment issued by
municipalities. Municipal obligations bear fixed, variable or floating
rates of interest, which are determined in some instances by formulas under
which the municipal obligation's interest rate will change directly or
inversely to changes in interest rates or an index, or multiples thereof,
in many cases subject to a maximum and minimum. Certain municipal
obligations are subject to redemption at a date earlier than their stated
maturity pursuant to call options, which may be separated from the related
municipal obligation and purchased and sold separately. Dividends received
by shareholders on Fund shares which are attributable to interest income
received by the Fund from municipal obligations generally will be subject
to Federal income tax. It is currently the Fund's intention to invest no
more than 25% of its assets in municipal obligations. However, this
percentage may be varied from time to time without shareholder approval.
Investment Techniques
Options Transactions. The Fund may engage in options transactions,
such as purchasing or writing covered call or put options. The principal
reason for writing covered call options is to realize, through the receipt
of premiums, a greater return than would be realized on the Fund's
portfolio securities alone. In return for a premium, the writer of a
covered call option forfeits the right to any appreciation in the value of
the underlying security above the strike price for the life of the option
(or until a closing purchase transaction can be effected). Nevertheless,
the call writer retains the risk of a decline in the price of the
underlying security. Similarly, the principal reason for writing covered
put options is to realize income in the form of premiums. The writer of a
covered put option accepts the risk of a decline in the price of the
underlying security. The size of the premiums that the Fund may receive
may be adversely affected as new or existing institutions, including other
investment companies, engage in or increase their option-writing
activities.
Options written ordinarily will have expiration dates between one and
nine months from the date written. The exercise price of the options may
be below, equal to or above the market values of the underlying securities
at the times the options are written. In the case of call options, these
exercise prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively. The Fund may write (a) in-the-money call
options when the Manager expects that the price of the underlying security
will remain stable or decline moderately during the option period, (b)
at-the-money call options when the Manager expects that the price of the
underlying security will remain stable or advance moderately during the
option period and (c) out-of-the-money call options when the Manager
expects that the premiums received from writing the call option plus the
appreciation in market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. In these circumstances, if the market price of the
underlying security declines and the security is sold at this lower price,
the amount of any realized loss will be offset wholly or in part by the
premium received. Out-of-the-money, at-the-money and in-the-money put
options (the reverse of call options as to the relation of exercise price
to market price) may be utilized in the same market environments that such
call options are used in equivalent transactions.
So long as the Fund's obligation as the writer of an option continues,
the Fund may be assigned an exercise notice by the broker-dealer through
which the option was sold, requiring the Fund to deliver, in the case of a
call, or take delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation terminates when the
option expires or the Fund effects a closing purchase transaction. The
Fund can no longer effect a closing purchase transaction with respect to an
option once it has been assigned an exercise notice.
An option position may be closed out only where there exists a
secondary market for an option of the same series on a recognized national
securities exchange or in the over-the counter market. Because of this
fact and current trading conditions, the Fund expects to purchase only call
or put options issued by the Options Clearing Corporation. The Fund
expects to write options on national securities exchanges and in the
over-the-counter market.
While it may choose to do otherwise, the Fund generally will purchase
or write only those options for which the Manager believes there is an
active secondary market so as to facilitate closing transactions. There is
no assurance that sufficient trading interest to create a liquid secondary
market on a securities exchange will exist for any particular option or at
any particular time, and for some options no such secondary market may
exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated
trading activity or order flow, or other unforeseen events, at times have
rendered certain clearing facilities inadequate and resulted in the
institution of special procedures, such as trading rotations, restrictions
on certain types of orders or trading halts or suspensions in one or more
options. There can be no assurance that similar events, or events that may
otherwise interfere with the timely execution of customers' orders, will
not recur. In such event, it might not be possible to effect closing
transactions in particular options. If as a covered call option writer the
Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise or it
otherwise covers its position.
Futures Contracts and Options on Futures Contracts. Upon exercise of
an option, the writer of the option delivers to the holder of the option
the futures position and the accumulated balance in the writer's futures
margin account, which represents the amount by which the market price of
the futures contract exceeds, in the case of a call, or is less than, in
the case of a put, the exercise price of the option on the futures
contract. The potential loss related to the purchase of options on futures
contracts is limited to the premium paid for the option (plus transaction
costs). Because the value of the option is fixed at the time of sale,
there are no daily cash payments to reflect changes in the value of the
underlying contract; however, the value of the option does change daily and
that change would be reflected in the net asset value of the Fund.
Foreign Currency Transactions. If the Fund enters into a currency
transaction, the Fund will deposit, if so required by applicable
regulations with its custodian or subcustodian cash or readily marketable
securities in a segregated account of the Fund in an amount at least equal
to the value of the Fund's total assets committed to the consummation of
the forward contract. If the value of the securities placed in the
segregated account declines, additional cash or securities will be placed
in the account so that the value of the account will equal the amount of
the Fund's commitment with respect to the contract.
At or before the maturity of a forward contract, the Fund either may
sell a portfolio security and make delivery of the currency, or retain the
security and offset its contractual obligation to deliver the currency by
purchasing a second contract pursuant to which the Fund will obtain, on the
same maturity date, the same amount of the currency which it is obligated
to deliver. If the Fund retains the portfolio security and engages in an
offsetting transaction, the Fund, at the time of execution of the
offsetting transaction, will incur a gain or a loss to the extent that
movement has occurred in forward contract prices. Should forward prices
decline during the period between the Fund's entering into a forward
contract for the sale of a currency and the date it enters into an
offsetting contract for the purchase of the currency, the Fund will realize
a gain to the extent the price of the currency it has agreed to sell
exceeds the price of the currency it has agreed to purchase. Should
forward prices increase, the Fund will suffer a loss to the extent the
price of the currency it has agreed to purchase exceeds the price of the
currency it has agreed to sell.
The cost to the Fund of engaging in currency transactions varies with
factors such as the currency involved, the length of the contract period
and the market conditions then prevailing. Because transactions in
currency exchange usually are conducted on a principal basis, no fees or
commissions are involved. The use of forward currency contracts does not
eliminate fluctuations in the underlying prices of the securities, but it
does establish a rate of exchange that can be achieved in the future. If a
devaluation generally is anticipated, the Fund may not be able to contract
to sell the currency at a price above the devaluation level it anticipates.
The requirements for qualification as a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"), may cause the
Fund to restrict the degree to which it engages in currency transactions.
See "Dividends, Distributions and Taxes."
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral. For
the purposes of this policy, the Fund considers collateral consisting of
U.S. Government securities or irrevocable letters of credit issued by banks
whose securities meet the standards for investment by the Fund to be the
equivalent of cash. From time to time, the Fund may return to the borrower
or a third party which is unaffiliated with the Fund, and which is acting
as a "placing broker," a part of the interest earned from the investment of
collateral received for securities loaned. Such loans may not exceed 33 1/3%
of the value of the Fund's total assets.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or
other distributions payable on the loaned securities, and any increase in
market value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan. These conditions may be subject to future
modification.
Risk Factors
Lower Rated Securities. The Fund is permitted to invest in securities
rated below Baa by Moody's Investors Service, Inc. ("Moody's") and below
BBB by Standard & Poor's Corporation ("S&P") and as low as Ca by Moody's or
C by S&P. Such securities, though higher yielding, are characterized by
risk. See "Description of the Fund -- Risk Factors -- Lower Rated
Securities" in the Prospectus for a discussion of certain risks and
"Appendix" for a general description of Moody's and S&P ratings. Although
ratings may be useful in evaluating the safety of interest and principal
payments, they do not evaluate the market value risk of these securities.
The Fund will rely on the Manager's judgment, analysis and experience in
evaluating the creditworthiness of an issuer. In this evaluation, the
Manager will take into consideration, among other things, the issuer's
financial resources, its sensitivity to economic conditions and trends, its
operating history, the quality of the issuer's management and regulatory
matters. It also is possible that a rating agency might not timely change
the rating on a particular issue to reflect subsequent events. Once the
rating of a security in the Fund's portfolio has been changed, the Manager
will consider all circumstances deemed relevant in determining whether the
Fund should continue to hold the security.
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities and will fluctuate over time. These securities are
considered by S&P and Moody's, on balance, as predominantly speculative
with respect to capacity to pay interest and repay principal in accordance
with the terms of the obligation and generally will involve more credit
risk than securities in the higher rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
experience financial stress and may not have sufficient revenues to meet
their interest payment obligations. The issuer's ability to service its
debt obligations also may be affected adversely by specific corporate
developments, or the issuer's inability to meet specific projected business
forecasts, or the unavailability of additional financing. The risk of loss
because of default by the issuer is significantly greater for the holders
of these securities because such securities generally are unsecured and
often are subordinated to other creditors of the issuer.
Because there is no established retail secondary market for many of
these securities, the Manager anticipates that such securities could be
sold only to a limited number of dealers or institutional investors. To
the extent a secondary trading market for these bonds does exist, it
generally is not as liquid as the secondary market for higher rated
securities. The lack of a liquid secondary market may have an adverse
impact on market price and yield and the Fund's ability to dispose of
particular issues when necessary to meet the Fund's liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid secondary market for
certain securities also may make it more difficult for the Fund to obtain
accurate market quotations for purposes of valuing the Fund's portfolio and
calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play
a greater role in valuation because less reliable, objective data may be
available.
These securities may be particularly susceptible to economic
downturns. It is likely that any economic recession could disrupt severely
the market for such securities and may have an adverse impact on the value
of such securities. In addition, it is likely that any such economic
downturn could adversely affect the ability of the issuers of such
securities to repay principal and pay interest thereon and increase the
incidence of default for such securities.
The Fund may acquire these securities during an initial offering.
Such securities may involve special risks because they are new issues. The
Fund has no arrangement with the Distributor or any other persons
concerning the acquisition of such securities, and the Manager will review
carefully the credit and other characteristics pertinent to such new
issues.
Lower rated zero coupon securities involve special considerations.
The credit risk factors pertaining to lower rated securities also apply to
lower rated zero coupon securities. Such zero coupon securities carry an
additional risk in that, unlike securities which pay interest throughout
the period to maturity, the Fund will realize no cash until the cash
payment date unless a portion of such securities are sold and, if the
issuer defaults, the Fund may obtain no return at all on its investment.
See "Dividends, Distributions and Taxes."
Investment Restrictions
The Fund has adopted the investment restrictions numbered 1 through 14
as fundamental policies. Fundamental policies cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940 (the "Act")) of the Fund's outstanding voting shares.
Investment restriction number 15 is not a fundamental policy and may be
changed by vote of a majority of the Trustees at any time. The Fund may
not:
1. Purchase the securities of any issuer (other than a bank) if such
purchase would cause more than 5% of the value of its total assets to be
invested in securities of such issuer, or invest more than 15% of its
assets in the obligations of any one bank, except that up to 25% of the
value of the Fund's total assets may be invested, and securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities may
be purchased, without regard to such limitations. Notwithstanding the
foregoing, based on rules of the Securities and Exchange Commission, the
Fund will not invest more than 5% of its assets in the obligations of any
one bank, except as otherwise provided in such rules.
2. Purchase the securities of any issuer if such purchase would
cause the Fund to hold more than 10% of the outstanding voting securities
of such issuer. This restriction applies only with respect to 75% of the
Fund's assets.
3. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
4. Purchase securities of closed-end investment companies except (a)
in the open market where no commission except the ordinary broker's
commission is paid, which purchases are limited to a maximum of (i) 3% of
the total voting stock of any one closed-end investment company, (ii) 5% of
its net assets with respect to any one closed-end investment company and
(iii) 10% of its net assets in the aggregate, or (b) those received as part
of a merger or consolidation. The Fund may not purchase the securities of
open-end investment companies other than itself.
