DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this semi-annual report for the six
months ended June 30, 1997 for the Dreyfus Variable Investment Fund-Small
Company Stock Portfolio. During this time, your Portfolio provided a total
return of 9.29%, based upon net asset value per share,* compared to a total
return of 11.25% for the Portfolio's benchmark, the Russell 2500 Index.**
ECONOMIC REVIEW
Since ending its 1995 mid-cycle slowdown, the economy has sustained an
above-trend growth trajectory, slowing only briefly in the third quarter of
1996 and again in recent months. Meanwhile, the level of economic activity is
now at the point where economic resources are near full deployment. Yet price
inflation remains quiescent, boosting the purchasing power of incomes and
contributing to the best sense of economic well-being in decades. In this
environment, economic policy has been benign, allowing market interest rates
to sway within an eighteen-month trading range and corporate profits to rise
steadily. However, even while the jury is out on the inflation risks ahead,
the Federal Reserve Board (the "Fed") has again indicated a one-way bias
towards tighter future policy.
Real Gross Domestic Product growth grew an above-trend 3.1% from year-end
1995 to year-end 1996, then accelerating to more than 4.0% in the first half
of this year. However, this year's pattern shows growth concentrated into the
first quarter, when GDP surged 5.9%, while a slowdown to near 2.5% is
apparent in the second quarter. The slower near-term growth is attributable
to a lackluster retail sector, even though exports and capital spending are
gaining. A key issue is whether the absence of pent-up demand could lead to a
sluggish consumer profile and, hence, a slow GDP growth from here on. Indeed,
factors that could underpin a resumption of stronger spending are rising:
real consumer purchasing power, soaring household wealth and all-time highs
in consumer confidence. Additionally, inventories remain lean, muting the
prospect of yet slower economic growth.
Alongside evidence of a slower retail sector in the second quarter are
reports showing that unemployment fell below 5% and industrial capacity
utilization tightened towards its 1994 highs. With these developments, the
economy now is operating at a high level with little slack. Yet wage
inflation abated in the second quarter while price inflation continued to
decelerate. The absence of any troublesome sign of inflation has kept market
interest rates in a long-standing trading range. Even corporate profits
continue to surprise on the upside.
Views on the need to tighten monetary policy are divergent. There are
those who believe that inflation pressure points are just different than in
the past and others who believe the inflation cycle has been eliminated by
global factors and technology. However, by leaning towards tighter future
policy, the Fed is at least willing to err on the cautious side in the next
several months.
MARKET OVERVIEW
It doesn't get much better than the performance of common stocks for the
first half of 1997. When the closing bell rang on June 30, the Standard &
Poor's 500 showed a six-month gain of over 20%, the Dow Jones Industrial
Average was up almost 19%, the Nasdaq Composite Index had gained 11.70% and
even small capitalization stocks represented by the Russell 2000 Index were
up by 9.31%.
All these major indexes set new records repeatedly during the half-year.
However, it wasn't clear sailing, and not all sectors profited equally. As
recently as April, just after the Fed voted its latest increase in interest
rates, broad stock averages were only modestly ahead for the year. Technology
and small cap stocks were lagging the larger, better-known issues.
A turnaround began in mid-April that carried all markets to new highs.
The main propellant was the expanding yet noninflationary economy. At the
same time, corporate profits, generally speaking, showed continued strength.
Clearly, all the hard work of corporate reorganization and down-sizing in
recent years was paying off. Before each scheduled meeting of the Fed, there
was apprehension that interest rates might be boosted again. Yet the
underlying tone of the market was one of confidence and strength. No doubt
the steady influx of retirement money and other assets into mutual funds was
an important factor in the market's buoyancy.
The best performing industries in the past six months included financial
stocks, pharmaceuticals, semiconductor and computer shares and
communications. Laggards included casino gambling, heavy construction,
precious metals and electric utilities.
As the market averages advanced, an increasing number of warnings were
being issued to the investing public to remember that what goes up might come
down _ that many stocks appeared richly priced in relation to earnings
prospects. In day-to-day stock trading, however, there was little evidence by
the end of June that the cautionary advice was affecting stock prices.
