DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Variable Investment
Fund_Money Market Portfolio for the six-month reporting period ended June 30,
1997. Your Fund produced an annualized yield of 5.03% and after taking into
account the effect of compounding, the annualized effective yield was 5.15%.*
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 accelerated 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.
THE MONEY MARKET
The money market began the current calendar year in a reasonably steady
mode with fluctuations within a narrow band. As the year advanced, however,
the market became increasingly concerned that the Fed would raise interest
rates. Late in December, 1996, Fed Chairman Alan Greenspan made his highly
publicized remark about "irrational exuberance" in the equity markets. Early
in 1997, other central bank officials spoke on the same theme. So it was no
great surprise to the markets when the Fed, in late March, actually raised
the short-term interbank rate by one quarter of a point. This was done as a
moderate dose of preventive medicine against possible future inflation.
By late spring and early summer, however, signs of a slowdown in the
economy caused interest rates to simmer down. To be sure, there was the usual
nervousness before each subsequent scheduled meeting of the rate-setting
Federal Open Market Committee. Yet the general trend of rates most recently
has been to fluctuate moderately while working down to somewhat lower levels.
PORTFOLIO OVERVIEW
In this environment, we have maintained average maturities generally in
line with the averages for the money market fund industry. The purpose is to
assure our investors competitive yields. To date, this has been a successful
strategy.
You may be assured that we will, as always, adapt portfolio strategy to
the prevailing market conditions in order to try to bring you satisfactory
yields on your cash reserves.
Once again, we would like to express our appreciation for your confidence
in Dreyfus Variable Investment Fund_Money Market Portfolio.
Sincerely,
[Patricia A. Larkin signature logo]
Patricia A. Larkin
Senior Portfolio Manager
July 17, 1997
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested monthly. The Portfolio's performance does not reflect the
deduction of additional changes imposed in connection with investing in
variable annuity contracts and variable life insurance policies.
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DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Principal
Negotiable Bank Certificates of Deposit_22.6% Amount Value
___________ ___________
<S> <C> <C>
ABN-AMRO Bank N.V. (Yankee)
5.56%, 12/23/97........................................................... $ 2,000,000 $ 2,000,325
Dai-Ichi Kangyo Bank Ltd. (Yankee)
5.92%, 12/11/97........................................................... 1,000,000 1,000,088
Fuji Bank Ltd. (Yankee)
5.73%-5.87%, 7/2/97-10/1/97............................................... 3,000,000 3,000,000
Sanwa Bank Ltd. (London)
5.86%-5.95%, 9/16/97-12/18/97............................................. 3,000,000 2,999,925
Societe Generale (Yankee)
6.03%, 7/21/97............................................................ 2,000,000 1,999,986
Sumitomo Bank Ltd. (Yankee)
5.76%-5.78%, 9/2/97-9/26/97............................................... 3,000,000 3,000,000
___________
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $14,000,324)........................................................ $14,000,324
=============
Bankers' Acceptances_3.2%
First National Bank of Boston
5.54%, 7/2/97
(cost $1,999,700)......................................................... $ 2,000,000 $ 1,999,700
=============
Commercial Paper_45.2%
Bankers Trust N.Y. Corp.
5.74%, 8/12/97............................................................ $ 1,750,000 $ 1,738,526
Chrysler Financial Corp.
5.62%, 7/24/97............................................................ 2,000,000 1,992,857
Den Danske Corp. Inc.
5.77%, 8/20/97............................................................ 2,500,000 2,480,451
General Electric Capital Corp.
5.67%, 9/2/97............................................................. 2,000,000 1,980,435
General Motors Acceptance Corp.
5.81%-5.89%, 11/18/97-12/08/97............................................ 3,000,000 2,930,400
Goldman Sachs Group L.P.
5.54%, 8/4/97............................................................. 2,000,000 1,989,951
Lehman Brothers Holdings Inc.
