Semi-Annual Report
Premier Stategic
Growth Fund
June 30, 1996
<PAGE>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Letter to Shareholders
Dear Shareholder:
We are pleased to report that for the six-month fiscal period ended June
30, 1996, total returns for the Premier Strategic Growth Fund were17.86% for
the Fund's Class A shares,18.13% for Class B, 18.13% for Class C and 18.66%
for Class R shares.* These results compare with a total return of 10.09% for
the Standard & Poor's 500 Composite Stock Price Index over the same time
period.**
In the following sections of this letter, we will discuss the current
economic and securities market environment, and then report on the
composition of the portfolio and the sectors that are now being emphasized.
THE ECONOMY
The U.S. economy is rebounding in 1996 following its midcycle growth
slowdown of last year. Yet overall corporate profit growth is slowing this
year. Although inflation remains low, faster economic growth has reignited
fears of higher inflation in the future. This has pushed bond yields higher
and built expectations for a Federal Reserve Board tightening in coming
months. This is the sixth year of expansion for this business cycle, which we
believe will prove a long one.
Economic growth has accelerated since year-end. The first quarter's 2.2%
real growth in Gross Domestic Product included a rebound in demand which
depleted inventories. Even stronger second quarter growth is apparent, led by
manufacturers' attempts to rebuild inventories. In addition, steady job
creation continues to support growth in consumer incomes and spending. As
yet, there are few indications of economic cooling. Some previously strong
capital goods sectors may now be slowing, but overall economic growth is
broadening to more industries. Despite better economic performance this year
than last, profit growth may have peaked last year.
Non-oil price inflation has remained minimal this year, although surging
oil prices boosted overall inflation temporarily this spring. Nevertheless,
signs of a faster economic pace have renewed fears of higher inflation in the
future, especially coming from upward pressure on wages. Thus, bond yields
have risen substantially this year. Short-term market rates are also higher
on expectations for Federal Reserve tightening in coming months. So far,
long-term rates have risen much more than short-term rates, forcing the
"yield curve" to steepen. A steep yield curve is usually supportive of
sustained growth in the real economy.
As we look forward, the question arises whether the higher interest rates
already in place and those in prospect will effectively cool the economy. At
present, however, any advance signs of an eventual cooling off in the economy
are hard to discern. The preoccupation at present is with the economy's
impressive strength, and the problems that it could create.
MARKET OVERVIEW
The broad trend of the stock market was strongly upward during the six
months under review, reaching a peak in May. However, there were many
crosscurrents at work. Not all stock groups benefitted equally. The blue
chips in the Dow Jones Industrial Average enjoyed solid advances for the six
months, as did the broader market as represented by the Nasdaq Composite
Index and the Standard & Poor's 500. However, as spring turned into summer,
technology stocks began to lag and small capitalization stocks were unable to
maintain the very fast growth pace of earlier months.
From time to time, unexpected signs of economic strength, particularly
employment and unemployment numbers, jolted the equity markets with the
specter of renewed inflation. Especially in the latter part of the half-year,
concern over inflation and higher interest rates restrained market
performance in a number of industry categories.
Profits, always a major element in stock performance, continued strong
for a good part of the period. However, fear of rising labor costs and
intensified competition at home and abroad have cast some shadows over the
profit outlook. This has been balanced, however, by the very large sum of
money that continues to be invested in equity mutual funds, much of it from
people planning for their retirement.
PORTFOLIO FOCUS
The portfolio has been managed in the belief that interest rates will
remain in a narrow trading range and may decline somewhat if economic
momentum slows later this summer. With a portfolio of stocks showing strong
fundamental revenue and earnings growth, we remain fully invested based on
our positive investment outlook.
The sectors in which the portfolio is overweighted, compared to the S&P
500 Index weightings, are health care, technology and consumer growth stocks.
The portfolio is underweighted in finance, utilities and energy. Foreign
holdings remain at a very small weighting.
As shown in the Statement of Investments, on a later page in this report,
our major areas of concentration are as follows: medical technology (Fuisz
Technologies, ONCOR, Chromatics Color Science International, MacroChem,
Cytoclonal Pharmaceutics), new consumer products (Ultrafem), auto parts
(Motorcar Parts & Accessories), entertainment (Casino Data Systems, Quintel
Entertainment, Metromedia International, Cinar Films), telephone industry
restructuring (Amnex), medical services (Complete Management, Core, HemaCare,
Pharmaceutical Product Development), electronic network technology (Cisco
Systems, Mercury Interactive) and niche technology (Voice Control Systems,
Advanced Photonix, Personal Computer Products).
