FOR USE BY BANKS ONLY
February 28, 1995
PEOPLES INDEX FUND, INC.
Supplement to Prospectus Dated February 28, 1995
All mutual fund shares involve certain investment risks, including
the possible loss of principal.
078/s022895IST
PEOPLES INDEX FUND, INC. (REGISTERED)
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
FEBRUARY 28, 1995
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Peoples Index Fund (Registered), Inc. (the "Fund"), dated February 28, 1995, as
it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale,
New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 794-5452
Wells Fargo Nikko Investment Advisors ("WFNIA") serves as the Fund's
index fund manager.
The Dreyfus Corporation ("Dreyfus") serves as the Fund's administrator.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . B-5
Index Management and Administration Agreements. . . . . . . B-8
Shareholder Services Plan . . . . . . . . . . . . . . . . . B-10
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . B-11
Redemption of Fund Shares . . . . . . . . . . . . . . . . . B-11
Shareholder Services. . . . . . . . . . . . . . . . . . . . B-13
Determination of Net Asset Value. . . . . . . . . . . . . . B-13
Dividends, Distributions and Taxes. . . . . . . . . . . . . B-14
Portfolio Transactions. . . . . . . . . . . . . . . . . . . B-15
Performance Information . . . . . . . . . . . . . . . . . . B-16
Information About the Fund. . . . . . . . . . . . . . . . . B-17
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Accountants . . . . . . . . . . . B-17
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . B-18
Financial Statements. . . . . . . . . . . . . . . . . . . . B-19
Report of Independent Accountants . . . . . . . . . . . . . B-32
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Description of the Fund."
Other Portfolio Securities
Securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial maturities of one
to ten years; and Treasury Bonds generally have initial maturities of greater
than ten years. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home Loan
Banks, by the right of the issuer to borrow from the Treasury; others, such
as those issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the agency
or instrumentality; and others, such as those issued by the Student Loan
Marketing Association, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or variable rates of interest.
Principal and interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law. The Fund will invest in such securities only
when it is satisfied that the credit risk with respect to the issuer is
minimal.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price, usually
not more than one week after its purchase. The Fund's custodian or sub-
custodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter into
repurchase agreements only with domestic banks with total assets in excess of
one billion dollars or primary government securities dealers reporting to the
Federal Reserve Bank of New York, with respect to securities of the type in
which the Fund may invest, and will require that additional securities be
deposited with it if the value of the securities purchased should decrease
below resale price. WFNIA will monitor on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the repurchase price.
Certain costs may be incurred by the Fund in connection with the sale of the
securities if the seller does not repurchase them in accordance with the
repurchase agreement. In addition, if bankruptcy proceedings are commenced
with respect to the seller of the securities, realization on the securities
by the Fund may be delayed or limited. The Fund will consider on an ongoing
basis the creditworthiness of the institutions with which it enters into
repurchase agreements.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by the Fund will not benefit from insurance from
the Bank Insurance Fund or the Savings Association Insurance Fund administered
by the Federal Deposit Insurance Corporation.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Bankers' acceptances are credit instruments evidencing the obligation of
a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the full amount of
the instrument upon maturity. Other short-term bank obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper purchased by
the Fund will consist only of direct obligations which, at the time of their
purchase, are (a) rated at least Prime-1 by Moody's Investors Service, Inc.
or A-1 by Standard & Poor's Corporation, (b) issued by companies having an
outstanding unsecured debt issue currently rated at least Aa by Moody's
Investors Service, Inc. or at least AA- by Standard & Poor's Corporation, or
(c) if unrated, determined by WFNIA to be of comparable quality to those rated
obligations which may be purchased by the Fund.
Management Policies
Lending Portfolio Securities. To a limited extent, the Fund may lend its
portfolio securities to brokers, dealers and other financial institutions,
provided it receives cash collateral which at all times is maintained in an
amount equal to at least 100% of the current market value of the securities
loaned. For purposes of this policy, the Fund considers collateral consisting
of U.S. Government securities or irrevocable letters of credit issued by banks
whose securities meet the standards for investment by the Fund to be the
equivalent of cash. By lending its portfolio securities, the Fund can
increase its income through the investment of the cash collateral. Such loans
may not exceed 30% of the value of the Fund's total assets. From time to
time, the Fund may return to the borrower or a third party which is
unaffiliated with the Fund, and which is acting as a "placing broker," a part
of the interest earned from the investment of collateral received for
securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower; (2)
the borrower must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the Fund must be able
to terminate the loan at any time; (4) the Fund must receive reasonable
interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection with
the loan; and (6) while voting rights on the loaned securities may pass to the
borrower, the Fund's Directors must terminate the loan and regain the right
to vote the securities if a material event adversely affecting the investment
occurs. These conditions may be subject to future modification.
Investment Restrictions
The Fund has adopted the following investment restrictions as fundamental
policies. These restrictions cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940 (the
"Act")) of the Fund's outstanding voting shares. The Fund may not:
1. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) if such
purchase would cause the value of the Fund's investments in all such companies
to exceed 5% of the value of its total assets.
