<PAGE>
Dreyfus
Bond Market
Index Fund
Semi-Annual
Report
April 30, 1998
<PAGE>
Dreyfus Bond Market Index Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Bond Market Index
Fund for the six-month period ended April 30, 1998, as shown in the following
table:
<TABLE>
<CAPTION>
Income Dividends Annualized
Total Return* (Approximate Per Share) Distribution Rate Per Share**
------------- ----------------------- -----------------------------
<S> <C> <C> <C>
Investor Shares 3.54% $.296 5.95%
BASIC Shares 3.76% $.308 6.18%
Lehman Brothers
Aggregate Bond Index*** 3.59%
</TABLE>
Effective November 14, 1997, the Fund's investment objective changed from
seeking to replicate the Lehman Brothers Government /Corporate Bond Index (the
"Government Corporate Bond Index") to seeking to replicate the Lehman Brothers
Aggregate Bond Index (the "Aggregate Bond Index"). During the period, the total
return of the Aggregate Bond Index was 3.59% and the total return of the
Government Corporate Bond Index was 3.64%.***
THE ECONOMY
The United States is now in the eighth year of economic expansion. Inflation
continues to rise at the slowest pace since 1964 and the unemployment rate has
fallen to a level not seen in 25 years. Not surprisingly, consumer confidence
has soared. Along with continued evidence of the robustness of the economy have
come heightened expectations that the Federal Reserve Board will raise interest
rates in a preemptive move to avoid a reignition of inflation. The last increase
in short-term rates came in March 1997 when the Federal Open Market Committee
(the policy-making arm of the Fed) hiked the target rates for Federal Funds by
one quarter of a percent to 5.5%. (The Federal Funds rate is the rate of
interest that banks charge one another for overnight loans.)
Inflation has remained benign on all fronts, even in the tight labor market,
an area closely watched by the Fed for signs of incipient inflation. The Labor
Department's Employment Cost Index (ECI), a measure of wage, salary and benefit
costs, suggests that wage inflation so far is not a problem. In fact, the first
quarter increase in the ECI (0.7%) was its smallest quarterly rise in two years.
Another inflation gauge, the broad-based Gross Domestic Product Price Deflator,
rose at an annual rate of only 0.9% in the first quarter, its lowest rate since
1964. Inflation as measured by the Consumer Price Index has been similarly tame.
Prices at the consumer level rose at an annual rate of about 1.5% over the
reporting period. The lack of inflation has been even more dramatic at the
production level of the economy where prices have fallen: in the 12 months ended
March 31, the Producer Price Index declined 1.8%. Such a generally tepid price
environment has been partly fostered by the economic problems in Asia which have
suppressed worldwide demand for commodities, particularly oil.
Reflecting a level of confidence not seen in three decades, consumers
increased their spending over the reporting period, the first-quarter rate
rising at the fastest pace in six years. Not surprisingly, the growth rate in
new-home construction over the reporting period was the strongest in four years.
Plentiful and well-paying jobs (total wage and salary income is 7% higher than a
year ago), low interest rates, the absence of inflation and investment market
gains have resulted in a financially healthy consumer with a corresponding
propensity to spend. Strong domestic demand for lower-priced imports has
contributed further to the quiescent inflation environment while offsetting the
drag on the economy resulting from the Asian financial crisis. It is still
widely expected that the Asian economic slowdown will have a further dampening
effect on the U.S. economy. Although the surge in domestic spending has masked
the full impact of the fall in Asian demand, our trade deficit has reached a
ten-year high, a dramatic sign of deterioration. Expectation of an economic
slowdown is another reason why the Fed has been reluctant to raise short-term
interest rates.
<PAGE>
The production side of the economy has remained robust. Factory utilization
has been high, production rates strong, and while exports to Asia have fallen
sharply, they are growing in the rest of the world. Such resilience has been
characteristic of one of the longest, most healthy economic advances in our
history. Yet we remain mindful that the concept of an economic cycle is not
dead, nor is inflation, and we are alert for indications of a resurgence in
price pressures.
MARKET ENVIRONMENT/PORTFOLIO FOCUS
At the beginning of the reporting period, the U.S. bond market benefited from
a "flight to quality" as global equity markets attempted to stabilize after
sharp corrections caused by the Asian financial crisis. Investors sought the
safe investment haven of U.S. government securities, and yields on the ten-year
Treasury Note for the reporting period declined to a low of 5.375% by
mid-January. As international equity markets recovered, the bond market moved
into a trading range with the ten-year Treasury Note trading between 5.40% and
5.80% for the remainder of the reporting period.
Low exposure to Asian securities helped the Fund's performance during the
reporting period. The global market volatility in November and December directly
affected the performance of the corporate bond market as yield spreads widened
relative to Treasuries. The performance of the mortgage sector was most affected
by interest rate volatility as concerns over mortgage prepayments at lower
interest rate levels put mortgage investors on the defensive.
As a matter of policy, the Fund's duration remains neutral to the Aggregate
Bond Index and the Fund's sector allocation is kept in alignment with that
Index.
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,
/s/ Laurie Carroll
Laurie Carroll
Portfolio Manager
May 29, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the net asset
value per share at the end of the period, adjusted for capital gain
distributions.
*** SOURCE: LEHMAN BROTHERS -- Total returns reflect reinvestment of dividends
and capital gains. The Lehman Brothers Aggregate Bond Index is a widely
accepted unmanaged index of corporate, government and government agency
debt instruments, mortgage-backed securities and asset-backed securities.
The Lehman Brothers Government/Corporate Bond Index is intended to measure
the performance of the domestic fixed-rate investment grade debt markets
and is a widely accepted unmanaged index of government and corporate bond
market performance composed of U.S. Government and agency securities,
fixed-income securities and nonconvertible investment-grade corporate debt.
