DREYFUS EUROPEAN FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
For the six-month semi-annual period ended April 30, 1996, the Dreyfus
European Fund's Investor shares and Class R shares posted total returns of
8.58% and 8.89%, respectively.* The Fund's benchmark index of comparison,
the Morgan Stanley Capital International Europe Index, provided a total
return of 8.54% for that same period.**
At a meeting of the Board of Directors held on April 25, 1996, the Board
approved a proposal to liquidate the Fund, distribute Fund assets to Fund
shareholders and close out shareholder accounts (the "Proposal").
Shareholders of the Fund will consider approving the Proposal at a Special
Meeting of Shareholders to be held on or about June 20, 1996. If Fund
shareholders approve the Proposal, the liquidation and distribution of Fund
assets would occur on or about June 27, 1996. In anticipation of such events,
effective May 15, 1996, the Fund will be closed to any new or subsequent
investments.
EUROPEAN ECONOMIC REVIEW
European economies continue to recover slowly while struggling with steep
unemployment rates, high wage costs and sluggish demand. Budget deficit
control issues - an important aspect of the impending economic union - remain
one of the key items on the political agendas of most governments. Inflation
has remained at moderate levels and interest rates have been declining. These
last two factors have proven supportive to European stock markets. We believe
that the gloom has been overdone and that European stock markets reflect
attractive long-term values at present levels. Germany and France are good
examples of countries afflicted with high unemployment rates, overvalued
currencies and steep wage costs, yet both have experienced good recent stock
market performance. As the effect of declining interest rates works to
stimulate internal demand and to realign currencies to more competitive
international levels, we expect economic growth to strengthen. Both Germany
and France are running external trade surpluses as well, benefiting from the
strong U.S. dollar. Some political uncertainty has been resolved by the
election of new governments in Spain and Italy. The new center-left Ulivo
coalition in Italy and the Conservative Popular Party in Spain appear committe
d to stimulate growth while keeping deficits in line. Interest rates are
declining throughout Europe, a condition that should result in solid and
sustainable rates of economic growth over the longer term.
THE PORTFOLIO AND THE MARKET
As of April 30, 1996, the portfolio was diversified among 179 issues
including rights, warrants and units spread over 14 European countries.
Countries are weighted using proprietary asset allocation models that examine
the risks associated with each individual market in relation to its expected
returns. Stocks are selected using models that seek to identify those with
attractive valuations relative to peer companies and above-average growth
potential. The Fund was most heavily weighted in the United Kingdom (26%),
France (18%), Germany (12%), Italy (9%) and the Netherlands (7%).
Allocations to France and Italy were weighted more heavily than the
benchmark index and were significant contributors to performance. France,
recovering from the crippling effect of widespread strikes
and political turmoil late last year, was the best performing European stock
market as the Banque de France continued to ease monetary policy during the
first quarter of 1996. The new Italian government proved favorable for stocks
as the Italian Bursa ended the reporting period near new highs.
On the other hand, the United Kingdom, beset by rising unemployment and
continuing economic slowdown, had the poorest performing stock market for the
period. We remain confident that the current low interest rate environment in
Europe will eventually prove beneficial to long-term equity investments in
the United Kingdom.
We believe that fundamentals are currently very attractive for equity
investment in Europe. A continuation of healthy corporate profit growth could
reward holders of European equities.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Sincerely,
[Timothy F. Ryan signature logo]
Timothy F. Ryan
Portfolio Manager
Dreyfus European Fund
S.A.M. Finance, S.A.
May 15, 1996
Paris, France
* Total return includes reinvestment of dividends and any capital gains
paid.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - The Morgan Stanley Capital
International Europe Index is an unmanaged index composed of a sample of
companies representative of the market structure of European countries. The
return indicated includes net dividends reinvested. The Index is the
property of Morgan Stanley & Co. Incorporated.