2. Purchase securities of closed-end investment companies except (a)
in the open market where no commission other than the ordinary broker's
commission is paid, which purchases are limited to a maximum of (i) 3% of the
total outstanding voting stock of any one closed-end investment company, (ii)
5% of the Fund's net assets with respect to the securities issued by any one
closed-end investment company and (iii) 10% of the Fund's net assets in the
aggregate, or (b) those received as part of a merger or consolidation. The
Fund may not purchase the securities of open-end investment companies other
than itself.
3. Invest in commodities, except that the Fund may invest in futures
contracts as described in the Prospectus and Statement of Additional
Information.
4. Purchase, hold or deal in real estate, or oil and gas interests, but
the Fund may purchase and sell securities that are secured by real estate or
issued by companies that invest or deal in real estate.
5. Borrow money, except from banks (which, if permitted by applicable
regulatory authority, may be from an agent bank of Wells Fargo Institutional
Trust Company, N.A. or Wells Fargo Bank, N.A., affiliates of WFNIA) for
temporary or emergency (not leveraging) purposes in an amount up to 15% of the
value of the Fund's total assets (including the amount borrowed) based on the
lesser of cost or market, less liabilities (not including the amount borrowed)
at the time the borrowing is made. While borrowings exceed 5% of the value
of the Fund's total assets, the Fund will not make any additional investments.
Transactions in futures and options do not involve any borrowing for purposes
of this restriction.
6. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 15% of the value of its total assets, but only to
secure borrowings for temporary or emergency purposes. Collateral
arrangements with respect to initial or variation margin for futures contracts
will not be deemed to be pledges of the Fund's assets.
7. Lend any funds or other assets except through the purchase of debt
securities, bankers' acceptances and commercial paper of corporations and
other entities. However, the Fund may lend its portfolio securities in an
amount not to exceed 30% of the value of its total assets. Any loans of
portfolio securities will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Directors.
8. Act as an underwriter of securities of other issuers or purchase
securities subject to restrictions on disposition under the Securities Act of
1933 (so-called "restricted securities"). The Fund may not enter into
repurchase agreements providing for settlement in more than seven days after
notice or purchase securities which are not readily marketable, if, in the
aggregate, more than 10% of the value of the Fund's net assets would be so
invested.
9. Invest in the securities of a company for the purpose of exercising
management or control, but the Fund will vote the securities it owns in its
portfolio as a shareholder in accordance with its views.
10. Purchase, sell or write puts, calls or combinations thereof.
11. Invest more than 25% of its assets in investments in any particular
industry or industries (including banking), except to the extent the Standard
& Poor's 500 Composite Stock Price Index also is so concentrated, provided
that, when the Fund has adopted a temporary defensive posture, there shall be
no limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
In addition to the investment restrictions adopted as fundamental
policies set forth above, though not fundamental policies, the Fund may not
(i) engage in arbitrage transactions, (ii) purchase warrants (excluding those
acquired by the Fund in units or attached to securities), or (iii) sell
securities short, but reserves the right to sell securities short against the
box (a transaction in which the Fund enters into a short sale of a security
which the Fund owns).
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best interests
of the Fund and its shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of Fund shares in the state involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to their
principal business occupations during at least the last five years, are shown
below. Each Director who is deemed to be an "interested person" of the Fund,
as defined in the Act, is indicated by an asterisk.
Directors of the Fund
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Mr.
DiMartino has served as Chairman of the Board for various funds in the
Dreyfus Family of Funds. For more than five years prior thereto, he was
President, a director and, until August 1994, Chief Operating Officer of
Dreyfus and Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus and, until August 1994,
the Fund's distributor. From August 1994 to December 31, 1994, he was
a director of Mellon Bank Corporation. Mr. DiMartino is a director and
former Treasurer of the Muscular Dystrophy Association; a trustee of
Bucknell University; and a director of the Noel Group, Inc. Mr.
DiMartino is also a Board member of other funds in the Dreyfus Family of
Funds. His address is 200 Park Avenue, New York, New York 10166.
*DAVID P. FELDMAN, Director. Corporate Vice President-Investment Management
of AT&T. He is also a trustee of Corporate Property Investors, a real
estate investment company. His address is One Oak Way, Berkeley Heights,
New Jersey 07922.
JACK R. MEYER, Director. President and Chief Executive Officer of Harvard
Management Company, an investment management company, since September
1990. For more than five years prior thereto, he was Treasurer and Chief
Investment Officer of The Rockefeller Foundation. His address is 600
Atlantic Avenue, Boston, Massachusetts 02210.
JOHN SZARKOWSKI, Director. Director Emeritus of the Department of Photography
at The Museum of Modern Art. Consultant in photography. His address is
Bristol Road Box 221, East Chatham, New York 12060.