As stated in our previous report six months ago, selections such as these
may not be conventional. However, we believe that these and other stocks in
the portfolio, chosen after careful research, have capacity for further
growth.
It is a pleasure and an honor to serve your investment needs.
Sincerely,
(logo signature)
Michael L. Schonberg
Portfolio Manager
July 10, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid. These figures do not reflect the maximum sales load for Class A shares
or the contingent deferred sales charge for Class B and Class C shares. The
inception date for Class B, C and R shares was January 3, 1996.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. Unlike
the Fund, which can utilize a broad range of investment techniques, the
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance composed of only equity
securities.
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Investments June 30, 1996 (Unaudited)
Common Stocks-122.9% Shares Value
------------- ------------
<S> <C> <C>
Commercial Services-5.1% Katz Digital Technologies....................... 80,000 $ 460,000
Quintel Entertainment........................... 205,600 2,158,800
------------
2,618,800
------------
Consumer
Non-Durables-7.9% Ultrafem........................................ 200,000 3,950,000
Vista 2000...................................(a) 240,000 134,880
------------
4,084,880
------------
Consumer Services-14.0% Alma International...........................(a) 200,000 600,000
Casino Data Systems..........................(a) 135,000 2,041,875
Checkfree....................................... 40,000 795,000
Cinar Films, Cl. B...........................(a) 90,000 1,957,500
Metromedia International Group...............(a) 70,000 857,500
Wiztec Solutions................................ 90,000 945,000
------------
7,196,875
------------
Electronic
Technology-16.4% Advanced Photonix, Cl. A.....................(a) 450,000 1,715,625
cisco Systems................................(a) 30,000 1,698,750
Cree Research................................(a) 80,000 1,200,000
Personal Computer Products...................(a) 1,275,000 2,908,594
Voice Control Systems........................(a) 100,000 912,500
------------
8,435,469
------------
Finance-2.8% ASTA Funding.................................... 196,000 1,421,000
------------
Health Services-21.6% Complete Management............................. 227,000 2,922,625
Comprehensive Care.........................(a,b) 132,560 845,070
Core.........................................(a) 165,000 2,402,813
Heartport....................................... 14,000 423,500
HemaCare.....................................(a) 425,000 1,593,750
Northstar Health Services....................(a) 225,000 450,000
OncorMed.....................................(a) 275,000 1,925,000
Ongard Systems...............................(a) 125,000 593,750
------------
11,156,508
------------
Health Technology-24.3% Avigen.......................................... 85,000 595,000
Cytoclonal Pharmaceutics........................ 50,000 206,250
Cytoclonal Pharmaceutics, Cl. D (Warrants)...... 200,000 137,500
Cytogen......................................(a) 983 8,908
EuroMed......................................... 45,000 281,250
Fuisz Technologies.............................. 180,000 3,420,000
MacroChem....................................(a) 212,500 1,062,500
NeoPharm........................................ 150,000 1,875,000
NeoPharm (Warrants)............................. 55,000 309,375
Oncor........................................(a) 430,000 2,365,000
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Investments (continued) June 30, 1996 (Unaudited)
Common Stocks (continued) Shares Value
------------- -------------
Health Technology
(continued) Teva Pharmaceutical Industries, A.D.R........... 35,000 $ 1,325,625
VIMRx Pharmaceuticals........................(a) 200,000 937,500
------------
12,523,908
------------
Industrial Services-1.7% Commodore Applied Technologies.................. 130,000 723,125
Commodore Applied Technologies (Warrants)....... 100,000 175,000
------------
898,125
------------
Process Industries-4.9% Chromatics Color Science International.......(a) 240,000 1,725,000
Ocal............................................ 150,000 825,000
------------
2,550,000
------------
Producer
Manufacturing-8.2% Motorcar Parts & Accessories.................(a) 155,000 2,441,250
Raychem......................................... 25,000 1,796,875
------------
4,238,125
------------
Technology Services-11.8% Mercury Interactive..........................(a) 160,000 2,200,000
Microware Systems............................... 100,000 1,800,000
Romac International............................. 15,000 382,500
Systems of Excellence........................(a) 400,000 1,262,500
Verilink........................................ 16,900 430,950
------------
6,075,950
------------
Utilities-4.2% AMNEX........................................(a) 600,000 2,175,000
------------
TOTAL INVESTMENTS (cost $58,488,798)................................................ 122.9% $ 63,374,640
======= ============
LIABILITIES, LESS CASH AND RECEIVABLES.............................................. (22.9%) $(11,801,531)
======= ============
NET ASSETS.......................................................................... 100.0% $ 51,573,109
======= ============
</TABLE>
<TABLE>
<CAPTION>
Notes to Statement of Investments:
(a) Non-income producing.