5.66%-5.70%, 7/7/97-7/14/97............................................... 2,500,000 2,496,082
Paine Webber Group Inc.
5.70%, 7/28/97............................................................ 3,000,000 2,987,288
Salomon Inc.
5.78%-5.86%, 8/4/97-9/18/97............................................... 3,000,000 2,976,700
Sanwa Business Credit Corp.
5.75%, 7/31//97........................................................... 2,000,000 1,990,467
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Principal
Commercial Paper (continued) Amount Value
_____________ _____________
SwedBank Inc.
5.51%, 7/1/97............................................................. $ 2,000,000 $ 2,000,000
UBS Finance (DE) Inc.
6.05%, 7/1/97............................................................. 2,500,000 2,500,000
___________
TOTAL COMMERCIAL PAPER
(cost $28,063,157)........................................................ $28,063,157
=============
Corporate Notes_7.3%
Bear Stearns Companies Inc.
5.68%, 12/8/97(a)......................................................... $ 2,500,000 $ 2,502,166
PHH Corp.
5.68%, 6/24/98............................................................ 2,000,000 2,000,000
___________
TOTAL CORPORATE NOTES
(cost $4,502,166)......................................................... $ 4,502,166
=============
Short-Term Bank Notes_3.2%
Comerica Bank
5.71%, 4/17/98(a)
(cost $1,999,233)......................................................... $ 2,000,000 $ 1,999,233
=============
U.S. Government Agencies_11.3%
Federal Farm Credit Banks
Floating Rate Notes
5.58%, 7/25/97(a)......................................................... $ 2,000,000 $ 1,999,950
Federal National Mortgage Association
Floating Rate Notes
5.61%, 11/21/97-1/21/98(a)................................................ 5,000,000 4,998,855
___________
TOTAL U.S. GOVERNMENT AGENCIES
(cost $6,998,805)......................................................... $ 6,998,805
=============
Time Deposits_6.7%
Berliner Handels-und Frankfurter Bank (Grand Cayman)
6.13%, 7/1/97............................................................. $ 1,647,000 $ 1,647,000
First Union National Bank (Nassau)
6%, 7/1/97................................................................ 2,500,000 2,500,000
___________
TOTAL TIME DEPOSITS
(cost $4,147,000)......................................................... $ 4,147,000
=============
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Principal
Repurchase Agreements_2.4% Amount Value
_____________ _____________
SBC Capital Markets
dated 6/30/97, due7/1/97 in the amount
of $1,500,248 (fully collateralized by $1,534,000
U.S. Treasury Notes, 5.25%, due 12/31/97, value
$1,531,124)
(cost $1,500,000)......................................................... $ 1,500,000 $ 1,500,000
=============
TOTAL INVESTMENTS
(cost $63,210,385)........................................................ 101.9% $63,210,385
======== =============
LIABILITIES, LESS
CASH AND RECEIVABLES...................................................... (1.9%) $ (1,185,012)
======== =============
NET ASSETS.................................................................. 100.0% $62,025,373
======== =============
Notes to Statement of Investments:
(a) Variable interest rate_subject to periodic change
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997
Cost Value
_____________ _____________
ASSETS: Investments in securities_See Statement of
Investments_Note 2(b).................. $63,210,385 $63,210,385
Cash....................................... 521,096
Interest receivable........................ 340,121
Prepaid expenses and other assets.......... 517
___________
64,072,119
___________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 25,256
Payable for investment securities purchased 2,000,000
Accrued expenses........................... 21,490
___________
2,046,746
___________
NET ASSETS.................................................................. $62,025,373
=============
REPRESENTED BY: Paid-in capital............................ $62,027,444
Accumulated net realized gain (loss) on investments (2,071)
___________
NET ASSETS.................................................................. $62,025,373
=============
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized) 62,027,444
NET ASSET VALUE, offering and redemption price per share.................... $1.00
========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INVESTMENT INCOME
INCOME Interest Income............................ $1,658,700
EXPENSES: Management fee_Note 3(a)................... $ 146,632
Auditing fees.............................. 10,908
Prospectus and shareholders' reports....... 9,210
Custodian fees............................. 8,385
Legal fees................................. 2,461
Registration fees.......................... 1,770
Trustees' fees and expenses_Note 3(b)...... 793
Shareholder servicing costs................ 165
Miscellaneous.............................. 655
______________
Total Expenses....................... 180,979
______________
INVESTMENT INCOME_NET....................................................... 1,477,721
NET REALIZED GAIN (LOSS) ON INVESTMENTS_Note 2(b)........................... (1,289)