ANNE WEXLER, Director. Chairman of the Wexler Group, consultants specializing
in government relations and public affairs. She is also a Director of
American Cyanamid Company, Alumax, The Continental Corporation, Comcast
Corporation and The New England Electric System, and a member of the
Board of the Carter Center of Emory University, the Council of Foreign
Relations, the National Park Foundation, the Visiting Committee of the
John F. Kennedy School of Government at Harvard University and the Board
of Visitors of the University of Maryland School of Public Affairs. Her
address is 1317 F Street, N.W., Washington, D.C. 20004.
Each Director is also a director of Dreyfus Stock Index Fund, Peoples S&P
MidCap Index Fund, Inc., Dreyfus Edison Electric Index Fund, Inc. and Dreyfus-
Wilshire Target Funds, Inc. Mr. Feldman and Ms. Wexler are also directors of
Dreyfus New Jersey Municipal Bond Fund, Inc. and Premier Global Investing,
managing general partners of Dreyfus Strategic Growth, L.P. and Dreyfus Global
Growth, L.P., and trustees of Dreyfus Florida Intermediate Municipal Bond
Fund, Dreyfus Florida Municipal Money Market Fund, Dreyfus Investors GNMA
Fund, Dreyfus New York Insured Tax Exempt Bond Fund, Dreyfus 100% U.S.
Treasury Intermediate Term Fund, Dreyfus 100% U.S. Treasury Long Term Fund,
Dreyfus 100% U.S. Treasury Money Market Fund and Dreyfus 100% U.S. Treasury
Short Term Fund. Mr. Feldman is also a director of Dreyfus Strategic
Governments Income, Inc. and Dreyfus BASIC Money Market Fund, Inc. and a
trustee of Dreyfus BASIC U.S. Government Money Market Fund, Dreyfus California
Intermediate Municipal Bond Fund, Dreyfus Connecticut Intermediate Municipal
Bond Fund, Dreyfus Massachusetts Intermediate Municipal Bond Fund, Dreyfus New
Jersey Intermediate Municipal Bond Fund, Dreyfus Pennsylvania Intermediate
Municipal Bond Fund, Dreyfus Strategic Income and Dreyfus Strategic Investing.
For so long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Directors of the Fund who
are not "interested persons" of the Fund, as defined in the Act, will be
selected and nominated by the Directors who are not "interested persons" of
the Fund.
The Fund does not pay any remuneration to its officers and Directors
other than fees and expenses to those Directors who are not officers,
directors, employees or holders of 5% or more of the outstanding voting
securities of WFNIA or Dreyfus, which totalled $18,621 for the fiscal year
ended October 31, 1994 for such Directors as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer and a Director of the Distributor and an officer of other
investment companies advised or administered by Dreyfus. From December
1991 to July 1994, she was President and Chief Compliance Officer of
Funds Distributor, Inc., a wholly-owned subsidiary of The Boston Company,
Inc. Prior to December 1991, she served as Vice President and
Controller, and later as Senior Vice President, of The Boston Company
Advisors, Inc.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President -
General Counsel of the Distributor and an officer of other investment
companies advised or administered by Dreyfus. From February 1992 to July
1994, he served as Counsel for The Boston Company Advisors, Inc. From
August 1990 to February 1992, he was employed as an Associate at Ropes
& Gray, and prior to August 1990, he was employed as an Associate at
Sidley & Austin.
JOSEPH F. TOWER, III, Assistant Treasurer. Senior Vice President, Treasurer
and Chief Financial Officer of the Distributor and an officer of other
investment companies advised or administered by Dreyfus. From July 1988
to August 1994, he was employed by The Boston Company, Inc. where he held
various management positions in the Corporate Finance and Treasury areas.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment companies
advised or administered by Dreyfus. From 1988 to August 1994, he was
manager of the High Performance Fabric Division of Springs Industries
Inc.
JOHN J. PYBURN, Assistant Treasurer. Vice President of the Distributor and
an officer of other investment companies advised or administered by
Dreyfus. From 1984 to July 1994, he was Assistant Vice President in the
Mutual Fund Accounting Department of Dreyfus.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by Dreyfus. From January 1992 to July 1994, he was a Senior
Legal Product Manager, and, from January 1990 to January 1992, he was a
mutual fund accountant for The Boston Company Advisors, Inc.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate General
Counsel of the Distributor and an officer of other investment companies
advised or administered by Dreyfus. From September 1992 to August 1994,
he was an attorney with the Board of Governors of the Federal Reserve
System.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by Dreyfus. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts and, prior thereto, was
employed as a Research Assistant for the Bureau of National Affairs.
The address of each officer of the Fund is 200 Park Avenue, New York, New
York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of the
Fund's shares of Common Stock outstanding on December 6, 1994.