PORTFOLIO FOCUS
The past six months have been volatile and trying for smaller cap stocks,
especially relative to large cap stocks. In the first three months of this
semi-annual period, small cap stocks, as measured by the Russell 2500, fell
3.35% on concerns that the Federal Reserve would embark on a tighter monetary
course in order to slow economic activity and keep inflation in check. When
those fears failed to materialize, small cap stocks put on a spirited
recovery with the Russell 2500 jumping 15.11% in the final three months of
the current reporting period.
In the meantime, large cap issues continued to perform even better. For
the six-month period ended June 30, the S&P 500 Composite Stock Price Index
climbed 20.60%*** which was considerably better than the 11.25% gain achieved
by the Russell 2500 benchmark. The performance gap over the past year has
been even greater, as the S&P advanced 34.68% for the 12 months ended June 30
compared with "only" a 20.10% rise for the Russell 2500 Index.
The performance differential between large cap and small cap stocks is
nearly unprecedented. As a result, small cap stocks are currently near the
low end of their relative valuation range compared to large cap issues. We
would not venture to say when small caps will start to do better relatively,
although a proposed cut in the capital gains tax, if enacted, could be the
catalyst for better performance. We do know, however, that low relative
valuations have historically preceded small stock rallies.
After achieving superior relative performance in the previous reporting
period and in the first eight months of its existence, the Portfolio
underperformed the Russell 2500 benchmark in the latest semi-annual period.
Regrettably, several investments that enhanced performance in 1996 have
contributed to lagging relative performance so far in 1997. In the
apparel, consumer durable and miscellaneous finance industries stocks like
Fila Holding, Harman International and AMRESCO were down in price.
We are pleased to note that your Portfolio had some notable successes in
such industries as food retail, media, insurance and electronic with winners
like General Nutrition, Evergreen Media Cl. A, CMAC Investment and Tellabs.
In addition, RCSB Financial, US Life, OrNda Healthcorp and PHH Corp. were all
acquired, or are in the process of being acquired, by other companies at
significant stock price premiums.
We remain confident that our disciplined investment process of seeking
stocks with above-average value and accelerating earnings growth should
continue to produce superior investment performance over time.
Sincerely,
[Anthony J. Galise signature logo]
Anthony J. Galise
[ James C. Wadsworth signature logo]
James C. Wadsworth
Portfolio Managers
July 15, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
The Portfolio's performance does not reflect the deduction of additional
charges imposed in connection with investing in variable annuity contracts
and variable life insurance policies.
** SOURCE: Frank Russell Company. Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Russell 2500
Index is a widely accepted measure of small cap stock performance.
*** SOURCE: LIPPER ANALYTICAL SERVICES, INC. _ Reflects the reinvestment
of income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of stock market performance.
<TABLE>
<CAPTION>
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Common Stocks_97.1% Shares Value
__________ __________
<S> <C> <C> <C>
Basic Industries_6.1% ACX Technologies....................... 3,250 (a) $ 73,125
American Buildings..................... 1,200 (a) 32,400
AptarGroup............................. 1,300 58,825
Cabot.................................. 3,400 96,475
Caraustar Industries................... 1,850 64,056
Clayton Homes.......................... 4,737 67,502
Cytec Industries....................... 2,650 (a) 99,044
Jacobs Engineering Group............... 1,400 (a) 37,625
Medusa................................. 1,550 59,481
Paragon Trade Brands................... 1,550 (a) 26,447
Quanex................................. 2,400 73,650
Sealed Air............................. 1,100 (a) 52,250
Triangle Pacific....................... 1,550 (a) 49,600
___________
790,480
___________
Capital Spending_24.4% AGCO................................... 3,700 132,969
AMETEK................................. 2,400 56,400
Adaptec................................ 2,570 (a) 89,308
Altron................................. 2,650 (a) 39,750
Analysts International................. 1,300 43,550
Atmel.................................. 3,200 (a) 89,600
CIDCO.................................. 3,400 (a) 46,750
Cognex................................. 1,950 (a) 51,675