<PAGE>
Dreyfus Bond Market Index Fund
- ------------------------------------------------------------------------------
Statement of Investments April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes--97.2% Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Aerospace and Aviation--.9% Boeing, Deb.:
8.10%, 2006................................ $ 25,000 $ 28,068
8 5/8%, 2031............................... 10,000 12,596
Lockheed,
Notes, 6 3/4%, 2003........................ 25,000 25,379
Raytheon, Notes:
6.45%, 2002................................ 300,000 302,244
6 1/2%, 2005............................... 25,000 25,262
Rockwell International,
Notes, 6 3/4%, 2002........................ 30,000 30,807
-----------
424,356
-----------
Automotive--.3% Chrysler,
Deb., 7.45%, 2027.......................... 50,000 53,933
General Motors:
Deb:
9 1/8%, 2001............................. 15,000 16,333
8 7/8%, 2003............................. 25,000 27,790
7.40%, 2025.............................. 10,000 10,766
Notes, 7%, 2003............................ 40,000 41,599
-----------
150,421
-----------
Banking--2.2% Banc One,
Sub. Notes, 9 7/8%, 2009................... 5,000 6,470
BankAmerica,
Sub. Notes, 7 3/4%, 2002................... 25,000 26,379
BankAmerica Capital II,
Gtd. Capital Securities, Ser. 2, 8%, 2026.. 55,000 59,449
Bankers Trust New York,
Sub. Notes, 7 1/2%, 2015................... 75,000 78,025
Capital One Bank,
Sr. Notes, 6 3/8%, 2003.................... 200,000 199,955
Chase Manhattan:
Sub. Deb., 6 1/2%, 2009.................... 10,000 9,990
Sub. Notes, 7 3/4%, 1999................... 40,000 41,071
Chemical,
Sub. Notes, 6 1/8%, 2008................... 15,000 14,634
Citicorp,
Sub. Notes, 7 1/8%, 2003................... 20,000 20,693
FBS Capital I,
Gtd. Capital Securities, 8.09%, 2026....... 100,000 106,285
First Bank System,
Sub. Notes, 7 5/8%, 2005................... 55,000 59,081
First Chicago,
Sub. Notes, 9 7/8%, 2000................... 20,000 21,624
First Union,
Sub. Notes, 6.30%, 2008.................... 100,000 98,834
Fleet Financial Group,
Sr. Notes, 7 1/8%, 2000.................... 40,000 40,824
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Banking (continued) Integra Financial,
Sub. Notes, 6 1/2%, 2000................... $ 15,000 $ 15,147
MBNA America Bank ,
Sub. Notes, 6 3/4%, 2008................... 100,000 99,990
Morgan (J.P.),
Sub. Notes, 6 1/4%, 2009................... 20,000 19,657
NCNB,
Deb., 9 3/8%, 2009......................... 20,000 24,489
NationsBank, Sub. Notes:
6 7/8%, 2005............................... 10,000 10,320
7 5/8%, 2005............................... 30,000 32,232
Republic New York Corp.,
Sub Notes, 5 7/8%, 2008.................... 25,000 23,868
Wachovia,
Sub. Notes, 6 3/8%, 2003................... 15,000 15,129
Wells Fargo Capital,
Gtd. Capital Securities, 7.96%, 2026....... 30,000 32,095
-----------
1,056,241
-----------
Chemicals--.5% duPont,
Deb., 6%, 2001............................. 15,000 15,021
duPont (E.I.) de Nemours:
Deb., 6 1/2%, 2028......................... 100,000 98,302
Notes, 6 3/4%, 2002........................ 40,000 41,136
Eastman Chemical,
Notes, 6 3/8%, 2004........................ 30,000 29,887
Monsanto,
Deb., 8.20%, 2025.......................... 20,000 21,853
Morton International,
Deb., 9 1/4%, 2020......................... 5,000 6,512
-----------
212,711
-----------
Consumer--.2% Clorox,
Deb., 8.80%, 2001.......................... 10,000 10,787
Kimberly-Clark,
Deb., 6 7/8%, 2014......................... 5,000 5,226
Maytag,
Deb., 9 3/4%, 2002......................... 5,000 5,612
Procter & Gamble, Deb.:
8.70%, 2001................................ 30,000 32,420
6.45%, 2026................................ 15,000 14,804
The Employee Stock
Ownership Trust of the Procter & Gamble
Profit Sharing Trust and Employee Stock
Ownership Plan,
Deb. (Gtd. by Procter & Gamble),
9.36%, 2021................................ 10,000 12,881
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Consumer (continued) Whirlpool,
Deb., 9%, 2003............................. $ 10,000 $ 11,092
-----------
92,822
-----------
Entertainment/Media--.3% Carnival,
Notes, 7.05%, 2005......................... 15,000 15,571
Cox Communications,
Notes, 6 3/8%, 2000........................ 100,000 100,629
Disney (Walt),
Global Bonds, 6 3/4%, 2006................. 20,000 20,792
News America Holdings,
Deb. (Gtd by The News) 7 3/4%, 2024........ 15,000 15,765
-----------
152,757
-----------
Financial Services--4.0% Aetna Services,
Notes (Gtd. by Aetna), 7 5/8%, 2026........ 50,000 52,116
American Express Credit,
Sr. Notes, 6 1/8%, 2001.................... 40,000 40,162
American General Finance,
Sr. Notes, 8 1/8%, 2009.................... 10,000 11,241
Ameritech Capital Funding,
Notes, 6 1/8%, 2001........................ 200,000 200,362
Associates Corp. of North America:
Deb., 7.95%, 2010.......................... 10,000 11,162
Sr. Notes:
6.10%, 2005.............................. 200,000 197,763
6 5/8%, 2005............................. 10,000 10,207
Bear Stearns, Sr. Notes:
8 3/4%, 2004............................... 10,000 11,171
7 1/4%, 2006............................... 75,000 79,055
Beneficial,
Medium-Term Notes, 9 1/8%, 2001............ 5,000 5,416
Commercial Credit Group, Notes:
6.70%, 1999................................ 25,000 25,201
10%, 2008.................................. 5,000 6,305