INDEX MANAGEMENT AND ADMINISTRATION AGREEMENTS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
Index Management Agreement. WFNIA provides management services pursuant
to the Index Management Agreement (the "Management Agreement") dated April 4,
1990, with the Fund, which is subject to annual approval by (i) the Fund's
Board of Directors or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in either event the
continuance also is approved by a majority of the Directors who are not
"interested persons" (as defined in the Act) of the Fund or WFNIA by vote cast
in person at a meeting called for the purpose of voting on such approval. The
Management Agreement was approved by shareholders at a meeting held on August
8, 1991 and was last approved by the Fund's Board of Directors, including a
majority of the Directors who are not "interested persons" of any party to the
Management Agreement, at a meeting held on May 4, 1994. The Management
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board of Directors or by vote of the holders of a majority of the Fund's
shares, or, upon not less than 90 days' notice, by WFNIA. The Management
Agreement will terminate automatically in the event of its assignment (as
defined in the Act).
As compensation for WFNIA's services, the Fund has agreed to pay WFNIA
a monthly management fee at the annual rate of .10 of 1% of the value of the
Fund's average daily net assets. All fees and expenses are accrued daily and
deducted before declaration of dividends to investors. For the fiscal year
ended October 31, 1992 the index management fee payable to WFNIA was $80,566.
However, no index management fee was paid pursuant to undertakings by WFNIA.
For the fiscal years ended October 31, 1993 and 1994, the index management
fees payable to WFNIA were $181,636 and $274,298, respectively, which were
reduced by $67,985 and $30,232, respectively, pursuant to undertakings by
WFNIA. In addition, Wells Fargo Institutional Trust Company, N.A., the Fund's
custodian, which is owned by WFNIA and Wells Fargo & Company, waived receipt
of $14,248 and $4,882 chargeable to the Fund for custodian fees for the fiscal
years ended October 31, 1992 and 1993, respectively.
The Fund has agreed that neither WFNIA nor Dreyfus will be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which WFNIA's or Dreyfus' respective agreement
with the Fund relates, except for a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of WFNIA or Dreyfus, as the case may
be, in the performance of its obligations or from reckless disregard by it of
its obligations and duties under its respective agreement with the Fund.
Administration Agreement. Pursuant to the Administration Agreement (the
"Administration Agreement") dated August 24, 1994 with the Fund, Dreyfus,
together with WFNIA, furnishes the Fund clerical help and accounting, data
processing, bookkeeping, internal auditing and legal services and certain
other services required by the Fund, prepares reports to the Fund's
shareholders, tax returns, reports to and filings with the Securities and
Exchange Commission and state Blue Sky authorities, and generally assists in
all aspects of the Fund's operations, other than providing investment advice.
Dreyfus bears all expenses in connection with the performance of its services
and pays the salaries of all officers and employees who are employed by both
it or its affiliates and the Fund.
The Administration Agreement is subject to annual approval by (i) the
Fund's Board of Directors or (ii) vote of a majority (as defined in the Act)
of the Fund's outstanding voting securities, provided that in either event the
continuance also is approved by a majority of the Directors who are not
"interested persons" (as defined in the Act) of the Fund or Dreyfus, by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Administration Agreement was approved by the Fund's Board of Directors,
including a majority of the Directors who are not "interested persons" (as
defined in the Act) of any party to the Administration Agreement, at a meeting
held on June 1, 1994. The Administration Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board of Directors or by vote of
the holders of a majority of the Fund's shares. The Administration Agreement
is terminable upon not less than 90 days' notice by Dreyfus and will terminate
automatically in the event of its assignment (as defined in the Act).
As compensation for its services, the Fund has agreed to pay Dreyfus a
monthly administration fee at the annual rate of .20 of 1% of the value of the
Fund's average daily net assets. For the fiscal year ended October 31, 1992
the administration fee payable to Dreyfus was $161,133. However, no
administration fee was paid pursuant to undertakings by Dreyfus. For the
fiscal years ended October 31, 1993 and 1994, the administration fees payable
to Dreyfus were $363,272 and $548,596, respectively, which were reduced by
$189,824 and $60,463, respectively, pursuant to undertakings by Dreyfus.
The following persons are officers and/or directors of Dreyfus: Howard
Stein, Chairman of the Board and Chief Executive Officer; Julian M. Smerling,
Vice Chairman of the Board of Directors; Joseph S. DiMartino, President and
a director; W. Keith Smith, Chief Operating Officer and a director; Paul H.
Snyder, Vice President--Finance and Chief Financial Officer; Daniel C. Maclean
III, General Counsel and Vice President; Robert F. Dubuss, Vice President;
Elie M. Genadry, Vice President--Institutional Sales; Henry D. Gottmann, Vice
President--Retail Sales and Service; Jeffrey N. Nachman, Vice President--Fund
Administration; Philip L. Toia, Vice Chairman--Operations and Administration;
Lawrence S. Kash, Vice Chairman--Distribution; Jay R. DeMartine, Vice
President--Retail Marketing; Barbara E. Casey, Vice President--Retirement
Services; Diane M. Coffey, Vice President--Corporate Communications; Katherine
C. Wickham, Vice President--Human Resources; Maurice Bendrihem--Controller;
Mark N. Jacobs, Vice President--Legal and Secretary; and Mandell L. Berman,
Alvin E. Friedman, Lawrence M. Greene, Frank V. Cahouet and David B. Truman,
directors.