(b) Security restricted as to public resale. Investment in restricted
security, with an aggregate value of $845,070, represents approximately
1.6% of net assets;
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation*
------ ------------ --------- --------------- ---------------
<S> <C> <C> <C> <C>
Comprehensive Care............. 11/30/95 $7.54 1.6% 15% discount
to market value
*The valuation of this security has been determined in good faith under
the direction of the Board of Trustees.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $58,488,798)-see statement...................................... $63,374,640
Cash.................................................................... 251,588
Receivable for investment securities sold............................... 937,000
Receivable for shares of Beneficial Interest subscribed................. 52,252
Dividends and interest receivable....................................... 810
Prepaid expenses........................................................ 14,255
-----------
64,630,545
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 50,799
Due to Distributor...................................................... 1,521
Bank loans payable-Note 2............................................... 11,855,000
Payable for investment securities purchased............................. 905,285
Loan commitment fees and interest payable............................... 140,576
Payable for shares of Beneficial Interest redeemed...................... 12,449
Accrued expenses........................................................ 91,806 13,057,436
----------- -----------
NET ASSETS.................................................................. $51,573,109
===========
REPRESENTED BY:
Paid-in capital......................................................... $45,922,769
Accumulated investment (loss)-net....................................... (683,845)
Accumulated undistributed net realized gain on investments.............. 1,448,343
Accumulated net unrealized appreciation on investments-Note 4........... 4,885,842
-----------
NET ASSETS at value......................................................... $51,573,109
===========
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 1,154,150
===========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 10,086
===========
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 27
===========
Class R Shares
(unlimited number of $.001 par value shares authorized)............... 420
===========
NET ASSET VALUE per share:
Class A Shares
($51,108,353 / 1,154,150 shares)...................................... $44.28
=======
Class B Shares
($444,975 / 10,086 shares)............................................ $44.12
=======
Class C Shares
($1,181.29 / 26.774 shares)........................................... $44.12
=======
Class R Shares
($18,600 / 419.710 shares)............................................ $44.32
=======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Operations six months ended June 30, 1996 (Unaudited)
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest.............................................................. $ 52,826
Cash dividends (net of $1,319 foreign taxes withheld at source)....... 23,002
------------
Total Income.................................................... $ 75,828
Expenses:
Management fee-Note 3(a).............................................. 201,672
Interest expense-Note 2............................................... 331,373
Shareholder servicing costs-Note 3(c)................................. 114,564
Professional fees..................................................... 54,550
Trustees' fees and expenses-Note 3(d)................................. 17,043
Loan commitment fees-Note 2........................................... 15,799
Prospectus and shareholders' reports.................................. 10,935
Registration fees..................................................... 5,609
Custodian fees-Note 3(c).............................................. 5,372
Distribution fees-Note 3(b)........................................... 313
Miscellaneous......................................................... 2,443
------------
Total Expenses.................................................. 759,673
------------
INVESTMENT (LOSS)-NET........................................... (683,845)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 4................................. $1,448,344
Net unrealized appreciation on investments.............................. 7,866,297
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 9,314,641
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $8,630,796
===========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Cash Flows six months ended June 30, 1996 (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Dividends received...................................................... $ 39,015
Interest received....................................................... 2,822
Interest, loan commitment fees and dividends on securities sold short paid (249,505)
Operating expenses paid................................................. (225,244)
Paid to The Dreyfus Corporation......................................... (195,546) $ (628,458)
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of portfolio securities....................................... (37,097,346)
Proceeds from sales of portfolio securities............................. 41,143,583 4,046,237
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Fund shares sold.......................................... 1,953,857
Payments for Fund shares redeemed....................................... (11,341,576)
Net repayment of bank loans............................................. 4,835,000 (4,552,719)
----------- -----------
Decrease in cash...................................................... (1,134,940)