Dean Witter Discovery,
Notes, 6 1/4%, 2000........................ 30,000 30,153
FINOVA Capital,
Notes, 9 1/8%, 2002........................ 20,000 21,856
Ford Capital B.V.,
Deb., 9 7/8%, 2002......................... 25,000 28,067
Ford Motor Credit,
Notes, 6 3/4%, 2008........................ 20,000 20,400
GMAC,
Deb.:
8.40%, 1999.............................. 30,000 31,030
6%, 2011................................. 70,000 65,707
General Electric Capital,
Deb., 8.30%, 1998.......................... 15,000 (a) 17,355
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Financial Services (continued) General Electric Credit,
Deb., 5 1/2%, 2001......................... $ 10,000 $ 9,824
Heller Financial,
Notes, 6 1/4%, 2001........................ 200,000 199,781
Household Finance,
Notes, 8%, 2004............................ 15,000 16,215
International Lease Finance,
Medium-Term Notes, 6 1/4%, 2000............ 40,000 40,164
Lehman Brothers Holdings,
Notes, 6 1/2%, 2002........................ 120,000 120,635
MCN Investment,
Notes, 6.30%, 2001......................... 300,000 (b) 300,054
Merrill Lynch,
Notes, 8.30%, 2002......................... 15,000 16,232
Norwest Financial,
Sr. Notes, 7%, 2003........................ 15,000 15,503
Pitney Bowes Credit,
Deb., 9 1/4%, 1998......................... 15,000 (c) 18,296
Salomon Brothers,
Sr. Notes, 7 1/4%, 2000.................... 10,000 10,178
Sears, Roebuck Acceptance, Notes:
7%, 2007................................... 35,000 36,282
6 3/4%, 2028............................... 100,000 97,168
Transamerica Financial,
Deb., 6 1/2%, 2011......................... 5,000 4,900
Travelers/Aetna Property & Casualty,
Notes, 6 3/4%, 2001........................ 60,000 61,119
Travelers Group,
Deb., 6 5/8%, 2028......................... 100,000 98,745
U.S. Leasing International,
Sr. Notes, 6 5/8%, 2003.................... 30,000 30,527
Xerox Credit,
Deb., 10%, 1999............................ 10,000 10,361
-----------
1,950,713
-----------
Food and Beverages--.9% Anheuser-Busch, Deb:
8 3/4%, 1999............................... 5,000 5,206
9%, 2009................................... 5,000 6,080
Archer-Daniels-Midland, Deb.:
Zero Coupon, 2002.......................... 5,000 3,933
8 1/8%, 2012............................... 40,000 46,847
Coca-Cola,
Deb., 6 5/8%, 2002......................... 35,000 35,736
Coca-Cola Enterprises:
Deb., 8 1/2%, 2022......................... 100,000 119,957
Notes, 7 7/8%, 2002........................ 15,000 15,921
Dole Food,
Notes, 6 3/4%, 2000........................ 15,000 15,194
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Food and Beverages (continued) Hershey Foods,
Deb., 8.80%, 2021.......................... $ 30,000 $ 37,729
McDonald's,
Notes, 6 3/4%, 2003........................ 20,000 20,427
Nabisco,
Deb., 7.55%, 2015.......................... 40,000 41,989
Ralston-Purina Group,
Deb., 8 5/8%, 2022......................... 40,000 47,819
Seagram,
Deb., 8.35%, 2022.......................... 10,000 11,683
Supervalu,
Notes, 7.80%, 2002......................... 15,000 15,890
Sysco,
Sr. Notes, 7%, 2006........................ 25,000 26,262
-----------
450,673
-----------
Health Care--.1% Baxter International,
Deb., 9 1/4%, 1999......................... 15,000 15,729
Bristol-Myers Squibb,
Deb., 7.15%, 2023.......................... 15,000 16,327
Lilly (Eli),
Notes, 6 3/4%, 1999........................ 15,000 15,186
-----------
47,242
-----------
Industrial--1.7% Aluminum Co. of America,
Notes, 5 3/4%, 2001........................ 50,000 49,773
Bass America,
Notes, 8 1/8%, 2002........................ 15,000 16,142
Bowater,
Deb., 9 3/8%, 2021......................... 10,000 12,749
Browning-Ferris,
Deb., 7.40%, 2035.......................... 10,000 10,655
Burlington Resources,
Deb., 6 7/8%, 2026......................... 70,000 70,624
Caterpillar, Deb:
9 3/8%, 2000............................... 5,000 5,346
9 3/8%, 2011............................... 10,000 12,702
Comdisco,
Notes, 6 3/8%, 2001........................ 155,000 155,944
Crown Cork & Seal,
Bonds, 7 3/8%, 2026........................ 75,000 78,734
Dana,
Notes, 7%, 2028............................ 100,000 99,032
Eaton,
Deb., 8.10%, 2022.......................... 10,000 11,579
Emerson Electric,
Notes, 6.30%, 2005......................... 35,000 35,510
Harnischfeger Industries,
Deb., 6 7/8%, 2007......................... 50,000 (d) 52,424
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Industrial (continued) Illinois Tool Works,
Notes, 5 7/8%, 2000........................ $ 20,000 $ 19,982
PPG Industries,
Notes, 7 3/8%, 2016........................ 45,000 48,589
Tenneco,
Deb., 10.20%, 1998......................... 15,000 (e) 19,259
TRW,
Notes, 6 1/4%, 2010........................ 100,000 97,573
WMX Technologies,
Notes, 6 3/8%, 2003........................ 30,000 29,782
-----------
826,399
-----------
Oil and Gas--.3% Atlantic Richfield,
Deb., 9%, 2021............................. 15,000 19,082
Mobil,
Deb., 8 5/8%, 2021......................... 15,000 18,801
Occidental Petroleum,
Sr. Notes, 10 1/8%, 2001................... 15,000 16,754
Pennzoil, Deb.:
9 5/8%, 1999............................... 10,000 10,492
10 1/8%, 2009.............................. 5,000 6,295
Phillips Petroleum,
Notes, 6.65%, 2003......................... 20,000 20,415
Texaco Capital (Gtd. by Texaco):
