Dreyfus
BASIC S&P 500
Stock Index Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
21 Statement of Financial Futures
22 Statement of Assets and Liabilities
23 Statement of Operations
24 Statement of Changes in Net Assets
25 Financial Highlights
26 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus BASIC
S&P 500 Stock Index Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus BASIC S&P 500 Stock
Index Fund, covering the six-month period from November 1, 1999 through April
30, 2000. Inside you'll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
managers, Steve Falci and Jocelin Reed.
The past six months have been highly volatile -- but generally rewarding -- for
investors in large-cap U.S. stocks. While the market's advance during the last
two months of 1999 was led primarily by technology stocks and large-cap growth
stocks in a fast-growing economy, the large-cap sector of the stock market
corrected substantially during the first quarter of 2000, causing large-cap
stocks to generally underperform small- and mid-cap stocks during those three
months.
In mid-March, investor sentiment appeared to shift once more. Faced with
evidence that inflationary pressures were building, a major measure of
technology stock performance, the Nasdaq Composite Index, fell substantially
between mid-March and the end of April, including a considerably large
single-day drop on April 14. Many "old economy" stocks declined less severely
and some value-oriented stocks gained ground amid renewed investor interest.
While it is too soon to determine whether this broadening of the market is
likely to persist, we believe that it may be a positive sign for the stock
market overall.
We appreciate your confidence over the past six months and we look forward to
your continued participation in Dreyfus BASIC S& P 500 Stock Index Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Steve Falci and Jocelin Reed, Portfolio Managers
How did Dreyfus BASIC S&P 500 Stock Index Fund perform relative to its
benchmark?
For the six-month period ended April 30, 2000, Dreyfus BASIC S&P 500 Stock Index
Fund produced a total return of 7.08%.(1) The Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500 Index"), the fund's benchmark, produced a total
return of 7.18% for the same period.(2) The difference in returns was primarily
due to transaction costs and other fund operating expenses.
What is the fund's investment approach?
The fund seeks to match the total return of the S&P 500 Index. To pursue that
goal, the fund generally invests in all 500 stocks in the S&P 500 Index in
proportion to their weighting in the Index. Often considered a barometer for the
stock market in general, the S&P 500 Index is made up of 500 widely held common
stocks. The S&P 500 Index is dominated by large-cap blue chip stocks that cover
nearly 75% of total U.S. market capitalization.
However, it is important to note that the S&P 500 Index is not composed of the
500 largest companies; rather, it is designed to capture the returns of many
different sectors of the U.S. economy. The S&P 500 Index contains approximately
375 industrial, 40 utility, 75 financial and 10 transportation stocks. Each
stock is weighted by its market capitalization; that is, larger companies have
greater representation in the S&P 500 Index than smaller ones. The fund may also
use stock index futures as a substitute for the sale or purchase of stocks.
As an index fund, the fund uses a passive management approach; all investment
decisions are made based on the fund's objective, which is to seek to match the
performance of the S& P 500 Index. The fund does not attempt to manage market
volatility.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The six-month reporting period was marked by high levels of stock market
volatility and changing investor preferences in three areas: technology versus
non-technology sectors; small-cap versus mid- and large-cap stocks; and growth
versus value investment styles.
From November 1, 1999, through mid-March 2000, the U.S. stock market advanced
sharply, driven primarily by strong gains within the volatile technology sector.
During this period, the prices of many high-flying tech stocks continued to
climb, especially those stocks that were related to the "new economy" of
Internet-related products and services. In this environment, large-cap stocks
underperformed their small- and mid-cap counterparts.
By mid-March, however, those trends had reversed themselves when many technology
stocks quickly fell out of favor. Even during this downturn in the technology
sector as a whole, there were days when tech stocks bounced back to report
strong gains, which increased the stock market's volatility levels. In this
environment, large-cap stocks generally outpaced small-cap stocks.
During the reporting period, the largest gains within the S&P 500 Index, and
therefore the fund as well, came from its technology group, which includes
electronic instruments, electronic semiconductors, electrical defense,
communications equipment and computer systems companies. In addition, the S&P
500 Index's holdings within the energy area, including oil and gas drilling, oil
well equipment and services and natural gas companies, provided strong returns,
as did its entertainment stocks.
On the other hand, the poorest performing returns of the S&P 500 Index, and
therefore of the fund as well during the reporting period, were generated from
its financial stocks, specifically within insurance companies, savings and
loans, and money center banks. In addition, the stocks of basic materials
companies, which include metal and glass containers, miscellaneous metal
companies, and hotel and motel stocks as well as consumer staples firms such as
household products and food companies, provided disappointing returns.
What is the fund's current strategy?
The fund is an index fund, and its goal is to replicate the return of the S&P
500 Index. Therefore, the fund's strategy is to hold all 500 stocks that make up
the S& P 500 Index in an effort to capture a similar return.
As of the end of the reporting period, the largest sector weightings of the S&P
500 Index, and for the fund as well, were approximately as follows: technology -
30% ; interest sensitive - 17% ; healthcare - 10%; consumer cyclicals - 8%;
utilities - 8%; producer goods - 7%; energy - 6%; and consumer staples - 4%. Of
course, this allocation may be subject to change.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500 INDEX") IS A WIDELY ACCEPTED,
UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE.
The Fund
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
COMMON STOCKS--98.2% Shares Value ($)
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<S> <C> <C>
ALCOHOL & TOBACCO--.9%
Anheuser-Busch Cos. 73,000 5,151,063
Brown-Forman, Cl. B 10,700 583,819
Coors (Adolph), Cl. B 5,815 296,565
Philip Morris Cos. 371,100 8,117,813
Seagram 68,000 3,672,000
UST 26,800 402,000
18,223,260
CONSUMER CYCLICAL--8.4%
AMR 23,200 (a) 790,250
Albertson's 66,486 2,164,950
AutoZone 22,200 (a) 509,213
Bed Bath & Beyond 22,000 (a) 807,125
Best Buy 32,100 (a) 2,592,075
Black & Decker 13,600 572,050
Brunswick 14,400 276,300
CVS 61,418 2,671,683
Circuit City Group 31,936 1,878,236
Consolidated Stores 17,400 (a) 216,413
Cooper Tire and Rubber 11,903 160,691
Costco Wholesale 69,700 (a) 3,768,156
Dana 25,799 783,645
Darden Restaurants 20,200 372,438
Delphi Automotive Systems 88,572 1,693,940
Delta Air Lines 20,400 1,076,100
Dillard's, Cl. A 16,500 229,969
Dollar General 41,437 947,871
Eastman Kodak 49,500 2,768,906
Federated Department Stores 32,900 (a) 1,118,600
Ford Motor 189,500 10,363,281
Gap 133,500 4,906,125
General Motors 100,400 9,399,950
Grainger (W.W.) 14,600 633,275
Great Atlantic & Pacific 6,043 110,662
Harley-Davidson 47,400 1,887,113
Harrah's Entertainment 20,194 (a) 415,239
Hasbro 27,575 439,477
Hilton Hotel 57,800 491,300
COMMON STOCKS (CONTINUED) Shares Value ($)
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CONSUMER CYCLICAL (CONTINUED)
Home Depot 361,100 20,244,169
K mart 76,400 (a) 620,750
Kohl's 51,200 (a) 2,457,600
Kroger 130,900 (a) 2,429,831
Leggett & Platt 30,800 658,350
Limited 33,700 1,522,819
Liz Claiborne 9,300 430,706
Longs Drug Stores 6,138 142,709
Lowes 60,000 2,970,000
Marriott International, Cl. A 39,000 1,248,000
Mattel 66,000 808,500
May Department Stores 52,200 1,435,500
Maytag 13,200 454,575
McDonald's 212,400 8,097,750
Mirage Resorts 30,300 (a) 617,363
NIKE, Cl. B 43,300 1,880,844
Navistar International 9,900 (a) 346,500
Nordstrom 21,300 592,406
Office Depot 51,600 (a) 545,025
PACCAR 12,322 586,065
Penney (J.C.) 40,900 564,931
Polaroid 7,000 141,313
Reebok International 8,815 (a) 149,855
Rite Aid 40,600 203,000
Russell 5,214 102,325
Safeway 79,800 (a) 3,521,175
Sears, Roebuck & Co. 59,300 2,171,863
Southwest Airlines 79,162 1,716,826
Springs Industries 2,800 114,975
Staples 73,650 (a) 1,403,953
TJX Cos. 48,600 932,513
Tandy 30,352 1,730,064
Target 68,700 4,572,844
Toys R Us 37,600 (a) 573,400
Tricon Global Restaurants 23,730 (a) 809,786
US Airways Group 11,200 (a) 311,500
V.F. 18,500 522,625
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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CONSUMER CYCLICAL (CONTINUED)
Wal-Mart Stores 698,600 38,684,975
Walgreen 157,800 4,438,125
Wendy's International 18,747 419,464
Whirlpool 11,700 761,963
Winn-Dixie Stores 22,900 379,281
166,361,251
CONSUMER STAPLES--4.2%
Alberto-Culver, Cl. B 8,744 206,577
Archer Daniels Midland 95,250 946,547
Avon Products 38,036 1,578,494
Bestfoods 43,800 2,200,950
Campbell Soup 66,900 1,739,400
Clorox 37,100 1,363,425
Coca-Cola 387,400 18,232,013
Coca-Cola Enterprises 66,700 1,421,544
Colgate-Palmolive 91,400 5,221,225
ConAgra 77,232 1,457,754
Fortune Brands 25,771 644,275
General Mills 47,200 1,716,900
Gillette 168,200 6,223,400
Heinz (H.J.) 55,600 1,890,400
Hershey Foods 21,700 984,638
International Flavors & Fragrances 16,500 568,219
Kellogg 63,600 1,554,225
Nabisco Group Holdings 51,200 659,200
National Service Industries 6,400 137,600
Newell Rubbermaid 44,278 1,115,252
Owens-Illinois 23,500 (a) 317,250
PepsiCo 228,300 8,375,756
Procter & Gamble 206,400 12,306,600
Quaker Oats 21,000 1,368,938
Ralston-Purina Group 47,300 836,619
SUPERVALU 21,900 453,056
Sara Lee 142,500 2,137,500
Sysco 51,804 1,949,126
Tupperware 9,000 169,875
COMMON STOCKS (CONTINUED) Shares Value ($)
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CONSUMER STAPLES (CONTINUED)
Unilever, N.V. 89,678 4,085,954
Wrigley, (Wm) Jr 18,200 1,317,225
83,179,937
ENERGY--5.8%
Amerada Hess 14,200 903,475
Anadarko Petroleum 20,000 868,750
Apache 17,900 867,031
Baker Hughes 51,620 1,642,161
Burlington Resources 34,106 1,340,792
Chevron 102,900 8,759,363
Coastal 33,520 1,682,285
Columbia Energy Group 12,700 796,925
Conoco, Cl. B 98,207 2,442,899
Duke Energy 57,361 3,298,258
Eastern Enterprises 4,218 256,771
El Paso Energy 35,800 1,521,500
Enron 112,200 7,818,938
Exxon Mobil 541,678 42,081,610
Halliburton 69,300 3,062,194
McDermott International 9,300 75,563
Nicor 7,400 250,675
ONEOK 4,882 123,271
Occidental Petroleum 57,700 1,236,944
Peoples Energy 5,570 173,018
Phillips Petroleum 39,700 1,883,269
Rowan Cos. 14,510 (a) 405,373
Royal Dutch Petroleum 336,300 19,295,213
Sunoco 14,168 429,468
Texaco 86,700 4,291,650
Tosco 22,600 724,613
Transocean Sedco Forex 32,800 1,541,600
USX-Marathon Group 48,700 1,135,319
Union Pacific Resources Group 39,507 758,041
Unocal 38,000 1,227,875
Williams Cos. 68,200 2,544,713
113,439,557
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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HEALTH CARE--9.5%
ALZA 16,000 (a) 705,000
Abbott Laboratories 241,100 9,267,281
Allergan 20,600 1,212,825
American Home Products 204,800 11,507,200
Amgen 160,220 (a) 8,972,320
Bard (C.R.) 8,000 348,500
Bausch & Lomb 9,064 547,239
Baxter International 45,600 2,969,700
Becton, Dickinson & Co. 39,500 1,012,188
Biogen 23,600 (a) 1,387,975
Biomet 17,700 631,669
Boston Scientific 65,000 (a) 1,722,500
Bristol-Myers Squibb 311,100 16,313,306
Cardinal Health 44,100 2,428,256
Columbia/HCA Healthcare 88,400 2,513,875
Guidant 48,200 (a) 2,765,475
HEALTHSOUTH 60,600 (a) 488,588
Humana 26,300 (a) 202,181
Johnson & Johnson 218,200 18,001,500
Lilly (Eli) & Co. 171,000 13,220,438
Mallinckrodt Group 10,800 290,250
Manor Care 16,200 (a) 193,388
McKesson HBOC 44,154 745,099
Medtronic 187,300 9,727,894
Merck & Co. 366,600 25,478,700
Pfizer 607,200 25,578,300
Schering-Plough 230,400 9,288,000
Sigma-Aldrich 15,800 464,125
St. Jude Medical 13,200 (a) 411,675
Tenet Healthcare 48,900 1,246,950
UnitedHealth Group 26,600 1,773,888
Warner-Lambert 134,700 15,330,544
Watson Pharmaceuticals 15,100 (a) 678,556
Wellpoint Health Networks 10,000 (a) 737,500
188,162,885
INTEREST SENSITIVE--17.0%
AFLAC 41,700 2,035,481
COMMON STOCKS (CONTINUED) Shares Value ($)
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INTEREST SENSITIVE (CONTINUED)
Aetna 23,027 1,332,688
Allstate 126,300 2,983,838
American Express 70,200 10,534,388
American General 38,738 2,169,328
American International Group 242,861 26,638,816
Amsouth Bancorp 61,300 892,681
Aon 40,250 1,089,266
Associates First Capital, Cl. A 114,222 2,534,301
BB&T 54,500 1,451,063
Bank One 179,898 5,486,889
Bank of America 267,804 13,122,396
Bank of New York 115,528 4,743,869
Bear Stearns Cos. 18,348 786,671
Block (H&R) 15,400 643,913
CIGNA 26,400 2,105,400
Capital One Financial 30,900 1,351,875
Cendant 110,786 (a) 1,710,259
Chase Manhattan 129,382 9,323,590
Chubb 27,600 1,756,050
Cincinnati Financial 25,700 1,036,031
Citigroup 528,887 31,435,721
Comerica 24,550 1,040,306
Conseco 51,271 278,786
Countrywide Credit Industries 17,800 491,725
Equifax 22,200 542,513
Fannie Mae 160,800 9,698,250
Federal Home Loan Mortgage 109,000 5,007,188
Fifth Third Bancorp 48,425 3,056,828
First Union 154,934 4,938,521
Firstar 153,774 3,825,128
FleetBoston Financial 143,624 5,089,676
Franklin Resources 39,000 1,257,750
General Electric 514,600 80,920,850
Golden West Financial 25,300 863,363
Hartford Financial Services Group 34,800 1,816,125
Household International 73,741 3,078,687
Huntington Bancshares 35,897 655,120
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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INTEREST SENSITIVE (CONTINUED)
Jefferson-Pilot 16,400 1,091,625
Keycorp 70,200 1,298,700
Lehman Brothers Holdings 18,800 1,542,775
Lincoln National 30,700 1,068,744
Loews 16,600 915,075
MBIA 15,600 771,225
MBNA 125,712 3,339,225
MGIC Investment 16,600 793,688
Marsh & McLennan Cos. 41,850 4,124,841
Mellon Financial 79,800 2,563,575
Merrill Lynch 58,100 5,922,569
Morgan (J.P.) 27,200 3,491,800
Morgan Stanley Dean Witter & Co. 178,710 13,715,993
National City 96,700 1,643,900
Northern Trust 34,900 2,237,963
Old Kent Financial 20,800 626,600
PNC Bank 46,100 2,011,113
Paine Webber Group 22,400 982,800
Progressive 11,500 752,531
Providian Financial 22,250 1,959,391
Regions Financial 34,300 701,006
SLM Holding 25,000 782,813
Safeco 20,400 451,350
Schwab (Charles) 128,600 5,722,700
SouthTrust 26,300 627,913
St. Paul Cos. 35,692 1,271,528
State Street 25,100 2,431,563
Summit Bancorp 27,400 695,275
SunTrust Banks 50,200 2,547,650
Synovus Financial 43,900 814,894
T. Rowe Price Associates 18,800 716,750
Torchmark 20,616 516,689
U.S. Bancorp 118,151 2,399,942
Union Planters 22,100 625,706
UnumProvident 37,672 640,424
Wachovia 31,800 1,993,463
Washington Mutual 90,557 2,314,863
COMMON STOCKS (CONTINUED) Shares Value ($)
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INTEREST SENSITIVE (CONTINUED)
Wells Fargo 258,980 10,634,366
334,468,358
INTERNET RELATED--1.7%
America Online 357,900 (a) 21,406,894
3COM 53,700 (a) 2,117,794
Yahoo! 82,600 (a) 10,758,650
34,283,338
PRODUCER GOODS--6.8%
Air Products & Chemicals 36,000 1,118,250
Alcan Aluminium 34,400 1,126,600
Alcoa 57,700 3,743,288
Allegheny Technologies 14,683 355,145
Armstrong World Industries 6,300 (a) 123,244
Ashland 11,100 378,788
Avery Dennison 17,692 1,161,038
Ball 4,700 148,050
Barrick Gold 61,800 1,039,013
Bemis 8,200 301,863
Bethlehem Steel 20,600 (a) 110,725
Boeing 136,244 5,407,184
Boise Cascade 9,014 293,518
Briggs & Stratton 3,600 138,150
Burlington Northern Santa Fe 71,717 1,730,173
CSX 34,200 716,063
Caterpillar 55,800 2,200,613
Centex 9,314 224,700
Champion International 15,100 992,825
Cooper Industries 14,800 507,825
Crane 10,350 278,156
Crown Cork & Seal 20,300 329,875
Cummins Engine 6,447 229,271
Deere & Co. 36,700 1,481,763
Dow Chemical 34,425 3,890,025
duPont (E.I.) deNemours & Co. 163,794 7,769,978
Eastman Chemical 12,226 639,573
Ecolab 20,300 792,969
Emerson Electric 67,600 3,709,550
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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PRODUCER GOODS (CONTINUED)
Engelhard 19,700 345,981
FMC 4,800 (a) 279,300
FedEx 45,892 (a) 1,729,555
Fluor 11,889 399,025
Fort James 33,900 811,481
Freeport-McMoRan Copper, Cl. B 25,600 (a) 246,400
General Dynamics 31,500 1,842,750
Genuine Parts 27,900 732,375
Georgia-Pacific 26,800 984,900
Goodrich (B.F.) 17,300 551,438
Goodyear Tire & Rubber 24,500 676,813
Grace (W.R.) & Co. 11,300 (a) 146,900
Great Lakes Chemical 9,003 242,518
Hercules 16,700 259,894
Homestake Mining 40,800 244,800
Honeywell International 124,150 6,952,400
ITT Industries 13,800 435,563
Illinois Tool Works 47,100 3,017,344
Inco 30,100 (a) 470,313
Ingersoll-Rand 25,650 1,203,947
International Paper 64,908 2,385,369
Kansas City Southern Industries 17,300 1,243,438
Kaufman & Broad Home 7,500 144,375
Kerr-McGee 14,939 773,093
Kimberly-Clark 87,100 5,057,244
Lockheed Martin 62,100 1,544,738
Louisiana-Pacific 16,700 223,363
Masco 70,118 1,573,273
Mead 16,054 558,880
Milacron 5,800 105,850
Minnesota Mining & Manufacturing 62,600 5,414,900
NACCO Industries, Cl. A 1,322 59,325
Newmont Mining 26,274 615,797
Norfolk Southern 59,900 1,055,738
Northrop Grumman 10,900 772,538
Nucor 13,700 589,100
Owens-Corning 8,600 156,413
COMMON STOCKS (CONTINUED) Shares Value ($)
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PRODUCER GOODS (CONTINUED)
PPG Industries 27,221 1,480,142
Pactiv 26,900 (a) 220,244
Pall 19,403 432,929
Parker-Hannifin 17,540 815,610
Pharmacia 196,247 9,800,085
Phelps Dodge 12,725 588,531
Placer Dome 51,100 415,188
Potlach 4,500 177,469
Praxair 24,900 1,106,494
Pulte 6,798 146,157
Raytheon, Cl. B 53,100 1,178,156
Reynolds Metals 9,900 658,350
Rockwell International 29,800 1,173,375
Rohm & Haas 34,355 1,223,897
Sealed Air 13,131 (a) 730,412
Sherwin-Williams 26,000 646,750
Snap-On 9,200 243,225
Stanley Works 14,027 413,797
TRW 19,100 1,117,350
Temple-Inland 8,800 441,100
Textron 23,300 1,443,144
Thomas & Betts 9,041 278,576
Timken 9,700 179,450
Tyco International 265,286 12,186,576
USX-U.S. Steel Group 13,900 348,369
Union Carbide 21,022 1,240,298
Union Pacific 39,000 1,642,875
United Technologies 74,528 4,634,710
Vulcan Materials 15,700 687,856
Westvaco 15,700 484,738
Weyerhaeuser 36,800 1,966,500
Willamette Industries 17,500 668,281
Worthington Industries 14,000 173,250
133,729,230
SERVICES--6.1%
ALLTEL 49,200 3,277,950
Allied Waste Industries 29,600 (a) 181,300
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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SERVICES (CONTINUED)
American Greetings, Cl. A 10,100 183,063
Automatic Data Processing 98,900 5,322,056
CBS 119,586 (a) 7,025,678
Carnival 96,800 2,407,900
Ceridian 22,666 (a) 491,569
Clear Channel Communications 53,100 (a) 3,823,200
Comcast, Cl. A 145,300 (a) 5,821,081
Computer Sciences 26,200 (a) 2,136,938
Deluxe 11,500 289,656
Disney (Walt) 324,700 14,063,569
Donnelley (R.R.) & Sons 19,800 420,750
Dow Jones & Co 14,100 914,738
Dun & Bradstreet 25,200 759,150
Electronic Data Systems 73,800 5,073,750
First Data 65,700 3,198,769
Gannett 43,700 2,791,338
Harcourt General 11,200 418,600
IMS Health 48,300 824,119
Interpublic Group Cos. 44,000 1,804,000
Jostens 5,222 128,918
Knight-Ridder 13,200 647,625
McGraw-Hill Cos. 30,800 1,617,000
MediaOne Group 96,000 (a) 7,260,000
Meredith 8,060 224,169
NEXTEL Communications, Cl. A 57,200 (a) 6,259,825
New York Times, Cl. A 26,836 1,105,308
Omnicom Group 27,800 2,531,538
Paychex 38,750 2,039,219
Quintiles Transnational 18,000 (a) 257,625
Ryder System 9,400 208,563
Shared Medical Systems 4,200 174,038
Sprint (PCS Group) 135,200 (a) 7,436,000
Time Warner 201,800 18,149,388
Times Mirror, Cl. A 9,439 920,892
Tribune 37,244 1,447,861
Viacom, Cl. B 109,300 (a) 5,943,188
Waste Management 97,142 1,542,129
COMMON STOCKS (CONTINUED) Shares Value ($)
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SERVICES (CONTINUED)
Young & Rubicam 10,900 606,994
119,729,454
TECHNOLOGY--29.9%
ADC Telecommunications 47,100 (a) 2,861,325
Adaptec 16,300 (a) 440,100
Adobe Systems 18,600 2,249,438
Advanced Micro Devices 23,100 (a) 2,027,025
Altera 31,400 (a) 3,210,650
Analog Devices 54,900 (a) 4,217,006
Andrew 12,600 (a) 370,913
Apple Computer 25,400 (a) 3,151,188
Applied Materials 120,000 (a) 12,217,500
Autodesk 9,700 372,238
BMC Software 38,300 (a) 1,792,919
Cabletron Systems 28,600 (a) 654,225
Cisco Systems 1,073,200 (a) 74,402,944
Citrix Systems 28,100 (a) 1,715,856
Compaq Computer 265,749 7,773,158
Computer Associates International 92,350 5,154,284
Compuware 56,500 (a) 709,781
Comverse Technology 24,000 (a) 2,140,500
Conexant Systems 33,700 (a) 2,017,788
Corning 43,300 8,551,750
Danaher 22,300 1,273,888
Dell Computer 402,300 (a) 20,165,288
Dover 31,900 1,620,919
EMC 159,600 (a) 22,174,425
Eaton 11,521 967,764
Gateway 49,600 (a) 2,740,400
Hewlett-Packard 157,600 21,276,000
Ikon Office Solutions 23,500 138,063
Intel 524,000 66,449,694
International Business Machines 282,700 31,556,388
Johnson Controls 13,428 850,160
KLA-Tencor 28,800 (a) 2,156,400
LSI Logic 46,682 (a) 2,917,625
Lexmark International Group, Cl. A 20,000 (a) 2,360,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Linear Technology 48,600 2,776,275
Lucent Technologies 499,921 31,088,837
Micron Technology 42,400 (a) 5,904,200
Microsoft 816,400 (a) 56,943,900
Millipore 7,100 508,981
Molex 30,725 1,687,955
Motorola 111,252 13,245,941
NCR 15,100 (a) 583,238
National Semiconductor 26,900 (a) 1,634,175
Network Appliance 47,800 (a) 3,534,213
Nortel Networks 226,440 25,644,330
Novell 51,200 (a) 1,004,800
Oracle 442,600 (a) 35,380,338
PE Biosystems Group 32,300 1,938,000
Parametric Technology 43,100 (a) 351,534
PeopleSoft 42,100 (a) 586,769
PerkinElmer 7,516 411,501
Pitney Bowes 41,606 1,700,645
QUALCOMM 115,800 (a) 12,557,063
Sabre Group Holdings 20,276 708,393
Schlumberger 86,200 6,599,688
Scientific-Atlanta 24,800 1,613,550
Seagate Technology 33,900 (a) 1,722,544
Silicon Graphics 28,900 (a) 207,719
Solectron 93,000 (a) 4,353,563
Sun Microsystems 247,600 (a) 22,763,725
Tektronix 7,459 431,690
Tellabs 63,100 (a) 3,458,669
Teradyne 26,800 (a) 2,948,000
Texas Instruments 127,500 20,766,563
Thermo Electron 24,800 (a) 480,500
Unisys 48,700 (a) 1,129,231
Veritas Software 60,700 (a) 6,511,023
Xerox 104,148 2,753,413
Xilinx 50,400 (a) 3,691,800
590,300,368
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES--7.9%
AES 32,400 (a) 2,913,975
AT&T 501,234 23,401,362
Ameren 21,500 788,781
American Electric Power 30,400 1,113,400
Bell Atlantic 243,572 14,431,641
BellSouth 295,200 14,372,550
CINergy 24,900 666,075
CMS Energy 18,200 345,800
Carolina Power & Light 25,056 916,110
Central & Southwest 33,400 724,363
CenturyTel 21,900 536,550
Consolidated Edison 34,700 1,221,006
Constellation Energy Group 23,500 776,969
DTE Energy 22,800 743,850
Dominion Resources 37,534 1,689,030
Edison International 54,500 1,038,906
Entergy 38,700 984,431
FPL Group 28,100 1,269,769
FirstEnergy 36,600 931,013
Florida Progress 15,400 754,600
GPU 19,400 544,413
GTE 152,400 10,325,100
Global Crossing 122,300 (a) 3,852,450
MCI WorldCom 445,202 (a) 20,228,866
New Century Energies 18,100 590,513
Niagara Mohawk Power 27,800 (a) 385,725
Northern States Power 24,300 530,044
PG&E 60,200 1,561,438
PECO Energy 29,100 1,213,106
PPL 22,500 537,188
Pinnacle West Capital 13,300 467,163
Public Service Enterprise Group 34,300 1,230,513
Reliant Energy 46,344 1,233,909
SBC Communications 535,078 23,443,105
Sempra Energy 32,042 594,780
Southern 105,600 2,633,400
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
Sprint (FON Group) 136,700 8,407,050
Texas Utilities 43,320 1,459,343
UniCom 34,100 1,355,475
U S West 79,254 5,641,894
155,855,656
TOTAL COMMON STOCKS
(cost $1,218,354,898) 1,937,733,294
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--2.2% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT--2.1%
Goldman Sachs & Co., 5.67% dated
4/28/2000, due 5/1/2000 in the amount
of $42,144,904 (fully collateralized by
$39,905,000 of various U.S. Government
Securities, value $42,967,927) 42,125,000 42,125,000
U.S. TREASURY BILLS--.1%
5.64%, 7/22/2000 2,800,000 (b) 2,765,084
TOTAL SHORT-TERM INVESTMENTS
(cost $44,889,898) 44,890,084
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $1,263,244,796) 100.4% 1,982,623,378
LIABILITIES, LESS CASH AND RECEIVABLES (.4%) (8,686,010)
NET ASSETS 100.0% 1,973,937,368
(A) NON-INCOME PRODUCING.
(B) PARTIALLY HELD BY THE CUSTODIAN IN A SEGREGATED ACCOUNT AS COLLATERAL FOR
OPEN FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
STATEMENT OF FINANCIAL FUTURES
April 30, 2000 (Unaudited)
Market Value Unrealized
Covered by Appreciation
Contracts Contracts ($) Expiration at 4/30/2000 ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL FUTURES LONG
Standard & Poor's 500 127 46,355,000 June 2000 148,175
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS ($):
Investments in securities--See Statement of
Investments--Note 1(c) 1,263,244,796 1,982,623,378
Cash 1,365,721
Dividends and interest receivable 1,461,859
Receivable for shares of Capital Stock subscribed 140,018
1,985,590,976
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation 324,881
Payable for shares of Capital Stock redeemed 11,138,540
Payable for futures variation margin--Note 1(d) 190,187
11,653,608
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 1,973,937,368
------------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 1,249,178,638
Accumulated undistributed investment income--net 6,296,172
Accumulated net realized gain (loss) on investments (1,064,199)
Accumulated net unrealized appreciation (depreciation)
on investments (including $148,175 net unrealized
appreciation on financial futures)--Note 3 719,526,757
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 1,973,937,368
------------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
(150 million shares of $.001 par value Capital Stock authorized) 64,904,881
NET ASSET VALUE, offering and redemption price per share ($) 30.41
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $14,164 foreign taxes withheld at source) 10,696,654
Interest 1,607,811
TOTAL INCOME 12,304,465
EXPENSES:
Management fee--Note 2 1,887,848
Loan commitment fees--Note 4 14,780
TOTAL EXPENSES 1,902,628
INVESTMENT INCOME--NET 10,401,837
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (1,385,726)
Net realized gain (loss) on financial futures 9,476,955
NET REALIZED GAIN (LOSS) 8,091,229
Net unrealized appreciation (depreciation) on investments [including
($3,900,775) net unrealized (depreciation) on financial futures] 109,529,00
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 117,620,234
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 128,022,071
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 10,401,837 19,488,277
Net realized gain (loss) on investments 8,091,229 6,948,611
Net unrealized appreication (depreciation)
on investments 109,529,005 303,889,104
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 128,022,071 330,325,992
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (8,612,420) (18,808,418)
Net realized gain on investments (14,475,871) (4,281,732)
TOTAL DIVIDENDS (23,088,291) (23,090,150)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 481,530,485 1,081,926,616
Dividends reinvested 22,644,448 22,563,493
Cost of shares redeemed (382,453,645) (797,590,203)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 121,721,288 306,899,906
TOTAL INCREASE (DECREASE) IN NET ASSETS 226,655,068 614,135,748
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 1,747,282,300 1,133,146,552
END OF PERIOD 1,973,937,368 1,747,282,300
Undistributed investment income--net 6,296,172 4,506,755
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 16,169,283 40,268,549
Shares issued for dividends reinvested 768,054 870,770
Shares redeemed (12,775,855) (28,940,895)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 4,161,482 12,198,424
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
---------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 28.76 23.34 19.73 15.38 12.75 10.42
Investment Operations:
Investment income--net .16(a) .34(a) .31 .30 .29 .26
Net realized and unrealized
gain (loss) on investments 1.86 5.52 3.89 4.52 2.69 2.37
Total from Investment Operations 2.02 5.86 4.20 4.82 2.98 2.63
Distributions:
Dividends from investment
income--net (.14) (.35) (.31) (.28) (.30) (.26)
Dividends from net realized gain
on investments (.23) (.09) (.28) (.19) (.05) (.04)
Total Distributions (.37) (.44) (.59) (.47) (.35) (.30)
Net asset value, end of period 30.41 28.76 23.34 19.73 15.38 12.75
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 7.08(b) 25.34 21.68 31.87 23.78 25.75
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .10(b) .20 .20 .20 .20 .37
Ratio of net investment income
to average net assets .55(b) 1.23 1.45 1.72 2.16 2.36
Portfolio Turnover Rate 1.04(b) 16.58 16.76 3.75 4.75 1.03
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,973,937 1,747,282 1,133,147 803,142 449,123 204,278
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC S& P 500 Stock 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, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering nineteen series including the fund. The fund's investment objective is
to replicate the total return of the Standard & Poor's 500 Composite Stock Price
Index primarily through investments in equity securities. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary
of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares, which
are sold to the public without a sales charge. Prior to March 22, 2000, Premier
Mutual Fund Services, Inc. was the distributor.
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 (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued to 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.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss fro
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) 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
counter party default, the fund has the 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) FINANCIAL FUTURES: The fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the fund to
"mark to market" on a daily basis, which reflects the change in the market value
of the contract at the close of each day's trading. Typically, variation margin
payments are received or made to reflect daily unrealized gains or losses. When
the contracts are closed, the fund recognizes a realized gain or loss. These
investments require initial margin deposits with a custodian, which consist of
cash or cash equivalents, up to approximately 10% of the contract amount.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The amount of these deposits is determined by the exchange or Board of Trade on
which the contract is traded and is subject to change. Contracts open at April
30, 2000, are set forth in the Statement of Financial Futures.
(E) DISTRIBUTIONS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a quarterly
basis. 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, if any, it is the policy of the 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 interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Investment Management Fee And Other Transactions with Affiliates:
Pursuant to an Investment Management agreement with the Manager, the Manager
provides or arranges for one or more third and/or affiliates parties 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 .20 of 1% 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, 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 fees). Each director receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities and financial futures, during the period ended April 30,
2000 amounted to $155,190,848 and $19,159,115, respectively.
At April 30, 2000, accumulated net unrealized appreciation on investments and
financial futures was $719,526,757, consisting of $797,002,360 gross unrealized
appreciation and $77,475,603 gross unrealized depreciation.
At April 30, 2000, 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).
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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. During the period ended April
30, 2000, the fund did not borrow under the Facility.
NOTES
For More Information
Dreyfus BASIC S&P 500 Stock 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 713SA004
Dreyfus
Bond Market
Index Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
20 Statement of Assets and Liabilities
21 Statement of Operations
22 Statement of Changes in Net Assets
24 Financial Highlights
26 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Bond Market Index Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Bond Market Index
Fund, covering the six-month period from November 1, 1999 through April 30,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, Laurie Carroll.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
bond market over the past six months. This was primarily a result of efforts by
the Federal Reserve Board (the "Fed") to forestall a potential reemergence of
inflationary pressures. The Fed raised short-term interest rates three times
during the reporting period, following two interest-rate hikes implemented in
the months before the reporting period began. Since June 1999, the Fed has
raised short-term interest rates a total of 1.25 percentage points.
Higher interest rates led to some additional erosion of bond prices, especially
during the last two months of 1999. During the first four months of 2000,
however, some bonds began to rally, led higher by long-term U.S. Treasury
securities, which rose primarily because of reduced supply amid robust demand
from domestic and foreign investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Bond Market Index Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Laurie Carroll, Portfolio Manager
How did Dreyfus Bond Market Index Fund perform relative to its benchmark?
For the six-month period ended April 30, 2000, Dreyfus Bond Market Index Fund's
Investor shares and BASIC shares produced total returns of 0.90% and 1.05%,
respectively.(1) The fund's benchmark, the Lehman Brothers Aggregate Bond Index
(the "Index" ), produced a total return of 1.42% for the same period.(2) The
fund's investment objective is to seek to replicate the total return provided by
the Index. The difference in returns is accounted for by transaction costs and
other fund operating expenses.
What is the fund's investment approach?
The fund seeks to match the total return of the Lehman Brothers Aggregate Bond
Index. To pursue that goal, the fund invests primarily in securities that are
included in the Index.
While the fund seeks to mirror the returns of the Index, it does not hold the
same number of bonds. Instead, the fund holds approximately 350 securities as
compared to 6,500 bonds in the Index. As a matter of policy, the fund's average
duration generally remains neutral to the Index, which as of April 30, 2000 was
about eight years for the fund and the Index.
What other factors influenced the fund's performance?
As index investors, we do not base our investment decisions on market or
economic trends; our goal is to replicate the return of the Index. However, we
remain fully cognizant of the overall economic environment, and we are aware of
trends that may affect our performance.
That said, the primary factors influencing the fund's performance over the past
six months have been the continued strength of the U.S. economy and the series
of short-term interest-rate hikes initiated by the
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Federal Reserve Board (the "Fed" ) in an attempt to slow economic growth and
forestall the buildup of inflationary pressures. In three separate moves during
November, February and March, the Fed raised interest rates for a total of 0.75
percentage points. These moves were in addition to the two rate hikes
implemented before the reporting period began, producing a total increase of
1.25 percentage points since last summer.
In addition, during the fourth quarter of 1999, the bond market was busy
preparing for the possibility of problems that could result from Y2K concerns.
At that time, many dealers and issuers basically shut down their operations,
preferring to have little or no activity until after year-end. That move caused
a lack of liquidity in the very short-term bond market. Once Y2K concerns had
passed, an event that some market analysts have since dubbed a "non-event,"
liquidity once again returned to the bond market, calming volatility levels.
Then, in mid-January, the government announced that it would use the federal
budget surplus to initiate a buyback program for outstanding U.S. Treasury
securities. This announcement triggered a wave of purchases of long-term
Treasury securities, a move that drove yields for 30-year Treasury bonds below
that of shorter term securities, creating what's called an inverted yield curve.
An unusual circumstance, an inverted yield curve occurs when short-term interest
rates are higher than long-term rates. Because most bonds use 30-year Treasury
securities as their benchmarks, including bonds held in this fund, the inverted
yield curve resulted in an increased level of volatility during the period.
As a result of these influences, the best returns for the Index over the past
six months, and therefore for the fund as well, were generated from U.S.
Treasuries, followed by government agency bonds, asset-backed securities and
corporate securities. In the case of U.S. Treasuries, government agency bonds
and asset-backed securities held by both the fund and the Index, each performed
well due in large part to their shorter duration stance. Generally speaking, in
a rising interest-rate environment, bonds with shorter durations tend to
outperform those with longer durations. On the other hand, the fund' s corporate
securities with longer durations tended to restrain performance during the
period, as did those in the Index.
What is the fund's current strategy?
As an index fund, the sectors of the bond market that we emphasized in this fund
are the same ones that were emphasized by the Index. As of the end of the
reporting period, the fund' s portfolio was allocated as follows: 30.5% U.S.
Treasury securities, 41.5% mortgage-backed securities, 23.3% corporate bonds,
2.1% U.S. Government agency bonds and 2.6% repurchase agreements. These were the
same general proportions represented in the Index as of April 30, 2000
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE LEHMAN BROTHERS
AGGREGATE BOND INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF CORPORATE, U.S.