5. Purchase or retain the securities of any issuer if the officers,
Trustees or Directors of the Fund or the Manager individually own
beneficially more than 1/2 of 1% of the securities of such issuer or
together own beneficially more than 5% of the securities of such issuer.
6. Purchase, hold or deal in real estate, or oil and gas interests,
but the Fund may purchase and sell securities that are secured by real
estate and may purchase and sell securities issued by companies that invest
or deal in real estate.
7. Invest in commodities, except that the Fund may purchase and sell
futures contracts, including those relating to indexes, and options on
futures contracts or indexes.
8. Borrow money, except (i) from banks for temporary or emergency
(not leveraging) purposes in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time
the borrowing is made and (ii) as described in the Fund's Prospectus and
this Statement of Additional Information. When borrowings under (i) exceed
5% of the value of the Fund's total assets, the Fund will not make any
additional investments. For purposes of this investment restriction, the
entry into options, futures contracts, including those relating to indexes,
and options on futures contracts or indexes shall not constitute borrowing.
9. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with writing covered put and call
options and the purchase of securities on a when-issued or delayed-delivery
basis and collateral and initial or variation margin arrangements with
respect to options, futures contracts, including those relating to indexes,
and options on futures contracts or indexes.
10. Make loans to others except through the purchase of debt
obligations or the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in an amount not to exceed 33 1/3% of the value
of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Trustees.
11. Act as an underwriter of securities of other issuers except to
the extent the Fund may be deemed an underwriter under the Securities Act
of 1933, as amended, by virtue of disposing of portfolio securities.
12. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
13. Purchase, sell or write puts, calls or combinations thereof,
except as set forth under "Short-Selling," "Call and Put Options on
Specific Securities," "Futures Transactions - In General", "Interest Rate
Futures Contracts and Options on Interest Rate Futures Contracts", "Futures
Contracts Based on an Index of Debt Securities and Options on such Futures
Contracts" and "Options on Foreign Currency" in the Fund's Prospectus and
"Futures Contracts and Options on Futures Contracts" and "Options
Transactions" in this Statement of Additional Information.
14. Invest more than 25% of its assets in investments in any
particular industry or industries (including banking), provided that, when
the Fund has adopted a temporary defensive posture, there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
15. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Fund's net assets would
be so invested.
If a percentage restriction is adhered to at the time an investment is
made, a later increase in percentage resulting from a change in values or
assets will not constitute a violation of such restriction.
While not fundamental policies, the Fund has undertaken, so as to
permit the sale of Fund shares in certain states, not to invest in oil, gas
and other mineral leases or in real estate limited partnerships, and to
treat the securities of foreign issuers which are not listed on a
recognized domestic or foreign exchange and for which a bona-fide market
does not exist at the time of purchase or subsequent valuation as not
readily marketable.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees of the Fund
DIANE DUNST, Trustee. Since January 1992, President of Diane Dunst
Promotion, Inc., a full service promotion agency. From January 1989 to
January 1992, Director of Promotion Services, Lear's Magazine. From 1985
to January 1989, she was Sales Promotion Manager of ELLE Magazine. Her
address is 1070 Park Avenue, New York, New York 10128.
*DAVID P. FELDMAN, Trustee. Chairman and Chief Executive Officer at&T
Investment Management Corporation. He is also a trustee of Corporate
Property Investors, a real estate investment company. His address is One
Oak Way, Berkeley Heights, New Jersey 07922.
JAY I. MELTZER, Trustee. Physician engaged in private practice
specializing in internal medicine. He is also a member of the Advisory
Board of the Section of Society and Medicine, College of Physicians and
Surgeons, Columbia University and Clinical Professor of Medicine,
Department of Medicine, Columbia University. His address is 903 Park
Avenue, New York, New York 10021.
DANIEL ROSE, Trustee. President and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and management
firm. He is also Chairman of the Housing Committee of The Real Estate
Board of New York, Inc., and a Trustee of Corporate Property Investors, a
real estate investment company. His address is c/o Rose Associates, Inc.,
380 Madison Avenue, New York, New York 10017.
WARREN S. RUDMAN, Trustee. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkin, Wharton & Garrison. From January 1981 to January
1993, Mr. Rudman served as a United States Senator from the State of New
Hampshire. Since January 1993, Mr. Rudman also served as Vice Chairman of
the Federal Reserve Bank of Boston and as a director of Chubb Corporation.
Since 1988, Mr. Rudman has served as a trustee of Boston College and, since
1986, as a member of the Senior Advisory Board of the Institute of Politics
of the Kennedy School of Government at Harvard University. His address is
c/o Paul, Weiss, Rifkind, Wharton & Garrison, 1615 L. Street, N.W., Washington,
D.C. 20036.
*HOWARD STEIN, Trustee and Investment Officer. Chairman of the Board and
Chief Executive Officer of the Manager, Chairman of the Board of the
Distributor and an officer, director, trustee or general partner of other
investment companies advised and administered by the Manager. He is also a
director of Avnet, an electronic parts and equipment company, and a trustee
of Corporate Property Investors, a real estate investment company. His
address is 200 Park Avenue, New York, New York 10166.
SANDER VANOCUR, Trustee. Since January 1992, Mr. Vanocur has been the
President of Old Owl Communications, a full-service communications firm
and, since November 1989, he has served as a Director of the Damon Runyon-
Walter Winchell Cancer Research Fund. From June 1986 to December 1991, he
was a senior Correspondent of ABC News and, from October 1986 to December
1991, he was Anchor of the ABC News program "Business World," a weekly
business program on the ABC television network. His address is 2928 P
Street, N.W., Washington, D.C. 20007.
There ordinarily will be no meetings of shareholders for the purpose
of electing Trustees unless and until such time as less than a majority of
the Trustees holding office have been elected by shareholders, at which
time the Trustees then in office will call a shareholders' meeting for the
election of Trustees. Under the Act, shareholders of record of not less
than two-thirds of the outstanding shares of the Fund may remove a Trustee
through a declaration in writing or by vote cast in person or by proxy at a
meeting called for that purpose. Under the Fund's Agreement and
Declaration of Trust, the Trustees are required to call a meeting of
shareholders for the purpose of voting upon the question of removal of any
such Trustee when requested in writing to do so by the shareholders of
record of not less than 10% of the Fund's outstanding shares.
For so long as the Fund's plan described in the section captioned
"Service Plan" remains in effect, the Trustees of the Fund who are not
"interested persons" of the Fund, as defined in the Act, will be selected
and nominated by the Trustees who are not "interested persons" of the Fund.
The "non-interested" Trustees and Mr. Feldman are also trustees of
Dreyfus BASIC U.S. Government Money Market Fund, Dreyfus California
Intermediate Municipal Bond Fund, Dreyfus Connecticut Intermediate
Municipal Bond Fund, Dreyfus Massachusetts Intermediate Municipal Bond
Fund, Dreyfus New Jersey Intermediate Municipal Bond Fund, Dreyfus
Pennsylvania Municipal Bond Fund and Dreyfus Strategic Investing, and
directors of Dreyfus BASIC Money Market Fund, Inc., Dreyfus Strategic
Governments Income, Inc. and (except Mr. Rudman) FN Network Tax Free Money
Market Fund, Inc. Messrs. Feldman, Rose and Vanocur are also directors of
Dreyfus New Jersey Municipal Bond Fund, Inc., managing general partners of
Dreyfus Strategic Growth, L.P. and Dreyfus Strategic World Investing, L.P.,
and trustees of Dreyfus Florida Intermediate Municipal Bond Fund, Dreyfus
New York Insured Tax Exempt Bond Fund and Dreyfus Investors GNMA Fund,
Dreyfus 100% U.S. Treasury Intermediate Term Fund, Dreyfus 100% U.S.
Treasury Long Term Fund, Dreyfus 100% U.S. Treasury Money Market Fund,
Dreyfus 100% U.S. Treasury Short Term Fund. Mr. Feldman is also a director
of Dreyfus Edison Electric Index Fund, Inc., Dreyfus Life and Annuity Index
Fund, Inc., Peoples Index Fund, Inc., Peoples S&P MidCap Index Fund, Inc
and Premier Global Investing. Mr. Rudman is also a trustee of Dreyfus Cash
Management, Dreyfus Government Cash Management, Dreyfus Municipal Cash
Management, Dreyfus New York Municipal Cash Management Plus, Dreyfus Tax
Exempt Cash Management, Dreyfus Treasury Cash Management and Dreyfus
Treasury Prime Cash Management and a directors of Dreyfus Cash Management
Plus, Inc.
The Fund does not pay any remuneration to its officers and Trustees
other than fees and expenses to Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totalled $18,353 for the fiscal year ended October 31,
1993 for such Trustees as a group.
Officers of the Fund
BARBARA L. KENWORTHY, President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
MARK N. JACOBS, Vice President. Secretary and Deputy General Counsel of
the Manager and an officer of other investment companies advised or
administered by the Manager.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President--Mutual Fund
Accounting of the Manager and an officer of other investment companies
advised or administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
DANIEL C. MACLEAN, Secretary. Vice President and General Counsel of the
Manager, Secretary of the Distributor and an officer of other
investment companies advised or administered by the Manager.
A. THOMAS SMITH III, Assistant Secretary. Since August 1991, Assistant
General Counsel of the Manager. From January 1989 to August 1991,
Senior Associate with Willkie Farr & Gallagher, and from January 1986
to December 1988, Staff Attorney in the Chief Counsel's Office of the
U.S. Securities and Exchange Commission, Division of Investment
Management.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Manager, the Distributor and other investment companies advised or
administered by the Manager.
JAMES M. WINDELS, Controller. Senior Accounting Manager in the Fund
Accounting Department of the Manager and an officer of other
investment companies advised or administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's outstanding shares of beneficial interest on December 22, 1993.
The following persons also are officers and/or directors of the
Manager: Julian M. Smerling, Vice Chairman of the Board of Directors;
Joseph S. DiMartino, President, Chief Operating Officer and a Director;
Alan M. Eisner, Vice President and Chief Financial Officer; David W. Burke,
Vice President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Elie M. Genadry, Vice President--Institutional Sales; Peter A.
Santoriello, Vice President; Robert A. Schmidt, Vice President; Kirk V.
Stumpp, Vice President--New Product Development; Philip L. Toia, Vice
President; Katherine C. Wickham, Assistant Vice President--Human Resources;
Maurice Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman,
Lawrence M. Greene, Abigail Q. McCarthy and David B. Truman, directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated September 11, 1986, as amended, with the
Fund, which is subject to annual approval by (i) the Fund's Board of
Trustees or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in either event
the continuance also is approved by a majority of the Trustees who are not
"interested persons" (as defined in the Act) of the Fund or the Manager, by
vote cast in person at a meeting called for the purpose of voting on such
approval. The Agreement was approved by shareholders on June 25, 1992,
and was last approved by the Board of Trustees, including a majority of the
Trustees who are not "interested persons" of any party to the Agreement, at
a meeting held on August 11, 1993. The Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board of Trustees or by vote of
the holders of a majority of the Fund's shares or, upon not less than 90
days' notice, by the Manager. The Agreement will terminate automatically
in the event of its assignment (as defined in the Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Trustees. The Manager is responsible for investment decisions,
and provides the Fund with Investment Officers who are authorized by the
Board of Trustees to execute purchases and sales of securities. The Fund's
Investment Officers are Barbara L. Kenworthy and Wolodymyr Wronskyj. The
Manager also maintains a research department with a professional staff of
portfolio managers and securities analysts who provide research services
for the Fund as well as for other funds advised by the Manager. All
purchases and sales are reported for the Trustees' review at the meeting
subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, loan commitment fees,
dividends and interest paid on securities sold short, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of maintaining
the Fund's existence, costs of independent pricing services, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and meetings and
any extraordinary expenses. The Fund bears certain Servicing expenses in
accordance with the Service Plan and also bears the costs of preparing and
printing prospectuses and statements of additional information and costs
associated with implementing and operating such Plan. See "Service Plan."
