Dreyfus Variable
Investment Fund,
Growth and Income Portfolio
ANNUAL REPORT December 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The portfolio could be adversely affected if the computer systems used by
Dreyfus and the portfolio's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. Dreyfus has
taken steps designed to avoid year 2000-related problems in its systems and to
monitor the readiness of other service providers. In addition, issuers of
securities in which the portfolio invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the portfolio's
investments and its share price.
Contents
THE PORTFOLIO
- ------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Portfolio Performance
7 Statement of Investments
12 Statement of Financial Futures
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
16 Financial Highlights
17 Notes to Financial Statements
23 Report of Independent Auditors
24 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Portfolio
Dreyfus Variable Investment Fund,
Growth and Income Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Variable Investment
Fund, Growth and Income Portfolio, covering the 12-month period from January 1,
1999 through December 31, 1999. Inside, you'll find valuable information about
how the portfolio was managed during the reporting period, including a
discussion with the portfolio manager, Douglas D. Ramos, CFA.
The past year has been both highly volatile and rewarding for many investors in
U.S. stocks. On December 31, the last trading day of 1999, most major stock
market indices hit new highs, including the Dow Jones Industrial Average, the S&
P 500 Index of large-cap stocks, the technology-heavy Nasdaq 100 and the Russell
2000 Index of small-capitalization stocks.
These simultaneous highs masked the remarkable narrowness of the stock market's
advance in 1999, however. Following the trend established over the past several
years, growth-oriented stocks handily outperformed value-oriented stocks.
Indeed, until a more broad-based rally in the fourth quarter, stellar
performance was generally limited to a handful of highly valued technology and
telecommunications companies. In our view, many fundamentally sound companies in
other market sectors may be selling at attractive valuations.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Variable Investment Fund, Growth and Income
Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
January 14, 2000
DISCUSSION OF PERFORMANCE
Douglas D. Ramos, CFA, Portfolio Manager
How did Dreyfus Variable Investment Fund, Growth and Income Portfolio perform
relative to its benchmark?
For the 12-month period ended December 31, 1999, the portfolio produced a total
return of 16.88%.(1) This performance compares with a total return of 21.03% for
the portfolio' s benchmark, the Standard & Poor's 500((reg.tm)) Composite Stock
Price Index ("S&P 500")(2) for the same period.
We attribute the portfolio's performance to the surprisingly rapid recovery of
global capital markets that occurred during the first half of 1999. During those
six months, the portfolio achieved its strongest gains. However, the recovery
was especially strong among a narrow group of very large growth stocks, of which
the S&P 500 Index was more heavily weighted than the portfolio. As a result, the
Index rose more rapidly than the portfolio.
What is the portfolio's investment approach?
The portfolio invests primarily in midsized and large-sized companies that we
believe have above-average growth potential and are attractively valued relative
to the S& P 500 Index. We generally look to avoid the risks associated with
market timing by remaining close to fully invested.
We typically measure a stock' s relative value by looking at its price in
relation to the company's business prospects and intrinsic worth, as measured by
a wide range of financial and business data. By examining each company's
fundamentals, together with economic and industry trends, we typically look for
factors that could trigger a rise in the stock's price, such as new competitive
opportunities or internal operational improvements. The result of our approach
during the recent 12-month period was a portfolio containing stocks from a
number of different market sectors and industries.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
The strong rise of the portfolio's benchmark was driven by the performance of a
narrow group of companies, many of which were in the volatile technology and
communications sectors. While the portfolio benefited from owning significant
positions in some of these stocks -- such as semiconductor equipment maker
Applied Materials, computer server maker Sun Microsystems and business software
developer Oracle -- others failed to meet our investment criteria. As a result,
our performance lagged the benchmark.
Nevertheless, the portfolio's technology holdings generally performed strongly
throughout the period. In addition to the computer-related technologies
mentioned above, the communications technology sector also showed strong growth,
driven by rapidly increasing demand for cellular services as well as line-based
analog and digital communications. The portfolio benefited with investments in
key communications equipment and services companies such as Nortel Networks and
Ericsson (LM) Telephone.