GOVERNMENT AND U.S. GOVERNMENT AGENCY DEBT INSTRUMENTS, MORTGAGE-BACKED
SECURITIES AND ASSET-BACKED SECURITIES WITH AN AVERAGE MATURITY OF 1 - 10 YEARS
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
STATEMENT OF INVESTMENTS
Principal
BONDS AND NOTES--96.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE AND AVIATION--.8%
American Airlines Pass-Through Trust,
Ser. 1999-1, Cl. A-2, 7.024%, 2011 250,000 235,211
Boeing,
Deb., 8.1%, 2006 25,000 25,072
Deb., 8.625%, 2031 10,000 10,532
Lockheed,
Notes, 6.75%, 2003 25,000 23,996
Raytheon:
Notes, 6.45%, 2002 300,000 290,824
Notes, 6.5%, 2005 25,000 23,248
Rockwell International,
Notes, 6.75%, 2002 30,000 29,472
United Technologies,
Deb., 8.75%, 2021 50,000 55,321
693,676
ASSET-BACKED SECURITIES--2.3%
Chase Manhattan Credit Card Master Trust,
Ser. 1996-3, Cl. A, 7.04%, 2005 700,000 699,419
MBNA Master Credit Card Trust,
Ser. 1995-C, Cl. A, 6.45%, 2008 400,000 386,128
Premier Auto Trust,
Ser. 1999-2, Cl. A-3, 5.49%, 2003 1,000,000 982,575
2,068,122
AUTOMOTIVE--.8%
Daimler-Chrysler:
Medium-Term Notes, 7.375%, 2006 120,000 117,047
Notes, 7.2%, 2009 200,000 193,454
Dana,
Notes, 7%, 2028 100,000 83,560
Delphi Auto Systems,
Deb., 7.125%, 2029 125,000 105,928
General Motors:
Notes, 9.125%, 2001 15,000 15,263
Notes, 7%, 2003 40,000 39,261
Sr. Notes, 8.8%, 2021 150,000 164,867
719,380
BANKING--1.6%
Banc One,
Sub. Notes, 9.875%, 2019 5,000 5,879
BankAmerica,
Sub. Notes, 7.75%, 2002 25,000 25,077
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
BANKING (CONTINUED)
BankAmerica Capital II,
Gtd. Capital Securities, 8%, 2026 55,000 51,153
Bankers Trust New York,
Sub. Deb., 7.5%, 2015 75,000 71,171
Capital One Bank,
Sr. Notes, 6.375%, 2003 200,000 191,895
Chemical,
Sub. Notes, 6.125%, 2008 15,000 13,456
Citicorp,
Sub. Notes, 7.125%, 2003 20,000 19,667
FBS Capital I,
Gtd. Capital Securities, 8.09%, 2026 100,000 92,786
First Bank System,
Sub. Notes, 7.625%, 2005 55,000 54,562
First Chicago,
Sub. Notes, 9.875%, 2000 20,000 20,170
First Union,
Sub. Notes, 6.3%, 2008 100,000 89,098
Fleet Financial Group,
Sr. Notes, 7.125%, 2000 40,000 40,000
Key Bank,
Sub. Deb., 6.95%, 2028 250,000 217,783
MBNA America Bank,
Sub. Notes, 6.75%, 2008 100,000 92,521
NationsBank:
Sub. Notes, 6.875%, 2005 10,000 9,633
Sub. Notes, 7.625%, 2005 190,000 187,843
PNC Funding,
Notes, 7%, 2004 225,000 219,428
Republic New York Corp.,
Sub. Notes, 5.875%, 2008 25,000 21,758
Wachovia,
Sub. Notes, 6.375%, 2003 15,000 14,579
Wells Fargo Capital,
Gtd. Capital Securities, 7.96%, 2026 30,000 27,924
1,466,383
CHEMICALS--.1%
duPont (E.I.) de Nemours,
Notes, 6.75%, 2002 40,000 39,451
Eastman Chemical,
Notes, 6.375%, 2004 30,000 28,256
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CHEMICALS (CONTINUED)
Monsanto,
Deb., 8.2%, 2025 20,000 19,197
Morton International,
Deb., 9.25%, 2020 5,000 5,758
92,662
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--.7%
Bear Stearns Commercial Mortgage Securities,
Ser. 1999-WF2, Cl. A-2, 7.08%, 2009 500,000 479,297
Heller Financial Commercial Mortgage Asset,
Ser. 1999-PH-1, Cl. A-2, 6.847%, 2031 150,000 141,984
621,281
CONSUMER--.3%
Clorox,
Notes, 8.8%, 2001 10,000 10,173
Maytag,
Deb., 9.75%, 2002 5,000 5,196
Procter & Gamble:
Deb., 8.7%, 2001 30,000 30,557
Notes, 5.25%, 2003 200,000 188,083
Whirlpool,
Notes, 9%, 2003 10,000 10,241
244,250
ENTERTAINMENT/MEDIA--1.1%
Disney (Walt),
Sr. Notes, 6.75%, 2006 20,000 19,420
News America Holdings,
Notes, 8.25%, 2018 300,000 283,943
Reed Elsevier Capital,
Medium-Term Notes, 7%, 2005 200,000 194,869
TCI Communications,
Deb., 8.75%, 2015 250,000 269,544
Time Warner,
Deb., 6.95%, 2028 100,000 86,997
Viacom,
Deb., 7.625%, 2016 125,000 118,546
973,319
FINANCIAL SERVICES--2.5%
Aetna Services,
Notes, 7.625%, 2026 50,000 44,937
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES (CONTINUED)
American Express Credit,
Notes, 6.125%, 2001 40,000 39,197
American General Finance,
Notes, 8.125%, 2009 10,000 10,328
Associates Corp. of North America,
Sr. Notes, 6.625%, 2005 10,000 9,507
Bear Stearns:
Sr. Notes, 8.75%, 2004 10,000 10,247
Sr. Notes, 7.25%, 2006 75,000 72,056
Chrysler,
Deb., 7.45%, 2027 50,000 47,936
Citigroup,
Notes, 6.625%, 2028 100,000 85,731
FINOVA Capital:
Notes, 9.125%, 2002 20,000 20,134
Notes, 7.25%, 2004 400,000 370,648
Ford Capital B.V.,
Notes, 9.875%, 2002 25,000 25,947
Ford Motor Credit,
Notes, 6.75%, 2008 20,000 18,625
GMAC,
Deb., 6%, 2011 70,000 59,442
General Electric Capital:
Notes, 8.3%, 2009 15,000 15,784
Notes, 8.125%, 2012 100,000 104,092
General Electric Credit,
Deb., 5.5%, 2001 10,000 9,750
Goldman Sachs Group,
Notes, 7.8%, 2010 200,000 197,224
Household Finance:
Notes, 8%, 2004 15,000 15,063
Notes, 6.5%, 2008 200,000 181,211
Lehman Brothers,
Notes, 6.625%, 2008 200,000 179,222
Merrill Lynch:
Notes, 8.3%, 2002 15,000 15,313
Notes, 6.875%, 2018 250,000 222,851
Norwest Financial,
Sr. Notes, 7%, 2003 15,000 14,764
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES (CONTINUED)
Paine Webber:
Notes, 7.625%, 2008 150,000 134,459
Sr. Notes, 6.55%, 2008 175,000 167,331
Sears, Roebuck Acceptance:
Deb., 6.75%, 2028 35,000 32,864
Notes, 7%, 2007 100,000 81,263
U.S. Leasing International,
Notes, 6.625%, 2003 30,000 28,851
2,214,777
FOOD & BEVERAGES--1.0%
Archer-Daniels-Midland:
Deb., 0%, 2002 5,000 4,310
Deb., 8.125%, 2012 40,000 41,254
Coca-Cola,
Notes, 6.625%, 2002 35,000 34,273
Coca-Cola Enterprises:
Deb., 8.5%, 2022 15,000 15,066
Notes, 7.875%, 2002 100,000 105,793
Diageo,
Notes, 6.125%, 2005 200,000 187,396
Dole Food,
Notes, 6.75%, 2000 15,000 14,894
Heinz (H.J),
Deb., 6.375%, 2028 100,000 85,357
Hershey Foods,
Deb., 8.8%, 2021 30,000 33,278
McDonald's,
Notes, 6.75%, 2003 20,000 19,567
Nabisco,
Deb., 7.55%, 2015 40,000 34,988
Ralston-Purina Group,
Notes, 8.625%, 2022 40,000 41,452
Safeway,
Notes, 7.5%, 2009 200,000 192,221
Seagram,
Deb., 8.35%, 2022 10,000 9,886
Supervalu,
Notes, 7.8%, 2002 15,000 14,772
Sysco,
Notes, 7%, 2006 25,000 24,428
858,935
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FOREIGN--4.1%
African Development Bank,
Notes, 7.75%, 2001 15,000 15,099
Bayerische Landesbank Girozentrale,
Sub. Notes, 7.375%, 2002 300,000 297,374
Dresdner Bank-New York,
Sub. Notes, 7.25%, 2015 145,000 132,681
European Investment Bank,
Notes, 10.125%, 2000 20,000 20,272
HSBC Holding,
Sub. Notes, 7.5%, 2009 200,000 193,960
Hydro-Quebec:
Ser. HH, Deb., 8.5%, 2029 10,000 10,832
Ser. HK, Deb., 9.375%, 2030 20,000 23,560
Ser. HQ, Deb., 9.5%, 2030 10,000 11,866
Inter-American Development Bank,
Deb., 6.125%, 2002 600,000 586,023
Italy Government Bonds,
Deb., 6.875%, 2023 70,000 67,468
KFW International Finance:
Deb., 9.125%, 2001 10,000 10,199
Deb., 8%, 2010 35,000 36,906
Korea Development Bank,
Bonds, 7.25%, 2006 300,000 282,701
Province of British Columbia:
Bonds, 7%, 2003 20,000 19,776
Bonds, 6.5%, 2026 25,000 22,228
Province of Manitoba,
Deb., 8.8%, 2020 10,000 11,274
Province of New Brunswick,
Deb., 6.75%, 2013 30,000 27,905
Province of Ontario:
Deb., 7%, 2005 400,000 403,638
Notes., 7.625%, 2004 40,000 39,389
Province of Quebec,
Deb., 7.5%, 2023 50,000 49,151
Province of Saskatchewan, C.D.A.,
Deb., 9.125%, 2021 10,000 11,549
Republic of Finland,
Bonds, 6.95%, 2026 25,000 24,053
Republic of Ireland,
Deb., 7.875%, 2001 150,000 151,250
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FOREIGN (CONTINUED)
Republic of Korea,
Notes, 8.875%, 2008 300,000 310,125
Republic of Portugal,
Notes, 5.75%, 2003 100,000 95,399
Royal Bank of Scotland,
Sub. Notes, 6.375%, 2011 160,000 142,609
Santander Finance Issuances,
Sub. Notes, 7.25%, 2006 100,000 96,425
Sanwa Finance Aruba,
Notes, 8.35%, 2009 150,000 148,458
Toyota Motor Credit,
Notes, 5.625%, 2003 200,000 189,172
United Mexican States,
Notes, 9.875%, 2010 275,000 283,938
3,715,280
INDUSTRIAL--.9%
Aluminum Co. of America,
Notes, 5.75%, 2001 50,000 49,491
Bass America,
Notes, 8.125%, 2002 15,000 15,083
Burlington Resources,
Deb., 6.875%, 2026 70,000 60,507
Caterpillar:
Deb., 9.375%, 2011 150,000 167,566
Sr. Notes, 9.375%, 2000 5,000 5,025
Comdisco,
Notes, 6.375%, 2001 155,000 151,530
Crown Cork & Seal,
Deb., 7.375%, 2026 75,000 58,016
Eaton,
Deb., 8.1%, 2022 10,000 10,142
Emerson Electric,
Notes, 6.3%, 2005 35,000 32,990
Lucent Technologies,
Deb., 6.5%, 2028 150,000 130,466
PPG Industries,
Notes, 7.375%, 2016 45,000 43,624
TRW,
Notes, 6.25%, 2010 100,000 85,458
809,898
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INSURANCE--1.1%
Cincinnati Financial,
Deb., 6.9%, 2028 100,000 84,510
Conseco,
Notes, 9%, 2006 450,000 263,250
Hartford Life,
Notes, 6.9%, 2004 400,000 385,831
Progressive,
Sr. Notes, 6.625%, 2029 100,000 80,274
Torchmark,
Deb., 8.25%, 2009 150,000 151,399
Travelers/Aetna Property & Casualty,
Sr. Notes, 6.75%, 2001 60,000 59,596
1,024,860
OIL AND GAS--.5%
Amoco Canada,
Deb., 6.75%, 2023 250,000 222,152
Atlantic Richfield,
Deb., 9%, 2021 15,000 17,043
Texaco Capital,
Deb., 6.875%, 2023 25,000 21,470
Union Oil of California,
Deb., 9.125%, 2006 200,000 207,626
468,291
OTHER--.0%
Private Export Funding,
Secured Notes, 8.4%, 2001 30,000 30,539
PAPER PRODUCTS--.2%
Bowater,
Deb., 9.375%, 2021 10,000 10,685
Georgia-Pacific:
Deb., 9.625%, 2022 25,000 24,916
Notes, 7.75%, 2029 125,000 113,968
International Paper,
Notes, 7.625%, 2007 10,000 9,576
Weyerhaeuser,
Deb., 7.95%, 2025 20,000 19,639
178,784
RETAIL--.9%
Dayton Hudson,
Deb., 8.5%, 2022 20,000 20,104
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
RETAIL (CONTINUED)
Dillard Department Stores,
Notes, 7.85%, 2012 150,000 120,907
Federated Department Stores,
Deb., 7%, 2028 100,000 86,530
Gap,
Notes, 6.9%, 2007 280,000 265,171
Limited,
Deb., 7.5%, 2023 110,000 99,014
May Department Stores,
Notes, 9.875%, 2002 15,000 15,768
Penney (J.C.):
Deb., 8.25%, 2022 15,000 12,197
Deb., 7.125%, 2023 15,000 9,550
Wal-Mart Stores:
Notes, 5.875%, 2005 25,000 23,515
Sr. Notes, 6.875%, 2009 150,000 144,999
797,755
TECHNOLOGY--.7%
Electronic Data Systems,
Notes, 7.125%, 2009 300,000 292,761
IBM:
Deb., 7.5%, 2013 75,000 75,480
Deb., 7%, 2025 220,000 207,495
Xerox,
Notes, 7.15%, 2004 15,000 14,593
590,329
TELEPHONE AND TELEGRAPH--2.1%
AT&T:
Deb., 5.125%, 2001 50,000 49,142
Deb., 8.35%, 2025 15,000 14,618
Notes, 7%, 2005 5,000 4,942
Airtouch Communications,
Notes, 7.125%, 2001 100,000 99,433
Alltel,
Sr. Notes, 7.6%, 2009 550,000 549,424
Ameritech Capital Funding,
Notes, 6.125%, 2001 200,000 196,823
Bell Telephone Pennsylvania,
Deb., 6.75%, 2008 250,000 236,608
Bellsouth Telecommunications,
Deb., 6.375%, 2028 100,000 82,337
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TELEPHONE AND TELEGRAPH (CONTINUED)
GTE,
Deb., 9.1%, 2003 35,000 36,382
MCI Worldcom,
Notes, 6.95%, 2028 120,000 107,401
New Jersey Bell Telephone,
Deb., 8%, 2022 25,000 25,119
New York Telephone,
Deb., 8.625%, 2010 5,000 5,227
Northern Telecom,
Deb., 8.75%, 2001 200,000 202,760
Pacific-Bell Telephone:
Deb., 7.375%, 2025 75,000 67,691
Deb., 7.125%, 2026 10,000 9,127
Southwestern Bell Telephone,
Notes, 6.625%, 2005 150,000 143,344
U.S. West Communications,
Deb., 6.875%, 2033 25,000 20,512
1,850,890
TOBACCO--.0%
Fortune Brands,
Deb., 8.625%, 2021 5,000 5,303
Philip Morris,
Deb., 8.375%, 2017 9,000 8,843
14,146
TRANSPORTATION--.2%
Canadian National Railway,
Notes, 6.9%, 2028 100,000 85,523
Federal Express,
Notes, 9.875%, 2002 15,000 15,445
Norfolk Southern:
Deb., 9%, 2021 10,000 10,512
Deb., 7.8%, 2027 50,000 47,134
Ryder System,
Ser. J, Bond, 8.75%, 2017 1,000 1,037
United Parcel Service,
Deb., 8.375%, 2020 10,000 10,732
170,383
UTILITIES--1.9%
Baltimore Gas & Electric:
First Mortgage Bonds, 7.5%, 2007 10,000 9,815
First Mortgage Bonds, 7.5%, 2023 33,000 30,351
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
Carolina Power & Light,
First Mortgage Bonds, 8.2%, 2022 15,000 14,371
Commonwealth Edison,
Deb., 6.4%, 2005 200,000 187,268
Duke Capital,
Sr. Notes, 8%, 2019 250,000 245,904
Florida Power & Light:
First Mortgage Bonds, 6.625%, 2003 30,000 29,363
First Mortgage Bonds, 7.75%, 2023 25,000 23,473
Gulf States Utilities,
First Mortgage Bonds, 6.41%, 2001 45,000 44,306
MCN Investment,
Notes, 6.3%, 2001 300,000 (a) 295,700
New York State Electric & Gas,
First Mortgage Bonds, 9.875%, 2020 10,000 10,434
Niagara Mohawk Power,
First Mortgage Bonds, 7.75%, 2006 400,000 393,746
Northern States Power,
First Mortgage Bonds, 7.125%, 2025 100,000 90,641
PP&L Resources,
First Mortgage Bonds, 6.55%, 2006 25,000 23,522
Public Service Electric & Gas:
First Mortgage Bonds, 6.125%, 2002 20,000 19,488
First Mortgage Bonds, 6.5%, 2004 25,000 24,050
South Carolina Electric & Gas,
First Mortgage Bonds, 9%, 2006 20,000 20,888
Texas Utilities,
First Mortgage Bonds, 8.75%, 2023 35,000 34,669
Union Electric,
First Mortgage Bonds, 6.75%, 2008 25,000 23,742
Virginia Electric & Power,
First Mortgage Bonds, 7.625%, 2007 25,000 24,656
Wisconsin Electric & Power,
First Mortgage Bonds, 7.7%, 2027 190,000 175,177
1,721,564
U.S. GOVERNMENTS--30.0%
U.S. Treasury Bonds:
15.75%, 11/15/2001 15,000 16,954
10.75%, 2/15/2003 830,000 915,000
10.75%, 5/15/2003 115,000 127,773
11.875%, 11/15/2003 10,000 11,623
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENTS (CONTINUED)
U.S. Treasury Bonds (continued):
11.625%, 11/15/2004 1,185,000 1,413,670
10.75%, 8/15/2005 765,000 904,330
9.375%, 2/15/2006 700,000 791,042
7.625%, 2/15/2007 1,060,000 1,074,522
8.75%, 11/15/2008 225,000 238,799
12.75%, 11/15/2010 75,000 95,664
14%, 11/15/2011 30,000 41,518
12%, 8/15/2013 445,000 595,788
12.5%, 8/15/2014 40,000 56,154
11.25%, 2/15/2015 25,000 36,634
7.25%, 5/15/2016 110,000 120,449
8.875%, 8/15/2017 1,525,000 1,932,907
8.75%, 5/15/2020 880,000 1,124,622
8.75%, 8/15/2020 290,000 371,484
7.875%, 2/15/2021 1,380,000 1,635,176
8%, 11/15/2021 1,100,000 1,324,642
5.5%, 8/15/2028 2,200,000 2,003,672
U.S. Treasury Notes:
8.75%, 8/15/2000 80,000 80,637
7.875%, 8/15/2001 2,500,000 2,537,200
6.25%, 1/31/2002 2,535,000 2,516,520
6.25%, 2/15/2003 1,530,000 1,515,587
5.875%, 2/15/2004 1,700,000 1,661,257
6%, 8/15/2004 1,000,000 979,950
5.625%, 5/15/2008 3,025,000 2,877,531
27,001,105
U.S. GOVERNMENT AGENCIES--42.3%
Federal Farm Credit Banks, 500,000 482,758
5.25%, 2002
Federal Home Loan Banks:
4.875%, 2002 350,000 337,698
5.785%, 2003 500,000 481,653
Federal Home Loan Mortgage Corp.:
5.75%, 2008 1,650,000 1,495,869
6.34%, 2002 500,000 489,481
6%, 12/1/2013-2/1/2029 2,593,818 2,395,636
6.5%, 3/1/2011-9/1/2029 3,857,531 3,630,170
7%, 9/1/2011-9/1/2029 2,420,239 2,331,058
7.5%, 7/1/2010-9/1/2029 1,483,726 1,467,050
8%, 5/1/2026-8/1/2026 396,390 398,122
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
Federal National Mortgage Association:
5.125%, 2004 1,717,000 1,597,354
5.25%, 2009 775,000 672,235
5.59%, 2002 100,000 97,473
6.06%, 2003 500,000 485,675
6.25%, 2029 750,000 663,819
5.5%, 3/1/2014 474,592 435,439
6%, 6/1/2011-7/1/2029 2,542,241 2,330,332
6.5%, 1/1/2005-11/1/2029 4,640,733 4,372,822
7%, 8/1/2008-10/1/2029 3,055,048 2,936,724
7.5%, 3/1/2024-10/1/2029 1,396,676 1,373,319
8%, 5/1/2027-6/1/2027 417,332 418,505
8.5%, 2/1/2025 207,110 212,222
Financing Corp.:
9.65%, 2018 10,000 12,325
8.6%, 2019 40,000 45,200
Government National Mortgage Association I:
6%, 2/15/2029 759,793 690,934
6.5%, 9/15/2008-7/15/2029 2,484,012 2,341,011
7%, 10/15/2011-9/15/2029 2,428,731 2,350,546
7.5%, 12/15/2026-9/15/2029 1,473,398 1,453,511
8%, 8/15/2024-10/15/2029 975,892 981,233
8.5%, 10/15/2026 193,909 198,272
9%, 2/15/2022-2/15/2023 361,335 377,308
Resolution Funding:
8.875%, 2020 75,000 90,470
8.625%, 2030 15,000 18,179
Tennessee Valley Authority:
Deb., 6%, 2013 450,000 398,112
Deb., 7.85%, 2044 10,000 9,833
38,072,348
TOTAL BONDS AND NOTES
(cost $89,020,960) 2,265,513 86,398,957
Principal
SHORT-TERM INVESTMENTS--2.5% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT;
Goldman, Sachs & Co., Tri-Party
Repurchase Agreement, 5.67%, dated 4/28/2000,
due 5/1/2000 in the amount of $2,266,583 (fully
collateralized by $1,857,000 U.S. Treasury Bonds,
11.625% due 11/15/2004 value $2,313,527)
(cost $2,265,513) 2,265,513 2,265,513
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $91,286,473) 98.6% 88,664,470
CASH AND RECEIVABLES (NET) 1.4% 1,279,998
NET ASSETS 100.0% 89,944,468
(A) REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION. THE STATED
MATURITY IS 4/2/2011.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS ($):
Investments in securities--See Statement of
Investments --Note 1(c) 91,286,473 88,664,470
Cash 16,963
Interest receivable 1,199,457
Receivable for shares of Capital Stock subscribed 81,479
89,962,369
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 16,651
Payable for shares of Capital Stock redeemed 1,250
17,901
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 89,944,468
------------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 93,997,663
Accumulated distributions in excess of investment income--net (1,005)
Accumulated net realized gain (loss) on investments (1,430,187)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 (2,622,003)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 89,944,468
</TABLE>
NET ASSET VALUE PER SHARE
Investor Shares BASIC Shares
--------------------------------------------------------------------------------
Net Assets ($) 26,837,585 63,106,883
Shares Outstanding 2,849,296 6,692,372
--------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 9.42 9.43
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 3,187,911
EXPENSES:
Management fee--Note 2(a) 72,063
Distribution fees (Investor Shares)--Note 2(b) 38,508
Loan commitment fees--Note 4 640
TOTAL EXPENSES 111,211
INVESTMENT INCOME--NET 3,076,700
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (1,188,301)
Net unrealized appreciation (depreciation) on investments (1,189,262)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (2,377,563)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 699,137
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,076,700 4,521,447
Net realized gain (loss) on investments (1,188,301) (235,135)
Net unrealized appreciation (depreciation)
on investments (1,189,262) (3,673,368)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 699,137 612,944
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Investor shares (955,649) (1,098,543)
BASIC shares (2,127,269) (3,417,691)
Net realized gain on investments:
Investor shares -- (13,369)
BASIC shares -- (389,542)
TOTAL DIVIDENDS (3,082,918) (4,919,145)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Investor shares 13,437,612 41,663,441
BASIC shares 14,279,850 56,683,374
Dividends reinvested:
Investor shares 892,337 1,096,075
BASIC shares 2,160,574 3,605,034
Cost of shares redeemed:
Investor shares (20,280,362) (9,667,040)
BASIC shares (16,092,274) (48,548,008)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (5,602,263) 44,832,876
TOTAL INCREASE (DECREASE) IN NET ASSETS (7,986,044) 40,526,675
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 97,930,512 57,403,837
END OF PERIOD 89,944,468 97,930,512
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
INVESTOR SHARES
Shares sold 1,402,854 4,221,976
Shares issued for dividends reinvested 94,200 112,563
Shares redeemed (2,147,601) (985,975)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (650,547) 3,348,564
--------------------------------------------------------------------------------
BASIC SHARES
Shares sold 1,490,878 5,839,805
Shares issued for dividends reinvested 227,902 363,500
Shares redeemed (1,688,698) (4,980,266)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 30,082 1,223,039
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
------------------------------------------------------------
INVESTOR SHARES (Unaudited) 1999 1998 1997(a) 1996(b) 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 9.63 10.26 9.99 9.78 9.93 9.15
Investment Operations:
Investment income--net .29 .56 .59 .57 .57 .55
Net realized and unrealized
gain (loss) on investments (.21) (.56) .32 .21 (.15) .78
Total from Investment Operations .08 -- .91 .78 .42 1.33
Distributions:
Dividends from investment
income--net (.29) (.56) (.59) (.57) (.57) (.55)
Dividends from net realized gain
on investments -- (.07) (.05) -- -- --
Total Distributions (.29) (.63) (.64) (.57) (.57) (.55)
Net asset value, end of period 9.42 9.63 10.26 9.99 9.78 9.93
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 1.80(c) .03 9.43 8.29 4.36 15.01
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .40(c) .40 .40 .60 .65 .65
Ratio of net investment income
to average net assets 6.22(c) 5.72 5.79 5.82 5.80 5.77
Portfolio Turnover Rate 41.73(d) 73.14 43.39 48.86 42.65 40.16
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 26,838 33,699 1,552 120 80 207
(A) EFFECTIVE AUGUST 15, 1997, INSTITUTIONAL SHARES WERE REDESIGNATED AS INVESTOR SHARES.
(B) EFFECTIVE JULY 15, 1996, INVESTOR SHARES WERE REDESIGNATED AS INSTITUTIONAL SHARES.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31,
-------------------------------------------------------------
BASIC SHARES (Unaudited) 1999 1998 1997(a) 1996(b) 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 9.64 10.27 10.00 9.80 9.94 9.15
Investment Operations:
Investment income--net .31 .59 .61 .60 .59 .58
Net realized and unrealized
gain (loss) on investments (.21) (.56) .32 .20 (.14) .79
Total from Investment Operations .10 .03 .93 .80 .45 1.37
Distributions:
Dividends from investment
income--net (.31) (.59) (.61) (.60) (.59) (.58)
Dividends from net realized gain
on investments -- (.07) (.05) -- -- --
Total Distributions (.31) (.66) (.66) (.60) (.59) (.58)
Net asset value, end of period 9.43 9.64 10.27 10.00 9.80 9.94
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 2.09(c) .29 9.69 8.46 4.69 15.41
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .15(c) .15 .15 .35 .40 .40
Ratio of net investment income
to average net assets 6.49(c) 5.96 6.06 6.12 6.02 6.10
Portfolio Turnover Rate 41.73(d) 73.14 43.39 48.86 42.65 40.16
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 63,107 64,232 55,852 33,234 32,986 6,824
(A) EFFECTIVE AUGUST 15, 1997, RETAIL SHARES WERE REDESIGNATED AS BASIC SHARES.
(B) EFFECTIVE JULY 15, 1996, CLASS R SHARES WERE REDESIGNATED AS RETAIL SHARES.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The 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, as amended (the "Act" ), as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the fund. The fund's investment objective is
to seek to replicate the total return of the Lehman Brothers Aggregate Bond
Index. The Dreyfus Corporation (the "Manager") serves as the fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank")
, which is a wholly-owned subsidiary of Mellon Financial Coporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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). BASIC shares and Investor
shares are offered to any investor. Differences between the two classes include
the services offered to and the expenses borne by each class, as well as their
minimum purchase and account balance requirements.
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 other than U.S. Treasury Bills) 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. Cost of investments represents amortized cost.
(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 Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 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, if any, 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $112,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1999. If not
applied, the carryover expires in fiscal 2007.
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 fees) . Each director receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
$2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus
High Yield Strategies Fund. These fees and expenses are charged and 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
for shareholder servicing activities primarily intended to result in the sale of
Investor shares. The BASIC shares bear no distribution fee. During the period
ended April 30, 2000, the Investor shares were charged $38,508 pursuant to the
Plan, of which $30,482 was paid to DSC.
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 or in any agreement
related to the Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$39,000,004 and $73,146,068, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$2,622,003, consisting of $303,575 gross unrealized appreciation and $2,925,578
gross unrealized depreciation.
At April 30, 2000, 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 $500 million
redemption credit facility (the "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,
2000, the fund did not borrow under the Facility.
The Fund
NOTES
For More Information
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 710SA004
Dreyfus
Disciplined Intermediate
Bond Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Disciplined
Intermediate Bond Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Disciplined
Intermediate Bond Fund, covering the six-month period from November 1, 1999
through April 30, 2000. Inside you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with the
fund's portfolio manager, Dan Fasciano.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
bond market over the past six months. This was primarily a result of efforts by
the Federal Reserve Board (the "Fed") to forestall a potential reemergence of
inflationary pressures. The Fed raised short-term interest rates three times
during the reporting period, following two interest-rate hikes implemented in
the months before the reporting period began. Since June 1999, the Federal
Reserve Board has raised short-term interest rates a total of 1.25 percentage
points.
Higher interest rates led to some additional erosion of bond prices, especially
during the last two months of 1999. During the first four months of 2000,
however, some bonds began to rally, led higher by long-term U.S. Treasury
securities which rose primarily because of reduced supply amid robust demand
from domestic and foreign investors.
We appreciate your confidence over the past six months and we look forward to
your continued participation in Dreyfus Disciplined Intermediate Bond Fund
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Dan Fasciano, Portfolio Manager
How did Dreyfus Disciplined Intermediate Bond Fund perform relative to its
benchmark?
For the six-month period ended April 30, 2000 the fund's Investor shares
produced a total return of 0.71% while its Restricted shares produced a total
return of 0.92%.(1) In comparison, the Lehman Brothers Aggregate Bond Index, the
fund's benchmark, returned 1.42% for the same period.(2)
We attribute the fund's underperformance to a rising interest-rate environment
during the period, which caused bond prices to fall. During the past six months,
the Federal Reserve Board raised short-term interest rates three times for a
total of 0.75% . Generally speaking, total return -- which reflects changes in
bond prices plus a bond' s yield -- is modest or negative in a rising
interest-rate environment. However, it is possible for a bond to have a weak
total return but still produce a strong yield, which was the case for the fund
during the reporting period.
What is the fund's investment approach?
We invest primarily in a mixture of U.S. Government and agency bonds, corporate
bonds and mortgage-related securities, generally keeping the portfolio's average
maturity between three and 10 years. Compared to U.S. Treasury securities,
high-grade corporate bonds generally offer additional yield in return for some
credit risk. Mortgage-backed securities offer additional yield spreads in
exchange for the mortgage holders' right to refinance their mortgages at any
time.
What other factors influenced the fund's performance?
During the first two months of the reporting period, the fund emphasized
corporate bonds, a decision that contributed positively to performance. At that
time, corporate bonds were snapping back from a The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
period of weak performance earlier in 1999 due to Y2K fears. Investors believed
that corporations would flood the market with issuance to get their financings
done so that they could concentrate on the Y2K computer transition. With bond
offerings plentiful in the summer of 1999, investors stayed away, hoping for
higher yields in the fall when corporations would most likely be in a rush to
issue debt. We purchased corporate bonds during that quiet period at significant
discounts, believing that bonds would recover in value once the Y2K hysteria
faded. The strategy worked. By November, demand for corporate bonds returned and
prices rose, positively impacting the fund's performance.
In January 2000, the Treasury market was gripped by the government's plan to use
the federal budget surplus to buy back bonds. The perceived diminishing supply
of long-term Treasury bonds boosted their prices during the first several months
of 2000. We anticipated this development by selling some of our corporate bonds
and buying U.S. Treasury securities, a move that served to boost the fund's
performance.
What is the fund's current strategy?
This is an unusual time for the domestic bond markets. On the one hand, the
Federal Reserve Board has raised short-term interest rates in an effort to slow
the economy. On the other hand, the government has been buying back long-term
Treasury bonds, causing prices to rise and Treasury yields to fall. At the end
of the period, the yield difference between U.S. Treasury bonds and corporate
bonds was nearly two percentage points, the highest difference in many years. As
a result, we emphasized high quality corporate bonds in order to capture the
highest possible yields.
Our credit team has been uncovering BBB-rated bonds offering yields as high as
10% -11% , which we have chosen to buy on a very selective basis. However,
investors have been quick to sell bonds issued by companies that report earnings
shortfalls or other negative news. Therefore, we generally do not believe that
the extra yield offered on lower quality corporate bonds is worth the added
risk.
We have continued to maintain an emphasis on mortgage-backed securities,
believing that in a rising interest-rate environment, the prepayment risk
associated with mortgages is reduced.
As long as there is a federal budget surplus, we believe the federal government
will likely continue to retire the national debt by buying back U.S. Treasury
bonds. In today' s environment, where unusual demand continues to boost bond
prices and lower yields, we are less inclined to consider adding more Treasury
securities to the portfolio.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LEHMAN BROTHERS -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE LEHMAN BROTHERS AGGREGATE BOND
INDEX IS A WIDELY ACCEPTED, UNMANAGED TOTAL RETURN INDEX OF CORPORATE, U.S.
GOVERNMENT AND U.S. GOVERNMENT AGENCY DEBT INSTRUMENTS, MORTGAGE-BACKED
SECURITIES AND ASSET-BACKED SECURITIES WITH AN AVERAGE MATURITY OF 1-10
YEARS.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
BONDS AND NOTES--97.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE--1.2%
Ford Motor,
Notes, 7.45%, 2031 3,700,000 3,527,321
BANKING--3.5%
First Union National Bank of Florida,
Medium-Term Notes, 6.18%, 2006 2,250,000 (a) 2,088,290
Fleet Financial Group,
Notes, 6.375%, 2008 4,250,000 3,848,643
U.S. Bank, N.A.,
Sub. Notes, 5.7%, 2008 1,500,000 1,291,674
U.S. Bank N.A. of Minneapolis, MN.,
Sub. Notes, 6.3%, 2008 3,000,000 2,766,159
9,994,766
COLLATERALIZED MORTGAGE OBLIGATIONS--3.0%
Countrywide Funding,
Ser. 1994-10, Cl. A5, 6%, 2009 58,064 57,636
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation Ctfs., REMIC:
Ser. 1660, Cl. H, 6.5%, 2009 2,570,000 2,506,889
Ser. 2123, Cl. PE, 6%, 2027 2,000,000 1,795,264
Federal National Mortgage Association,
REMIC Trust, Pass-Through Ctfs.
(collateralized by FNMA Pass-Through Ctfs.):
Ser. 1998-M2, Cl. B, 6.247%, 2021 1,500,000 1,389,833
Ser. 1999-54, Cl. PG, 6.5%, 2029 3,000,000 2,769,225
8,518,847
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--2.1%
Asset Securitization:
Ser. 1995-MD IV, Cl. A1, 7.1%, 2029 3,444,408 3,372,506
Ser. 1997-D4, Cl. A-CS1, 1.263%, 2029
(Interest Only Obligation) 11,541,536 (b,c) 236,241
GS Mortgage Securities II,
Ser. 1998-GLII, Cl. A2, 6.562%, 2031 2,500,000 2,313,925
5,922,672
CONSUMER--1.3%
Safeway Stores:
Notes, 6.05%, 2003 2,500,000 2,347,310
Notes, 7%, 2002 1,500,000 1,475,252
3,822,562
ENERGY--.9%
Conoco,
Sr. Notes, 6.95%, 2029 2,800,000 2,520,924
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCE--4.9%
Ford Motor Credit:
Sr. Notes, 5.75%, 2004 3,000,000 2,804,808
Notes, 7.375%, 2009 1,500,000 1,457,265
GMAC,
Floating Rate Notes, 6.54%, 2004 3,000,000 b 2,986,071
Heller Financial, Ser. J,
Notes, 6.52%, 2002 3,675,000 b 3,673,405
Lehman Brothers,
Notes, 7.36%, 2003 3,000,000 2,932,287
13,853,836
FINANCE/ASSET-BACKED CTFS.--3.0%
American Airlines Pass-Through Trusts,
Ser. 1991-A1, 9.71%, 2007 912,076 947,812
Chemical Master Credit Card Trust I,
Ser 1995-3, Cl. A, 6.23%, 2005 3,000,000 2,924,070
CitiBank Credit Card Master Trust I:
Ser. 1997-3, Cl. A, 6.839%, 2004 1,500,000 1,488,023
Ser. 1999-1, Cl. A, 5.5%, 2006 3,250,000 3,030,950
8,390,855
FINANCIAL SERVICES--1.8%
Associates, N.A.,
Sr. Notes, 7.75%, 2005 1,500,000 1,492,547
NYNEX Capital Funding,
Medium-Term Notes, 8.23%, 2009 3,500,000 3,624,593
5,117,140
FOOD & BEVERAGES--.4%
Dole Foods,
Notes, 6.75%, 2000 1,000,000 992,921
FOREIGN/YANKEE--4.4%
ABN AMRO Bank,
Sub. Notes, 7.125%, 2007 1,125,000 1,079,154
Cable & Wireless Communications,
Notes, 6.75%, 2008 3,000,000 2,967,600
Hanson Overseas,
Sr. Notes, 6.75%, 2005 1,500,000 1,419,777
Midland Bank,
Sub. Notes, 7.65%, 2007 1,500,000 (d) 1,514,331
National Australia Bank,
Sub. Notes, 6.4%, 2007 4,250,000 (b) 4,092,975
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
FOREIGN/YANKEE (CONTINUED)
Province of Quebec,
Medium-Term Notes, 7.295%, 2006 250,000 (e) 247,546
Santander Financial Issuances,
Sub. Notes, 7%, 2006 1,125,000 1,072,103
12,393,486
INDUSTRIAL--4.7%
Coca Cola Enterprises,
Notes, 6.375%, 2001 1,025,000 1,012,782
Cox Communications,
Notes, 6.5%, 2002 2,750,000 2,664,459
Crown Cork & Seal,
Notes, 8.375%, 2005 1,350,000 1,301,422
News America Holdings,
Deb., 8.25%, 2018 2,750,000 2,602,809
Royal Caribbean Cruises,
Sr. Notes, 7.5%, 2027 1,250,000 981,513
WMX Technologies,
Sr. Notes, 7.1%, 2003 5,050,000 (f) 4,627,047
13,190,032
INSURANCE--.7%
American General,
Sr. Notes, 6.625%, 2029 2,500,000 2,094,493
RETAIL--.7%
Federated Department Stores,
Notes, 6.3%, 2009 2,250,000 1,996,400
TELECOMMUNICATION/CARRIERS--1.9%
GTE North:
Deb., 6.9%, 2008 1,250,000 1,181,660
Ser. H, Deb., 5.65%, 2008 1,250,000 1,085,698
Sprint Capital,
Notes, 6.125%, 2008 3,500,000 3,114,615
5,381,973
TELECOMMUNICATIONS--.8%
Lucent Technologies,
Deb., 6.45%, 2029 2,800,000 2,407,213
U.S. GOVERNMENT--16.3%
U.S. Treasury Bonds:
5.25%, 2/15/2029 3,450,000 3,037,242
7.875%, 2/15/2021 5,000,000 5,924,550
U.S. Treasury Coupon Strips,
0%, 2/15/2017 8,770,000 3,079,936
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT (CONTINUED)
U.S. Treasury Notes:
5.875%, 11/15/2004 8,500,000 8,277,555
6%, 8/15/2009 8,750,000 8,560,475
6.5%, 10/15/2006 875,000 874,501
6.625%, 4/30/2002 16,500,000 16,483,170
46,237,429
U.S. GOVERNMENT AGENCY--8.0%
Federal Farm Credit Bank,
Bonds, 6.625%, 2002 3,000,000 2,977,782
Federal Home Loan Banks,
Bonds, 6.375%, 2006 5,000,000 4,767,050
Federal Home Loan Mortgage Corp.,
Notes, 6.45%, 2009 2,000,000 1,847,540
Federal National Mortgage Association:
Bonds, 6.25%, 2029 9,250,000 8,187,101
Notes, 7.1%, 2004 5,000,000 4,911,765
22,691,238
U.S. GOVERNMENT AGENCY/MORTGAGE-BACKED--36.1%
Federal Home Loan Mortgage Corp.,
6.505%, 3/1/2029-8/1/2029 11,593,629 10,839,783
7%, 2/1/2029 6,107,359 5,863,065
8.5%, 6/1/2018 8,090,206 8,368,266
Federal National Mortgage Association:
6%, 2/1/2029 4,746,262 4,299,782
6.5%, 8/1/2029 13,480,551 12,600,002
7%, 6/1/2009 1,314,016 1,289,378
7.5%, 10/1/2029-3/1/2015 12,252,169 12,083,116
8%, 2/1/2013-11/1/2029 9,888,159 9,903,737
Government National Mortgage Association I:
6%, 11/15/2008-5/15/2009 2,353,753 2,229,856
6.5%, 2/15/2024-5/15/2028 9,774,231 9,190,489
7%, 10/15/2023-12/15/2023 2,296,874 2,228,504
7.5%, 3/15/2027 3,301,119 3,250,547
8%, 5/15/2007-4/15/2008 8,826,582 8,932,253
Government National Mortgage Association II,
Adjustable Rate Mortgage,
6%, 1/20/2029-2/20/2029 12,272,635 (g) 11,091,392
102,170,170
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
UTILITIES--1.4%
K N Energy,
Sr. Notes, 6.45%, 2001 4,000,000 3,929,676
TOTAL BONDS AND NOTES
(cost $284,625,568) 275,153,954
-----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--1.8%
-----------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
J.P. Morgan Securities, 5.7%
Dated 4/28/2000, due 5/1/2000 in the
amount of $ 5,189,464 (fully collateralized by
$ 5,057,000 U.S. Treasury Notes, 6.875%,
5/15/2006, value $5,299,639)
(cost $5,187,000) 5,187,000 5,187,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $289,812,568) 98.9% 280,340,954
CASH AND RECEIVABLES (NET) 1.1% 2,995,664
NET ASSETS 100.0% 283,336,618
(A) REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION; THE STATED MATURITY IS 2/15/2036.
(B) VARIABLE RATE SECURITY--INTEREST RATE SUBJECT TO PERIODIC CHANGE.
(C) NOTIONAL FACE AMOUNT SHOWN.
(D) REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION; THE STATED MATURITY IS 5/1/2025.
(E) REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION; THE STATED MATURITY IS 7/22/2026.
(F) REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION; THE STATED MATURITY IS 8/15/2026.
(G) PARTIALLY PURCHASED ON A FORWARD COMMITMENT BASIS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
-------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments--Note 1(c) 289,812,568 280,340,95
Interest receivable 3,974,12
Paydowns receivable 87,38
Other assets 1,08
284,403,53
-------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 128,790
Cash overdraft due to Custodian 931,018
Payable for shares of Capital Stock redeemed 7,113
1,066,921
-------------------------------------------------------------------------------
NET ASSETS ($) 283,336,618
-------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 299,620,573
Accumulated undistributed investment income--net 101,170
Accumulated net realized gain (loss) on investments (6,913,511
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 (9,471,614
-------------------------------------------------------------------------------
NET ASSETS ($) 283,336,618
NET ASSET VALUE PER SHARE
Investor Shares Restricted Shares
-------------------------------------------------------------------------------
Net Assets ($) 3,359,305 279,977,31
Shares Outstanding 288,511 24,054,49
-------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.64 11.64
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
-------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 9,406,873
EXPENSES:
Management fee--Note 2(a) 738,985
Distribution fees (Investor Shares)--Note 2(b) 3,543
Loan commitment fees--Note 4 1,787
TOTAL EXPENSES 744,315
INVESTMENT INCOME--NET 8,662,558
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (3,548,568)
Net unrealized appreciation (depreciation) on investments (2,644,607)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (6,193,175)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,469,383
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
-------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 8,662,558 12,997,362
Net realized gain (loss) on investments (3,548,568) (3,336,362)
Net unrealized appreciation (depreciation)
on investments (2,644,607) (10,412,217)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,469,383 (751,217)
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Investor Shares (87,688) (103,206)
Restricted Shares (8,562,436) (12,833,622)
Net realized gain on investments:
Investor Shares -- (19,420)
Restricted Shares -- (2,243,985)
TOTAL DIVIDENDS (8,650,124) (15,200,233)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Investor shares 2,178,678 2,504,041
Restricted shares 50,195,465 124,388,414
Dividends reinvested:
Investor shares 36,725 99,791
Restricted shares 2,934,084 6,623,316
Cost of shares redeemed:
Investor shares (1,046,077) (1,665,390)
Restricted shares (23,502,614) (28,301,206)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 30,796,261 103,648,966
TOTAL INCREASE (DECREASE) IN NET ASSETS 24,615,520 87,697,516
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 258,721,098 171,023,582
END OF PERIOD 283,336,618 258,721,098
Undistributed investment income--net 101,170 88,736
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
INVESTOR SHARES
Shares sold 186,236 204,113
Shares issued for dividends reinvested 3,138 8,080
Shares redeemed (89,163) (135,617)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 100,211 76,576
-------------------------------------------------------------------------------
RESTRICTED SHARES
Shares sold 4,276,486 10,113,315
Shares issued for dividends reinvested 250,854 535,682
Shares redeemed (2,005,329) (2,309,550)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 2,522,011 8,339,447
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31,
---------------------------------------------
INVESTOR SHARES (Unaudited) 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 11.92 12.87 12.52 12.29 12.50
Investment Operations:
Investment income--net .36 .70 .72 .74 .71
Net realized and unrealized
gain (loss) on investments (.28) (.79) .35 .23 (.21)
Total from Investment Operations .08 (.09) 1.07 .97 .50
Distributions:
Dividends from investment income--net (.36) (.70) (.72) (.74) (.71)
Dividends from net realized gain on investments -- (.16) -- -- --
Total Distributions (.36) (.86) (.72) (.74) (.71)
Net asset value, end of period 11.64 11.92 12.87 12.52 12.29
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 1.42(b) (.69) 8.80 8.21 4.18
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets ,80(b) .80 .80 .80 .79
Ratio of net investment income
to average net assets 6.20(b) 5.74 5.68 6.01 5.61
Portfolio Turnover Rate 33.62(c) 114.24 106.93 143.91 198.16
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 3,359 2,244 1,438 317 126
(A) FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31,
--------------------------------------------
RESTRICTED SHARES (Unaudited) 1999 1998 1997 1996(a)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($)
Net asset value, beginning of period 11.91 12.85 12.52 12.29 12.50
Investment Operations:
Investment income--net .38 .73 .76 .77 .74
Net realized and unrealized
gain (loss) on investments (.27) (.78) .32 .23 (.21)
Total from Investment Operations .11 (.05) 1.08 1.00 .53
Distributions:
Dividends from investment income--net (.38) (.73) (.75) (.77) (.74)
Dividends from net realized gain on investments -- (.16) -- -- --
Total Distributions (.38) (.89) (.75) (.77) (.74)
Net asset value, end of period 11.64 11.91 12.85 12.52 12.29
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 1.85(b) (.37) 8.90 8.49 4.45
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets ,55(b) .55 .55 .55 .55
Ratio of net investment income
to average net assets 6.43(b) 5.99 5.95 6.31 6.29
Portfolio Turnover Rate 33.62(c) 114.24 106.93 143.91 198.16
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 279,977 256,477 169,585 108,688 58,466
(A) FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Disciplined Intermediate Bond 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, as amended (the "Act"), as
an open-end management investment company and operates as a series company
currently offering nineteen series, including the fund. The fund's investment
objective is to outperform the Lehman Brothers Aggregate Bond Index, while
maintaining a similar level of risk, by investing primarily in domestic and
foreign investment-grade debt securities and by actively managing bond market
and maturity exposure. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 100 million of $.001 par value Capital Stock in each of
the following classes of shares: Investor and Restricted. Investor shares are
offered to any investor. Restricted shares are offered only to the 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. Other differences between the 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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(a) Portfolio valuation: Investments in securities (excluding short-term
investments, other than U.S. Treasury Bills) 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. 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) 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 o
a counter party default, the fund has the 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 fund' s 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) Dividends 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 of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $3,138,000
available for federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1999. If not
applied, the carryover expires in fiscal 2007.
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 The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 .55% 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 fees). Each director receives $40,000 per year, plus $5,000
for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the
" Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee meetings
attended which are not held in conjunction with a regularly scheduled board
meeting and $500 for Board meetings and separate committee meetings attended
that are conducted by telephone and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional 25% of such
compensation (with the exception of reimbursable amounts). In the event that
there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus
High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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 Distribution Plan (the "Plan") adopted pursuant
to Rule 12b-1 under the Act, the fund may pay annually up to .25% of the value
of the average daily net assets attrib
utable to its Investor shares to compensate the distributor for shareholder
servicing activities primarily intended to result in the sale of Investor
shares. The Restricted shares bear no distribution fee. During the period ended
April 30, 2000, Investor shares were charged $3,543 pursuant to the Plan, of
which $3,155 was paid to DSC.
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 or in any agreement related to
the Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchase and sales (including paydowns) of investment
securities, excluding short-term securities, during the period ended April 30,
2000, amounted to $117,977,400 and $87,863,947, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$9,471,614, consisting of $242,450 gross unrealized appreciation and $9,714,064
gross unrealized depreciation.
At April 30, 2000 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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. During the period ended April
30, 2000, the fund did not borrow under the Facility.
The Fund
For More Information
Dreyfus
Disciplined Intermediate Bond 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 302SA004
Dreyfus Disciplined Smallcap Stock Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Disciplined
Smallcap Stock Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Disciplined
Smallcap Stock Fund, covering the six-month period from November 1, 1999 through
April 30, 2000. Inside, you'll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, Gene Cervi.
The past six months have been favorable for small-cap stocks, which, as measured
by the Russell 2000 Index, outpaced the performance of large-cap stocks, as
measured by the Standard & Poor's 500 Composite Stock Price Index. However, a
closer look reveals that small-cap stocks experienced heightened volatility
during the reporting period, rising and falling sharply in response to shifting
investor preferences.
For example, during the last two months of 1999, small-cap stocks were generally
outpaced by large-cap growth stocks -- particularly technology stocks -- in a
fast-growing economy. Then, during the first two months of 2000, the
large-capitalization sector of the stock market corrected sharply while
small-cap stocks generally rose. In March and April, investor sentiment shifted
once more, and large-cap companies generally provided higher returns than
small-cap companies. In fact, small-cap stocks had their best performance ever
in February followed, in March, by their worst performance relative to large-cap
stocks since the small-cap market' s benchmark was created in January 1979
While it is too soon to determine whether these volatile changes signify a
broadening of the market, we believe that many small-cap stocks -- particularly
those in so-called "old economy" industry groups -- continue to be attractively
valued relative to their large-cap counterparts.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Disciplined Smallcap Stock Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Gene Cervi, Portfolio Manager
How did Dreyfus Disciplined Smallcap Stock Fund perform relative to its
benchmark?
For the six-month period ended April 30, 2000, the fund produced a total return
of 16.29% .(1) In comparison, the fund' s benchmark, the Standard & Poor's
SmallCap 600 Index ("S&P 600"), produced a total return of 17.25% for the same
period.(2)
Small-cap stocks, which are often shunned by investors when business conditions
are uncertain, generally outperformed large-cap stocks for the six-month
reporting period. With fears of a global recession and disruptions due to Y2K
behind them, investors felt more comfortable investing in small-cap stocks.
Despite the substantial volatility in the technology sector during March and
April, the top five contributors to the fund's results during the reporting
period were technology stocks. This reflects the sector's extremely strong
performance during the first four months of the period, far outweighing
subsequent declines during the period.
What is the fund's investment approach?
The fund invests primarily in a broadly diversified portfolio of small-cap
stocks that blends growth and value investment styles. The stocks are chosen
using a disciplined process that combines computer analysis with human judgment.
The computer model identifies and ranks stocks based on financial strength,
relative profit growth and the disparity between stock price and intrinsic
worth. After the computer sifts through several thousand candidates, we select
the most attractive stocks using the insights of our investment analysts. The
fund's portfolio is constructed to have approximately the same sector weightings
as the S&P 600.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
For much of the period, technology stocks dominated all other industry groups,
resulting in the most positive impact on the fund's performance. However, that
changed in mid-March when stock market investors became worried about rising
interest rates and the possible return of inflation. Tech stocks, which had done
so well in 1999, led the decline in March and April 2000.
Despite the technology sector' s extreme volatility, the fund' s top five
performers during the reporting period were all tech stocks. These companies
continued to benefit from the "new economy" -- the world of the Internet and all
the related new industries created by it. Some of those top performers included:
Check Point Software Technologies, a leading provider of Internet security -- a
growing concern for its worldwide corporate clients; Novellus Systems, a company
that builds semiconductor equipment that allows manufacturers to add working
space to their factories; and Lernout & Hauspie Speech Products, a company that
specializes in speech recognition software, a growing market thanks to expanded
voice traffic on the Internet. Check Point Software and Novellus Systems were
sold in February 2000.
During the first part of the six-month period, the fund's performance was also
enhanced by its participation in several successful initial public offerings
(IPOs) . Typically, IPOs will account for less than 5% of the portfolio, since
these stocks are very volatile and can have a disproportionate impact on
performance. Often the companies issuing stock for the first time have no
earnings, so investors are relying heavily on forecasts of profitability many
years down the road. It is not uncommon for a company's stock to double or
triple on the first day of trading. To limit risk, we typically sell our
holdings in IPOs within one month of investing in them. However, after several
months of extremely good performance, the IPO market turned down sharply in
March and April as investors became more concerned about rising interest rates
and the potential slowdown in the economy. This hurt the fund's performance.
Disappointing fund holdings in the period included certain "old economy" stocks,
or those companies NOT related to the Internet, such as Devon Energy, a natural
gas distributor, which was generally hurt by weak demand due to the mild winter,
and AnnTaylor Stores, whose shares declined when the company reported weak
holiday sales. Other companies saw their stock prices decline even though
corporate developments were not negative. For example, our holdings in Citadel
Communications, an operator of radio stations, declined due to investor concerns
that the company would lose advertising revenues from Internet companies, should
the economy weaken. We do not believe that this is a significant issue, however,
because "dot-com" companies account for only about 2% of the company's revenues.
What is the fund's current strategy?
We have remained consistent in our disciplined focus on small-cap stocks,
generally matching the S& P 600 Index in terms of sector weightings to manage
risk. Although our investment model considers value and growth, we continue to
allocate a significant portion of the portfolio to technology so that we can
participate in the exciting new economy. In addition, we plan to continue to
pursue our IPO strategy and are confident that it can lead us to many investment
opportunities going forward.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD &
POOR'S SMALLCAP 600 INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF OVERALL
SMALL-CAP STOCK MARKET PERFORMANCE.