The Manager pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities, and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services. The
Manager also may make such advertising and promotional expenditures, using
its own resources, as it from time to time deems appropriate.
As compensation for its services, the Fund has agreed to pay the
Manager a monthly management fee at the annual rate of .60 of 1% of the
value of the Fund's average daily net assets. The management fees
chargeable for the fiscal years ended October 31, 1991, 1992 and 1993
amounted to $285,314, $545,396 and $1,536,141, respectively; however, no
management fee was paid by the Fund in 1991 and the fees for fiscal 1992
and 1993 were reduced by $363,819 and $213,144, respectively, resulting in
a net fee of $181,577 in fiscal 1992 and $1,322,997 in fiscal 1993,
pursuant to various undertakings in effect.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed the expense limit of any state having jurisdiction over the Fund,
the Fund may deduct from the payment to be made to the Manager under the
Agreement, or the Manager will bear, such excess expense to the extent
required by state law. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the case may be,
on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 A.M. and 4:00 P.M., New York time, on
any business day that the Transfer Agent and the New York Stock Exchange
are open. Such purchases will be credited to the shareholder's Fund
account on the next bank business day. To qualify to use Dreyfus
TeleTransfer, payments for purchase of Fund shares must be drawn on, and
redemption proceeds paid to, the same bank and account as is designated on
the Account Application or Optional Services Form on file. If the proceeds
of a particular redemption are to be wired to an account at any other bank,
the request must be in writing and signature-guaranteed. See "Redemption
of Fund Shares--TeleTransfer Privilege."
Sales Loads. The scale of sales loads applies to purchases made by
any "purchaser," which term includes an individual and/or spouse purchasing
securities for his, her or their own account or for the account of any
minor children, or a trustee or other fiduciary purchasing securities for a
single trust estate or a single fiduciary account (including a pension,
profit-sharing or other employee benefit trust created pursuant to a plan
qualified under Section 401 of the Code) although more than one beneficiary
is involved; or a group of accounts established by or on behalf of the
employees of an employer or affiliated employers pursuant to an employee
benefit plan or other program (including accounts established pursuant to
Sections 403(b), 408(k), and 457 of the Code); or an organized group which
has been in existence for more than six months, provided that it is not
organized for the purpose of buying redeemable securities of a registered
investment company and provided that the purchases are made through a
central administration or a single dealer, or by other means which result
in economy of sales effort or expense.
Offering Price
The method of computing the offering price for individual sales
aggregating less than $100,000, based upon the price in effect at the close
of business on October 31, 1993, is as follows:
NET ASSET VALUE and redemption price per share $15.36
Sales load, 3.0 percent of offering price
(approximately 3.1 percent of net asset value
per share) .48
Offering price to public . . . . . . . . . . . $15.84
SERVICE PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Service
Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the Act, provides, among other things, that an investment
company may bear expenses of distributing its shares only pursuant to a
plan adopted in accordance with the Rule. Because some or all of the fees
paid for advertising or marketing the Fund's shares and the fees paid to
the Distributor and to certain financial institutions (which may include
banks) securities dealers, and other financial industry professionals
(collectively "Service Agents") could be deemed to be payment of
distribution expenses, the Fund's Board of Trustees has adopted such a plan
(the "Plan"). The Fund's Board of Trustees believes that there is a
reasonable likelihood that the Plan will benefit the Fund and its
shareholders. In some states, banks or other financial institutions
effecting transactions in Fund shares may be required to register as
dealers pursuant to state law.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Board of Trustees for its review. In addition, the Plan provides that it
may not be amended to increase materially the costs which the Fund may bear
for distribution pursuant to the Plan without shareholder approval and that
other material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who are not "interested persons" (as defined
in the Act) of the Fund and have no direct or indirect financial interest
in the operation of the Plan or in the related service agreements, by vote
cast in person at a meeting called for the purpose of considering such
amendments. The Plan and the related service agreements are subject to
annual approval by such vote of the Trustees cast in person at a meeting
called for the purpose of voting on the Plan. The Plan was last approved
by shareholders on August 31, 1988 and by the Board of Trustees at a
meeting held on August 11, 1993. The Plan may be terminated at any time by
vote of a majority of the Trustees who are not "interested persons" and
have no direct or indirect financial interest in the operation of the Plan
or in any of the related service agreements or by vote of a majority of the
Fund's shares. Any service agreement may be terminated without penalty, at
any time, by such vote of the Trustees, or, upon not more than 60 days'
written notice to the Service Agent, by vote of the holders of a majority
of the Fund's shares, or, upon 15 days' written notice, by the Distributor.
Each service agreement will terminate automatically in the event of its
assignment (as defined in the Act).
During the fiscal year ended October 31, 1993, the total amount
chargeable to the Fund under the Plan was $694,724, of which $640,059 was
charged for advertising, marketing and servicing the Fund's shares and
$54,665 was charged for preparing, printing and distributing prospectuses
and statements of additional information and operating the Plan. Pursuant
to undertakings in effect, the amount chargeable to the Fund pursuant to
the Plan was reduced by $399,526, resulting in a net fee of $295,198.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal is specifically requested. Redemption proceeds will be on
deposit in the investor's account in an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or part in securities or other assets of the Fund in case of an emergency
or any time a cash distribution would impair the liquidity of the Fund to
the detriment of the existing shareholders. In such event, the securities
would be valued in the same manner as the Fund's portfolio is valued. If
the recipient sold such securities, brokerage charges would be incurred.
Suspension of Redemption. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of
its net asset value is not reasonably practicable, or (c) for such other
periods as the Securities and Exchange Commission by order may permit to
protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Exchange Privilege. Shares of other funds purchased by exchange will
be purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the applicable sales
load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales load,
and additional shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein as
"Purchased Shares") may be exchanged for shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds the maximum sales load
that could have been imposed in connection with the Purchased Shares (at
the time the Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account number.
To use this Privilege, an investor or the investor's Service Agent
acting on his behalf must give exchange instructions to the Transfer Agent
in writing, by wire or by telephone. Telephone exchanges may be made only
if the appropriate "YES" box has been checked on the Account Application or
a separate signed Optional Services Form is on file with the Transfer
Agent. By using this Privilege, the investor authorizes the Transfer Agent
to act on telephonic, telegraphic or written exchange instructions from any
person representing himself or herself to be the investor or a
representative of the investor's Service Agent, and reasonably believed by
the Transfer Agent to be genuine. Telephone exchanges may be subject to
limitations as to the amount involved or the number of telephone exchanges
permitted. Shares issued in certificate form are not eligible for
telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in Corporate Plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value
of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Automatic-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of another fund in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under "Exchange
Privilege." Investors may modify or cancel this Privilege at any time by
writing to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02040-9671. Enrollment in or modification or cancellation of this
Privilege is effective three business days following such notification. An
investor will be notified if his account falls below the amount designated
under this Privilege; an investor's account will fall to zero unless
additional investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA accounts,
but not from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Optional Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Dreyfus Auto-
Exchange Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. An Automatic Withdrawal Plan may be established by completing
the appropriate application available from the Distributor. There is a
service charge of $.50 for each withdrawal check. Automatic Withdrawal may
be terminated at any time by the investor, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep Privilege. Dreyfus Dividend Sweep Privilege
allows investors to invest on the payment date their dividends or dividends
and capital gain distributions, if any, from the Fund in shares of another
fund in the Dreyfus Family of Funds of which the investor is a shareholder.
Shares of other funds purchased pursuant to this Privilege will be
purchased on the basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of other funds that
are offered without sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of other funds sold with
a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds the maximum sales load
charged by the fund from which dividends or distributions are being swept,
without giving effect to any reduced loads, the difference will be
deducted.
D. Distributions paid by a fund may be invested in shares
of other funds that impose a contingent deferred sales charge ("CDSC") and
the applicable CDSC, if any, will be imposed upon redemption of such
shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit sharing plans, including a 401(k) Salary Reduction Plan. In
addition, the Fund makes available Keogh Plans, IRAs, (including SEP-IRAs
and IRA "Rollover Accounts") and 403(b)(7) Plans. Plan support services
are also available. For details, please contact Dreyfus Group Retirement
Plans, a division of the Distributor, by calling toll free 1-800-358-5566.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity which acts as custodian may charge a fee for Keogh Plans,
403(b)(7) Plans or IRAs, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Such purchases will be
effective when payments received by the Transfer Agent are converted into
Federal Funds. Purchases for these plans may not be made in advance of
receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans, and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs, and 403(b)(7)
Plans with only one participant is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. Portfolio securities, including
covered call options written by the Fund, are valued at the last sale price
on the securities exchange or national securities market on which such
securities primarily are traded. Securities not listed on an exchange or
national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except in the case of open short positions where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Market quotations for foreign securities in foreign currencies
are translated into U.S. dollars at the prevailing rates of exchange. Any
securities or other assets for which recent market quotations are not
readily available are valued at fair value as determined in good faith by
the Board of Trustees. Expenses and fees, including the management fee,
are accrued daily and taken into account for the purpose of determining the
net asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund qualified as a "regulated investment
company" under the Code for fiscal year ended October 31, 1993 and the Fund
intends to continue to so qualify, if such qualification is in the best
interests of its shareholders. As a regulated investment company, the Fund
will pay no Federal income tax on net investment income and net realized
capital gains to the extent that such income and gains are distributed to
shareholders in accordance with applicable provisions of the Code. To
qualify as a regulated investment company, the Fund must distribute at
least 90% of its net income (consisting of net investment income and net
short-term capital gain) to its shareholders, must derive less than 30% of
its annual gross income from gain on the sale of securities held for less
than three months, and must meet certain asset diversification and other
requirements. Accordingly, the Fund may be restricted in the selling of
securities held for less than three months, and in the utilization of
certain of the investment techniques described in the Prospectus under
"Description of the Fund - Investment Techniques." The Code, however,
allows the Fund to net certain offsetting positions, making it easier for
the Fund to satisfy the 30% test. The term "regulated investment company"
does not imply the supervision of management or investment practices or
policies by any government agency.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the aggregate net asset value of his shares
below the cost of his investment. Such a distribution would be a return on
investment in an economic sense, although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of the Fund
for six months or less and has received a capital gain distribution with
respect to such shares, any loss incurred on the sale of such shares will
be treated as long-term capital loss to the extent of the capital gain
distribution received.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains or losses. However, a portion of the gain or
loss realized from the disposition of non-U.S. dollar denominated
securities (including debt instruments, certain financial forwards, futures
and options, and certain preferred stock) may be treated as ordinary income
or loss under Section 988 of the Code. In addition, all or a portion of
the gain realized from the disposition of certain market discount bonds
will be treated as ordinary income under Section 1276. Finally, all or a
portion of the gain realized from engaging in "conversion transactions" may
be treated as ordinary income under Section 1258. "Conversion
transactions" are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce capital
gains, or transactions described in Treasury regulations to be issued in
the future.
