DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Variable
Investment Fund _ Zero Coupon 2000 Portfolio. For its semi-annual reporting
ended June 30, 1997, the Portfolio produced a total return of 2.13% per
share* compared with a 2.74% performance for the Merrill Lynch U.S. Treasury
Coupon 3-year Strips Index.** Income dividends of $ .343 per share were
declared, which is equivalent to an annualized distribution rate per share of
5.64%.***
ECONOMIC REVIEW
Despite recent moderation in the rate of new job creation, the latest
reported unemployment rate (5% in June) was the lowest since 1973. When the
unemployment rate was last at that level, the inflation rate was heading
toward double-digit territory. Now, inflation is subdued; the Consumer Price
Index rose at an annual rate of just 1.4% for the twelve-month period through
May. Producer prices have risen a minuscule 0.6% over the same time. It has
been unprecedented for the economy to have seven years of expansion, low
unemployment and low inflation at the same time.
Ever alert for signs of incipient inflation, the Federal Open Market
Committee, the policy-making arm of the Federal Reserve, has raised interest
rates just once in more than two years. That hike came in March 1997 when the
Federal Funds rate was increased by one quarter of a percentage point to
5.50%. (The Federal Funds rate is the rate of interest that banks charge one
another for overnight loans.) While there have been some signs that wages are
increasing (an area of particular concern to the Federal Reserve), there have
also been indications that the economy may be slowing from its torrid first
quarter pace when it surged at a 5.9% annual rate, the biggest advance since
the fourth quarter of 1987.
Indicating possible moderation in the rate of economic growth, retail
sales have been in decline all spring despite record levels of consumer
optimism about the economy. The latest report on retail sales through June
showed a decline at an annual rate of 5% over the previous three months. This
marked the first three-month decline since the fall of 1981. Yet, despite
their sluggish spending at checkout counters, consumers' confidence in the
economy continues to climb, heavily influenced by increased job security and
low inflation.
Throughout the seven-year economic expansion, the pattern of consumer
spending has been stop-and-go, alternating between spurts of spending and
retrenchment. The 5% decline for the three months through May was preceded by
a 15% advance over the previous three-month period. On the production side of
the economy, a survey of corporate buyers compiled by the National
Association of Purchasing Management reported that growth in factory activity
eased slightly during June. The much-observed supplier-delivery component of
the survey, a measure of how quickly orders are being satisfied and a
possible sign of production bottlenecks, also fell modestly. In further
evidence of a slowing economy during the second quarter, the Commerce
Department recently reported that factory orders fell in May.
Rising incomes, low unemployment and quiescent inflation have all
contributed to a feeling of confidence, as measured by the Conference Board's
Index of Consumer Sentiment, that has been unmatched for 28 years. Many
economists feel that the optimistic consumer sentiment indicators provide a
floor to economic growth and will spur consumer spending later in the year,
particularly if the unemployment rate remains low and job security worries
recede further. We are mindful of the potent role that consumers play in the
economy _ their spending accounts for about two thirds of economic output. So
we remain alert to signs of any strain on productive capacity caused by
increases in consumer spending that might, in turn, lead to another
tightening in monetary policy by the Federal Reserve.
MARKET ENVIRONMENT
The technical factors in the bond market are quite positive, and should
continue to push interest rates lower. A balanced budget looks like an
achievable goal. U.S. interest rates are currently higher than almost all
other developed
countries, making our rates attractive globally, and the dollar continues to
remain strong. Last, commodity prices have been drifting lower.
At the consumer level, the rate outlook also appears positive. Bank
lending criteria, especially in the credit card arena, are becoming more
stringent. The primary reason for that is the continued rise of consumer
delinquencies. Retail sales have been sluggish, and car sales have also
turned sluggish. In fact, some of the hottest selling vehicles last year now
must offer incentives to find buyers. These incentives include loans that
carry 0% interest for 2 years (Nissan). This shows that auto dealers are
having trouble clearing 1997 inventory, which is an indication that consumers
have turned the aggressive spending pattern down.
PORTFOLIO OVERVIEW
Currently, the maturity of the fund is at a 3.35-year weighted average
life, which makes the effective duration 3.62 years. We currently plan on
maintaining this positioning for a declining rate environment in the
immediate foreseeable future. As for positioning on the interest rate curve,
we have currently targeted a bullet structure versus the final maturity of
the Portfolio.
We had written to you last time that we moved out of coupon-bearing
securities and were utilizing zero coupon securities only. This still
continues to be the objective, with only one security in the fund earning a
coupon, a Merck & Co. puttable bond that we added to the Portfolio. These
puttable bonds have performed admirably well, as rates have declined since
purchase.