Expenses and Expense Information. All expenses incurred in the operation
of the Fund are borne by the Fund, except to the extent specifically assumed
by WFNIA and/or Dreyfus. The expenses borne by the Fund include the
following: organizational costs, taxes, interest, brokerage fees and
commissions, if any, fees of Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
WFNIA or Dreyfus or their affiliates, Securities and Exchange Commission fees,
state Blue Sky qualification fees, index management and administration fees,
charges of custodians, transfer and dividend disbursing agents' fees, certain
insurance premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining corporate existence, costs of independent
pricing services, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of shareholders' reports
and corporate meetings, costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders, and any extraordinary expenses.
WFNIA and Dreyfus have agreed that if in any fiscal year the aggregate
expenses of the Fund (including fees pursuant to the Management Agreement and
the Administration Agreement, but excluding taxes, brokerage, interest on
borrowings and, with the prior written consent of the necessary state
securities commissions, extraordinary expenses) exceed the expense limitation
of any state having jurisdiction over the Fund, the Fund may deduct from the
fees to be paid to each of WFNIA and Dreyfus, or Dreyfus will bear, such
excess expense in proportion to their management fee and administration fee,
to the extent required by state law. Such deduction or payment, if any, will
be estimated daily and reconciled and effected or paid, as the case may be,
on a monthly basis.
The aggregate of the fees payable to WFNIA and Dreyfus is not subject to
reduction as the value of the Fund's net assets increases.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services
Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund reimburses Dreyfus Service Corporation, a wholly-owned
subsidiary of Dreyfus, for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such an answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by the
Directors who are not "interested persons" (as defined in the Act) of the Fund
and have no direct or indirect financial interest in the operation of the
Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan is subject to annual approval by such
vote of the Directors cast in person at a meeting called for the purpose of
voting on the Plan. The Plan is terminable at any time by vote of a majority
of the Directors who are not "interested persons" (as defined in the Act) of
the Fund, and have no direct or indirect financial interest in the operation
of the Plan.
For the fiscal year ended October 31, 1994, $602,702 was charged to the
Fund under the Plan.
PURCHASE OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the
other funds in the Dreyfus Family of Funds and for certain other investment
companies.
Transactions through Securities Dealers. In some states, banks or other
financial institutions effecting transactions in Fund shares may be required
to register as dealers pursuant to state law.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Fund
Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt if the Transfer Agent
receives the redemption request in proper form. Redemption proceeds will be
transferred by Federal Reserve wire only to the commercial bank account
specified by the investor on the Account Application or Shareholder Services
Form. Redemption proceeds, if wired, must be in the amount of $1,000 or more
and will be wired to the investor's account at the bank of record designated
in the investor's file at the Transfer Agent, if the investor's bank is a
member of the Federal Reserve System, or to a correspondent bank if the
investor's bank is not a member. Fees ordinarily are imposed by such bank and
usually are borne by the investor. Immediate notification by the
correspondent bank to the investor's bank is necessary to avoid a delay in
crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmission:
Transfer Agent's
Transmittal Code Answer Back Sign
---------------- ----------------
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may have
the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171,
toll free. Investors should advise the operator that the above transmittal
code must be used and should also inform the operator of the Transfer Agent's
answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each shareholder, including each holder
of a joint account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also must be guaranteed. The
Transfer Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees must be
signed by an authorized signatory of the guarantor and "Signature-Guaranteed"
must appear with the signature. The Transfer Agent may request additional
documentation from corporations, executors, administrators, trustees or
guardians, and may accept other suitable verification arrangements from
foreign investors, such as consular verification. For more information with
respect to signature-guarantees, please call one of the telephone numbers
listed on the cover.
Redemption Commitment. The Fund has committed to pay in cash all
redemption requests by any shareholder of record, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of the Fund's net
assets at the beginning of such period. Such commitment is irrevocable
without the prior approval of the Securities and Exchange Commission. In the
case of requests for redemption in excess of such amount, the Board of
Directors reserves the right to make payments in whole or part in securities
or other assets of the Fund in case of an emergency or any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. In such event, the securities would be valued in the
same manner as the Fund's portfolio is valued. If the recipient sold such
securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such other periods
as the Securities and Exchange Commission by order may permit to protect the
Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Corporate Pension, Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans including a 401(k) Salary Reduction Plan. In addition,
the Fund makes available Keogh Plans, IRAs, including IRAs set up under a
Simplified Employee Pension Plan ("SEP-IRAs") and IRA "Rollover Accounts," and
403(b)(7) Plans. Plan support services also are available. Investors can
obtain details on the various plans by calling the following numbers toll
free: for Keogh Plans, please call 1-800-358-5566; for IRAs and IRA "Rollover
Accounts," please call 1-800-645-6561; for SEP-IRAs, 401(k) Salary Reduction
Plans and 403(b)(7) Plans, please call 1-800-322-7880.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
A fee may be charged by the entity acting as custodian for Keogh Plans,
403(b)(7) Plans or IRAs, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans, and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans, with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a non-working
spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details as to eligibility,
service fees and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
Valuation of Portfolio Securities. The Fund's portfolio securities are
valued at the last sale price on the securities exchange or national
securities market on which such securities are primarily traded. Securities
not listed on an exchange or national securities market, or securities in
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.