Under Section 1256 of the Code, gain or loss realized by the Fund from
certain financial futures or forward contracts and certain options
transactions (other than those taxed under Section 988 of the Code) will be
treated as 60% long-term capital gain or loss and 40% short-term capital
gain or loss. Gain or loss will arise upon exercise or lapse of such
futures, forwards or options as well as from closing transactions. In
addition, any such futures, forward contracts or options remaining
unexercised at the end of the Fund's taxable year will be treated as sold
for their then fair market value, resulting in additional gain or loss to
the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving certain futures,
forwards or options may be considered, for tax purposes, to constitute
"straddles." "Straddles" are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of "straddles" is
governed by Sections 1092 and 1258 of the Code, which, in certain
circumstances, overrides or modifies the provisions of Sections 988 and
1256. As such, all or a portion of any short or long-term capital gain
from certain "straddle" transactions may be recharacterized to ordinary
income.
If the Fund were treated as entering into "straddles" by reason of its
engaging in futures, forwards or options transactions, such "straddles"
would be characterized as "mixed straddles" if the futures, forwards, or
options comprising a part of such "straddles" were governed by Section 1256
of the Code. The Fund may make one or more elections with respect to
"mixed straddles." If no election is made, to the extent the straddle
rules apply to positions established by the Fund, losses realized by the
Fund will be deferred to the extent of unrealized gain in any offsetting
positions. Moreover, as a result of the straddle and conversion
transaction rules, short-term capital loss on straddle positions may be
recharacterized as long-term capital loss, and long-term capital gain may
be recharacterized as short-term capital gain or ordinary income.
Investment by the Fund in securities issued or acquired at a discount
or providing for deferred interest or for payment of interest in the form
of additional obligations could, under special tax rules, affect the
amount, timing and character or distributions to shareholders. For
example, the Fund could be required to take into account annually a portion
of the discount (or deemed discount) at which such securities were issued
and to distribute such portion in order to maintain its qualification as a
regulated investment company. In such case, the Fund may have to dispose
of securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.
PORTFOLIO TRANSACTIONS
The Manager supervises the placement of orders on behalf of the Fund
for the purchase or sale of portfolio securities. Allocation of brokerage
transactions, including their frequency, is made in the best judgment of
the Manager and in a manner deemed fair and reasonable to shareholders.
The primary consideration is prompt execution of orders at the most
favorable net price. Subject to this consideration, the brokers selected
include those that supplement the Manager's research facilities with
statistical data, investment information, economic facts and opinions.
Information so received is in addition to and not in lieu of services
required to be performed by the Manager and the Manager's fee is not
reduced as a consequence of the receipt of such supplemental information.
Such information may be useful to the Manager in serving both the Fund and
other funds it manages and, conversely, supplemental information obtained
by the placement of business of other clients may be useful to the Manager
in carrying out its obligation to the Fund. Brokers also are selected
because of their ability to handle special executions such as are involved
in large block trades or broad distributions, provided the primary
consideration is met. Large block trades may, in certain cases, result
from two or more funds managed by the Manager being engaged simultaneously
in the purchase or sale of the same security. Certain of the Fund's
transactions in securities of foreign issuers may not benefit from the
negotiated commission rates available to the Fund for transactions in
securities of domestic issuers. The Fund's portfolio turnover rate for the
fiscal year ended October 31, 1993 was 118.38%. Portfolio turnover may
vary from year to year, as well as within a year. It is anticipated that
in any fiscal year, the turnover rate should not generally exceed 150%;
however, in periods in which extraordinary market conditions prevail, the
Manager will not be deterred from changing investment strategy as rapidly
as needed, in which case higher turnover rates can be anticipated. High
turnover rates are likely to result in comparatively greater brokerage
expenses. The overall reasonableness of brokerage commissions paid is
evaluated by the Manager based upon its knowledge of available information
as to the general level of commissions paid by other institutional
investors for comparable services.
In connection with its portfolio securities transactions for the
fiscal years ended October 31, 1991, 1992 and 1993, no brokerage
commissions were paid by the Fund. Gross spreads and concessions on
principal transactions which, where determinable, amounted to $82,500,
$652,895 and $629,615 for fiscal 1991, 1992 and 1993, respectively, none of
which was paid to the Distributor.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
The Fund's current yield for the 30-day period ended October 31, 1993
was 6.08%. The Fund's net yield for this same period was 5.87%. See
"Management of the Fund" in the Prospectus. Current yield is computed
pursuant to a formula which operates as follows: The amount of the Fund's
expenses accrued for the 30-day period (net of reimbursements) is
subtracted from the amount of the dividends and interest earned (computed
in accordance with regulatory requirements) by the Fund during the period.
That result is then divided by the product of: (a) the average daily
number of shares outstanding during the period that were entitled to
receive dividends, and (b) the maximum offering price per share on the last
day of the period less any undistributed earned income per share reasonably
expected to be declared as a dividend shortly thereafter. The quotient is
then added to 1, and that sum is raised to the 6th power, after which 1 is
subtracted. The current yield is then arrived at by multiplying the result
by 2.
The Fund's average annual total return for the 1, 5 and 7.079 year
periods ended October 31, 1993 was 14.43%, 11.99% and 11.05%, respectively.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result.
Total return is calculated by subtracting the amount of the Fund's
maximum offering price per share at the beginning of a stated period from
the net asset value per share at the end of the period (after giving effect
to the reinvestment of dividends and distributions during the period), and
dividing the result by the maximum offering price per share at the
beginning of the period. Total return also may be calculated based on the
net asset value per share at the beginning of the period instead of the
maximum offering price per share at the beginning of the period. In such
cases, the calculation would not reflect the deduction of the sales load
which, if reflected, would reduce the performance quoted. The Fund's total
return for the period October 3, 1986 to October 31, 1993, based on maximum
offering price per share, was 109.98%. Based on net asset value per share,
the Fund's total return was 116.51% for this period.
Comparative performance may be used from time to time in advertising
the Fund's shares, including data from Lipper Analytical Services, Inc.,
Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial
Average, Money Magazine, Morningstar, Inc. and other industry publications.
From time to time, the Fund may compare its performance against inflation
with the performance of other instruments against inflation, such as short-
term Treasury Bills (which are direct obligations of the U.S. Government)
and FDIC-insured bank money market accounts. In addition, advertising for
the Fund may indicate that investors may consider diversifying their
investment portfolios in order to seek protection of the value of their
assets against inflation.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic or financial conditions, development
and/or events. The Fund's advertising materials also may refer to the
integration of the world's securities markets, discuss the investment
opportunities available worldwide and mention the increasing importance of
an investment strategy including foreign investments. From time to time
advertising materials for the Fund also may refer to Morningstar ratings
and related analyses supporting the ratings.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Shares are of one class and have equal rights as to
dividends and in liquidation. Fund shares have no preemptive, subscription
or conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
acts as custodian of the Fund's assets. The Shareholder Services Group,
Inc., a subsidiary of First Data Corporation, P.O. Box 9671, Providence,
Rhode Island 02940-9671, acts as the Fund's transfer and dividend
disbursing agent. Neither The Bank of New York nor The Shareholder
Services Group, Inc. has any part in determining the investment policies of
the Fund or which securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York 10004-
2696, as counsel for the Fund, has rendered its opinion as to certain legal
matters regarding the due authorization and valid issuance of the shares of
beneficial interest being sold pursuant to the Fund's Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of certain ratings assigned by Standard & Poor's
Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch
Investors Service, Inc. ("Fitch") and Duff & Phelps, Inc. ("Duff"):
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds in
higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default,
and are dependent upon favorable business, financial and economic
conditions to meet timely payments of principal. In the event of adverse
business, financial or economic conditions, they are not likely to have the
capacity to pay interest and repay principal.
S&P's letter ratings may be modified by the addition of a plus (+) or
minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Rating
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category.
The modifier 1 indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of a rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations in
a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because
of economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment.
Considerable variability in risk during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial
protection factors fluctuate according to industry conditions or company
fortunes. Overall quality may move up or down frequently within the
category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating
within this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such
bonds may be in default or have considerable uncertainty as to timely
payment of interest, preferred dividends and/or principal. Protection
factors are narrow and risk can be substantial with unfavorable economic or
industry conditions and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating
category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by
ample asset protection. Risk factors are minor.
DREYFUS STRATEGIC INCOME OCTOBER 31, 1993
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF INVESTMENTS OCTOBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
BONDS AND NOTES--95.4% AMOUNT VALUE
---------------------- ----------- ------------
<C> <S> <C> <C>
AEROSPACE--4.7% Boeing, Deb.,
6 7/8%, 2043........... $ 5,000,000 $ 4,906,580
Lockheed, Deb.,
7 7/8%, 2023........... 6,000,000 6,346,278
McDonnell Douglas,
Notes:
8 1/4%, 2000............ 1,680,000 1,783,557
9 1/4%, 2002............ 4,000,000 4,447,916
------------
17,484,331
------------
BANKING--7.8% Banque Paribas, Sub.
Notes,
8.35%, 2007............ 5,550,000 6,418,325
Barclays North American
Capital, Capital Notes
(Gtd. by Barclays Bank
PLC),
10 1/2%, 2017.......... 1,000,000 1,220,230
First Chicago, Sub.
Notes,
11 1/4%, 2001.......... 3,500,000 4,549,517
Fleet Financial Group,
Sub. Notes,
8 1/8%, 2004........... 6,000,000 6,790,710
Kansallis-Osake-Pankki,
Sub. Notes,
9 3/4%, 1998........... 6,000,000 7,014,516
KeyCorp, Sub. Notes,
8%, 2004............... 2,000,000 2,277,738
Republic New York, Sub.
Notes,
7 7/8%, 2001........... 1,000,000 1,133,454
------------
29,404,490
------------
CHEMICALS--.6% E. I. du Pont de Nemours
and Co., Deb.,
8 1/4%, 2022........... 2,000,000 2,286,440
------------
CONSUMER--10.8% AMR, Deb.,
9%, 2012............... 2,000,000 2,171,656
B.A.T. Capital, Notes
(Gtd. by B.A.T.
Industries PLC),
7 1/4%, 1999........... 4,000,000 (a) 4,284,000
News America Holdings
(Gtd. by News):
Sr. Deb.:
9 1/4%, 2013............ 5,000,000 5,750,000
8 1/4%, 2018............ 2,000,000 2,100,000
Sr. Notes,
9 1/8%, 1999........... 3,000,000 3,423,750
Qantas Airways, Sr.
Notes,
7 1/2%, 2003........... 5,000,000 (a) 5,061,500
Rogers Cablesystems, Sr.
Secured Second Priority
Deb.,
10 1/8%, 2012.......... 5,000,000 5,700,000
Time Warner
Entertainment:
Sr. Deb.,
8 3/8%, 2023........... 8,000,000 8,600,000
Sr. Notes,
8 7/8%, 2012........... 2,000,000 2,251,200
United Air Lines, Deb.,
9 1/8%, 2012........... 1,000,000 1,079,499
------------
40,421,605
------------
</TABLE>
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
--------------------------- ----------- ------------
<C> <S> <C> <C>
FINANCE--13.1% Chrysler Financial,
Notes,
6 5/8%, 2000........... $10,000,000 $ 10,349,030
Commercial Credit, Deb.,
10%, 2009.............. 1,000,000 1,336,799
Ford Motor Credit,
Medium-Term Notes,
4%, 1998............... 5,000,000 (b) 5,000,000
Goldman Sachs Group,
Notes,
7.80%, 2002............ 2,000,000 (a) 2,190,000
Great Western Financial,
Notes,
6 3/8%, 2000........... 5,000,000 5,095,830
KfW International
Finance, Notes
(Gtd. by KfW
International),
7%, 2013............... 5,000,000 5,272,225
McDonnell Douglas
Finance, Medium-Term
Notes, 9.90%, 2000..... 2,000,000 2,209,960
Merrill Lynch & Co., Sr.