<TABLE>
<CAPTION>
DREYFUS EUROPEAN FUND
STATEMENT OF INVESTMENTS APRIL 30, 1996 (UNAUDITED)
COMMON STOCKS-93.8% SHARES VALUE
_______ _____
<S> <C> <C>
AUSTRIA-.6%............. Bank Austria AG 270 $ 21,299
OMV AG 160 15,889
Oesterreichische El Wirtsch 180 12,713
Wienerberger Baustoffindustrie AG 80 15,555
___________
65,456
___________
BELGIUM-2.1%............... Electrabel 140 31,428
Generale de Banque 210 73,617
Glaverbel Strip NPV VVPR 13 2
Petrofina 130 38,525
Solvay, Class A, NPV 70 41,176
Tractabel 100 40,779
___________
225,527
___________
DENMARK-1.4%......... Carlsberg, Class B 350 18,970
DS Svendborg, Class B 1 31,673
International Service Systems AS, Class B 600 16,972
Sophus Berenden, Class B 280 34,336
Tele Danmark A/S 500 25,152
Unidanmark, Class A 450 20,046
___________
147,149
___________
FINLAND-1.5%................... Merita 5,000 (a) 10,749
Outokumpu, Class A 3,200 56,092
Pohjola, Class B, Free 2,800 44,276
Repola 1,100 21,328
Stockmann AB, Class B, Free 600 29,394
___________
161,839
___________
FRANCE-18.0%..................... AXA 2,466 146,749
Air Liquide (L') 1,000 181,484
Carrefour 250 195,110
Cerus (Cie Europenne Reunis) 2,500 (a) 48,222
Credit Commercial de France 1,400 70,054
Credit National 900 70,344
DMC (Dollfus-Mieg & Cie) 500 27,252
Danone (EX BSN) 660 99,625
Dassault Electronique 700 44,497
Eurafrance 105 40,344
Finextel 3,500 51,377
GTM-Entrepose 977 62,880
IMETAL 500 78,179
L'Oreal 600 185,195
Lafarge 1,800 115,153
Legrand 500 97,120
Lyonnaise des Eaux Dumez 1,100 110,340
Pinault-Printemps-Redante 300 90,974
Sagem 100 62,331
DREYFUS EUROPEAN FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
______ ______
FRANCE (CONTINUED)............. Salomon 60 $ 41,747
Sat sa de Telecom 200 83,147
___________
1,902,124
___________
GERMANY-12.3%....... Allianz Holdings AG 100 171,705
BASF AG 130 35,477
Bayer AG 230 74,029
Bayerische Motoren Werke AG 218 117,632
Bayerische Vereinsbank 850 24,972
Commerzbank AG 300 64,928
Daimler Benz Group AG 140 76,640
Dresdner Bank 1,250 31,436
Gehe AG 20 11,543
Heidelberg (Portland-Zementwerke) 80 49,879
Linde AG 200 122,217
M.A.N. AG 100 26,722
Muenchener Rueckverischerungs-Gesellschaft 15 27,225
Preussag AG 250 67,328
Siemens AG 380 207,974
VEBA AG 3,100 154,018
Viag AG 110 43,125
___________
1,306,850
___________
IRELAND-.1%............. Kerry Group PLC 1,180 10,854
Woodchester Investment (Units) 173 513
___________
11,367
___________
ITALY-9.3%.................. Ambroveneto 32,400 52,184
Assicurazioni Generali SPA 4,001 99,557
Banca Commerciale Italiana 24,100 53,988
Banco Ambrosiano Veneto 22,000 66,218
Burgo (Cartiere) SPA 4,000 22,811
Cementir 16,000 12,614
Credito Italiano 7,000 8,903
Ente Nazionale Idrocarburi SPA 72,000 (a) 310,732
Finanziaria Autogrill SPA 6,712 (a) 7,170
Franco Tosi 2,000 13,871
Italgas 10,100 34,779
Magneti Marelli SPA 2,200 3,312
Pirelli SPA 6,500 (a) 10,053
Pirelli SPA di Risp 17,000 21,393
Premafin Financeria 17,000 (a) 4,163
RAS (Warrants) 160 (a) 734
Risanamento di Napoli 480 5,687
SME (Meridionale Finanziaria) 6,712 (a) 7,475
Saffa SPA 4,000 (a) 8,556
Sirti SPA 5,000 31,438
Snia BPD 28,000 (a) 31,201
DREYFUS EUROPEAN FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
______ ______
ITALY (CONTINUED). Telecom Italia Mobile 46,460 (a) $ 101,935
.Telecom Italia Mobile di Risp 6,000 (a) 8,453
.Telecom Italia SPA 34,460 70,090
___________
987,317
___________
NETHERLANDS-7.6%...... ABN Amro Holdings 1,234 63,897
.Akzo Nobel N.V 430 49,953
.Elsevier N.V 4,600 69,282
.Koninklijke Ahold N.V. 1,474 72,710