Any securities or other assets for which recent market quotations are not
readily available are valued at fair value as determined in good faith by the
Board of Directors. Expenses and fees, including the index management and
administration fees (reduced by the expense limitation, if any), are accrued
daily and taken into account for the purpose of determining the net asset
value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Distributions
and Taxes."
Taxation of the Fund. Management of the Fund believes that the Fund
qualified for the fiscal year ended October 31, 1994 as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). The Fund intends to continue to so qualify as long as such
qualification is in the best interests of its shareholders. Among the
requirements for such qualification is that less than 30% of the Fund's gross
income must be derived from the gain on the sale or other disposition of
securities held for less than three months. Accordingly, the Fund may be
restricted in the sale or other disposition of securities held for less than
three months, and in the utilization of certain investment techniques
described in the Prospectus under "Description of the Fund." The Code,
however, allows the Fund to net certain offsetting positions, making it easier
for the Fund to satisfy the 30% test. The term "regulated investment company"
does not imply the supervision of management or investment practices or
policies by any government agency.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. In addition, all or a portion of the gain
realized from engaging in "conversion transactions" may be treated as ordinary
income under Section 1258. "Conversion transactions" are defined to include
certain forward, futures, option and "straddle" transactions, transactions
marketed or sold to produce capital gains, or transactions described in
Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss realized by the Fund from
certain financial futures will be treated as 60% long-term capital gain or
loss and 40% short-term capital gain or loss. Gain or loss will arise upon
the exercise of such futures as well as from closing transactions. In
addition, any such futures remaining unexercised at the end of the Fund's
taxable year will be treated as sold for their then fair market value,
resulting in additional gain or loss to the Fund characterized in the manner
described above.
Offsetting positions held by the Fund involving futures may constitute
"straddles." Straddles are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of straddles is governed
by Sections 1092 and 1258 of the Code, which, in certain circumstances,
overrides or modifies the provisions of Section 1256.
As such, all or a portion of any short or long-term capital gain from
certain "straddle" and conversion transactions may be recharacterized to
ordinary income. If a Fund were treated as entering into straddles by reason
of its futures transactions, such straddles could be characterized as "mixed
straddles" if the futures transactions comprising such straddles were governed
by Section 1256 of the Code. The Fund may make one or more elections with
respect to "mixed straddles." Depending upon which election is made, if any,
the results to the Fund may differ. If no election is made, to the extent the
straddle and conversion transactions rules apply to positions established by
the Fund, losses realized by the Fund will be deferred to the extent of
unrealized gain in any offsetting positions. Moreover, as a result of the
straddle rules, short-term capital loss on straddle positions may be
recharacterized as long-term capital loss, and long-term capital gain on
straddle positions may be recharacterized as short-term capital gain or
ordinary income.
Shareholder Taxation. Depending on the composition of the Fund's income,
all or a portion of the dividends paid by the Fund from net investment income
may qualify for the dividends received deduction allowable to certain U.S.
corporate shareholders ("dividends received deduction"). In general, dividend
income of the Fund distributed to qualifying corporate shareholders will be
eligible for the dividends received deduction only to the extent that (i) the
Fund's income consists of dividends paid by U.S. corporations and (ii) the
Fund would have been entitled to the dividends received deduction with respect
to such dividend income if the Fund were not a regulated investment company.
The dividends received deduction for qualifying corporate shareholders may be
further reduced if the shares of the Fund held by them with respect to which
dividends are received are treated as debt-financed or deemed to have been
held for less than 46 days. In addition, the Code provides other limitations
with respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding Fund shares.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of his shares below the
cost of his investment. Such a distribution would be a return on the
investment in an economic sense although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of the Fund for
six months or less and has received a capital gain distribution with respect
to such shares, any loss incurred on the sale of such shares will be treated
as a long-term capital loss to the extent of the capital gain distribution
received.
PORTFOLIO TRANSACTIONS
WFNIA assumes general supervision over placing orders on behalf of the
Fund for the purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the best
judgment of WFNIA and in a manner deemed fair and reasonable to shareholders.
The primary consideration is prompt execution of orders at the most favorable
net price. Brokers also will be selected because of their ability to handle
special executions such as are involved in large block trades or broad
distributions, provided the primary consideration is met. Portfolio turnover
may vary from year to year, as well as within a year. High turnover rates are
likely to result in comparatively greater brokerage expenses. The overall
reasonableness of brokerage commissions paid is evaluated by WFNIA based upon
its knowledge of available information as to the general level of commissions
paid by other institutional investors for comparable services.