Most other sectors remained generally flat or suffered declines during the
period. The most significant declines occurred in the consumer staples sector,
where concerns about the impact of Internet-based shopping on the food retailing
industry hurt stock prices. The portfolio' s holdings in companies such as
Albertson' s and Safeway declined as a result. We responded by selling most of
our position in these companies. The consumer cyclical sector was also hard hit
by rising interest rates, hurting the portfolio's holdings in such companies as
Masco and Black & Decker.
The financial industry, which represented the portfolio's second largest group
of holdings, was particularly volatile. During the first few months of the
period, financial stocks reacted well to the continued strength of the U.S.
economy and the apparent stabilization of many global economies. After showing
sharp gains, however, many banking and insurance stocks declined in response to
rising interest rates. We viewed these declines as buying opportunities,
increasing some of our positions in the sector. In mid-October, financial stocks
rallied as evi
dence mounted that inflation remained in check, then slumped again in December
as interest rates edged up again.
What is the portfolio's current strategy?
We adjusted our strategy during the reporting period in an effort to give the
portfolio added flexibility to hold stocks that we believe are moderately valued
relative to the benchmark, as well as those that we believe are undervalued. In
the past, our investment discipline often led us to avoid what we believe are
moderately valued stocks with excellent growth potential, or to sell a stock
relatively early in its growth cycle, causing the portfolio to miss out on
subsequent appreciation.
This adjustment in our strategy benefited the portfolio over the past year by
allowing us to purchase shares of moderately priced technology stocks, such as
Electronic Data Systems, which later rose sharply. Our modified strategy also
allowed us to hold appreciating shares of companies, such as Lexmark
International Group and Intel, which subsequently rose further in value.
We have continued to adhere to our disciplined investment approach in seeking
attractively priced securities that we believe offer above-average growth
potential.
January 14, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD
& POOR'S 500((reg.tm)) COMPOSITE STOCK PRICE INDEX IS A WIDELY ACCEPTED,
UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE.
The Portfolio
PORTFOLIO PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Variable
Investment Fund, Growth and Income Portfolio with the Standard and Poor's 500
Composite Stock Price Index and the Wilshire Large Company Value Index
- --------------------------------------------------------------------------------
Average Annual Total Returns AS OF 12/31/99
<TABLE>
Inception From
Date 1 Year 5 Years Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PORTFOLIO 5/2/94 16.88% 24.31% 20.90%
</TABLE>
(+) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
(+)(+) SOURCE: WILSHIRE ASSOCIATES, INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES
AND EXPENSES IMPOSED IN CONNECTION WITH INVESTING IN VARIABLE INSURANCE
CONTRACTS WHICH WILL REDUCE RETURNS.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS VARIABLE
INVESTMENT FUND, GROWTH AND INCOME PORTFOLIO ON 5/2/94 (INCEPTION DATE) TO A
$10,000 INVESTMENT MADE ON THAT DATE IN THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX AS WELL AS TO THE WILSHIRE LARGE COMPANY VALUE INDEX WHICH ARE
DESCRIBED BELOW. FOR COMPARATIVE PURPOSES, THE VALUE OF EACH INDEX ON 4/30/94 IS
USED AS THE BEGINNING VALUE ON 5/2/94. ALL DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS ARE REINVESTED.
THE PORTFOLIO'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL
APPLICABLE FEES AND EXPENSES OF THE PORTFOLIO. THE STANDARD & POOR'S 500
COMPOSITE STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK
MARKET PERFORMANCE. THE WILSHIRE LARGE COMPANY VALUE INDEX IS CONSTRUCTED BY
USING A BLEND OF PRICE-TO-BOOK AND FORECAST PRICE-TO-EARNINGS RATIOS. THE
LARGEST 750 STOCKS IN THE WILSHIRE 5000 ARE RANKED BASED ON A STYLE SCORE THAT
IS 75% PRICE-TO-EARNINGS RATIO AND 25% FORECASTED PRICE-TO-EARNINGS RATIO. THE
UNIVERSE ALSO IS DIVIDED SO THAT COMPANIES THAT REPRESENT HALF OF THE TOTAL
CAPITALIZATION FALL INTO GROWTH AND THE REMAINDER ARE PLACED INTO VALUE. THE
INDICES DO NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER
INFORMATION RELATING TO PORTFOLIO PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS,
IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE
PROSPECTUS AND ELSEWHERE IN THIS REPORT.