.Koninklijke Bols Wessanen N.V 1,500 29,335
Koninklijke Bols Wessanen N.V. (Coupons) 1,500 (a) 298
.Koninklijke PTT Nederland N.V 2,300 86,334
.Nutricia Verenigde Bedrijven 300 32,067
.Philips Electronics N.V 1,500 52,977
.Royal Dutch Petroleum 1,890 269,322
.Van Ommerren 350 13,076
.Wolters Kluwer NV (Coupons) 600 (a) 65,604
.Wolters Kluwer NV 600 760
___________
805,615
___________
NORWAY-.9%.... Hafslund Nycomed, Class B 1,759 49,096
Norske Hydro AS 1,100 50,195
___________
99,291
___________
SPAIN-3.5%................... Argentaria 1,600 64,760
.Autopista Cesa 80 836
.Banco Bilbao Vizcaya 1,494 56,771
.Empresa Nacional de Elec (Endesa) 700 43,956
.Gas Natural S.D.G. SA 200 36,341
.Repsol SA 2,200 80,659
.Telefonica de Espana 5,000 89,005
___________
372,328
___________
SWEDEN-4.2%................... Asea 490 49,552
.Astra A 2,100 93,065
.Atlas Copco AB, Class B 1,500 28,442
.Autoliv AB 350 19,035
.Electrolux AB, Class B 700 35,189
.Ericsson LM, Class B 1,900 38,401
.Hennes & Mauritz AB, Class B 300 20,637
.Incentive AB, Class B 450 23,812
.Industrivarden AB, Class A 700 25,003
.Stora Kopparbergs 2,100 28,089
.Svenska Cellulosa AB 2,000 37,629
.Volvo AB 2,000 45,713
___________
444,567
___________
DREYFUS EUROPEAN FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
______ ______
SWITZERLAND-6.0% BBC Brown Boveri & Cie, Series A 50 $ 60,129
..Ciba-Geigy AG 70 80,635
..Cs Holding 230 20,846
..Nestle SA 60 66,608
..Roche Holdings AG 5 67,524
..SMH Nuenberg AG 150 22,307
.. Sandoz AG 135 147,154
...Schweizerischer Bankverein 170 63,545
...Swiss Reinsurance 8 8,360
.. Union Bank of Switzerland 25 24,799
...Zurich Verischerung 250 69,735
___________
631,642
___________
UNITED KINGDOM-26.3%. Allied Irish Banks 1,005 5,259
...Argyll Group PLC 9,117 45,642
...BBA Group 6,000 31,440
...Barclays Bank PLC 13,930 154,597
...Beazer Homes PLC 9,000 28,228
...British Gas PLC 26,700 95,016
...British Petroleum Company PLC 113 1,022
...British Telecommunications PLC 17,970 98,768
...Burham Castrol 7,600 121,763
...CRH 1,900 17,076
...de La Rue PLC 2,600 29,110
...General Electric PLC 18,393 99,429
...Glaxo Wellcome PLC 18,691 227,164
...Hanson PLC 48,981 145,501
...Hillsdown Holdings PLC 6,000 16,285
...Imperial Chemical Industries PLC 8,000 108,569
...Irish Life PLC 2,550 10,036
...Laing (John) PLC 54 258
...Meggitt 25,000 35,813
...Meyer International 5,114 34,971
...National Grid Group PLC 1,320 (a) 4,070
...National Power PLC 9,500 80,292
...Norcros 1,600 (a) 2,123
...Pilkington PLC 18,000 57,813
...RMC Group 800 13,167
...Reuters PLC 7,400 83,912
...Royal Bank of Scotland Group PLC 19,344 151,240
...Royal Insurance Holdings 13,200 72,452
...Sainsbury PLC 11,719 64,676
...Sedgwick Group PLC 11,900 25,122
...Siebe 5,600 72,536
...Signet Group 7,000 (a) 3,378
...Simon Engineering 16,000 18,095
...Smith & Nephew 21,100 61,565
...Smiths Industries 6,600 70,362
...SmithKline Beecham PLC 177 1,880
DREYFUS EUROPEAN FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
______ ______
UNITED KINGDOM (CONTINUED) Smurfit (Jefferson) Group 4,700 $ 12,721
...Southern Electricity 1,860 23,489
...Southern Water PLC 17,000 195,205
...TSB Group 16,064 77,150
...Tate & Lyle 7,000 50,824
...Thames Water PLC 2,865 24,776
...Thorn-EMI PLC 35 972
...Ti Group PLC 7,700 63,511
...Vickers PLC 3,000 11,671
...Williams Holdings PLC 11,214 58,338
...Willis Corroon PLC 11,250 25,954
...Zeneca Group PLC 7,050 148,032
___________
2,781,273
___________
...TOTAL COMMON STOCKS
.....(cost $8,115,375) $ 9,942,345
===========
PRINCIPAL