For its portfolio securities transactions for the fiscal years ended
October 31, 1992, 1993 and 1994, the Fund paid total brokerage commissions of
$20,583, $50,389 and $111,012, respectively, none of which was paid to the
Distributor. There were no spreads or concessions on principal transactions
in fiscal 1992, 1993 and 1994.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance Information."
The Fund's average annual total return for the 1 and 4.830 year periods
ended October 31, 1994 was 3.14% and 8.72%, respectively. Average annual
total return is calculated by determining the ending redeemable value of an
investment purchased with a hypothetical $1,000 payment made at the beginning
of the period (assuming the reinvestment of dividends and distributions),
dividing by the amount of the initial investment, taking the "n"th root of the
quotient (where "n" is the number of years in the period) and subtracting 1
from the result.
The Fund's total return for the period January 2, 1990 (commencement of
operations) to October 31, 1994 was 49.76%. Total return is calculated by
subtracting the amount of the Fund's net asset value per share at the
beginning of a stated period from the net asset value per share at the end of
the period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the net asset
value per share at the beginning of the period.
Comparative performance information may be used from time to time in
advertising the Fund's shares, including data from Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index"), Lipper Analytical Services,
Inc., the Dow Jones Industrial Average and other industry publications. Past
performance of the S&P 500 Index is no guarantee of future success of the
Fund. The Fund's share price and yield fluctuate, and its investment return
will reflect applicable expenses. The Fund also may cite in its
advertisements or reports or other communications to shareholders, historical
performance of unmanaged indexes as reported in Ibbotson, Roger G. and Rex A.
Sinquefield, Stocks, Bonds, Bills and Inflation (SBBI), 1982 updated annually
in the SBBI Yearbook, Ibbotson Associates, Chicago. The Fund also may cite
in its advertisements to the aggregate amount of assets committed to index
investing by pension funds and/or other institutional investors, which
currently exceeds $300 billion.
The S&P 500 Index and the Standard & Poor's MidCap 400 Index together
represent approximately 86% of the total market capitalization of stocks
traded in the United States. From time to time, advertising materials for the
Fund may refer to Morningstar ratings and related analysis supporting such
ratings.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund shares
are of one class and have equal rights as to dividends and in liquidation.
Shares have no preemptive, subscription or conversion rights and are freely
transferable.
On March 23, 1990, the Fund changed its name from Dreyfus Stock Index
Fund, Inc. to Peoples Index Fund, Inc.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT ACCOUNTANTS
Wells Fargo Institutional Trust Company, N.A., 45 Fremont Street, San
Francisco, California 94105, acts as custodian of the Fund's investments. The
Shareholder Services Group, Inc., a subsidiary of First Data Corporation, P.O.
Box 9671, Providence, Rhode Island 02940-9671, acts as transfer and dividend
disbursing agent. Neither Wells Fargo Institutional Trust Company, N.A. nor
The Shareholder Services Group, Inc. has any part in determining the
investment policies of the Fund or which securities are to be purchased or
sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
of Common Stock being sold pursuant to the Fund's Prospectus.
Coopers & Lybrand L.L.P., 1301 Avenue of the Americas, New York, New York
10019-6013, independent accountants, have been selected as auditors of the
Fund.
<TABLE>
PEOPLES INDEX FUND, INC.
STATEMENT OF INVESTMENTS OCTOBER 31, 1994
SHARES COMMON STOCKS-97.5% VALUE
- ----------- ----------------
<S> <C> <C>
CAPITAL GOODS-16.6%
7,274 AMP $ 550,096
6,539 (a) Advanced Micro Devices 172,466
3,820 Alco Standard 217,740
19,664 Allied-Signal 680,866
8,031 (a) Amdahl 81,314
1,775 (a) Andrew 91,856
8,188 Apple Computer 353,619
3,248 Autodesk 112,056
5,809 Black & Decker 145,951
23,641 Boeing 1,037,249
976 Briggs & Stratton 67,832
13,611 Browning-Ferris Industries 432,149
17,883 (a) COMPAQ 717,555