Deb., 6 7/8%, 2023......................... 25,000 24,893
Notes, 9%, 1999............................ 15,000 15,717
-----------
132,449
-----------
Paper Products--.1% Georgia-Pacific,
Deb., 9 5/8%, 2022......................... 25,000 28,402
International Paper,
Notes, 7 5/8%, 2007........................ 10,000 10,800
Weyerhaeuser,
Deb., 7.95%, 2025.......................... 20,000 22,616
-----------
61,818
-----------
Retail--.8% Dayton Hudson,
Deb., 8 1/2%, 2022......................... 20,000 22,203
Federated Department Stores,
Deb., 7%, 2028............................. 100,000 99,097
Gap,
Notes, 6.90%, 2007......................... 80,000 83,066
Limited,
Deb., 7 1/2%, 2023......................... 10,000 9,964
May Department Stores,
Deb., 9 7/8%, 2002......................... 15,000 17,187
Penney (J.C.), Deb.:
9.05%, 2001................................ 50,000 53,587
8 1/4%, 2022............................... 15,000 16,015
7 1/8%, 2023............................... 15,000 15,207
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Retail (continued) Sears, Roebuck,
Deb., 6%, 2000............................. $ 5,000 $ 4,987
Wal-Mart Stores:
Deb., 9.10%, 2000.......................... 10,000 10,658
Notes, 5 7/8%, 2005........................ 25,000 24,601
-----------
356,572
-----------
Technology--.4% Dell Computer,
Deb., 7.10%, 2028.......................... 100,000 99,972
IBM,
Deb., 7%, 2025............................. 20,000 20,925
United Technologies,
Global Notes, 8 3/4%, 2021................. 50,000 62,390
Xerox,
Notes, 7.15%, 2004......................... 15,000 15,758
-----------
199,045
-----------
Telephone & Telegraph--2.2% AT&T:
Deb.:
5 1/8%, 2001............................. 50,000 48,903
8.35%, 2025.............................. 5,000 5,493
Notes, 7%, 2005............................ 15,000 15,625
Airtouch Communications,
Notes, 7 1/8%, 2001........................ 100,000 102,796
Bellsouth Telecommunications,
Deb., 7%, 2025............................. 50,000 52,505
GTE,
Deb., 9.10%, 2003.......................... 35,000 39,291
Lucent Technologies,
Deb., 6 1/2%, 2028......................... 150,000 148,321
MCI Communications,
Sr. Notes, 6 1/4%, 1999.................... 75,000 75,072
Michigan Bell Telephone,
Deb., 6 3/8%, 2005......................... 25,000 24,999
New Jersey Bell Telephone,
Deb., 8%, 2022............................. 25,000 29,235
New York Telephone,
Deb., 8 5/8%, 2010......................... 5,000 5,899
Northern Telecom,
Deb., 8 3/4%, 2001......................... 200,000 214,792
Pacific Bell Telephone, Deb.:
7 3/8%, 2025............................... 75,000 76,943
7 1/8%, 2026............................... 10,000 10,658
Pacific Telephone & Telegraph,
Deb., 4 5/8%, 1999......................... 70,000 69,197
TCI Communications,
Sr. Deb., 8 3/4%, 2015..................... 100,000 116,984
U.S. West Capital Funding,
Notes (Gtd. by U.S. West), 6.31%, 2000..... 10,000 (f) 10,080
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Telephone & Telegraph
(continued) U.S. West Communications,
Deb., 6 7/8%, 2033......................... $ 25,000 $ 24,144
-----------
1,070,937
-----------
Tobacco--.2% Fortune Brands,
Deb., 8 5/8%, 2021......................... 5,000 6,082
Philip Morris, Deb.:
9 1/4%, 2000............................... 40,000 42,011
6%, 2001................................... 20,000 19,810
8 3/8%, 2017............................... 11,000 11,696
-----------
79,599
-----------
Transportation--.2% Federal Express,
Notes, 9 7/8%, 2002........................ 15,000 16,850
Norfolk Southern, Deb.:
9%, 2021................................... 10,000 12,621
7.80%, 2027................................ 50,000 56,210
Ryder System,
Deb., 8 3/4%, 2017......................... 10,000 10,420
Seariver Maritime,
Deb. (Gtd. by Exxon), Zero Coupon, 2012.... 5,000 2,097
United Parcel Service,
Deb., 8 3/8%, 2030......................... 10,000 12,234
-----------
110,432
-----------
Utilities--1.9% Alabama Power,
First Mortgage, 6%, 2000................... 50,000 50,047
Baltimore Gas & Electric,
First and Refunding Mortgage:
7 1/2%, 2007............................. 10,000 10,783
7 1/2%, 2023............................. 40,000 41,461
Carolina Power & Light, First Mortgage,
8.20%, 2022................................ 15,000 16,159
Commonwealth Edison,
Mortgage, 8 1/8%, 2007..................... 10,000 10,212
Duke Power, First and Refunding Mortgage:
7 1/2%, 1999............................... 50,000 50,686
7 3/8%, 2023............................... 15,000 15,350
Florida Power & Light, First Mortgage:
6 5/8%, 2003............................... 30,000 30,175
7 3/4%, 2023............................... 25,000 26,215
Gulf State Utilities,
First Mortgage, 6.41%, 2001................ 45,000 45,144
Houston Lighting & Power,
First Mortgage, 8 3/4%, 2022............... 150,000 164,664
Illinois Power,
First Mortgage, 8 3/4%, 2021............... 15,000 15,991
New York State Electric & Gas,
First Mortgage, 9 7/8%, 2020............... 10,000 10,978
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Utilities (continued) Northern States Power,
First Mortgage, 7 1/8%, 2025............... $100,000 $ 105,946
Pacific Gas & Electric,
First and Refunding Mortgage, 8.80%, 2024.. 50,000 63,036
Pennsylvania Power & Light, First Mortgage:
6 1/2%, 2005............................... 20,000 20,252
6.55%, 2006................................ 25,000 25,283