STATEMENT OF INVESTMENTS
December 31, 1999
COMMON STOCKS--95.9% Shares Value ($)
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COMMERCIAL SERVICES--1.5%
At Home, Cl. A 25,300 1,084,737
McGraw-Hill Cos. 51,900 3,198,338
Valassis Communications 58,500(a) 2,471,625
6,754,700
CONSUMER DURABLES--1.0%
Ford Motor 42,000 2,244,375
General Motors 13,000 944,938
Leggett & Platt 63,900 1,369,856
4,559,169
CONSUMER NON-DURABLES--3.4%
Anheuser-Busch Cos. 12,000 850,500
Estee Lauder, Cl. A 24,900 1,255,894
Heinz (H.J.) 22,000 875,875
Intimate Brands 61,000 2,630,625
Kimberly-Clark 48,000 3,132,000
PepsiCo 202,000 7,120,500
15,865,394
CONSUMER SERVICES--8.0%
AMFM 30,000(a) 2,347,500
Adelphia Communications, Cl. A 42,100 2,762,812
CBS 92,000(a) 5,882,250
Carnival 111,800 5,345,438
Cendant 241,600(a) 6,417,500
Clear Channel Communications 16,000(a) 1,428,000
Gannett 62,000 5,056,875
Infinity Broadcasting, Cl. A 37,500(a) 1,357,031
McDonald's 34,000 1,370,625
Time Warner 70,800 5,128,575
37,096,606
ELECTRONIC TECHNOLOGY--20.1%
American Tower, Cl. A 106,200 3,245,737
Apple Computer 16,200(a) 1,665,562
Applied Materials 39,000(a) 4,940,813
Boeing 58,000 2,410,625
Cabletron Systems 67,300(a) 1,749,800
Compaq Computer 40,000 1,082,500
Computer Sciences 69,200(a) 6,548,050
The Portfolio
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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ELECTRONIC TECHNOLOGY (CONTINUED)
Ericsson (LM) Telephone, Cl. B, ADR 104,000 6,831,500
General Dynamics 28,000 1,477,000
Hewlett-Packard 33,600 3,828,300
Intel 131,900 10,857,019
International Business Machines 89,000 9,612,000
LSI Logic 93,000(a) 6,277,500
Lexmark International Group, Cl. A 49,300(a) 4,461,650
Motorola 40,000 5,890,000
National Semiconductor 93,800(a) 4,015,813
Nortel Networks 42,000 4,242,000
Sun Microsystems 26,000(a) 2,013,375
3COM 30,000(a) 1,410,000
Teradyne 67,000(a) 4,422,000
Texas Instruments 15,000 1,453,125
United Technologies 65,200 4,238,000
92,672,369
ENERGY MINERALS--5.0%
Burlington Resources 19,000 628,187
Conoco, Cl. A 86,000 2,128,500
Exxon Mobil 94,723 7,631,134
Royal Dutch Petroleum, ADR 130,000 7,856,875
Texaco 72,200 3,921,362
USX-Marathon Group 36,000 888,750
23,054,808
FINANCE--12.9%
American Express 16,900 2,809,625
American General 31,100 2,359,712
American International Group 60,620 6,554,538
Associates First Capital, Cl. A 70,000 1,920,625
Bank of America 60,200 3,021,288
Bank of New York 55,000 2,200,000
Chase Manhattan 69,000 5,360,437
Citigroup 174,100 9,673,431
Federal Home Loan Mortgage 56,600 2,663,738
Federal National Mortgage Association 97,400 6,081,412
Fleet Boston Financial 57,588 2,004,782
Household International 23,700 882,825
Morgan (J.P.) 17,000 2,152,625
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
FINANCE (CONTINUED)
Morgan Stanley, Dean Witter 44,600 6,366,650
