[dreyfus lion "d" logo] (reg.tm)
[dreyfus logo] (reg.tm)
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. 117SA986
Variable
Investment Fund,
Money Market
Portfolio
Semi-Annual
Report
June 30, 1998
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Variable Investment
Fund--Money Market Portfolio for the six-month period ended June 30, 1998. For
the period, your Portfolio produced an annualized yield of 5.07% and, after
taking into account the effect of compounding, the annualized effective yield
was 5.19%.*
THE ECONOMY AND MARKET ENVIRONMENT
A major influence on the money market in the past few months has been
increased evidence of a slowdown in general economic activity. Overall, the
economy appears to be healthy, the job market has been strong, consumers seem to
be in a constructive frame of mind and inflation is still at bay. However, the
fast pace of expansion that prevailed earlier in the year has clearly cooled.
The problems in Japan and Southeast Asia are finally having some repercussions
in this country. Demand for our exports from that part of the world has declined
sharply. Furthermore, the flight to the dollar which has resulted from the Asian
problems has made the U.S. dollar very expensive for those trading partners.
Lately, the virtual shutdown of U.S. production at General Motors plants, due
to the UAW strike in Flint, Michigan, has been another factor reducing the pace
of the economy.
Although growth in corporate profits has slowed in many sectors in the past
year, consensus estimates of future profit growth continue to be cut by several
analysts. Profit margins had already begun to shrink under the weight of rising
labor costs, making companies' reported profits increasingly dependent on growth
of sales. Overall profits could thus prove quite vulnerable to a period of
significantly slower economic growth.
In view of this cooling trend, it has come as no surprise that the Federal
Reserve Board, though still watchful for signs of wage inflation, has not taken
any recent action to raise interest rates.
Thus, the money market is feeling the effects of economic cross-currents.
Factors tending to restrain interest rates include the demand for U.S.
instruments from foreign investors seeking a "safe haven" as well as the
prospect of the U.S. Government running a budget surplus, thus reducing the need
for Treasury borrowing. Yet we believe that the continuing economic expansion,
albeit at a lower rate, helped to keep money market rates from going lower than
they did during the reporting period.
PORTFOLIO FOCUS
In this market environment, we have maintained an average maturity
approximating that of our peers. This is a moderately defensive strategy which
we feel is wise at this juncture. We will look to vary our approach should new
factors in the market make this desirable.
Sincerely,
[Patricia A. Larkin signature logo]
Patricia A. Larkin
Senior Portfolio Manager
July 15, 1998
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 charges imposed in connection with investing in variable annuity
contracts and variable life insurance policies.
<TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
Principal
Negotiable Bank Certificates of Deposit--11.6% Amount Value
- -------------------------------------------------------
____________ ___________
Bankers Trust Co.
<S> <C> <C>
6.00%, 12/10/98 $2,000,000 $ 2,000,085
Credit Suisse First Boston (Yankee)
5.61%, 4/14/99 (a) 3,000,000 3,000,000
NationsBank N.A.
5.59%, 9/11/98 3,000,000 3,000,000
____________
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $8,000,085) $ 8,000,085
============
Commercial Paper--47.3%
- -------------------------------------------------------
BHF Finance (DE) Inc.
5.61%, 7/10/98 $ 3,000,000 $ 2,995,800
Commonwealth Bank of Australia
5.64%, 10/19/98 3,000,000 2,949,583
Donaldson Lufkin & Jenrette Inc.
5.68%, 7/6/98 1,000,000 999,222
FINOVA Capital Corp.
5.63%, 10/16/98 3,000,000 2,950,780
General Electric Capital Corp.
5.52%, 7/31/98 3,000,000 2,986,575
General Motors Acceptance Corp.
5.54%, 9/2/98 3,000,000 2,971,755
Goldman Sachs Group L.P.
5.60%, 9/18/98 3,000,000 2,963,792
Hertz Corp.
5.57%, 7/16/98 3,000,000 2,993,113
Merrill Lynch & Co. Inc.
5.52%, 7/28/98 3,000,000 2,987,940
Paine Webber Group Inc.
5.71%, 9/8/98 3,000,000 2,968,088
Prudential Funding Corp.
6.42%, 7/1/98 2,000,000 2,000,000
Svenska Handelsbanken Inc.
5.57%, 7/14/98 3,000,000 2,994,031
____________
TOTAL COMMERCIAL PAPER
(cost $32,760,679) $32,760,679
============
Corporate Notes--13.0%
- -------------------------------------------------------
Heller Financial Inc.
5.80%, 4/13/99 (a) $ 3,000,000 $ 3,000,000
IBM Credit Corp.
5.60%, 6/18/99 (a) 3,000,000 2,998,305
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998 (UNAUDITED)
Principal
Corporate Notes (continued) Amount Value
- -------------------------------------------------------
____________ ___________
Lehman Brothers Holdings, Inc.
5.65%, 11/2/98 $ 1,500,000 $ 1,515,135
Lehman Brothers Holdings, Inc.