______________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,476,432
===============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
________________ __________________
OPERATIONS:
Investment income_net................................................... $ 1,477,721 $ 2,566,517
Net realized gain (loss) on investments................................. (1,289) (3)
________________ __________________
Net Increase (Decrease) in Net Assets Resulting from Operations..... 1,476,432 2,566,514
________________ __________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net................................................... (1,477,721) (2,579,096)
________________ __________________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................... 29,290,772 114,999,607
Dividends reinvested.................................................. 1,477,721 2,579,096
Cost of shares redeemed................................................. (24,927,943) (106,628,860)
________________ __________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 5,840,550 10,949,843
________________ __________________
Total Increase (Decrease) in Net Assets........................... 5,839,261 10,937,261
NET ASSETS:
Beginning of Period..................................................... 56,186,112 45,248,851
________________ __________________
End of Period........................................................... $62,025,373 $56,186,112
================= =================
SEE NOTES TO FINANCIAL STATEMENTS.
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DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET 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.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
________ ______ ______ ______ ______ ______
Investment Operations:
Investment income_net................. .025 .050 .055 .043 .032 .041
________ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income_net.. (.025) (.050) (.055) (.043) (.032) (.041)
________ ______ ______ ______ ______ ______
Net asset value, end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======= ====== ====== =======
TOTAL INVESTMENT RETURN................... 5.08%* 5.10% 5.66% 4.37% 3.29% 4.14%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .62%* .62% .62% -- -- --
Ratio of net investment income
to average net assets............... 5.04%* 4.96% 5.51% 4.62% 3.23% 4.10%
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation............. _ _ .03% .88% 2.81% 4.25%
Net Assets, end of period (000's Omitted) $62,025 $56,186 $45,249 $34,728 $7,651 $790
* Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
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DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET 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 Money Market 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 a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity. The Dreyfus
Corporation ("Dreyfus") serves as the Series' investment adviser. Dreyfus is
a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc.
is the distributor of the Series' shares, which are sold without a sales
charge.
It is the Series' policy to maintain a continuous net asset value per
share of $1.00; the Series has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so. There
is no assurance, however, that the Fund will be able to maintain a stable net
asset value per share of $1.00.
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 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.
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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.
NOTE 2_SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Trustees to represent the fair
value of the Series' investments.
(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 is recognized on the accrual basis. Cost of investments represents
amortized cost.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the terms of the repurchase price plus accrued
interest, the Fund will require the seller to deposit additional collateral
by the next business day. If the request for additional collateral is not
met, or the seller defaults on its repurchase obligation, the Fund maintains
its right to sell the underlying securities at market value and may claim any
resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, 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 a net realized capital gain can be offset by a capital loss
carryovers, 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.
The Fund has an unused capital loss carryover of approximately $850
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1996. If not
applied, the carryover expires in fiscal 2004.
NOTE 3_INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to the provisions of an Investment Advisory Agreement with
Dreyfus, the investment advisory fee is computed at the annual rate of .50 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.
(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.
[Dreyfus lion "d" logo]
Registration Mark
DREYFUS VARIABLE INVESTMENT FUND,
MONEY MARKET PORTFOLIO
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 117SA976
[Dreyfus logo]
Registration Mark
Variable
Investment Fund,
Money Market
Portfolio
Semi-Annual Report
June 30, 1997