SHORT-TERM INVESTMENTS-4.6% AMOUNT
______
COMMERCIAL PAPER; General Electric Co.,
.....5.35%, 5/1/1996
.....(cost $484,000) $ 484,000 $ 484,000
===========
TOTAL INVESTMENTS (cost $8,599,375)..................................... 98.4% $10,426,345
===== ===========
CASH AND RECEIVABLES (NET)..... ..................................... 1.6% $ 168,392
===== ===========
NET ASSETS..................... ..................................... 100.0% $10,594,737
===== ===========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
DREYFUS EUROPEAN FUND
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1996 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $8,599,375)-see Statement of Investments...................... $10,426,345
Cash and foreign currency (cost $216,421)............................... 141,741
Dividends and interest receivable....................................... 58,167
____________
10,626,253
LIABILITIES:
Due to The Dreyfus Corporation-Note 2(a)................................ $30,135
Due to Distributor-Note 2(c)............................................ 289
Directors' fees payable-Note 2(d)....................................... 1,092 31,516
_______ __
__________
NET ASSETS.................................................................. $10,594,737
===========
REPRESENTED BY:
Paid-in capital......................................................... $ 8,169,949
Accumulated undistributed investment income-net......................... 7,801
Accumulated undistributed net realized gain on investments.............. 607,129
Accumulated net unrealized appreciation on investments and
foreign currency transactions ........................................ 1,809,858
........................................................ ____________
NET ASSETS at value........................................................ $10,594,737
===========
NET ASSET VALUE offering and redemption price per share:
Investor Shares
(8 million shares of $.001 par value Capital Stock authorized)
($1,040,816 3 88,285 shares of Capital Stock outstanding)........... $11.79
======
Class R Shares
(12 million shares of $.001 par value Capital Stock authorized)
($9,553,921 3 811,691 shares of Capital Stock outstanding).......... $11.77
======
See notes to financial statements.
DREYFUS EUROPEAN FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $16,396 foreign taxes withheld at source)...... $ 97,459
Interest.............................................................. 5,052
_________
TOTAL INCOME........................................................ $102,511
EXPENSES:
Investment management fee-Note 2(a,b)................................. 92,025
Distribution fees (Investor shares)-Note 2(c)......................... 1,034
Directors' fees and expenses-Note 2(d)................................ 529
_________
TOTAL EXPENSES.................................................... 93,588
_________
INVESTMENT INCOME-NET............................................. 8,923
_________
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 3:
Net realized gain on investments and foreign currency transactions...... $595,185
Net realized gain on forward currency exchange contracts................ 15,978
_________
NET REALIZED GAIN..................................................... 611,163
Net unrealized appreciation on investments and foreign currency transactions 281,604
_________
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 892,767
_________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $901,690
=========
See notes to financial statements.