Cash at beginning of period........................................... 1,386,528
-----------
Cash at end of period................................................. $ 251,588
============
RECONCILIATION OF NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS TO NET CASH USED BY OPERATING ACTIVITIES:
Net Increase in Net Assets Resulting From Operations.................... $ 8,630,796
Adjustments to reconcile net decrease in net assets resulting from operations
to net cash used by operating activities:
Decrease in interest receivable................................... 11,516
Decrease in dividends receivable.................................. 16,013
Increase in interest, loan commitment fees and dividends on securities
sold short payable.............................................. 97,667
Decrease in accrued operating expenses............................ (5,901)
Increase in prepaid expenses...................................... (8,827)
Increase in due to The Dreyfus Corporation........................ 6,439
Net interest sold on investments.................................. (61,520)
Net realized gain on investments.................................. (1,448,344)
Net unrealized appreciation on investments........................ (7,866,297)
-----------
Net Cash Used by Operating Activities....................................... $ (628,458)
=============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Changes in Net Assets
Year Ended Six Months Ended
December 31, June 30, 1996
1995 (Unaudited)
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income (loss)_net............................................ $ 1,143,455 $ (683,845)
Net realized gain (loss) on investments................................. (2,531,111) 1,448,344
Net unrealized appreciation (depreciation) on investments for the period (1,774,747) 7,866,297
------------ ------------
Net Increase (Decrease) In Net Assets Resulting From Operations... (3,162,403) 8,630,796
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 4,051,009 1,489,432
Class B shares........................................................ ___ 496,209
Class C shares........................................................ ___ 1,000
Class R shares........................................................ ___ 19,468
Cost of shares redeemed:
Class A shares........................................................ (47,496,495) (11,348,269)
Class B shares........................................................ ___ (1,347)
------------ ------------
(Decrease) In Net Assets From Beneficial Interest Transactions.... (43,445,486) (9,343,507)
------------ ------------
Total (Decrease) In Net Assets.................................. (46,607,889) (712,711)
NET ASSETS:
Beginning of period..................................................... 98,893,709 52,285,820
------------ ------------
End of period [including undistributed investment income-net;
$15,339,253 in 1995 and investment (loss)-net; ($683,845) in 1996].... $ 52,285,820 $ 51,573,109
============= ============
</TABLE>
<TABLE>
<CAPTION>
Shares
--------------------------------------------------------------------------------
Class A Class B Class C Class R
----------------------------- ---------------- ---------------- -----------------
Year Ended Six Months Ended Six Months Ended Six Months Ended Six Months Ended
December 31, June 30, 1996 June 30, 1996 June 30, 1996 June 30, 1996
1995 (Unaudited) (Unaudited)* (Unaudited)* (Unaudited)*
---------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE
TRANSACTIONS:
Shares sold........ 104,015 31,958 10,114 27 420
Shares redeemed.... (1,224,539) (269,413) (28) ___ ___
---------- ------------- ------------- ----------- ------------
Net Increase
(Decrease) In
Shares
Outstanding.. (1,120,524) (237,455) 10,086 27 420
=========== ======== ======== ========== =========
* From January 2, 1996 (commencement of initial offering) to June 30, 1996.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Class A Shares
-----------------------------------------------------------------------
Year Ended December 31, Six Months Ended
-------------------------------------------------- June 30, 1996
PER SHARE DATA: 1991 1992 1993 1994 1995 (Unaudited)
------ ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $27.27 $36.19 $30.63 $38.22 $39.37 $37.57
------ ------ ------ ------- ------ ------
Investment Operations:
Investment income (loss)_net.......... 2.07 1.38 2.21 .87(1) 5.37 (.55)(1)
Net realized and unrealized gain (loss)
on investments...................... 6.85 (6.94) 5.38 .28 (7.17) 7.26
------ ------ ------ ------- ------ ------
Total from Investment Operations.... 8.92 (5.56) 7.59 1.15 (1.80) 6.71
------ ------ ------ ------- ------ ------
Net asset value, end of period........ $36.19 $30.63 $38.22 $39.37 $37.57 $44.28
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)................ 32.71% (15.36%) 24.78% 3.01% (4.57%) 17.86%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average
net assets.......................... 1.50%(4) 1.50%(4) 1.59%(4) 1.46% 1.57% .76%(3)
Ratio of interest expense, loan commitment
fees and dividends on securities sold short
to average net assets............... .08% .22% .03% .16% .27% .64%(3)
Ratio of net investment income (loss) to
average net assets.................. 1.48% .83% .79% 2.17% 1.52% (1.26%)(3)
Decrease reflected in above expense ratios due
to undertaking by the Manager....... -- -- .06% -- -- --
Average commission rate paid(5)....... -- -- -- -- -- $.0548
Portfolio Turnover Rate............... 95.49% 209.38% 301.07% 269.41% 298.93% 56.61%(3)
Net Assets, end of period (000's Omitted) $61,063 $44,765 $45,397 $98,894 $52,286 $51,108
(1) Based on an average of shares outstanding at each month end.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Net of expenses reimbursed.