The Fund
<TABLE>
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
COMMON STOCKS--96.8% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALCOHOL & TOBACCO--.8%
Canandaigua Brands, Cl. A 18,750 (a) 944,531
CONSUMER CYCLICAL--12.0%
Alaska Air Group 20,450 (a) 587,937
Ames Department Stores 20,970 (a) 376,149
AnnTaylor Stores 30,880 (a) 638,830
Copart 38,200 (a) 658,950
Harman International Industries 22,550 1,474,206
Jack in the Box 51,100 (a) 1,251,950
Kenneth Cole Productions, Cl. A 34,520 (a) 1,411,005
La-Z-Boy 62,080 973,880
Pacific Sunwear of California 45,630 (a) 1,554,272
ShopKo Stores 38,150 (a) 681,931
Too 52,280 1,565,132
Warnaco Group, Cl. A 55,800 592,875
Zale 34,990 (a) 1,443,337
13,210,454
CONSUMER STAPLES--1.7%
Hain Food Group 32,990 (a) 884,544
Michael Foods 45,210 969,189
1,853,733
ELECTRONIC EQUIPMENT--6.7%
DDi 15,000 225,000
Digital Microwave 53,120 (a) 1,962,120
KEMET 29,000 (a) 2,160,500
Plexus 19,600 (a) 1,501,850
Sawtek 27,200 (a) 1,300,500
Viasystems Group 14,000 223,125
7,373,095
ENERGY--6.0%
Devon Energy 40,790 1,965,568
ENSCO International 54,610 1,812,369
Marine Drilling Cos. 54,220 (a) 1,409,720
Valero Energy 48,800 1,415,200
6,602,857
HEALTH CARE--12.4%
Aclara Biosciences 10,300 392,687
Alpharma, Cl. A 28,350 1,095,019
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (CONTINUED)
CONMED 53,860 (a) 1,407,093
COR Therapeutics 10,200 (a) 777,113
Cooper Cos. 22,980 772,703
IDEC Pharmaceuticals 16,860 (a) 1,079,040
Incyte Pharmaceuticals 9,100 (a) 700,700
Jones Pharma 56,745 1,634,965
King Pharmaceuticals 17,700 (a) 873,937
Medicis Pharmaceutical, Cl. A 36,160 (a) 1,582,000
Ocular Sciences 24,650 (a) 408,266
Patterson Dental 31,930 (a) 1,536,631
Protein Design Labs 7,800 (a) 791,700
Triad Hospitals 36,040 619,437
13,671,291
INTEREST SENSITIVE--10.4%
Allied Capital 54,270 1,014,171
Banknorth Group 48,800 1,165,100
Cullen/Frost Bankers 76,410 1,886,372
Eaton Vance 23,290 985,458
Financial Security Assurance Holdings 22,980 1,696,211
Legg Mason 41,830 1,581,697
MONY Group 35,620 1,101,994
RenaissanceRe Holdings 26,660 979,755
Webster Financial 51,110 1,092,476
11,503,234
INTERNET RELATED--.5%
S1 9,780 (a) 531,176
PRODUCER GOODS--15.0%
ATMI 25,700 (a) 989,450
Astec Industries 42,780 (a) 1,074,847
Catalytica 53,860 (a) 599,193
CommScope 30,100 (a) 1,429,750
Howmet International 35,000 (a) 741,563
Insituform Technologies, Cl. A 42,370 (a) 1,422,043
Manitowoc 35,937 1,192,659
MasTec 6,000 (a) 518,250
Mattson Technology 12,800 (a) 628,800
Milacron 31,690 578,342
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PRODUCER GOODS (CONTINUED)
NCI Building Systems 50,690 (a) 969,446
Reliance Steel & Aluminum 63,700 1,465,100
Teekay Shipping 36,300 1,191,094
Terex 70,810 (a) 1,106,406
Timken 62,910 1,163,835
Tredegar 35,830 924,862
USFreightways 13,134 612,373
16,608,013
SERVICES--9.4%
Armor Holdings 63,750 (a) 713,203
Breakaway Solutions 20,300 535,413
Catalina Marketing 19,810 (a) 2,005,763
Citadel Communications 39,310 (a) 1,535,547
Cox Radio, Cl. A 23,290 (a) 1,688,525
Entercom Communications 20,020 (a) 850,850
MarchFirst 54,300 (a) 1,157,269
Ritchie Brothers Auctioneers 35,300 (a) 811,900
360networks 2,500 37,969
Veritas DGC 43,210 (a) 1,037,040
10,373,479
TECHNOLOGY--20.5%
Asyst Technologies 36,900 (a) 1,974,150
CheckFree Holdings 13,180 (a) 669,709
Concord Communications 26,770 (a) 749,560
Dallas Semiconductor 51,380 2,206,129
Lernout & Hauspie Speech Products 16,520 (a) 1,598,310
Mercury Interactive 32,100 (a) 2,889,000
Micrel 30,050 (a) 2,599,325
New Era of Networks 23,300 (a) 731,038
Power Integrations 37,800 (a) 859,950
RSA Security 29,000 (a) 1,701,938
Remedy 25,820 (a) 1,371,688
Sanchez Computer Associates 34,000 (a) 658,750
Semtech 33,630 (a) 2,293,146
TranSwitch 26,770 (a) 2,357,433
22,660,126
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES--1.4%
Adelphia Business Solutions 18,870 (a) 660,450
Covad Communications Group 33,760 (a) 936,840
1,597,290
TOTAL COMMON STOCKS
(cost $104,312,102) 106,929,279
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--3.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT;
Greenwich Capital Markets, Tri-Party Repurchase
Agreement, 5.72%, dated 4/28/2000,
due 5/1/2000 in the amount of $3,326,585
(fully collateralized by $990,000 Federal Home
Loan Bank Bonds, 6.75%, 2/15/2002, and
by $2,540,000 Federal Home Loan Mortgage
Corp. Notes, 5%, 1/15/2004, value $3,393,501)
(cost $3,325,000) 3,325,000 3,325,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $107,637,102) 99.8% 110,254,279
CASH AND RECEIVABLES (NET) .2% 170,959
NET ASSETS 100.0% 110,425,238
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--
See Statement of Investments--Note 1(c) 107,637,102 110,254,279
Cash 99,984
Receivable for investment securities sold 1,715,203
Dividends and interest receivable 15,592
112,085,058
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 129,260
Payable for investment securities purchased 1,530,560
1,659,820
--------------------------------------------------------------------------------
NET ASSETS ($) 110,425,238
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 104,082,563
Accumulated investment (loss) (220,536)
Accumulated net realized gain (loss) on investments 3,946,034
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 2,617,177
--------------------------------------------------------------------------------
NET ASSETS ($) 110,425,238
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 5,794,946
NET ASSET VALUE, offering and redemption price per share--Note 2(c)($) 19.06
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends 157,074
Interest 121,418
TOTAL INCOME 278,492
EXPENSES:
Management fee--Note 2(a) 415,697
Distribution fees--Note 2 (b) 83,139
Loan commitment fees--Note 4 192
TOTAL EXPENSES 499,028
INVESTMENT (LOSS) (220,536)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments 3,946,034
Net unrealized appreciation (depreciation) on investments (878,436)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 3,067,598
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,847,062
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (220,536) (87,892)
Net realized gain (loss) on investments 3,946,034 80,509
Net unrealized appreciation (depreciation)
on investments (878,436) 3,209,491
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,847,062 3,202,108
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 89,004,304 25,188,670
Cost of shares redeemed (5,008,427) (10,237,144)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 83,995,877 14,951,526
TOTAL INCREASE (DECREASE) IN NET ASSETS 86,842,939 18,153,634
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 23,582,299 5,428,665
END OF PERIOD 110,425,238 23,582,299
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 4,615,347 1,691,393
Shares redeemed (259,127) (668,393)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 4,356,220 1,023,000
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31
--------------------------
(Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 16.39 13.06 12.50
Investment Operations:
Investment (loss)-net (.06)(b) (.09)(b) --
Net realized and unrealized
gain (loss) on investments 2.73 3.42 .56
Total from Investment Operations 2.67 3.33 .56
Net asset value, end of period 19.06 16.39 13.06
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 16.29(c) 25.50 4.48(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .75(c) 1.50 .13(c)
Ratio of net investment (loss)
to average net assets (.33)(c) (.56) (.02)(c)
Portfolio Turnover Rate 54.28(c) 76.14 2.58(c)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 110,425 23,582 5,429
(A) FROM SEPTEMBER 30, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) CALCULATED BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Disciplined Smallcap Stock 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, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the fund. The fund's investment objective is
to seek investment returns (consisting of capital appreciation and income) that
surpass the Standard & Poor's SmallCap 600((reg.tm) ) Index. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A, which is a wholly-owned subsidiary
of Mellon Financial Corporation. Effective March 22, 2000, Dreyfus Service
Corporation (" DSC"), a wholly-owned subsidiary of the Manager, became the
distributor of the fund's shares, which are sold to the public without a sales
charges. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was the
distributor.
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 (including financial futures)
are valued at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. 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.
(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) 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
counter party default, the fund has the 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) Financial futures: The fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the fund to
"mark to market" on a daily basis, which reflects the change in the market value
of the contract at the close of each day's trading. Typically, variation margin
payments are received or made to reflect daily unrealized gains or losses. When
the contracts are closed, the fund recognizes a realized gain or loss. These
investments require initial margin deposits with a custodian, which consist of
cash or cash equivalents, up to approximately 10% of the contract amount. The
amount of these deposits is determined by the exchange or Board
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
of Trade on which the contract is traded and is subject to change. At April 30,
2000, there were no open financial futures 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 distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the 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 interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--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 1.25% 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 fees) . Each director receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the " Dreyfus/Laurel Funds" ) attended, $2,000 for separate
committee meetings attended which are not held in conjunction with a regularly
scheduled board meeting and $500 for Board meetings and separate committee
meetings attended that are conducted by telephone and is reimbursed for travel
and out-of-pocket expenses. The Chairman of the Board receives an additional 25%
of such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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 a Distribution Plan (the "Plan") adopted pursuant
to Rule 12b-1 under the Act, the fund may pay annually up to .25% of the value
of the fund's average daily net assets to compensate Mellon Bank and the Manager
for shareholder servicing activities and the distributor for shareholder
servicing activities primarily intended to result in the sale of fund shares.
During the period ended April 30, 2000, the fund was charged $83,139 pursuant to
the Plan, of which $28,567 was paid to DSC.
(c) A 1% redemption fee is charged and retained by the fund on shares redeemed
within six months following the date of issuance, including redemptions made
through use of the fund's exchange privilege.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$116,364,268 and $34,383,160, respectively.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
At April 30, 2000, accumulated net unrealized appreciation on investments was
$2,617,177, consisting of $12,564,087 gross unrealized appreciation and
$9,946,910 gross unrealized depreciation.
At April 30, 2000, 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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. During the period ended April
30, 2000, the fund did not borrow under the Facility.
NOTES
For More Information
Dreyfus Disciplined
Smallcap Stock 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 041SA004
Dreyfus Disciplined
Stock Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Disciplined Stock Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Disciplined Stock
Fund, covering the six-month period from November 1, 1999 through April 30,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, Bert J. Mullins.
The past six months have been highly volatile -- but generally rewarding -- for
investors in large-cap U.S. stocks. While the market's advance during the last
two months of 1999 was led primarily by technology stocks and large-cap growth
stocks in a fast-growing economy, the large-cap sector of the stock market
corrected substantially during the first quarter of 2000, causing large-cap
stocks to generally underperform small- and mid-cap stocks during those three
months.
In mid-March, investor sentiment appeared to shift once more. Faced with
evidence that inflationary pressures were building, a major measure of
technology stock performance, the Nasdaq Composite Index, fell substantially
between mid-March and the end of April, including a considerably large
single-day drop on April 14. Many "old economy" stocks declined less severely
and some value-oriented stocks gained ground amid renewed investor interest.
While it is too soon to determine whether this broadening of the market is
likely to persist, we believe that it may be a positive sign for the stock
market overall.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Disciplined Stock Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Bert J. Mullins, Portfolio Manager
How did Dreyfus Disciplined Stock Fund perform relative to its benchmark?
For the six-month period ended April 30, 2000, the fund's total return was 7.93%
. (1) For the same period, the total return of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index"), the fund's benchmark, was 7.18%
.(2)
We attribute the fund' s good relative performance to our stock selection
process, particularly within the technology sector. We achieved these results
despite a volatile market in which performance was driven by a relative handful
of very large growth stocks, conditions that do not generally favor the fund's
diversified growth and value investment approach.
What is the fund's investment approach?
Dreyfus Disciplined Stock Fund invests primarily in a diversified portfolio of
large companies that meet our strict standards for value and growth. We identify
potential investments through a quantitative analytic process that sifts through
a universe of approximately 2,000 stocks in search of those that are not only
undervalued according to our criteria, but that also exhibit improving earnings
momentum. A team of experienced analysts examine the fundamentals of the
top-ranked candidates. Armed with these analytical insights, the portfolio
manager decides which stocks to purchase, and whether any current holdings
should be sold.
In addition to identifying attractive investment opportunities, our approach is
designed to manage the risks associated with market timing and sector and
industry exposure. Market timing refers to the practice of attempting to benefit
from gains and declines in the overall market by adjusting the percentage of a
fund's assets that are invested in the market at any one time. We do not believe
that the advantages of attempting to time the market or rotate in and out of
various indus
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
try sectors outweigh the risks of such moves. Instead, our goal is to neutralize
these risks by being fully invested and remaining industry and sector neutral in
relation to the S&P 500 Index.
The result is a broadly diversified portfolio of carefully selected stocks. At
the end of the recent six-month period, the fund held positions in approximately
145 stocks across eleven economic sectors. Our ten largest holdings accounted
for approximately 25% of the portfolio, so that the fund's performance was not
overly dependent on any one stock, but was determined by a large number of
securities.
What other factors influenced the fund's performance?
The fund's performance was driven primarily by its technology-related holdings,
which benefited from both general investor enthusiasm as well as the successful
application of our security selection strategy within the sector. Consistent
with our investment approach, the fund held approximately the same percentage of
technology stocks as the S& P 500 Index. However, our experienced team of
securities analysts succeeded in identifying several of the sector's strongest
performers, such as Corning, Micron Technology and Applied Materials. We
experienced similar success in the health care sector, where the fund's
significant position in Warner-Lambert benefited from the company's agreement to
be acquired by Pfizer at a substantial premium to its then prevailing stock
price.
Although the portfolio outperformed the S& P 500 Index during the reporting
period, we were disappointed with the performance of the quantitative model that
helps us choose securities. Uncertainties regarding rising interest rates and
the sustainability of U.S. economic growth caused sudden swings in investor
sentiment. As a result, stock prices rose and fell sharply. These conditions
undermined the effectiveness of our model, which depends on using data from one
month to identify stocks that will outperform during the next.
What is the fund's current strategy?
We continue to employ our sector-neutral strategy, which is designed to manage
certain risks by apportioning assets among various sectors in a way that is
consistent with the S& P 500 Index. In addition, our stock selection strategy
continues to be driven by our quantitative model, and we are looking for ways to
increase our model's effectiveness in volatile market environments. We continue
to adhere to our disciplined investment process in our efforts to outperform the
S&P 500 Index.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD
& POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX
OF U.S. STOCK MARKET PERFORMANCE.
The Fund
April 30, 2000 (Unaudited)
<TABLE>
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
COMMON STOCKS--99.7% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALCOHOL & TOBACCO--.9%
Anheuser-Busch Cos. 303,800 21,436,887
Seagram 160,300 8,656,200
30,093,087
CONSUMER CYCLICAL--9.2%
Best Buy 266,100 (a) 21,487,575
Costco Wholesale 293,800 (a) 15,883,563
Federated Department Stores 355,700 (a) 12,093,800
Ford Motor 191,700 10,483,594
General Motors 478,100 44,762,112
Home Depot 400,200 22,436,213
Limited 429,900 19,426,106
Lowe's Cos. 304,000 15,048,000
Safeway 346,900 (a) 15,306,963
Staples 475,450 (a) 9,063,266
TJX Cos. 588,300 11,288,006
Tandy 383,300 21,848,100
Target 325,900 21,692,719
US Airways Group 240,100 (a) 6,677,781
Wal-Mart Stores 1,270,900 70,376,087
317,873,885
CONSUMER STAPLES--3.8%
Coca-Cola 472,300 22,227,619
Energizer Holdings 148,966 2,541,732
General Mills 427,000 15,532,125
Nabisco Holdings, Cl. A 386,000 14,499,125
PepsiCo 710,200 26,055,462
Procter & Gamble 481,800 28,727,325
Quaker Oats 208,900 13,617,669
Ralston-Purina Group 447,000 7,906,313
131,107,370
ENERGY--5.5%
BP Amoco, ADS 344,564 17,572,764
Coastal 362,300 18,182,931
Enron 397,600 27,707,750
Exxon Mobil 804,700 62,515,131
Kerr-McGee 238,380 12,336,165
Royal Dutch Petroleum (New York Shares) 606,200 34,780,725
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ENERGY (CONTINUED)
Tosco 327,000 10,484,437
USX-Marathon Group 306,800 7,152,275
190,732,178
HEALTH CARE--9.9%
American Home Products 614,400 34,521,600
Amgen 510,300 (a) 28,576,800
Bausch & Lomb 158,400 9,563,400
Bristol-Myers Squibb 665,200 34,881,425
Elan, ADS 305,500 (a) 13,098,313
Genentech 84,000 9,828,000
MedImmune 80,500 (a) 12,874,969
Medtronic 510,700 26,524,481
Merck & Co. 656,700 45,640,650
Schering-Plough 612,400 24,687,375
UnitedHealth Group 233,000 15,538,187
Warner-Lambert 752,300 85,621,144
341,356,344
INTEREST SENSITIVE--16.7%
ACE 322,600 7,722,238
Allstate 613,260 14,488,268
Ambac Financial Group 139,500 6,696,000
American General 271,300 15,192,800
Bank of America 761,200 37,298,800
CIGNA 134,600 10,734,350
Chase Manhattan 637,880 45,967,227
Citigroup 748,970 44,516,904
Fannie Mae 364,700 21,995,969
FleetBoston Financial 1,115,000 39,512,812
General Electric 948,600 149,167,350
Hartford Financial Services Group 477,000 24,893,438
Lehman Brothers Holdings 237,400 19,481,638
MBNA 774,600 20,575,313
Merrill Lynch 293,000 29,867,688
Morgan Stanley Dean Witter & Co. 227,200 17,437,600
PNC Financial Services Group 233,800 10,199,525
SLM Holding 270,800 8,479,425
SouthTrust 415,350 9,916,481
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
SunTrust Banks 163,300 8,287,475
Wells Fargo 800,600 32,874,638
575,305,939
INTERNET RELATED--1.4%
America Online 430,900 (a) 25,773,206
Internet Capital Group 69,500 2,945,063
Yahoo! 133,400 (a) 17,375,350
46,093,619
PRODUCER GOODS--6.6%
Alcoa 218,100 14,149,238
Boeing 388,700 15,426,531
Burlington Northern Santa Fe 289,500 6,984,188
Canadian National Railway 189,300 5,312,231
Champion International 186,400 12,255,800
Honeywell International 185,700 10,399,200
Ingersoll-Rand 207,850 9,755,959
International Paper 213,100 7,831,425
Martin Marietta Materials 121,100 6,418,300
Minnesota Mining & Manufacturing 261,500 22,619,750
Northrop Grumman 96,500 6,839,438
PPG Industries 275,100 14,958,562
Rohm & Haas 201,300 7,171,313
Southdown 203,000 11,799,375
Tyco International 1,174,600 53,958,187
Union Carbide 155,800 9,192,200
United Technologies 213,700 13,289,469
228,361,166
SEMICONDUCTORS--6.7%
Altera 163,500 (a) 16,717,875
Analog Devices 206,400 (a) 15,854,100
Applied Materials 296,200 (a) 30,156,862
Intel 946,300 120,002,669
Linear Technology 238,900 13,647,163
Maxim Integrated Products 198,200 (a) 12,845,838
Micron Technology 155,900 (a) 21,709,075
230,933,582
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SERVICES--7.0%
AMFM 88,600 (a) 5,880,825
AT&T--Liberty Media Group, Cl. A 291,100 (a) 14,536,806
Automatic Data Processing 315,400 16,972,462
Clear Channel Communications 194,900 (a) 14,032,800
Disney (Walt) 581,600 25,190,550
Fox Entertainment Group, Cl. A 361,700 (a) 9,313,775
Hispanic Broadcasting 100,500 (a) 10,156,781
Infinity Broadcasting, Cl. A 344,600 (a) 11,694,863
MediaOne Group 102,800 (a) 7,774,250
Omnicom Group 196,300 17,875,569
Time Warner 535,000 48,116,562
Viacom, Cl. B 498,800 (a) 27,122,250
Vodafone AirTouch, ADR 523,550 24,606,850
VoiceStream Wireless 61,000 6,039,000
239,313,343
TECHNOLOGY--24.0%
Cisco Systems 2,083,000 (a) 144,410,484
Citrix Systems 123,200 (a) 7,522,900
Corning 205,500 40,586,250
Dell Computer 869,200 (a) 43,568,650
EMC 341,500 (a) 47,447,156
Gateway 188,900 (a) 10,436,725
International Business Machines 303,500 33,878,187
Lexmark International Group, Cl. A 130,700 (a) 15,422,600
Lucent Technologies 269,400 16,753,312
Microsoft 1,311,700 (a) 91,491,075
Motorola 280,560 33,404,175
Network Appliance 172,200 (a) 12,732,038
Nokia, ADS 242,800 13,809,250
Nortel Networks 465,600 52,729,200
Oracle 1,083,600 (a) 86,620,275
QUALCOMM 170,100 (a) 18,445,219
SCI Systems 412,240 (a) 21,951,780
Schlumberger 285,800 21,881,563
Siebel Systems 95,200 (a) 11,697,700
Solectron 467,800 (a) 21,898,887
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Sun Microsystems 626,400 (a) 57,589,650
Symantec 169,100 (a) 10,558,181
Tellabs 238,000 (a) 13,045,375
827,880,632
UTILITIES--8.0%
AT&T 1,131,800 52,840,912
Bell Atlantic 463,810 27,480,742
Calpine 84,800 (a) 7,759,200
Florida Progress 214,600 10,515,400
GPU 285,300 8,006,231
GTE 352,900 23,908,975
MCI WorldCom 623,400 (a) 28,325,737
PECO Energy 228,000 9,504,750
Public Service Enterprise Group 222,000 7,964,250
Qwest Communications International 108,232 (a) 4,694,563
SBC Communications 734,331 32,172,877
Sprint (FON Group) 573,600 35,276,400
Telefonos de Mexico, Cl. L, ADS 121,800 7,163,363
U S WEST 288,500 20,537,594
276,150,994
TOTAL COMMON STOCKS
(cost $2,373,287,454) 3,435,202,139
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--.3% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT;
Goldman Sachs & Co., Tri-Party Repurchase Agreement,
5.67% dated 4/28/2000, due 5/1/2000 in the amount of
$12,005,670 (fully collateralized by $12,290,000
U.S. Treasury Notes, 4.50%, 9/30/2000,
value $12,240,135)
(cost $12,000,000) 12,000,000 12,000,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $2,385,287,454) 100.0% 3,447,202,139
LIABILITIES, LESS CASH AND RECEIVABLES (.0%) (813,223)
NET ASSETS 100.0% 3,446,388,916
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments-Note 1(c) 2,385,287,454 3,447,202,139
Cash 958,893
Dividends and interest receivable 1,878,978
Receivable for shares of Capital Stock subscribed 653,296
3,450,693,306
-------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 2,828,988
Payable for shares of Capital Stock redeemed 1,475,402
4,304,390
--------------------------------------------------------------------------------
NET ASSETS ($) 3,446,388,916
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 2,274,805,88
Accumulated distributions in excess of investment income--net (54,423)
Accumulated net realized gain (loss) on investments 109,722,769
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 1,061,914,685
--------------------------------------------------------------------------------
NET ASSETS ($) 3,446,388,916
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(245 million shares of $.001 par value Capital Stock authorized) 80,610,761
NET ASSET VALUE, offering and redemption price per share ($) 42.75
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $54,411 foreign taxes withheld at source) 17,737,988
Interest 402,537
TOTAL INCOME 18,140,525
EXPENSES:
Management fee--Note 2(a) 15,266,687
Distribution fees-Note 2(b) 1,696,298
Loan commitment fees--Note 4 23,913
Interest expense--Note 4 9,775
TOTAL EXPENSES 16,996,673
INVESTMENT INCOME--NET 1,143,852
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments 120,818,244
Net unrealized appreciation (depreciation) on investments 136,730,227
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 257,548,471
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 258,692,323
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,143,852 8,305,061
Net realized gain (loss) on investments 120,818,244 111,120,419
Net unrealized appreciation (depreciation)
on investments 136,730,227 484,270,158
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 258,692,323 603,695,638
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (1,198,275) (11,442,543)
Net realized gain on investments (111,279,716) (119,405,805)
TOTAL DIVIDENDS (112,477,991) (130,848,348)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 446,064,849 1,255,734,317
Dividends reinvested 105,855,006 121,358,577
Cost of shares redeemed (541,294,014) (996,555,018)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 10,625,841 380,537,876
TOTAL INCREASE (DECREASE) IN NET ASSETS 156,840,173 853,385,166
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 3,289,548,743 2,436,163,577
END OF PERIOD 3,446,388,916 3,289,548,743
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 10,639,290 32,584,410
Shares issued for dividends reinvested 2,566,804 3,330,034
Shares redeemed (12,897,807) (25,858,146)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 308,287 10,056,298
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------------
(Unaudited) 1999 1998(a) 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 40.96 34.68 32.78 26.65 22.09 18.54
Investment Operations:
Investment income--net .01(b) .11(b) .20 .25 .28 .30
Net realized and
unrealized gain (loss)
on investments 3.19 7.97 5.31 7.92 5.13 4.02
Total from Investment
Operations 3.20 8.08 5.51 8.17 5.41 4.32
Distributions:
Dividends from investment
income--net (.02) (.15) (.24) (.26) (.29) (.30)
Dividends from net realized
gain on investments (1.39) (1.65) (3.37) (1.78) (.56) (.47)
Total Distributions (1.41) (1.80) (3.61) (2.04) (.85) (.77)
Net asset value,
end of period 42.75 40.96 34.68 32.78 26.65 22.09
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 7.93(c) 24.01 18.37 32.32 25.14 24.33
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL
DATA (%):
Ratio of expenses to
average net assets .50(c) 1.00 .99 .90 .90 .90
Ratio of net investment
income to average
net assets .03(c) .28 .61 .87 1.23 1.61
Portfolio Turnover Rate 28.05(c) 57.23 54.45 68.87 64.47 60.00
Net Assets, end of period
($ x 1,000) 3,446,389 3,289,549 2,436,164 1,482,176 807,680 382,646
(A) EFFECTIVE DECEMBER 15, 1997, THE FUND CONVERTED TO A SINGLE CLASS FUND,
WITH THE EXISTING INSTITUTIONAL SHARES AND RETAIL SHARES CONVERTED INTO A NEW
SINGLE CLASS OF SHARES.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Disciplined Stock 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, as amended (the "Act" ), as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the fund. The fund's investment objective is
to seek investment returns (consisting of capital appreciation and income) that
are consistently superior to the Standard & Poor's 500 Composite Stock Price
Index. The Dreyfus Corporation (the "Manager") serves as the fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank")
, a wholly-owned subsidiary of Mellon Financial Corporation. Effective March 22,
2000, Dreyfus Service Corporation (" DSC"), a wholly-owned subsidiary of the
Manager, became the distributor of the fund's shares, which are sold to the
public without a sales charge. Prior to March 22, 2000, Premier Mutual Fund
Services, Inc. was the distributor.
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 (including financial futures)
are valued at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. 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.
(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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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) 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
counter party default, the fund has the 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) Financial futures: The fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the fund to
"mark to market" on a daily basis, which reflects the change in the market value
of the contract at the close of each day's trading. Typically, variation margin
payments are received or made to reflect daily unrealized gains or losses. When
the contracts are closed, the fund recognizes a realized gain or loss. These
investments require initial margin deposits with a custodian, which consist of
cash or cash equivalents, up to approximately 10% of the contract amount. The
amount of these deposits is determined by the exchange or Board
of Trade on which the contract is traded and is subject to change. At April 30,
2000, there were no financial futures contracts outstanding.
(e) Distributions to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a quarterly
basis. 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, if any, it is the policy of the 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 interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--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 .90% 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
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
the fund' s allocable portion of fees and expenses of the non-interested
Directors (including counsel fees) . Each director receives $40,000 per year,
plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the
" Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee meetings
attended which are not held in conjunction with a regularly scheduled board
meeting and $500 for Board meetings and separate committee meetings attended
that are conducted by telephone and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional 25% of such
compensation (with the exception of reimbursable amounts). In the event that
there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus
High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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 Distribution Plan (the "Plan") adopted pursuant
to Rule 12b-1 under the Act, the fund may pay annually up to .10% of the value
of the fund's average daily net assets to compensate Mellon Bank and the Manager
for shareholder servicing activities and the distributor for shareholder
servicing activities and expenses primarily intended to result in the sale of
fund shares. During the period ended April 30, 2000, the fund was charged
$1,696,299 pursuant to the Plan, of which $377,204, was paid to DSC.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of a 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 or in any agreement related to
the Plan.
NOTE 3-Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$950,430,675 and $1,063,324,150, respectively.
At April 30, 2000, accumulated net unrealized appreciation on investments was
$1,061,914,685, consisting of $1,166,399,392 gross unrealized appreciation and
$104,484,707 gross unrealized depreciation.
At April 30, 2000, 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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.
The average daily amount of borrowings outstanding during the period ended April
30, 2000 was approximately $299,700 with a related weighted average annualized
interest rate of 6.56%.
NOTE 5--Litigation:
The fund, along with certain related parties, were defendants in a class action
lawsuit. Former Retail class shareholders asserted that the adoption of the
Plan, with respect to the fund's Retail class, was in violation of the Act and
common law. On March 29, 1999, the trial court dismissed the lawsuit with
prejudice, but the plaintiffs filed an appeal. On December 23, 1999, the appeals
court affirmed the dismissal and the time period for the plaintiffs to petition
for further review has expired.
The Fund
NOTES
For More Information
Dreyfus Disciplined Stock 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 728SA004
Dreyfus Institutional
Government Money
Market Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
8 Statement of Assets and Liabilities
9 Statement of Operations
10 Statement of Changes in Net Assets
11 Financial Highlights
12 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Institutional Government Money Market Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Institutional
Government Money Market Fund, covering the six-month period from November 1,
1999 through April 30, 2000. Inside, you'll find valuable information about how
the fund was managed during the reporting period, including a discussion with
the fund's portfolio manager, Laurie Carroll.
When the reporting period began, international and domestic economies were
growing faster than most analysts expected, giving rise to concerns that
long-dormant inflationary pressures might reemerge. Consumers continued to spend
heavily, unemployment levels reached new lows and the stock market, while highly
volatile, continued to climb.
Because unsustainable economic growth may trigger unwanted inflationary
pressures, the Federal Reserve Board raised key short-term interest rates three
times during the reporting period. In total, the Federal Reserve Board has
raised short-term interest rates by 1.25 percentage points since late June 1999.
While these economic influences adversely affected long-term bonds, they
positively influenced money market yields.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Institutional Government Money Market
Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Laurie Carroll, Portfolio Manager
How did Dreyfus Institutional Government Money Market Fund perform during the
period?
For the six-month period ended April 30, 2000, Dreyfus Institutional Government
Money Market Fund produced an annualized yield of 5.40%, and after taking into
account the effect of compounding, an annualized effective yield of 5.53%.(1)
We attribute the fund' s positive performance to our maturity management
strategy, which led us to maintain a relatively short average maturity for the
portfolio. This somewhat defensive position enabled us to capture higher yields
more quickly as interest rates rose during the reporting period.
What is the fund's investment approach?
As a government money market fund, the fund provides shareholders with an
investment vehicle that is made up of high quality, income-producing securities
that are also very liquid in nature; that is, they can be converted to cash
quickly. To pursue its investment goal, the fund invests in a portfolio of high
quality short-term debt securities that are issued by the United States
Government or its agencies or instrumentalities, including U.S. Treasury
securities, as well as repurchase agreements. Generally, the fund is required to
invest at least 95% of its assets in the securities of issuers with the highest
credit rating or the unrated equivalent as determined by Dreyfus. It is also
required to maintain an average dollar-weighted portfolio maturity of 90 days or
less.
What other factors influenced the fund's performance?
The primary factors influencing the fund's performance over the past six months
have been the continued strength of the U.S. economy and the series of
short-term interest-rate hikes initiated by the Federal Reserve Board (the
" Fed" ) in an attempt to slow economic growth and forestall the buildup of
inflationary pressures. In three separate moves The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
during November, February and March, the Fed raised interest rates for a total
of 0.75 percentage points. These moves were in addition to the two rate hikes
implemented before the reporting period began, producing a total increase of
1.25 percentage points since last summer.
The fund was able to benefit from these rate hikes because we concentrated on
holding securities with shorter average maturities. By doing so, we enabled the
fund to take advantage of higher money market yields as rates were rising
In addition, during the fourth quarter of 1999 the money markets were busy
preparing for the possibility of problems that could result from Y2K concerns.
At that time, many dealers and issuers basically shut down their operations,
preferring to have little or no activity until after year-end. That move caused
a lack of liquidity in the overnight bond market. Once Y2K concerns had passed,
an event that some market analysts have since dubbed a "non-event," liquidity
once again returned to the bond markets, calming volatility levels.
Then, in mid-January, the government announced that it would use the federal
budget surplus to initiate a buyback program for outstanding Treasuries. This
announcement triggered a wave of purchases of long-term Treasury securities, a
move that drove yields for 30-year Treasury bonds below that of shorter term
securities, creating what' s called an inverted yield curve. An unusual
circumstance, an inverted yield curve occurs when short-term interest rates are
higher than long-term rates.
What is the fund's current strategy?
Our strategy has been to retain the flexibility we need to seek high current
income by responding quickly to changing market conditions. To that end, we have
kept the portfolio' s average maturity short. As the U.S. economy continues to
grow, we believe that the Fed has more work to do in order to curb a potential
reacceleration of inflation. By keeping maturities near the short end of the
range, we believe we are positioning the fund to seek to capture potentially
higher money market yields that may accompany further interest-rate increases
Throughout the period, we continued to emphasize agency securities in an effort
to earn the highest possible yield for the fund. In fact, as of the end of the
reporting period, approximately 65% of the fund's total assets were allocated
among different government agency securities. In addition, we maintained our
allocation to government floating-rate notes -- 34% as of April 30, 2000
--because these notes provide the fund with protection against rising interest
rates. Most recently, in the rising interest-rate environment, floating-rate
notes have been particularly beneficial for the fund. The portfolio's remaining
assets were allocated to repurchase agreements, which provided liquidity and
helped boost returns.
May 15, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR
THE U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
FUND.
The Fund
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
Annualized
Yield on
Date of Principal
U.S. GOVERNMENT AGENCIES--103.2% Purchase (%) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Federal Farm Credit Banks, Notes
<S> <C> <C> <C>
5/1/2000 5.65 10,000,000 10,000,000
6/1/2000 5.73 10,000,000 10,000,000
7/3/2000 5.92 10,000,000 10,000,000
8/1/2000 5.95 10,000,000 10,000,000
9/1/2000 5.99 5,000,000 5,000,000
10/2/2000 6.15 5,000,000 5,000,000
11/1/2000 6.20 5,000,000 5,000,000
Federal Home Loan Banks, Discount Notes
5/3/2000 5.86 30,000,000 29,990,250
5/17/2000 5.88 10,000,000 9,973,956
7/26/2000 6.19 10,000,000 9,854,517
Federal Home Loan Banks, Floating Rate Notes
9/28/2000 6.02 (a) 10,000,000 9,998,361
10/4/2000 6.13 (a) 10,000,000 9,997,612
3/20/2001 5.95 (a) 10,000,000 9,995,575
Federal Home Loan Mortgage Corp., Discount Notes
5/2/2000 5.95 5,000,000 4,999,178
5/4/2000 5.98 5,000,000 4,997,521
5/9/2000 5.99 5,000,000 4,993,389
5/19/2000 5.89 5,000,000 4,985,325
5/23/2000 5.92 10,000,000 9,964,006
6/29/2000 6.10 10,000,000 9,901,175
Federal Home Loan Mortgage Corp.,
Floating Rate Notes
5/18/2000 6.02 (a) 10,000,000 9,999,628
4/11/2001 5.95 (a) 15,000,000 14,998,609
Federal National Mortgage Association,
Discount Notes
5/16/2000 5.88 5,000,000 4,987,792
6/1/2000 5.96 10,000,000 9,949,022
6/5/2000 5.79 5,000,000 4,972,875
7/20/2000 6.19 10,000,000 9,864,444
2/16/2001 6.41 5,000,000 4,999,523
Federal National Mortgage Association,
Floating Rate Notes
8/9/2000 5.98 (a) 10,000,000 9,998,361
9/6/2000 5.87 (a) 10,020,000 10,019,564
9/18/2000 6.15 (a) 10,000,000 9,999,236
4/26/2001 6.11 (a) 10,000,000 9,999,014
TOTAL U.S. GOVERNMENT AGENCIES
(cost $274,438,933) 274,438,933
Annualized
Yield on
Date of Principal
REPURCHASE AGREEMENTS--.4% Purchase (%) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Goldman, Sachs & Co.,
Repurchase Agreement dated 4/28/2000,
due 5/1/2000 in the amount of $1,108,200
(fully collateralized by $908,000
U.S. Treasury Bonds 11.625%,
due 11/15/2004 value $1,130,212
(cost $1,107,677) 5.67 1,107,677 1,107,677
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $275,546,610) 103.6% 275,546,610
LIABILITIES, LESS CASH AND RECEIVABLES (3.6%) (9,628,725)
NET ASSETS 100.0% 265,917,885
(A) VARIABLE INTEREST RATE-SUBJECT TO PERIODIC CHANGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
-------------------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments--Note 1(c) 275,546,610 275,546,610
Interest receivable 1,154,297
276,700,907
-------------------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 97,077
Cash overdraft due to Custodian 685,945
Payable for investment securities purchased 10,000,000
10,783,022
------------------------------------------------------------------------------------------
NET ASSETS ($) 265,917,885
------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 266,031,957
Accumulated net realized gain (loss) on investments (114,072)
------------------------------------------------------------------------------------------
NET ASSETS ($) 265,917,885
------------------------------------------------------------------------------------------
SHARES OUTSTANDING
(2 billion shares of $.001par value Capital Stock authorized) 266,031,957
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
------------------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 7,896,110
EXPENSES:
Management fee--Note 2(a) 206,782
Shareholder servicing costs--Note 2(b) 206,782
TOTAL EXPENSES 413,564
INVESTMENT INCOME--NET, REPRESENTING NET INCREASE IN
NET ASSETS RESULTING FROM OPERATIONS 7,482,546
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 7,482,546 11,831,116
Net realized gain (loss) from investments -- (31,649)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 7,482,546 11,799,467
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (7,482,546) (11,831,116)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold 1,352,412,673 2,626,381,951
Dividends reinvested 129,738 358,854
Cost of shares redeemed (1,323,156,270) (2,734,165,524)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 29,386,141 (107,424,719)
TOTAL INCREASE (DECREASE) IN NET ASSETS 29,386,141 (107,456,368)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 236,531,744 343,988,112
END OF PERIOD 265,917,885 236,531,744
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .027 .046 .052 .052 .051 .056
Distributions:
Dividends from
investment income--net (.027) (.046) (.052) (.052) (.051) (.056)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 5.45(a) 4.74 5.36 5.28 5.25 5.71
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses
to average net assets .30(a) .30 .30 .30 .30 .30
Ratio of net investment
income to average net assets 5.41(a) 4.64 5.22 5.14 5.14 5.55
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 265,918 236,532 343,988 191,853 295,434 515,812
(A) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - Significant Accounting Policies:
Dreyfus Institutional Government Money Market 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, as amended (the "Act"), as
an open-end management investment company and operates as a series company
currently offering nineteen series including the fund. The fund's investment
objective is to seek a high level of current income consistent with stability of
principal and conservative investment risk by investing principally in high
grade money market instruments issued or guaranteed by the U.S. Government and
its agencies and instrumentalities. The Dreyfus Corporation (the "Manager")
serves as the fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A, which is a wholly-owned subsidiary of Mellon Financial
Corporation. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of the Manager, became the distributor of the fund's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
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 are valued at amortized cost
in accordance with Rule 2a-7 of the Act, which has been determined by the fund's
Board of Directors to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
(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. Interes
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
(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
counter party default, the fund has the 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 fund' s 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, if any, 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund has an unused capital loss carryover of approximately $114,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1999. If not
applied, $14,000 of the carryover expires in fiscal 2005, $68,000 expires in
fiscal 2006 and $32,000 expires in fiscal 2007.
At April 30, 2000, 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).
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, shareholder servicing 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 fees). Each director receives $40,000 per year, plus $5,000
for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the
" Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee meetings
attended which are not held in conjunction with a regularly scheduled board
meeting and $500 for Board meetings and separate committee meetings attended
that are conducted by telephone and is reimbursed for travel and out-of-pocket
expenses.
The Chairman of the Board receives an additional 25% of such compensation (with
the exception of reimbursable amounts) . In the event that there is a joint
committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield
Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are
charged and 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) Shareholder servicing plan: Under the Shareholder Servicing Plan (the
" Plan" ), the fund may pay up to .15% of the value of the average daily net
assets annually to compensate certain banks, brokers, dealers or other financial
institutions for shareholder services. During the period ended April 30, 2000,
the fund was charged $206,782 pursuant to the Plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of a 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 or any agreement related to the
Plan.
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended April 30, 2000, the fund did not borrow
under the line of credit.
The Fund
NOTES
For More Information
Dreyfus Institutional Government Money Market 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 919SA004
Dreyfus
Institutional Prime
Money Market Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
1 FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Institutional
Prime Money Market Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Institutional Prime
Money Market Fund, covering the six-month period from November 1, 1999 through
April 30, 2000. Inside, you'll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, Laurie Carroll.
When the reporting period began, international and domestic economies were
growing faster than most analysts expected, giving rise to concerns that
long-dormant inflationary pressures might reemerge. Consumers continued to spend
heavily, unemployment levels reached new lows and the stock market, while highly
volatile, continued to climb.
Because unsustainable economic growth may trigger unwanted inflationary
pressures, the Federal Reserve Board raised key short-term interest rates three
times during the reporting period. In total, the Federal Reserve Board has
raised short-term interest rates by 1.25 percentage points since late June 1999.
While these economic influences adversely affected long-term bonds, they
positively influenced money market yields.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Institutional Prime Money Market Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Laurie Carroll, Portfolio Manager
How did Dreyfus Institutional Prime Money Market Fund perform during the period
For the six-month period ended April 30, 2000, Dreyfus Institutional Prime Money
Market Fund produced an annualized yield of 5.59%, and after taking into account
the effect of compounding, an annualized effective yield of 5.74%.(1)
We attribute the fund' s positive performance to our maturity management
strategy, which led us to maintain a relatively short average maturity for the
portfolio. This somewhat defensive position enabled us to capture higher yields
more quickly as interest rates rose during the reporting period.
What is the fund's investment approach?
As a money market fund, the fund provides shareholders with an investment
vehicle that is made up of high quality income-producing securities that are
also very liquid in nature; that is, they can be converted to cash quickly. To
pursue its investment goal, the fund invests in a diversified portfolio of high
quality short-term debt securities, such as those issued by the United States
Government or its agencies or instrumentalities, certificates of deposit issued
by banks, repurchase agreements and commercial paper issued by corporations.
Generally, the fund is required to invest at least 95% of its assets in the
securities of issuers with the highest credit rating or the unrated equivalent
as determined by Dreyfus. It is also required to maintain an average
dollar-weighted portfolio maturity of 90 days or less.
What other factors influenced the fund's performance?
The primary factors influencing the fund's performance over the past six months
have been the continued strength of the U.S. economy and the series of
short-term interest-rate hikes initiated by the Federal Reserve Board (the
" Fed" ) in an attempt to slow economic growth and
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
forestall the buildup of inflationary pressures. In three separate moves during
November, February and March, the Fed raised interest rates for a total of 0.75
percentage points. These moves were in addition to the two rate hikes
implemented before the reporting period began, producing a total increase of
1.25 percentage points since last summer.
The fund was able to benefit from these rate hikes because we concentrated on
holding securities with shorter average maturities. By doing so, we enabled the
fund to take advantage of higher money market yields as rates were rising
In addition, during the fourth quarter of 1999 the money markets were busy
preparing for the possibility of problems that could result from Y2K concerns.
At that time, many dealers and issuers basically shut down their operations,
preferring to have little or no activity until after year-end. That move caused
a lack of liquidity in the overnight bond market. Once Y2K concerns had passed,
an event that some market analysts have since dubbed a "non-event," liquidity
once again returned to the bond markets, calming volatility levels.
Then, in mid-January, the government announced that it would use the federal
budget surplus to initiate a buyback program for outstanding Treasuries. This
announcement triggered a wave of purchases of long-term Treasury securities, a
move that drove yields for 30-year Treasury bonds below that of shorter term
securities, creating what' s called an inverted yield curve. An unusual
circumstance, an inverted yield curve occurs when short-term interest rates are
higher than long-term rates. Since most all other bonds are benchmarked off of
Treasury securities, including bonds held in this fund, the inverted yield curve
resulted in an increased level of volatility during the period.
What is the fund's current strategy?
Our strategy has been to retain the flexibility we need to seek high current
income by responding quickly to changing market conditions. To that end, we have
kept the portfolio's average maturity short at approximately 22 days as of the
end of the reporting period. As the U.S. economy continues to grow, we believe
that the Fed has more work to do in order to curb a potential reacceleration of
inflation. By keeping maturities near the short end of the range, we believe we
are positioning the fund to seek to capture potentially higher money market
yields that may accompany further interest-rate increases.
As of the end of the reporting period, the largest portion of the fund's assets
was invested in commercial paper, followed by repurchase agreements, corporate
notes and time deposits. During the course of the period, we trimmed our
exposure to commercial paper, choosing instead to deploy those assets to
repurchase agreements in an effort to earn the highest possible yield for the
fund.
May 15, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR
THE U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
FUND.
The Fund
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
Principal
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--1.6% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Svenska Handelsbanken (Yankee)
7.00%, 5/2/2001
(cost $9,998,106) 10,000,000 9,998,106
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER--52.6%
------------------------------------------------------------------------------------------------------------------------------------
Akzo Nobel Inc.
6.05%, 5/23/2000 5,000,000 4,981,606
Alpine Securitization Corp.
6.09%, 5/15/2000 5,000,000 4,988,197
American Honda Finance Corp.
5.99%, 5/3/2000 10,000,000 9,996,722
Amsterdam Funding Corp.
6.09%-6.15%, 5/22/2000-6/19/2000 15,000,000 14,921,457
Asset Portfolio Funding Corp.
6.10%, 5/18/2000 5,000,000 4,985,668
Associates First Capital B.V.
6.00%, 5/5/2000 10,000,000 9,993,433
AT & T Corp.
6.01%-6.02%, 5/1/2000-5/9/2000 15,000,000 14,986,644
Bass Finance Ltd.
6.06%-6.07%, 5/10/2000-5/15/2000 10,000,000 9,980,738
Bellsouth Telecommunications Inc.
6.05%, 5/25/2000 5,000,000 4,979,967
British Telecommunications Plc
6.03%, 5/9/2000 5,000,000 4,993,333
Coca-Cola Co.
5.98%, 5/5/2000 5,000,000 4,996,706
Corporate Asset Funding Co. Inc.
6.05%-6.09%, 5/11/2000-5/18/2000 10,000,000 9,977,388
Countrywide Home Loans Inc.
6.09%-6.10%, 5/12/2000-5/22/2000 10,000,000 9,973,067
CXC Inc.
6.07%, 5/8/2000 5,000,000 4,994,147
Daimlerchrysler North America Holding Corp.
6.06%, 5/23/2000 5,000,000 4,981,575
Eaton Corp.
5.97%, 5/19/2000 5,000,000 4,985,500
Edison International
6.08%, 5/17/2000 5,000,000 4,986,622
Falcon Asset Securitization Corp.
6.03%-6.11%, 5/3/2000-5/30/2000 15,000,000 14,949,391
Principal
COMMERCIAL PAPER (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FCE Bank
6.02%-6.04, 5/2/2000-5/18/2000 20,000,000 19,979,967
France Telecom
6.00%, 5/3/2000 10,000,000 9,996,717
General Electric Capital Corp.
6.00%, 5/3/2000 5,000,000 4,998,347
Georgia Power Co.
6.09%, 5/17/2000 5,000,000 4,986,511
Greenwich Funding Corp.
6.10%, 5/30/2000 5,000,000 4,975,592
Halifax Plc
6.02%, 5/16/2000 5,000,000 4,987,500
Halliburton Co.
6.03%-6.06%, 5/4/2000-5/16/2000 10,000,000 9,984,988
Homeside Lending Inc.
6.08%-6.11%, 5/8/2000-5/10/2000 15,000,000 14,980,647
International Securitization Corp.
6.08%-6.10%, 5/2/2000-5/23/2000 25,000,000 24,936,907
KFW International Finance.
5.92%, 5/24/2000 5,000,000 4,981,632
Market Street Funding Corp.
6.08%, 5/19/2000 5,000,000 4,984,875
Repsol International Finance B.V.
6.10%, 5/1/2000 5,000,000 5,000,000
Textron Inc.
5.99%, 5/4/2000 10,000,000 9,995,083
Variable Funding Capital Corp.
6.05%-6.08%, 5/10/2000-5/23/2000 10,000,000 9,974,007
Volkswagen of America Inc.
6.03%-6.06%, 5/5/2000-5/25/2000 20,000,000 19,967,378
Walt Disney Co.
6.03%, 5/9/2000 5,000,000 4,993,322
Windmill Funding Corp.
6.06%, 5/3/2000 5,000,000 4,998,325
Xerox Corp.
6.05%-6.13%, 5/4/2000-5/12/2000 10,000,000 9,988,181
TOTAL COMMERCIAL PAPER
(cost $319,362,140) 319,362,140
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
CORPORATE NOTES--14.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Bank One Corp
6.18%-6.22%, 1/3/2001-5/1/2001 20,000,000 (a) 20,000,000
Bear Stearns Cos. Inc.
6.38%, 10/13/2000 10,000,000 (a) 10,000,000
Branch Bank & Trust Co.
6.41%, 9/29/2000 10,000,000 (a) 9,997,560
Diageo Capital PLC
6.16%, 12/4/2000 10,000,000 9,995,672
Household Finance Corp.
6.40%, 9/14/2000 10,000,000 (a) 9,997,770
John Deere Capital Corp.
5.63%-6.12%, 7/7/2000-9/21/2000 15,000,000 (a) 15,003,262
Sigma Finance Corp.
6.30%, 8/2/2000 10,000,000 (a) 10,000,000
TOTAL CORPORATE NOTES
(cost $84,994,264) 84,994,264
------------------------------------------------------------------------------------------------------------------------------------
SHORT TERM BANK NOTES--1.6%
--------------------------------------------------------------------------------
Comerica Bank
6.10%, 4/20/2001
(cost $9,996,191) 10,000,000 (a) 9,996,191
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--29.6%
------------------------------------------------------------------------------------------------------------------------------------
Barclays De Zoette Wedd
5.73% dated 4/28/2000, due 5/1/2000 in the
amount of $40,019,100 (fully collateralized
by $14,528,000 U.S.Treasury Notes 6.00%
due 8/15/2000 and by $25,259,000 U.S. Treasury
Strips 4.25% due 1/15/2010 value $40,800,863) 40,000,000 40,000,000
Donaldson, Lufkin & Jenrette Securities Inc.
5.72% dated 4/28/2000, due 5/1/2000
amount of $90,042,900 (fully collateralized
by $13,725,000 U.S.Treasury Bills due
7/27/2000 to 10/5/2000, by $39,495,000 U.S. Treasury
Bonds 6.25% to14.00% due 11/15/2004 to 5/15/2030,
by $25,486,000 U.S. Treasury Notes 4.625% to 8.5%
due 5/31/2000 to 2/15/2010 and by $2,842,000 U.S.
U.S.Treasury Strips 3.875% due 1/15/2009
value $91,800,074) 90,000,000 90,000,000
Principal
REPURCHASE AGREEMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Goldman, Sachs & Co.