DT Industries.......................... 1,200 42,900
Dallas Semiconductor................... 2,050 80,462
ECI Telecom............................ 2,400 71,400
ENCAD.................................. 1,700 (a) 70,550
Electroglas............................ 3,250 (a) 81,859
Electronics For Imaging................ 3,200 (a) 151,200
Elsag Bailey Process Auto, N.V......... 3,150 (a) 57,881
Glenayre Technologies.................. 3,300 (a) 54,038
Hadco.................................. 1,950 (a) 127,725
HealthCare COMPARE..................... 2,000 (a) 104,750
Hummingbird Communications............. 1,550 (a) 39,815
Ionics................................. 900 (a) 40,950
Kennametal............................. 1,950 83,850
Komag.................................. 3,800 (a) 62,225
Mutual Risk Management................. 2,633 120,789
Philip Environmental................... 9,400 (a) 149,225
Pittston Brinks Group.................. 3,150 94,500
Plantronics............................ 1,300 (a) 65,163
Regis.................................. 2,375 56,109
Reynolds & Reynolds, Cl. A............. 2,800 44,100
Rohr................................... 2,300 (a) 50,456
Silicon Valley Group................... 4,600 (a) 121,325
Sirrom Capital......................... 1,900 65,550
Sotheby's Holdings, Cl. A.............. 3,800 64,125
Sterling Commerce...................... 2,672 (a) 87,842
Sterling Software...................... 2,650 (a) 82,812
SunGuard Data Systems.................. 2,400 (a) 111,600
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Common Stocks (continued) Shares Value
___________ ___________
Capital Spending (continued) Tech Data.............................. 3,050 (a) $ 95,884
Tellabs................................ 2,500 (a) 139,687
Thiokol................................ 700 49,000
Wyle Electronics....................... 2,150 84,925
Zebra Technologies, Cl. A.............. 2,500 (a) 69,688
___________
3,172,387
___________
Consumer Cyclical_15.3% Apple South............................ 2,200 33,550
Borg-Warner Automotive................. 1,350 72,984
Breed Technologies..................... 3,100 71,300
Cannondale............................. 2,900 (a) 51,475
CompUSA................................ 5,300 (a) 113,950
Devon Group............................ 1,550 55,412
Ethan Allen Interiors.................. 1,000 57,000
Evergreen Media, Cl. A................. 2,600 (a) 116,025
Fila Holdings ADS...................... 1,100 36,781
Fingerhut Cos. ........................ 5,700 99,394
General Nutrition...................... 5,400 (a) 151,200
Harman International................... 1,400 58,975
Interface, Cl. A....................... 3,050 67,481
Interstate Hotels...................... 2,100 (a) 61,819
Promus Hotel........................... 2,000 (a) 77,500
Regal Cinemas.......................... 3,575 (a) 117,975
Richfood Holdings...................... 1,875 48,750
Ryan's Family Steak House.............. 7,550 (a) 64,647
Safeskin............................... 2,300 (a) 67,706
Speedway Motorsports................... 2,500 (a) 54,375
Sports Authority....................... 2,800 (a) 54,425
Tommy Hilfiger......................... 1,450 (a) 58,272
U.S. Office Products................... 2,800 (a) 85,575
Waban.................................. 2,400 (a) 77,250
Wallace Computer Services.............. 2,800 84,175
Warnaco Group, Cl. A................... 2,600 82,875
Zale................................... 3,950 (a) 78,259
___________
1,999,130
___________
Consumer Staples_3.0% Central Garden & Pet................... 3,200 (a) 80,000
Consolidated Cigar Holdings, Cl. A..... 2,400 (a) 66,600
Morningstar Group...................... 4,950 (a) 145,406
Robert Mondavi, Cl. A.................. 2,200 (a) 103,950
___________
395,956
___________
Electronic Technology_.6% Intuit................................. 3,200 (a) 73,400
___________
Energy_7.4% Benton Oil & Gas....................... 5,350 (a) 80,250
Cairn Energy USA....................... 3,600 (a) 47,250
Chesapeake Energy...................... 4,700 46,119
Devon Energy........................... 2,200 (a) 80,850
Holly.................................. 1,350 33,497
KN Energy.............................. 1,450 61,081
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Common Stocks (continued) Shares Value
__________ __________
Energy (continued) Nabors Industries...................... 4,450 (a) $ 111,250
Noble Drilling......................... 5,800 (a) 130,863
Pacific Enterprises.................... 3,850 129,456
Smith International.................... 1,650 (a) 100,238
Ultramar Diamond Shamrock.............. 2,600 84,825
WICOR.................................. 1,450 56,459
____________
962,138
____________
Health Care_8.5% AmeriSource Health, Cl. A.............. 3,000 (a) 149,625