DREYFUS EUROPEAN FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995
_________________ ______________
OPERATIONS:
Investment income-net................................................ $ 8,923 $ 107,256
Net realized gain on investments..................................... 611,163 622,725
Net unrealized appreciation on investments for the period............ 281,604 33,050
_____________ _____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. 901,690 763,031
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Investor shares.................................................... (4,124) (86,136)
Class R shares..................................................... (104,227) (373)
Net realized gain on investments:
Investor shares.................................................... (31,592) (1,268,308)
Class R shares..................................................... (595,192) (7,780)
_____________ _____________
TOTAL DIVIDENDS.................................................. (735,135) (1,362,597)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Investor shares.................................................... 5,802,774 9,095,386
Class R shares..................................................... 5,631,651 3,495,761
Dividends reinvested:
Investor shares.................................................... 33,506 7,800
Class R shares..................................................... 653,248 1,326,541
Cost of shares redeemed:
Investor shares.................................................... (5,435,409) (8,608,735)
Class R shares..................................................... (7,471,551) (4,348,365)
_____________ _____________
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS (785,781) 968,388
_____________ _____________
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ (619,226) 368,822
NET ASSETS:
Beginning of period.................................................. 11,213,963 10,845,141
_____________ _____________
End of period (including undistributed investment income-net of:
$7,801 in 1996 and $107,229 in 1995)............................... $10,594,737 $11,213,963
============= =============
</TABLE>
<TABLE>
<CAPTION>
SHARES
______________________________________________________________________
INVESTOR CLASS R
_______________________________ ________________________________
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30,1996 OCTOBER 31 APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
_____________ ___________ _____________ ____________
<C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................... 508,300 835,473 492,954 301,352
Shares issued for dividends reinvested 3,111 762 60,937 129,926
Shares redeemed..................... (474,125) (789,079) (659,279) (378,020)
___________ __________ ___________ ___________
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING.................... 37,286 47,156 (105,388) 53,258
=========== ========== =========== ===========
</TABLE>
See notes to financial statements.
DREYFUS EUROPEAN FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
INVESTOR SHARES
_________________________________________________________
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1996 __________________________________
PER SHARE DATA: (UNAUDITED) 1995 1994(1)(2)
_________________ _____________ _____________
<S> <C> <C> <C>
Net asset value, beginning of period.............. $11.60 $12.50 $11.78
______ ______ ______
INVESTMENT OPERATIONS:
Investment income_net............................ .03 .01 .05
Net realized and unrealized gain on investments... .90 .67 .67
______ ______ ______
TOTAL FROM INVESTMENT OPERATIONS................ .93 .68 .72
______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net.............. (.09) (.07) -
Dividends from net realized gain on investments... (.65) (1.51) -
______ ______ ______
TOTAL DISTRIBUTIONS............................. (.74) (1.58) -
______ ______ ______
Net asset value, end of period.................... $11.79 $11.60 $12.50
______ ______ ______
______ ______ ______
TOTAL INVESTMENT RETURN............................... 8.58%(3) 7.16% 6.11%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........... 1.00%(3) 2.00% 1.10%(3)
Ratio of net investment income to average net assets 1.01%(3) .45% .40%(3)
Portfolio Turnover Rate........................... 38.64%(3) 41.66% 46.00%(3)
Average commission rate paid(4)................... $.0337 - -
Net Assets, end of period (000's Omitted)......... $1,041 $591 $48
________________
(1) The Fund commenced selling Investor shares on April 14, 1994.
(2) Based on average shares outstanding.
(3) Not annualized.
(4) For fiscal years beginning on or after November 1, 1995, the Fund is
required to disclose its average commission rate paid per share for purchases
and sales of investment securities.
</TABLE>
See notes to financial statements.