5.67% dated 4/28/2000, due 5/1/2000 in the
amount of $49,657,426 (fully collateralized
by $34,647,000 U.S.Treasury Bonds 6.75% to 13.25% due
5/15/2014 to 8/15/2026 and by $5,200,000 U.S. Treasury
Notes 8.75% due 5/15/2006 value $50,627,992) 49,633,974 49,633,974
TOTAL REPURCHASE AGREEMENTS
(cost $179,633,974) 179,633,974
------------------------------------------------------------------------------------------------------------------------------------
TIME DEPOSITS--3.5%
------------------------------------------------------------------------------------------------------------------------------------
Suntrust Bank (London)
5.88%, 5/1/2000
(cost $21,200,000) 21,200,000 21,200,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $625,184,675) 102.9% 625,184,675
LIABILITIES, LESS CASH AND RECEIVABLES (2.9%) (17,680,195)
NET ASSETS 100.0% 607,504,480
(A) VARIABLE INTEREST RATE-SUBJECT TO PERIODIC CHANGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
------------------------------------------------------------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments
(including Repurchase Agreements of
$179,633,974)--Note 1(c) 625,184,675 625,184,675
Interest receivable 840,061
626,024,736
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 161,429
Cash overdraft due to Custodian 8,360,720
Payable for investment securities purchased 9,998,107
18,520,256
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 607,504,480
------------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 607,514,636
Accumulated net realized gain (loss) on investments (10,156)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 607,504,480
------------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
(4 billion shares of $.001 par value shares of Capital Stock authorized)
607,514,636
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 18,605,061
EXPENSES:
Management fee--Note 2(a) 472,252
Shareholder servicing costs--Note 2(b) 472,252
TOTAL EXPENSES 944,504
INVESTMENT INCOME--NET 17,660,557
------------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($) 156
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 17,660,713
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 17,660,557 25,488,760
Net realized gain (loss) from investments 156 --
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 17,660,713 25,488,760
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (17,660,557) (25,488,760)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($1.00 PER SHARE):
Net proceeds from shares sold 2,001,723,063 3,392,852,344
Dividends reinvested 5,108,104 8,943,144
Cost of shares redeemed (1,983,797,556) (3,297,190,786)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 23,033,611 104,604,702
TOTAL INCREASE (DECREASE) IN NET ASSETS 23,033,767 104,604,702
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 584,470,713 479,866,011
END OF PERIOD 607,504,480 584,470,713
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .028 .048 .053 .053 .052 .056
Distributions:
Dividends from investment
income--net (.028) (.048) (.053) (.053) (.052) (.056)
Net asset value,
end of period 1.00 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 5.66(a) 4.91 5.47 5.42 5.33 5.77
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .30(a) .30 .30 .30 .30 .30
Ratio of net investment
income to average
net assets 5.59(a) 4.81 5.34 5.27 5.25 5.61
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 607,504 584,471 479,866 533,154 575,700 773,602
(A) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Institutional Prime Money Market 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, as amended (the "Act"), as
an open-end management investment company and operates as a series company
currently offering nineteen series including the fund. The fund's investment
objective is to seek a high level of current income consistent with stability of
principal by investing in high grade money market instruments. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., which is a wholly owned subsidiary
of Mellon Financial Corporation. Effective March 22, 2000, Dreyfus Service
Corporation (" DSC" ), a wholly-owned subsidiary of the Manager, became the
distributor of the fund's shares, which are sold to the public without a sales
charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was the
distributor.
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 are valued at amortized cost
in accordance with Rule 2a-7 of the Act, which has been determined by the fund's
Board of Directors to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
(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
counter party default, the fund has the 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, 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 provi
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
sions of the Code, and to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $10,313 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to October 31, 1999. If not applied, $167
of the carryover expires in fiscal 2004, $9,373 expires in fiscal 2005 and $773
expires in fiscal 2006.
At April 30, 2000, 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).
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, shareholder servicing 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 fees). Each director receives $40,000 per year, plus $5,000
for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the
" Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee meetings
attended which are not held in conjunction with a regularly scheduled board
meeting and $500 for Board meet ings and separate committee meetings attended
that are conducted by telephone and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional 25% of such
compensation (with the exception of reimbursable amounts) . In the event that
there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus
High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the 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 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) Shareholder servicing plan: Under the Shareholder Servicing Plan (the
"Plan" ), the fund may pay up to .15% of the value of the average daily net
assets annually to compensate certain banks, brokers, dealers or other financial
institutions for shareholder services. During the period ended April 30, 2000,
the fund was charged $472,252 pursuant to the Plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of a 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 any agreement
related to the Plan.
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended April 30, 2000, the fund did not borrow
under the line of credit.
The Fund
For More Information
Dreyfus Institutional Prime Money Market 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 922SA004
Dreyfus Institutional
U.S. Treasury
Money Market Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
7 Statement of Assets and Liabilities
8 Statement of Operations
9 Statement of Changes in Net Assets
10 Financial Highlights
11 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Institutional
U.S. Treasury Money Market Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Institutional U.S.
Treasury Money Market Fund, covering the six-month period from November 1, 1999
through April 30, 2000. Inside, you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with the
fund's portfolio manager, Laurie Carroll.
When the reporting period began, international and domestic economies were
growing faster than most analysts expected, giving rise to concerns that
long-dormant inflationary pressures might reemerge. Consumers continued to spend
heavily, unemployment levels reached new lows and the stock market, while highly
volatile, continued to climb.
Because unsustainable economic growth may trigger unwanted inflationary
pressures, the Federal Reserve Board raised key short-term interest rates three
times during the reporting period. In total, the Federal Reserve Board has
raised short-term interest rates by 1.25 percentage points since late June 1999.
While these economic influences adversely affected longer term bonds, they
positively influenced money market yields.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Institutional U.S. Treasury Money Market
Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Laurie Carroll, Portfolio Manager
How did Dreyfus Institutional U.S. Treasury Money Market Fund perform during the
period?
For the six-month period ended April 30, 2000, Dreyfus Institutional U.S.
Treasury Money Market Fund produced an annualized yield of 5.12%, and after
taking into account the effect of compounding, an annualized effective yield of
5.25%.(1)
We attribute the fund' s positive performance to our maturity management
strategy, which led us to maintain a relatively short average maturity for the
portfolio. This relatively defensive position enabled us to capture higher
yields more quickly as interest rates rose during the reporting period. In
addition, our emphasis on repurchase agreements helped boost the fund's overall
returns.
What is the fund's investment approach?
As a U.S. Treasury money market fund, the fund provides shareholders with an
investment vehicle that invests in a portfolio of U.S. Treasury securities as
well as repurchase agreements that are backed by U.S. Treasuries. A major
benefit of these securities is that they are very liquid in nature; that is,
they can be converted to cash quickly. Because U.S. Treasury obligations are
backed by the full faith and credit of the U.S. Government, they are generally
considered to be among the highest quality investments available. By investing
in these obligations, the fund seeks to add an incremental degree of safety to
the portfolio. The fund is required to maintain an average dollar-weighted
maturity of 90 days or less.
What other factors influenced the fund's performance?
The primary factor influencing the fund's performance over the past six months
has been the continued strength of the U.S. economy and the series of short-term
interest-rate hikes initiated by the Federal Reserve
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Board (the "Fed" ) in an attempt to slow economic growth and forestall the
buildup of inflationary pressures. In three separate moves during November,
February and March, the Fed raised interest rates for a total of 0.75 percentage
points. These moves were in addition to the two rate hikes implemented before
the reporting period began, producing a total increase of 1.25 percentage points
since last summer.
The fund was able to benefit from these rate hikes because we concentrated on
holding repurchase agreements and Treasury bills with shorter average
maturities. By doing so, we enabled the fund to take advantage of higher money
market yields as rates were rising.
In addition, during the fourth quarter of 1999 the money markets were busy
preparing for the possibility of problems that could have resulted from Y2K
concerns. At that time, many dealers and issuers basically shut down their
operations, preferring to have little to no activity until after year-end. That
move caused a lack of liquidity in the repurchase agreement market. Commonly
referred to as repos, repurchase agreements are overnight loans to government
dealers that are collateralized, in the case of this fund, with U.S. Treasuries.
The primary purpose of investing in repos is to provide liquidity to the fund.
However, because their rates were higher than Treasury bills during the period,
they also generated a higher return.
In response to the lack of liquidity in the repo market, in December 1999, we
chose to limit our exposure to repurchase agreements and instead to concentrate
the fund's investments in short-term Treasury bills. Once Y2K concerns had
subsided, an event that some market analysts have since dubbed a "non-event," we
resumed our normal investment practice of investing in a combination of U.S.
Treasury securities and repurchase agreements.
What is the fund's current strategy?
Our strategy has been to retain the flexibility we need to seek high current
income by responding quickly to changing market conditions. To that end, we have
kept the portfolio's average maturity short. As the U.S. economy continues to
grow, we believe the Federal Reserve Board has more work to do in order to curb
a potential reacceleration of inflation. By keeping maturities near the short
end of their range, we believe we are positioning the fund to capture
potentially higher money market yields that may accompany further interest-rate
increases.
Finally, at the end of the reporting period, we continued to allocate about 42%
of the fund' s total assets to repurchase agreements in an effort to earn the
highest possible yield for the fund. However, we will continue to monitor the
investment environment and make changes to the portfolio as deemed necessary.
May 15, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR
THE U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
FUND.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
STATEMENT OF INVESTMENTS
Annualized
Yield on
Date of Principal
U.S. TREASURY BILLS--40.2% Purchase (%) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/11/2000 5.76 50,000,000 49,920,556
6/8/2000 5.44 30,000,000 29,828,683
6/15/2000 5.75 40,000,000 39,715,750
7/20/2000 5.71 40,000,000 39,500,000
7/27/2000 5.72 20,000,000 19,727,642
TOTAL U.S. TREASURY BILLS (cost $178,692,631) 178,692,631
------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY NOTES--16.9%
------------------------------------------------------------------------------------------------------------------------------------
5.50%, 5/31/2000 5.61 20,000,000 19,996,307
5.375%, 6/30/2000 5.73 20,000,000 19,985,979
5.375%, 7/31/2000 5.73 35,000,000 34,956,310
TOTAL U.S. TREASURY NOTES (cost $74,938,596) 74,938,596
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--42.6%
------------------------------------------------------------------------------------------------------------------------------------
Barclays De Zoette Wedd Securities, Inc.
dated 4/28/2000, due 5/1/2000 in the amount of
$60,028,650 (fully collateralized by $59,333,000
U.S. Treasury Notes, 3.875% due 4/15/2029,
value $61,200,817 5.73 60,000,000 60,000,000
Donaldson, Lufkin & Jenrette Securities, Inc.
dated 4/28/2000, due 5/1/2000 in the amount of
$70,033,367 (fully collateralized by $22,158,000
U.S. Treasury Notes 5.625% to 7.00%, due from
2/28/2001 to 5/15/2007, and $30,843,000
U.S. Treasury Bonds 7.625% to 13.25%, due from
8/15/2003 to 2/15/2025 and $9,026,000
U.S. Treasury Bills due from 5/4/2000 to 10/19/2000,
value $71,400,538) 5.72 70,000,000 70,000,000
Goldman, Sachs & Co.
dated 4/28/2000, due 5/1/2000 in the amount of
$59,373,068 (fully collateralized by $38,609,000
U.S. Treasury Notes, 4.00% to 7.875% due from
10/31/2000 to 2/15/2004 and $15,018,000
U.S Treasury Bonds, 11.25% due 2/15/15,
value $60,532,035) 5.67 59,345,028 59,345,028
TOTAL REPURCHASE AGREEMENTS (cost $189,345,028) 189,345,028
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $442,976,255) 99.7% 442,976,255
CASH AND RECEIVABLES (NET) .3% 1,146,276
NET ASSETS 100.0% 444,122,531
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments
(including Repurchase Agreements of $189,345,028
--Note 1(c) 442,976,255 442,976,255
Interest receivable 1,380,508
444,356,763
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 108,942
Cash overdraft due to Custodian 125,290
234,232
--------------------------------------------------------------------------------
NET ASSETS ($) 444,122,531
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 444,122,909
Accumulated net realized gain (loss) on investments (378)
--------------------------------------------------------------------------------
NET ASSETS ($) 444,122,531
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(2 billion shares of $.001 par value Capital Stock authorized) 444,122,909
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 10,822,428
EXPENSES:
Management fee--Note 2(a) 298,284
Shareholder servicing costs--Note 2(b) 298,284
TOTAL EXPENSES 596,568
INVESTMENT INCOME--NET, REPRESENTING NET INCREASE IN
NET ASSETS RESULTING FROM OPERATIONS 10,225,860
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 10,225,860 25,986,617
Net realized gain (loss) on investments -- (378)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 10,225,860 25,986,239
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (10,225,860) (25,986,617)
Net realized gain on investments -- (160,744)
TOTAL DIVIDENDS (10,225,860) (26,147,361)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold 1,837,715,367 4,828,958,916
Dividends reinvested 1,011,926 3,272,221
Cost of shares redeemed (1,867,945,915) (5,004,026,360)
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS (29,218,622) (171,795,223)
TOTAL INCREASE (DECREASE) IN NET ASSETS (29,218,622) (171,956,345)
--------------------------------------------------------------------------------
ASSETS ($):
Beginning of Period 473,341,153 645,297,498
END OF PERIOD 444,122,531 473,341,153
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .026 .047 .051 .050 .051 .054
Distributions:
Dividends from investment
income--net (.026) (.047) (.051) (.050) (.051) (.054)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 5.17(a) 4.58 5.22 5.16 5.17 5.57
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .30(a) .30 .30 .30 .30 .30
Ratio of net investment income
to average net assets 5.13(a) 4.45 5.10 5.04 5.06 5.44
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 444,123 473,341 645,297 776,726 666,360 767,948
(A) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Institutional U.S. Treasury Money Market 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, as amended (the "Act"), as
an open-end management investment company and operates as a series company
currently offering nineteen series including the fund. The fund's investment
objective is to seek a high level of current income consistent with stability of
principal and conservative investment risk by investing in direct obligations of
the U.S. Treasury and repurchase agreements secured by such obligations. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A, which is a wholly-owned
subsidiary of Mellon Financial Corporation. Effecive March 22, 2000, Dreyfus
Service Corporation (" DSC"), a wholly-owned subsidiary of the Manager, became
the distributor of the fund's shares, which are sold to the public without a
sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
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 are valued at amortized cost
in accordance with Rule 2a-7 of the Act, which has been determined by the fund's
Board of Directors to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
(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
counter party default, the fund has the 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, if any, 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, if any, it is the policy of the 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
At April 30, 2000, 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).
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, shareholder servicing 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 fees). Each director receives $40,000 per year, plus $5,000
for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the
"Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee meetings
attended which are not held in conjunction with a regularly scheduled board
meeting and $500 for Board meet The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
ings and separate committee meetings attended that are conducted by telephone
and is reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board receives an additional 25% of such compensation (with the exception of
reimbursable amounts). In the event that there is a joint committee meeting of
the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000
fee will be allocated between the Dreyfus/Laurel Funds and the 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
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) Shareholder servicing plan: Under the Shareholder Servicing Plan (the
"Plan" ), the fund may pay up to .15% of the value of the average daily net
assets annually to compensate certain banks, brokers, dealers or other financial
institutions for shareholder services. During the period ended April 30, 2000,
the fund was charged $298,284 pursuant to the Plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of a 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 or any agreement related to the
Plan.
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended April 30, 2000, the fund did not borrow
under the line of credit.
NOTES
For More Information
Dreyfus
Institutional U.S. Treasury
Money Market 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 930SA004
Dreyfus
Money Market
Reserves
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Money Market Reserves
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Money Market
Reserves, covering the six-month period from November 1, 1999 through April 30,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, David Hertan.
When the reporting period began, international and domestic economies were
growing faster than most analysts expected, giving rise to concerns that
long-dormant inflationary pressures might reemerge. Consumers continued to spend
heavily, unemployment levels reached new lows and the stock market, while highly
volatile, continued to climb.
Because unsustainable economic growth may trigger unwanted inflationary
pressures, the Federal Reserve Board raised key short-term interest rates three
times during the reporting period. In total, the Federal Reserve Board has
raised short-term interest rates by 1.25 percentage points since late June 1999.
While these economic influences adversely affected long-term bonds, they
positively influenced money market yields.
We appreciate your confidence over the past six months and we look forward to
your continued participation in Dreyfus Money Market Reserves.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
David Hertan, Portfolio Manager
How did Dreyfus Money Market Reserves perform during the period?
For the six-month period ended April 30, 2000, Dreyfus Money Market Reserves
Investor shares produced an annualized yield of 5.15% while its Class R shares
produced an annualized yield of 5.35%. After taking into account the effect of
compounding, the annualized effective yields for the Investor shares and Class R
shares were 5.28% and 5.48%, respectively.(1)
We attribute the fund's performance to the fact that we maintained a relatively
short average maturity in the portfolio, which enabled us to capture higher
yields as interest rates were rising during the reporting period.
What is the fund's investment approach?
Our goal is to provide shareholders with an investment vehicle that offers a
high level of income, a stable net asset value and a portfolio of securities
that are very liquid in nature; that is, they can be converted to cash quickly.
To pursue that goal, we invest in a diversified portfolio of high quality
short-term debt securities, such as those issued by the United States Government
or its agencies, certificates of deposit issued by banks, repurchase agreements
with securities dealers, and commercial paper issued by corporations. Generally,
the fund is required to invest at least 95% of its assets in the securities of
issuers with the highest credit rating or the unrated equivalent as determined
by Dreyfus. It is also required to maintain an average dollar-weighted portfolio
maturity of 90 days or less.
What other factors influenced the fund's performance?
During the past six months, the returns offered by money market securities, such
as those held in this fund, have continued to rise. That' s The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
because interest rates, which generally determine the returns for these types of
investments, have also steadily risen during the period.
The primary factor that influenced the fund's performance during the past six
months has been the steady stream of short-term interest-rate hikes initiated by
the Federal Reserve Board (the "Fed"). In three separate moves in November,
February and March, the Fed raised interest rates for a total of 0.75 percentage
points. The fund was able to benefit from these rate hikes because we
concentrated on holding securities with a shorter average maturity. By doing so,
the fund was able to take advantage of the higher interest rates, and therefore
higher yields, as rates were rising.
In addition, we continued to increase our position in adjustable-rate notes
throughout the past six months. For example, at the beginning of the reporting
period, the fund allocated approximately 49% of its assets to adjustable-rate
notes -- by the end of the period that allocation had increased to approximately
52% . Commonly referred to as floating-rate notes, adjustable-rate notes are
bonds that have a variable interest rate that is linked to a money market index,
such as U.S. Treasury bill rates. The benefit of owning these bonds is that they
provide the fund with protection against rising interest rates. With interest
rates rising during the period, adjustable-rate notes have been particularly
beneficial for the fund.
What is the fund's current strategy?
As of the end of the reporting period, the largest portion of the fund's assets
was invested in floating rate notes, followed by foreign bank obligations,
commercial paper, short-term bank notes and time deposits. Towards the end of
the period, we trimmed our commercial paper and one-year CD exposure and
deployed those assets to increase the amount of assets in adjustable-rate notes
We are also maintaining a defensive posture with respect to the portfolio's
average maturity. As of the end of the reporting period the fund's average
maturity was 57 days. By comparison, in a more "nor
malized" market, or one characterized by less volatility and a more stable
interest-rate environment, we would expect to maintain an average maturity in
the high 60s to low 70s range.
As the U.S. economy continues to grow, we believe the Fed has more work to do in
terms of attempting to curb inflation. By keeping a shorter maturity, we feel we
have positioned the fund to seek to take advantage of any possible further
interest-rate moves.
May 15, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR
THE U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
FUND.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF INVESTMENTS
Principal
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--30.7% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Bank of Nova Scotia (Yankee)
6.70%, 2/5/2001 8,000,000 7,997,088
Bank of Scotland (Yankee)
6.27%, 10/2/2000 4,100,000 4,098,475
Bayerische Hypo-Und Vereinsbank (Yankee)
6.83%, 4/6/2001 15,000,000 14,998,013
Bayerische Landesbank NY (Yankee)
6.15%, 3/1/2001 10,000,000 9,995,419
CIBC World Markets Inc. (Yankee)
6.00%, 5/23/2000 25,000,000 25,000,000
Commerzbank AG (Yankee)
6.20%-6.80%, 8/10/2000-4/17/2001 22,000,000 21,997,265
Credit Commerciale de Belgique (Yankee)
5.24%, 5/15/2000 10,000,000 9,999,834
DG Bank Deutsche Genossenschaftsbank AG (Yankee)
6.24%, 7/6/2000 15,000,000 15,000,271
Deutsche Bank AG (Yankee)
6.57%, 1/22/2001 15,000,000 14,995,325
Dresdner Bank AG (Yankee)
6.75%, 2/26/2001 7,000,000 6,997,810
First National Bank of Maryland (Yankee)
6.07%, 8/7/2000 12,000,000 11,998,821
Royal Bank of Canada (Yankee)
5.64%, 6/14/2000 10,000,000 9,999,653
Svenska Handelsbanken Inc. (Yankee)
6.01%, 5/8/2000 17,000,000 17,000,000
UBS AG (Yankee)
6.00%, 5/31/2000 10,000,000 9,998,535
Westdeutsche Landesbank Girozentrale (Yankee)
6.12%, 3/23/2001 15,000,000 14,993,471
Westpac Banking Corp. (Yankee)
6.05%, 10/2/2000 15,000,000 14,993,352
TOTAL NEGOTIABLE CERTIFICATES OF DEPOSIT
(cost $210,063,332) 210,063,332
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER--15.2%
------------------------------------------------------------------------------------------------------------------------------------
Associates Corp. of North America
6.05%, 5/1/2000 20,000,000 20,000,000
Centric Cap. Corp.
6.07%, 5/15/2000-5/17/2000 31,000,000 30,923,104
Countrywide Home Loans
6.08%, 5/17/2000 5,000,000 4,986,533
Principal
COMMERCIAL PAPER (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Fountain Square Communication Funding Corp.
6.09%-6.10%, 5/1/2000-5/2/2000 31,755,000 31,754,364
GTE Corp.
6.09%, 5/5/2000 2,500,000 2,498,314
Pitney Bowes Credit Corp.
6.05%, 5/1/2000 8,300,000 8,300,000
UBS Finance Delaware LLC
6.10%, 5/1/2000 5,800,000 5,800,000
TOTAL COMMERCIAL PAPER
(cost $104,262,315) 104,262,315
------------------------------------------------------------------------------------------------------------------------------------
CORPORATE NOTES--46.7%
------------------------------------------------------------------------------------------------------------------------------------
Abbey National Treasury Services
6.19%, 5/1/2000 10,000,000 (a) 10,000,000
Associates Corp. of North America
5.19%, 6/15/2000 12,000,000 12,013,205
AT&T Capital Corp.
6.25%-6.40%, 11/15/2000-12/1/2000 12,000,000 (a) 12,058,844
AT&T Corp.
6.19%-6.28%, 7/13/2000-4/9/2001 18,000,000 (a) 18,003,334
Bank Austria AG
6.08%, 2/16/2001 6,000,000 (a) 5,997,086
Bank of Scotland
6.31%, 9/21/2000 12,000,000 (a) 11,998,143
Bank One Corp.
6.04%, 11/24/2000 6,000,000 (a) 6,007,496
Caisse Centrale Du Quebec
6.05%, 5/15/2000 24,000,000 (a) 24,000,061
Caterpillar Financial Services
6.11%-6.19%, 5/26/2000-10/12/2000 23,000,000 (a) 23,002,619
Chase Manhattan Corp.
6.20%, 10/13/2000 1,500,000 (a) 1,501,706
Chrysler Financial Co. LLC
6.12%, 5/11/2000-1/29/2001 16,500,000 (a) 16,502,880
CIT Group Holdings Inc.
5.06%-5.10%, 5/26/2000-6/2/2000 7,000,000 7,006,555
Citicorp
6.05%, 11/10/2000 2,500,000 (a) 2,500,935
Countrywide Home Loans, Inc.
6.09%, 8/3/2000 25,000,000 24,999,816
Daimler-Benz North America Corp.
6.18%, 6/30/2000 15,000,000 (a) 14,998,304
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
COMMERCIAL PAPER (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
First Chicago Corp.
6.10%, 9/5/2000 12,115,000 (a) 12,114,093
Ford Motor Credit Corp.
6.11%, 6/8/2000 2,500,000 (a) 2,500,540
Glaxo Wellcome PLC
5.23%, 5/31/2000 4,645,000 4,649,293
Homeside Lending Inc.
6.30%, 8/16/2000 14,875,000 (a) 14,872,741
Hydro-Quebec
6.33%-6.47%, 12/4/2000-12/15/2000 2,250,000 (a) 2,283,403
IBM Credit Corp.
6.02%, 5/21/2001 15,000,000 (a) 15,002,614
Merrill Lynch & Co.
6.00%-6.16%, 5/22/2000-5/8/2001 20,000,000 (a) 20,005,527
Morgan (J.P.) & Co.
6.12%, 3/16/2001 15,000,000 (a) 15,000,000
Morgan Stanley Group, Inc.
6.00%, 2/6/2001 1,470,000 (a) 1,472,689
Morgan Stanley, Dean Witter, Discover & Co.
6.11%-6.20%, 6/27/2000-3/16/2001 23,465,000 (a) 23,469,652
New Jersey Bell Telephone Co.
6.46%, 11/1/2000 1,002,000 (a) 993,733
Norwest Financial Inc.
6.23%, 7/7/2000 10,000,000 (a) 9,999,011
TCI Communications Inc.
6.03%, 3/12/2001 1,000,000 (a) 1,005,197
US Bancorp.
6.11%, 3/21/2001 5,000,000 (a) 5,004,635
TOTAL CORPORATE NOTES
(cost $318,964,112) 318,964,112
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM BANK NOTES--7.2%
------------------------------------------------------------------------------------------------------------------------------------
American Express Centurion Bank
6.15%, 3/29/2001 15,000,000 (a) 14,998,636
Comerica Bank
6.12%, 9/25/2000 5,000,000 (a) 5,001,414
First Union National Bank
6.19%, 5/17/2000 9,000,000 (a) 9,000,000
Key Bank N.A.
6.07%, 6/19/2000 15,000,000 14,986,875
Principal
SHORT-TERM BANK NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PNC Bank NA
6.09%, 5/26/2000 5,000,000 (a) 5,000,039
TOTAL SHORT-TERM BANK NOTES
(cost $48,986,964) 48,986,964
------------------------------------------------------------------------------------------------------------------------------------
TIME DEPOSITS--.6%
------------------------------------------------------------------------------------------------------------------------------------
Branch Bank & Trust Co. (Grand Cayman)
5.87%, 5/1/2000
(cost $3,973,000) 3,973,000 3,973,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $686,249,723) 100.4% 686,249,723
LIABILITIES, LESS CASH AND RECEIVABLES (.4%) (2,788,578)
NET ASSETS 100.0% 683,461,145
(A) VARIABLE INTEREST RATE--SUBJECT TO PERIODIC CHANGE.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 686,249,723 686,249,723
Interest receivable 7,955,144
694,204,867
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 354,808
Cash overdraft due to Custodian 293,160
Payable for investment securities purchased 10,095,754
10,743,722
--------------------------------------------------------------------------------
NET ASSETS ($) 683,461,145
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 683,478,656
Accumulated net realized gain (loss) on investments (17,511)
--------------------------------------------------------------------------------
NET ASSETS ($) 683,461,145
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE PER SHARE
Investor Shares Class R Shares
------------------------------------------------------------------------------------------------------------------------------------
Net Assets ($) 344,811,034 338,650,111
Shares Outstanding 344,820,270 338,658,383
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 1.00 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 19,555,930
EXPENSES:
Management fee--Note 2(a) 1,665,288
Distribution fees (Investor Shares)--Note 2(b) 344,474
TOTAL EXPENSES 2,009,762
INVESTMENT INCOME--NET 17,546,168
--------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($) 3,728
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 17,549,896
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 17,546,168 29,794,053
Net realized gain (loss) on investments 3,728 1,215
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 17,549,896 29,795,268
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Investor shares (8,903,819) (15,677,015)
Class R shares (8,642,349) (14,117,038)
TOTAL DIVIDENDS (17,546,168) (29,794,053)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Investor shares 500,779,724 901,165,096
Class R shares 462,802,319 887,124,611
Dividends reinvested:
Investor shares 8,584,515 15,260,680
Class R shares 4,106,888 7,024,686
Cost of shares redeemed:
Investor shares (512,151,425) (870,302,688)
Class R shares (428,647,118) (843,178,882)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 35,474,903 97,093,503
TOTAL INCREASE (DECREASE) IN NET ASSETS 35,478,631 97,094,718
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 647,982,514 550,887,796
END OF PERIOD 683,461,145 647,982,514
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class the fiscal
periods indicated. All information reflects financial results for a single fund
share. Total return shows how much your investment in the fund would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the fund's
financial statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six Months Ended
April 30, 2000 Year Ended October 31,
---------------------------------------------------------------------
INVESTOR SHARES (Unaudited) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .026 .045 .050 .049 .048 .052
Distributions:
Dividends from investment
income--net (.026) (.045) (.050) (.049) (.048) (.052)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 5.21(a) 4.64 5.13 5.04 4.94 5.28
---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .70(a) .70 .70 .70 .70 .70
Ratio of net investment income
to average net assets 5.16(a) 4.54 5.01 4.95 4.84 5.25
---------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 344,811 347,596 301,473 204,851 144,168 161,819
(A) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31,
---------------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .027 .047 .052 .051 .050 .053
Distributions:
Dividends from investment
income--net (.027) (.047) (.052) (.051) (.050) (.053)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 5.41(a) 4.84 5.34 5.25 5.16 5.44
---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .50(a) .50 .50 .50 .50 .50
Ratio of net investment income
to average net assets 5.36(a) 4.74 5.21 5.13 5.01 5.40
---------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 338,650 300,386 249,415 232,032 170,409 139,787
(A) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Money Market Reserves (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, as amended (the "Act" ), as an open-end
management investment company and operates as a series company currently
offering nineteen series including the fund. The fund's investment objective is
to seek a high level of current income consistent with stability of principal by
investing in high-grade money market instruments. The Dreyfus Corporation (the
" Manager" ) serves as the fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. (" Mellon Bank" ), which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 2 billion of $.001 par value Capital Stock in each of the
following classes of shares: Investor and Class R. 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) 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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(a) Portfolio valuation: Investments in securities are valued at amortized cost
in accordance with Rule 2a-7 of the Act, which has been determined by the fund's
Board of Directors to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
(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. Cost of investments represents amortized cost.
(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
counter party default, the fund has the 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $21,000 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to October 31, 1999. If not applied, $8,000
of the carryover expires in fiscal 2003 and $13,000 expires in fiscal 2005.
At April 30, 2000, 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).
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 .50% 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 The Fun
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 fees). Each director receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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: The fund has adopted a distribution plan (the "Plan")
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 attributable to its Investor
shares to compensate the distributor for shareholder servicing activities
primarily intended to result in the sale of Investor shares. The Class R shares
bear no distribution fee. During the period April 30, 2000, Investor shares were
charged $344,474 pursuant to the Plan of which $340,534 was paid to DSC.
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 or in any agreement related to
the Plan.
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended April 30, 2000, the fund did not borrow
under the line of credit.
The Fund
NOTES
For More Information
Dreyfus Money Market Reserves
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 317SA004
Dreyfus
Municipal Reserves
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
16 Financial Highlights
18 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Municipal Reserves
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Municipal Reserves,
covering the six-month period from November 1, 1999 through April 30, 2000.
Inside you' ll find valuable information about how the fund was managed during
the reporting period, including a discussion with the fund's portfolio manager,
John Flahive.
When the reporting period began, international and domestic economies were
growing faster than most analysts expected, giving rise to concerns that
long-dormant inflationary pressures might reemerge. Consumers continued to spend
heavily, unemployment levels reached new lows and the stock market, while highly
volatile, continued to climb.
Because unsustainable economic growth may trigger unwanted inflationary
pressures, the Federal Reserve Board raised key short-term interest rates three
times during the reporting period. In total, the Federal Reserve Board has
raised short-term interest rates by 1.25 percentage points since late June 1999.
While these economic influences adversely affected longer term municipal bonds,
they positively influenced tax-exempt money market yields.
We appreciate your confidence over the past six months and we look forward to
your continued participation in Dreyfus Municipal Reserves.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
John Flahive, Portfolio Manager
How did Dreyfus Municipal Reserves perform during the period?
For the six-month period ended April 30, 2000, the fund's Investor shares
produced an annualized yield of 3.04% and, after taking into account the effect
of compounding, the annualized effective yield was 3.09%.(1) The fund's Class R
shares provided a 3.24% annualized yield and a 3.29% annualized effective
yield.(2)
We attribute the fund's positive performance to two factors. First, we allocated
a large percentage of the fund' s assets to variable securities, which are
securities with yields that are adjusted based on changes in the money market
rate. The combination of holding more adaptable securities and the ability to
reinvest proceeds from maturities at higher interest rates allowed the portfolio
to move quickly to capture higher yields as interest rates rose during the
period.
What is the fund's investment approach?
Our goal is to seek as high a level of federally tax-exempt income as is
practical while maintaining a stable $1.00 share price. To achieve this
objective, we employ two primary strategies. First and foremost, we attempt to
add value by selecting the individual tax-exempt money market instruments that
we believe are most likely to provide the highest returns with the least risk.
Second, we actively manage the portfolio's average maturity in anticipation of
supply-and-demand changes in the short-term municipal marketplace.
Using a "bottom-up" approach that focuses on individual securities rather than
economic or market trends, we constantly search for securities that, in our
opinion, represent better values than we currently hold in the portfolio. When
we find securities that we believe will help us enhance the fund's yield without
sacrificing quality, we buy them and sell what we feel are less attractive
securities.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
The management of the portfolio's average maturity is a more tactical approach.
If we expect the demand for securities to decrease temporarily, we may reduce
the portfolio' s average maturity to make cash available for the purchase of
higher yielding securities.
If we expect demand for short-term municipal securities to surge at a time when
we anticipate little issuance and, therefore, lower yields, we may increase the
portfolio' s average maturity to maintain current yields for as long as
practical. At other times, we generally try to maintain a neutral average
maturity that is consistent with our benchmark index.
What other factors influenced the fund's performance?
The primary factors influencing the fund's performance over the past six months
have been the continued strength of the U.S. economy and the series of
short-term interest-rate hikes initiated by the Federal Reserve Board (the
" Fed" ) in an attempt to slow economic growth and forestall the buildup of
inflationary pressures. In three separate moves during November, February and
March, the Fed raised interest rates for a total of 0.75 percentage points.
These moves were in addition to the two rate hikes implemented before the
reporting period began, producing a total increase of 1.25 percentage points
since last summer. These changes helped the fund increase its yield as money
market rates rose with general interest rates.
In addition, seasonal changes in the tax-exempt money market have created
supply-and-demand fluctuations. For example, in late December, a lack of demand
caused short-term municipal yields to rise. However, by mid-January, demand
increased and yields began to decline. Then, in mid-April demand decreased again
because many investors used their liquid assets to pay income tax liabilities.
We responded to these changes by modifying our investments in Variable-Rate
Demand Notes (" VRDNs" ), which are issued by investment banks through the
securitization of long-term municipal bonds.
What is the fund's current strategy?
We are currently emphasizing VRDNs because they provide the fund with protection
against rising interest rates. As of April 30, 2000, about 72% of the portfolio
was allocated to VRDNs, while municipal notes comprised 22%, respectively. In
addition, we are currently keeping a longer average weighted maturity -- at the
end of the period it was in the 48-day range. We believe that by maintaining
this asset allocation strategy, along with our longer average maturity stance,
we are positioning the portfolio to benefit from the current rising
interest-rate environment.
May 15, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES, AND SOME INCOME MAY
BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR THE U.S.
GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT
$1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
TAX EXEMPT INVESTMENTS--100.6% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALASKA--1.4%
Alaska Industrial Development Authority, Revenue,
VRDN (Providence Medical Office Building)
4.25% (LOC; Kredietbank) 3,380,000 (a) 3,380,000
ARIZONA--1.8%
Maricopa County Pollution Control Corporation, PCR, Refunding,
VRDN (Arizona Public Service Co.) 6.05%
Series E (LOC; Bank of America) 4,300,000 (a) 4,300,000
COLORADO--3.3%
Dove Valley Metropolitan District of Arapohoe County,
Revenue, Refunding
3.95%, Series B, 11/1/2000
(LOC; Banque Nationale de Paris) 1,000,000 1,000,000
Interstate South Metropolitan District, Refunding
3.95%, Series B, 11/1/2000
(LOC; Banque Nationale de Paris) 975,000 975,000
Panaroma Metropolitian District
4%, Series A, 12/01/2000
(LOC; Banque Nationale de Paris) 2,300,000 2,300,000
SBC Metropolitan District:
4%, 12/1/2000(LOC; US Bancorp) 1,000,000 1,000,000
4%, Series 99, 12/1/2000 (LOC; U.S. Bancorp) 2,655,000 2,655,000
DELAWARE--1.1%
Delaware Transportation Authority,
Transportation System Revenue
6.75%, 7/01/2000 (LOC; U.S. Government Securities) 2,500,000 2,560,871
FLORIDA--10.4%
Alachua County Health Facilities Authority,
Health Facility Revenue,
VRDN (Shands Teaching Hospital)
5.50%, Series B (Insured; MBIA and LOC; Suntrust Bank) 1,600,000 (a) 1,600,000
Broward County Housing Finance Authority, MFHR, Refunding,
VRDN (Waters Edge Project) 5.05% 6,740,000 (a) 6,740,000
Dade County Industrial Development Authority,IDR,VRDN
(Dolphins Stadium Project):
5%, Series A (LOC; Societe Generale) 1,100,000 (a) 1,100,000
5%, Series B (LOC; Societe Generale) 1,200,000 (a) 1,200,000
Florida Board of Education, Capital Outlay, Refunding
0%, Series A, 6/01/2000 (LOC; U.S. Government Securities) 7,500,000 3,032,535
Miami Health Facilities Authority, Health Facilities Revenue,
Refunding, VRDN (Mercy Hospital Project)
5.05% (LOC; Bank of America) 1,900,000 (a) 1,900,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
Sarasota County School Bond Finance Corporation,
LR, Prerefunded 3.57%, 7/1/2000 (Escrowed in;
U.S. Government Securities and Insured; AMBAC) 2,500,000 2,539,780
Sunshine Governmental Finance Commission, Revenue, VRDN
3.80%, (Insured; AMBAC and LOC; Credit Local De France) 6,900,000 (a) 6,900,000
GEORGIA--8.4%
Atlanta, Water and Sewer Revenue, Refunding
4.20%, 1/01/2001(Escrowed in; U.S. Government Securities) 2,000,000 2,000,000
De Kalb County Development Authority, Revenue, VRDN
(Marist School Inc. Project) 5.10% (LOC; Suntrust Bank) 3,500,000 (a) 3,500,000
De Kalb Private Hospital Authority, Revenue Anticipation
Certificates, VRDN (ESR Children's Health)
5.05%, Series A, (LOC; First Union National Bank) 6,000,000 6,000,000
Municipal Electric Authority, VRDN (Georgia Project One-C)
5.05% (LOC; ABN-Amro Bank) 8,700,000 (a) 8,700,000
ILLINOIS--13.0%
City of Chicago,
3.90%, Series A, 12/07/2000 (LOC; Landesbank Hessen) 4,000,000 4,000,000
VRDN 5.%, Series B (LOC; Canadian Imperial
Bank of Commerce) 1,700,000 (a) 1,700,000
Chicago O'Hare International Airport, Revenue,VRDN
5%, Series B, (LOC; Society Generale) 2,700,000 (a) 2,700,000
Illinois Development Finance Authority, VRDN
IDR:
(Heritage Tool and Manufacturing Inc.)
5.15% (LOC; Harris Trust and Savings Bank) 4,965,000 (a) 4,965,000
(Institute of Gas Technology Project)
5.05% (LOC; Bank of Montreal) 2,800,000 (a) 2,800,000
Revenue
(Residential Rental-F.C. Harris Pavilion Project)
5.10% (LOC; FNMA) 1,100,000 (a) 1,100,000
Illinois Health Facilities Authority, Revenue
VRDN Refunding (Swedish Covenant)
5%, Series A (Insured; AMBAC and LOC; Bank One Corp.) 1,400,000 a 1,400,000
(Ressurection Health)
4%, Series A (LOC; Bank One Corp, Insured; FSA) 7,600,000 a 7,600,000
(Rush Presbyterian Medical Center)
5.10% (LOC; Northern Trust Co.) 3,800,000 a 3,800,000
City of New Lenox, IDR, VRDN (Panduit Corp. Project)
5.10% (LOC; Commerzbank) 1,300,000 (a) 1,300,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
INDIANA--4.6%
Merrillville Multi School Building Corporation
(First Mortgage)
7.50%, 07/15/2000 (LOC; U.S. Government Securities) 4,400,000 4,518,329
City of Seymour, EDR, VRDN
(Pedcor Investments-Sycamore Springs Apartments Project)
5.30%, Series A (LOC; Federal Home Loan Banks) 4,052,000 (a) 4,052,000
Whiting, PCR (Amoco Project-Standard Oil Industry)
3.10%, 8/15/2000 ( Corp. Guaranty; Amoco Credit Corp) 2,500,000 2,500,000
KENTUCKY--2.1%
Kentucky Housing Corporation, Housing Revenue
4.40%, Series D, 12/1/2000 2,500,000 2,500,000
Lexington-Fayette Urban County Airport Corporation.,
Revenue, VRDN 5.95%, Series C
(Insured; MBIA and LOC; Credit Local De France) 2,500,000 (a) 2,500,000
LOUISIANA--3.9%
Louisiana Public Facilities Authority,HR, Refunding, VRDN
(Willis Knighton Medical Project)
5.10% (Insured; AMBAC and Credit Local de France) 4,140,000 (a) 4,140,000
Louisiana Offshore Terminal Authority, Deep Water Port
Revenue, Refunding, VRDN
5.90%, (LOC; Union Bank of Switzerland) 5,200,000 (a) 5,200,000
MASSACHUSETTS--3.5%
Commonwealth of Massachusetts, Refunding, VRDN:
5%, Series A (LOC; Commerzbank) 2,600,000 (a) 2,600,000
5.20%, Series B (LOC; Landesbank Hessen) 500,000 (a) 500,000
Massachusetts Development Finance Agency, Revenue, VRDN
(First Mortgage Lasell Village)
4.90%, Series C (LOC; Fleet Bank) 2,400,000 (a) 2,400,000
Massachusetts Health and Education Facility Authority,
Revenue, VRDN:
(Falmouth Assistant Living)
4.90%, Series A (LOC; Fleet Bank) 2,000,000 (a) 2,000,000
(Harvard University)
5%, Series R (LOC; Harvard University) 900,000 (a) 900,000
MAINE--1.7%
Eastport, IDR, Refunding, VRDN (Passamaquoddy Tribe)
4.85% (LOC; Wachovia Bank and Trust Co.) 4,060,000 (a) 4,060,000
MICHIGAN--4.9%
Michigan Municipal Bond Authority, Revenue, BAN
4.18%, Series B-2, 8/25/2000
(LOC; Morgan Guaranty Trust Co.) 3,000,000 3,006,235
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (CONTINUED)
Michigan Strategic Fund, PCR, Refunding, VRDN
(Consumers Power Project) 6.05%, Series A
(Insured; AMBAC and LOC; Barclays Bank, Bank One
and Chase Manhattan Bank) 8,900,000 (a) 8,900,000
MINNESOTA--1.7%
Minnesota Housing Finance Agency, Single Family Mortgage
3.80%, Series H, 6/29/2000 4,000,000 4,000,924
MISSISSIPPI--.6%
Noxubee County, IDR, VRDN (Barge Forest Products Project)
3.65% (LOC; Amsouth Bank-Alabama) 1,465,000 (a) 1,465,000
MISSOURI--.4%
Missouri Higher Education Loan Authority,
Student Loan Revenue, VRDN
5.10%, Series A (LOC; National Westminster Bank) 1,000,000 (a) 1,000,000
MONTANA--.5%
Butte-Silver Bow, PCR, Refunding, VRDN
(Rhone-Poulenc Inc. Project)
5.15% (LOC; Banque Nationale de Paris) 1,300,000 (a) 1,300,000
NEVADA--1.1%
Clark County, Airport Improvement Revenue, VRDN (Sub Lien)
5%, Series A-1 (LOC; Westdeutsche Landesbank) 2,700,000 (a) 2,700,000
NEW MEXICO--1.4%
City of Santa Fe, Gross Receipts Tax Revenue, VRDN (Sub-Lien)
(Wastewater Systems)
5.05%, Series B (LOC; Canadian Imperial Bank of Commerce) 3,500,000 (a) 3,500,000
NEW YORK--.5%
Long Island Power Authority, Electric Systems Revenue
5.950%, Series 6 (LOC; ABN-Ambro Bank) 1,200,000 (a) 1,200,000
OHIO--7.7%
Ohio Air Quality Development Authority, Revenue
(JMG Funding Limited Partnership) 5.05%,
(LOC; Societe General) 9,700,000 (a) 9,700,000
Ohio Housing Finance Agency, Mortgage Revenue (Residential)
4.25%, Series A-3, 3/01/2001 9,000,000 9,000,000
PENNSYLVANIA--.9%
Allegheny County Hospital Development Authority, Revenue,
VRDN (Health Center Presbyterian)
5.15%, Series B (Insured; MBIA and LOC; PNC Bank) 100,000 (a) 100,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Lehigh County Industrial Development Authority, PCR, VRDN
(Allegheny Electric Co-Op)
4.30% (LOC; Rabobank Nederland N.V.) 820,000 (a) 820,000
Moon Industrial Development Authority, IDR, VRDN
(Executive Office Association Project)
5.10% (LOC; PNC Bank) 1,250,000 (a) 1,250,000
Quakertown General Authority, Revenue, VRDN
(Pooled Financing Program)
5%, Series A (LOC; PNC Bank) 135,000 (a) 135,000
SOUTH CAROLINA--5.8%
Piedmont Municipal Power Agency, South Carolina
Electric Revenue, Refunding
3.150%, Series D, (Insured; MBIA and LOC;
Morgan Guaranty Trust Co.) 12,900,000 (a) 12,900,000
South Carolina Jobs Economic Development Authority,
EDR, VRDN (Wellman Inc. Project)
6.15% (LOC; Wachovia Bank and Trust Co.) 1,100,000 (a) 1,100,000
TEXAS--6.9%
Comal County Health Facilities Development Corporation,
Health Care Systems Revenue, VRDN
(McKenna) 5.15% (LOC; Chase Manhattan Bank) 3,000,000 (a) 3,000,000
Dallas Industrial Development Corporation, IDR, VRDN
(Sealed Power Corp.)
4.05% (LOC; National Bank of Detroit) 1,100,000 (a) 1,100,000
Nueces County Health Facilities Development Corporation,
Revenue, VRDN (Driscoll Childrens Foundation)
5.15% (LOC; Bank One Corp.) 2,395,000 (a) 2,395,000
Rockwall Industrial Development Corporation, IDR, VRDN
(Columbia Extrusion Corp.)
5.05% (LOC; U.S. Bancorp) 2,085,000 (a) 2,085,000
State of Texas, TRAN,
4.50%, Series A, 8/31/2000 8,000,000 8,020,884
VIRGINIA--3.2%
Campbell County Industrial Development Authority,
Exempt Facility Revenue, VRDN
(Hadson Power 12)
6.15%, Series A (LOC; Barclays Bank) 4,600,000 (a) 4,600,000
Halifax County Industrial Development Authority, IDR, VRDN
(Annin and Co. Project)
5.25% (LOC; Chase Manhattan Bank) 1,875,000 (a) 1,875,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
VIRGINIA (CONTINUED)
Virginia Small Business Financing Authority, IDR, VRDN
(Coral Graphic) 5.25% (LOC; Chase Manhattan Bank) 1,400,000 (a) 1,400,000
WASHINGTON--6.2%
City of Seattle
5%, Series B, 12/01/2000 3,195,000 3,212,178
Washington Housing Finance Committee, MFHR, VRDN
(Village Apartments Project)
5.15%, (LOC; Federal National Mortgage Association) 10,750,000 (a) 10,750,000
Washington Public Power Supply System, Revenue, Refunding
(Nuclear Project No. 1)
7.25%, Series C, 7/1/2000 (Insured; FGIC) 1,000,000 1,005,918
WEST VIRGINIA--.6%
State of West Virginia
4.75%, 11/01/2000 1,505,000 1,506,649
WISCONSIN--2.1%
Wisconsin Housing and Economic Development Authority, Revenue
(Home Ownership)
3.55%, Series I, 8/15/2000 5,000,000 5,000,000
WYOMING--.9%
Green River, PCR, Revenue, Refunding, VRDN
(Rhone Poulenc Inc. Project)
6.05% (LOC; ABN-Amro Bank) 2,300,000 (a) 2,300,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $242,946,303) 100.6% 242,946,303
LIABILITIES, LESS CASH AND RECEIVABLES (.6%) (1,350,687)
NET ASSETS 100.0% 241,595,616
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
BAN Bond Anticipation Notes
EDR Economic Development Revenue
FGIC Financial Guaranty
Insurance Company
FNMA Federal National
Mortgage Association
FSA Financial Security Assurance
HR Hospital Revenue
IDR Industrial Development Revenue
LOC Letter of Credit
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
TRAN Tax and Revenue
Anticipation Notes
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 83.6
Aaa/Aa(b) AAA/AA(b) 15.4
Not Rated(c) Not Rated(c) 1.0
100.0
</TABLE>
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(B) NOTES WHICH ARE NOT MIG OR SP RATED ARE REPRESENTED BY BOND RATINGS OF THE
ISSUERS.