Lincare Holdings....................... 3,000 (a) 129,000
Orthodontic Centers of America......... 5,900 (a) 107,306
Physician Sales & Service.............. 5,800 (a) 110,200
Prime Medical Services................. 1,840 (a) 19,895
Quorum Health Group.................... 2,300 (a) 82,225
Teva Pharmaceutical Industries, A.D.R.. 1,250 80,938
Universal Health Services, Cl. B....... 3,600 (a) 138,600
Vencor................................. 3,200 (a) 135,200
Vital Signs............................ 1,900 33,369
Watson Pharmaceuticals................. 2,900 (a) 122,525
____________
1,108,883
____________
Interest Sensitive_18.4% AMBAC.................................. 1,100 84,012
AMRESCO................................ 3,650 (a) 78,475
AmeriCredit............................ 2,000 (a) 42,000
American General....................... 2,324 110,971
Amerin................................. 2,500 (a) 60,625
Bank United, Cl. A..................... 1,700 64,600
CMAC Investment........................ 3,400 162,350
City National.......................... 3,700 89,031
Conseco................................ 1,600 59,200
Crestar Financial...................... 2,600 101,075
Cullen Frost Bankers................... 2,500 105,938
Edwards (A.G.)......................... 2,150 91,912
Equity Residential Properties Trust.... 1,640 77,900
First Tennessee National............... 2,300 110,400
Franchise Finance Corp. of America..... 2,300 59,944
Health Care Property Investors......... 1,950 68,738
Kimco Realty........................... 2,150 68,263
Mid Ocean.............................. 1,650 86,522
Money Store............................ 4,750 136,266
ONBANCorp.............................. 1,850 94,350
Old Kent Financial..................... 1,566 84,596
Pacific Century Financial.............. 2,500 115,625
People's Bank.......................... 3,300 85,388
RCSB Financial......................... 2,300 110,113
Reliance Group Holdings................ 6,100 72,438
Southern Pacific Funding............... 2,400 (a) 39,900
United Cos. Financial.................. 2,150 60,738
Washington Federal..................... 3,078 79,066
____________
2,400,436
____________
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Common Stocks (continued) Shares Value
__________ __________
Mining and Metals_2.9% Brush Wellman.......................... 2,200 $ 46,063
Cable Design Technologies.............. 1,550 (a) 45,628
IMCO Recycling......................... 1,300 24,538
Pittston Minerals Group................ 2,300 26,881
Potash Saskatchewan.................... 1,395 104,712
Titanium Metals........................ 1,900 (a) 60,088
TubosDeAceroMex, A.D.R................. 3,800 (a) 70,063
____________
377,973
____________
Real Estate_3.3% Beacon Properties...................... 2,150 71,756
Cali Realty............................ 2,440 82,960
EVEREN Capital......................... 1,820 56,761
FelCor Suite Hotels.................... 1,700 63,325
Pacific Gulf Properties................ 3,200 70,400
Public Storage......................... 2,840 83,070
____________
428,272
____________
Transportation_1.8% Air Express International.............. 1,200 47,700
America West Holdings, Cl. B........... 3,950 (a) 57,275
Illinois Central....................... 2,200 76,862
Pittston Burlington Group.............. 1,950 54,844
____________
236,681
____________
Utilities_5.4% CalEnergy.............................. 3,600 (a) 136,800
Calpine................................ 1,600 (a) 30,400
DQE.................................... 2,750 77,687
Illinova............................... 3,500 77,000
LCI International...................... 2,550 (a) 55,781
MidAmerican Energy Holdings............ 4,450 77,041
NIPSCO Industries...................... 2,100 86,756
Pinnacle West Capital.................. 3,050 91,691
Transaction Network Services........... 5,300 (a) 74,862
____________
708,018
____________
TOTAL COMMON STOCKS
(cost $11,153,725)................... $12,653,754
============
Principal
Short-Term Investments_2.1% Amount
____________
U.S. Treasury Bills; 5.10%, 9/18/97
(cost $269,031)...................... $ 272,000 $ 268,970
============
TOTAL INVESTMENTS (cost $11,422,756)........................................ 99.2% $12,922,724
======== ============
CASH AND RECEIVABLES (NET).................................................. .8% $ 106,532
======== ============
NET ASSETS.................................................................. 100.0% $13,029,256
======== ============
Notes to Statement of Investments:
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997 (UNAUDITED)
Cost Value
_____________ _____________
ASSETS: Investments in securities_See Statement of Investments $11,422,756 $12,922,724