The Portfolio owned Hospital Corporation of America (HCA) zero coupon
bonds. HCA was acquired by Columbia Healthcare in 1994. In light of the
recent investigation of Federal authorities into Columbia Healthcare's
billing practices we decided to move out of our position. While we still
believe that Columbia will be able to meet its debt commitments, the
volatility we believe the bonds have and would continue to exhibit would not
be appropriate for the Portfolio.
As always, we will be monitoring these factors, as well as numerous other
indicators, to institute any changes that are necessary to continue to
provide you with an attractive investment vehicle.
Very truly yours,
[Gerald E. Thunelius signature logo]
Gerald E. Thunelius
Portfolio Manager
June 17, 1997
New York, NY
* 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: BLOOMBERG. The Merrill Lynch U.S. Treasury Coupon 3-Year
Strips Index is an unmanaged zero coupon index with constant maturity and
duration. The Index does not take into account charges, fees and other
expenses.
*** Distribution rate per share is based upon dividends per share declared
from net investment income during the period (annualized), divided by the net
asset value per share at the end of the period.
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<CAPTION>
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO
STATEMENT OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Principal
Bonds and Notes_99.1% Amount Value
_______ _______
<S> <S> <C> <C>
Finance_8.2% American Express,
Gtd. Euro-Bond, Zero Coupon, 2000.... $ 3,400,000 $ 2,691,644
_____________
Foreign_2.6% Deutsche Bank AG,
Medium-Term Notes, Zero Coupon, 2000. 1,000,000 847,140
_____________
Health Care_14.6% Columbia Healthcare,
Zero Coupon, 2000.................... 5,178,000 4,293,748
Merck & Co,
Medium-Term Notes, Ser. B, 5.76%, 1999 500,000 (a) 502,155
_____________
4,795,903
_____________
Municipal Bonds_3.6% New Jersey Economic Development Authority,
State Pension Funding Bonds, Ser. 1997B,
Zero Coupon, 2001.................... 1,500,000 1,186,875
_____________
U.S. Government
Agencies_61.8% Chattanooga Valley,
Secured First Mortgage, Zero Coupon, 1/1/2000 176,000 149,915
FACO Coupon Strips,
Ser. 97-1, Zero Coupon, 7/21/2000.... 4,743,000 3,918,984
FICO Coupon Strips:
Zero Coupon, 10/6/2000............... 478,000 388,415
Ser. 1, Zero Coupon, 11/11/2000...... 150,000 121,124
Ser.10, Zero Coupon, 11/30/2000...... 152,000 122,307
Federal Home Loan Mortgage, Principal Strips,
Zero Coupon, 5/15/2000............... 1,000,000 835,410
Federal National Mortgage Association,
Medium-Term Note Coupon Strips:
Zero Coupon, 2/7/2001.............. 1,338,000 1,062,765
Zero Coupon, 7/24/2001............. 1,227,000 945,116
Principal Strips,
Zero Coupon, 8/7/2001............. 6,500,000 4,997,747
Resolution Funding, Coupon Strips,
Zero Coupon, 10/15/2000.............. 5,000,000 4,082,086
Tennessee Valley Authority:
Coupon Strips, Zero Coupon, 11/1/2000 2,500,000 2,026,008
Principal Strips, Zero Coupon, 11/1/2000 2,000,000 1,619,766
_____________
20,269,643
_____________
U.S. Government_8.3% U.S. Treasury Principal Strips,
Zero Coupon, 8/15/2001............... 3,500,000 2,701,324
_____________
TOTAL BONDS AND NOTES
(cost $32,614,970)................... $32,492,529
==============
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Principal
Short-Term Investments_.8% Amount Value
___________ ___________
U.S. Government_.1% U.S. Treasury Bills,
5.57%, 9/18/1997..................... $ 11,000 (b) $ 10,877
_____________
U.S. Government Agency_.7% Federal Home Loan Banks,
6%, 7/1/1997......................... 245,000 245,000
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $255,881)...................... $ 255,877
==============
TOTAL INVESTMENTS (cost $32,870,851)........................................ 99.9% $32,748,406
======= ==============
CASH AND RECEIVABLES (NET).................................................. .1% $ 33,674
======= ==============
NET ASSETS.................................................................. 100.0% $32,782,080
======= ==============
Notes to Statement of Investments:
(a) Reflects date security can be redeemed at holders' option; the
stated maturity date is 5/3/2037.
(b) Held by custodian in a segregated account as collateral for open
financial futures positions.