(C) SECURITIES WHICH, WHILE NOT RATED BY MOODY'S OR STANDARD & POOR'S HAVE BEEN
DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS ($):
Investments in securities--
See Statement of Investments 242,946,303 242,946,303
Interest receivable 1,592,318
244,538,621
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 441,216
Payable for investment securities purchased 2,500,000
Interest payable--Note 3 1,789
2,943,005
--------------------------------------------------------------------------------
NET ASSETS ($) 241,595,616
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 241,603,960
Accumulated net realized gain (loss) on investments (8,344)
--------------------------------------------------------------------------------
NET ASSETS ($) 241,595,616
NET ASSET VALUE PER SHARE
Investor Class R
--------------------------------------------------------------------------------
Net Assets ($) 31,091,866 210,503,750
Shares Outstanding 31,093,876 210,509,481
--------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($): 1.00 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 5,411,762
EXPENSES:
Management fee--Note 2(a) 720,980
Distribution fees (Investor Shares)--Note 2(b) 30,052
Interest expense--Note 3 9,244
TOTAL EXPENSES 760,276
INVESTMENT INCOME--NET 4,651,486
-------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) 3
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,651,489
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
-------------------------------------------------------------------------------
OPERATIONS ($):
INVESTMENT INCOME--NET 4,651,486 7,780,014
Net realized gain (loss) on investments 3 --
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,651,489 7,780,014
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Investor shares (459,558) (724,308)
Class R shares (4,191,928) (7,055,706)
TOTAL DIVIDENDS (4,651,486) (7,780,014)
-------------------------------------------------------------------------------
CAPITAL STOCK TANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares 56,596,123 101,990,468
Class R shares 383,519,253 872,535,246
Dividends reinvested:
Investor shares 432,385 669,793
Class R shares 693,678 1,220,288
Cost of shares redeemed:
Investor shares (56,625,519) (99,272,622)
Class R shares (460,826,399) (814,277,109)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (76,210,479) 62,866,064
TOTAL INCREASE (DECREASE) IN NET ASSETS (76,210,476) 62,866,064
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 317,806,092 254,940,028
END OF PERIOD 241,595,616 317,806,092
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31,
--------------------------------------------------------------
INVESTOR SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .015 .025 .029 .030 .029 .032
Distributions:
Dividends from investment
income--net (.015) (.025) (.029) (.029) (.029) (.032)
Dividends from net realized gain
on investments -- -- (.000)(a) (.001) -- --
Total Distributions (.015) (.025) (.029) (.030) (.029) (.032)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 3.07(b) 2.57 3.00 3.00 2.96 3.28
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .70(b) .70 .70 .72 .70 .70
Ratio of net investment income
to average net assets 3.05(b) 2.54 2.90 2.92 2.92 3.33
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 31,092 30,689 27,301 19,486 14,074 17,764
(A) AMOUNT REPRESENTS LESS THAN $.001 PER SHARE.
(B) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31,
--------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .016 .027 .031 .032 .031 .034
Distributions:
Dividends from investment
income--net (.016) (.027) (.031) (.031) (.031) (.034)
Dividends from net realized
gain on investments -- -- (.000)(a) (.001) -- --
Total Distributions: (.016) (.027) (.031) (.032) (.031) (.034)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 3.27(b) 2.77 3.21 3.21 3.17 3.48
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .51(b) .50 .50 .52 .50 .50
Ratio of net investment income
to average net assets 3.24(b) 2.74 3.11 3.10 3.11 3.41
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 210,504 287,117 227,639 194,158 221,178 205,373
(A) AMOUNT REPRESENTS LESS THAN $.001 PER SHARE.
(B) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Municipal Reserves (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, as amended (the "Act" ), as an open-end
management investment company and operates as a series company currently
offering nineteen series including the fund. The fund's investment objective is
to seek income exempt from federal income tax consistent with stability of
principal by investing in tax-exempt municipal obligations. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., (Mellon Bank"), which is a
wholly-owned subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 1 billion shares of $.001 par value Capital Stock in each
of the following classes of shares: Investor Class 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) 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 are valued at amortized cost
in accordance with Rule 2a-7 of the Act, which has been determined by the fund's
Board of Directors to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
(c) 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of taxable income sufficient to relieve it from substantially all Federal income
and excise taxes.
The fund has an unused capital loss carryover of approximately $8,300 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to October 31, 1999. If not applied, the
carryover expires in fiscal 2005.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
At April 30, 2000, 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).
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 .50% 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 fees) . Each director receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and
the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and
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 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 attributable to its Investor shares to
compensate the distributor for shareholder servicing activities primarily
intended to result in the sale of Investor shares. The Class R shares bear no
distribution fee. During the period ended April 30, 2000, the Investor shares
were charged $30,052 pursuant to the Plan, of which $29,797 was paid to DSC.
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 or in any agreement related to the Plan.
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings.
The average amount of borrowings outstanding during the period ended April 30,
2000 was approximately $296,700 with a related weighted average annualized
interest rate of 6.25%.
The Fund
For More Information
Dreyfus Municipal Reserves
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 324SA004
Dreyfus
U.S. Treasury
Reserves
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
6 Statement of Investments
7 Statement of Assets and Liabilities
8 Statement of Operations
9 Statement of Changes in Net Assets
10 Financial Highlights
12 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
U.S. Treasury Reserves
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus U.S. Treasury
Reserves, covering the six-month period from November 1, 1999 through April 30,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, David Hertan.
When the reporting period began, international and domestic economies were
growing faster than most analysts expected, giving rise to concerns that
long-dormant inflationary pressures might reemerge. Consumers continued to spend
heavily, unemployment levels reached new lows and the stock market, while highly
volatile, continued to climb.
Because unsustainable economic growth may trigger unwanted inflationary
pressures, the Federal Reserve Board raised key short-term interest rates three
times during the reporting period. In total, the Federal Reserve Board has
raised short-term interest rates by 1.25 percentage points since late June 1999.
While these economic influences adversely affected long-term bonds, they
positively influenced money market yields.
We appreciate your confidence over the past six months and we look forward to
your continued participation in Dreyfus U.S. Treasury Reserves.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
David Hertan, Portfolio Manager
How did Dreyfus U.S. Treasury Reserves perform during the period?
For the six-month period ended April 30, 2000, Dreyfus U.S. Treasury Reserves
Investor shares produced an annualized yield of 4.88% while its Class R shares
produced an annualized yield of 5.09%. After taking into account the effect of
compounding, the annualized effective yields for Investor shares and Class R
shares were 5.00% and 5.21%, respectively.(1)
We attribute the fund's performance to the fact that we maintained a relatively
short average maturity in the portfolio, which enabled us to capture higher
yields as interest rates were rising during the reporting period. In addition,
our emphasis on repurchase agreements helped boost the fund's overall returns
What is the fund's investment approach?
As a U.S. Treasury money market fund, our goal is to provide shareholders with
an investment vehicle that is made up of Treasury bills and notes issued by the
United States Government as well as repurchase agreements with securities
dealers which are backed by U.S. Treasuries. A major benefit of these securities
is that they are very liquid in nature; that is, they can be converted to cash
quickly. Because U.S. Treasury bills and notes are backed by the full faith and
credit of the U.S. Government, they are generally considered to be among the
highest quality investments available. By investing in these obligations, the
fund seeks to add an incremental degree of safety to the portfolio. The fund is
also required to maintain an average dollar-weighted portfolio maturity of 90
days or less.
What other factors influenced the fund's performance?
During the past six months, the returns offered by U.S. Treasury securities,
such as those held in this fund, have continued to rise. That's because interest
rates, which generally determine the returns for these The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
types of investments, have also steadily risen during the period.
The primary factor that influenced the fund's performance during the past six
months has been the steady stream of short-term interest-rate hikes initiated by
the Federal Reserve Board (the "Fed"). In three separate moves in November,
February and March, the Fed raised interest rates for a total of 0.75 percentage
points. The fund was able to benefit from these rate hikes because we
concentrated on holding Treasury bills with a shorter average maturity. By doing
so, the fund was able to take advantage of the higher interest rates, and
therefore higher yields, as rates were rising.
In addition, during the fourth quarter of 1999 the bond markets were busy
preparing for the possibility of problems that could result from Y2K concerns.
At that time, many bond dealers and issuers basically shut down their
operations, preferring instead to have little or no activity until after
year-end. That move caused a lack of liquidity in the repurchase agreement
market. Commonly referred to as repos, repurchase agreements are overnight loans
to government dealers that are collateralized, in the case of this fund, with
U.S. Treasuries. The primary purpose of investing in repos is to provide
liquidity to the fund. However, because their rates were higher than T-bills
during the period, they generated a higher return.
In response to the lack of liquidity in the repo market due to Y2K concerns, in
December 1999 we chose to limit our exposure to repurchase agreements and to
instead concentrate the fund's investments in short-term Treasury bills. Once
Y2K had passed, an event that some market analysts have since dubbed a "non
event," we resumed our normal investment practice of investing in a combination
of U.S. Treasury securities and repurchase agreements.
What is the fund's current strategy?
In an effort to earn as high of a yield as possible for the fund, we have
continued to allocate a large portion of the portfolio's total assets to
repurchase agreements. We have also maintained a defensive posture with respect
to the portfolio's average maturity. As the U.S. economy continues to grow, we
believe the Fed has more work to do in terms of attempting to curb inflation. By
keeping a shorter maturity, we believe we have positioned the fund to seek to
take advantage of any possible further interest-rate moves.
May 15, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR
THE U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
FUND.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
STATEMENT OF INVESTMENTS
Annualized
Yield on
Date of Principal
U.S. TREASURY BILLS--32.5% Purchase (%) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
5/4/2000 5.10 200,000,000 199,915,000
(cost $199,915,000)
U.S. TREASURY NOTES--23.5%
-----------------------------------------------------------------------------------------------------------------------------------
6.375%, 5/15/2000 5.05 55,000,000 55,024,499
6.00%, 8/15/2000 5.72 50,000,000 50,011,078
5.75%, 11/15/2000 6.13 30,000,000 29,922,285
8.50%, 11/15/2000 6.06 10,000,000 10,116,016
TOTAL U.S. TREASURY NOTES (cost $145,073,878) 145,073,878
-----------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--43.5%
-----------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co.
dated 4/28/2000, due 5/1/2000 in the amount of
$122,871,825 (fully collateralized by $120,230,000
U.S. Treasury Notes, 6.25% to 7.50%, due from
4/30/2001 to 11/15/2001, value $125,272,775) 5.65 122,814,000 122,814,000
SBC Warburg Dillon Read, Inc.
dated 4/28/2000, due 5/1/2000 in the amount of
$145,068,875 (fully collateralized by $139,530,000
U.S. Treasury Bonds, 6.50% due 11/15/2026,
value $147,901,800) 5.70 145,000,000 145,000,000
TOTAL REPURCHASE AGREEMENTS (cost $267,814,000) 267,814,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $612,802,878) 99.5% 612,802,878
CASH AND RECEIVABLES (NET) .5% 3,267,560
NET ASSETS 100.0% 616,070,438
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments
(including Repurchase Agreements of $267,814,000)
--Note 1(c) 612,802,878 612,802,878
Interest receivable 3,561,779
616,364,657
-----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 263,303
Cash overdraft due to Custodian 30,916
294,219
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 616,070,438
-----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 616,100,020
Accumulated net realized gain (loss) on investments (29,582)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 616,070,438
</TABLE>
NET ASSET VALUE PER SHARE
Investor Shares Class R
Shares
--------------------------------------------------------------------------------
Net Assets ($) 37,114,804 578,955,634
SHARES OUTSTANDING 37,125,717 578,974,303
--------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 1.00 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 17,557,904
EXPENSES:
Management fee--Note 2(a) 1,567,511
Distribution fees (Investor Shares)--Note 2(b) 37,686
TOTAL EXPENSES 1,605,197
INVESTMENT INCOME--NET 15,952,707
--------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($): 486
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 15,953,193
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 15,952,707 29,565,748
Net realized gain (loss) on investments 486 8,819
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 15,953,193 29,574,567
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Investor shares (922,579) (3,995,726)
Class R shares (15,030,128) (25,570,022)
TOTAL DIVIDENDS (15,952,707) (29,565,748)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Investor shares 44,419,155 547,120,345
Class R shares 1,096,523,157 1,600,623,062
Dividends reinvested:
Investor shares 894,128 3,916,616
Class R shares 12,911,533 22,586,362
Cost of shares redeemed:
Investor shares (44,573,712) (630,281,989)
Class R shares (1,095,253,454) (1,672,499,479)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 14,920,807 (128,535,083)
TOTAL INCREASE (DECREASE) IN NET ASSETS 14,921,293 (128,526,264)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 601,149,145 729,675,409
END OF PERIOD 616,070,438 601,149,145
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information reflects financial results for a
single fund share. Total return shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had reinvested
all dividends and distributions. These figures have been derived from the fund's
financial statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------------
INVESTOR SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .024 .042 .048 .048 .046 .049
Distributions:
Dividends from investment
income--net (.024) (.042) (.048) (.048) (.046) (.049)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 4.93 4.27 4.95 4.89 4.74 5.02
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .70 .70 .70 .70 .70 .70
Ratio of net investment income
to average net assets 4.91 4.16 4.85 4.81 4.64 4.92
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 37,115 36,375 115,622 112,900 21,826 21,386
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .025 .044 .050 .050 .048 .051
Distributions:
Dividends from investment
income--net (.025) (.044) (.050) (.050) (.048) (.051)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 5.13 4.48 5.16 5.10 4.94 5.23
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .50 .50 .50 .50 .50 .50
Ratio of net investment income
to average net assets 5.12 4.40 5.03 4.98 4.79 5.14
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 578,956 564,774 614,053 522,178 464,303 399,873
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus U.S. Treasury Reserves (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, as amended (the "Act" ), as an open-end
management investment company and operates as a series company currently
offering nineteen series including the fund. The fund's investment objective is
to seek a high level of current income consistent with stability of principal by
investing in high-grade money market instruments. The Dreyfus Corporation (the
" Manager" ) serves as the fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. (" Mellon Bank" ), which is a wholly-owned
subsidiary of Mellon financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 1 billion shares of $.001 par value Capital Stock in each
of the following classes of shares: Investor and Class R. 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) 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 are valued at amortized cost in accordance
with Rule 2a-7 of the Act, which has been determined by the fund's Board of
Directors to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
(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. Cost of investments represents amortized cost.
(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
counter party default, the fund has the 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 The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $30,000 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to October 31, 1999. If not applied, the
carryover expires in fiscal 2006.
At April 30, 2000, 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).
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 .50% 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, service 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 fees) . Each director receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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 attributable to its Investor
shares to compensate the distributor for shareholder servicing activities and
expenses primarily intended to result in the sale of Investor shares. The Class
R shares bear no distribution fee. During the The Fun
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
period April 30, 2000, Investor shares were charged $37,686 pursuant to the
Plan, of which $37,680 was paid to DSC.
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 or in any agreement related to
the Plan.
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended April 30, 2000, the fund did not borrow
under the line of credit.
For More Information
Dreyfus
U.S. Treasury Reserves
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 326SA004
Dreyfus Premier
Balanced Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
15 Statement of Financial Futures
16 Statement of Assets and Liabilities
17 Statement of Operations
18 Statement of Changes in Net Assets
21 Financial Highlights
26 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Balanced Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Balanced
Fund, covering the six-month period from November 1, 1999 through April 30,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
managers, Ron Gala and Laurie Carroll.
The past six months have been highly volatile for investors in U.S. stocks and
bonds, primarily because of the effects of rising interest rates. In the stock
market, a substantial advance during the last two months of 1999 was led
primarily by technology and large-cap growth companies in a fast-growing
economy. However, the stock market corrected sharply during the first quarter of
the year 2000, causing large-capitalization stocks to underperform small- and
mid-cap stocks. In mid-March, investor sentiment appeared to shift once more,
and prices of technology stocks fell precipitously. On the other hand, some
long-neglected value-oriented stocks gained ground amid renewed investor
interest.
In the bond market, higher interest rates generally led to an erosion of bond
prices, especially those of corporate securities. However, long-term U.S.
Treasury bonds began to rally in 2000, primarily because of reduced supply amid
robust demand from domestic and foreign investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Balanced Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Ron Gala and Laurie Carroll, Portfolio Managers
How did Dreyfus Premier Balanced Fund perform relative to its benchmark?
For the six-month period ended April 30, 2000, Dreyfus Premier Balanced Fund
produced total returns of 0.16%, -0.28%, -0.22%, 0.22% and -0.03% for its Class
A, Class B, Class C, Class R and Class T shares, respectively.(1) In contrast, a
hybrid index that is composed of 60% Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index") and 40% Lehman Brothers Intermediate Government/
Corporate Bond Index ("Intermediate Index"), provided a total return of 4.74%
for the same period. The S&P 500 Index and the Intermediate Index provided total
returns of 7.18% and 1.07%, respectively, for the same period.(2)
We attribute the fund' s modest underperformance in comparison to the hybrid
index to our defensive position throughout the reporting period. Because we
believed that the stock market was very volatile and overvalued, we allocated a
large portion of the fund' s assets to bonds and away from stocks. That move
served to constrain the fund's returns.
What is the fund's investment approach?
The fund is a balanced fund, with a "neutral" allocation under normal
circumstances of 60% stocks and 40% bonds. However, the fund is permitted to
invest up to 75%, and as little as 40%, of its total assets in stocks, and up to
60%, and as little as 25%, of its total assets in bonds.
When allocating assets between stocks and bonds, we assess the relative return
and risks of each asset class using a model that analyzes several factors,
including interest-rate-adjusted price-to-earnings ratios, the valuation and
volatility levels of stocks relative to bonds, and economic factors such as
interest rates.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The primary factors influencing the fund's performance over the past six months
have been the continued strength of the U.S. economy and the series of
short-term interest-rate hikes initiated by the Federal Reserve Board (the
"Fed" ) in an attempt to slow economic growth and forestall the buildup of
inflationary pressures. In three separate moves during November, February and
March, the Fed raised interest rates 0.75 percentage points. These moves were in
addition to the two rate hikes implemented before the reporting period began,
producing a total increase of 1.25 percentage points since last summer. The
uncertainty caused by these interest-rate hikes created heightened volatility
for the fund and the financial markets.
The strong gains achieved by the stock market during the reporting period were
primarily limited to stocks within the technology sector. Those technology
stocks with the highest price-to-earnings ratios actually performed the best,
creating an unusual - or non-traditional - stock market environment. We
maintained a significant exposure to technology stocks during the period. In
fact, the fund' s top 10 performing stocks were technology companies. However,
most speculative Internet companies did not meet the portfolio's risk/reward
criteria and, as a result, we did not own them. Instead, we favored large,
well-established technology companies that provide products and services for the
Internet's infrastructure. While the fund's technology exposure helped drive our
performance, the fund's tech gains were not as strong as those achieved by the
S&P 500 Index.
The fixed-income markets experienced liquidity problems during the fourth
quarter of 1999 when many dealers and issuers essentially shut down their
operations, preferring to have little or no activity until after year-end
uncertainties had passed. Once Y2K concerns were behind us, an occasion that
some market analysts have since dubbed a "non-event," liquidity once again
returned to the bond market, calming volatility levels.
Subsequently, in mid-January 2000, the federal government announced that it
would use a portion of the budget surplus to buy back certain outstanding U.S.
Treasury securities. This announcement triggered a wave of purchases of
long-term Treasury securities, a move that drove down yields for 30-year
Treasury bonds. As a result, the best fixed-income returns for the fund over the
past six months were generated from U.S. Treasuries, followed by government
agency bonds, asset-backed securities and corporate securities. Our limited
exposure to U.S. Treasuries ultimately hindered our performance. However, when
viewing the portfolio as a whole, the negative results of the fixed-income
portion had limited impact on the fund's total returns.
What is the fund's current strategy?
We have continued to maintain a relatively defensive asset allocation strategy
because we believe that the U.S. stock market remains overvalued relative to
bonds. That said, however, following our discipline of creating a diversified
portfolio, we plan to continue to emphasize carefully selected technology stocks
as well as investments within other sectors.
Within the portfolio' s fixed-income portion, we have continued to emphasize
corporate securities, government agency bonds and U.S. Treasuries. As of the end
of the reporting period, we plan to continue this strategy because, in our view,
once the bond market returns to more normalized levels, investors will return to
higher yielding securities, such as government agency bonds and corporate
securities. In the meantime, we believe these areas of investment currently
represent attractive values.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES
CHARGE IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN
FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN
THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500 INDEX") IS A WIDELY ACCEPTED,
UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE. THE LEHMAN BROTHERS
INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX IS A WIDELY ACCEPTED, UNMANAGED
INDEX OF GOVERNMENT AND CORPORATE BOND MARKET PERFORMANCE COMPOSED OF U.S.
GOVERNMENT, TREASURY AND AGENCY SECURITIES, FIXED-INCOME SECURITIES AND
NONCONVERTIBLE INVESTMENT-GRADE CORPORATE DEBT, WITH AN AVERAGE MATURITY OF 1-10
YEARS.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
COMMON STOCKS--44.3% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALCOHOL & TOBACCO--.1%
Philip Morris Cos. 58,400 1,277,500
CONSUMER CYCLICAL--3.7%
Bed Bath & Beyond 39,900 (a) 1,463,831
Best Buy 19,500 (a) 1,574,625
Delphi Automotive Systems 24,668 471,776
Delta Air Lines 33,900 1,788,225
Federated Department Stores 39,800 (a) 1,353,200
Ford Motor 86,400 4,725,000
Gap 17,100 628,425
General Motors 35,050 3,281,556
Home Depot 90,900 5,096,081
Limited 34,200 1,545,412
Office Depot 11,900 (a) 125,694
Sears, Roebuck & Co. 78,600 2,878,725
TJX Cos. 91,200 1,749,900
Target 27,600 1,837,125
Wal-Mart Stores 145,800 8,073,675
Whirlpool 25,200 1,641,150
38,234,400
CONSUMER STAPLES--1.8%
Avon Products 50,100 2,079,150
Coca-Cola 39,600 1,863,675
Energizer Holdings 30,066 513,001
Fortune Brands 21,300 532,500
Lauder(Estee) Cos., Cl. A 29,100 1,284,037
PepsiCo 104,100 3,819,169
Procter & Gamble 42,000 2,504,250
Ralston-Purina Group 90,200 1,595,412
SYSCO 31,300 1,177,663
Sara Lee 199,000 2,985,000
Unilever, N.V. (New York Shares) 4,348 198,106
18,551,963
ENERGY--2.9%
Amerada Hess 38,500 2,449,562
BP Amoco, ADS 56,400 2,876,400
Chevron 24,350 2,072,794
Conoco, Cl. B 47,300 1,176,587
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ENERGY (CONTINUED)
Diamond Offshore Drilling 35,900 1,447,219
Duke Energy 46,800 2,691,000
Exxon Mobil 101,400 7,877,513
Kerr-McGee 22,200 1,148,850
KeySpan 39,300 1,154,438
Royal Dutch Petroleum (New York Shares) 122,100 7,005,488
29,899,851
HEALTH CARE--4.2%
Allergan 18,900 1,112,737
Amgen 19,500 (a) 1,092,000
Bausch & Lomb 17,100 1,032,413
Biomet 37,000 1,320,438
Bristol-Myers Squibb 52,200 2,737,237
Johnson & Johnson 54,200 4,471,500
Medtronic 46,800 2,430,675
Merck & Co. 124,000 8,618,000
Pfizer 171,900 7,241,287
Schering-Plough 132,900 5,357,531
UnitedHealth Group 21,200 1,413,775
Warner-Lambert 39,850 4,535,428
Wellpoint Health Networks 26,700 (a) 1,969,125
43,332,146
INTEREST SENSITIVE--7.8%
Ambac Financial Group 27,000 1,296,000
American Express 31,500 4,726,969
American International Group 20,100 2,204,719
Bank of America 110,400 5,409,600
CIGNA 29,700 2,368,575
Chase Manhattan 28,800 2,075,400
Citigroup 172,500 10,252,969
Fannie Mae 24,000 1,447,500
FleetBoston Financial 111,600 3,954,825
General Electric 123,600 19,436,100
MBNA 123,400 3,277,812
MGIC Investment 29,750 1,422,422
Marsh & McLennan Cos. 30,000 2,956,875
Merrill Lynch 14,400 1,467,900
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
Morgan (J.P.) & Co. 24,000 3,081,000
Morgan Stanley Dean Witter & Co. 62,400 4,789,200
SLM Holding 38,200 1,196,137
St. Paul Cos. 69,300 2,468,813
State Street 17,700 1,714,687
SunTrust Banks 19,800 1,004,850
UnionBanCal 32,900 910,919
XL Capital, Cl. A 39,000 1,857,375
79,320,647
INTERNET RELATED--1.4%
America Online 122,600 (a) 7,333,012
Juniper Networks 4,500 957,094
VeriSign 6,000 (a) 836,250
Yahoo! 35,400 (a) 4,610,850
13,737,206
PRODUCER GOODS--3.0%
American Power Conversion 50,100 (a) 1,769,156
Boeing 60,400 2,397,125
Deere & Co. 48,900 1,974,337
Dow Chemical 26,300 2,971,900
duPont (E.I.) deNemours & Co. 21,600 1,024,650
General Dynamics 46,900 2,743,650
Georgia-Pacific Group 71,700 2,634,975
International Paper 42,000 1,543,500
Minnesota Mining & Manufacturing 30,000 2,595,000
PPG Industries 22,800 1,239,750
Pharmacia 45,900 2,292,131
Tyco International 81,000 3,720,937
USG 19,800 826,650
Union Carbide 19,900 1,174,100
United Technologies 21,900 1,361,906
30,269,767
SERVICES--2.1%
ALLTEL 32,400 2,158,650
CBS 40,800 (a) 2,397,000
Disney (Walt) 98,100 (a) 4,248,956
Dow Jones & Co. 20,100 1,303,988
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SERVICES (CONTINUED)
Fox Entertainment Group, Cl. A 98,900 (a) 2,546,675
Gannett 21,900 1,398,863
IMS Health 68,100 1,161,956
Infinity Broadcasting, Cl. A 112,050 (a) 3,802,697
SunGard Data Systems 26,500 (a) 915,906
U.S. Cellular 21,600 (a) 1,297,350
21,232,041
TECHNOLOGY--13.3%
ADC Telecommunications 55,800 (a) 3,389,850
Advanced Micro Devices 22,800 (a) 2,000,700
Agilent Technologies 12,300 1,090,087
Analog Devices 15,600 (a) 1,198,275
Apple Computer 36,300 (a) 4,503,469
Applied Materials 44,400 (a) 4,520,475
Brocade Communications Systems 10,500 1,302,000
Cisco Systems 255,600 (a) 17,720,269
Computer Associates International 40,800 2,277,150
Corning 9,000 1,777,500
Dell Computer 105,300 (a) 5,278,162
EMC 18,300 (a) 2,542,556
Eaton 23,800 1,999,200
Hewlett-Packard 17,400 2,349,000
Intel 142,600 18,083,462
International Business Machines 45,000 5,023,125
Lexmark International Group, Cl. A 21,000 (a) 2,478,000
Lucent Technologies 38,100 2,369,344
Microsoft 210,300 (a) 14,668,425
Motorola 32,400 3,857,625
NCR 35,400 (a) 1,367,325
Network Appliance 17,400 (a) 1,286,513
Nokia, ADS 36,000 2,047,500
Nortel Networks 43,500 4,926,375
Oracle 114,600 (a) 9,160,838
QUALCOMM 36,000 (a) 3,903,750
Sun Microsystems 72,900 (a) 6,702,244
Tellabs 47,100 (a) 2,581,669
Teradyne 17,400 (a) 1,914,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Texas Instruments 25,200 4,104,450
136,423,338
UTILITIES--4.0%
AT&T 133,600 6,237,450
Ameren 42,750 1,568,391
BellSouth 146,900 7,152,194
Consolidated Edison 52,350 1,842,066
FPL Group 59,400 2,684,138
GTE 96,900 6,564,975
MCI WorldCom 191,025 (a) 8,679,698
SBC Communications 112,800 4,942,050
Sempra Energy 63,400 1,176,863
40,847,825
TOTAL COMMON STOCKS
(cost $388,336,348) 453,126,684
------------------------------------------------------------------------------------------------------------------------------------
Principal
BONDS AND NOTES-51.3% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCE--10.2%
ABN Amro Bank, N.V., Sub. Notes,
7.55%, 6/28/2006 700,000 690,880
American Express Credit Account Master Trust,
Asset Backed Ctfs., Ser. 1997-1, Cl. A,
6.40%, 4/15/2005 2,500,000 2,452,863
Associates, Sr. Notes,
5.75%, 11/1/2003 2,000,000 1,882,866
Atlantic Richfield, Notes,
5.55%, 4/15/2003 5,000,000 4,768,585
BSCH Issuance, Notes,
7.625%, 11/3/2009 12,500,000 12,183,825
Chase Credit Card Master Trust,
Asset Backed Ctfs., Ser. 1998-3, Cl. A,
6%, 8/15/2005 5,000,000 4,825,100
Citibank Credit Card Master Trust,
Asset Backed Ctfs., Ser. 1998-1, Cl. A,
5.75%, 1/15/2003 4,500,000 4,465,012
Ford Motor Credit, Notes,
7.375%, 10/28/2009 10,000,000 9,715,100
General Motors Acceptance, Notes,
6.625%, 10/1/2002 2,000,000 1,958,716
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCE (CONTINUED)
Goldman Sachs Group, Sr. Unsub.,
7.80%, 1/28/2010 2,000,000 1,972,246
HSBC Holding, Sub. Notes,
7.50%, 7/15/2009 4,500,000 4,364,100
International Lease Finance, Notes,
5.625%, 5/1/2002 5,000,000 4,814,720
Lehman Brothers Holdings, Notes,
7.50%, 9/1/2006 7,000,000 6,795,152
Merrill Lynch, Notes,
6%, 2/17/2009 12,000,000 10,579,620
Morgan Stanley Dean Witter & Co., Sr. Unsub.,
7.125%, 1/15/2003 3,000,000 2,965,920
Norwest, Sr. Notes,
6.75%, 10/1/2006 2,200,000 2,101,257
Province of Ontario, Bonds,
7.75%, 6/4/2002 2,651,000 2,670,904
Province of Quebec:
Deb.,
7.50%, 7/15/2002 4,000,000 4,001,732
Sr. Unsub.,
5.75%, 2/15/2009 6,500,000 5,776,108
Republic New York, Deb.,
9.75%, 12/1/2000 1,000,000 1,015,422
Skandinaviska Enskilda Banken, Sub. Notes,
6.875%, 2/15/2009 2,500,000 2,355,725
Textron Financial, Notes,
7.125%, 12/9/2004 12,900,000 12,626,843
104,982,696
INDUSTRIAL--9.1%
Aesop Funding, Asset Backed Ctfs.,
Ser. 1997-1A, Cl. A2,
6.40%, 10/20/2003 2,000,000 (b) 1,956,610
Albertson's, Sr. Notes,
6.95%, 8/1/2009 3,000,000 2,813,055
BP Amoco, Notes,
6.25%, 10/15/2004 1,500,000 1,442,359
Comcast Cable Communications, Notes,
6.20%, 11/15/2008 1,500,000 1,314,471
Conoco, Sr. Notes,
5.90%, 4/15/2004 5,000,000 4,730,730
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL (CONTINUED)
DaimlerChrysler Holding, Notes,
7.40%, 1/20/2005 6,000,000 5,948,154
Delphi Automotive Systems, Notes,
6.125%, 5/1/2004 8,820,000 8,207,213
duPont (E.I.) de Nemours & Co., Notes,
6.50%, 9/1/2002 3,000,000 2,949,069
Lockheed Martin, Notes,
8.20%, 12/1/2009 7,700,000 7,549,804
Monsanto, Notes,
5.375%, 12/1/2001 2,900,000 2,809,874
Newell Rubbermaid, Sr. Notes,
6.60%, 11/15/2006 4,500,000 4,239,940
News America Holdings, Sr. Notes,
8.625%, 2/1/2003 5,000,000 5,021,475
PPG Industries, Notes,
6.50%, 11/1/2007 5,000,000 4,683,890
Petroleum Geo-Services, Notes,
7.50%, 3/31/2007 5,000,000 4,781,705
Procter & Gamble, Deb.,
8%, 11/15/2003 1,000,000 1,020,403
Raytheon:
Notes,
5.70%, 11/1/2003 10,150,000 9,462,469
Notes,
6.75%, 8/15/2007 10,000,000 9,092,780
Wal-Mart Stores:
Notes,
7.50%, 5/15/2004 5,000,000 5,038,970
Sr. Notes,
6.875%, 8/10/2009 5,000,000 4,833,300
Western Atlas, Notes,
7.875%, 6/15/2004 5,000,000 5,028,790
92,925,061
UTILITIES--1.6%
AT&T, Notes,
5.625%, 3/15/2004 500,000 469,217
MCI WorldCom, Sr. Notes,
6.40%, 8/15/2005 1,250,000 1,188,158
PECO Energy Transition Trust,
Asset Backed Ctfs., Ser. 1999-A, Cl. A2,
5.63%, 3/1/2005 4,000,000 3,854,940
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
Paramount Communications, Sr. Notes,
7.50%, 1/15/2002 5,500,000 5,473,936
TECO Energy, Notes,
5.54%, 9/15/2001 2,000,000 1,955,630
Wisconsin Electric Power, Notes,
7.25%, 8/1/2004 3,500,000 3,464,265
16,406,146
U.S. GOVERNMENT & AGENCIES--30.4%
Federal Home Loan Bank, Bonds:
5.61%, 6/22/2001 7,700,000 7,599,823
5.875%, 9/17/2001 13,000,000 12,818,949
6.75%, 2/1/2002 18,650,000 18,556,750
5.125%, 2/26/2002 4,400,000 4,251,500
5.125%, 9/15/2003 2,100,000 1,972,257
Federal Home Loan Mortgage Corp., Notes:
5.75%, 7/15/2003 18,000,000 17,246,340
5%, 1/15/2004 20,000,000 18,553,640
6.25%, 7/15/2004 19,500,000 18,797,786
6.875%, 1/15/2005 25,000,000 24,633,750
5.75%, 3/15/2009 10,500,000 9,423,750
Federal National Mortgage Association, Notes:
5.25%, 1/15/2003 3,000,000 2,860,098
4.75%, 11/14/2003 10,000,000 9,246,790
5.625%, 5/14/2004 19,000,000 17,930,224
6.50%, 8/15/2004 25,500,000 24,797,959
U.S. Treasury Bonds:
11.625%, 11/15/2002 500,000 556,705
11.125%, 8/15/2003 10,800,000 12,208,752
11.875%, 11/15/2003 15,000,000 17,434,350
U.S. Treasury Notes:
6.50%, 5/31/2001 5,000,000 4,998,600
5.75%, 6/30/2001 2,000,000 1,981,460
6.625%, 6/30/2001 4,000,000 4,006,360
6.625%, 7/31/2001 5,000,000 5,000,200
7.875%, 8/15/2001 3,000,000 3,044,640
6.25%, 10/31/2001 3,900,000 3,876,990
5.875%, 11/30/2001 5,300,000 5,236,559
6.125%, 12/31/2001 9,500,000 9,417,065
6.25%, 2/28/2002 5,000,000 4,962,900
6.625%, 3/31/2002 300,000 299,577
6.625%, 4/30/2002 4,250,000 4,245,665
7.50%, 5/15/2002 13,300,000 13,504,022
5.875%, 9/30/2002 4,500,000 4,423,005
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCIES (CONTINUED)
U.S. Treasury Notes (continued):
5.75%, 10/31/2002 4,400,000 4,310,196
5.50%, 1/31/2003 2,200,000 2,138,708
5.75%, 8/15/2003 5,000,000 4,876,950
6.50%, 10/15/2006 11,000,000 10,993,730
5.625%, 5/15/2008 5,000,000 4,756,250
310,962,300
TOTAL BONDS AND NOTES
(cost $537,102,272) 525,276,203
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-3.6%
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT--3.5%
Goldman Sachs & Co.,Tri-Party Repurchase
Agreement, 5.67% dated 4/28/2000, due
5/1/2000 in the amount of $36,042,022
(fully collateralized by $37,325,000
various U.S. Government Securities,
value $36,746,240) 36,025,000 36,025,000
U.S. TREASURY BILLS--.1%
5.65%, 7/20/2000 900,000 (c) 888,777
TOTAL SHORT-TERM INVESTMENTS
(cost $36,913,700) 36,913,777
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $962,352,320) 99.2% 1,015,316,664
CASH AND RECEIVABLES(NET) .8% 8,294,167
NET ASSETS 100.0% 1,023,610,831
(A) NON-INCOME PRODUCING.
(B) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT APRIL 30, 2000, THIS SECURITY
AMOUNTED TO $1,956,610 OR APPROXIMATELY .2% OF NET ASSETS.
(C) HELD BY THE CUSTODIAN IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN
FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF FINANCIAL FUTURES
<TABLE>
April 30, 2000 (Unaudited)
Unrealized
Market Value Appreciation
Covered by (Depreciation)
Contracts Contracts ($) Expiration at 4/30/2000 ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL FUTURES LONG
5 Year U.S. Treasury Notes 356 34,737,812 June 2000 81,742
FINANCIAL FUTURES SOLD
Standard & Poor's 500 24 8,760,000 June 2000 (397,762)
(316,020)
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--
See Statement of Investments--Note 1(c) 962,352,320 1,015,316,664
Cash 148,823
Receivable for investment securities sold 33,232,846
Dividends and interest receivable 11,008,689
Receivable for shares of Capital Stock subscribed 1,116,825
Receivable for futures variation margin--Note 1(d) 4,862
1,060,828,709
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 1,143,563
Payable for investment securities purchased 34,909,451
Payable for shares of Capital Stock redeemed 1,164,864
37,217,878
--------------------------------------------------------------------------------
NET ASSETS ($) 1,023,610,831
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 968,725,463
Accumulated undistributed investment income--net 8,494,885
Accumulated net realized gain (loss) on investments (6,257,841)
Accumulated net unrealized appreciation (depreciation)
on investments [including ($316,020) net unrealized
(depreciation) on financial futures]--Note 3 52,648,324
--------------------------------------------------------------------------------
NET ASSETS ($) 1,023,610,831
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets ($) 332,951,033 219,742,192 60,080,964 410,636,724 199,918
Shares Outstanding 21,888,704 14,492,088 3,948,865 26,981,866 13,161
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE ($) 15.21 15.16 15.21 15.22 15.19
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 17,154,648
Cash dividends (net of $5,993 foreign taxes withheld at source) 2,591,304
TOTAL INCOME 19,745,952
EXPENSES:
Management fee--Note 2(a) 4,940,529
Distribution and service fees--Note 2(b) 1,759,374
Loan commitment fees--Note 4 7,330
TOTAL EXPENSES 6,707,233
INVESTMENT INCOME--NET 13,038,719
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (2,472,547)
Net realized gain (loss) on financial futures (3,713,644)
NET REALIZED GAIN (LOSS) (6,186,191)
Net unrealized appreciation (depreciation) on investments
(including $514,005 net unrealized appreciation on financial futures)
(7,047,594)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (13,233,785)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (195,066)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 13,038,719 13,426,928
Net realized gain (loss) on investments (6,186,191) 24,297,901
Net unrealized appreciation (depreciation) (7,047,594) 23,866,853
on investments
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (195,066) 61,591,682
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (3,025,038) (1,580,492)
Class B shares (1,617,737) (1,223,741)
Class C shares (438,549) (248,678)
Class R shares (5,152,049) (6,441,114)
Class T shares (731) --
Net realized gain on investments:
Class A shares (6,179,160) (2,889,067)
Class B shares (4,523,086) (4,479,684)
Class C shares (1,225,367) (646,144)
Class R shares (8,622,107) (13,660,063)
Class T shares (2,255) --
TOTAL DIVIDENDS (30,786,079) (31,168,983)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 266,210,117 186,156,663
Class B shares 44,973,422 149,541,513
Class C shares 16,689,896 50,394,929
Class R shares 70,067,651 341,138,366
Class T shares 191,575 24,689
Dividends reinvested:
Class A shares 5,299,803 3,904,501
Class B shares 4,580,833 4,568,521
Class C shares 929,976 636,923
Class R shares 11,205,640 19,652,706
Class T shares 2,986 --
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS (CONTINUED) ($):
Cost of shares redeemed:
Class A shares (142,414,430) (22,218,320)
Class B shares (28,490,199) (17,504,497)
Class C shares (11,398,035) (4,762,205)
Class R shares (55,076,642) (188,359,586)
Class T shares (17,245) --
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 182,755,348 523,174,203
TOTAL INCREASE (DECREASE) IN NET ASSETS 151,774,203 553,596,902
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 871,836,628 318,239,726
END OF PERIOD 1,023,610,831 871,836,628
Undistributed investment income--net 8,494,885 5,690,270
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999
FOR CLASS T SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(B)
Shares sold 17,244,519 12,037,162
Shares issued for dividends reinvested 344,309 262,442
Shares redeemed (9,296,257) (1,444,709)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 8,292,571 10,854,895
-------------------------------------------------------------------------------
CLASS B(B)
Shares sold 2,937,778 9,761,921
Shares issued for dividends reinvested 297,798 308,271
Shares redeemed (1,876,185) (1,141,433)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,359,391 8,928,759
-------------------------------------------------------------------------------
CLASS C
Shares sold 1,088,590 3,277,930
Shares issued for dividends reinvested 60,258 42,774
Shares redeemed (749,350) (309,521)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 399,498 3,011,183
--------------------------------------------------------------------------------
CLASS R
Shares sold 4,563,000 22,264,108
Shares issued for dividends reinvested 727,430 1,321,991
Shares redeemed (3,602,132) (12,212,108)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,688,298 11,373,991
--------------------------------------------------------------------------------
CLASS T
Shares sold 12,485 1,629
Shares issued for dividends reinvested 194 --
Shares redeemed (1,147) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 11,532 1,629
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999
FOR CLASS T SHARES.
(B) DURING THE PERIOD ENDED APRIL 30, 2000, 57,364 CLASS B SHARES REPRESENTING
$874,176 WERE AUTOMATICALLY CONVERTED TO 57,258 CLASS A SHARES AND DURING THE
PERIOD ENDED OCTOBER 31, 1999, 256,691 CLASS B SHARES REPRESENTING $3,945,999
WERE AUTOMATICALLY CONVERTED TO 256,023 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 15.69 14.88 15.17 13.71 11.91 10.08
Investment Operations:
Investment income--net .22(a) .36(a) .33 .34 .31 .28
Net realized and unrealized
gain (loss) on investments (.19) 1.68 1.81 2.77 1.88 1.82
Total from Investment Operations .03 2.04 2.14 3.11 2.19 2.10
Distributions:
Dividends from investment
income--net (.18) (.30) (.37) (.28) (.31) (.27)
Dividends from net realized
gain on investments (.33) (.93) (2.06) (1.37) (.08) --
Total Distributions (.51) (1.23) (2.43) (1.65) (.39) (.27)
Net asset value, end of period 15.21 15.69 14.88 15.17 13.71 11.91
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) .16(c) 14.39 16.06 25.24 18.71 21.17
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .62(c) 1.25 1.25 1.25 1.25 1.25
Ratio of net investment income
to average net assets 1.37(c) 2.31 2.44 2.21 2.39 2.65
Portfolio Turnover Rate 41.30(c) 104.42 69.71 98.88 85.21 53.20
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 332,951 213,362 40,780 14,687 6,275 1,650
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) EXCLUSIVE OF SALES CHARGE.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 15.65 14.83 15.12 13.68 11.89 9.76
Investment Operations:
Investment income--net .15(b) 24(b) .24 .23 .21 .14
Net realized and unrealized
gain (loss) on investments (.19) 1.69 1.79 2.77 1.87 2.11
Total from Investment Operations (.04) 1.93 2.03 3.00 2.08 2.25
Distributions:
Dividends from investment
income--net (.12) (.18) (.26) (.19) (.21) (.12)
Dividends from net realized
gain on investments (.33) (.93) (2.06) (1.37) (.08) --
Total Distributions (.45) (1.11) (2.32) (1.56) (.29) (.12)
Net asset value, end of period 15.16 15.65 14.83 15.12 13.68 11.89
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (.28)(d) 13.64 15.20 24.27 17.76 23.19(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.00(d) 2.00 2.00 2.00 2.00 1.73(d)
Ratio of net investment income
to average net assets .99(d) 1.55 1.70 1.47 1.65 2.16(d)
Portfolio Turnover Rate 41.30(d) 104.42 69.71 98.88 85.21 53.20
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 219,742 205,491 62,324 28,940 9,141 3,118
(A) FROM DECEMBER 19, 1994 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1995.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 15.70 14.87 15.16 13.70 11.90 9.76
Investment Operations:
Investment income--net .15(b) .24(b) .22 .24 .25 .11
Net realized and unrealized
gain (loss) on investments (.19) 1.71 1.81 2.78 1.84 2.15
Total from Investment Operations (.04) 1.95 2.03 3.02 2.09 2.26
Distributions:
Dividends from investment
income--net (.12) (.19) (.26) (.19) (.21) (.12)
Dividends from net realized
gain on investments (.33) (.93) (2.06) (1.37) (.08) --
Total Distributions (.45) (1.12) (2.32) (1.56) (.29) (.12)
Net asset value, end of period 15.21 15.70 14.87 15.16 13.70 11.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (.22)(d) 13.59 15.24 24.41 17.83 23.29(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.00(d) 2.00 2.00 2.00 2.00 1.73(d)
Ratio of net investment income
to average net assets .99(d) 1.57 1.69 1.47 1.62 2.16(d)
Portfolio Turnover Rate 41.30(d) 104.42 69.71 98.88 85.21 53.20
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 60,081 55,723 8,004 2,017 237 6
(A) FROM DECEMBER 19, 1994 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1995.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 15.70 14.88 15.18 13.72 11.92 10.09
Investment Operations:
Investment income--net .23(a) .40(a) .38 .36 .34 .31
Net realized and unrealized
gain (loss) on investments (.18) 1.69 1.79 2.79 1.88 1.81
Total from Investment Operations .05 2.09 2.17 3.15 2.22 2.12
Distributions:
Dividends from
investment income--net (.20) (.34) (.41) (.32) (.34) (.29)
Dividends from net
realized gain on investments (.33) (.93) (2.06) (1.37) (.08) --
Total Distributions (.53) (1.27) (2.47) (1.69) (.42) (.29)
Net asset value, end of period 15.22 15.70 14.88 15.18 13.72 11.92
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) .22(b) 14.76 16.37 25.56 18.99 21.46
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .50(b) 1.00 1.00 1.00 1.00 1.00
Ratio of net investment income
to average net assets 1.49(b) 2.54 2.71 2.44 2.68 2.89
Portfolio Turnover Rate 41.30(b) 104.42 69.71 98.88 85.21 53.20
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 410,637 397,234 207,132 148,605 129,744 97,881
A BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
B NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
Six Months Ended
April 30, 2000 Year Ended
CLASS T SHARES (Unaudited) October 31,
1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 15.68 15.43
Investment Operations:
Investment income--net .20(b) .08(b)
Net realized and unrealized gain (loss)
on investments (.20) .17
Total from Investment Operations -- .25
Distributions:
Dividends from investment income--net (.16) --
Dividends from net realized
gain on investments (.33) --
Total Distributions (.49) --
Net asset value, end of period 15.19 15.68
--------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (.03)(d) 1.62(d)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .75(d) .32(d)
Ratio of net investment income
to average net assets 1.24(d) .40(d)
Portfolio Turnover Rate 41.30(d) 104.42
--------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 200 26
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Balanced 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, as amended (the "Act" ), as an open-end
management investment company and operates as a series company currently
offering nineteen series including the fund. The fund's investment objective is
to outperform a hybrid index, 60% of which is the Standard & Poor's 500
Composite Stock Price Index and 40% of which is the Lehman Brothers Intermediate
Government/ Corporate Bond Index, by investing in common stocks and bonds in
proportions consistent with their expected returns and risks as determined by
the fund's investment adviser. The Dreyfus Corporation (the "Manager") serves as
the fund' s investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A. (" Mellon Bank" ) which is a wholly-owned subsidiary of Mellon
Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 50 million shares of $.001 par value Capital Stock in
each of the following classes of shares: Class A, Class B, Class C and Class R
shares and 200 million of $.001 par value Capital Stock of Class T shares. Class
A, Class B, Class C and Class T shares are sold primarily to retail investors
through financial intermediaries and bear a distribution fee and/or service fee.
Class A and Class T shares are sold with a front-end sales charge, while Class B
and Class C shares are subject to a contingent deferred sales charge ("CDSC").
Class B shares automatically convert to Class A shares after six years. 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 or service fee. Class R shares are
offered without a front-end sales load or CDSC. Each class of share
has identical rights and privileges, except with respect to distribution and
service fees and voting rights on matters affecting a single 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: Most debt securities are valued each business day by an
independent pricing service (the "Service") approved by the Board of Directors.
Debt securities 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 debt
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.Other securities (including financial
futures) are valued at the last sales price on the securities exchange on which
such securities are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. 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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(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) 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
counter party default, the fund has the 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) Financial futures: The fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the fund to
"mark to market" on a daily basis, which reflects the change in the market value
of the contract at the close of each day's trading. Typically, variation margin
payments are received or made to reflect daily unrealized gains or losses. When
the contracts are closed, the fund recognizes a realized gain or loss. These
investments
require initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. Contracts open at April 30, 2000 are set
forth in the Statement of Financial Futures.
(e) Distributions to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a quarterly
basis. 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, if any, it is the policy of the 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 interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--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 1% 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
distribution fees and expenses, service fees, 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 fees). Each director receives $40,000 per year, plus $5,000
for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the
" Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee meetings
attended which are not held in conjunction with a regularly scheduled board
meeting and $500 for Board meetings and separate committee meetings attended
that are conducted by telephone and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional 25% of such
compensation (with the exception of reimbursable amounts). In the event that
there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus
High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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.