Cash....................................... 60,478
Receivable for investment securities sold.. 58,539
Dividends receivable....................... 9,809
Prepaid expenses........................... 102
__________
13,051,652
__________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 12,375
Payable for shares of Beneficial Interest redeemed 1,357
Accrued expenses........................... 8,664
__________
22,396
__________
NET ASSETS.................................................................. $ 13,029,256
============
REPRESENTED BY: Paid-in capital............................ $11,434,401
Accumulated undistributed investment income_net 48,267
Accumulated net realized gain (loss) on investments 46,620
Accumulated net unrealized appreciation (depreciation)
on investments_Note 5 1,499,968
__________
NET ASSETS.................................................................. $ 13,029,256
============
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest
authorized) ........................................... 882,374
NET ASSET VALUE, offering and redemption price per share.................... $14.77
========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INVESTMENT INCOME
INCOME: Cash dividends (net of $250 foreign taxes
withheld at source).................... $ 92,309
Interest................................... 17,059
____________
Total Income......................... $ 109,368
EXPENSES: Investment advisory fee_Note 4(a).......... 37,736
Auditing fees.............................. 11,711
Custodian fees_Note 4(a)................... 6,919
Prospectus and shareholders' reports....... 2,598
Registration fees.......................... 1,185
Shareholder servicing costs................ 183
Trustees' fees and expenses_Note 4(b)...... 143
Interest expense_Note 3.................... 119
Loan commitment fees_Note 3................ 99
Legal fees................................. 76
Miscellaneous.............................. 332
____________
Total Expenses....................... 61,101
____________
INVESTMENT INCOME_NET....................................................... 48,267
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 5:
Net realized gain (loss) on investments.... $ 48,099
Net unrealized appreciation (depreciation) on investments 941,156
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 989,255
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,037,522
============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996*
_______________ __________________
OPERATIONS:
Investment income_net................................................. $ 48,267 $ 27,985
Net realized gain (loss) on investments............................... 48,099 15,153
Net unrealized appreciation (depreciation) on investments............. 941,156 558,812
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations... 1,037,522 601,950
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net................................................. __ (29,082)
Net realized gain on investments...................................... (11,060) (4,475)
_____________ _____________
Total Dividends................................................... (11,060) (33,557)
_____________ _____________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold......................................... 5,523,175 13,969,599
Dividends reinvested.................................................. 11,060 33,557
Cost of shares redeemed............................................... (1,679,730) (6,423,260)
_____________ _____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 3,854,505 7,579,896
_____________ _____________
Total Increase (Decrease) in Net Assets................................ 4,880,967 8,148,289
NET ASSETS:
Beginning of Period................................................... 8,148,289 __
_____________ _____________
End of Period..................................................... $13,029,256 $ 8,148,289
============= ==============
(Undistributed investment income_net).................................... $ 48,267 __
_____________ _____________
Shares Shares
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Shares sold........................................................... 400,976 1,107,475
Shares issued for dividends reinvested................................ 853 2,521
Shares redeemed....................................................... (121,945) (507,506)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding..................... 279,884 602,490
============= ==============
*From April 30, 1996 (commencement of operations) to December 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
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 Series' financial statements.