Wells Fargo 108,000 4,367,250
XL Capital, Cl. A 25,000 1,296,875
59,715,813
HEALTH SERVICES--3.1%
Columbia/HCA Healthcare 287,100 8,415,619
Wellpoint Health Networks 92,500(a) 6,099,219
14,514,838
HEALTH TECHNOLOGY--5.7%
American Home Products 35,000 1,380,312
Baxter International 24,000 1,507,500
Bristol-Myers Squibb 67,000 4,300,562
Johnson & Johnson 52,000 4,842,500
Lilly (Eli) 28,900 1,921,850
Merck & Co. 113,000 7,578,063
Pharmacia & Upjohn 58,600 2,637,000
Warner-Lambert 26,000 2,130,375
26,298,162
INDUSTRIAL SERVICES--1.3%
Schlumberger 93,000 5,231,250
Transocean Sedco Forex 18,005 606,537
5,837,787
NON-ENERGY MINERALS--.9%
Alcoa 18,000 1,494,000
Weyerhaeuser 34,100 2,448,806
3,942,806
PROCESS INDUSTRIES--1.8%
Dow Chemical 19,000 2,538,875
duPont (E.I.) deNemours 37,000 2,437,375
International Paper 16,000 903,000
PPG Industries 15,000 938,437
Rohm & Haas 40,800 1,660,050
8,477,737
PRODUCER MANUFACTURING--8.2%
Emerson Electric 23,000 1,319,625
General Electric 121,000 18,724,750
Georgia-Pacific 8,400 426,300
Honeywell International 146,875 8,472,852
The Portfolio
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
PRODUCER MANUFACTURING (CONTINUED)
Ingersoll-Rand 20,900 1,150,806
Masco 138,300 3,509,362
Tyco International 108,400 4,214,050
37,817,745
RETAIL TRADE--3.9%
Dayton Hudson 104,000 7,637,500
Federated Department Stores 14,400(a) 728,100
Gap 25,000 1,150,000
Lowes 87,200 5,210,200
May Department Stores 48,900 1,577,025
TJX Cos. 83,800 1,712,663
18,015,488
TECHNOLOGY SERVICES--8.6%
BMC Software 33,300(a) 2,661,919
Charter Communications, Cl. A 210,100(a) 4,595,938
Computer Associates International 118,000 8,252,625
Compuware 66,800(a) 2,488,300
Electronic Data Systems 91,000 6,091,313
First Data 20,000 986,250
Network Associates 77,000(a) 2,054,937
Oracle 76,000(a) 8,516,750
Synopsys 61,000(a) 4,071,750
39,719,782
UTILITIES--10.5%
AT&T 123,500 6,267,625
Bell Atlantic 89,000 5,479,063
Coastal 119,800 4,245,413
El Paso Energy 25,700 997,481
Enron 52,000 2,307,500
GTE 108,000 7,620,750
MCI WorldCom 134,700(a) 7,147,519
Niagara Mohawk Power 39,000(a) 543,562
SBC Communications 131,000 6,386,250
Sprint 91,600 6,165,825
Texas Utilities 32,400 1,152,225
48,313,213
TOTAL COMMON STOCKS
(cost $338,292,723) 442,656,417
Principal
SHORT-TERM INVESTMENTS--3.9% Amount ($) Value ($)
- --------------------------------------------------------------------------------
U.S. TREASURY BILLS:
5.16%,1/13/2000 4,224,000 4,218,551
4.98%,1/20/2000 2,425,000 2,419,689
4.93%, 2/3/2000 9,409,000(b) 9,371,552
5.05%, 2/10/2000 1,416,000 1,408,708
5.05%, 3/30/2000 645,000 636,957
TOTAL SHORT-TERM INVESTMENTS
(cost $18,046,773) 18,055,457
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TOTAL INVESTMENTS (cost $356,339,496) 99.8% 460,711,874
CASH AND RECEIVABLES (NET) .2% 680,475
NET ASSETS 100.0% 461,392,349
(A) NON-INCOME PRODUCING.