DSC retained $3,387 during the period ended April 30, 2000, from commissions
earned on sales of the fund's shares.
(b) Distribution and service plan: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up
to .25% of the value of its average daily net assets to compensate the
distributor for shareholder servicing activities and expenses primarily intended
to result in the sale of Class A shares. Under the Plan, Class B, Class C and
Class T shares may pay the distributor for distributing their shares at an
aggregate annual rate of .75% of the value of the average daily net assets of
Class B and Class C shares, respectively, and .25% of the value of the average
daily net assets of Class T shares. The distributor may pay one or more agents
in respect of advertising, marketing and other distribution services for Class T
shares and determines the amounts, if any, to be paid to agents and the basis on
which such payments are made. Class B, Class C and Class T shares are also
subject to a service plan adopted pursuant to Rule 12b-1, under which Class B,
Class C and Class T shares pay the distributor for providing certain services to
the holders of Class B, Class C and Class T shares a fee at the annual rate of
.25% of the value of the average daily net assets of Class B, Class C and Class
T shares. During the period ended April 30, 2000, Class A, Class B, Class C and
Class T shares were charged $383,465, $810,109, $221,585 and $159, respectively,
pursuant to the Plan, of which $250,327, $179,984, $49,212 and $49 for Class A,
Class B, Class C and Class T shares, respectively, were paid to DSC. During the
period ended April 30, 2000, Class B, Class C and Class T shares were charged
$270,036, $73,861 and $159, respectively, pursuant to the service plan, of which
$91,703, $30,042 and $73 for Class B, Class C and Class T shares, respectively,
were paid to DSC.
Under its terms, the Plan and service 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 or in any agreement
related to the Plan and service plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities and financial futures, during the period ended April 30,
2000, amounted to $532,913,624 and $390,406,316, respectively.
At April 30, 2000, accumulated net unrealized appreciation on investments and
financial futures was $52,648,324, consisting of $84,232,716 gross unrealized
appreciation and $31,584,392 gross unrealized depreciation.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
At April 30, 2000, 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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. During the period ended April
30, 2000, the fund did not borrow under the Facility.
For More Information
Dreyfus Premier Balanced 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative
or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 342SA004
Dreyfus Premier
Limited Term
Income Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
19 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Limited Term Income Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Limited
Term Income Fund, covering the six-month period from November 1, 1999 through
April 30, 2000. Inside, you'll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, Laurie Carroll.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
bond market over the past six months. This was primarily a result of efforts by
the Federal Reserve Board (the "Fed") to forestall a potential reemergence of
inflationary pressures. The Fed raised short-term interest rates three times
during the reporting period, following two interest-rate hikes implemented in
the months before the reporting period began. Since June 1999, the Fed has
raised short-term interest rates a total of 1.25 percentage points.
Higher interest rates led to some additional erosion of bond prices, especially
during the last two months of 1999. During the first four months of 2000,
however, some bonds began to rally, led higher by long-term U.S. Treasury
securities which rose primarily because of reduced supply amid robust demand
from domestic and foreign investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Limited Term Income Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Laurie Carroll, Portfolio Manager
How did Dreyfus Premier Limited Term Income Fund perform relative to its
benchmark?
For the six-month period ended April 30, 2000, Dreyfus Premier Limited Term
Income Fund provided a total return of 0.91% for Class A shares, 0.67% for Class
B shares, 0.64% for Class C shares and 0.93% for Class R shares.(1) The fund's
benchmark, the Lehman Brothers Aggregate Bond Index, produced a total return of
1.42% for the same period.(2)
We attribute the fund' s modest underperformance to our security selection
strategy, which emphasized government agency bonds and corporate securities
during a period in which the highest returns were generated from U.S. Treasury
securities.
What is the fund's investment approach?
The fund's goal is to provide shareholders with as high a level of current
income as is consistent with safety of principal and maintenance of liquidity.
Liquidity is measured by how quickly assets can be converted to cash. To pursue
its goal, the fund invests primarily in various types of U.S. and foreign
investment-grade bonds, including government bonds, mortgage-backed securities
and corporate debt.
When choosing securities for the fund, we conduct extensive research into the
credit history and current financial strength of investment-grade issuers. We
also examine such factors as the long-term outlook for the industry in which the
issuer operates, the economy, the bond market and the dollar-weighted average
maturity of the securities, which, on average, will not exceed 10 years.
Maturity refers to the length of time between the date on which a bond is issued
and the date the principal amount must be paid. Generally speaking, bonds with
longer maturities tend to offer higher yields, but also fluctuate more in price
than their short-term counterparts.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The primary factors influencing the fund's performance over the past six months
have been the continued strength of the U.S. economy and the series of
short-term interest-rate hikes initiated by the Federal Reserve Board in an
attempt to slow economic growth and forestall the buildup of inflationary
pressures. In three separate moves during November, February and March, the Fed
raised interest rates 0.75 percentage points. These moves were in addition to
the two rate hikes implemented before the reporting period began, producing a
total increase of 1.25 percentage points since last summer.
In addition, during the fourth quarter of 1999, the bond market was busy
preparing for the possibility of problems that could result from Y2K concerns.
At that time, many dealers and issuers basically shut down their operations,
preferring to have little or no activity until after year-end. That move caused
a lack of liquidity in the short-term bond market. Once Y2K concerns had passed,
an occasion that some market analysts have since dubbed a "non-event," liquidity
once again returned to the bond market, calming volatility levels.
Then, in mid-January, the government announced that it would use a portion of
the federal budget surplus to initiate a buyback program for outstanding U.S.
Treasury securities. This announcement triggered a wave of purchases of
long-term Treasury securities, a move that drove yields for 30-year Treasury
bonds below that of shorter term securities, creating what's called an inverted
yield curve. An unusual circumstance, an inverted yield curve occurs when
short-term interest rates are higher than long-term rates. Because most bonds
use 30-year Treasury securities as their benchmarks, including bonds held in
this fund, the inverted yield curve resulted in greater volatility during the
period.
As a result of these influences, the best returns for the fund over the past six
months were generated from U.S. Treasuries, followed by government agency bonds,
asset-backed securities and corporate securities. In the case of the fund's
holdings in U.S. Treasuries, government agency bonds and asset-backed
securities, all three of these types of securities performed well due in large
part to their shorter duration stance. On the other hand, the fund's corporate
securities with longer durations tended to restrain performance during the
period.
What is the fund's current strategy?
As of the end of the reporting period, the largest portion of the fund's assets,
42.3% , was invested in mortgage-backed securities, followed by 37.4% in
corporate securities, 14.6% in U.S. Treasuries and 2.4% in government agency
bonds. We currently plan to continue to emphasize these sectors of the bond
market because, in our view, once the Treasury curve becomes more normalized,
investors will return to higher yielding securities, such as government agency
bonds and corporate securities. In the meantime, we believe these areas of
investment currently represent value for the portfolio.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE LEHMAN BROTHERS
AGGREGATE BOND INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF CORPORATE, U.S.
GOVERNMENT AND U.S. GOVERNMENT AGENCY DEBT INSTRUMENTS, MORTGAGE-BACKED
SECURITIES AND ASSET-BACKED SECURITIES WITH AN AVERAGE MATURITY OF 1 - 10 YEARS
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
STATEMENT OF INVESTMENTS
Principal
BOND AND NOTES--97.6% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES--5.5%
American Express Credit Account Master Trust,
Ser. 1997-1, Cl. A, 6.4%, 2005 1,000,000 981,145
Citibank Credit Card Master Trust,
Ser. 1998-1, Cl. A, 5.75%, 2003 1,500,000 1,488,338
Peco Energy Transition Trust,
Ser. 1999-A, Cl. A-2, 5.63%, 2005 500,000 481,867
WFS Financial Owner Trust,
Ser. 1999-B, Cl. A-3, 6.32%, 2003 250,000 246,350
3,197,700
BANKING--5.3%
Bank of Boston,
Sub. Notes, 6.625%, 2004 750,000 720,775
Barnett Capital I,
Gtd. Capital Securities, 8.06%, 2026 435,000 413,761
HSBC Holding,
Sub. Notes, 7.5%, 2009 1,000,000 969,800
Washington Mutual Capital I,
Gtd. Capital Securities, 8.375%, 2027 500,000 474,405
Wells Fargo,
Notes, 6.625%, 2004 500,000 483,525
3,062,266
CHEMICALS--.7%
Monsanto,
Deb., 6.85%, 2028 500,000 427,888
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--.9%
Bear Stearns Commercial Mortgage,
Ser. 1999-WF2, Cl. A-1, 6.8%, 2008 270,556 261,698
DLJ Commercial Mortgage,
Ser. 1999-CG3, Cl. A-1A, 7.12%, 2009 272,659 266,632
528,330
FINANCIAL SERVICES--7.7%
Ford Motor Credit,
Notes, 8%, 2002 500,000 503,869
GMAC,
Deb., 6.125%, 2008 1,000,000 899,048
Goldman Sachs,
Notes, 7.8%, 2010 500,000 493,061
Household Finance,
Sr. Sub. Notes, 5.875%, 2009 500,000 433,866
Principal
BOND AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES (CONTINUED)
International Lease Finance,
Notes, 5.625%, 2002 1,000,000 962,944
Lehman Brothers,
Sr. Sub. Notes, 6.125%, 2001 200,000 197,871
Merrill Lynch,
Notes, 6%, 2009 500,000 440,817
Morgan Stanley Dean Witter,
Sr. Notes, 7.125%, 2003 300,000 296,592
Transamerica Financial,
Notes, 7.25%, 2002 200,000 198,304
4,426,372
FOREIGN--7.3%
AT&T Canada,
Sr. Notes, 7.65%, 2006 500,000 494,932
Abbey National PLC,
Sub. Deb., 7.95%, 2029 1,000,000 977,106
Australia & New Zealand Banking Group,
Sr. Sub. Notes, 6.25%, 2004 1,000,000 949,168
Hydro-Quebec,
Deb., 8.4%, 2022 201,000 215,555
Province of British Columbia,
Bonds, 6.5%, 2026 500,000 444,551
Province of Saskatchewan, C.D.A.,
Notes, 6.625%, 2003 500,000 487,158
Santander Finance Issuances,
Sub. Notes, 6.375%, 2011 250,000 217,387
Swiss Bank,
Sub. Deb., 7%, 2015 200,000 182,438
United Mexican States,
Notes, 9.875%, 2010 250,000 258,125
4,226,420
INDUSTRIAL--.4%
USX,
Deb., 9.125%, 2013 200,000 210,935
OIL AND GAS--.8%
Atlantic Richfield,
Notes, 5.55%, 2003 500,000 476,859
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BOND AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OTHER--1.7%
Private Export Funding,
Ser. NN Secured Notes, 7.3%, 2002 1,000,000 1,003,220
TELEPHONE AND TELEGRAPH--2.0%
Bell Atlantic Pennsylvania,
Deb., 6%, 2028 500,000 387,837
MCI WorldCom,
Sr. Notes, 6.4%, 2005 500,000 475,263
TCI Communications,
Deb., 7.875%, 2026 300,000 297,136
1,160,236
TRANSPORTATION--.8%
Burlington Northern Santa Fe,
Deb., 7.5%, 2023 500,000 457,684
UTILITIES--5.2%
National Rural Utilities,
Collateral Trust, 5.5%, 2005 500,000 459,124
Niagara Mohawk Power,
First Mortgage Bonds, 7.75%, 2006 300,000 295,310
PP&L Resources,
First Mortgage Bonds, 6.125%, 2001 1,000,000 (a) 988,291
Philadelphia Electric,
First Refunding Mortgage Bonds, 6.625%, 2003 1,300,000 1,261,779
3,004,504
U.S. GOVERNMENTS--14.6%
U. S. Treasury Bonds:
12.375%, 5/15/2004 500,000 596,485
11.625%, 11/15/2004 500,000 599,705
11.25%, 2/15/ 2015 250,000 366,335
12.5%, 8/15/2014 250,000 350,962
8.875%, 2/15/2019 1,600,000 1,925,184
8.125%, 8/15/2019 500,000 640,570
8.5%, 2/15/2020 500,000 624,025
6.25%, 8/15/2023 630,000 630,693
5.25%, 2/15/2029 250,000 250,480
6.125%, 8/15/2029 400,000 352,144
U. S. Treasury Notes:
7.5%, 2/15/2005 100,000 103,755
6.5%, 10/15/2006 2,000,000 1,998,860
8,439,198
Principal
BOND AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES--44.7%
Federal Home Loan Banks:
5.125%, 2003 1,000,000 905,721
5.8%, 2008 500,000 469,585
Federal Home Loan Mortgage Corp.:
5.5%, 8/1/2013 225,518 209,308
6%, 6/1/2012-2/1/2029 1,349,681 1,245,588
6.5%, 11/1/2004-12/1/2028 2,466,683 2,335,303
7%, 3/1/2012-6/1/2029 1,512,546 1,459,793
7.5%, 12/1/2024-12/1/2029 642,809 632,566
8%, 10/1/2019-1/1/2028 323,051 324,850
Federal National Mortgage Association:
4.75%, 2003 1,850,000 1,710,656
6%, 2008 800,000 736,712
6.5%, 2004 1,000,000 972,469
6.625%, 2009 600,000 572,585
7.125%, 2005 2,900,000 2,885,680
5.5%, 12/1/2013-2/1/2014 224,687 206,150
6%, 9/1/2013-7/1/2029 1,556,294 1,435,012
6.5%, 3/1/2011-8/1/2029 2,451,595 2,300,374
7%, 6/1/2011-1/1/2030 1,647,934 1,585,257
7.5%, 3/1/2012-1/1/2030 990,660 975,040
8%, 5/1/2013-9/1/2027 285,422 287,921
Government National Mortgage Association I:
6%, 1/15/2029 384,289 349,461
6.5%, 9/15/2008-6/15/2029 1,260,107 1,185,991
7%, 8/15/2025-1/15/2030 1,262,099 1,218,297
7.5%, 12/15/2026-1/15/2030 763,361 752,676
8%, 12/15/2026-1/15/2030 552,527 555,447
8.5%, 5/15/2025 269,946 276,524
9%, 10/15/2027 138,614 143,508
9.5%, 2/15/2025 148,148 156,111
25,888,585
TOTAL BONDS AND NOTES
(cost $58,634,360) 56,510,197
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM INVESTMENTS--1.6% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT;
Goldman, Sachs & Co., Tri-Party
Repurchase Agreement, 5.67%, dated 4/28/2000,
due 5/1/2000 in the amount of $885,423 (fully
collateralized by $726,000 U.S. Treasury Bonds,
11.625% due 11/15/2004 value $904,481)
(cost $885,005) 885,005 885,005
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $59,519,365) 99.2% 57,395,202
CASH AND RECEIVABLES (NET) .8% 490,534
NET ASSETS 100.0% 57,885,736
A REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION; THE STATED MATURITY IS 5/1/2006.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--
See Statement of Investments--Note 1(c) 59,519,365 57,395,202
Interest receivable 783,021
Receivable for shares of Capital Stock subscribed 3,283
58,181,506
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 36,288
Cash overdraft due to Custodian 164,245
Payable for shares of Capital Stock redeemed 95,237
295,770
--------------------------------------------------------------------------------
NET ASSETS ($) 57,885,736
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 62,241,587
Accumulated undistributed investment income--net 5
Accumulated net realized gain (loss) on investments (2,231,693)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 (2,124,163)
--------------------------------------------------------------------------------
NET ASSETS ($) 57,885,736
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 4,431,652 9,443,377 1,647,134 42,363,573
Shares outstanding 426,465 905,625 160,131 4,076,822
NET ASSET VALUE PER SHARE ($) 10.39 10.43 10.29 10.39
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,949,748
EXPENSES:
Management fee--Note 2(a) 174,699
Distribution and service fees--Note 2(b) 49,799
Loan commitment fees--Note 4 498
TOTAL EXPENSES 224,996
INVESTMENT INCOME--NET 1,724,752
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (484,013)
Net unrealized appreciation (depreciation) on investments (781,380)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,265,393)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 459,359
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,724,752 3,129,815
Net realized gain (loss) on investments (484,013) (1,085,712)
Net unrealized appreciation (depreciation)
on investments (781,380) (2,865,975)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 459,359 (821,872)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (151,811) (351,005)
Class B shares (263,533) (442,015)
Class C shares (45,220) (72,478)
Class R shares (1,264,070) (2,264,430)
TOTAL DIVIDENDS (1,724,634) (3,129,928)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 9,903,824 12,059,310
Class B shares 4,634,966 11,986,879
Class C shares 583,131 1,929,966
Class R shares 8,271,356 10,142,313
Dividends reinvested:
Class A shares 110,637 243,578
Class B shares 104,959 180,992
Class C shares 34,877 50,085
Class R shares 709,348 1,508,068
Cost of shares redeemed:
Class A shares (10,518,621) (12,172,203)
Class B shares (5,139,560) (6,869,077)
Class C shares (744,781) (1,144,120)
Class R shares (2,917,128) (13,649,898)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 5,033,008 4,265,893
TOTAL INCREASE (DECREASE) IN NET ASSETS 3,767,733 314,093
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 54,118,003 53,803,910
END OF PERIOD 57,885,736 54,118,003
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 945,946 1,110,255
Shares issued for dividends reinvested 10,605 22,422
Shares redeemed (1,005,724) (1,129,873)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (49,173) 2,804
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 440,088 1,082,346
Shares issued for dividends reinvested 10,022 16,653
Shares redeemed (489,307) (629,249)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (39,197) 469,750
--------------------------------------------------------------------------------
CLASS C
Shares sold 56,148 178,774
Shares issued for dividends reinvested 3,376 4,692
Shares redeemed (71,982) (106,959)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (12,458) 76,507
--------------------------------------------------------------------------------
CLASS R
Shares sold 780,081 914,656
Shares issued for dividends reinvested 67,992 138,448
Shares redeemed (279,157) (1,256,689)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 568,916 (203,585)
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 6,105 CLASS B SHARES REPRESENTING
$63,544 WERE AUTOMATICALLY CONVERTED TO 6,131 CLASS A SHARES AND DURING THE
PERIOD ENDED OCTOBER 31, 1999, 13,685 CLASS B SHARES REPRESENTING $145,726 WERE
AUTOMATICALLY CONVERTED TO 13,733 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 10.60 11.31 10.96 10.78 10.84 10.22
Investment Operations:
Investment income--net .30 .57 .58 .62 .58 .56
Net realized and unrealized
gain (loss) on investments (.21) (.71) .35 .19 (.07) .62
Total from Investment Operations .09 (.14) .93 .81 .51 1.18
Distributions:
Dividends from investment
income--net (.30) (.57) (.58) (.63) (.57) (.56)
Net asset value, end of period 10.39 10.60 11.31 10.96 10.78 10.84
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 1.83(b) (1.26) 8.73 7.80 4.85 11.83
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .85(b) .85 .85 .85 .85 .85
Ratio of net investment income
to average net assets 5.87(b) 5.22 5.20 5.80 5.38 5.33
Portfolio Turnover Rate 40.13(c) 161.28 149.08 129.94 153.63 73.00
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 4,432 5,044 5,349 1,169 1,001 1,150
A EXCLUSIVE OF SALES CHARGE.
B ANNUALIZED.
C NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 10.64 11.35 11.00 10.78 10.84 10.15
Investment Operations:
Investment income--net .28 .52 .52 .56 .52 .47
Net realized and unrealized
gain (loss) on investments (.21) (.71) .35 .23 (.07) .69
Total from Investment Operations .07 (.19) .87 .79 .45 1.16
Distributions:
Dividends from investment
income--net (.28) (.52) (.52) (.57) (.51) (.47)
Net asset value, end of period 10.43 10.64 11.35 11.00 10.78 10.84
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 1.34(c) (1.73) 8.14 7.56 4.33 11.32(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.35(c) 1.35 1.35 1.35 1.35 1.35(c)
Ratio of net investment income
to average net assets 5.34(c) 4.72 4.49 5.06 4.86 4.85(c)
Portfolio Turnover Rate 40.13(d) 161.28 149.08 129.94 153.63 73.00
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 9,443 10,056 5,391 542 143 78
(A) FROM DECEMBER 19, 1994 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1995.
(B) EXCLUSIVE OF SALES CHARGE
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 10.50 11.20 10.84 10.73 10.84 10.15
Investment Operations:
Investment income--net .28 .51 .52 (1.98) 3.05 .48
Net realized and unrealized
gain (loss) on investments (.21) (.70) .35 2.65 (2.65) .69
Total from Investment Operations .07 (.19) .87 .67 .40 1.17
Distributions:
Dividends from investment
income--net (.28) (.51) (.51) (.56) (.51) (.48)
Net asset value, end of period 10.29 10.50 11.20 10.84 10.73 10.84
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 1.28(c) (1.74) 8.25 6.49 3.83 11.32(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.35(c) 1.35 1.35 1.35 1.41 --
Ratio of net investment income
to average net assets 5.35(c) 4.72 4.61 4.98 5.50 --
Portfolio Turnover Rate 40.13(d) 161.28 149.08 129.94 153.63 73.00
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,647 1,812 1,076 349 -- --
(A) FROM DECEMBER 19, 1994 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1995.
(B) EXCLUSIVE OF SALES CHARGE
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 10.61 11.31 10.96 10.78 10.84 10.22
Investment Operations:
Investment income--net .32 .60 .61 .65 .60 .58
Net realized and unrealized
gain (loss) on investments (.22) (.70) .35 .19 (.06) .62
Total from Investment Operations .10 (.10) .96 .84 .54 1.20
Distributions:
Dividends from investment
income--net (.32) (.60) (.61) (.66) (.60) (.58)
Net asset value, end of period 10.39 10.61 11.31 10.96 10.78 10.84
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 1.87(a) (.91) 9.02 8.09 5.12 12.11
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .60(a) .60 .60 .60 .60 .60
Ratio of net investment income
to average net assets 6.09(a) 5.47 5.51 6.06 5.62 5.58
Portfolio Turnover Rate 40.13(b) 161.28 149.08 129.94 153.63 73.00
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 42,364 37,207 41,988 47,532 49,664 69,924
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Limited Term Income 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, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the fund. The fund's investment objective is
to obtain as high a level of current income as is consistent with safety of
principal and maintenance of liquidity. Although the fund may invest in
obligations with different remaining maturities, the fund's dollar-weighted
average maturity will be no more than 10 years. The Dreyfus Corporation (the
" Manager" ) serves as the fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. (" Mellon Bank" ), which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 250 million of $.001 par value Capital Stock. The fund
currently offers four classes of shares: Class A (50 million shares authorized),
Class B (50 million shares authorized), Class C (50 million shares authorized)
and Class R (100 million shares authorized). Class A, Class B and Class C shares
are sold primarily to retail investors through financial intermediaries and bear
a distribution fee and/or service fee. Class A shares are sold with a front-end
sales charge, while Class B and Class C shares are subject to a contingent
deferred sales charge ("CDSC"). Class B shares automatically convert to Class A
shares after six years. 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 or service
fees. Class R shares are offered without a front-end sales charge or CDSC. Each
class of shares has identical rights and privileges, except with The Fun
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
respect to distribution and service fees and voting rights on matters affecting
a single 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 other than U.S. Treasury Bills) 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
counter party default, the fund has the 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund has an unused capital loss carryover of approximately $1,703,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1999. If not
applied, $344,000 of the carryover expires in fiscal 2002, $274,000 expires in
fiscal 2003 and $1,085,000 expires in fiscal 2007.
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 .60% 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 $40,000 per
year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds
Trust (the "Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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 and service plan: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up
to .25% of the value of its average daily net assets to compensate the
distributor for shareholder servicing activities and expenses primarily intended
to result in the sale of Class A shares. Under the Plan, Class B and Class C
shares may pay the distributor for distributing shares at an aggregate annual
rate of .50% of the value of the average daily net assets of Class B and Class C
shares. Class B and Class C shares are also subject to a service plan adopted
pursuant to Rule 12b-1, under which Class B and Class C shares pay the
distributor for providing certain services to the holders of Class B and Class C
shares a fee at the annual rate of .25% of the value of the average daily net
assets of Class B and Class C shares. During the period ended April 30, 2000,
Class A, Class B and Class C shares were charged $6,465, $24,659 and $4,230,
respectively, pursuant to the Plan, of which $521, $5,147 and $896 for Class A,
Class B and Class C shares, respectively, were paid to DSC. Class B and Class C
shares were charged $12,330 and $2,115, respectively, pursuant to the service
plan, of which $8,116 and $921 for Class B and Class C shares, respectively,
were paid to DSC.
Under its terms, the Plan and service 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 or in any agreement
related to the Plan and service plan.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales (including paydowns) of investment
securities, excluding short-term securities, during the period ended April 30,
2000, amounted to $26,718,747 and $22,647,057, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$2,124,163, consisting of $99,299 gross unrealized appreciation and $2,223,462
gross unrealized depreciation.
At April 30, 2000, 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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. During the period ended April
30, 2000, the fund did not borrow under the Facility.
For More Information
Dreyfus Premier Limited Term Income Fund
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
The Boston Company
Asset Management, Inc.
One Boston Place
Boston, MA 02108
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative
or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 345SA004
Dreyfus Premier
Large Company
Stock Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
16 Financial Highlights
21 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Large Company Stock Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Large
Company Stock Fund covering the six-month period from November 1, 1999 through
April 30, 2000. Inside, you'll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, Bert J. Mullins.
The past six months have been highly volatile -- but generally rewarding -- for
investors in large-cap U.S. stocks. While the market's advance during the last
two months of 1999 was led primarily by technology stocks and large-cap growth
stocks in a fast-growing economy, the large-cap sector of the stock market
corrected substantially during the first quarter of 2000, causing large-cap
stocks to generally underperform small- and mid-cap stocks during those three
months.
In mid-March, investor sentiment appeared to shift once more. Faced with
evidence that inflationary pressures were building, a major measure of
technology stock performance, the Nasdaq Composite Index, fell substantially
between mid-March and the end of April, including a considerably large
single-day drop on April 14. Many "old economy" stocks declined less severely
and some value-oriented stocks gained ground amid renewed investor interest.
While it is too soon to determine whether this broadening of the market is
likely to persist, we believe that it may be a positive sign for the stock
market overall.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Large Company Stock Fund
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Bert J. Mullins, Portfolio Manager
How did Dreyfus Premier Large Company Stock Fund perform relative to its
benchmark?
For the six-month period ended April 30, 2000, the fund's total return was 7.93%
for Class A shares, 7.54% for Class B shares, 7.54% for Class C shares, 8.10%
for Class R shares, and 7.76% for Class T shares.(1) For the same period, the
total return of the Standard & Poor's 500 Composite Stock Price Index ("S&P 500
Index"), the fund's benchmark, was 7.18%.(2)
We attribute the fund' s good relative performance to our stock selection
process, particularly within the technology sector. We achieved these results
despite a volatile market in which performance was driven by a relative handful
of very large growth stocks, conditions that do not generally favor the fund's
diversified growth and value investment approach.
What is the fund's investment approach?
Dreyfus Premier Large Company Stock Fund primarily invests in a diversified
portfolio of large companies that meet our strict standards for value and
growth. We identify potential investments through a quantitative analytic
process that sifts through a universe of approximately 2,000 stocks in search of
those that are not only undervalued according to our criteria, but that also
exhibit improving earnings momentum. A team of experienced analysts examine the
fundamentals of the top-ranked candidates. Armed with these analytical insights,
the portfolio manager decides which stocks to purchase, and whether any current
holdings should be sold.
In addition to identifying attractive investment opportunities, our approach is
designed to manage the risks associated with market timing and sector and
industry exposure. Market timing refers to the practice of attempting to benefit
from gains and declines in the overall
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
market by adjusting the percentage of a fund's assets that are invested in the
market at any one time. We do not believe that the advantages of attempting to
time the market or rotate in and out of various industry sectors outweigh the
risks of such moves. Instead, our goal is to neutralize these risks by being
fully invested and remaining industry and sector neutral in relation to the S&P
500 Index.
The result is a broadly diversified portfolio of carefully selected stocks. At
the end of the recent six-month period, the fund held positions in approximately
145 stocks across eleven economic sectors. Our ten largest holdings accounted
for approximately 25% of the portfolio, so that the fund's performance was not
overly dependent on any one stock, but was determined by a large number of
securities.
What other factors influenced the fund's performance?
The fund's performance was driven primarily by its technology-related holdings,
which benefited from both general investor enthusiasm as well as the successful
application of our security selection strategy within the sector. Consistent
with our investment approach, the fund held approximately the same percentage of
technology stocks as the S& P 500 Index. However, our experienced team of
securities analysts succeeded in identifying several of the sector's strongest
performers, such as Corning, Micron Technology and Applied Materials. We
experienced similar success in the health care sector, where the fund's
significant position in Warner-Lambert benefited from the company's agreement to
be acquired by Pfizer at a substantial premium to its then prevailing stock
price.
Although the portfolio outperformed the S& P 500 Index during the reporting
period, we were disappointed with the performance of the quantitative model that
helps us choose securities. Uncertainties regarding rising interest rates and
the sustainability of U.S. economic growth caused sudden swings in investor
sentiment. As a result, stock prices rose and fell sharply. These conditions
undermined the effectiveness of our model, which depends on using data from one
month to identify stocks that will outperform during the next.
What is the fund's current strategy?
We continue to employ our sector-neutral strategy, which is designed to manage
certain risks by apportioning assets among various sectors in a way that is
consistent with the S& P 500 Index. In addition, our stock selection strategy
continues to be driven by our quantitative model, and we are looking for ways to
increase our model's effectiveness in volatile market environments. We continue
to adhere to our disciplined investment process in our efforts to outperform the
S&P 500 Index.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGES IN THE
CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES
CHARGES IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD
THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS
NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD
& POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX
OF U.S. STOCK MARKET PERFORMANCE.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
STATEMENT OF INVESTMENTS
COMMON STOCKS--99.3% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALCOHOL & TOBACCO-.9%
Anheuser-Busch Cos. 18,240 1,287,060
Seagram 9,600 518,400
1,805,460
CONSUMER CYCLICAL-9.2%
Best Buy 15,980 (a) 1,290,385
Costco Wholesale 17,600 (a) 951,500
Federated Department Stores 21,340 (a) 725,560
Ford Motor 11,480 627,812
General Motors 28,630 2,680,484
Home Depot 24,000 1,345,500
Limited 25,800 1,165,837
Lowe's Cos. 18,240 902,880
Safeway 20,800 (a) 917,800
Staples 28,460 (a) 542,519
TJX Cos. 35,260 676,551
Tandy 22,940 1,307,580
Target 19,540 1,300,631
US Airways Group 14,390 (a) 400,222
Wal-Mart Stores 76,180 4,218,468
19,053,729
CONSUMER STAPLES-3.8%
Coca-Cola 28,300 1,331,869
Energizer Holdings 8,920 152,197
General Mills 25,560 929,745
Nabisco Holdings, Cl. A 23,100 867,694
PepsiCo 42,590 1,562,521
Procter & Gamble 28,870 1,721,374
Quaker Oats 12,550 818,103
Ralston-Purina Group 26,760 473,317
7,856,820
ENERGY-5.5%
BP Amoco, ADS 20,221 1,031,281
Coastal 21,750 1,091,578
Enron 23,810 1,659,259
Exxon Mobil 48,200 3,744,537
Kerr-McGee 14,320 741,060
Royal Dutch Petroleum (New York Shares) 36,360 2,086,155
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ENERGY (CONTINUED)
Tosco 19,600 628,425
USX-Marathon Group 18,400 428,950
11,411,245
HEALTH CARE-9.9%
American Home Products 36,800 2,067,700
Amgen 30,620 (a) 1,714,720
Bausch & Lomb 9,520 574,770
Bristol-Myers Squibb 39,890 2,091,732
Elan, ADS 18,350 (a) 786,756
Genentech 5,000 585,000
MedImmune 4,800 (a) 767,700
Medtronic 30,620 1,590,326
Merck & Co. 39,400 2,738,300
Schering-Plough 36,730 1,480,678
UnitedHealth Group 13,980 932,291
Warner-Lambert 45,040 5,126,115
20,456,088
INTEREST SENSITIVE-16.6%
ACE 19,290 461,754
Allstate 36,782 868,975
Ambac Financial Group 8,410 403,680
American General 16,290 912,240
Bank of America 45,600 2,234,400
CIGNA 8,070 643,583
Chase Manhattan 38,270 2,757,832
Citigroup 44,910 2,669,338
Fannie Mae 21,870 1,319,034
FleetBoston Financial 66,800 2,367,225
General Electric 56,850 8,939,663
Hartford Financial Services Group 28,600 1,492,562
Lehman Brothers Holdings 14,180 1,163,646
MBNA 46,420 1,233,031
Merrill Lynch 17,580 1,792,061
Morgan Stanley Dean Witter & Co. 13,640 1,046,870
PNC Financial Services Group 13,980 609,877
SLM Holding 16,210 507,576
SouthTrust 24,880 594,010
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
SunTrust Banks 9,790 496,842
Wells Fargo 47,990 1,970,589
34,484,788
INTERNET RELATED-1.3%
America Online 25,780 (a) 1,541,966
Internet Capital Group 4,200 177,975
Yahoo! 8,000 (a) 1,042,000
2,761,941
PRODUCER GOODS-6.6%
Alcoa 13,080 848,565
Boeing 23,300 924,719
Burlington Northern Santa Fe 17,350 418,569
Canadian National Railway 11,380 319,351
Champion International 11,140 732,455
Honeywell International 11,150 624,400
Ingersoll-Rand 12,490 586,249
International Paper 12,800 470,400
Martin Marietta Materials 7,300 386,900
Minnesota Mining & Manufacturing 15,630 1,351,995
Northrop Grumman 5,800 411,075
PPG Industries 16,480 896,100
Rohm & Haas 12,080 430,350
Southdown 12,160 706,800
Tyco International 70,360 3,232,162
Union Carbide 9,300 548,700
United Technologies 12,790 795,378
13,684,168
SEMICONDUCTORS-6.7%
Altera 9,800 (a) 1,002,050
Analog Devices 12,400 (a) 952,475
Applied Materials 17,700 (a) 1,802,081
Intel 56,700 7,190,269
Linear Technology 14,300 816,887
Maxim Integrated Products 11,920 (a) 772,565
Micron Technology 9,300 (a) 1,295,025
13,831,352
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SERVICES-6.9%
AMFM 5,300 (a) 351,787
AT&T - Liberty Media Group, Cl. A 17,400 (a) 868,912
Automatic Data Processing 18,900 1,017,056
Clear Channel Communications 11,700 (a) 842,400
Disney (Walt) 34,900 1,511,606
Fox Entertainment Group, Cl. A 21,720 (a) 559,290
Hispanic Broadcasting 6,000 (a) 606,375
Infinity Broadcasting, Cl. A 20,680 (a) 701,828
MediaOne Group 6,190 (a) 468,119
Omnicom Group 11,730 1,068,163
Time Warner 32,110 2,887,893
Viacom, Cl. B 29,910 (a) 1,626,356
Vodafone AirTouch, ADR 31,400 1,475,800
VoiceStream Wireless 3,700 366,300
14,351,885
TECHNOLOGY-23.9%
Cisco Systems 124,800 (a) 8,652,150
Citrix Systems 7,400 (a) 451,863
Corning 12,290 2,427,275
Dell Computer 52,060 (a) 2,609,507
EMC 20,420 (a) 2,837,104
Gateway 11,300 (a) 624,325
International Business Machines 18,190 2,030,459
Lexmark International Group, Cl. A 7,820 (a) 922,760
Lucent Technologies 16,130 1,003,084
Microsoft 78,650 (a) 5,485,838
Motorola 16,817 2,002,274
Network Appliance 10,300 (a) 761,556
Nokia, ADS 14,580 829,238
Nortel Networks 27,900 3,159,675
Oracle 64,980 (a) 5,194,339
QUALCOMM 10,200 (a) 1,106,063
SCI Systems 24,720 (a) 1,316,340
Schlumberger 17,100 1,309,219
Siebel Systems 5,700 (a) 700,388
Solectron 28,000 (a) 1,310,750
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Sun Microsystems 37,560 (a) 3,453,173
Symantec 10,100 (a) 630,619
Tellabs 14,290 (a) 783,271
49,601,270
UTILITIES-8.0%
AT&T 67,870 3,168,681
Bell Atlantic 27,748 1,644,069
Calpine 5,100 (a) 466,650
Florida Progress 12,840 629,160
GPU 17,130 480,711
GTE 21,110 1,430,203
MCI WorldCom 37,355 (a) 1,697,318
PECO Energy 13,700 571,119
Public Service Enterprise Group 13,330 478,214
Qwest Communications International 6,508 (a) 282,285
SBC Communications 44,045 1,929,722
Sprint (FON Group) 34,400 2,115,600
Telefonos de Mexico, Cl. L, ADS 7,280 428,155
U S WEST 17,300 1,231,544
16,553,431
TOTAL COMMON STOCKS
(cost $162,056,146) 205,852,177
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--1.2% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT;
Goldman Sachs & Co., Tri-Party Repurchase
Agreement, 5.67% dated 4/28/2000,
due 5/1/2000 in the amount of
$ 2,501,181 (fully collateralized
by $ 2,049,000 U.S. Treasury Bonds,
11.625%, 11/15/2004, value $ 2,550,445)
(cost $2,500,000) 2,500,000 2,500,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $164,556,146) 100.5% 208,352,177
LIABILITIES, LESS CASH AND RECEIVABLES (.5%) (1,137,185)
NET ASSETS 100.0% 207,214,992
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments--Note 1(c) 164,556,146 208,352,177
Cash 307,207
Receivable for shares of Capital Stock subscribed 792,334
Dividends and interest receivable 110,946
209,562,664
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 252,315
Payable for investment securities purchased 1,975,343
Payable for shares of Capital Stock redeemed 120,014
2,347,672
--------------------------------------------------------------------------------
NET ASSETS ($) 207,214,992
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 164,484,923
Accumulated investment (loss) (357,661)
Accumulated net realized gain (loss) on investments (708,301)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 43,796,031
--------------------------------------------------------------------------------
NET ASSETS ($) 207,214,992
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets ($) 66,311,371 81,939,398 28,155,521 30,353,925 454,777
Shares Outstanding 2,564,581 3,210,628 1,102,975 1,172,226 17,620
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE ($) 25.86 25.52 25.53 25.89 25.81
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $2,843 foreign taxes withheld at source) 944,810
Interest 71,338
TOTAL INCOME 1,016,148
EXPENSES:
Management fee--Note 2(a) 829,756
Distribution and service fees--Note 2(b) 542,727
Loan commitment fees--Note 4 1,326
TOTAL EXPENSES 1,373,809
INVESTMENT (LOSS) (357,661)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (144,421)
Net unrealized appreciation (depreciation) on investments 13,727,912
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 13,583,491
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 13,225,830
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (357,661) (121,597)
Net realized gain (loss) on investments (144,421) (282,289)
Net unrealized appreciation (depreciation)
on investments 13,727,912 21,415,606
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 13,225,830 21,011,720
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares -- (52,833)
Class R shares -- (109,997)
Net realized gain on investments:
Class A shares (22,246) (1,520,037)
Class B shares (24,472) (912,663)
Class C shares (9,708) (291,767)
Class R shares (12,878) (1,678,760)
Class T shares (25) --
TOTAL DIVIDENDS (69,329) (4,566,057)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 22,130,433 31,597,928
Class B shares 28,353,363 40,780,563
Class C shares 6,127,949 20,617,520
Class R shares 297,699 1,231,238
Class T shares 407,423 38,917
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($) (CONTINUED):
Dividends reinvested:
Class A shares 19,443 1,351,183
Class B shares 19,815 795,685
Class C shares 7,072 187,918
Class R shares 10,968 1,549,773
Class T shares 25 --
Cost of shares redeemed:
Class A shares (12,096,018) (12,114,117)
Class B shares (6,312,078) (4,710,006)
Class C shares (3,029,304) (2,299,576)
Class R shares (3,884,869) (6,383,006)
Class T shares (528) (412)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 32,051,393 72,643,608
TOTAL INCREASE (DECREASE) IN NET ASSETS 45,207,894 89,089,271
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 162,007,098 72,917,827
END OF PERIOD 207,214,992 162,007,098
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999
FOR CLASS T SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended
CAPITAL SHARE TRANSACTIONS: (Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
CLASS A(B)
Shares sold 877,261 1,393,914
Shares issued for dividends reinvested 771 64,384
Shares redeemed (480,001) (535,102)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 398,031 923,196
--------------------------------------------------------------------------------
CLASS B(B)
Shares sold 1,135,357 1,791,184
Shares issued for dividends reinvested 793 37,850
Shares redeemed (253,589) (207,883)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 882,561 1,621,151
--------------------------------------------------------------------------------
CLASS C
Shares sold 245,896 917,025
Shares issued for dividends reinvested 283 8,996
Shares redeemed (122,115) (101,830)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 124,064 824,191
--------------------------------------------------------------------------------
CLASS R
Shares sold 11,774 55,010
Shares issued for dividends reinvested 434 73,922
Shares redeemed (154,216) (279,459)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (142,008) (150,527)
--------------------------------------------------------------------------------
CLASS T
Shares sold 15,946 1,705
Shares issued for dividends reinvested 1 --
Shares redeemed (15) (17)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 15,932 1,688
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999
FOR CLASS T SHARES.
(B) DURING THE PERIOD ENDED APRIL 30, 2000, 16,183 CLASS B SHARES REPRESENTING
$396,852 WERE AUTOMATICALLY CONVERTED TO 16,004 CLASS A SHARES AND DURING THE
PERIOD ENDED OCTOBER 31, 1999, 8,795 CLASS B SHARES REPRESENTING $198,413 WERE
AUTOMATICALLY CONVERTED TO 8,746 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998(a) 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 23.97 20.45 18.23 14.49 12.00 9.95
Investment Operations:
Investment income (loss)--net (.01)(b) .03(b) .07 .20 .27 .22
Net realized and unrealized gain
(loss) on investments 1.91 4.68 3.39 4.26 2.54 2.05
Total from Investment Operations 1.90 4.71 3.46 4.46 2.81 2.27
Distributions:
Dividends from investment
income--net -- (.04) (.15) (.20) (.20) (.22)
Dividends from net realized gain
on investments (.01) (1.15) (1.09) (.52) (.12) --
Total Distributions (.01) (1.19) (1.24) (.72) (.32) (.22)
Net asset value, end of period 25.86 23.97 20.45 18.23 14.49 12.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 7.93(c),(d) 23.86(c) 19.85(c) 32.01 23.87 23.20
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net
assets .57(d) 1.15 1.15 1.15 1.15 1.15
Ratio of net investment income
(loss) to average net assets (.02)(d) .13 .52 1.23 1.81 2.32
Portfolio Turnover Rate 26.15(d) 49.42 81.27 37.17 44.33 37.57
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 66,311 51,926 25,421 6,456 4,599 1,714
(A) EFFECTIVE JANUARY 16, 1998, INVESTOR SHARES WERE REDESIGNATED AS CLASS A SHARES.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31
--------------------------
CLASS B SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 23.75 20.38 17.93
Investment Operations:
Investment (loss) (.10)(b) (.14)(b) (.02)
Net realized and unrealized gain (loss) on investments 1.88 4.66 2.48
Total from Investment Operations 1.78 4.52 2.46
Distributions:
Dividends from investment income--net -- -- (.01)
Dividends from net realized gain on investments (.01) (1.15) --
Total Distributions (.01) (1.15) (.01)
Net asset value, end of period 25.52 23.75 20.38
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 7.54(d) 22.91 13.76(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .95(d) 1.90 1.51(d)
Ratio of net investment (loss) to average net assets (.40)(d) (.63) (.24)(d)
Portfolio Turnover Rate 26.15(d) 49.42 81.27
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 81,939 55,289 14,410
(A) EFFECTIVE JANUARY 16, 1998 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31
--------------------------
CLASS C SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 23.75 20.38 17.93
Investment Operations:
Investment (loss) (.10)(b) (.15)(b) (.02)
Net realized and unrealized gain (loss) on investments 1.89 4.67 2.48
Total from Investment Operations 1.79 4.52 2.46
Distributions:
Dividends from investment income--net -- -- (.01)
Dividends from net realized gain on investments (.01) (1.15) --
Total Distributions (.01) (1.15) (.01)
Net asset value, end of period 25.53 23.75 20.38
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 7.54(d) 22.97 13.70(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .95(d) 1.90 1.51(d)
Ratio of net investment (loss) to average net assets (.40)(d) (.64) (.24)(d)
Portfolio Turnover Rate 26.15(d) 49.42 81.27
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 28,156 23,249 3,154
(A) EFFECTIVE JANUARY 16, 1998 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998(a) 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 23.97 20.44 18.23 14.49 12.00 9.95
Investment Operations:
Investment income--net .03(b) .09(b) .17 .23 .21 .28
Net realized and unrealized gain
(loss) on investments 1.90 4.67 3.33 4.27 2.63 2.02
Total from Investment Operations 1.93 4.76 3.50 4.50 2.84 2.30
Distributions:
Dividends from investment
income--net -- (.08) (.20) (.24) (.23) (.25)
Dividends from net realized gain
on investments (.01) (1.15) (1.09) (.52) (.12) --
Total Distributions (.01) (1.23) (1.29) (.76) (.35) (.25)
Net asset value, end of period 25.89 23.97 20.44 18.23 14.49 12.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 8.10(c) 24.16 20.10 32.25 24.18 23.48
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net
assets .45(c) .90 .90 .90 .90 .90
Ratio of net investment income
to average net assets .11(c) .40 .85 1.46 2.06 2.57
Portfolio Turnover Rate 26.15(c) 49.42 81.27 37.17 44.33 37.57
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 30,354 31,503 29,933 28,224 13,387 4,509
(A) EFFECTIVE JANUARY 16, 1998, RESTRICTED SHARES WERE REDESIGNATED AS CLASS R SHARES.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
CLASS T SHARES (Unaudited) October 31,
1999(a)
-------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 23.96 23.57
Investment Operations:
Investment (loss) (.05)(b) (.01)(b)
Net realized and unrealized gain (loss) on investments 1.91 .40
Total from Investment Operations 1.86 .39
Distributions:
Dividends from net realized gain on investments (.01) --
Net asset value, end of period 25.81 23.96
--------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 7.76(d) 1.66(d)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .70(d) .30(d)
Ratio of net investment (loss) to average net assets (.20)(d) (.11)(d)
Portfolio Turnover Rate 26.15(d) 49.42
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 455 40
(A) EFFECTIVE AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31,
1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Large Company Stock 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, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the fund. The fund's investment objective is
to seek investment returns (including capital appreciation and income) that are
consistently superior to the Standard & Poor's 500 Composite Stock Price Index.
The Dreyfus Corporation (the "Manager") serves as the fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank") which is
a wholly-owned subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 100 million of $.001 par value Capital Stock in each of
the following classes of shares: Class A, Class B, Class C, Class R and 200
million of $.001 par value Capital Stock of Class T shares. Class A, Class B,
Class C and Class T shares are sold primarily to retail investors through
financial intermediaries and bear a distribution fee and /or service fee. Class
A and Class T shares are sold with a front-end sales charge, while Class B and
Class C shares are subject to a contingent deferred sales charge ("CDSC"). Class
B shares automatically convert to Class A shares after six years. 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 an investment account or relationship at
such institution and bear no distribution or service fees. Class R shares are
offered without a front end sales charge or CDSC. Each class of shares has
identical rights and privileges, except with respect to distribution and service
fees and voting rights on matters affecting a single class.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 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.
(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) 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 o
a counter party default, the fund has the 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: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a quarterly
basis. 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, if any, it is the policy of the 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 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,
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
at the annual rate of .90% 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, service fees, 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 fees). Each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings` attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable amounts)
. In the event that there is a joint committee meeting of the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be
allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies
Fund. These fees and expenses are charged and 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.
DSC retained $4,831 during the period ended April 30, 2000 from commissions
earned on sales of the fund shares.
(b) Distribution and service plan: Under the distribution plan ("Plan") adopted
pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up to .25%
of their average daily net assets to compensate the distributor and DSC, for
shareholder servicing activities and the distributor for activities and expenses
primarily intended to result in the sale of Class A shares. Under the Plan,
Class B, Class C and Class T shares may pay the distributor for distributing
their shares at an aggregate annual rate of .75% of the value of the average
daily net assets of Class B and Class C shares and .25% of the average daily net
assets of Class T shares. The distributor may pay one or more agents in respect
of advertising, marketing and other distribution services for Class T shares and
determines the amounts, if any, to be paid to agents and the basis on which such
payments are made. Class B, Class C and Class T shares are also subject to a
service plan adopted pursuant to Rule 12b-1, under which Class B, Class C and
Class T shares pay the distributor for providing services to the holders of
Class B, Class C and Class T shares a fee at the annual rate of .25% of the
value of the average daily net assets of Class B, Class C and Class T shares.
During the period ended April 30, 2000, Class A, Class B, Class C and Class T
shares were charged $74,373, $255,166, $95,698 and $268, respectively, pursuant
to the Plan, of which $36,595, $64,627,$22,677 and $108 for Class A, Class B,
Class C and Class T shares, respectively, were paid to DSC. Class B, Class C and
Class T shares were charged $85,055, $31,899 and $268, respectively, pursuant to
the service plan, of which $60,329, $31,341 and $268 for Class B, Class C and
Class T shares, respectively, were paid to DSC.
Under its terms, the Plan and service 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 had no
direct or indirect financial interest in the operation of or in any agreement
related to the Plan or Service Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$80,553,924 and $47,735,390, respectively.