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<CAPTION>
STATEMENT OF FINANCIAL FUTURES JUNE 30, 1997 (UNAUDITED)
Market Value Unrealized
Covered Appreciation
Financial Futures Contracts by Contracts Expiration at 6/30/97
________ ___________ _____________ ______________ _______________
<S> <C> <C> <C> <C>
U.S. Treasury 5yr Note (Long)...... 7 $741,234 September `97 $2,219
======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997 (UNAUDITED)
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $32,870,851 $32,748,406
Cash....................................... 1,294,785
Interest receivable........................ 3,865
Prepaid expenses and other assets.......... 3,932
_______________
34,050,988
_______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 13,382
Payable for investment securities purchased 1,188,510
Payable for shares of Beneficial Interest redeemed 49,951
Accrued expenses........................... 17,065
_______________
1,268,908
_______________
NET ASSETS.................................................................. $32,782,080
================
REPRESENTED BY: Paid-in capital............................ $32,834,421
Accumulated undistributed investment income_net 151,748
Accumulated net realized gain (loss) on investments (83,863)
Accumulated net unrealized appreciation (depreciation)
on investments (including $2,219 net unrealized
appreciation on financial futures)_Note 5(b) (120,226)
_______________
NET ASSETS.................................................................. $32,782,080
================
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST
AUTHORIZED) ........................................... 2,674,181
NET ASSET VALUE, offering and redemption price per share.................... $12.26
=======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INVESTMENT INCOME
INCOME Interest Income............................ $ 997,603
EXPENSES: Investment advisory fee_Note 4(a).......... $ 71,201
Auditing fees.............................. 8,785
Prospectus and shareholders' reports....... 7,681
Custodian fees_Note 4(a)................... 6,301
Legal fees................................. 807
Trustees' fees and expenses_Note 4(b)...... 488
Loan commitment fees and Interest_Note 3... 485
Registration fees.......................... 321
Shareholder servicing costs................ 247
Miscellaneous.............................. 1,228
___________
Total Expenses......................... 97,544
___________
INVESTMENT INCOME_NET....................................................... 900,059
___________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 5:
Net realized gain (loss) on investments.... $(356,483)
Net realized gain (loss) on financial futures (21,857)
___________
Net Realized Gain (Loss)............... (378,340)
Net unrealized appreciation (depreciation) on investments
(including $2,219 net unrealized appreciation
on financial futures).................. 153,172
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (225,168)
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 674,891
============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
______________ ____________________
OPERATIONS:
Investment income_net............................................. $ 900,059 $ 1,585,212
Net realized gain (loss) on investments........................... (378,340) 356,407
Net unrealized appreciation (depreciation) on investments......... 153,172 (1,096,022)
______________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations. 674,891 845,597
______________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net............................................. (748,311) (1,586,541)
Net realized gain on investments.................................. ___ (109,770)
______________ ________________
Total Dividends................................................. (748,311) (1,696,311)
______________ ________________
BENEFICIAL INTEREST TRANSACTIONS :
Net proceeds from shares sold..................................... 3,125,490 13,887,331
Dividends reinvested.............................................. 758,188 1,696,311
Cost of shares redeemed........................................... (2,823,935) (5,228,437)
______________ ________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 1,059,743 10,355,205
______________ ________________
Total Increase (Decrease) in Net Assets..................... 986,323 9,504,491
NET ASSETS:
Beginning of Period............................................... 31,795,757 22,291,266
______________ ________________
End of Period..................................................... $ 32,782,080 $ 31,795,757
============== ================
UNDISTRIBUTED INVESTMENT INCOME_NET................................... $ 151,748 ___
______________ ________________
Shares Shares
______________ ________________
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................................... 255,886 1,118,673
Shares issued for dividends reinvested............................ 62,297 137,813
Shares redeemed................................................... (231,500) (424,557)
______________ ________________
Net Increase (Decrease) in Shares Outstanding................... 86,683 831,929
============== ================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 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
June 30, 1997 Year Ended December 31,
______________________________________________
PER SHARE DATA: (Unaudited) 1996 1995 1994 1993 1992
____________ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $12.29 $12.70 $11.39 $12.57 $11.77 $11.64
________ ______ ______ ______ ______ ______
Investment Operations:
Investment income_net................. .40 .68 .69 .69 .79 .83
Net realized and unrealized gain (loss)
on investments...................... (.09) (.36) 1.31 (1.18) .96 .15
________ ______ ______ ______ ______ ______
Total from Investment Operations...... .31 .32 2.00 (.49) 1.75 .98
________ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income_net.. (.34) (.68) (.69) (.68) (.78) (.84)
Dividends from net realized gain on investments -- (.05) -- (.01) (.17) (.01)
________ ______ ______ ______ ______ ______
Total Distributions................... (.34) (.73) (.69) (.69) (.95) (.85)
________ ______ ______ ______ ______ ______
Net asset value, end of period........ $12.26 $12.29 $12.70 $11.39 $12.57 $11.77
======== ======== ======= ======= ====== =======
TOTAL INVESTMENT RETURN................... 4.30%(1) 2.59% 17.95% (3.91%) 15.19% 8.87%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .62%(1) .66% .68% -- -- .64%
Ratio of net investment income
to average net assets............... 5.69%(1) 5.54% 5.73% 6.04% 6.21% 7.15%
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation............. -- -- .03% 1.05% 2.43% 2.28%
Portfolio Turnover Rate............... 109.75%(2) 98.28% 49.43% -- 106.35% 3.08%
Net Assets, end of period (000's Omitted) $32,782 $31,796 $22,291 $10,913 $5,696 $1,362
(1) Annualized.