Potomac Electric & Power,
First Mortgage, 5 7/8%, 2002............... 10,000 9,851
Public Service Electric & Gas,
First and Refunding Mortgage:
8 3/4%, 1999............................. 25,000 25,750
6 1/8%, 2002............................. 20,000 20,007
6 1/2%, 2004............................. 25,000 25,320
South Carolina Electric & Gas,
Mortgage, 9%, 2006......................... 20,000 23,283
Southern California Gas,
First Mortgage, 7 3/8%, 2023............... 20,000 20,458
Texas Utilities,
First Mortgage, 8 3/4%, 2023............... 35,000 38,090
Union Electric,
First Mortgage, 6 3/4%, 2008............... 25,000 25,805
Virginia Electric & Power,
First Mortgage, 7 5/8%, 2007............... 25,000 27,171
Wisconsin Electric & Power,
First Mortgage, 7.70%, 2027................ 20,000 21,179
-----------
939,296
-----------
Other--.1% Private Export Funding:
Deb., 9.45%, 1999.......................... 5,000 5,291
Secured Notes (Gtd. by the Export-Import
Bank of the U.S.), 8.40%, 2001........... 30,000 32,283
-----------
37,574
-----------
Foreign--2.4% African Development Bank,
Sub. Notes, 7 3/4%, 2001................... 15,000 15,924
Daimler-Benz of North America,
Medium-Term Notes (Gtd. by Daimler-Benz AG),
7 3/8%, 2006............................... 120,000 129,404
Dresdner Bank-New York,
Sub. Deb., 7 1/4%, 2015.................... 40,000 41,539
European Investment Bank,
Deb., 10 1/8%, 2000........................ 20,000 21,897
Hydro-Quebec, Bonds,
(Gtd. by the Province of Quebec):
8 1/2%, 2029............................. 10,000 12,161
9 3/8%, 2030............................. 20,000 26,531
9 1/2%, 2030............................. 10,000 13,436
Italy Government Bonds,
6 7/8%, 2023............................... 70,000 72,791
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Foreign (continued) KFW International Finance, Deb.:
(Gtd. by the Federal Republic of Germany),
9 1/8%, 2001............................. $ 10,000 $ 10,940
(Gtd. by KFW),
8%, 2010................................. 35,000 40,206
Province of British Columbia:
Bonds, 6 1/2%, 2026........................ 25,000 25,236
Deb., 7%, 2003............................. 20,000 20,786
Province of Manitoba,
Bonds, 8.80%, 2020......................... 10,000 12,644
Province of New Brunswick,
Deb., 6 3/4%, 2013......................... 30,000 31,115
Province of Ontario:
Sr. Deb., 7%, 2005......................... 40,000 42,095
Sr. Unsub. Deb., 7 3/8%, 2003.............. 30,000 31,427
Province of Quebec:
Bonds, 9 1/8%, 2000........................ 30,000 31,667
Deb., 7 1/2%, 2023......................... 50,000 54,534
Republic of Finland,
Bonds, 6.95%, 2026......................... 25,000 26,468
Republic of Ireland,
Notes, 7 7/8%, 2001........................ 150,000 159,655
Republic of Portugal,
Unsub. Notes, 5 3/4%, 2003................. 100,000 99,536
Royal Bank of Scotland,
Sub. Notes, 6 3/8%, 2011................... 60,000 58,706
Santander Finance Issuances,
Unsecured Sub. Notes
(Gtd. by Banco Santander, S.A.),
7 1/4%, 2006............................... 100,000 104,365
Saskatchewan C.D.A.,
Bonds, 9 1/8%, 2021........................ 10,000 12,977
Swiss Bank-New York,
Sub. Deb., 7%, 2015........................ 70,000 71,565
-----------
1,167,605
-----------
U.S. Governments --40.1% U.S. Treasury Bonds:
11 3/4%, 2/15/2001......................... 155,000 179,616
15 3/4%, 11/15/2001........................ 15,000 19,820
10 3/4%, 2/15/2003......................... 1,030,000 1,245,126
10 3/4%, 5/15/2003......................... 115,000 140,178
11 7/8%, 11/15/2003........................ 10,000 12,886
11 5/8%, 11/15/2004........................ 185,000 243,652
10 3/4%, 8/15/2005......................... 765,000 989,474
7 5/8%, 2/15/2007.......................... 60,000 63,605
8 3/4%, 11/15/2008......................... 225,000 255,598
12 3/4%, 11/15/2010........................ 75,000 106,237
14%, 11/15/2011............................ 30,000 46,248
12%, 8/15/2013............................. 45,000 65,981
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
U.S. Governments (continued) U.S. Treasury Bonds (continued):
12 1/2%, 8/15/2014......................... $ 40,000 $ 61,439
11 1/4%, 2/15/2015......................... 25,000 39,015
7 1/4%, 5/15/2016.......................... 110,000 125,023
8 3/4%, 5/15/2017.......................... 300,000 392,049
8 7/8%, 8/15/2017.......................... 115,000 152,147
8 7/8%, 2/15/2019.......................... 140,000 186,616
8 1/2%, 2/15/2020.......................... 225,000 291,213
8 3/4%, 5/15/2020.......................... 880,000 1,167,082
8 3/4%, 8/15/2020.......................... 290,000 385,091
7 7/8%, 2/15/2021.......................... 130,000 159,112
8%, 11/15/2021............................. 950,000 1,180,860
7 5/8%, 2/15/2025.......................... 850,000 1,028,925
U.S. Treasury Notes:
5 1/2%, 2/28/1999.......................... 30,000 30,005
7%, 4/15/1999.............................. 200,000 202,746
6 3/8%, 5/15/1999.......................... 500,000 503,985
6 3/4%, 5/31/1999.......................... 20,000 20,250
6 7/8%, 7/31/1999.......................... 80,000 81,243
8%, 8/15/1999.............................. 30,000 30,902
7 1/8%, 9/30/1999.......................... 520,000 531,024
7 7/8%, 11/15/1999......................... 550,000 568,585