Notes,
8.40%, 2019............ 10,000,000 11,828,280
United States Leasing
International,
Medium-Term Notes,
Ser. A, 9.88%, 2001.... 5,000,000 6,083,500
------------
49,365,624
------------
INDUSTRIAL--3.7% Aktiebolaget SKF, Sr.
Notes,
7 7/8%, 1999........... 2,000,000 (a) 2,116,212
Bowater, Deb.,
9 1/2%, 2012........... 5,000,000 5,812,030
Harnischfeger
Industries, Deb.,
8.90%, 2022............ 1,000,000 1,228,292
MCI Communications, Sr.
Deb.,
8 1/4%, 2023........... 1,000,000 1,135,275
Waste Management, Deb.,
8 3/4%, 2018........... 3,000,000 3,581,922
------------
13,873,731
------------
INSURANCE--5.8% Aetna Life and Casualty,
Deb.,
6 3/4%, 2013........... 5,000,000 4,892,585
NAC Re, Notes,
8%, 1999............... 2,000,000 2,176,526
NWNL Cos., Notes,
6 5/8%, 2003........... 5,000,000 5,030,080
SunAmerica:
Deb., 9.95%, 2012...... 3,000,000 3,776,070
Notes, 9%, 1999........ 5,000,000 5,703,255
------------
21,578,516
------------
OIL AND GAS--2.8% Atlantic Richfield,
Deb.,
9%, 2021............... 1,000,000 1,256,880
Maxus Energy:
Notes,
9 1/2%, 2003.......... 2,000,000 2,052,500
Sinking Fund Deb.,
11 1/4%, 2013......... 1,245,000 1,316,588
</TABLE>
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
--------------------------- ----------- ------------
<C> <S> <C> <C>
OIL AND GAS (CONTINUED) Occidental Petroleum,
Sr. Deb.,
11 3/4%, 2011.......... $ 1,000,000 $ 1,179,492
Pennzoil, Deb.,
10 1/4%, 2005.......... 1,000,000 1,269,518
Texas Gas Transmission,
Notes,
9 5/8%, 1997........... 1,000,000 1,107,500
Transcontinental Gas
Pipe Line, Sinking Fund
Deb.,
9 1/8%, 2017........... 1,000,000 1,062,500
Triton Energy, Sr. Sub.
Notes,
Zero Coupon, 1997...... 2,000,000 1,410,000
------------
10,654,978
------------
UTILITIES--14.3% Cleveland Electric
Illuminating, First
Mortgage,
7 3/8%, 2003........... 4,000,000 4,131,312
Commonwealth Edison,
First Mortgage,
Ser. 88, 8 3/8%, 2023.. 7,000,000 7,649,817
Dayton Power and Light,
First Mortgage,
7 7/8%, 2024........... 3,000,000 3,287,409
Detroit Edison, Secured
Medium-Term Notes,
Ser. E, 6.36%, 2000.... 5,000,000 5,160,500
El Paso Natural Gas,
Deb.,
8 5/8%, 2022........... 1,000,000 1,179,058
GTE:
Deb.,
7.83%, 2023........... 5,000,000 5,409,135
Sinking Fund Deb.,
10 3/4%, 2017......... 500,000 602,388
GTE North, First
Mortgage,
8 1/2%, 2031........... 1,000,000 1,189,349
Long Island Lighting,
Deb.:
11 3/4%, 1994.......... 500,000 535,683
8.90%, 2019............ 2,000,000 2,208,730
Niagara Mohawk Power,
Secured Facility Bonds,
8.77%, 2018............ 990,000 1,097,048
North Atlantic Energy,
First Mortgage,
Ser. A, 9.05%, 2002.... 2,000,000 2,090,000
Public Service Electric
and Gas, First and
Refunding Mortgage,
Ser. SS, 7%, 2024...... 5,000,000 4,950,000
Tele-Communications, Sr.
Deb.:
9 7/8%, 2022........... 3,000,000 3,921,720
8 3/4%, 2023........... 2,000,000 2,313,006
9 1/4%, 2023........... 5,000,000 6,036,720
Texas Utilities Mining,
Sr. Notes,
7%, 2003............... 2,000,000 (a) 2,058,600
------------
53,820,475
------------
</TABLE>
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
--------------------------- ----------- ------------
<C> <S> <C> <C>
FOREIGN--18.0% Banco Rio de la Plata
S.A., Cl. lll
Negotiable Obligations,
8 1/2%, 1998........... $ 3,000,000 (a) $ 3,045,000
CEMEX, Notes,
8 7/8%, 1998........... 5,000,000 (a) 5,225,000
Compania Naviera Perez
S.A.C.F.I.M.F.A.,
Euro Medium-Term Notes,
8 3/8%, 1998........... 5,000,000 (a) 5,050,000
French Treasury Bonds,
9%, 1995............... 5,080,440 (c) 5,281,117
German Government Unity
Bond,
8%, 2002............... 1,783,061 (d) 2,016,998
Hydro-Quebec, Deb. (Gtd.
by Province of Quebec),
Ser. GW, 9 3/4%, 2018.. 1,500,000 1,857,960
Iberdrola International
B.V., Notes (Gtd. by
Iberdrola, S.A.),
7 1/8%, 2003........... 8,500,000 (a) 8,979,400
Nacional Financiera,
S.N.C., Notes,
5 7/8%, 1998........... 5,000,000 4,806,250
Norsk Hydro A.S., Deb.,
7 3/4%, 2023........... 5,000,000 5,379,580
Province of British
Columbia, Deb.,
Ser. BCCG-1, 7 3/4%,
2003................... 1,515,726 (e) 1,569,382
Province of
Newfoundland, Sinking
Fund Deb.,
10%, 2020.............. 1,000,000 1,319,600
Province of Nova Scotia,
Deb.,
8 3/4%, 2022........... 2,000,000 2,389,280
Swedish Export Credit,
Deb.,
9 7/8%, 2038........... 1,500,000 1,807,731
Telefonica de Argentina
SA, Notes,
8 3/8%, 2000........... 5,000,000 (a) 5,037,500
Telstra, Notes,
6 1/2%, 2003........... 5,000,000 (a) 5,089,000
Tolmex, S.A. de C.V.,
Notes (Gtd. by Empresas
Tolteca de Mexico, S.A.
de C.V. and Cegusa,
S.A.),
8 3/8%, 2003........... 1,500,000 1,507,500
United Mexican States,
Notes,
8 1/2%, 2002........... 7,000,000 7,328,671
------------
67,689,969
------------
OTHER--.5% GPA Holland B.V.,
Medium-Term Notes
(Gtd. by GPA Group
PLC),
Ser. B, 9.06%, 1999.... 1,000,000 (a) 735,000
Rural Electric
Cooperative Grantor
Trust Ctfs. (Soyland),
9.70%, 2017............ 1,000,000 1,191,499
------------
1,926,499
------------
</TABLE>
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
--------------------------- ----------- ------------
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCIES-- Federal Home Loan
13.3% Mortage Corp.,
Multiclass Mortgage
Participation Ctfs.:
Ser. 1350, Cl. 1350-K,
7 1/2%, 2007......... $ 4,000,000 $ 4,180,000
Ser. 1480, Cl. 1480-VA,
7 1/2%, 2013
(Interest Only
Obligation)............ (f) 3,223,495
Ser. 1318, Cl. 1318-K,
7 1/2%, 2018
(Interest Only
Obligation)............ (g) 2,948,563
Ser. 1166, Cl. 1166-PG,
8%, 2020............... 5,000,000 5,258,850
Federal National Mortage
Association, Real
Estate Mortgage
Investment Conduit
Trust, Pass-Through
Ctfs. (Collateralized
by FNMA Pass-Through
Ctfs.):
Ser. 1992-136, Cl.
136-PD,
6%, 2016............. 4,240,000 4,293,000
Ser. 1993-168, Cl. 168-
DA,
7%, 2023 (Interest Only
Obligation)............ (h) 2,185,787
U.S. Treasury Coupon
Strips,
Zero Coupon, 2/15/2010. 25,000,000 (i) 8,931,975
U.S. Treasury Principal
Strips:
Zero Coupon, 2/15/2020. 50,000,000 (i) 9,001,550
Zero Coupon, 5/15/2020.. 55,000,000 (i) 9,754,085
------------
49,777,305
------------
TOTAL BONDS AND NOTES
(cost $342,476,151).... $358,283,963
============
SHORT-TERM INVESTMENTS--4.4%
TIME DEPOSIT; Chemical Bank (London),
2 7/8%, 11/1/1993 (cost
$16,625,000)........... $16,625,000 $ 16,625,000
============
TOTAL INVESTMENTS (cost $359,101,151)....................... 99.8% $374,908,963
=========== ============
CASH AND RECEIVABLES (NET).................................. .2% $ 550,430
=========== ============
NET ASSETS.................................................. 100.0% $375,459,393
=========== ============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At
October 31, 1993, these securities amounted to $48,871,212 or 13.0%
of net assets.
(b) Variable rate security-interest rate subject to periodic change.
(c) Denominated in French Francs.
(d) Denominated in German Deutsche Marks.
(e) Denominated in Canadian Dollars.
(f) Notional face $19,536,333.
(g) Notional face $21,444,093.
(h) Notional face $4,285,857.
(i) Held by the custodian in a segregated account as collateral for open
short positions.
See notes to financial statements.
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF SECURITIES SOLD SHORT OCTOBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<C> <S> <C> <C>
U.S. Treasury
Notes,
5 3/4%,
8/15/2003
(proceeds
$20,446,875).. $20,000,000 $20,481,250
===========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1993
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $359,101,151)--see statement.................. $374,908,963
Cash................................................. 818,278
Receivable from broker for proceeds on securities
sold short.......................................... 20,446,875
Interest receivable.................................. 6,762,969
Receivable for shares of Beneficial Interest
subscribed.......................................... 200,341
Prepaid expenses..................................... 45,967
------------
403,183,393
LIABILITIES:
Due to The Dreyfus Corporation....................... $ 192,144
Securities sold short, at value
(proceeds $20,446,875)--see statement............... 20,481,250
Payable for investment securities purchased.......... 6,615,240
Payable for shares of Beneficial Interest redeemed... 217,845
Accrued expenses..................................... 217,521 27,724,000
----------- ------------
NET ASSETS............................................ $375,459,393
============
REPRESENTED BY:
Paid-in capital...................................... $350,472,786
Accumulated undistributed net realized gain on
investments......................................... 9,213,170
Accumulated net unrealized appreciation on
investments--Note 4(b).............................. 15,773,437
------------
NET ASSETS at value applicable to 24,451,774
outstanding shares of Beneficial Interest, equivalent
to $15.36 per share (unlimited number of $.001 par
value shares authorized)............................. $375,459,393
============
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1993
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME....................................... $19,628,474
EXPENSES:
Management fee--Note 3(a)............................. $1,536,141
Shareholder servicing costs--Note 3(b)................ 927,718
Registration fees..................................... 107,364
Prospectus and shareholders' reports--Note 3(b)....... 59,553
Professional fees..................................... 48,180
Custodian fees........................................ 48,022
Trustees' fees and expenses--Note 3(c)................ 18,353
Miscellaneous......................................... 17,679
----------
2,763,010
Less--reduction in management fee and shareholder
servicing costs due to undertakings--Note 3(a,b)..... 612,670
----------
TOTAL EXPENSES...................................... 2,150,340
-----------
INVESTMENT INCOME--NET.............................. 17,478,134
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 4(a):
Long transactions (including options transactions).... $9,117,697
Short sale transactions............................... (79,716)
Net realized (loss) on forward currency exchange
contracts--Note 4(a);
Short transactions.................................... (55,899)
Net realized gain on financial futures--Note 4(a)..... 194,920
----------
NET REALIZED GAIN..................................... 9,177,002
Net unrealized appreciation on investments and
securities sold short................................ 13,890,150
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS..... 23,067,152
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS... $40,545,286
===========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS STRATEGIC INCOME
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------
1992 1993
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................ $ 6,888,597 $ 17,478,134
Net realized gain on investments.................. 1,545,052 9,177,002
Net unrealized appreciation on investments for the
year............................................. 943,674 13,890,150
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS....................................... 9,377,323 40,545,286
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net............................ (6,900,371) (17,466,360)
Net realized gain on investments.................. -- (832,582)
------------ ------------
TOTAL DIVIDENDS................................... (6,900,371) (18,298,942)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold..................... 107,503,826 235,916,143
Dividends reinvested.............................. 5,056,521 13,989,576
Cost of shares redeemed........................... (22,572,465) (46,493,330)
------------ ------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST
TRANSACTIONS..................................... 89,987,882 203,412,389
------------ ------------
TOTAL INCREASE IN NET ASSETS.................... 92,464,834 225,658,733
NET ASSETS:
Beginning of year................................. 57,335,826 149,800,660
------------ ------------
End of year [including distributions in excess of
investment
income--net; ($11,774) in 1992].................. $149,800,660 $375,459,393
============ ============
<CAPTION>
SHARES SHARES
------------ ------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................... 7,667,021 15,965,920
Shares issued for dividends reinvested............ 362,528 945,381
Shares redeemed................................... (1,612,224) (3,143,003)
------------ ------------
NET INCREASE IN SHARES OUTSTANDING.............. 6,417,325 13,768,298
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS STRATEGIC INCOME
FINANCIAL HIGHLIGHTS
Reference is made to page 2 of the Fund's Prospectus dated January 28, 1994.