At April 30, 2000, accumulated net unrealized appreciation on investments was
$43,796,031, consisting of $50,843,413 gross unrealized appreciation and
$7,047,382 gross unrealized depreciation.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
At April 30, 2000, 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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. During the period ended April
30, 2000, the fund did not borrow under the Facility.
NOTES
For More Information
Dreyfus Premier Large Company Stock 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative
or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 318SA004
Dreyfus Premier
Midcap Stock Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
17 Financial Highlights
22 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Midcap Stock Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Midcap
Stock Fund, covering the six-month period from November 1, 1999 through April
30, 2000. Inside, you' ll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, John O'Toole.
The past six months have been highly volatile for investors in midcap stocks.
Although the market' s advance through the last two months of 1999 was led
primarily by technology stocks and large-cap growth stocks in a fast-growing
economy, the large-cap sector of the stock market corrected substantially during
the first quarter of 2000. At the same time, prices of many midcap stocks rose,
helping midcap stocks to generally outperform large-cap stocks during that
period.
In March, however, investor sentiment shifted once more, and large-cap companies
generally provided higher returns than midcap companies. In April, many stocks
of all sizes were adversely affected by a sharp decline in technology stock
prices. A major indicator of technology stock performance, the Nasdaq Composite
Index, fell substantially between mid-March and the end of April, including a
considerably large single-day drop on April 14. We believe that many midcap
stocks continue to be attractively valued relative to their larger counterparts.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Midcap Stock Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
John O'Toole, Portfolio Manager
How did Dreyfus Premier Midcap Stock Fund perform relative to its benchmark?
For the six-month period ended April 30, 2000, the fund's Class A, B, C, R and T
shares produced total returns of 17.31%, 16.88%, 16.92%, 17.47% and 17.20%,
respectively.(1) In comparison, the Standard & Poor's MidCap 400 Index ("S&P
MidCap 400" ), the fund's benchmark, produced a total return of 21.26% for the
same period.(2)
The fund' s performance was impacted positively in two ways: first, by strong
investor interest in midcap stocks as an investment category and second, by our
singular focus on individual stock selection rather than trying to favor certain
industries. On the other hand, the stock market's extreme volatility and abrupt
shift from investors favoring growth stocks to value stocks late in the period
had a negative effect on overall performance.
What is the fund's investment approach?
The fund invests primarily in a blended portfolio of growth and value stocks of
mid-capitalization companies chosen through a disciplined process that combines
computer modeling techniques, fundamental analysis and risk management.
The quantitatively driven valuation process identifies and ranks approximately
2,500 midcap stocks as an attractive, neutral or unattractive investment, based
upon more than a dozen different valuation inputs. Those inputs, which we
believe can have an important influence on stock returns, include, among other
things, earnings estimates, profit margins and growth in cash flow. Based upon
our analysis of which factors are being rewarded by investors, we establish
weightings for each factor and make adjustments along the way for the uniqueness
of various industries and economic sectors. For example, if the equity markets
were rewarding companies with strong growth in cash flow, then we would add more
weight to our growth-in-cash-flow factor.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Next, our investment management team conducts fundamental research on each
stock, which ultimately results in the buy-and-sell recommendations. The fund
seeks to own the best-performing stocks within each economic sector of the
midcap market. By maintaining an economic sector-neutral stance, we allow
individual stock selection to drive the portfolio's performance.
What other factors influenced the fund's performance?
During the first four months of the period, growth stocks overwhelmingly
outperformed value stocks. However, by mid-March, value stocks staged a dramatic
comeback. The fund's quantitative model examines a mixture of growth and value
characteristics, without necessarily favoring either one. A downside to the
model is that it does not work as well in very polarized markets where one
investment style dominates another. While we attempted to boost the portfolio's
emphasis on value stocks early in the period, and then increase the emphasis on
growth stocks later on, our efforts were not rewarded because the market changed
so quickly.
Nevertheless, our focus on individual stock selection was rewarded in many
instances. For example, Convergys, which provides billing services to a wide
range of industries including telecommunications, technology and financial
services, was one of the fund's top performers, more than doubling in price
during the period. Investors were enthusiastic about the company's increasing
client base and expansion internationally. Another strong performer was Waters,
a provider of laboratory products and services to the pharmaceutical, chemical
and environmental testing industries. The company's stock price surged along
with the boom in biotechnology stocks during the early part of the reporting
period. In addition, two hospital management companies, Universal Health
Services and Health Management Associates, benefited from an improved outlook
for government reimbursement of health care costs. Universal Health Services
owns and operates hospitals, mental health centers and other medical facilities
throughout the United States while Health Management Associates operates acute
care hospitals in rural communities primarily in the southeastern and
southwestern U.S. Both companies reported stronger than expected profits during
the first quarter of 2000.
What is the fund's current strategy?
We continue to follow our quantitatively driven valuation model and our
sector-neutral portfolio construction process. Nevertheless, we are always
trying to improve the model' s performance. Because the market has been so
volatile, we have refined our quantitative methods in some instances to place
more emphasis on a company's recent data rather than its longer term historical
results. By doing so, we have been able to identify a number of individual
stocks in a broad array of industries that are providing competitive investment
performance.
We continue to believe that the midcap sector of the market represents a
collection of very dynamic and interesting companies that offer attractive
values relative to their large-cap counterparts.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
TOTAL RETURN DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE
IN THE CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED
SALES CHARGE ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD
& POOR'S MIDCAP 400 INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX MEASURING THE
PERFORMANCE OF THE MIDSIZE COMPANY SEGMENT OF THE U.S. MARKET.
The Fund
<TABLE>
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
COMMON STOCKS--97.6% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER CYCLICAL--10.1%
Abercrombie & Fitch, Cl. A 45,900 (a) 504,900
Alaska Air Group 22,500 (a) 646,875
BJ's Wholesale Club 55,100 (a) 1,952,606
Blyth Industries 37,200 1,104,375
Brinker International 37,200 (a) 1,185,750
Brunswick 30,200 579,463
Dollar Tree Stores 46,400 (a) 2,685,400
Johnson Controls 17,500 1,107,969
Leggett & Platt 38,200 816,525
Liz Claiborne 22,200 1,028,138
MGM Grand 49,600 1,463,200
Miller (Herman) 33,500 917,062
Navistar International 19,300 (a) 675,500
Park Place Entertainment 60,300 (a) 772,594
Ross Stores 84,300 1,749,225
Starbucks 13,800 (a) 417,234
TJX Cos. 73,000 1,400,687
Zale 36,000 (a) 1,485,000
20,492,503
CONSUMER STAPLES--2.7%
Dial 39,450 549,834
Hormel Foods 55,400 844,850
Lancaster Colony 27,300 716,625
McCormick & Co. 27,800 867,013
Supervalu 36,850 762,334
Universal Foods 40,000 657,500
Wrigley (Wm.) Jr. 15,100 1,092,863
5,491,019
ENERGY--8.5%
Amerada Hess 24,200 1,539,725
BJ Services 35,200 (a) 2,472,800
Diamond Offshore Drilling 45,600 1,838,250
ENSCO International 64,000 2,124,000
Equitable Resources 32,800 1,521,100
KeySpan 44,150 1,296,906
Murphy Oil 19,600 1,156,400
Peoples Energy 41,300 1,282,881
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ENERGY (CONTINUED)
Questar 46,100 867,256
Santa Fe International 28,100 965,938
Tidewater 33,500 996,625
Ultramar Diamond Shamrock 51,650 1,278,338
17,340,219
HEALTH CARE--11.2%
Allergan 40,600 2,390,325
Bausch & Lomb 8,100 489,037
Biomet 45,300 1,616,644
Chiron 49,350 (a) 2,233,088
Cytyc 18,800 (a) 841,300
Forest Laboratories 11,000 (a) 924,687
Health Management Associates, Cl. A 115,700 (a) 1,843,969
IVAX 114,750 (a) 3,141,281
Lincare Holdings 30,750 (a) 937,875
MedImmune 21,300 (a) 3,406,669
Millennium Pharmaceuticals 11,600 (a) 920,750
Patterson Dental 9,150 (a) 440,344
Universal Health Services, Cl. B 28,400 (a) 1,554,900
Waters 19,800 (a) 1,876,050
22,616,919
INTEREST SENSITIVE--11.1%
Associated Banc 29,700 759,206
Block (H & R) 22,000 919,875
City National 47,500 1,748,594
Cullen/Frost Bankers 48,200 1,189,937
Dime Bancorp 49,000 918,750
Edwards (A.G.) 40,300 1,516,288
Gallagher (Arthur J.) & Co. 32,800 1,221,800
Golden West Financial 34,400 1,173,900
Mercantile Bankshares 36,050 1,027,425
Metris Cos. 45,100 1,691,250
Nationwide Financial Services, Cl. A 29,500 822,313
North Fork Bancorporation 83,100 1,345,181
PMI Group 36,550 1,770,391
Pacific Century Financial 50,600 1,040,462
Paine Webber Group 10,800 473,850
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
Radian Group 20,300 1,034,031
RenaissanceRe Holdings 11,300 415,275
T. Rowe Price Associates 44,350 1,690,844
Union Planters 42,500 1,203,281
UnionBanCal 22,100 611,894
22,574,547
INTERNET--2.8%
Check Point Software Technologies 6,600 (a) 1,141,800
iXL Enterprises 15,200 338,200
Portal Software 22,200 1,018,425
Proxicom 26,000 888,875
Scient 11,500 621,000
VeriSign 11,300 (a) 1,574,938
5,583,238
PRODUCER GOODS--9.6%
American Power Conversion 50,800 (a) 1,793,875
Briggs & Stratton 19,250 738,719
CNF Transportation 15,900 444,206
Centex 28,200 680,325
Centex Construction Products 22,200 685,425
Cytec Industries 41,600 (a) 1,253,200
Dexter 14,500 795,688
Englehard 48,200 846,512
Helix Technology 20,400 1,041,675
Kansas City Southern Industries 18,000 1,293,750
Louisiana-Pacific 66,200 885,425
Mead 37,700 1,312,431
Parker-Hannifin 19,250 895,125
Quanta Services 36,300 (a) 1,685,681
Sealed Air 21,000 (a) 1,168,125
Sherwin-Williams 63,900 1,589,513
Trinity Industries 33,100 736,475
USFreightways 17,200 801,950
United Parcel Service, Cl. B 13,300 884,450
19,532,550
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SERVICES--9.7%
Belo (A.H.), Cl. A 49,100 819,356
Convergys 52,600 (a) 2,314,400
DST Systems 19,100 (a) 1,416,981
DeVry 51,100 (a) 1,216,819
Dow Jones & Co. 11,900 772,012
Hertz, Cl. A 34,500 1,075,969
Hispanic Broadcasting 10,800 (a) 1,091,475
Knight-Ridder 14,900 731,031
MarchFirst 26,642 (a) 567,808
McClatchy, Cl. A 23,600 747,825
Pulitzer 16,800 644,700
Robert Half International 29,000 (a) 1,772,625
Telephone & Data Systems 8,750 892,500
United States Cellular 10,800 (a) 648,675
Univision Communiations, Cl. A 14,300 (a) 1,562,275
Washington Post, Cl. B 2,600 1,268,800
Westwood One 24,600 (a) 870,225
Young & Rubicam 23,950 1,333,716
19,747,192
TECHNOLOGY--23.5%
Atmel 41,000 (a) 2,006,438
CIENA 14,400 (a) 1,780,200
Cypress Semiconductor 34,700 (a) 1,802,231
Entrust Technologies 8,800 (a) 432,300
Extreme Networks 18,000 1,037,250
Intuit 36,300 (a) 1,304,531
Jabil Circuit 55,200 (a) 2,259,750
Lexmark International Group, Cl. A 14,150 (a) 1,669,700
Maxim Integrated Products 69,900 (a) 4,530,394
NVIDIA 8,600 (a) 766,475
Novellus Systems 30,800 (a) 2,053,975
Pharmacopeia 16,500 (a) 678,563
Powerwave Technologies 10,200 (a) 2,122,238
RF Micro Devices 8,300 (a) 863,719
Rational Software 20,600 (a) 1,753,575
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Redback Networks 12,600 1,000,125
SDL 10,400 (a) 2,028,000
Sanmina 25,200 (a) 1,513,575
Sawtek 21,450 (a) 1,025,578
Siebel Systems 31,300 (a) 3,845,987
Sybase 58,800 (a) 1,187,025
Symantec 31,900 (a) 1,991,756
Synopsys 28,900 (a) 1,213,800
Terayon Communication Systems 5,900 (a) 548,700
TranSwitch 21,600 (a) 1,902,150
Vignette 15,900 (a) 766,181
Vishay Intertechnology 30,700 (a) 2,574,962
Vitesse Semiconductor 45,100 (a) 3,069,619
47,728,797
UTILITIES--8.4%
Allegheny Energy 64,900 1,971,337
Constellation Energy Group 52,000 1,719,250
DTE Energy 44,350 1,446,919
Dynegy, Cl. A 37,500 2,453,906
Energy East 61,550 1,284,856
GPU 38,000 1,066,375
ITXC 27,600 (a) 740,025
Illuminet Holdings 15,500 (a) 698,469
NSTAR 43,600 1,921,125
Northern States Power 33,400 728,537
OGE Energy 70,000 1,386,875
Pinnacle West Capital 24,250 851,781
TECO Energy 31,200 682,500
16,951,955
TOTAL COMMON STOCKS
(cost $177,119,022) 198,058,939
Principal
SHORT-TERM INVESTMENTS--2.4% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT;
Goldman Sachs & Co.,
Tri-Party Repurchase Agreement, 5.67%
dated 4/28/2000 to be repurchased
at $4,902,315 on 5/1/2000,
collateralized by $4,919,000 U.S.
Treasury Notes, 5.625% due
5/15/2001, value $4,998,309
(cost $4,900,000) 4,900,000 4,900,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $182,019,022) 100.0% 202,958,939
LIABILITIES, LESS CASH AND RECEIVABLES (.0%) (97,552)
NET ASSETS 100.0% 202,861,387
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--
See Statement of Investments--Note 1(c) 182,019,022 202,958,939
Cash 420,505
Receivable for shares of Capital Stock subscribed 142,494
Dividends and interest receivable 180,334
203,702,272
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 217,032
Payable for shares of Capital Stock redeemed 609,184
Loan commitment fees payable 14,669
840,885
--------------------------------------------------------------------------------
NET ASSETS ($) 202,861,387
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 151,896,680
Accumulated investment (loss) (108,519)
Accumulated net realized gain (loss) on investments 30,133,309
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 20,939,917
--------------------------------------------------------------------------------
NET ASSETS ($) 202,861,387
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C Class R Class T
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets ($) 56,971,732 30,272,630 6,195,746 109,341,067 80,212
Shares Outstanding 2,965,608 1,604,268 327,918 5,656,860 4,183
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE ($) 19.21 18.87 18.89 19.33 19.18
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends 1,224,749
Interest 43,173
TOTAL INCOME 1,267,922
EXPENSES:
Management fee--Note 2(a) 1,108,946
Distribution and service fees--Note 2(b) 251,169
Interest expense--Note 4 14,569
Loan commitment fees--Note 4 1,757
TOTAL EXPENSES 1,376,441
INVESTMENT (LOSS) (108,519)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments 30,573,340
Net unrealized appreciation (depreciation) on investments 1,469,131
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 32,042,471
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 31,933,952
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss)--net (108,519) (341,834)
Net realized gain (loss) on investments 30,573,340 7,058,703
Net unrealized appreciation (depreciation)
on investments 1,469,131 18,185,744
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 31,933,952 24,902,613
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Net realized gain on investments:
Class A shares (1,598,532) --
Class B shares (519,276) --
Class C shares (107,432) --
Class R shares (1,850,641) --
Class T shares (700) --
TOTAL DIVIDENDS (4,076,581) --
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 31,326,186 87,568,401
Class B shares 4,242,813 10,111,646
Class C shares 1,419,589 3,098,549
Class R shares 10,087,810 50,612,334
Class T shares 74,598 2,330
Dividends reinvested:
Class A shares 1,527,611 --
Class B shares 423,230 --
Class C shares 61,914 --
Class R shares 1,514,740 --
Class T shares 700 --
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($) (CONTINUED):
Cost of shares redeemed:
Class A shares (68,322,821) (53,668,857)
Class B shares (3,921,062) (4,263,709)
Class C shares (1,549,261) (1,751,689)
Class R shares (11,210,570) (19,791,175)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (34,324,523) 71,917,830
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,467,152) 96,820,443
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 209,328,539 112,508,096
END OF PERIOD 202,861,387 209,328,539
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999
FOR CLASS T SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(B)
Shares sold 1,716,951 5,612,113
Shares issued for dividends reinvested 89,073 --
Shares redeemed (3,853,440) (3,285,647)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (2,047,416) 2,326,466
--------------------------------------------------------------------------------
CLASS B(B)
Shares sold 239,306 638,392
Shares issued for dividends reinvested 25,043 --
Shares redeemed (222,746) (267,298)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 41,603 371,094
--------------------------------------------------------------------------------
CLASS C
Shares sold 79,225 195,119
Shares issued for dividends reinvested 3,659 --
Shares redeemed (87,032) (109,042)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (4,148) 86,077
--------------------------------------------------------------------------------
CLASS R
Shares sold 551,906 3,084,883
Shares issued for dividends reinvested 87,862 --
Shares redeemed (614,392) (1,227,426)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 25,376 1,857,457
--------------------------------------------------------------------------------
CLASS T
Shares sold 4,002 140
Shares issued for dividends reinvested 41 --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 4,043 140
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999
FOR CLASS T SHARES.
(B) DURING THE PERIOD ENDED APRIL 30, 2000, 690 CLASS B SHARES REPRESENTING
$12,213 WERE AUTOMATICALLY CONVERTED TO 679 CLASS A SHARES, AND DURING THE
PERIOD ENDED OCTOBER 31, 1999, 3,059 CLASS B SHARES REPRESENTING $48,938 WERE
AUTOMATICALLY CONVERTED TO 3,028 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portlolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 (a) 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 16.69 14.24 17.02 14.36 11.92 9.75
Investment Operations:
Investment income (loss)--net (.01)(b) (.03)(b) (.01) .02 .04 .09
Net realized and
unrealized gain (loss)
on investments 2.86 2.48 (.29) 4.79 2.98 2.17
Total from
Investment Operations 2.85 2.45 (.30) 4.81 3.02 2.26
Distributions:
Dividends from
investment income--net -- -- (.01) (.01) (.05) (.09)
Dividends from net realized
gain on investments (.33) -- (2.47) (2.14) (.53) --
Total Distributions (.33) -- (2.48) (2.15) (.58) (.09)
Net asset value, end of period 19.21 16.69 14.24 17.02 14.36 11.92
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 17.31(c,d) 17.21(c) (2.16)(c) 38.40 26.29 23.39
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets .67(d) 1.35 1.35 1.35 1.35 1.35
Ratio of interest expense to
average net assets .01(d) -- -- -- -- --
Ratio of net investment
income (loss)
to average net assets (.06)(d) (.17) (.19) .16 .28 .86
Portfolio Turnover Rate 48.60(d) 80.15 78.02 81.87 90.93 71.00
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 56,972 83,674 38,267 6,847 3,205 1,417
(A) EFFECTIVE JANUARY 16, 1998, INVESTOR SHARES WERE REDESIGNATED AS CLASS A SHARES.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31
----------------------------
CLASS B SHARES (Unaudited) 1999 1998 (a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 16.46 14.16 14.65
Investment Operations:
Investment (loss)--net (.08)(b) (.15)(b) (.06)
Net realized and unrealized gain (loss)
on investments 2.82 2.45 (.43)
Total from Investment Operations 2.74 2.30 (.49)
Distributions:
Dividends from net realized gain on investments (.33) -- --
Net asset value, end of period 18.87 16.46 14.16
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 16.88(d) 16.32 (3.41)(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets 1.04(d) 2.10 1.66(d)
Ratio of interest expense to
average net assets .01(d) -- --
Ratio of net investment (loss)
to average net assets (.42)(d) (.92) (.77)(d)
Portfolio Turnover Rate 48.60(d) 80.15 78.02
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 30,273 25,724 16,867
(A) FROM JANUARY 16, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31
----------------------------
CLASS C SHARES (Unaudited) 1999 1998 (a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 16.48 14.17 14.65
Investment Operations:
Investment (loss)--net (.08)(b) (.15)(b) (.06)
Net realized and unrealized gain (loss)
on investments 2.82 2.46 (.42)
Total from Investment Operations 2.74 2.31 (.48)
Distributions:
Dividends from net realized gain on investments (.33) -- --
Net asset value, end of period 18.89 16.48 14.17
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 16.92(d) 16.30 (3.28)(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets 1.04(d) 2.10 1.66(d)
Ratio of interest expense to
average net assets .01(d) -- --
Ratio of net investment (loss)
to average net assets (.42)(d) (.92) (.77)(d)
Portfolio Turnover Rate 48.60(d) 80.15 78.02
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 6,196 5,473 3,485
(A) FROM JANUARY 16, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31,
-----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 (a) 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 16.77 14.28 17.03 14.36 11.92 9.76
Investment Operations:
Investment income--net .01(b) .01(b) .01 .05 .07 .12
Net realized and unrealized
gain (loss)
on investments 2.88 2.48 (.26) 4.80 2.98 2.16
Total from
Investment Operations 2.89 2.49 (.25) 4.85 3.05 2.28
Distributions:
Dividends from
investment income--net -- -- (.03) (.04) (.08) (.12)
Dividends from net realized
gain on investments (.33) -- (2.47) (2.14) (.53) --
Total Distributions (.33) -- (2.50) (2.18) (.61) (.12)
Net asset value, end of period 19.33 16.77 14.28 17.03 14.36 11.92
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 17.47(c) 17.44 (1.88) 38.88 26.61 23.57
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets .55(c) 1.10 1.10 1.10 1.10 1.10
Ratio of interest expense to
average net assets .01(c) -- -- -- -- --
Ratio of net investment income
to average net assets .07(c) .09 .05 .42 .57 1.11
Portfolio Turnover Rate 48.60(c) 80.15 78.02 81.87 90.93 71.00
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 109,341 94,455 53,888 31,769 15,644 12,129
(A) EFFECTIVE JANUARY 16, 1998, RESTRICTED SHARES WERE REDESIGNATED AS CLASS R SHARES.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
Six Months Ended
April 30, 2000 Year Ended
CLASS T SHARES (Unaudited) October 31,
1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 16.68 16.84
Investment Operations:
Investment (loss)--net (.03)(b) (.01)(b)
Net realized and unrealized gain (loss)
on investments 2.86 (.15)
Total from Investment Operations 2.83 (.16)
Distributions:
Dividends from net realized gain on investments (.33) --
Net asset value, end of period 19.18 16.68
--------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 17.20(d) .95(d)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets .80(d) .34(d)
Ratio of interest expense to
average net assets .01(d) --
Ratio of net investment (loss)
to average net assets (.14)(d) (.06)(d)
Portfolio Turnover Rate 48.60(d) 80.15
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 80 2
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Midcap Stock 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, as amended (the "Act" ), as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the fund. The fund's investment objective is
to seek total investment returns (including capital appreciation and income)
which consistently outperform the Standard & Poor' s 400 Midcap Index. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank"), which is a
wholly-owned subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 488 million shares of $.001 par value Capital Stock. The
fund currently offers five classes of shares: Class A (22 million shares
authorized) , Class B (100 million shares authorized), Class C (100 million
shares authorized) , Class R (66 million shares authorized) and Class T shares
(200 million shares authorized). Class A, Class B, Class C and Class T shares
are sold primarily to retail investors through financial intermediaries and bear
a distribution fee and/or service fee. Class A and Class T shares are sold with
a front-end sales charge, while Class B and Class C shares are subject to a
contingent deferred sales charge ("CDSC"). Class B shares automatically convert
to Class A shares after six years. 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 an
investment account or relationship at such institution and bear no distribution
or service fees. Class R shares are offered without a front end sales charge or
CDSC. Each class of shares has identical rights and privileges,
except with respect to distribution and service fees and voting rights on
matters affecting a single 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 (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. 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.
(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) 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 The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 counter party
default, the fund has the 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: 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 distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the 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 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 1.10% 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,
service fees, 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 fees). Each director receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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.
DSC retained $1,408 during the period ended April 30, 2000 from commissions
earned on sales of fund shares.
(b) Distribution and service plan: Under the fund's Distribution Plan (the
" Plan" ) adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay
annually up to .25% of the value of their average
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
daily net assets to compensate the distributor for shareholder servicing
activities and expenses primarily intended to result in the sale of Class A
shares. Under the Plan, Class B, Class C and Class T shares may pay the
distributor for distributing their shares at an aggregate annual rate of .75% of
the value of the average daily net assets of Class B and Class C shares and .25%
of the value of the average daily net assets of Class T shares, respectively.
The distributor may pay one or more agents in respect of advertising, marketing
and other distribution services for class T shares and determines the amounts,
if any, to be paid to Agents and the basis on which such payments are made.
Class B, Class C and Class T shares are also subject to a service plan adopted
pursuant to Rule 12b-1, under which Class B, Class C and Class T shares pay the
distributor for providing services to the holders of Class B, Class C and Class
T shares a fee at the annual rate of .25% of the value of the average daily net
assets of Class B, Class C and Class T shares, respectively. During the period
ended April 30, 2000, Class A, Class B, Class C and Class T shares were charged
$81,815, $105,177, $21,766 and $48, respectively, pursuant to the Plan, of which
$51,863, $24,286, $4,997 and $17 for Class A, Class B, Class C and Class T
shares, respectively, were paid to DSC. Class B, Class C and Class T shares were
charged $35,059, $7,256 and $48, respectively, pursuant to the service plan, of
which $24,318, $6,446 and $17 for Class B, Class C and Class T shares,
respectively, were paid to DSC.
Under its terms, the Plan and service 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 or in any agreement
related to the Plan or service plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$98,326,470 and $142,417,048, respectively.
At April 30, 2000, accumulated net unrealized appreciation on investments was
$20,939,917, consisting of $37,779,090 gross unrealized appreciation and
$16,839,173 gross unrealized depreciation.
At April 30, 2000, 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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.
The average daily amount of borrowings outstanding under the Facility during the
period ended April 30, 2000 was approximately $385,000, with a related weighted
average annualized interest rate of 7.61%.
The Fund
NOTES
For More Information
Dreyfus Premier Midcap Stock 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative
or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 330SA004
Dreyfus Premier
Small Cap
Value Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
22 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Small Cap Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Small Cap
Value Fund, covering the six-month period from November 1, 1999 through April
30, 2000. Inside, you' ll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, William P. Rydell.
The past six months have been favorable for small-cap stocks, which, as measured
by the Russell 2000 Index, outpaced the performance of large-cap stocks, as
measured by the Standard & Poor's 500 Composite Stock Price Index. However, a
closer look reveals that small-cap stocks experienced heightened volatility
during the reporting period, rising and falling sharply in response to shifting
investor preferences.
For example, during the last two months of 1999, small-cap stocks were generally
outpaced by large-cap growth stocks -- particularly technology stocks -- in a
fast-growing economy. Then, during the first two months of 2000, the
large-capitalization sector of the stock market corrected sharply while
small-cap stocks generally rose. In March and April, investor sentiment shifted
once more, and large-cap companies generally provided higher returns than
small-cap companies. In fact, small-cap stocks had their best performance ever
in February followed, in March, by their worst performance relative to large-cap
stocks since the small-cap market' s benchmark was created in January 1979
While it is too soon to determine whether these volatile changes signify a
broadening of the market, we believe that many small-cap stocks -- particularly
those in so-called "old economy" industry groups -- continue to be attractively
valued relative to their large-cap counterparts.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Small Cap Value Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
William P. Rydell, Portfolio Manager
How did Dreyfus Premier Small Cap Value Fund perform relative to its benchmark?
For the six-month period ended April 30, 2000, the fund's Class A, B, C and R
shares produced total returns of 2.92%, 2.56%, 2.46% and 3.00%, respectively.(1)
In contrast, the Russell 2000 Value Index, which serves as the fund's benchmark,
produced a total return of 8.20% for the same period, while the Russell 2000
Index, which includes small-cap growth as well as value stocks, provided a total
return of 18.72%.(2
The public offering of the fund's Class T shares commenced on March 1, 2000.
From March 1, 2000 through April 30, 2000, the fund produced a total return of
5.71% for Class T shares.(1)
Although the value style of investing outperformed the growth style during the
final two months of the reporting period, growth stocks dominated small-cap
returns when taking the entire six months into account. As a result, the fund,
which adheres to a strict value investment discipline, underperformed the
Russell 2000 Index, which measures a mixture of growth AND value. In addition,
small-cap returns in the Russell 2000 Value Index were driven primarily by
certain growth-oriented stocks with higher relative price-to-earnings ratios,
such as biotechnology stocks. Our lack of exposure to these relatively expensive
stocks hindered the fund' s relative performance.
What is the fund's investment approach?
The fund uses a disciplined investment process that combines fundamental
valuation with a computer model that searches for undervalued stocks. A common
definition of an undervalued stock is one selling at a low price relative to its
profits and prospective earnings growth. Our stock evaluation process uses 13
different characteristics -- including changes in earnings estimates and changes
in price-to-earnings ratios -- to identify value among individual stocks.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Rather than using broad economic or market trends, we select stocks on a
company-by-company basis. To ensure ample diversification, we allocate the
portfolio' s assets among industries and economic sectors in similar proportions
as the Russell 2000 Value Index. We generally stay industry-neutral to prevent
the fund from being adversely affected if a particular industry is out of favor
during an investment period. By maintaining such a neutral stance, stock
selection drives the fund's performance.
What other factors influenced the fund's performance?
At the beginning of the reporting period, the United States economy was booming,
international economies were improving and investors were no longer quite as
fearful about a financial disaster taking place somewhere in the world. For the
six-month reporting period, small-cap stocks, which are often shunned by
investors when business conditions are uncertain, generally outperformed
large-cap stocks.
However, investors clearly preferred technology companies, large and small. From
November 1 to mid-March, "new economy" companies, those focused on the Internet
and related technologies, completely dominated the market. A second group,
biotechnology, was also extremely strong during that time period, as investors
became excited about the potential effectiveness of gene therapy, a
revolutionary way to treat cancer and other diseases. However, many Internet and
biotechnology companies, which are plentiful in the Russell 2000 Index -- but
less so in the Russell 2000 Value Index -- had little or no earnings and were
excluded from our portfolio. That is because our investment process places a
strong emphasis on a company's profitability. This hurt the fund's performance.
By mid-March, investors became concerned about a return of inflation and rising
interest rates. The high-flying technology and biotechnology stocks sold off,
and the "old economy" non-Internet-related companies bounced back. That
development helped boost the fund's relative performance. However, it was not
enough of a bounce back to make up for the prior four and a half months.
The fund' s top two performers during the reporting period, Kulicke & Soffa
Industries and Integrated Device Technology, both fall under the technology
category. We considered both of these semiconductor equipment manufacturers
value stocks at the time of purchase because of their relatively modest stock
prices. In addition, two oil drillers, Atwood Oceanics and Patterson Energy,
benefited from rising oil prices, while a corporate buyout boosted the stock
price of Financial Security Assurance Holdings.
Because of their low prices, many small-cap value companies merged or were
acquired during the reporting period. The fund was able to benefit from many of
these corporate buyouts, primarily from large-cap companies that were looking to
expand into a particular market niche.
What is the fund's current strategy?
Areas of focus of our investment model continue to include companies that offer
strong dividend yield, that are likely to produce positive earnings surprises
and that, in our view, are able to show profits in excess of a company's cost of
capital. Because of the considerable market volatility during the past six
months, we have recently begun to increase the number of stocks held in the
portfolio, in seeking to manage risk.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
TOTAL RETURN DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES
CHARGE IN THE CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE
CONTINGENT DEFERRED SALES CHARGE ON REDEMPTIONS IN THE CASE OF CLASS B AND
CLASS C SHARES. HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN
LOWER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE
RUSSELL 2000 VALUE INDEX IS AN UNMANAGED INDEX WHICH MEASURES THE
PERFORMANCE OF THOSE RUSSELL 2000 COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS
AND LOWER FORECASTED GROWTH VALUES. THE RUSSELL 2000 INDEX IS AN UNMANAGED
INDEX OF SMALL-CAP STOCK PERFORMANCE AND IS COMPOSED OF THE 2,000 SMALLEST
COMPANIES IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF
THE 3,000 LARGEST U.S. COMPANIES BASED ON TOTAL MARKET CAPITALIZATION.
The Fund
April 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
COMMON STOCKS--96.5% Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALCOHOL & TOBACCO--.4%
Coors (Adolph), Cl. B 500 25,500
CONSUMER CYCLICAL--8.0%
Alaska Air Group 700 (a) 20,125
American Eagle Outfiitters 1,200 (a) 20,400
Anchor Gaming 400 (a) 16,100
Arvin Industries 1,700 36,975
BJ's Wholesale Club 1,100 (a) 38,981
Borg-Warner Automotive 800 33,450
Ethan Allen Interiors 2,600 69,388
Fossil 1,500 (a) 31,125
Furniture Brands International 1,800 (a) 33,637
Harman International 600 39,225
Kellwood 1,200 20,550
Ross Stores 2,700 56,025
Ryan's Family Steak House 4,500 (a) 44,016
SkyWest 700 29,487
Springs Industries, Cl. A 700 28,744
Zale 1,300 (a) 53,625
571,853
CONSUMER STAPLES--2.7%
Corn Products International 1,000 24,000
Fleming 1,200 19,725
J & J Snack Foods 1,100 (a) 17,531
Libbey 600 18,300
Performance Food Group 1,200 (a) 31,650
Riviana Foods 2,300 36,369
Tupperware 1,400 26,425
Universal Foods 1,300 21,369
195,369
ENERGY--9.3%
Atwood Oceanics 900 (a) 54,563
Berry Petroleum, Cl. A 1,600 25,300
California Water Service Group 1,100 25,644
Energen 2,900 53,106
Equitable Resources 1,700 78,838
Helmerich & Payne 3,800 118,988
Mitchell Energy & Development, Cl. A 1,500 35,812
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
ENERGY (CONTINUED)
Northwestern 900 20,700
ONEOK 1,800 45,450
Patterson Energy 1,000 (a) 28,250
Southwest Gas 1,300 24,781
Southwestern Energy 3,000 25,500
Ultramar Diamond Shamrock 900 22,275
Valero Energy 1,000 29,000
Varco International 2,100 (a) 26,250
Washington Gas Light 1,900 48,687
663,144
HEALTH CARE--6.6%
ALPHARMA, Cl. A 600 23,175
Albany Molecular Research 700 (a) 30,712
Apria Healthcare Group 2,100 (a) 29,269
Bindley Western Industries 1,600 27,900
Celera Genomics 800 (a) 66,000
Datascope 1,000 33,125
First Health Group 600 (a) 18,262
King Pharmaceuticals 700 (a) 34,563
Mentor 1,100 19,456
Patterson Dental 800 (a) 38,500
Quest Diagnostics 800 (a) 46,550
ResMed 800 (a) 27,200
Trigon Healthcare 1,000 (a) 35,938
Varian Medical Systems 600 (a) 24,000
Vertex Pharmaceuticals 400 (a) 20,900
475,550
INTEREST SENSITIVE--23.4%
Allied Capital 1,500 28,031
BRE Properties, Cl. A 1,500 41,906
BSB Bancorp 1,200 23,700
BancorpSouth 2,400 37,050
BancWest 1,100 20,144
Banknorth Group 1,600 38,200
Bradley Real Estate 1,800 32,512
CVB Financial 3,100 49,988
Cabot Industrial Trust 1,800 34,650
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
Chittenden 900 23,906
City National 1,000 36,813
Commerce Group 900 26,550
Corus Bankshares 1,000 24,922
Cullen/Frost Bankers 3,100 76,531
Dain Rauscher 400 24,775
Doral Financial 2,600 31,037
Downey Financial 2,400 71,700
Eaton Vance 900 38,081
Fidelity National Financial 900 13,275
Financial Security Assurance Holdings 600 44,288
First American Financial 1,100 16,981
First Citizens BancShares, Cl. A 100 6,313
First Industrial Realty Trust 1,200 36,075
Franchise Finance Corp. of America 2,800 66,500
Gables Residential Trust 1,200 28,800
Gallagher (Arthur J.) 1,600 59,600
Harbor Florida Bancshares 1,400 14,700
Health Care REIT 1,500 23,906
Hospitality Properties Trust 1,300 28,925
Leucadia National 1,300 30,306
MAF Bancorp 2,400 45,000
MONY Group 1,400 43,313
Nationwide Health Properties 2,600 34,450
North Fork Bancorp 2,200 35,613
PFF Bancorp 1,600 22,500
Presidential Life 2,700 42,989
Professionals Group 1,500 (a) 26,531
Queens County Bancorp 1,000 20,312
Radian Group 1,400 71,313
Reckson Associates Realty 2,800 56,175
Regency Realty 1,200 26,550
Silicon Valley Bancshares 400 (a) 24,700
StanCorp Financial Group 800 23,300
Washington Federal 1,300 22,669
Webster Financial 1,800 38,475
Weingarten Realty Investors 1,100 44,550
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
Westamerica Bancorp 1,200 30,075
Whitney Holding 900 31,387
1,670,067
INTERNET--.2%
Proxicom 400 13,675
PRODUCER GOODS--22.9%
ATMI 900 (a) 34,650
Alexander & Baldwin 1,200 25,200
AptarGroup 700 19,950
Belden 1,000 29,687
Brooks Automation 300 (a) 26,906
Cable Design Technologies 900 (a) 30,825
Carpenter Technology 1,200 24,075
Catellus Development 1,600 (a) 20,800
Chesapeake 900 28,125
Cleveland-Cliffs 1,100 27,019
Commercial Metals 1,700 49,938
Cytec Industries 1,500 (a) 45,188
D.R. Horton 4,300 55,631
Dycom Industries 400 (a) 20,800
Geon 900 19,688
Grace (W.R.) & Co. 2,700 (a) 35,100
H.B. Fuller 400 15,375
Helix Technology 600 30,637
IDEX 800 25,000
Kaufman & Broad Home 1,300 25,025
Kaydon 1,000 23,375
Lincoln Electric Holdings 2,900 55,236
Lubrizol 1,500 38,437
M.D.C. Holdings 2,100 40,031
Manitowoc 1,200 39,825
Milacron 1,100 20,075
OM Group 500 23,000
Olin 1,200 21,300
Pope & Talbot 1,800 38,138
Potlatch 1,300 51,269
Precision Castparts 800 33,400
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
PRODUCER GOODS (CONTINUED)
Pulte 3,200 68,800
Rayonier 600 28,162
Reliance Steel & Aluminum 1,600 36,800
Roadway Express 2,200 51,700
Southdown 900 52,313
Spartech 1,600 55,600
Superior Industries International 700 22,531
Tecumseh Products, Cl. A 800 37,150
Terex 1,500 (a) 23,438
Texas Industries 800 26,100
Thomas Industries 2,600 52,325
Toll Brothers 1,700 (a) 36,869
Trinity Industries 1,000 22,250
USFreightways 1,400 65,275
United Stationers 600 (a) 20,025
Worthington Industries 1,700 21,037
Webb (Del E.) 2,700 40,331
1,634,411
SERVICES--4.2%
Banta 900 17,606
CDI 900 (a) 20,250
CIBER 1,300 (a) 23,481
Entercom Communications 500 (a) 21,250
Gaylord Entertainment 900 21,544
Harland (John H.) 1,400 21,525
Interim Services 1,500 (a) 25,687
Leap Wireless International 200 (a) 10,275
Rent-Way 1,800 (a) 46,688
Scholastic 600 (a) 28,012
Sea Containers, Cl. A 1,200 27,300
True North Communications 900 37,069
300,687
TECHNOLOGY--15.3%
Allaire 300 (a) 16,519
Asyst Technologies 300 (a) 16,050
Brooktrout 1,700 (a) 45,900
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Catapult Communications 1,200 (a) 9,975
Coherent 400 (a) 23,125
Cohu 600 22,837
Credence Systems 300 (a) 42,825
Cypress Semiconductor 1,400 (a) 72,713
ESS Technology 1,800 (a) 23,400
Electro Scientific Industries 300 (a) 18,919
Electroglas 900 (a) 34,875
Glenayre Technologies 1,200 (a) 15,825
Hadco 300 (a) 24,694
Imation 700 (a) 19,644
In Focus Systems 1,000 (a) 29,937
Integrated Device Technology 2,100 (a) 100,931
KEMET 1,100 (a) 81,950
Kulicke & Soffa Industries 900 (a) 70,481
Lam Research 700 (a) 32,113
Littelfuse 500 (a) 17,750
ONYX Software 900 (a) 19,181
Phoenix Technologies 1,500 (a) 29,437
Plantronics 400 (a) 35,400
Power-One 500 (a) 34,125
Progress Software 1,500 (a) 30,000
RadiSys 700 (a) 28,962
Rogers 1,000 (a) 67,375
Semtech 700 (a) 47,731
Sybase 1,400 (a) 28,263
Tektronix 500 28,938
Varian Semiconductor Equipment 400 (a) 26,900
1,096,775
UTILITIES--3.5%
Calpine 300 (a) 27,450
Cleco 1,100 37,881
Conectiv 1,600 28,400
Idacorp 800 29,500
NSTAR 800 35,250
Public Service Company of New Mexico 3,300 59,400
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
RGS Energy Group 500 11,750
Sierra Pacific Resources 1,500 22,688
252,319
TOTAL COMMON STOCKS
(cost $6,803,170) 6,899,350
-----------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--2.1% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS;
Greenwich Capital Markets,
5.72% dated 4/28/2000 to be
repurchased at $150,072 on 5/1/2000,
collateralized by $155,000
Federal Home Loan Bank Bonds,
6.75% due 2/15/2001, value $156,521
(cost $150,000) 150,000 150,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $6,953,170) 98.6% 7,049,350
CASH AND RECEIVABLES (NET) 1.4% 102,139
NET ASSETS 100.0% 7,151,489
A NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--
See Statement of Investments--Note 1(d) 6,953,170 7,049,350
Cash 104,816
Dividends and interest receivable 7,376
7,161,542
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 9,878
Payable for shares of Capital Stock redeemed 175
10,053
--------------------------------------------------------------------------------
NET ASSETS ($) 7,151,489
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 7,778,693
Accumulated undistributed investment income--net 10,061
Accumulated net realized gain (loss) on investments (733,445)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 96,180
--------------------------------------------------------------------------------
NET ASSETS ($) 7,151,489
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets ($) 4,250,152 1,473,244 889,926 537,111 1,056
Shares Outstanding 388,648 136,357 82,358 48,955 96.71
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE ($) 10.94 10.80 10.81 10.97 10.92
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends 64,986
Interest 4,135
TOTAL INCOME 69,121
EXPENSES:
Management fee--Note 2(a) 43,373
Distribution and service plan fees--Note 2(b) 15,633
Loan commitment fees--Note 4 54
TOTAL EXPENSES 59,060
INVESTMENT INCOME--NET 10,061
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (408,120)
Net unrealized appreciation (depreciation) on investments 569,239
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 161,119
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 171,180
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000(a) Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income (loss)--net 10,061 (3,552)
Net realized gain (loss) on investments (408,120) (208,895)
Net unrealized appreciation (depreciation)
on investments 569,239 278,088
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 171,180 65,641
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares -- (9,456)
Class R shares -- (2,327)
TOTAL DIVIDENDS -- (11,783)
-------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 771,033 1,354,136
Class B shares 651,968 575,937
Class C shares 272,828 173,901
Class R shares 12,363 405,000
Class T shares 1,000 --
Dividends reinvested:
Class A shares -- 9,165
Class R shares -- 2,327
Cost of shares redeemed:
Class A shares (1,057,596) (139,346)
Class B shares (194,989) (230,496)
Class C shares (67,024) (135,853)
Class R shares -- (327,019)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 389,583 1,687,752
TOTAL INCREASE (DECREASE) IN NET ASSETS 560,763 1,741,610
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 6,590,726 4,849,116
END OF PERIOD 7,151,489 6,590,726
Undistributed investment income--net 10,061 --
(A) FROM MARCH 1, 2000 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 2000 FOR
CLASS T SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000(a) Year Ended
(Unaudited) October 31, 1999
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(B)
Shares sold 72,411 125,449
Shares issued for dividends reinvested -- 843
Shares redeemed (100,581) (12,631)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (28,170) 113,661
-------------------------------------------------------------------------------
CLASS B(B)
Shares sold 61,247 54,531
Shares redeemed (18,811) (22,016)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 42,436 32,515
-------------------------------------------------------------------------------
CLASS C
Shares sold 26,245 15,787
Shares redeemed (6,438) (12,867)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 19,807 2,920
-------------------------------------------------------------------------------
CLASS R
Shares sold 1,150 36,359
Shares issued for dividends reinvested -- 214
Shares redeemed -- (28,894)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,150 7,679
-------------------------------------------------------------------------------
CLASS T
SHARES SOLD 97 --
(A) FROM MARCH 1, 2000 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 2000 FOR
CLASS T SHARES.
(B) DURING THE PERIOD ENDED APRIL 30, 2000, 242 CLASS B SHARES REPRESENTING
$2,490 WERE AUTOMATICALLY CONVERTED TO 240 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31
-------------------------
CLASS A SHARES (Unaudited) 1999 1998(a)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 10.63 10.45 12.50
Investment Operations:
Investment income--net .03(b) .01(b) .03
Net realized and unrealized gain (loss)
on investments .28 .20 (2.08)
Total from Investment Operations .31 .21 (2.05)
Distributions:
Dividends from investment income--net -- (.03) --
Net asset value, end of period 10.94 10.63 10.45
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 2.92(d) 2.01 (16.40)(d)
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .75(d) 1.50 .88(d)
Ratio of net investment income
to average net assets .25(d) .12 .24(d)
Portfolio Turnover Rate 43.42(d) 53.87 19.72(d)
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 4,250 4,432 3,169
(A) FROM APRIL 1, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31
--------------------------
CLASS B SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 10.54 10.41 12.50
Investment Operations:
Investment (loss)--net (.01)(b) (.07)(b) (.02)
Net realized and unrealized gain (loss)
on investments .27 .20 (2.07)
Total from Investment Operations .26 .13 (2.09)
Net asset value, end of period 10.80 10.54 10.41
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 2.56(d) 1.25 (16.72)(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.12(d) 2.25 1.32(d)
Ratio of net investment (loss)
to average net assets (.12)(d) (.63) (.20)(d)
Portfolio Turnover Rate 43.42(d) 53.87 19.72(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,473 990 639
(A) FROM APRIL 1, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31
--------------------------
CLASS C SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 10.55 10.41 12.50
Investment Operations:
Investment (loss)--net (.02)(b) (.07)(b) (.02)
Net realized and unrealized gain (loss)
on investments .28 .21 (2.07)
Total from Investment Operations .26 .14 (2.09)
Net asset value, end of period 10.81 10.55 10.41
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 2.46(d) 1.34 (16.72)(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.12(d) 2.25 1.32(d)
Ratio of net investment (loss)
to average net assets (.14)(d) (.63) (.19)(d)
Portfolio Turnover Rate 43.42(d) 53.87 19.72(d
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 890 660 621
(A) FROM APRIL 1, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31
--------------------------
CLASS R SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 10.65 10.47 12.50
Investment Operations:
Investment income--net .04(b) .04(b) .04
Net realized and unrealized gain (loss)
on investments .28 .20 (2.07)
Total from Investment Operations .32 .24 (2.03)
Distributions:
Dividends from investment income--net -- (.06) --
Net asset value, end of period 10.97 10.65 10.47
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 3.00(c) 2.26 (16.24)(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .62(c) 1.25 .73(c)
Ratio of net investment income
to average net assets .37(c) .36 .38(c)
Portfolio Turnover Rate 43.42(c) 53.87 19.72(c)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 537 509 420
(A) FROM APRIL 1, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
Six Months Ended
April 30, 2000(a)
CLASS T SHARES (Unaudited)
-------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 10.34
Investment Operations:
Investment income--net .00(b,c
Net realized and unrealized gain (loss)
on investments .58
Total from Investment Operations .58
Net asset value, end of period 10.92
-------------------------------------------------------------------------------
TOTAL RETURN (%)(D) 5.71(e)
-------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .31(e)
Ratio of net investment (loss)
to average net assets (.02)(e)
Portfolio Turnover Rate 43.42(e)
-------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1
(A) FROM MARCH 1, 2000 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 2000.
(B) AMOUNT REPRESENTS LESS THAN $.01.
(C) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(D) EXCLUSIVE OF SALES CHARGE.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Small Cap Value 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, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering nineteen series including the fund. The fund's investment objective is
to provide investors with total investment returns that consistently outperform
the Russell 2000 Value Index. The Dreyfus Corporation (the "Manager") serves as
the fund' s investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A. (" Mellon Bank" ) which is a wholly-owned subsidiary of Mellon
Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 100 million shares of $.001 par value Capital Stock in
each of the following classes: Class A, Class B, Class C and Class R and 200
million shares of $.001 par value Capital Stock of Class T shares. Class A,
Class B, Class C and Class T shares are sold primarily to retail investors
through financial intermediaries and bear a distribution fee and/or service fee.
Class A and Class T shares are sold with a front-end sales charge, while Class B
and Class C shares are subject to a contingent deferred sales charge ("CDSC").
Class B shares automatically convert to Class A shares after six years. 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 or service fees. Class R shares are offered
without a front-end sales charge or CDSC. Each class of shares has identical
rights and privileges, except with respect to distribution and service fees and
voting rights on matters affecting a single class.