7 3/4%, 12/31/1999......................... 20,000 20,685
6 3/8%, 1/15/2000.......................... 800,000 810,512
7 3/4%, 1/31/2000.......................... 410,000 424,580
6 7/8%, 3/31/2000.......................... 1,305,000 1,335,459
5 1/2%, 4/15/2000.......................... 20,000 19,977
8 3/4%, 8/15/2000.......................... 80,000 85,367
8 1/2%, 11/15/2000......................... 1,405,000 1,500,470
6 1/2%, 5/31/2001.......................... 300,000 307,272
7 7/8%, 8/15/2001.......................... 590,000 628,999
6 1/4%, 1/31/2002.......................... 1,335,000 1,361,113
6 1/4%, 2/15/2003.......................... 530,000 542,895
5 3/4%, 8/15/2003.......................... 280,000 281,109
6 7/8%, 5/15/2006.......................... 520,000 556,868
6 1/4%, 2/15/2007.......................... 1,000,000 1,034,000
-----------
19,415,039
-----------
U.S. Government Agencies--37.4% Federal Farm Credit Banks,
6.33%, 11/6/2000........................... 700,000 701,735
Federal Home Loan Banks:
8.60%, 1/25/2000........................... 15,000 15,699
5.785%, 3/17/2003.......................... 500,000 498,365
Federal Home Loan Mortgage Corp.:
6.09%, 3/1/2000............................ 40,000 39,975
6.34%, 11/12/2002.......................... 500,000 501,165
5.90%, 2/14/2006........................... 600,000 399,762
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
U.S. Government Agencies
(continued) 6 1/2%, 3/1/2011-3/1/2028.................. $1,278,342 $ 1,276,918
7%, 9/1/2011-1/1/2028...................... 1,476,518 1,502,445
7 1/2%, 2/1/2023........................... 586,010 604,868
8%, 8/1/2026............................... 402,955 418,191
Federal National Mortgage Association:
9.55%, 3/10/1999........................... 30,000 30,955
8.70%, 6/10/1999........................... 15,000 15,475
8.45%, 7/12/1999........................... 15,000 15,468
8.35%, 11/10/1999.......................... 25,000 25,946
6.06%, 1/13/2003........................... 500,000 497,457
6.20%, 7/10/2003........................... 90,000 89,101
6.85%, 4/5/2004............................ 145,000 151,825
7.40%, 7/1/2004............................ 450,000 484,468
5 7/8%, 2/2/2006........................... 125,000 124,736
5 3/4%, 2/15/2008.......................... 200,000 197,701
6%, 6/1/2011............................... 467,928 461,930
6 1/2%, 1/1/2005-11/1/2027................. 1,442,562 1,444,788
7%, 8/1/2008-4/1/2028...................... 1,746,537 1,772,825
7 1/2%, 3/1/2024-9/1/2027.................. 732,033 756,121
8%, 5/1/2027............................... 443,328 459,537
8%......................................... 500,000 (g) 517,340
8 1/2%, 2/1/2025........................... 456,232 479,756
Financing Corp., Bonds:
9.65%, 11/2/2018........................... 10,000 13,875
8.60%, 9/26/2019........................... 40,000 49,700
Government National Mortgage Association I:
6 1/2%, 9/15/2008-2/15/2024................ 959,701 965,653
7%, 2/15/2022-3/15/2028.................... 949,647 964,819
7 1/2%, 12/15/2026-10/15/2027.............. 964,042 992,649
8%, 8/15/2024.............................. 414,907 432,927
8 1/2%, 10/15/2026......................... 358,941 379,132
Government National Mortgage Association I,
Project Loans,
7%, 10/15/2011............................. 473,995 487,917
Resolution Funding, Bonds:
8 7/8%, 7/15/2020.......................... 75,000 99,718
8 5/8%, 1/15/2030.......................... 15,000 19,911
Tennessee Valley Authority:
Deb.:
8 3/8%, 10/1/1999........................ 15,000 15,540
7.85%, 6/15/2044......................... 10,000 10,837
Global Bonds, 6%, 3/15/2013................ 200,000 198,306
-----------
18,115,536
-----------
TOTAL BONDS AND NOTES
(cost $46,070,033)......................... $47,050,237
===========
</TABLE>
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Short-Term Investments Amount Value
- ------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Repurchase Agreement; Goldman, Sachs & Co. Tri-Party
Repurchase Agreement, 5.52%
dated 4/30/1998, due 5/1/1998 in the amount of
$1,196,070 (fully collateralized by
$1,184,000 U.S. Treasury Notes,
6 1/8%, due 8/15/2007, value $1,231,400)
(cost $1,195,887)........................... $1,195,887 $ 1,195,887
===========
TOTAL INVESTMENTS (cost $47,265,920)........................................... 99.7% $48,246,124
====== ===========
CASH AND RECEIVABLES (NET)..................................................... .3% $ 158,508
====== ===========
NET ASSETS..................................................................... 100.0% $48,404,632
====== ===========
<FN>
Notes to Statement of Investments:
- ------------------------------------------------------------------------------------------------------------------------
(a) Reflects date security can be redeemed at holders' option; the stated maturity date is 5/15/2008.
(b) Reflects date security can be redeemed at holders' option; the stated maturity date is 4/2/2011.
(c) Reflects date security can be redeemed at holders' option; the stated maturity date is 6/15/2008.
(d) Reflects date security can be redeemed at holders' option; the stated maturity date is 2/15/2027.
(e) Reflects date security can be redeemed at holders' option; the stated maturity date is 3/15/2008.
(f) Reflects date security can be redeemed at holders' option; the stated maturity date is 11/1/2005.