(B) PARTIALLY HELD BY THE CUSTODIAN IN A SEGREGATED ACCOUNT AS COLLATERIAL FOR
OPEN FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF FINANCIAL FUTURES
December 31, 1999
<TABLE>
Market Value Unrealized
Covered Appreciation
Contracts by Contracts ($) Expiration at 12/31/99 ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL FUTURES LONG
Standard & Poor's 500 36 13,357,800 March 2000 484,650
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 356,339,496 460,711,874
Cash 297,548
Receivable for investment securities sold 719,475
Dividends receivable 373,450
Receivable for futures variation margin 30,600
Prepaid expenses 1,030
462,133,977
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 297,011
Payable for investment securities purchased 417,897
Accrued expenses 26,720
741,628
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NET ASSETS ($) 461,392,349
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 357,831,055
Accumulated undistributed investment income--net 516,936
Accumulated distributions in excess of net
realized gain on investments (1,812,670)
Accumulated net unrealized appreciation (depreciation)
on investments (including $484,650 net unrealized appreciation
on financial futures)--Note 4(b) 104,857,028
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NET ASSETS ($) 461,392,349
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SHARES OUTSTANDING
(unlimited number of $.001 par value shares of
Beneficial Interest authorized) 18,105,074
NET ASSET VALUE, offering and redemption price per share ($) 25.48
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
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INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $35,984 foreign taxes withheld at source) 5,485,354
Interest 820,935
TOTAL INCOME 6,306,289
EXPENSES:
Investment advisory fee--Note 3(a) 3,244,091
Prospectus and shareholders' reports 52,401
Custodian fees--Note 3(a) 45,533
Professional fees 40,146
Trustees' fees and expenses--Note 3(b) 5,783
Shareholder servicing costs 4,047
Loan commitment fees--Note 2 3,376
Miscellaneous 13,095
TOTAL EXPENSES 3,408,472
INVESTMENT INCOME--NET 2,897,817
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments:
Long transactions 20,330,094
Short sale transactions (3,618)
Net realized gain (loss) on forward currency exchange contracts 103,192
Net realized gain (loss) on financial futures 5,429,595
NET REALIZED GAIN (LOSS) 25,859,263
Net unrealized appreciation (depreciation) on investments
[including ($825,850) net unrealized (depreciation)
on financial futures] 39,651,160
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 65,510,423
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 68,408,240
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended December 31,
------------------------------
1999 1998
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,897,817 4,016,926
Net realized gain (loss) on investments 25,859,263 (12,202,953)
Net unrealized appreciation (depreciation)
on investments 39,651,160 51,292,044
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 68,408,240 43,106,017
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DIVIDENDS TO SHAREHOLDERS ($):
From investment income--net (2,714,649) (3,885,893)
From net realized gain on investments (12,151,955) (7,167,070)
In excess of net realized gain on investments (1,809,052) --
TOTAL DIVIDENDS (16,675,656) (11,052,963)
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BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 43,105,900 98,659,399
Dividends reinvested 16,675,656 11,052,963
Cost of shares redeemed (80,823,642) (80,895,666)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (21,042,086) 28,816,696
TOTAL INCREASE (DECREASE) IN NET ASSETS 30,690,498 60,869,750
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 430,701,851 369,832,101
END OF PERIOD 461,392,349 430,701,851
Undistributed investment income--net 516,936 333,768
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,803,945 4,575,277
Shares issued for dividends reinvested 668,393 497,056
Shares redeemed (3,401,483) (3,835,536)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (929,145) 1,236,797
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
<TABLE>
Year Ended December 31,
---------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 22.63 20.78 19.55 18.33 11.98
Investment Operations:
Investment income--net .16(a) .21 .28 .36 .28
Net realized and unrealized
gain (loss) on investments 3.64 2.23 2.79 3.43 7.07
Total from Investment Operations 3.80 2.44 3.07 3.79 7.35
Distributions:
Dividends from investment income--net (.15) (.20) (.28) (.35) (.27)
Dividends from net realized gain
on investments (.70) (.39) (1.56) (2.22) (.73)
Dividends in excess of net realized
gain on investments (.10) -- -- -- --
Total Distributions (.95) (.59) (1.84) (2.57) (1.00)
Net asset value, end of period 25.48 22.63 20.78 19.55 18.33
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 16.88 11.81 16.21 20.75 61.89
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .79 .78 .80 .83 .92
Ratio of net investment income
to average net assets .67 1.00 1.37 1.96 2.21