See notes to financial statements.
<PAGE>
DREYFUS STRATEGIC INCOME
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the distributor of the Fund's shares.
The Distributor is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager").
(A) PORTFOLIO VALUATION: The Fund's investments (excluding short-term
investments) are valued each business day by an independent pricing
service ("Service") approved by the Board of Trustees. Investments for
which quoted bid prices in the judgment of the Service are readily
available and are representative of the bid side of the market are valued
at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the
Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio
securities) are carried at fair value as determined by the Service, based
on methods which include consideration of: yields or prices of securities
of comparable quality, coupon, maturity and type; indications as to
values from dealers; and general market conditions. Securities for which
there are no such valuations are valued at fair value as determined in
good faith under the direction of the Board of Trustees. Short-term
investments are carried at amortized cost, which approximates value.
Investments traded in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Interest income including, where applicable, amortization of discount on
investments, is recognized on the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid
monthly. 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.
On November 29, 1993, the Board of Trustees declared a cash dividend of
$.366 per share from net realized capital gain (including $.2135 per
share from short-term capital gain), payable on November 30, 1993 (ex-
dividend date), to shareholders of record as of the close of business on
November 29, 1993.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in
the best interests of its shareholders, by complying with the provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income taxes.
NOTE 2--BANK LINE OF CREDIT:
Effective February 2, 1993, in accordance with an agreement with a
bank, the Fund may borrow up to $10 million under a short-term unsecured
line of credit. Prior to February 2, 1993, in accordance with an
agreement with a bank, the Fund could borrow up to $8 million under a
short-term unsecured line of credit. Interest on borrowings is charged at
rates which are related to Federal Funds rates in effect from time to
time.
There were no borrowings during the year ended October 31, 1993.
<PAGE>
DREYFUS STRATEGIC INCOME
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 .60 of 1% of the
average daily value of the Fund's net assets and is payable monthly. The
Agreement provides for an expense reimbursement from the Manager should
the Fund's aggregate expenses, exclusive of taxes, interest on borrowings
(which, in the view of Stroock & Stroock & Lavan, counsel to the Fund,
also contemplates interest on securities sold short), brokerage and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund. The most stringent state expense limitation
applicable to the Fund presently requires reimbursement of expenses in
any full fiscal year that such expenses (exclusive of distribution
expenses and certain expenses as described above) exceed 2 1/2% of the
first $30 million, 2% of the next $70 million and 1 1/2% of the excess
over $100 million of the average value of the Fund's net assets in
accordance with California "blue sky" regulations. However, the Manager
had undertaken from November 1, 1992 through March 31, 1993 to reduce the
management fee paid by the Fund, to the extent that the Fund's aggregate
expenses (excluding certain expenses as described above) exceeded an
annual rate of .85 of 1% of the average daily value of the Fund's net
assets. The reduction in management fee, pursuant to the undertaking,
amounted to $213,144 for the year ended October 31, 1993.
The Distributor retained $5,455,782 during the year ended October 31,
1993 from commissions earned on sales of Fund shares.
(B) The Fund has adopted a Service Plan (the "Plan") pursuant to which
the Fund pays the Distributor, at an annual rate of .25 of 1% of the
value of the Fund's average daily net assets, for costs and expenses in
connection with advertising, marketing and distributing the Fund's shares
and for servicing shareholder accounts. The Distributor may make payments
to one or more Service Agents (a securities dealer, financial
institution, or other industry professional) based on the value of the
Fund's shares owned by clients of the Service Agent. The Plan also
separately provides for the Fund to bear the costs of preparing, printing
and distributing certain of the Fund's prospectuses and statements of
additional information and costs associated with implementing and
operating the Plan, not to exceed the greater of $100,000 or .005 of 1%
of the Fund's average daily net assets for any full fiscal year. During
the year ended October 31, 1993, $694,724 was charged to the Fund
pursuant to the Plan, of which $399,526 was waived pursuant to an
undertaking by the Manager.
(C) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each
trustee who is not an "affiliated person" receives an annual fee of
$2,500 and an attendance fee of $250 per meeting.
NOTE 4--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and
sales of investment securities and securities sold short, excluding
short-term securities, forward currency exchange contracts and options
transactions, during the year ended October 31, 1993:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Long transactions................................. $488,848,272 $292,256,935
Short sale transactions........................... 115,339,972 135,707,131
------------ ------------
Total........................................... $604,188,244 $427,964,066
============ ============
</TABLE>
<PAGE>
DREYFUS STRATEGIC INCOME
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund is engaged in short-selling which obligates the Fund to
replace the security borrowed by purchasing the security at current
market value. The Fund would incur a loss if the price of the security
increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. The Fund would realize a gain if the
price of the security declines between those dates. Until the Fund
replaces the borrowed security, the Fund will maintain daily, a
segregated account with a broker and custodian, of cash and/or U.S.
Government securities sufficient to cover its short position. Securities
sold short at October 31, 1993 and their related market values and
proceeds are set forth in the statement of Securities Sold Short.
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. At October 31, 1993, there were no forward currency exchange
contracts outstanding.
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures
require the Fund to "mark to market" on a daily basis, which reflects the
change in market value of the contract at the close of each day's
trading. Accordingly, variation margin payments are made or received to
reflect daily unrealized gains or losses. When the contracts are closed,
the Fund recognizes a realized gain or loss. These investments require
initial margin deposits which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits
with a custodian, is determined by the exchange or Board of Trade on
which the contract is traded and is subject to change. At October 31,
1993, there were no financial futures contracts outstanding.
(B) At October 31, 1993, accumulated net unrealized appreciation on
investments was $15,773,437, consisting of $18,152,271 gross unrealized
appreciation and $2,378,834 gross unrealized depreciation.
At October 31, 1993, 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 STRATEGIC INCOME
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS STRATEGIC INCOME
We have audited the accompanying statement of assets and liabilities of
Dreyfus Strategic Income, including the statements of investments and
securities sold short, as of October 31, 1993, and the related statement
of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and financial
highlights for each of the years indicated therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1993 by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Strategic Income at October 31, 1993, 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
New York, New York
December 10, 1993
DREYFUS STRATEGIC INCOME
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information - For the period from
October 1, 1986 (commencement of operations) to
October 31, 1986 and for each of the seven years in the
period ended October 31, 1993.
Included in Part B of the Registration Statement:
Statement of Investments--October 31, 1993.
Statement of Securities Sold Short--Year ended
October 31, 1993.
Statement of Assets and Liabilities--October 31, 1993.
Statement of Operations--Year ended October 31, 1993.
Statement of Changes in Net Assets--For the years ended
October 31, 1992 and 1993.
Notes to Financial Statements.
Report of Ernst & Young, Independent Auditors, dated
December 10, 1993.
Schedules No. I through VII and other Financial Statement information, for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Registrant's Amended and Restated Agreement and Declaration of
Trust is incorporated by reference to Exhibit (1) of Post Effective
No. 8 to the Registration Statement filed on Form N-1A filed on
December 29, 1992.
(2) Registrant's By-Laws, as amended, are incorporated by reference
to Exhibit (2) of Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on October 2, 1986.
(4) Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1, filed
on October 2, 1986.
(5) Management Agreement, as amended is incorporated by reference to
Exhibit (5) of Post-Effective Amendment No. 9 to the Registration
Statement filed on Form N-1A filed on December 29, 1992.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6) of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1, filed on October 2, 1986.
(6)(b) Forms of Service Agreement are incorporated by reference to
Exhibit 6(b) and (6)(c) of Post-Effective Amendment No. 2
to the Registration Statement on Form N-1A, filed on
February 25, 1988.
(8)(a) Amended and Restated Custody Agreement is incorporated by
reference to Exhibit 8(a) of Post-Effective Amendment No. 6 to
the Registration Statement on Form N-1A, filed on March 1, 1991.
(8)(b) Sub-Custodian Agreements are incorporated by reference to Exhibit
8(b) of Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A, filed on March 1, 1991.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1, filed on October 2, 1986.
(11) Consent of Independent Auditors.
(15) Service Plan is incorporated by reference to Exhibit (15) of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1, filed on October 2, 1986.
(16) Schedules of Computation of Performance Data.
Item 24. Financial Statements and Exhibits. - List (continued)
Other Exhibits
(a) Powers of Attorney. Additional Powers of Attorney are
incorporated by reference to Other Exhibits (a) of
Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A, filed on December 31, 1991.
(b) Certificate of Secretary is incorporated by reference
to Other Exhibits (b) of Post-Effective Amendment No. 2
to the Registration Statement on Form N-1A, filed on
February 25, 1988. An additional Certificate of
Secretary is enclosed herein.
Item 25. Persons Controlled by or under Common Control with Registrant.
Not Applicable
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record
Title of Class Holders as of December 22, 1993
Beneficial Interest
(Par value $.001) 17,615
Item 27. Indemnification
The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is insured or
indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own
protection, is incorporated by reference to Item 4 of Part II of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on October 2, 1986.
Reference is also made to the Distribution Agreement attached as
Exhibit (6) thereto.
Item 28. Business and Other Connections of Investment Adviser.
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser, manager and distributor for
sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other
investment companies. Dreyfus Service Corporation, a wholly-
owned subsidiary of Dreyfus, serves primarily as distributor of
shares of investment companies sponsored by Dreyfus and of
other investment companies for which Dreyfus acts as investment
adviser, sub-investment adviser or administrator. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Director of Independence One Investment
Services, Inc.
Division of Michigan National Corp.
27777 Inkster Road
Farmington Hills, Michigan 48018;
Past Chairman of the Board of Trustees of
Skillman Foundation
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.