(g) Purchased on a forward commitment basis.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
----------- -----------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments--Note 1(c)............................... $47,265,920 $48,246,124
Interest receivable.................................... 722,655
-----------
48,968,779
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.......... 6,062
Due to Distributor..................................... 27
Cash overdraft due to Custodian........................ 38,678
Payable for investment securities purchased............ 519,380
-----------
564,147
-----------
NET ASSETS..................................................................... $48,404,632
===========
REPRESENTED BY: Paid-in capital........................................ $47,123,852
Accumulated net realized gain (loss) on investments 300,576
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3............................... 980,204
-----------
NET ASSETS..................................................................... $48,404,632
===========
</TABLE>
NET ASSET VALUE PER SHARE
-------------------------
<TABLE>
<CAPTION>
Investor BASIC
Shares Shares
------------- ------------
<S> <C> <C>
Net Assets..................................................................... $ 968,407 $47,436,225
Shares Outstanding............................................................. 96,899 4,740,967
NET ASSET VALUE PER SHARE...................................................... $9.99 $10.01
===== ======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Operations Six Months Ended April 30, 1998 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income.................................. $1,262,426
EXPENSES: Management fee--Note 2(a)........................ $ 29,829
Distribution fees (Investor shares)--Note 2(b)... 871
Loan commitment fees--Note 4..................... 113
----------
Total Expenses................................. 30,813
----------
INVESTMENT INCOME--NET......................................................... 1,231,613
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments.......... $ 305,365
Net unrealized appreciation (depreciation)
on investments................................. (152,474)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 152,891
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $1,384,504
==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
April 30, 1998 Year Ended
(Unaudited) October 31, 1997*
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 1,231,613 $ 2,000,295
Net realized gain (loss) on investments................................ 305,365 199,887
Net unrealized appreciation (depreciation) on investments.............. (152,474) 494,107
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 1,384,504 2,694,289
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares..................................................... (20,793) (1,995,878)
BASIC shares........................................................ (1,210,820) (4,417)
Net realized gain on investments:
Investor shares..................................................... (3,054) --
BASIC shares........................................................ (179,538) --
----------- -----------
Total Dividends.................................................. (1,414,205) (2,000,295)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Investor shares..................................................... 1,026,549 49,970
BASIC shares........................................................ 25,728,176 16,797,940
Dividends reinvested:
Investor shares..................................................... 23,667 4,125
BASIC shares........................................................ 1,322,580 1,914,516
Cost of shares redeemed:
Investor shares..................................................... (201,825) (16,579)
BASIC shares........................................................ (12,818,656) (19,156,787)
----------- -----------
Increase (Decrease) in Net Assets from Capital Stock Transactions 15,080,491 (406,815)
----------- -----------
Total Increase (Decrease) in Net Assets....................... 15,050,790 287,179
NET ASSETS:
Beginning of Period.................................................... 33,353,842 33,066,663
----------- -----------
End of Period.......................................................... $48,404,632 $33,353,842
=========== ===========
CAPITAL SHARE TRANSACTIONS:
Investor Shares Shares Shares
----------- -----------
Shares sold............................................................ 102,722 5,057
Shares issued for dividends reinvested................................. 2,368 422
Shares redeemed........................................................ (20,180) (1,695)
----------- -----------
Net Increase (Decrease) in Shares Outstanding.................... 84,910 3,784
=========== ===========
BASIC Shares
Shares sold............................................................ 2,560,585 1,720,766
Shares issued for dividends reinvested................................. 132,184 195,856
Shares redeemed........................................................ (1,274,982) (1,959,827)
----------- -----------
Net Increase (Decrease) in Shares Outstanding.................... 1,417,787 (43,205)
=========== ===========
<FN>
- ------------------------
* Effective August 15, 1997, Institutional Class shares were redesignated as
Investor shares and Retail shares were redesignated as BASIC shares.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Bond Market Index 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, 1998 --------------------------------------------
PER SHARE DATA: (Unaudited) 1997(1) 1996(2) 1995 1994(3,4)
---------------- -------- -------- ------ ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............. $ 9.99 $ 9.78 $ 9.93 $ 9.15 $ 9.44
------ ------ ------ ------ ------
Investment Operations:
Investment income--net........................... .30 .57 .57 .55 .24
Net realized and unrealized gain (loss) on
investments.................................... .05 .21 (.15) .78 (.28)
------ ------ ------ ------ ------
Total from Investment Operations................. .35 .78 .42 1.33 (.04)
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net............ (.30) (.57) (.57) (.55) (.25)
Dividends from net realized gain on investments.. (.05) -- -- -- --
------ ------ ------ ------ ------
Total Distributions.............................. (.35) (.57) (.57) (.55) (.25)
------ ------ ------ ------ ------
Net asset value, end of period................... $ 9.99 $ 9.99 $ 9.78 $ 9.93 $ 9.15
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN............................. 7.14%(5) 8.29% 4.36% 15.01% (.46%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets .40%(5) .60% .65% .65% .65%(5)
Ratio of net investment income to average net assets 5.97%(5) 5.82% 5.80% 5.77% 4.81%(5)
Portfolio Turnover Rate.......................... 37.55%(6) 48.86% 42.65% 40.16% 188.00%
Net Assets, end of period (000's Omitted)........ $968 $120 $80 $207 $38
<FN>
- ----------------------
(1) Effective August 15, 1997, Institutional shares were redesignated as
Investor shares.
(2) Effective July 15, 1996, Investor shares were redesignated as Institutional
shares.
(3) The Fund commenced selling Investor shares on April 28, 1994.
(4) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served as
the Fund's investment manager.
(5) Annualized.