(5) For fiscal years beginning January 1, 1996, the Fund is required
to disclose its average commission rate paid per share for purchases
and sales of investment securities.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Class B Class C Class R
------------------- ------------------- -------------------
Six Months Ended Six Months Ended Six Months Ended
June 30, 1996 June 30, 1996 June 30, 1996
(Unaudited)(1) (Unaudited)(1) (Unaudited)(1)
------------------- ------------------- -------------------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............... $37.35 $37.35 $37.35
------ ------ ------
Investment Operations:
Investment (loss)-net.............................. (.63)(2) (.71)(2) (.66)(2)
Net realized and unrealized gain on investments.... 7.40 7.48 7.63
------ ------ ------
Total from Investment Operations................. 6.77 6.77 6.97
------ ------ ------
Net asset value, end of period..................... $44.12 $44.12 $44.32
====== ====== ======
TOTAL INVESTMENT RETURN(3)(4).......................... 18.13% 18.13% 18.66%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets(4) 1.13% 1.13% .62%
Ratio of interest expense and loan commitment fees
to average net assets(4)......................... .73% .63% .69%
Ratio of net investment (loss) to average net assets(4) (1.79%) (1.60%) (1.21%)
Portfolio Turnover Rate(4)......................... 56.61% 56.61% 56.61%
Average commission rate paid(5).................... $.0548 $.0548 $.0548
Net Assets, end of period (000's Omitted).......... $445 $1 $19
(1) From January 2, 1996 (commencement of initial offering) to June 30, 1996.
(2) Based on an average of shares outstanding at each month end.
(3) Exclusive of sales load.
(4) Not annualized.
(5) For fiscal years beginning January 1, 1996, the Fund is required to
disclose its average commission rate paid per share for purchases and
sales of investment securities.
See independent accountants' review report and notes to financial statements.
</TABLE>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1-Significant Accounting Policies:
Premier Strategic Growth Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company. The Fund's investment objective is to maximize
capital growth. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon"). Premier Mutual Fund Services, Inc. (the "Distributor") acts as
the distributor of the Fund's shares.
On December 15, 1995, the Fund's Trustees approved a change of the Fund's
name, effective January 1, 1996, from "Dreyfus Strategic Growth, L.P." to
"Premier Strategic Growth Fund". Effective on January 1, 1996, the Fund was
reorganized as a Massachusetts business trust under the name Premier
Strategic Growth Fund. Effective January 2, 1996, the Fund offers four
classes of shares_Class A, Class B, Class C and Class R. The existing class
of shares were designated as Class A. Class A shares are subject to a sales
charge imposed at the time of purchase, Class B shares are subject to a
contingent deferred sales charge imposed at the time of redemption on
redemptions made within six years of purchase, Class C shares are subject to
a contingent deferred sales charge imposed at the time of redemption on
redemptions made within one year of purchase and Class R shares are sold at
net asset value per share only to institutional investors. Other differences
between the four Classes include the services offered to and the expenses
borne by each Class and certain voting rights.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Forward currency exchange contracts are
valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
Prior to January 1, 1996 the Fund was a limited partnership and was not
required to distribute net investment income or realized capital gains to
avoid Federal income and excise taxes. Prior years' net investment income and
realized gains and losses had been allocated to shareholders and not paid, in
accordance with the limited partnership structure. This resulted in a
difference between financial reporting purposes versus Federal income tax
purposes, with respect to the treatment of such allocated net investment
income and realized gains and losses. The Fund has therefore reclassified
$21,191,878 from accumulated net realized gain on investments and $15,339,253
from accumulated undistributed investment income-net to paid-in-capital. This
amount represented the cumulative effect of such differences. Results of
operations and net assets were not effected by this reclassification.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interest of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2-Bank Line of Credit:
The Fund may borrow up to $25 million for leveraging purposes under a
short-term unsecured line of credit and participates with other
Dreyfus-managed Funds in a $100 million unsecured line of credit primarily to
be utilized for temporary or emergency purposes, including the financing of
redemptions. Interest is charged to the Fund at rates which are related to
the Federal Funds rate in effect at the time of borrowings and an additional
commitment fee is paid on the line of credit utilized for leveraging.