767 Fifth Avenue
New York, New York 10153
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board, President and Investment
Chairman of the Board and Officer:
Chief Executive Officer The Dreyfus Leverage Fund, Inc.++;
Chairman of the Board and Investment Officer:
The Dreyfus Fund Incorporated++;
HOWARD STEIN Dreyfus New Leaders Fund, Inc.++;
(cont'd) The Dreyfus Third Century Fund, Inc.++;
Chairman of the Board:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund++++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Land Development Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
The Dreyfus Trust Company (N.J.)++;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
President, Managing General Partner and
Investment Officer:
The Dreyfus Convertible Securities Fund,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Managing General Partner:
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Strategic World Investing, L.P.++;
Director, President and Investment Officer:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director and President:
Dreyfus Life Insurance Company*;
Director and Investment Officer:
Dreyfus Growth and Income Fund, Inc.++;
President:
Dreyfus Consumer Life Insurance Company*;
President and Investment Officer:
Dreyfus Growth Allocation Fund, Inc.++;
Director:
Avnet, Inc.**;
Comstock Partners Strategy Fund, Inc.***;
Dreyfus A Bonds Plus, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
The Dreyfus Fund International
Limited++++++;
Dreyfus Global Investing, Inc.++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
HOWARD STEIN Dreyfus Money Market Instruments, Inc.++;
(cont'd) Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus Partnership Management, Inc.*;
Dreyfus Personal Management, Inc.**;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
Dreyfus Strategic Governments Income,
Inc.++;
The Dreyfus Trust Company++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
FN Network Tax Free Money Market Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
World Balanced Fund++++;
Trustee and Investment Officer:
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Strategic Investing++;
Dreyfus Variable Investment Fund++;
Trustee:
Corporate Property Investors
New York, New York;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term Treasury
Fund++;
Dreyfus Strategic Income++
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Consumer Life Insurance Company*;
Dreyfus Land Development Corporation*;
Dreyfus Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, Chief Operating The Dreyfus Trust Company++;
Officer and Director Director, President and Investment Officer:
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus-Lincoln, Inc.*;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Trustee, President and Investment Officer:
Dreyfus Cash Management++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Premier GNMA Fund++;
Trustee and President:
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Trustee, Vice President and Investment Officer:
Dreyfus Institutional Short Term
Treasury Fund++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director, Vice President and Investment
Officer:
Dreyfus Balanced Fund, Inc.++;
Dreyfus International Equity Fund, Inc.++;
JOSEPH S. DiMARTINO Director and Vice President:
(cont'd) Dreyfus Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
Director and Investment Officer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
The Dreyfus Convertible Securities Fund,
Inc.++;
Dreyfus Short-Term Income Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director and Corporate Member:
Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
Director:
Dreyfus Management, Inc.**;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
Trustee:
Bucknell University
Lewisburg, Pennsylvania 17837;
President and Investment Officer:
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
McDonald Money Market Fund, Inc.++;
McDonald U.S. Government Money Market
Fund, Inc.++;
President, Chief Executive Officer and
Director:
Dreyfus Personal Management, Inc.*;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Consumer Bank+;
Director Director and President:
Dreyfus Land Development Corporation*;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus America Fund++++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Management, Inc.**;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
Vice President:
The Dreyfus Convertible Securities Fund,
Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus-Lincoln, Inc.*;
Trustee:
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Investment Officer:
The Dreyfus Fund Incorporated++
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Life Insurance Company*;
The Truepenny Corporation*;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Management, Inc.**;
Dreyfus Personal Management, Inc.**;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Assistant Treasurer:
The Dreyfus Fund Incorporated++;
Controller:
Dreyfus Land Development Corporation*;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ALAN M. EISNER Director and President:
Vice President and Chief The Truepenny Corporation*;
Financial Officer Director, Vice President and Chief Financial
Officer:
Dreyfus Life Insurance Company*;
Vice President and Chief Financial Officer:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Realty Advisors, Inc.+++;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
Dreyfus Thrift & Commerce****;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*
DAVID W. BURKE Vice President and Director:
Vice President and Chief The Dreyfus Trust Company++;
Administrative Officer Formerly, President:
CBS News, a division of CBS, Inc.
524 West 57th Street
New York, New York 10019
ELIE M. GENADRY President:
Vice President - Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Executive Vice President:
Dreyfus Service Corporation*;
Senior Vice President:
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
ELIE M. GENADRY Dreyfus Edison Electric Index Fund,
(cont'd) Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Vice President:
The Dreyfus Trust Company++;
Premier California Insured Municipal
Bond Fund++;
Premier California Municipal Bond Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
Treasurer:
Pacific American Fund+++++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Personal Management, Inc.**;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
McDonald Money Market Fund, Inc.++;
McDonald Tax Exempt Money Market Fund,
Inc.++;
McDonald U.S. Government Money Market
Fund, Inc.++;
The Truepenny Corporation+;
Director:
Dreyfus America Fund++++;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Life Insurance Company*;
The Dreyfus Trust Company++;
Vice President:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
DANIEL C. MACLEAN Dreyfus California Tax Exempt Money Market
(cont'd) Fund++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
DANIEL C. MACLEAN Dreyfus Treasury Prime Cash Management++;
(cont'd) Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier California Insured Municipal
Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Secretary:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
The Dreyfus Convertible Securities Fund,
Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Investing, Inc.++;
DANIEL C. MACLEAN Dreyfus Growth Allocation Fund,
(cont'd) Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Land Development Corporation+;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
Director and Assistant Secretary:
The Dreyfus Fund International
Limited++++++
JEFFREY N. NACHMAN Vice President-Financial:
Vice President - Mutual Dreyfus A Bonds Plus, Inc.++;
Fund Accounting Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
JEFFREY N. NACHMAN Dreyfus California Tax Exempt Bond Fund,
(cont'd) Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Convertible Securities Fund,
Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
JEFFREY N. NACHMAN Dreyfus 100% U.S. Treasury Intermediate
(cont'd) Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
McDonald Money Market Fund, Inc.++;
McDonald Tax Exempt Money Market Fund,
Inc.++;
JEFFREY N. NACHMAN McDonald U.S. Government Money Market
(cont'd) Fund, Inc.++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Vice President and Treasurer:
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Global Investing, Inc.++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Growth Fund, Inc.++;
Premier California Insured Municipal
Bond Fund++;
Assistant Treasurer:
Pacific American Fund+++++
PETER A. SANTORIELLO Director, President and Investment
Vice President Officer:
Dreyfus Balanced Fund, Inc.++;
Director and President:
Dreyfus Management, Inc.**;
Vice President:
Dreyfus Personal Management, Inc.*
ROBERT H. SCHMIDT President and Director:
Vice President Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
Formerly, Chairman and Chief Executive
Officer:
Levine, Huntley, Schmidt & Beaver
250 Park Avenue
New York, New York 10017
KIRK V. STUMPP Senior Vice President and
Vice President - Director of Marketing:
New Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice President and Dreyfus Thrift & Commerce****;
Director of Fixed- The Dreyfus Consumer Bank;
Income Research Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Vice President:
Assistant Vice President - Dreyfus Consumer Life Insurance
Human Resources Company++;
Formerly, Assistant Commissioner:
Department of Parks and Recreation of the
City of New York
830 Fifth Avenue
New York, New York 10022
JOHN J. PYBURN Vice President and Treasurer:
Assistant Vice President McDonald Money Market Fund, Inc.++;
McDonald Tax Exempt Money Market Fund,
Inc.++;
McDonald U.S. Government Money Market
Fund, Inc.++;
Treasurer and Assistant Secretary:
The Dreyfus Fund International
Limited++++++;
Treasurer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund, Inc.++;
JOHN J. PYBURN Dreyfus Cash Management++;
(cont'd) Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Convertible Securities Fund,
Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
JOHN J. PYBURN Dreyfus 100% U.S. Treasury Money Market
(cont'd) Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++
MAURICE BENDRIHEM Formerly, Vice President-Financial Planning,
Controller Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019;
Treasurer:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Land Development Corporation*;
Dreyfus Life Insurance Company*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
MARK N. JACOBS Vice President:
Secretary and Deputy Dreyfus A Bonds Plus, Inc.++;
General Counsel Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
The Dreyfus Convertible Securities Fund,
Inc. ++;
Dreyfus Edison Electric Index Fund,
Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Investing, Inc.++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
MARK N. JACOBS Dreyfus New Jersey Intermediate Municipal
(cont'd) Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Director:
World Balanced Fund++++;
Director and Secretary:
Dreyfus Life Insurance Company*;
Secretary:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
MARK N. JACOBS Dreyfus Insured Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus Management, Inc.**;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Personal Management, Inc.**;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Money Market
Fund++;
MARK N. JACOBS General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Pacific American Fund+++++;
Premier California Insured Municipal
Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Convertible Securities Fund,
Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
CHRISTINE PAVALOS Dreyfus Florida Intermediate Municipal
(cont'd) Bond Fund++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Investing, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus Land Development Corporation*;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Management, Inc.**;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
CHRISTINE PAVALOS Dreyfus New York Tax Exempt Money Market
(cont'd) Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Service Corporation*;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
CHRISTINE PAVALOS General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
McDonald Money Market Fund, Inc.++;
McDonald Tax Exempt Money Market Fund,
Inc.++;
McDonald U.S. Government Money Market
Fund, Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier California Insured Municipal
Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 767 Fifth Avenue, New
York, New York 10153.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
++++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Money Market Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) The Dreyfus Fund Incorporated
21) Dreyfus Global Investing, Inc.
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth Opportunity Fund, Inc.
26) Dreyfus Institutional Money Market Fund
27) Dreyfus Institutional Short Term Treasury Fund
28) Dreyfus Insured Municipal Bond Fund, Inc.
29) Dreyfus Intermediate Municipal Bond Fund, Inc.
30) Dreyfus International Equity Fund, Inc.
31) Dreyfus Investors GNMA Fund, L.P.
32) The Dreyfus Leverage Fund, Inc.
33) Dreyfus Life and Annuity Index Fund, Inc.
34) Dreyfus Liquid Assets, Inc.
35) Dreyfus Massachusetts Intermediate Municipal Bond Fund
36) Dreyfus Massachusetts Municipal Money Market Fund
37) Dreyfus Massachusetts Tax Exempt Bond Fund
38) Dreyfus Michigan Municipal Money Market Fund, Inc.
39) Dreyfus Money Market Instruments, Inc.
40) Dreyfus Municipal Bond Fund, Inc.
41) Dreyfus Municipal Cash Management Plus
42) Dreyfus Municipal Money Market Fund, Inc.
43) Dreyfus New Jersey Intermediate Municipal Bond Fund
44) Dreyfus New Jersey Municipal Bond Fund, Inc.
45) Dreyfus New Jersey Municipal Money Market Fund, Inc.
46) Dreyfus New Leaders Fund, Inc.
47) Dreyfus New York Insured Tax Exempt Bond Fund
48) Dreyfus New York Municipal Cash Management
49) Dreyfus New York Tax Exempt Bond Fund, Inc.
50) Dreyfus New York Tax Exempt Intermediate Bond Fund
51) Dreyfus New York Tax Exempt Money Market Fund
52) Dreyfus Ohio Municipal Money Market Fund, Inc.
53) Dreyfus 100% U.S. Treasury Intermediate Term Fund, L.P.
54) Dreyfus 100% U.S. Treasury Long Term Fund, L.P.
55) Dreyfus 100% U.S. Treasury Money Market Fund, L.P.
56) Dreyfus 100% U.S. Treasury Short Term Fund, L.P.
57) Dreyfus Pennsylvania Municipal Money Market Fund
58) Dreyfus Short-Intermediate Government Fund
59) Dreyfus Short-Intermediate Municipal Bond Fund
60) Dreyfus Short-Term Income Fund, Inc.
61) Dreyfus Strategic Growth, L.P.
62) Dreyfus Strategic Investing
63) Dreyfus Strategic World Investing, L.P.
64) Dreyfus Tax Exempt Cash Management
65) The Dreyfus Third Century Fund, Inc.
66) Dreyfus Treasury Cash Management
67) Dreyfus Treasury Prime Cash Management
68) Dreyfus Variable Investment Fund
69) Dreyfus-Wilshire Target Funds, Inc.
