February 7, 1997
DREYFUS VARIABLE INVESTMENT FUND
SUPPLEMENT TO PROSPECTUS
DATED NOVEMBER 1, 1996
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION IN THE FUND'S
PROSPECTUS UNDER THE CAPTION "INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
- -- QUALITY BOND PORTFOLIO -- ZERO COUPON 2000 PORTFOLIO."
QUALITY BOND AND ZERO COUPON 2000 PORTFOLIOS ONLY
U.S Treasury securities include Treasury Inflation-Protection
Securities ("TIPS"), which are newly created securities issued by the U.S.
Treasury designed to protect investors against inflation. The interest rate
paid by TIPS is fixed, while the principal value rises or falls semi-annually
based on changes in a published Consumer Price Index. Thus, if the rate of
inflation increases, the principal and interest payments on the TIPS also
increase, protecting investors from inflationary loss. During a deflationary
period, the principal and interest payments decrease, although the TIPS'
principal will not decrease below its face amount at maturity.
In exchange for the inflation protection, TIPS generally pay lower
interest rates than typical Treasury securities. Only if the rate of
inflation rises will TIPS offer a higher real yield than a conventional
Treasury bond of the same maturity. In addition, it is not possible to
predict with assurance how the market for TIPS will develop; initially, the
secondary market for these securities may not be as active or liquid as the
secondary market for conventional Treasury securities. Principal appreciation
and interest payments on TIPS will be taxed annually as ordinary interest
income for federal income tax calculations. As a result, any appreciation in
principal must be counted as interest income in the year the increase occurs,
even though the investor will not receive such amounts until the TIPS are
sold or mature. Principal appreciation and interest payments will be exempt
from state and local income taxes.
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY CONTRARY
INFORMATION CONTAINED IN THE FUND'S PROSPECTUS WITH RESPECT TO THE MANAGED
ASSETS PORTFOLIO.
MANAGED ASSETS PORTFOLIO ONLY
As of the close of business on December 31, 1996, Comstock
Partners, Inc. ("Comstock") ceased to serve as sub-investment adviser to the
Managed Assets Portfolio. Thereafter, The Dreyfus Corporation has assumed
responsibility for the day-to-day management of the Series' portfolio. The
Series' primary portfolio manager is Timothy M. Ghriskey. Mr. Ghriskey has
been employed by The Dreyfus Corporation since July 1995. For more than five
years prior thereto, he was Vice President and Associate Managing Partner of
Loomis, Sayles & Company. The Series is managed as a "contrary value"
portfolio and its investments include (i) securities which are out-of-favor
and whose price to earnings ratios are lower than the rest of the market or
industry, (ii) securities which are temporarily depressed but for which a
turnaround is expected and (iii) special situations, such as corporate
restructurings, gold stocks and high yield bonds. In addition, The Dreyfus
Corporation intends to utilize certain investment techniques, such as
short-selling and leveraging, in connection with its management of the
Series' portfolio.
In connection with The Dreyfus Corporation agreeing to provide the
day-to-day management of the Series' portfolio, at a meeting held on December
9, 1996, the Fund's Board, including a majority of the Board members who are
not "interested persons" of the Fund (as defined in the 1940 Act), approved
amending the Investment Advisory Agreement (the "Amended Advisory Agreement")
with respect to the Series, to, among other things, increase the advisory fee
payable to The Dreyfus Corporation so that it equals the aggregate annual
rate payable to The Dreyfus Corporation and Comstock for advisory services
under the then existing Investment Advisory Agreement and Sub-Investment
Advisory Agreement, respectively. At a meeting held on January 31, 1997, the
Series' shareholders approved the Amended Advisory Agreement. Under the
Amended Advisory Agreement, The Dreyfus Corporation supervises and assists in
the overall management of the Series' affairs for a monthly fee at the annual
rate of .75 of 1% of the value of the Series' average daily net assets. This
fee is equal to the aggregate annual rate of fee formerly paid by the Series
to The Dreyfus Corporation and Comstock.
(CONTINUED ON REVERSE SIDE)
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY CONTRARY
INFORMATION CONTAINED IN THE SECTION OF THE FUND'S PROSPECTUS ENTITLED
"DESCRIPTION OF THE FUND -- INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES --
SMALL CAP PORTFOLIO."
SMALL CAP PORTFOLIO ONLY
Under normal market conditions, the Small Cap Portfolio will invest
at least 65% of its total assets in companies with market capitalizations of
less than $1.5 billion at the time of purchase, both domestic and foreign,
which the Small Cap Portfolio believes to be characterized by new or
innovative products or services which should enhance prospects for growth in
future earnings.
VIFs020797