Outstanding borrowings under both arrangements on June 30, 1996 amounted to
$11.86 million.
The average daily amount of borrowings outstanding under both
arrangements during the six months ended June 30, 1996 was approximately
$10,368,000, with a related weighted average annualized interest rate of
6.43%. The maximum amount borrowed at any time during the six months ended
June 30, 1996 was $13.9 million.
NOTE 3-Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a Management Agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the value
of the Fund's average daily 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, brokerage, interest on borrowings
(which, in the view of Stroock & Stroock & Lavan, counsel to the Fund, also
contemplates loan commitment fees and dividends and interest accrued on
securities sold short), and extraordinary expenses, exceed the expense
limitation.
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
NOTES TO FINANCIAL STATEMENTS (Unaudited)
of any state having jurisdiction over the Fund, the Fund may deduct from
payments to be made to the Manager, or the Manager will bear the amount
of such excess to the extent required by state law. The most stringent
state expense limitation applicable to the Fund presently requires
reimbursement of expenses in any full year that such expenses (excluding
distribution expenses and certain expenses as described above) exceed 2-1\2%
of the first $30 million, 2% of the next $70 million and 1-1\2% of the excess
over $100 million of the average value of the Fund's net assets in accordance
with California "blue sky" regulations. There was no expense reimbursement
for the six months ended June 30, 1996.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $14,138 during the six months ended June 30, 1996 from commissions
earned on sales of Fund shares.
(b) Effective January 2, 1996, the Fund adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the Plan, the Fund pays
the Distributor for distributing the Fund's Class B and Class C shares at an
annual rate of .75 of 1% of the value of the average daily net assets of
Class B and Class C shares, respectively. During the six months ended June
30, 1996, $309 and $4 were charged to the Class B and Class C shares,
respectively, by the Distributor pursuant to the Plan.
(c) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A, Class B and Class C shares for provision of certain services. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents (a securities dealer, financial institution or other industry
professional) in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the six months ended June 30,
1996, $67,111, $103 and $1 were charged to the Class A, Class B and Class C
shares, respectively, by the Distributor pursuant to the Shareholder Services
Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $26,889 during the six months ended June 30, 1996.
Effective May 10, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. For the period from May
10, 1996 to June 30, 1996 $1,950 was paid to Mellon pursuant to the custody
agreement.
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4-Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the six months ended June 30, 1996,
amounted to $36,295,729 and $36,670,175, respectively.
At June 30, 1996, accumulated net unrealized appreciation on investments
was $4,885,842, consisting of $13,568,060 gross unrealized appreciation and
$8,682,218 gross unrealized depreciation.
At June 30, 1996, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Review Report of Ernst & Young LLP, Independent Accountants
Shareholders and Board of Trustees
Premier Strategic Growth Fund
We have reviewed the accompanying statement of assets and liabilities of
Premier Strategic Growth Fund, including the statement of investments, as of
June 30, 1996, and the related statements of operations, cash flows and
changes in net assets and financial highlights for the six month period ended
June 30, 1996. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
December 31, 1995 and financial highlights for each of the five years in the
period ended December 31, 1995 and in our report dated February 12, 1996, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP logo signature)
New York, New York
August 7, 1996
Premier Strategic Growth Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 038SA966