Six Months Ended Year Ended
June 30, 1997 December 31,
PER SHARE DATA: (Unaudited) 1996(1)
_________________ _______________
<S> <C> <C>
Net asset value, beginning of period.................................... $13.52 $12.50
_______ _______
Investment Operations:
Investment income_net................................................... .05 .05
Net realized and unrealized gain (loss)
on investments........................................................ 1.22 1.03
_______ _______
Total from Investment Operations........................................ 1.27 1.08
_______ _______
Distributions:
Dividends from investment income_net.................................... -- (.05)
Dividends from net realized gain on investments......................... (.02) (.01)
_______ _______
Total Distributions..................................................... (.02) (.06)
_______ _______
Net asset value, end of period.......................................... $14.77 $13.52
======= =========
TOTAL INVESTMENT RETURN..................................................... 9.29% (2) 8.73% (2,3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................. .60% (2) .75% (2)
Ratio of net investment income
to average net assets................................................. .48% (2) .39% (2)
Decrease reflected in above expense ratios
due to undertakings by the Dreyfus Corporation........................ -- .19% (2)
Portfolio Turnover Rate................................................. 16.28% (2) 35.68% (2)
Average commission rate paid (4)........................................ $.0370 $.0412
Net Assets, end of period (000's Omitted)............................... $13,029 $8,148
(1) From April 30, 1996 (commencement of operations) to December 31, 1996.
(2) Not annualized.
(3) Calculated based on net asset value on the close of business on
May 1, 1996 (commencement of initial offering) to December 31, 1996.
(4) The Series is required to disclose its average commission rate paid
per share for purchases and sales of investment securities.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1_General:
Dreyfus Variable Investment Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as an open-end management investment
company, operating as a series company currently offering thirteen series,
including the Small Company Stock Portfolio (the "Series") and is intended to
be a funding vehicle for variable annuity contracts and variable life
insurance policies to be offered by the separate accounts of life insurance
companies. The Series is a diversified portfolio. The Series' investment
objective is to provide investment results that are greater than the total
return performance of publicly-traded common stocks in the aggregate, as
represented by the Russell 2500 Index. The Dreyfus Corporation ("Dreyfus")
serves as the Series' investment adviser. Dreyfus is a direct subsidiary of
Mellon Bank, N.A. ("Mellon"). Premier Mutual Fund Services, Inc. is the
distributor of the Series' shares, which are sold without a sales charge.
The Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series' financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results may differ from those
estimates.
NOTE 2_Significant Accounting Policies:
(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.
(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. 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.
(C) 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 Series 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 Series not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 3_Bank Line of Credit:
The Series participates with other Dreyfus-managed funds in a $600
million redemption credit facility ("Facility") to be utilized for temporary
or emergency purposes, including the financing of redemptions. In connection
therewith, the Series has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to the Series at rates based on
prevailing market rates in effect at the time of borrowings. At June 30,
1997, there were no outstanding borrowings under the Facility.
The average daily amount of borrowings outstanding during the period
ended June 30, 1997 was approximately $3,867, with a related weighted average
annualized interest rate of 6.21%. The maximum amount borrowed at any time
during the period ended June 30, 1997 was $175,000.
NOTE 4_Investment Advisory Fee and Other Transactions With Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the
investment advisory fee is computed at the annual rate of .75 of 1% of the
value of the Series' average daily net assets and is payable monthly.
The Series compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary
of Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Series.
The Series compensates Mellon under a custody agreement for providing
custodial services for the Series. During the period ended June 30, 1997,
$6,919 was charged by Mellon pursuant to the custody agreement.
(B) 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 5_Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended June 30, 1997,
amounted to $6,047,951 and $1,535,429, respectively.
At June 30, 1997, accumulated net unrealized appreciation on investments
was $1,499,968, consisting of $1,904,471 gross unrealized appreciation and
$404,503 gross unrealized depreciation.
At June 30, 1997, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
[Dreyfus lion "d" logo]
Registration Mark
Dreyfus Variable Investment Fund,
Small Company Stock Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
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. 151SA976
[Dreyfus logo]
Registration Mark
Variable
Investment Fund,
SMALL COMPANY
STOCK PORTFOLIO
Semi-Annual
Report
June 30, 1997