DREYFUS EUROPEAN FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS R SHARES
__________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1996 ____________________________________________________________
PER SHARE DATA: (UNAUDITED) 1995 1994(1)(2) 1993(3) 1992(3) 1991(3)
____ ____ _____ ____ _____ ___
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period............... $11.58 $12.50 $12.70 $10.96 $11.12 $11.01
______ ______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income (loss)-net .01 .12 .12(4) .11 .12 (.02)
Net realized and unrealized
gain (loss) on investments .94 .57 .63 1.73 (.10) .57
______ ______ ______ ______ ______ ______
TOTAL FROM INVESTMENT
OPERATIONS.......... .95 .69 .75 1.84 .02 .55
______ ______ ______ ______ ______ ______
DISTRIBUTIONS:
Dividends from investment
income-net.............. (.11) (.10) (.12) (.10) - (.08)
Dividends from net realized gain
on investments.......... (.65) (1.51) (.83) - (.18) (.36)
______ ______ ______ ______ ______ ______
TOTAL DISTRIBUTIONS..... (.76) (1.61) (.95) (.10) (.18) (.44)
______ ______ ______ ______ ______ ______
Net asset value, end of period $11.77 $11.58 $12.50 $12.70 $10.96 $11.12
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN....... 8.89%(6) 7.29% 5.97% 16.88% .16% 5.12%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets...... .87%(6) 1.75% 1.75%(5) 1.83%(5) 1.57%(5) 1.67%
Ratio of net investment income
(loss) to average net assets .96%(6) 1.02% .98%(5) .59%(5) .92%(5) (.16%)
Portfolio Turnover Rate... 38.64%(6) 41.66% 46.00% 12.00% 7.00% 5.00%
Average commission rate paid(7) $.0337 - - - - -
Net Assets, end of period
(000's Omitted)......... $9,554 $10,622 $10,797 $10,481 $15,648 $17,204
_____________
(1) Based on average shares outstanding.
(2) On October 17, 1994, the Fund's Trust shares were reclassified as Class R
shares. The Fund has had the following investment advisers: CCF
International Finance Corporation (January 5, 1987 to October 31, 1993);
Mellon Bank N.A. (November 1, 1993 to October 16, 1994); and the Dreyfus
Corporation (October 17, 1994 to present).
(3) Audited by Tait, Weller & Baker, Certified Public Accountants.
(4) Net investment income before expenses reimbursed by the investment
adviser was $.09 for the year ended October 31, 1994.
(5) For the year ended October 31, 1994, the ratio of expenses and the ratio
of net investment income to average net assets before reimbursement of
expenses by the investment adviser was 2.02% and 1.25%, respectively. For
the years ended October 31, 1993 and 1992, the ratio of expenses and the
ratio of net investment income to average net assets on an annualized basis
before reimbursement of expenses by CCF International Finance Corp. were
2.41% and .01%; and 1.82% and .67%, respectively.
(6) Not annualized.
(7) For fiscal years beginning on or after November 1, 1995, the Fund is
required to disclose its average commission rate paid per share for purchases
and sales of investment securities.
</TABLE>
See notes to financial statements.
DREYFUS EUROPEAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Dreyfus/Laurel Funds, Inc. (the "Company") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering
seventeen series including the Dreyfus European Fund (the "Fund"). The
Fund's investment objective is to outperfrom the Morgan Stanley Capital
International Europe Index (the "Benchmark") in the medium to long term by
allocating the Fund's assets among the Western European countries and industry
sectors represented in the Benchmark. The Dreyfus Corporation ("Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary
of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is currently authorized to issue
two classes of shares: Investor shares and Class R shares. Investor shares
are sold primarily to retail investors and bear a distribution fee. Class R
shares are sold primarily to bank trust departments and other financial
service providers (including Mellon Bank and its affiliates) acting on behalf
of customers having a qualified trust or investment account or relationship
at such institution, and bear no distribution fee. Each class of shares has
identical rights and privileges, except with respect to the distribution fee
and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
At a meeting of the Board of Directors held on April 25, 1996, the Board
approved a proposal to liquidate the Fund, distribute Fund assets to Fund
shareholders and close out shareholder accounts (the "Proposal").