(2) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 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 Zero Coupon 2000 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 as high an investment return as is consistent with the preservation
of capital. 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 currently functions as the funding vehicle for the Dreyfus
Series 2000 Variable Annuity Contract (the "Account") issued by Mutual
Benefit Life Insurance Company ("Mutual Benefit Life"). On July 16, 1991, the
Superior Court of New Jersey entered an Order (the "Order") appointing the
New Jersey Insurance Commissioner as Rehabilitator of Mutual Benefit Life.
The Commissioner was granted immediate exclusive possession and control of,
and title to, the business and assets of Mutual Benefit Life, including the
assets and liabilities of the Account.
The Commissioner was empowered by the Order to take such steps as he
deemed appropriate toward removing the cause and conditions that made
rehabilitation necessary. On January 15, 1993, the Commissioner filed the
First Amended Plan of Rehabilitation ("Plan") with the Court. The Plan
stipulated that the assets and liabilities of the Account would be
transferred to a separate account of MBL Life Assurance Corporation
("MBLLAC"), a wholly-owned subsidiary of Mutual Benefit Life. The Plan also
provided for the transfer of the ownership of the stock of MBLLAC to a Trust.
The Commissioner was designated as the sole Trustee of the Trust. On August
12, 1993, the Court rendered an opinion approving the Plan with certain
modifications. Two subsequent amendments to the Plan were filed and approved
by the Court. None of the modifications or amendments affected the status of
the Account. On November 10, 1993, the Court issued an Order of Confirmation
permitting the implementation of the Plan.
An order was also issued by the Court on January 28, 1994, approving the
form of the Third Amended Plan of Rehabilitation, the Election Materials and
related documents. On April 29, 1994, the Plan was implemented. Substantially
all of the assets of Mutual Benefit Life were transferred to MBLLAC which
assumed and reinsured Mutual Benefit Life's restructured insurance
liabilities. The stock of MBLLAC was assigned to the Stock Trust and the
Commissioner was designated as Trustee.
In view of the terms and conditions of both the Order and the Plan,
applications for new contracts and additional purchase payments under
existing contracts are currently not being accepted by the Account. The terms
of the Order and the Plan permit redemptions from the Account to continue as
requested.
The proceedings of the New Jersey Insurance Commissioner with respect to
Mutual Benefit Life or the Account do not apply to the separate accounts of
other life insurance companies that may use the Fund as a funding vehicle for
contracts or policies issued by them.
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 could differ from those
estimates.
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2_SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Investments in securities (excluding short-term
investments, financial futures and U.S. Government obligations) are valued
each business day by an independent pricing service ("Service") approved by
the Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service 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's 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. Investments in U.S.
Government obligations are valued at the mean between quoted bid and asked
prices. Short-term investments are carried at amortized cost, which
approximates value. 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 on each business day.
(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: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid monthly.
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.
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 $11,000, with a related weighted
average annualized interest rate of 5.57%. The maximum amount borrowed at any
time during the period ended June 30, 1997 was $500,000.
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 .45 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.
DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Series compensates Mellon under a custody agreement to provide
custodial services for the Series. During the period ended
June 30, 1997, $6,301 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:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period
ended June 30, 1997, amounted to $33,409,690 and $36,370,748, respectively.
The Fund may invest in financial futures contracts in order to gain
exposure to or protect against changes in the market. The Fund is exposed to
market risk as a result of changes in the value of the underlying financial
instruments (See Statement of Financial Futures). Investments in financial
futures require the Fund to "mark to market" on a daily basis, which reflects
the change in the market value of the contract at the close of each day's
trading. Typically, variation margin payments are received or made to reflect
daily realized gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require initial margin
deposits with a custodian, which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded
and is subject to change. Contracts open at June 30, 1997, and their related
unrealized appreciation are set forth in the Statement of Financial Futures.
(B) At June 30, 1997, accumulated net unrealized depreciation on
investments and financial futures, was $120,226, consisting of $116,917 gross
unrealized appreciation and $237,143 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,
ZERO COUPON 2000 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. 119SA976
[Dreyfus logo]
Registration Mark
Variable
Investment Fund,
Zero Coupon
2000 Portfolio
Semi-Annual
Report
June 30, 1997