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- -- -- -- .03
Portfolio Turnover Rate 96.26 126.18 180.73 237.44 255.42
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 461,392 430,702 369,832 225,935 71,161
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Variable Investment Fund (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company, operating as a series company, currently offering thirteen
series, including the Growth and Income Portfolio (the "portfolio") 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 portfolio is a non-diversified series. The portfolio's investment
objective is to provide long-term capital growth, current income and growth of
income, consistent with reasonable investment risk. The Dreyfus Corporation
(" Dreyfus" ) serves as the portfolio's investment adviser. Dreyfus is a direct
subsidiary of Mellon Bank, N.A. ("Mellon"), which is a wholly-owned subsidiary
of Mellon Financial Corporation. Premier Mutual Fund Services, Inc. is the
distributor of the portfolio's 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 portfolio' s 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 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
The Portfolio
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in the market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amount of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) 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. Under the terms of the custody agreement, the portfolio received
net earnings credits of $5,587 during the period ended December 31, 1999 based
on available cash balances left on deposit. Income earned under this arrangement
is included in interest income.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
The portfolio declares and pays dividends from investment income-net on a
quarterly basis. Dividends from net realized capital gain are normally declared
and paid annually, but the portfolio
may make distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(E) FEDERAL INCOME TAXES: It is the policy of the portfolio 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 Code and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The portfolio participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the portfolio has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to the portfolio at rates based on
prevailing market rates in effect at the time of borrowings. During the period
ended December 31, 1999, the portfolio did not borrow under the Facility.
NOTE 3--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
portfolio's average daily net assets and is payable monthly.
The portfolio 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 portfolio. During the
period ended December 31, 1999, the portfolio was charged $284 pursuant to the
transfer agency agreement.
The portfolio compensates Mellon under a custody agreement for providing
custodial services for the portfolio. During the period ended
The Portfolio
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, the portfolio was charged $45,533 pursuant to the custody
agreement.
(B) Each trustee who is not an "affiliated person" as defined in the Act
received from the fund an annual fee of $2,500 and an attendance fee of $250 per
meeting. The Chairman of the Board received an additional 25% of such
compensation.
Each non-affiliated trustee is a Board member of one or more funds comprising a
certain group of funds (" Fund Group") within the Dreyfus complex. Effective
January 1, 2000, for their participation as a trustee in a Fund Group, the
trustees receive an annual fee of $40,000 each, $6,000 for each meeting attended
in person and $500 for each telephonic meeting in which they participate. These
fees are allocated among the funds in the Fund Group. The Chairman of the Board
receives an additional 25% of such compensation.
(C) During the period ended December 31, 1999, the portfolio incurred total
brokerage commissions of $851,094, of which $17,900 was paid to Dreyfus
Brokerage Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
(A) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, financial futures and forward currency exchange contracts, during
the period ended December 31, 1999:
Purchases Sales
- --------------------------------------------------------------------------------
Long transactions 398,083,774 399,961,702
Short sale transactions 447,873 444,255
TOTAL 398,531,647 400,405,957
The portfolio is engaged in short-selling which obligates the portfolio to
replace the security borrowed by purchasing the security at current market
value. The portfolio would incur a loss if the price of the security increases
between the date of the short sale and the date on which the portfolio replaces
the borrowed security. The portfolio would realize a gain if the price of the
security declines between those
dates. Until the portfolio replaces the borrowed security, the portfolio will
maintain daily, a segregated account with a broker and custodian, of permissible
liquid assets sufficient to cover its short position. At December 31, 1999,
there were no securities sold short outstanding.