Shareholders of the Fund will consider approving the Proposal at a Special
Meeting of Shareholders to be held on or about June 20, 1996. If Fund
shareholders approve the Proposal, the liquidation and distribution of Fund
assets would occur on or about June 27, 1996. In anticipation of such events,
effective May 15, 1996, the Fund will be closed to any new or subsequent
investments.
(A) PORTFOLIO VALUATION: Investments in securities 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. Bid price is used when no asked price
is available. Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of the Board of
Directors. 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) 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.
(C) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of the operations resulting from changes in foreign exchange
rates on investments from the fluctuations
DREYFUS EUROPEAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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, the difference between
the amount of dividends, interest, and foreign withholding taxes recorded on
the Fund'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.
(D) FORWARD CURRENCY EXCHANGE CONTRACTS: The Fund 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 Fund 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
Fund 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 Fund realizes a gain if the value of the contract decreases
between those dates. With respect to purchases of forward currency exchange
contracts, the Fund 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 Fund realizes a gain if the value of the contract
increases between those dates. The Fund is also exposed to credit risk
associated with counter party nonperformance on these forward currency
exchange contracts which is typically limited to the unrealized gains on such
contracts that are recognized in the statement of assets and liabilities. At
April 30, 1996, there were no open forward currency exchange contracts.
(E) DISTRIBUTIONS TO SHAREHOLDERS: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net and dividends from net
realized capital gain are normally declared and paid annually, but the Fund
may make distributions on a more frequent basis to comply with the distributio
n 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 Fund not to distribute such gain.
(F) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interest 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 2-INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties and or affiliates to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. The Manager also directs the investments of the Fund in accordance with
its investment objective, policies and limitations. For these services, the
Fund is contractually obligated to pay the Manager a fee,
DREYFUS EUROPEAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
calculated daily and paid monthly, at the annual rate of 1.75% of the
value of the Fund's average daily net assets. Out of its fee, the Manager
pays all of the expenses of the Fund except brokerage fees, taxes, interest,
Rule 12b-1 distribution fees and expenses, fees and expenses of
non-interested Directors (including counsel fees) and extraordinary expenses.
In addition, the Manager is required to reduce its fee in an amount equal to
the Fund's allocable portion of fees and expenses of the non-interested
Directors (including counsel).
(B) SUB-ADVISORY AGREEMENT: S.A.M. Finance, S.A. (the "Sub-Advisor"), a
wholly-owned subsidiary of Credit Commercial de France, serves as the Fund's
Sub-Advisor pursuant to a sub-advisory agreement among the Fund, the
Sub-Advisor and the Manager. For its services, the Sub-Advisor is paid an
annual fee of .60% of the value of the Fund's average daily net assets and is
paid by the Manager out of its fee.
(C) DISTRIBUTION PLAN: The Fund has adopted a distribution plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its Investor
shares. Under the Plan, the Fund may pay annually up to .25% of the value of
the average daily net assets attributable to its Investor shares to
compensate the Distributor and Dreyfus Service Corporation, an affiliate of
the Manager, for shareholder servicing activities and the Distributor for
activities primarily intended to result in the sale of Investor shares. The
Class R shares bear no distribution fee. For the six months ended April 30,
1996, the distribution fee for the Investor shares was $1,034.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Directors who are not "interested persons" of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(D) DIRECTOR'S FEES: Each director who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee meeting attended and is reimbursed
for travel and out-of-pocket expenses. These expenses are paid in total by
the following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel
Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition
the Chairman of the Board receives an annual fee of $75,000 per year. These
fees and expenses are charged and allocated to each series based on net
assets.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the six months ended April 30, 1996 amounted to $3,981,206 and
$5,810,227, respectively.
At April 30, 1996, accumulated net unrealized appreciation on investments
was $1,826,970, consisting of $1,980,661 gross unrealized appreciation and
$153,691 gross unrealized depreciation.
At April 30, 1996, 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]
DREYFUS EUROPEAN FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISOR
CCF S. A. M.
115 Avenue des Champs-Elysees
Paris, France 75008
CUSTODIAN
Mellon Bank
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 308/708SA964
[Dreyfus logo]
European
Fund
Semi-Annual
Report
April 30, 1996