As of April 30, 2000, MBC Investment Corp., an indirect subsidiary of Mellon
Financial Corporation, held the following shares:
Class A 280,799 Class C 40,000
Class B 40,000 Class R 40,214
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 (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. 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.
(b) Foreign currency transactions: The fund does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in 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, cur The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
rency gains or losses realized on securities transactions and the difference
between the amounts 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.
(c) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(d) 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
counter party default, the fund has the 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.
(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain, if any, 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 of 1986, as amended (the "Code). To
the extent that net realized capital gain can be offset by capital loss
carryovers, 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 interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $313,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1999. If not
applied, $116,000 of the carryover expires in fiscal 2006 and $197,000 expires
in fiscal 2007.
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 1.25% 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,
service fees, fees and expenses of non- The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 fee). Each non-interested director receives $40,000 per year,
plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust (the
" Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee meetings
attended which are not held in conjunction with a regularly scheduled board
meeting and $500 for Board meetings and separate committee meetings attended
that are conducted by telephone and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional 25% of such
compensation (with the exception of reimbursable amounts). In the event that
there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus
High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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.
DSC retained $34 during the period ended April 30, 2000 from commissions earned
on sales of the fund's shares.
(b) Distribution and service plan: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up
to .25% of the value of their average daily net assets to compensate the
distributor for shareholder servicing activities and expenses primarily intended
to result in the sale of Class A shares. Under the Plan, Class B, Class C and
Class T shares pay the distributor for distributing their shares at an aggregate
annual rate of .75% of the value of the average daily net assets of Class B and
Class C shares and .25% of the average daily net assets of Class T shares. The
distributor may pay one or more agents in
respect of advertising, marketing and other distribution services for Class T
shares and determines the amounts, if any, to be paid to agents and the basis on
which such payments are made. Class B, Class C and Class T shares are also
subject to a service plan adopted pursuant to Rule 12b-1, under which Class B,
Class C and Class T shares pay the distributor for providing certain services to
the holders of Class B, Class C and Class T shares a fee at the annual rate of
. 25% of the value of the average daily net assets of Class B, Class C and Class
T shares. During the period ended April 30, 2000, Class A, Class B, Class C and
Class T shares were charged $5,510, $4,868, $2,723 and $1, respectively,
pursuant to the Plan, of which $4,082, $1,170, $703 and $1 for Class A, Class B,
Class C and Class T shares, respectively, were paid to DSC and Class B, Class C
and Class T shares were charged $1,622, $908 and $1, respectively, pursuant to
the service plan of which $1,259, $587 and $1 for Class B, Class C and Class T
shares, respectively, were paid to DSC.
Under its terms, the Plan and service 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 or in any agreement
related to the Plan or service plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$3,330,489 and $2,937,622, respectively.
At April 30, 2000, accumulated net unrealized appreciation on investments was
$96,180, consisting of $878,561 gross unrealized appreciation and $782,381 gross
unrealized depreciation.
At April 30, 2000, 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).
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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. During the period ended April
30, 2000, the fund did not borrow under the Facility.
For More Information
Dreyfus Premier Small Cap Value 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 148SA004
Dreyfus Premier
Small Company
Stock Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
16 Financial Highlights
21 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Small Company Stock Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Small
Company Stock Fund, covering the six-month period from November 1, 1999 through
April 30, 2000. Inside, you'll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio managers, Anthony Galise and James Wadsworth.
The past six months have been favorable for small-cap stocks, which, as measured
by the Russell 2000 Index, outpaced the performance of large-cap stocks, as
measured by the Standard & Poor's 500 Composite Stock Price Index. However, a
closer look reveals that small-cap stocks experienced heightened volatility
during the reporting period, rising and falling sharply in response to shifting
investor preferences.
For example, during the last two months of 1999, small-cap stocks were generally
outpaced by large-cap growth stocks -- particularly technology stocks -- in a
fast-growing economy. Then, during the first two months of 2000, the
large-capitalization sector of the stock market corrected sharply while
small-cap stocks generally rose. In March and April, investor sentiment shifted
once more, and large-cap companies generally provided higher returns than
small-cap companies. In fact, small-cap stocks had their best performance ever
in February followed, in March, by their worst performance relative to large-cap
stocks since the small-cap market' s benchmark was created in January 1979
While it is too soon to determine whether these volatile changes signify a
broadening of the market, we believe that many small-cap stocks -- particularly
those in so-called "old economy" industry groups -- continue to be attractively
valued relative to their large-cap counterparts.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Small Company Stock Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Anthony Galise and James Wadsworth, Portfolio Managers
How did Dreyfus Premier Small Company Stock Fund perform relative to its
benchmark?
For the six-month period ended April 30, 2000, the fund's Class A, B, C, R and T
shares produced total returns of 16.79%, 16.44%, 16.43%, 16.95% and 16.68%,
respectively.(1) In comparison, the Russell 2500 Index, the fund's benchmark,
produced a total return of 22.00% for the same period.(2)
We attribute the fund' s underperformance to the fact that the Russell 2500's
total return was dominated from the beginning of the fund's reporting period
until mid-March by technology and biotechnology companies with little or no
earnings, which we generally avoided. At that point, investors became concerned
about the sky-high valuations in technology and biotech and shifted their
attention to stocks that had lagged, typically "old economy" companies unrelated
to the Internet. Our relative performance for the balance of the reporting
period was much improved, but not enough to offset the earlier underperformance
What is the fund's investment approach?
The fund invests primarily in a broadly diversified portfolio of small- and
mid-cap companies that can include growth and value stocks. The stocks are
chosen through a disciplined process that combines computer analysis with human
judgment.
The computer model identifies and ranks stocks within an industry based on three
broad concepts. The first one is relative value, or how a stock is priced
relative to its perceived intrinsic worth. The second is relative growth, or how
a company's profit growth compares to other companies in its industry. The third
factor is relative financial strength, which examines attributes such as the
debt level of a company.
Using the insights our analysts gained from their fundamental analysis, we
select what we believe are the most attractive of the top-ranked The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
securities in the model. Finally, we use portfolio construction techniques to
neutralize sector and industry risks. For example, if the Russell 2500 Index has
a 10% weighting in a particular sector, about 10% of the fund's assets will also
be invested in that sector.
What other factors influenced the fund's performance?
At the beginning of the reporting period, the United States economy was booming,
international economies were improving and investors were no longer quite as
fearful about a financial disaster taking place somewhere in the world. For the
six-month reporting period, small-cap stocks, which are often shunned by
investors when business conditions are uncertain, generally outperformed
large-cap stocks.
However, investors clearly preferred technology companies, large and small. From
November 1 to mid-March, "new economy" companies -- those focused on the
Internet and related technologies -- completely dominated the market. A second
group, biotechnology, was also extremely strong during that period, as investors
became excited about the potential effectiveness of gene therapy, a
revolutionary way to treat cancer and other diseases. Many Internet and
biotechnology companies, which are plentiful in the Russell 2500 Index, had
little or no earnings and were excluded from our portfolio. That is because our
investment process places a strong emphasis on a company's profitability. This
hurt the fund's performance.
By mid-March, investors became concerned about a return of inflation and rising
interest rates. The high-flying technology and biotechnology stocks sold off,
and the "old economy" -- non-Internet-related companies -- bounced back. That
development helped boost the fund's relative performance. However, it was not
enough of a bounce back to make up for the prior four and a half months.
Indeed, the fund's best performing stock during the reporting period, Calpine,
typifies our strategy: the company is profitable and it is a leader in its
market niche. As an independent power company, the company is benefiting from
the shortage of electric power supply
nationwide. Another type of shortage, oil, is powering many energy-related
stocks, such as BJ Services, which has benefited from higher oil and natural gas
prices and the resulting increase in drilling activity.
Although technology does not dominate the portfolio, it still had a positive
impact on performance. For example, Check Point Software Technologies, one of
the fund's top performers, helps corporate clients throughout the world maintain
Internet security. The recent "I Love You" e-mail virus that disabled computers
worldwide is a vivid example of just one of the many challenges Check Point
helps combat.
What is the fund's current strategy?
We plan to continue to focus our investment strategy and methodology on seeking
companies that we believe have strong earnings growth and are selling at
reasonable valuation levels. In addition, we currently intend to continue to
participate in new economy stocks, primarily technology and Internet-related
companies, taking time to carefully select those stocks that, in our view, offer
the best relative value.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES
CHARGE ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) SOURCE: FACTSET RESEARCH SYSTEMS, INC. -- REFLECTS THE REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL 2500
INDEX IS A WIDELY RECOGNIZED UNMANAGED INDEX OF SMALL- TO MID-CAP STOCK
PERFORMANCE AND IS COMPOSED OF THE 2,500 SMALLEST COMPANIES IN THE RUSSELL 3000
INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF THE 3,000 LARGEST U.S. COMPANIES BY
MARKET CAPITALIZATION.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF INVESTMENTS
COMMON STOCKS--98.2% Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
ALCOHOL & TOBACCO--.3%
Canandaigua Brands, Cl. A 28,210 (a) 1,421,079
COMPUTER HARDWARE--3.6%
Brocade Communications Systems 29,900 (a) 3,707,600
Electronics For Imaging 40,870 (a) 2,135,457
Extreme Networks 33,910 (a) 1,954,064
Network Appliance 56,660 (a) 4,189,299
Zebra Technologies, Cl. A 51,710 (a) 2,947,470
14,933,890
CONSUMER CYCLICAL--7.6%
Ames Department Stores 57,690 (a) 1,034,814
Applied Power, Cl. A 54,390 1,556,914
BJ's Wholesale Club 43,430 (a) 1,539,051
Bed Bath & Beyond 66,780 (a) 2,449,991
Borg-Warner Automotive 50,480 2,110,695
Continental Airlines, Cl. B 51,280 (a) 2,051,200
Darden Restaurants 83,020 1,530,681
Dollar Tree Stores 43,610 (a) 2,523,929
Ethan Allen Interiors 77,850 2,077,622
Family Dollar Stores 116,700 2,224,594
Liz Claiborne 30,336 1,404,936
Polaroid 49,920 1,007,760
Ross Stores 104,740 2,173,355
Ryan's Family Steak House 204,620 (a) 2,001,439
Speedway Motorsports 64,330 (a) 1,539,899
Tower Automotive 102,750 (a) 1,605,469
Zale 50,890 (a) 2,099,212
30,931,561
CONSUMER STAPLES--2.4%
Dial 104,830 1,461,068
Energizer Holdings 93,400 (a) 1,593,637
Pepsi Bottling Group 108,710 2,344,059
SUPERVALU 116,675 2,413,714
Suiza Foods 48,347 (a) 1,882,511
9,694,989
ENERGY--7.0%
BJ Services 108,500 (a) 7,622,125
Devon Energy 58,820 2,834,389
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
ENERGY (CONTINUED)
Kerr-McGee 42,070 2,177,122
Kinder Morgan 121,310 3,677,209
MCN Energy Group 71,340 1,779,041
Newfield Exploration 66,450 (a) 2,699,531
Noble Drilling 86,700 (a) 3,462,581
Smith International 36,070 (a) 2,741,320
Ultramar Diamond Shamrock 60,990 1,509,503
28,502,821
HEALTH CARE--10.0%
AmeriSource Health, Cl. A 134,160 (a) 2,683,200
Bard (C.R.) 36,360 1,583,933
Chiron 30,420 (a) 1,376,505
Forest Laboratories 36,710 (a) 3,085,934
Genzyme 62,870 (a) 3,068,842
IDEXX Laboratories 51,140 (a) 1,342,425
Lincare Holdings 77,890 (a) 2,375,645
MedImmune 26,510 (a) 4,239,943
Millennium Pharmaceuticals 39,300 (a) 3,119,437
Minimed 32,820 (a) 4,034,809
Mylan Laboratories 76,760 2,178,065
Orthodontic Centers of America 155,740 (a) 3,299,741
Regeneron Pharmaceuticals 43,510 (a) 1,242,754
Waters 40,210 (a) 3,809,897
Watson Pharmaceuticals 76,810 (a) 3,451,649
40,892,779
INTEREST SENSITIVE--15.4%
Allmerica Financial 23,830 1,289,799
Ambac Financial Group 58,860 2,825,280
Apartment Investment & Management, Cl. A 57,590 2,289,203
Bank United, Cl. A 62,020 2,058,289
Boston Properties 103,420 3,606,772
Camden Property Trust 67,290 1,909,354
Charter One Financial 115,200 2,340,000
City National 100,400 3,695,975
Duke Realty Investments 83,490 1,810,689
Edwards (A.G.) 75,260 2,831,657
Franchise Finance Corp. of America 63,100 1,498,625
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
Gallagher (Arthur J.) 74,040 2,757,990
GreenPoint Financial 46,670 869,229
H&R Block 57,970 2,423,871
Hartford Life, Cl. A 30,560 1,505,080
Hibernia, Cl. A 154,370 1,640,181
Investment Technology Group 51,127 (a) 1,917,263
M&T Bank 6,286 2,761,126
Mack-Cali Realty 63,850 1,644,138
Mercantile Bankshares 88,300 2,516,550
Mutual Risk Management 93,490 1,466,624
Old Kent Financial 57,613 1,735,592
Pacific Gulf Properties 51,767 1,112,991
People's Bank 63,600 1,295,850
Peoples Heritage Financial Group 142,270 1,858,402
Pinnacle Holdings 24,680 (a) 1,386,708
Protective Life 73,650 1,753,791
Radian Group 74,544 3,797,085
TCF Financial 93,900 2,194,913
Waddell & Reed Financial, Cl. A 75,795 2,018,042
62,811,069
INTERNET--2.5%
Checkpoint Software Technologies 20,240 (a) 3,501,520
F5 Networks 28,110 (a) 1,312,386
GlobeSpan 35,370 (a) 3,360,150
S1 17,940 (a) 974,366
SonicWALL 8,330 (a) 503,965
24/7 Media 40,780 (a) 800,308
10,452,695
PRODUCER GOODS & SERVICES--9.2%
American Power Conversion 83,100 (a) 2,934,469
American Standard 57,880 (a) 2,373,080
AptarGroup 68,940 1,964,790
Bowater 20,000 1,100,000
CK Witco 101,390 1,191,333
CNF Transportation 72,330 2,020,719
Cabot 92,120 2,487,240
Caraustar Industries 48,130 730,974
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
PRODUCER GOODS & SERVICES (CONTINUED)
Cordant Technologies 33,340 1,887,877
Cytec Industries 72,190 (a) 2,174,724
Louisiana Pacific 86,040 1,150,785
Martin Marietta Materials 34,000 1,802,000
Mead 29,670 1,032,887
Placer Dome 79,270 644,069
Quanta Services 51,125 (a) 2,374,117
Reynolds Metals 35,270 2,345,455
Snap-on 55,710 1,472,833
Southdown 36,789 2,138,361
Sybron International 65,830 (a) 2,048,959
Temple-Inland 25,380 1,272,173
Timken 52,230 966,255
USX-U.S. Steel Group 63,950 1,602,747
37,715,847
SEMICONDUCTORS--9.3%
Dallas Semiconductor 105,490 4,529,477
Kopin 51,710 (a) 4,004,293
Lattice Semiconductor 39,120 (a) 2,635,710
PMC-Sierra 28,920 (a) 5,549,025
Power Integrations 48,880 (a) 1,112,020
QLogic 31,300 (a) 3,139,781
RF Micro Devices 38,460 (a) 4,002,244
Semtech 48,980 (a) 3,339,824
TranSwitch 34,990 (a) 3,081,307
TriQuint Semiconductor 34,520 (a) 3,549,087
Vitesse Semiconductor 43,980 (a) 2,993,389
37,936,157
SERVICES--10.2%
American Management Systems 79,450 (a) 2,939,650
Avis Rent A Car 73,090 (a) 1,480,073
Convergys 80,860 (a) 3,557,840
DST Systems 25,990 (a) 1,928,133
Hispanic Broadcasting 42,200 (a) 4,264,837
Houghton Mifflin 26,800 1,113,875
Mail-Well 167,130 (a) 1,493,724
MarchFirst 37,116 (a) 791,035
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
SERVICES (CONTINUED)
National Information Consortium 42,478 (a) 525,665
Powertel 20,620 (a) 1,386,695
Robert Half International 57,220 (a) 3,497,572
SFX Entertainment 30,990 (a) 1,289,959
SunGuard Data Systems 97,630 (a) 3,374,337
Telephone & Data Systems 26,700 2,723,400
U.S. Interactive 98,280 (a) 1,633,905
Univision Communications, Cl. A 28,400 (a) 3,102,700
Western Wireless, Cl. A 43,100 (a) 2,141,531
Westwood One 47,660 (a) 1,685,973
Young & Rubicam 50,950 2,837,278
41,768,182
TECHNOLOGY--14.4%
Allaire 44,640 (a) 2,457,990
American Tower, Cl. A 76,620 (a) 3,562,830
CheckFree Holdings 30,552 (a) 1,552,424
Cognex 37,620 (a) 2,139,638
Entrust Technologies 52,410 (a) 2,574,641
Harmonic 22,710 (a) 1,676,282
Jabil Circuit 111,900 (a) 4,580,906
New Era Of Networks 48,600 (a) 1,524,825
Plantronics 25,660 (a) 2,270,910
Powerwave Technologies 24,060 (a) 5,005,984
Rational Software 38,290 (a) 3,259,436
SCI Systems 57,400 (a) 3,056,550
Safeguard Scientifics 53,250 (a) 2,223,188
Sawtek 44,600 (a) 2,132,438
Scientific-Atlanta 92,780 6,036,499
Siebel Systems 50,100 (a) 6,156,037
Vignette 122,290 (a) 5,892,849
Vishay Intertechnology 32,500 (a) 2,725,937
58,829,364
UTILITIES--6.3%
Allegiance Telecom 21,920 (a) 1,550,840
Broadwing 120,650 (a) 3,415,903
Calpine 133,790 (a) 12,241,785
DQE 75,890 2,902,792
COMMON STOCKS (CONTINUED) Shares Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
McLeodUSA, Cl. A 70,230 (a) 1,755,750
Montana Power 91,270 4,021,584
25,888,654
TOTAL COMMON STOCKS
(cost $326,671,876) 401,779,087
-----------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--2.0% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement;
Goldman, Sachs & Co., 5.67% dated
4/28/00, due 5/1/00 in the amount
of $8,128,839 (fully collateralized by
$8,217,000 U.S. Government Securities,
value $8,288,613)
(cost $8,125,000) 8,125,000 8,125,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $334,796,876) 100.2% 409,904,087
LIABILITIES, LESS CASH AND RECEIVABLES (.2%) (935,431)
NET ASSETS 100.0% 408,968,656
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments--Note 1 (c) 334,796,876 409,904,087
Cash 76,403
Receivable for investment securities sold 13,716,289
Dividends and interest receivable 71,090
Receivable for shares of Capital Stock subscribed 26,243
423,794,112
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 428,165
Payable for investment securities purchased 14,349,103
Payable for shares of Capital Stock redeemed 48,188
14,825,456
--------------------------------------------------------------------------------
NET ASSETS ($) 408,968,656
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 327,611,469
Accumulated investment (loss) (609,493)
Accumulated net realized gain (loss) on investments 6,859,469
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 75,107,211
--------------------------------------------------------------------------------
NET ASSETS ($) 408,968,656
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T
------------------------------------------------------------------------------------------------------------------------------------
Net Assets ($) 20,146,348 24,711,907 4,162,623 359,939,223 8,555
Shares Outstanding 1,034,359 1,321,477 222,514 18,308,065 439.866
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE ($) 19.48 18.70 18.71 19.66 19.45
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $593 foreign taxes withheld at source) 1,866,548
Interest 157,059
TOTAL INCOME 2,023,607
EXPENSES:
Management fee--Note 2(a) 2,460,748
Distribution and service fees--Note 2(b) 169,284
Loan commitment fees--Note 4 3,068
TOTAL EXPENSES 2,633,100
INVESTMENT (LOSS) (609,493)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments 24,240,952
Net unrealized appreciation (depreciation) on investments 36,952,368
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 61,193,320
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 60,583,827
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (609,493) (340,985)
Net realized gain (loss) on investments 24,240,952 (13,424,852)
Net unrealized appreciation (depreciation)
on investments 36,952,368 42,306,665
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 60,583,827 28,540,828
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 29,319,079 58,145,411
Class B shares 2,852,955 5,744,035
Class C shares 572,390 1,523,010
Class R shares 48,667,124 115,299,579
Class T shares 7,240 1,000
Cost of shares redeemed:
Class A shares (27,791,524) (57,554,573)
Class B shares (5,933,778) (9,200,611)
Class C shares (930,984) (2,306,158)
Class R shares (55,895,601) (64,595,908)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (9,133,099) 47,055,785
TOTAL INCREASE (DECREASE) IN NET ASSETS 51,450,728 75,596,613
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 357,517,928 281,921,315
END OF PERIOD 408,968,656 357,517,928
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999
FOR CLASS T SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999(a)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (B)
Shares sold 1,565,186 3,518,240
Shares redeemed (1,471,659) (3,463,986)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 93,527 54,254
--------------------------------------------------------------------------------
CLASS B (B)
Shares sold 159,285 363,147
Shares redeemed (326,898) (581,757)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (167,613) (218,610)
--------------------------------------------------------------------------------
CLASS C
Shares sold 31,629 95,223
Shares redeemed (52,117) (145,202)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (20,488) (49,979)
--------------------------------------------------------------------------------
CLASS R
Shares sold 2,563,804 6,958,746
Shares redeemed (2,938,488) (3,920,202)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (374,684) 3,038,544
--------------------------------------------------------------------------------
CLASS T
SHARES SOLD 380 60
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999
FOR CLASS T SHARES.
(B) DURING THE PERIOD ENDED APRIL 30, 2000, 25,657 CLASS B SHARES REPRESENTING
$451,765 WERE AUTOMATICALLY CONVERTED TO 24,676 CLASS A SHARES AND DURING THE
PERIOD ENDED OCTOBER 31, 1999, 19,186 CLASS B SHARES REPRESENTING $303,709 WERE
AUTOMATICALLY CONVERTED TO 18,546 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six Months Ended
April 30, 2000 Year Ended October 31,
--------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 16.67 15.18 18.89 15.13 13.09 10.07
Investment Operations:
Investment income (loss)--net (.05)(a) (.04)(a) (.02) (.04) (.02) .02
Net realized and
unrealized gain (loss)
on investments 2.86 1.53 (2.78) 4.52 2.48 3.03
Total from
Investment Operations 2.81 1.49 (2.80) 4.48 2.46 3.05
Distributions:
Dividends from investment
income--net -- -- -- -- -- (.03)
Dividends from net realized gain
on investments -- -- (.91) (.72) (.42) --
Total Distributions -- -- (.91) (.72) (.42) (.03)
Net asset value, end of period 19.48 16.67 15.18 18.89 15.13 13.09
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 16.79(c) 9.81 (15.42) 30.73 19.22 30.31
---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .75(c) 1.50 1.50 1.50 1.50 1.50
Ratio of net investment
income (loss)
to average net assets (.25)(c) (.25) (.32) (.35) (.16) .10
Portfolio Turnover Rate 40.10(c) 43.32 47.44 39.18 49.03 56.00
---------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 20,146 15,688 13,462 9,190 3,884 1,359
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) EXCLUSIVE OF SALES CHARGE.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31,
-------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 16.06 14.75 18.51 14.95 13.05 9.49
Investment Operations:
Investment (loss)--net (.11)(b) (.16)(b) (.11) (.03) (.07) (.03)
Net realized and unrealized
gain (loss)
on investments 2.75 1.47 (2.74) 4.31 2.39 3.59
Total from
Investment Operations 2.64 1.31 (2.85) 4.28 2.32 3.56
Distributions:
Dividends from net realized
gain on investments -- -- (.91) (.72) (.42) --
Net asset value, end of period 18.70 16.06 14.75 18.51 14.95 13.05
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 16.44(d) 8.88 (16.10) 29.72 18.17 37.51(d)
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.12(d) 2.25 2.25 2.25 2.24 1.95(d)
Ratio of investment (loss)
to average net assets (.60)(d) (.99) (1.07) (1.02) (.93) (.56)(d)
Portfolio Turnover Rate 40.10(d) 43.32 47.44 39.18 49.03 56.00
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 24,712 23,918 25,183 19,257 4,633 1,025
(A) FROM DECEMBER 19, 1994 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1995.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31,
---------------------------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 16.07 14.75 18.52 14.95 13.04 9.49
Investment Operations:
Investment income
(loss)--net (.11)(b) (.16)(b) (.14) .01 (.09) (.01)
Net realized and
unrealized gain
(loss) on investments 2.75 1.48 (2.72) 4.28 2.42 3.56
Total from
Investment Operations 2.64 1.32 (2.86) 4.29 2.33 3.55
Distributions:
Dividends from net realized
gain on investments -- -- (.91) (.72) (.42) --
Net asset value,
end of period 18.71 16.07 14.75 18.52 14.95 13.04
----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 16.43(d) 8.88 (16.08) 29.79 18.27 37.41(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.12(d) 2.25 2.25 2.25 2.25 1.14(d)
Ratio of investment (loss)
to average net assets (.61)(d) (.99) (1.08) (1.01) (.93) (.33)(d)
Portfolio Turnover Rate 40.10(d) 43.32 47.44 39.18 49.03 56.00
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 4,163 3,906 4,323 3,647 514 147
(A) FROM DECEMBER 19, 1994 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1995.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 16.81 15.27 18.96 15.15 13.10 10.07
Investment Operations:
Investment income
(loss)--net (.02)(a) .00(a,b) (.01) .00(b) .01 .04
Net realized and
unrealized gain
(loss) on investments 2.87 1.54 (2.77) 4.53 2.48 3.04
Total from
Investment Operations 2.85 1.54 (2.78) 4.53 2.49 3.08
Distributions:
Dividends from investment
income--net -- -- -- -- (.02) (.05)
Dividends from net realized
gain on investments -- -- (.91) (.72) (.42) --
Total Distributions -- -- (.91) (.72) (.44) (.05)
Net asset value,
end of period 19.66 16.81 15.27 18.96 15.15 13.10
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 16.95(c) 10.08 (15.31) 31.04 19.43 30.70
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .62(c) 1.25 1.25 1.25 1.25 1.25
Ratio of net investment
income (loss) to
average net assets (.11)(c) -- (.07) .02 .09 .35
Portfolio Turnover Rate 40.10(c) 43.32 47.44 39.18 49.03 56.00
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 359,939 314,005 238,953 244,292 112,209 44,091
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) AMOUNT REPRESENTS LESS THAN $.01.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
CLASS T SHARES (Unaudited) October 31,
1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 16.67 16.70
Investment Operations:
Investment (loss)--net (.09)(b) (.02)(b)
Net realized and unrealized gain (loss)
on investments 2.87 (.01)
Total from Investment Operations 2.78 (.03)
Net asset value, end of period 19.45 16.67
--------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 16.68(d) (.18)(d)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .87(d) .35(d)
Ratio of net investment income (loss)
to average net assets (.43)(d) (.14)(d)
Portfolio Turnover Rate 40.10(d) 43.32
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 9 1
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Small Company Stock 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, as amended (the "Act"), an open-end
management investment company and operates as a series company currently
offering nineteen series including the fund. The fund's investment objective is
to consistently exceed the total return performance of the Russell 2500(TM )
Stock Index while maintaining a similar level of risk. The Dreyfus Corporation
(the "Manager") serves as the fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. (" Mellon Bank" ), which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 368 million of $.001 par value Capital Stock. The fund
currently offers five classes of shares: Class A (27 million shares authorized),
Class B (50 million shares authorized), Class C (50 million shares authorized),
Class R (41 million shares authorized) and Class T (200 million shares
authorized) . Class A, Class B, Class C and Class T shares are sold primarily to
retail investors through financial intermediaries and bear a distribution fee
and/or service fee. Class A and Class T shares are sold with a front-end sales
charge, while Class B and Class C shares are subject to a contingent deferred
sales charge (" CDSC"). Class B shares automatically convert to Class A shares
after six years. 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 or service fees.
Class R shares are offered without a front-end sales load or CDSC. Each class of
shares has identical rights and privileges, except with The Fun
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
respect to distribution and service fees and voting rights on matters affecting
a single 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 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.
(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) 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 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) Dividends 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 distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $16,349,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1999. If not
applied, $2,362,000 of the carryover expires in fiscal 2006 and $13,987,000
expires in fiscal 2007.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 1.25% of the value of the fund' 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, service 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 fees). Each director receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and 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.
DSC retained $2,103 during the period ended April 30, 2000 from commissions
earned on sales of the fund's shares.
(b) Distribution and service plan: The fund has adopted a Distribution Plan (the
" Plan" ) pursuant to Rule 12b-1 under the Act relating to its Class A, Class B,
Class C, and Class T shares. Under the Plan, the fund may pay annually up to
. 25% of the value of the average daily net assets attributable to its Class A
shares to compensate the distributor for shareholder servicing activities and
for activities and expenses primarily intended to result in the sale of Class A
shares. Under the Plan, Class B, Class C and Class T shares may pay the
distributor for distributing their shares at an aggregate annual rate of .75% of
the value of the average daily net assets of Class B and Class C shares and .25%
of the value of the average daily net assets of Class T shares. The distributor
may pay one or more agents in respect of advertising, marketing and other
distribution services for Class T shares and determines the amounts, if any, to
be paid to agents and the basis on which such payments are made. Class B, Class
C and Class T shares are also subject to a service plan adopted pursuant to Rule
12b-1, under which Class B, Class C and Class T shares pay the distributor for
providing certain services to the holders of Class B, Class C and Class T shares
a fee at the annual rate of .25% of the value of the average daily net assets of
Class B, Class C shares and Class T shares. During the period ended April 30,
2000, Class A, Class B, Class C and Class T shares were charged $21,374,
$95,366, $15,558 and $6, respectively, pursuant to the Plan, of which $12,240,
$20,538, $3,428 and $2 for Class A, Class B, Class C and Class T shares,
respectively, were paid to DSC. During the period ended April 30, 2000, Class B,
Class C and Class T shares were charged $31,789, $5,185 and $6, respectively,
pursuant to the service plan, of which $21,179, $3,772 and $2, respectively,
were paid to DSC.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
Under its terms, the Plan and service plan shall remain in effect from year to
year, provided such continuance is approved annually by a vote of the 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 or in any agreement
related to the Plan or service 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, 2000, amounted to
$155,426,070 and $167,517,710, respectively.
At April 30, 2000, accumulated net unrealized appreciation on investments was $
75,107,211, consisting of $110,165,432 gross unrealized appreciation and
$35,058,221 gross unrealized depreciation.
At April 30, 2000, 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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 the borrowings. During the period ended
April 30, 2000, the fund did not borrow under the Facility.
NOTES
For More Information
Dreyfus Premier Small Company Stock 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 385SA004
Dreyfus Premier
Tax Managed
Growth Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
13 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Tax Managed Growth Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Tax Managed
Growth Fund, covering the six-month period from November 1, 1999 through April
30, 2000. Inside, you' ll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, Fayez Sarofim, of Fayez Sarofim & Co., the fund's
sub-investment adviser.
The past six months have been highly volatile -- but generally rewarding -- for
investors in large-cap U.S. stocks. While the market's advance during the last
two months of 1999 was led primarily by technology stocks and large-cap growth
stocks in a fast-growing economy, the large-cap sector of the stock market
corrected substantially during the first quarter of 2000, causing large-cap
stocks to generally underperform small- and mid-cap stocks during those three
months.
In mid-March, investor sentiment appeared to shift once more. Faced with
evidence that inflationary pressures were building, a major measure of
technology stock performance, the Nasdaq Composite Index, fell substantially
between mid-March and the end of April, including a considerably large
single-day drop on April 14. Many "old economy" stocks declined less severely,
and some value-oriented stocks gained ground amid renewed investor interest.
While it is too soon to determine whether this broadening of the market is
likely to persist, we believe that it may be a positive sign for the stock
market overall.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Tax Managed Growth Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Fayez Sarofim, Portfolio Manager Fayez Sarofim & Co., Sub-Investment Adviser
How did Dreyfus Premier Tax Managed Growth Fund perform relative to its
benchmark?
For the six-month period ended April 30, 2000, the fund's total return was 3.06%
for Class A shares, 2.70% for Class B shares, 2.70% for Class C shares and 2.90%
for Class T shares.(1) For the same period, the total return of the Standard &
Poor' s 500 Composite Stock Price Index ("S&P 500 Index"), the fund's benchmark,
was 7.18%.(2)
We attribute the fund's relative underperformance to the narrow base of stocks
supporting the market's rise. Much of the market's advance during the period was
driven by strong performance among technology-related stocks. Since the S&P 500
Index is more heavily exposed to such companies than the fund, the Index
produced higher returns than the fund. Nevertheless, we are pleased that the
fund produced a positive return in a volatile market while maintaining our
commitment to reasonably priced, high quality investments.
What is the fund's investment approach?
The fund invests primarily in large, well-established, multinational growth
companies that we believe are well positioned to weather difficult economic
climates and thrive during favorable times. We focus on purchasing growth stocks
at a price we consider to be justified by a company's fundamentals. The result
is a portfolio of stocks in prominent companies selected for their sustained
patterns of profitability, strong balance sheets, expanding global presence and
above-average growth potential.
At the same time, we manage the portfolio in a manner particularly well suited
to the concerns of tax-conscious investors. Our tax-managed approach is based on
targeting long-term growth rather than short-term profit. We buy and sell
relatively few stocks during the course of the year, thereby minimizing
investors' tax liabilities and reducing the fund's trading costs. During the
six-month reporting
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
period, the fund maintained a turnover rate of less than 5%, well within our
goal of an annual turnover rate below 15% during normal market conditions.
What other factors influenced the fund's performance?
As mentioned earlier, much of the S& P 500 Index's rise was driven by
technology-related companies. While the fund benefited from owning significant
positions in some of these, our investment process determined that prices of
most technology stocks were higher than warranted by company fundamentals.
Although many of the most richly valued technology stocks declined sharply in
March and April 2000, they still failed to meet our investment criteria.
A wide range of macroeconomic, industry- and company-specific issues also
affected the fund's performance. High marketing costs and weak consumer spending
in many emerging markets around the world created difficulties for multinational
consumer products companies. Several fund holdings, such as Coca-Cola, Gillette
and Procter & Gamble, delivered disappointing earnings, which hurt stock prices.
Rising interest rates took a toll on the stocks of many financial services
companies, a sector that is traditionally sensitive to interest rates. Several
fund holdings, such as Federal National Mortgage Association and Berkshire
Hathaway, suffered with the sector despite strong company fundamentals.
Stocks of the fund's pharmaceutical holdings suffered throughout the first half
of the reporting period due to concerns over expiring drug patents and new U.S.
limits on Medicare reimbursements. However, many of these stocks rebounded in
March and April 2000, as the market focused on future revenue opportunities.
What is the fund's current strategy?
Much of the fund's current strategy is based on our sector selection process, an
analysis designed to identify industries likely to enjoy long-term growth. For
example, developments in biotechnology and demographic shifts toward an aging
population in developed countries have created long-term trends favorable to the
health care industry. Trends toward growing global wealth have created
opportunities for financial services firms with a well-established global
presence and consumer products companies with globally recognized brand names.
These conditions have led us to maintain the fund's emphasis on the health care,
consumer staples and financial services industries, and to de-emphasize
commodities and basic industries. Our investment discipline has led us away from
technology companies with stock prices higher than we judge to be warranted by
their financial strength and growth rates.
As of April 30, 2000, the long-term economic trends that have led us to
emphasize health care, financial services and consumer staples appear to remain
in place. Specifically, the U.S. economy has continued to perform well. Despite
rising interest rates, inflation remained low while consumer confidence remained
high -- and the global economy demonstrated continuing signs of improvement.
Accordingly, we have seen little reason to alter our asset allocation model. Nor
have we observed changes in company fundamentals that might lead us to make
significant changes among our individual holdings.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES
CHARGE IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD
THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS
NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500 INDEX") IS A WIDELY ACCEPTED,
UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
COMMON STOCKS--97.3% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE--3.9%
DailmerChrysler 55,175 3,176,010
Ford Motor 180,000 9,843,750
General Motors 15,000 1,404,375
14,424,135
BANKING--4.7%
Bank of America 78,948 3,868,452
Chase Manhattan 125,000 9,007,813
Sun Trust Banks 95,000 4,821,250
17,697,515
CAPITAL GOODS--7.7%
Emerson Electric 70,000 3,841,250
General Electric 105,000 16,511,250
Honeywell International 90,000 5,040,000
Rockwell International 90,000 3,543,750
28,936,250
COMMUNICATIONS--5.1%
Bell Atlantic 70,000 4,147,500
BellSouth 160,000 7,790,000
SBC Communications 161,320 7,067,832
19,005,332
COMPUTERS--15.3%
Cisco Systems 240,000 (a) 16,638,750
EMC Corp 50,000 6,946,875
Hewlett-Packard 100,000 13,500,000
International Business Machines 100,000 11,162,500
Microsoft 125,000 (a) 8,718,750
56,966,875
ELECTRONICS--9.2%
Conexant Systems 55,000 (a) 3,293,125
Intel 245,000 31,069,063
34,362,188
ENERGY--5.3%
BP Amoco, ADS 130,000 6,630,000
Chevron 40,000 3,405,000
Exxon Mobil 117,806 9,152,054
Royal Dutch Petroleum, ADR 12,000 688,500
19,875,554
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCE-MISC.--9.4%
American Express 40,000 6,002,500
Associates First Capital, Cl. A 185,166 4,108,371
Citigroup 190,000 11,293,125
Federal National Mortgage Association 130,000 7,840,625
Goldman Sachs Group 30,000 2,797,500
Merrill Lynch 30,000 3,058,125
35,100,246
FOOD & DRUGS--1.7%
Walgreen 225,000 6,328,125
FOOD, BEVERAGE & TOBACCO--5.2%
Coca-Cola 175,000 8,235,937
PepsiCo 185,000 6,787,188
Philip Morris Cos. 200,000 4,375,000
19,398,125
HEALTH CARE--14.6%
Abbott Laboratories 140,000 5,381,250
American Home Products 100,000 5,618,750
Bristol-Myers Squibb 100,000 5,243,750
Johnson & Johnson 110,000 9,075,000
Merck & Co. 145,000 10,077,500
Pfizer 450,000 18,956,250
54,352,500
HOUSEHOLD & PERSONAL PRODUCTS--3.9%
Colgate-Palmolive 90,000 5,141,250
Gillette 125,000 4,625,000
Procter & Gamble 80,000 4,770,000
14,536,250
INSURANCE--3.5%
Berkshire Hathaway, Cl. A 79 (a) 4,684,700
Berkshire Hathaway, Cl. B 15 (a) 28,742
Marsh & McLennan 85,000 8,377,812
13,091,254
MEDIA/ENTERTAINMENT--3.7%
Fox Entertainment Group, Cl. A 120,000 (a) 3,090,000
McDonald's 130,000 4,956,250
Tricon Global Restaurants 12,500 (a) 426,563
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MEDIA/ENTERTAINMENT (CONTINUED)
Viacom, Cl. B 100,000 (a) 5,437,500
13,910,313
PUBLISHING--1.4%
McGraw-Hill Cos. 100,000 5,250,000
RETAIL--1.9%
Wal-Mart Stores 130,000 7,198,750
TRANSPORTATION--.8%
Norfolk Southern 130,000 2,291,250
United Parcel Service, Cl. B 8,200 545,300
2,836,550
TOTAL COMMON STOCKS
(cost $311,345,348) 363,269,962
------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--.6%
------------------------------------------------------------------------------------------------------------------------------------
PUBLISHING;
News Corp, ADS, Cum., $.4228
(cost $1,391,500) 55,000 2,420,000
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--2.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS;
5.58%, 7/13/2000
(cost $7,772,979) 7,862,000 7,772,530
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $320,509,827) 100.0% 373,462,492
LIABILITIES, LESS CASH AND RECEIVABLES .0% (145,430)
NET ASSETS 100.0% 373,317,062
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 320,509,827 373,462,492
Cash 183,396
Receivable for shares of Capital Stock subscribed 768,116
Dividends receivable 488,568
374,902,572
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 587,014
Payable for shares of Capital Stock redeemed 998,496
1,585,510
--------------------------------------------------------------------------------
NET ASSETS ($) 373,317,062
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 321,668,353
Accumulated investment (loss) (758,782)
Accumulated net realized gain (loss) on investments (545,174)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 52,952,665
--------------------------------------------------------------------------------
NET ASSETS ($) 373,317,062
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class T
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 87,438,751 212,474,039 66,017,276 7,386,996
Shares Outstanding 4,801,123 11,873,003 3,690,820 407,883
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 18.21 17.90 17.89 18.11
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $41,809 foreign taxes withheld at source) 2,435,151
Interest 285,203
TOTAL INCOME 2,720,354
EXPENSES:
Management fee--Note 2(a) 2,000,202
Distribution and service plan fees--Note 2(b) 1,476,137
Loan commitment fees--Note 4 2,797
TOTAL EXPENSES 3,479,136
INVESTMENT (LOSS) (758,782)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (309,624)
Net unrealized appreciation (depreciation) on investments 10,575,988
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 10,266,364
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 9,507,582
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (758,782) (1,012,047)
Net realized gain (loss) on investments (309,624) (235,550)
Net unrealized appreciation (depreciation)
on investments 10,575,988 35,117,606
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 9,507,582 33,870,009
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 15,458,220 55,621,236
Class B shares 37,319,651 115,526,681
Class C shares 12,380,554 42,487,916
Class T shares 324,499 3,980,373
Cost of shares redeemed:
Class A shares (13,409,715) (11,628,031)
Class B shares (22,303,882) (14,203,323)
Class C shares (10,472,976) (6,908,718)
Class T shares (1,615,776) (1,137,798)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 17,680,575 183,738,336
TOTAL INCREASE (DECREASE) IN NET ASSETS 27,188,157 217,608,345
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 346,128,905 128,520,560
END OF PERIOD 373,317,062 346,128,905
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 867,285 3,316,225
Shares redeemed (759,527) (682,806)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 107,758 2,633,419
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 2,128,620 6,940,466
Shares redeemed (1,282,156) (844,926)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 846,464 6,095,540
--------------------------------------------------------------------------------
CLASS C
Shares sold 704,832 2,553,452
Shares redeemed (603,430) (412,700)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 101,402 2,140,752
--------------------------------------------------------------------------------
CLASS T
Shares sold 18,094 243,702
Shares redeemed (90,764) (68,513)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (72,670) 175,189
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 10,038 CLASS B SHARES REPRESENTING
$173,240 WERE AUTOMATICALLY CONVERTED TO 9,878 CLASS A SHARES AND DURING THE
PERIOD ENDED OCTOBER 31, 1999, 23,432 CLASS B SHARES REPRESENTING $393,822 WERE
AUTOMATICALLY CONVERTED TO 23,192 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share.Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
April 30, 2000 Year Ended October 31
-----------------------
CLASS A SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 17.67 14.77 12.50
Investment Operations:
Investment income--net .01(b) .09(b) .05
Net realized and unrealized gain (loss)
on investments .53 2.81 2.23
Total from Investment Operations .54 2.90 2.28
Distributions:
Dividends from investment income--net -- -- (.01)
Net asset value, end of period 18.21 17.67 14.77
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 3.06(d) 19.64 18.26(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .67(d) 1.35 1.34(d)
Ratio of net investment income
to average net assets .07(d) .15 .52(d)
Portfolio Turnover Rate .26(d) 1.26 .05(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 87,439 82,943 30,428
(A) FROM NOVEMBER 4, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31
-----------------------
CLASS B SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.43 14.67 12.50
Investment Operations:
Investment (loss) (.05)(b) (.15)(b) (.02)
Net realized and unrealized gain (loss)
on investments .52 2.91 2.19
Total from Investment Operations .47 2.76 2.17
Net asset value, end of period 17.90 17.43 14.67
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 2.70(d) 18.81 17.36(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.05(d) 2.10 2.09(d)
Ratio of investment (loss)
to average net assets (.30)(d) (.60) (.27)(d)
Portfolio Turnover Rate .26(d) 1.26 .05(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 212,474 192,196 72,347
(A) FROM NOVEMBER 4, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31
-----------------------
CLASS C SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.42 14.66 12.50
Investment Operations:
Investment (loss) (.05)(b) (.14)(b) (.02)
Net realized and unrealized gain (loss)
on investments .52 2.90 2.18
Total from Investment Operations .47 2.76 2.16
Net asset value, end of period 17.89 17.42 14.66
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 2.70(d) 18.74 17.36(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.05(d) 2.10 2.09(d)
Ratio of investment (loss)
to average net assets (.30)(d) (.60) (.26)(d)
Portfolio Turnover Rate .26(d) 1.26 .05(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 66,017 62,533 21,244
(A) FROM NOVEMBER 4, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31
-----------------------
CLASS T SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.60 14.74 12.50
Investment Operations:
Investment income (loss)--net (.01)(b) .12(b) .03
Net realized and unrealized gain (loss)
on investments .52 2.74 2.22
Total from Investment Operations .51 2.86 2.25
Distributions:
Dividends from investment income--net -- -- (. 01)
Net asset value, end of period 18.11 17.60 14.74
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 2.90(d) 19.40 17.97(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .80(d) 1.60 1.59(d)
Ratio of net investment income (loss)
to average net assets (.05)(d) (.10) .25(d)
Portfolio Turnover Rate .26(d) 1.26 .05(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 7,387 8,457 4,501
(A) FROM NOVEMBER 4, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Tax Managed Growth 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, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering nineteen series including the fund. The fund's investment objective is
to provide investors with long-term capital appreciation consistent with
minimizing realized capital gains and taxable current income. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary
of Mellon Financial Corporation. Fayez Sarofim & Co. ("Sarofim") serves as the
fund's sub-investment adviser.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue 100 million shares of $.001 par value Capital Stock in
each of the following classes of shares: Class A, Class B, Class C and Class T.
Class A, Class B, Class C and Class T shares are sold primarily to retail
investors through financial intermediaries and bear a distribution fee and/or
service fee. Class A and Class T shares are sold with a front-end sales charge,
while Class B and Class C shares are subject to a contingent deferred sales
charge (" CDSC" ). Class B shares automatically convert to Class A shares after
six years. Each class of shares has identical rights and privileges, except with
respect to distribution and service fees and voting rights on matters affecting
a single 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
management estimates and assumptions. Actual results could differ from those
estimates.
(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.
(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 operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts 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) DIVIDENDS 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 distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $236,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1999. If not
applied, the carryover expires in fiscal 2007.
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 1.10% 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
distribution fees and expenses, service 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
fees). Each director receives $40,000 per year, plus $5,000 for each joint Board
meeting of The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal
Funds and The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended,
$2,000 for separate committee meetings attended which are not held in
conjunction with a regularly scheduled board meeting and $500 for Board meetings
and separate committee meetings attended that are conducted by telephone and is
reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
receives an additional 25% of such compensation (with the exception of
reimbursable amounts) . In the event that there is a joint committee meeting of
the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000
fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High
Yield Strategies Fund. These fees and expenses are charged and 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.
Pursuant to a Sub-Investment Advisory Agreement between the Manager and Sarofim,
the Manager has agreed to pay Sarofim an annual fee of .30 of 1% of the value of
the fund's average daily net assets, payable monthly.
DSC retained $6,160 during the period ended April 30, 2000 from commissions
earned on sales of the fund's shares.
(B) DISTRIBUTION AND SERVICE PLAN: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A may pay annually up to .
25% of the value of its average daily net assets to compensate the distributor
for shareholder servicing activities and for activities and expenses primarily
intended to result in the sale of Class A shares. Under the Plan, Class B, Class
C and Class T shares pay the distributor for distributing their shares at an
aggregate annual rate of .75%, of the value of the average daily net assets of
Class B and Class C shares, respectively, and . 25% of the value of the average
daily net assets of Class T shares. The distributor may pay one or more agents
in respect of advertising, marketing and other distribution services for Class T
shares and determines the amounts, if any, to be paid to agents and the basis on
which such payments are made. Class B, Class C and Class T shares are also
subject to a service plan adopted pursuant to Rule 12b-1, under which Class B,
Class C and Class T shares pay the distributor for providing certain services to
the holders of Class B, Class C and Class T shares a fee at the annual rate of
.25% of the value of the average daily net assets of Class B, Class C and Class
T shares. During the period ended April 30, 2000, Class A, Class B, Class C and
Class T shares were charged $107,491, $767,441, $244,228 and $9,877,
respectively, pursuant to the Plan, of which $42,608, $172,990, $53,723 and
$2,052 for Class A, Class B, Class C and Class T shares, respectively, were paid
to DSC. During the period ended April 30, 2000, Class B, Class C and Class T
shares were charged $255,814, $81,409 and $9,877, respectively, pursuant to the
service plan, of which $223,377, $77,513 and $9,528 for Class B, Class C and
Class T shares, respectively, were paid to DSC.
Under its terms, the Plan and service 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 or in any agreement
related to the Plan or service plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$21,323,129 and $925,594, respectively.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
At April 30, 2000, accumulated net unrealized appreciation on investments was
$52,952,665, consisting of $77,327,376 gross unrealized appreciation and
$24,374,711 gross unrealized depreciation.
At April 30, 2000, 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).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the 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. During the period ended April
30, 2000, the fund did not borrow under the Facility.
NOTES
For More Information
Dreyfus Premier Tax Managed Growth Fund
200 Park Avenue
New York, NY 10166
Investment Advisor
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Advisor
Fayez Sarofim & Co.
Two Houston Center
Suite 2907
Houston, TX 77010
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative
or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 149SA004