The portfolio enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings. When executing forward currency exchange contracts, the
portfolio is obligated to buy or sell a foreign currency at a specified rate on
a certain date in the future. With respect to sales of forward currency exchange
contracts, the portfolio would incur a loss if the value of the contract
increases between the date the forward contract is opened and the date the
forward contract is closed. The portfolio realizes a gain if the value of the
contract decreases between those dates. With respect to purchases of forward
currency exchange contracts, the portfolio would incur a loss if the value of
the contract decreases between the date the forward contract is opened and the
date the forward contract is closed. The portfolio realizes a gain if the value
of the contract increases between those dates. The portfolio is also exposed to
credit risk associated with counter party nonperformance on these forward
currency exchange contracts which is typically limited to the unrealized gain on
each open contract. At December 31, 1999, there were no open forward currency
exchange contracts.
The portfolio may invest in financial futures contracts in order to gain
exposure to or protect against changes in the market. The portfolio is exposed
to market risk as a result of changes in the value of the underlying financial
instruments. Investments in financial futures require the portfolio to "mark to
market" on a daily basis, which reflects the change in market value of the
contracts at the close of each day's trading. Accordingly, variation margin
payments are received or made to reflect daily unrealized gains or losses. When
the contracts are closed, the portfolio 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 Portfolio
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
December 31, 1999 are set forth in the Statement of Financial Futures.
(B) At December 31, 1999, accumulated net unrealized appreciation on investments
and financial futures was $104,857,028, consisting of $111,697,089 gross
unrealized appreciation and $6,840,061 gross unrealized depreciation.
At December 31, 1999, 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).
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Variable Investment Fund, Growth and Income Portfolio
We have audited the accompanying statement of assets and liabilities, including
the statements of investments and financial futures, of Dreyfus Variable
Investment Fund, Growth and Income Portfolio (one of the series constituting the
Dreyfus Variable Investment Fund) as of December 31, 1999, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and financial
highlights for each of the years indicated therein. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
verification by examination of securities held by the custodian as of December
31, 1999 and confirmation of securities not held by the custodian by
correspondence with others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Variable Investment Fund, Growth and Income Portfolio at December 31,
1999, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with accounting
principles generally accepted in the United States.
New York, New York
February 3, 2000
The Portfolio
IMPORTANT TAX INFORMATION (Unaudited)
For Federal tax purposes the portfolio hereby designates $.7960 per share as a
long-term capital gain distribution of the $.8060 per share paid on December 29,
1999.
The portfolio also designates 100% of the ordinary dividends paid during the
fiscal year ended December 31, 1999 as qualifying for the corporate dividends
received deduction.
For More Information
Dreyfus Variable Investment Fund,
Growth and Income 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 108AR9912
IN DREYFUS VARIABLE INVESTMENT FUND, GROWTH AND INCOME
PORTFOLIO WITH THE STANDARD & POOR'S 500 COMPOSITE STOCK
PRICE INDEX AND THE WILSHIRE LARGE COMPANY VALUE INDEX
EXHIBIT A:
STANDARD DREYFUS
& POOR'S VARIABLE
500 INVESTMENT WILSHIRE
COMPOSITE FUND, LARGE
STOCK GROWTH COMPANY
PRICE AND INCOME VALUE
PERIOD INDEX* PORTFOLIO INDEX**
5/2/94 10,000 10,000 10,000
12/31/94 10,397 9,878 9,780
12/31/95 14,299 15,992 14,031
12/31/96 17,580 19,311 16,709
12/31/97 23,443 22,442 21,952
12/31/98 30,148 25,093 24,420
12/31/99 36,489 29,329 22,684
*Source: Lipper Analytical Services, Inc.
**Source: Wilshire Associates, Inc.