70) Dreyfus Worldwide Dollar Money Market Fund, Inc.
71) First Prairie Cash Management
72) First Prairie Diversified Asset Fund
73) First Prairie Money Market Fund
74) First Prairie Tax Exempt Bond Fund, Inc.
75) First Prairie Tax Exempt Money Market Fund
76) First Prairie U.S. Treasury Securities Cash Management
77) FN Network Tax Free Money Market Fund, Inc.
78) General California Municipal Bond Fund, Inc.
79) General California Municipal Money Market Fund
80) General Government Securities Money Market Fund, Inc.
81) General Money Market Fund, Inc.
82) General Municipal Bond Fund, Inc.
83) General Municipal Money Market Fund, Inc.
84) General New York Municipal Bond Fund, Inc.
85) General New York Municipal Money Market Fund
86) Pacific American Fund
87) Peoples Index Fund, Inc.
88) Peoples S&P MidCap Index Fund, Inc.
89) Premier California Insured Municipal Bond Fund
90) Premier California Municipal Bond Fund
91) Premier GNMA Fund
92) Premier Growth Fund, Inc.
93) Premier Municipal Bond Fund
94) Premier New York Municipal Bond Fund
95) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Howard Stein* Chairman of the Board Trustee
and
Investment
Officer
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director None
Lawrence M. Greene* Executive Vice President and Director None
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President None
Hank Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President None
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President None
and Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Secretary
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Elie M. Genadry* President None
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
Edward Donley
Latham, NY Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Mary Rogers** Assistant Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Donald A. Nanfeldt* Executive Vice President None
Charles Cardona** Senior Vice President None
Stacy Alexander* Vice President None
Eric Almquist* Vice President None
James E. Baskin+++++++ Vice President None
Kenneth Bernstein
Boca Raton, FL Vice President-Institutional Sales None
Stephen Burke* Vice President None
Laurel A. Diedrick
Burrows*** Vice President None
Daniel L. Clawson++++ Vice President None
Michael Caraboolad
Gates Mills, OH Vice President-Institutional Sales None
Laura Caudillo++ Vice President-Institutional Sales None
Steven Faticone***** Vice-President-Institutional Sales None
William E. Findley**** Vice President None
Mary Genet***** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Institutional Sales None
Nancy Knee++++ Vice President-Institutional Sales None
Bradford Lange* Vice President-Institutional Sales None
Kathleen McIntyre
Lewis++ Vice President None
Eva Machek***** Vice President-Institutional Sales None
Mary McCabe*** Vice President-Institutional Sales None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President None
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President None
Lorianne Pinto* Vice President-Institutional Sales None
Douglas Rentschler
Grosse Point Park, MI Vice President-Institutional Sales None
Leah Ryan**** Vice President-Institutional Sales None
Emil Samman* Vice President-Institutional
Marketing None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President None
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Carolyn Warren++ Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Robert W. Stone* Executive Vice President None
Paul Allen* Executive Vice President-
National Sales None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
Wendy Holcomb++ Vice President-Sales None
William Gallagher* Vice President-Sales None
Brent Glading* Vice President-Sales None
Gerald Goz* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
_____________________________________________________
* The address of the offices so indicated is 200 Park Avenue, New
York, New York 10166
** The address of the offices so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580 California
Street,
San Francisco, California 94104.
**** The address of the offices so indicated is 3384 Peachtree Road,
Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South LaSalle
Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box 1657, Duxbury,
Massachusetts 02331.
++ The address of the offices so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick Lane,
Edgewood, Rhode Island 02905.
++++ The address of the offices so indicated is 1700 Lincoln Street,
Suite 3940, Denver, Colorado 80203.
+++++ The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117 Diamond Street,
San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box 757,
Holliston, Massachusetts 01746.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested
in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of its latest annual report to shareholders, upon request
and without charge, beginning with the annual report to
Shareholders for the fiscal year ended October 31, 1993.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this registration statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 20th day of January, 1994.
DREYFUS STRATEGIC INCOME
BY: /s/Barbara L. Kenworthy*
BARBARA L. KENWORTHY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
and on the date indicated.
Signatures Title Date
___________________________ _____________________________ ___________
/s/Barbara L. Kenworthy * President (Principal Executive 1/20/94
Barbara L. Kenworthy Officer) and Trustee
/s/John J. Pyburn * Treasurer (Principal Financial 1/20/94
John J. Pyburn Officer)
/s/Diane P. Dunst * Controller (Principal Accounting 1/20/94
Diane P. Dunst Officer)
/s/David P. Feldman * Trustee 1/20/94
David P. Feldman
/s/Howard Stein * Trustee 1/20/94
Howard Stein
/s/Jay I. Meltzer * Trustee 1/20/94
Jay I. Meltzer
/s/Daniel Rose * Trustee 1/20/94
Daniel Rose
/s/Warren B. Rudman * Trustee 1/20/94
Warren B. Rudman
/s/Sander Vanocur * Trustee 1/20/94
Sander Vanocur
BY: ______________________________ *
A. Thomas Smith, III
Attorney-in-Fact
POWER OF ATTORNEY
Howard Stein, whose signature appears below, hereby
constitutes and appoints Daniel C. Maclean, Mark N. Jacobs, Robert I. Frenkel,
Steven F. Newman and A. Thomas Smith, III, and each of them, with full power
to act without the other, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement of Dreyfus Strategic
Income (including post-effective amendments and amendments thereto), and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Trustee December 9, 1993
Howard Stein
POWER OF ATTORNEY
Daniel Rose, whose signature appears below, hereby constitutes
and appoints Daniel C. Maclean, Mark N. Jacobs, Robert I. Frenkel, Steven F.
Newman and A. Thomas Smith, III, and each of them, with full power to act
without the other, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities (until revoked in writing) to sign any and
all amendments to the Registration Statement of Dreyfus Strategic Income
(including post-effective amendments and amendments thereto), and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Trustee December 9, 1993
Daniel Rose
POWER OF ATTORNEY
Jay I. Meltzer, whose signature appears below, hereby
constitutes and appoints Daniel C. Maclean, Mark N. Jacobs, Robert I. Frenkel,
Steven F. Newman and A. Thomas Smith, III, and each of them, with full power
to act without the other, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement of Dreyfus Strategic
Income (including post-effective amendments and amendments thereto), and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Trustee December 9, 1993
Jay I. Meltzer
POWER OF ATTORNEY
Warren B. Rudman, whose signature appears below, hereby
constitutes and appoints Daniel C. Maclean, Mark N. Jacobs, Robert I. Frenkel,
Steven F. Newman and A. Thomas Smith, III, and each of them, with full power
to act without the other, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement of Dreyfus Strategic
Income (including post-effective amendments and amendments thereto), and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Trustee December 9, 1993
Warren B. Rudman
POWER OF ATTORNEY
David P. Feldman, whose signature appears below, hereby
constitutes and appoints Daniel C. Maclean, Mark N. Jacobs, Robert I. Frenkel,
Steven F. Newman and A. Thomas Smith, III, and each of them, with full power
to act without the other, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement of Dreyfus Strategic
Income (including post-effective amendments and amendments thereto), and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Trustee December 9, 1993
David P. Feldman
POWER OF ATTORNEY
Diane Dunst, whose signature appears below, hereby constitutes
and appoints Daniel C. Maclean, Mark N. Jacobs, Robert I. Frenkel, Steven F.
Newman and A. Thomas Smith, III, and each of them, with full power to act
without the other, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities (until revoked in writing) to sign any and
all amendments to the Registration Statement of Dreyfus Strategic Income
(including post-effective amendments and amendments thereto), and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Trustee December 9, 1993
Diane Dunst
POWER OF ATTORNEY
Sander Vanocur, whose signature appears below, hereby
constitutes and appoints Daniel C. Maclean, Mark N. Jacobs, Robert I. Frenkel,
Steven F. Newman and A. Thomas Smith, III, and each of them, with full power
to act without the other, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement of Dreyfus Strategic
Income (including post-effective amendments and amendments thereto), and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Trustee December 9, 1993
Sander Vanocur
DREYFUS STRATEGIC INCOME
Secretary's Certificate
The undersigned, Christine Pavalos, Assistant Secretary of
Dreyfus Strategic Income (the "Fund") hereby certifies that set forth below
is a copy of the resolutions adopted by the Fund's Board of Trustees:
RESOLVED, that the Registration Statement and any and
all amendments and supplements thereto, may be signed by any one of Daniel
C. Maclean, Mark N. Jacobs, Steven F. Newman, Robert I. Frenkel and A.
Thomas Smith, III as the attorney-in-fact for the proper officers of the
Fund, with full power of substitution and resubstitution; and that the
appointment of each of such persons as such attorney-in-fact hereby is
authorized and approved; and that such attorneys-in-fact, and each of them,
shall have full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection with such
Registration Statement and any and all amendments and supplements thereto,
as fully to all intents and purposes as the officer, for whom he is acting
as attorney-in-fact, might or could do in person.
IN WITNESS THEREOF, I have hereunto signed my name and affixed
the seal of the Fund on January 13, 1994.
Christine Pavalos
Assistant Secretary
INDEX OF EXHIBITS
Page
(11) Consent of Ernst & Young,
Independent Auditors . . . . . . . . . . . . . . . .
(16) Schedules of Calculations
of Performance Data. . . . . . . . . . . . . . . . .
Other Exhibit
(a) Power of Attorney. . . . . . . . . . . . . . . . . .
(b) Certificate of Secretary . . . . . . . . . . . . . .
(SEAL)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report dated
December 10, 1993, in this Registration Statement (Form N-1A 33-7172) of
Dreyfus Strategic Income.
ERNST & YOUNG
New York, New York
January 14, 1994
DREYFUS STRATEGIC INCOME
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from inception through 10/31/93
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 10/31/93 of a $1,000
hypothetical investment made on 10/3/86 (inception)
7.079
1000( 1 + T ) = 2,099.79
T = 11.05%
==========
DREYFUS STRATEGIC INCOME
TOTAL RETURN COMPUTATION
Total return computation from inception through 10/31/93
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 15.36 + ( 15.36 x 0.9043 ) ] - 13.51
--------------------------------------------
13.51
T = 116.51%
========
DREYFUS STRATEGIC INCOME
SEC 30 DAY YIELD CALCULATION
INCOME 10/2/93 - 10/31/93 $2,125,481.34
EXPENSES 10/2/93 - 10/31/93 $244,027.51
Average Shares Entitled to Dividend
10/2/93 - 10/31/93 23,743,817.065
Maximum Offering Price per share 10/31/93 $15.84
x = 2,125,481.34 - 244,027.51
----------------------------------------
23,743,817.065 x 15.84
x = 0.005003
6
30 Day yield = 2 [( 1 + x) -1]
6
30 Day yield = 2 [ ( 1 + 0.005003 ) -1]
30 Day yield = 6.08%
=================
DREYFUS STRATEGIC INCOME
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 10/31/92 through 10/31/93
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 10/31/93 of a $1,000
hypothetical investment made on 10/31/92
1.00
1000( 1 + T ) = 1,144.26
T = 14.43%
============
DREYFUS STRATEGIC INCOME
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 10/31/88 through 10/31/93
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 10/31/93 of a $1,000
hypothetical investment made on 10/31/88
5.00
1000( 1 + T ) = 1,761.67
T = 11.99%
============
DREYFUS STRATEGIC INCOME
TOTAL RETURN COMPUTATION
Total return computation from inception through 10/31/93
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = Maximum Offering Price at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 15.36 + ( 15.36 x 0.9043 ) ] - 13.93
--------------------------------------------
13.93
T = 109.98%
========