(6) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Bond Market Index 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>
BASIC Shares
---------------------------------------------------------------
Six Months Ended Year Ended October 31,
April 30, 1998 --------------------------------------------
PER SHARE DATA: (Unaudited) 1997(1) 1996(2) 1995 1994(3,4)
---------------- -------- -------- ------ ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............. $10.00 $ 9.80 $ 9.94 $ 9.15 $10.00
------ ------ ------ ------ ------
Investment Operations:
Investment income--net........................... .31 .60 .59 .58 .49(5)
Net realized and unrealized gain (loss) on
investments...................................... .06 .20 (.14) .79 (.85)
------ ------ ------ ------ ------
Total from Investment Operations................. .37 .80 .45 1.37 (.36)
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net............ (.31) (.60) (.59) (.58) (.49)
Dividend from net realized gain on investments... (.05) -- -- -- --
------ ------ ------ ------ ------
Total Distributions.............................. (.36) (.60) (.59) (.58) (.49)
------ ------ ------ ------ ------
Net asset value, end of period................... $10.01 $10.00 $ 9.80 $ 9.94 $ 9.15
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN............................. 7.58%(6) 8.46% 4.69% 15.41% (3.68%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......... .15%(6) .35% .40% .40% .40%(6)(7)
Ratio of net investment income to average net assets 6.20%(6) 6.12% 6.02% 6.10% 5.05%(6)
Portfolio Turnover Rate.......................... 37.55%(8) 48.86% 42.65% 40.16% 188.00%
Net Assets, end of period (000's Omitted)........ $47,436 $33,234 $32,986 $6,824 $4,464
<FN>
- ----------------------
(1) Effective August 15, 1997, Retail shares were redesignated as BASIC shares.
(2) Effective July 15, 1996, Class R shares were redesignated as Retail shares.
(3) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served as
the Fund's investment manager.
(4) The Fund commenced operations on November 30, 1993. On April 28, 1994 the
Fund began selling Investor shares and the shares existing prior to April
28, 1994 were designated Trust shares. Effective October 17, 1994 the Fund's
Trust shares were redesignated Class R shares.
(5) Net investment income before reimbursement of expenses by the investment
adviser for the period ended October 31, 1994 was $0.39 per share.
(6) Annualized.
(7) Annualized expense ratio before reimbursement of expenses by investment
adviser for the period ended October 31, 1994 was 1.41%.
(8) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Bond Market Index Fund (the "Fund") is a separate diversified series
of The Dreyfus/ Laurel Funds, Inc. (the "Company") which is registered under the
Investment Company Act of 1940 ("Act") as an open-end management investment
company and operates as a series company currently offering eighteen series
including the Fund. The Fund's investment objective is to seek to replicate the
total return of the Lehman Brothers Government/Corporate Bond Index. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager is
a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Effective November 14, 1997, the Fund's investment objective changed from
seeking to replicate the total return of the Lehman Brothers
Government/Corporate Index to replicate the total return of the Lehman Brothers
Aggregate Bond Index.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares. The Fund is authorized to issue 150 million of $.001 par
value Capital Stock. The Fund is currently authorized to issue two classes of
shares: Investor (50 million shares authorized) and BASIC (100 million shares
authorized). Investor shares are offered only to clients of banks, securities
brokers or dealers and other financial institutions (collectively, Service
Agents) that have entered into selling agreements with the Fund's distributor
and BASIC shares are offered to any investor. Other differences between the two
classes include the services offered to and the expenses borne by each class.
Investment income, net of expenses (other than class specific expenses) and
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.
The Fund'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 (excluding short-term
investments) are valued each business day by an independent pricing service
("Service") approved by the Board of Directors. Investments for which quoted bid
prices are readily available and are representative of the bid side of the
market in the judgment of the Service are valued at the mean between the quoted
bid prices (as obtained by the Service from dealers in such securities) and
asked prices (as calculated by the Service based upon its evaluation of the
market for such securities). Other investments (which constitute a majority of
the portfolio securities) are carried at fair value as determined by the
Service, based on methods which include consideration of: yields or prices of
securities of comparable quality, coupon, maturity and type; indications as to
values from dealers; and general market conditions. 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. Short-term investments excluding
U.S. Treasury Bills are carried at amortized cost, which approximates value.
(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,
adjusted for amortization of premiums and discounts on investments, is
recognized on the accrual basis.
(c) Repurchase agreements: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund,
through its custodian and sub-custodian, takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund
to resell, the obligation at an agreed upon price and time, thereby determining
the yield during the Fund's holding period. This arrangement results in a fixed
rate of return that is not subject to market fluctuations during the Fund's
holding period. The value of the collateral is at least equal, at all times, to
the total amount of the repurchase obligation, including interest. In the event
of a counterparty default, the Fund has the
<PAGE>
Dreyfus Bond Market Index Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
right to use the collateral to offset losses incurred. There is potential loss
to the Fund in the event the Fund is delayed or prevented from exercising its
rights to dispose of the collateral securities, including the risk of a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights. The Manager, acting under the supervision of
the Board of Directors, reviews the value of the collateral and the
creditworthiness of those banks and dealers with which the Fund enters into
repurchase agreements to evaluate potential risks.
(d) Distributions to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
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 distribution 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.
(e) 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
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.
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, calculated daily and paid monthly, at the
annual rate of .15% 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, commitment fees, 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). Each director 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. The
Chairman of the Board receives and additional annual fee of $25,000 per year.
These fees pertain to the following funds: The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust (The
$1,000 attendance fee and reimbursement of meeting expenses are also borne pro
rata by Dreyfus High Yield Strategies Fund). These fees and expenses are
allocated to each series based on net assets. Amounts required to be paid by the
Company directly to the non-interested Directors, that would be applied to
offset a portion of the management fee payable to the Manager, are in fact paid
directly by the Manager to the non-interested Directors.
(b) Distribution plan: Under the Fund's Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Investor shares may pay annually
up to .25% of the value of the average daily net assets 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 BASIC shares bear no
distribution fee. During the period ended April 30, 1998, the Investor shares
were charged $871 pursuant to the Plan.
<PAGE>
Dreyfus Bond Market Index Fund
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 Investment Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1998 amounted
to $28,966,191 and $14,352,100, respectively.
At April 30, 1998, accumulated net unrealized appreciation on investments
was $980,204, consisting of $1,021,053 gross unrealized appreciation and
$40,849 gross unrealized depreciation.
At April 30, 1998, cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 4--Bank Line of Credit:
The Fund participates with other Dreyfus-Managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended April 30,
1998, the Fund did not borrow under the Facility.
<PAGE>
Dreyfus Bond Market
Index Fund
200 Park Avenue
New York, NY 10166
Manager
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
Printed in U.S.A. 310/710SA984