5.71%, 3/22/99 (a) 1,500,000 1,500,000
____________
TOTAL CORPORATE NOTES
(cost $9,013,440) $ 9,013,440
=============
Short-Term Bank Notes--21.7%
- -------------------------------------------------------
BankBoston N.A.
5.71%, 12/10/98 (a) $ 3,000,000 $ 3,000,000
Bankers Trust N.Y. Corp.
5.65%, 3/19/99 (a) 1,000,000 999,720
Huntington National Bank
5.60%, 12/8/98 (a) 3,000,000 2,998,777
Key Bank N.A.
5.62%, 2/24/99 (a) 3,000,000 2,998,670
PNC Bank N.A.
5.67%, 9/2/98 (a) 2,000,000 1,999,766
Societe Generale
5.63%, 2/23/99 (a) 3,000,000 2,999,240
____________
TOTAL SHORT-TERM BANK NOTES
(cost $14,996,173) $14,996,173
============
Time Deposits--7.6%
- -------------------------------------------------------
Chase Manhattan Bank N.A.(London)
5.50%, 7/1/98 $ 2,261,000 $ 2,261,000
Republic National Bank of New York (London)
5.75%, 7/1/98 3,000,000 3,000,000
____________
TOTAL TIME DEPOSITS
(cost $5,261,000) $ 5,261,000
============
TOTAL INVESTMENTS
(cost $70,031,377) 101.2% $70,031,377
======= ============
LIABILITIES, LESS CASH AND RECEIVABLES (1.2%) $ (835,004)
======= ============
NET ASSETS 100.0% $69,196,373
======= ============
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, 1998 (UNAUDITED)
Cost Value
____________ ___________
ASSETS: Investments in securities--See Statement of Investments $70,031,377 $70,031,377
Interest receivable 272,442
Prepaid expenses and other assets 2,636
____________
70,306,455
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 29,086
Cash overdraft due to Custodian 82,767
Receivable for shares of Beneficial Interest redeemed 954,456
Accrued expenses 43,773
____________
1,110,082
____________
NET ASSETS $69,196,373
============
REPRESENTED BY:
Paid-in capital $69,198,644
Accumulated net realized gain (loss) on investments (2,271)
____________
NET ASSETS $69,196,373
============
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST AUTHORIZED) 69,198,644
NET ASSET VALUE, offering and redemption price per share $1.00
=====
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income $1,928,388
EXPENSES: Investment advisory fee--Note 2(a) $ 169,497
Auditing fees 12,098
Custodian fees 10,712
Prospectus and shareholders' reports 2,811
Registration fees 1,828
Trustees' fees and expenses--Note 2(b) 513
Shareholder servicing costs 165
Legal fees 144
Miscellaneous 10,117
___________
Total Expenses 207,885
___________
INVESTMENT INCOME--NET 1,720,503
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) (200)
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,720,303
===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1998 Year Ended
(Unaudited) December 31, 1997
________________ _______________
OPERATIONS:
<S> <C> <C>
Investment income--net $ 1,720,503 $ 3,093,574
Net realized gain (loss) from investments (200) (1,289)
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations 1,720,303 3,092,285
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net (1,720,503) (3,093,574)
____________ ____________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold 37,310,655 62,971,700
Dividends reinvested 1,720,503 3,093,574
Cost of shares redeemed (34,462,576) (57,622,106)
____________ ____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 4,568,582 8,443,168
____________ ____________
Total Increase (Decrease) in Net Assets 4,568,382 8,441,879
NET ASSETS:
Beginning of period 64,627,991 56,186,112
____________ ____________
End of period $69,196,373 $64,627,991
============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
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, 1998 Year Ended December 31,
__________________________________
___________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993
__________ ______ ______ ______ ______ ______
<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 .050 .055 .043 .032
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net (.025) (.050) (.050) (.055) (.043) (.032)
______ ______ ______ ______ ______ ______
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 5.12%* 5.19% 5.10% 5.66% 4.37% 3.29%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . 61%* .61% .62% .62% -- --
Ratio of net investment income to average net assets 5.08%* 5.08% 4.96% 5.51% 4.62% 3.23%
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation -- -- -- .03% .88% 2.81%
Net Assets, end of period (000's Omitted) $69,196 $64,628 $56,186 $45,249 $34,728 $7,651
- -----------------------------
* Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
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 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.
(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.
Under the terms of the custodian agreement, the Series received net earnings
credits of $3,714 during the period ended June 30, 1998 based on available cash
balances left on deposit. Income earned under this arrangement is included in
interest income.
The Series 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 Series' agreement to resell such securities at a
mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Series' 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 at all times.
If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Series 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 Series maintains its right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(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 Series has an unused capital loss carryover of approximately $2,150
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1997. If not
applied, $850 of the carryover expires in fiscal 2004, and $1,300 expires in
fiscal 2005.
NOTE 2--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 .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.