14,138 Caterpillar 844,745
3,096 (a) Ceridian 80,496
2,294 Cincinnati Milacron 62,798
1,230 (a) Clark Equipment 86,254
24,968 Columbia Healthcare 1,039,293
11,275 Computer Associates International 559,522
3,512 (a) Computer Sciences 163,308
8,003 Cooper Industries 299,112
15,408 Corning 523,872
1,779 (a) Cray Research 34,023
7,741 (a) DSC Communications 238,036
2,582 (a) Data General 25,174
6,045 Deere & Co 433,729
9,635 (a) Digital Equipment 295,072
3,933 Dover 218,281
3,860 EG & G 62,242
2,316 E-Systems 96,114
5,711 Eastman Chemical 308,394
5,331 Eaton 279,211
15,611 Emerson Electric 948,368
5,741 Fluor 284,180
4,338 General Dynamics 183,822
119,070 General Electric 5,819,546
3,308 General Signal 119,088
2,410 Giddings & Lewis 37,355
3,560 Grainger (W.W.) 195,800
1,751 Harnischfeger Industries 43,775
2,748 Harris 117,821
17,707 Hewlett-Packard 1,730,859
9,057 Honeywell 292,088
7,843 Illinois Tool Works 351,955
7,380 Ingersoll-Rand 262,913
29,180 Intel 1,812,808
3,179 (a) Intergraph 27,419
40,550 International Business Machines 3,020,975
4,367 Lockheed 314,424
5,772 Loral 228,716
3,153 (a) Lotus Development 120,602
1,793 (a) M/A-Com 12,551
6,643 Martin Marietta 304,748
2,751 McDonnell Douglas 387,891
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
CAPITAL GOODS (CONTINUED)
7,043 Micron Technology $ 279,079
40,067 (a) Microsoft 2,524,221
2,269 Morrison Knudson 35,453
39,385 Motorola 2,318,792
8,523 (a) National Semiconductor 150,218
5,183 (a) Navistar International 68,027
17,529 Northern Telecommunications 633,235
3,438 Northrop 150,842
25,638 (a) Novell 474,303
19,910 (a) Oracle Systems 915,860
8,016 Pall 145,290
3,347 Parker-Hannifin 156,472
3,056 Perkin-Elmer 90,152
7,007 Pet 120,871
10,977 Pitney Bowes 370,474
3,005 Raychem 111,185
9,394 Raytheon 598,868
15,280 Rockwell International 532,890
9,114 (a) Santa Fe Pacific Gold 131,014
5,248 Scientific-Atlanta 113,488
6,540 (a) Sun Microsystems 214,185
7,955 (a) Tandem Computers 140,207
2,071 Tektronix 78,698
6,409 Texas Instruments 479,874
1,362 Thomas & Betts 97,043
2,121 Timken 73,970
5,261 Tyco Laboratories 253,843
11,911 (a) Unisys 126,554
3,011 (a) Varity 115,171
33,577 WMX Technologies 986,324
3,579 Western Atlas 164,634
24,639 Westinghouse Elec 348,026
7,331 Xerox 751,428
886 Zurn Industries 16,170
------------
40,694,990
------------
CONSUMER BASIC-15.7%
5,614 (a) ALZA 99,648
56,729 Abbott Laboratories 1,758,599
17,665 Albertson's 529,950
4,342 Allergan 114,520
14,016 American Brands 487,056
21,272 American Home Products 1,350,772
9,296 (a) Amgen 518,252
23,879 Archer-Daniels-Midland 683,536
3,596 Bard (C.R.) 88,102
4,162 Bausch & Lomb 135,265
19,673 Baxter International 511,498
5,027 Becton Dickinson & Co 237,526
5,749 (a) Beverly Enterprises 86,954
7,957 (a) Biomet 91,505
9,806 Borden 132,381
35,363 Bristol-Myers Squibb 2,064,315
5,379 Bruno's 51,773
10,331 CPC International 552,708
PEOPLES INDEX FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
CONSUMER BASIC (CONTINUED)
17,375 Campbell Soup $ 716,719
3,698 Clorox 199,692
10,206 Colgate-Palmolive 622,566
3,072 Community Psychiatric Centers 30,336
17,233 ConAgra 536,377
2,585 Fleming Cos. 62,040
10,976 General Mills 614,656
4,164 Giant Food 95,772
2,616 Great Atlantic & Pacific Tea 68,343
17,274 Heinz (H.J.) 641,297
6,068 Hershey Foods 286,713
44,709 Johnson & Johnson 2,442,229
15,567 Kellogg 914,561
7,625 (a) Kroger 199,203
20,391 Lilly (Eli) & Co 1,264,242
4,349 Manor Care 119,597
8,116 Medtronic 423,047
87,636 Merck & Co 3,132,987
1,686 Millipore 86,618
11,520 (a) National Medical Enterprises 167,040
21,237 Pfizer 1,574,193
60,545 Philip Morris Cos. 3,708,381
6,204 Pioneer Hi Bred International 207,834
4,452 Premark International 199,227
47,568 Procter & Gamble 2,973,000
4,661 Quaker Oats 348,992
6,973 Ralston Purina 296,353
3,826 (a) Ryan's Family Steak House 23,913
3,266 St. Jude Medical 121,659
33,238 Sara Lee 818,486
13,384 Schering-Plough 953,610
1,615 Shared Medical Systems 47,643
4,926 Supervalu 119,456
12,750 Sysco 317,156
14,164 UST 375,346
11,151 Unilever, N.V. 1,324,181
11,891 United Healthcare 627,250
11,128 U.S. Health Care Systems 525,798
3,962 U.S. Surgical 89,145
12,060 Upjohn 397,980
9,276 Warner-Lambert 707,295
5,140 Winn-Dixie Stores 271,778
8,081 Wrigley (Wm.) Jr 364,655
------------
38,511,726
------------
CONSUMER DISCRETIONARY-14.8%
1,991 Alberto-Culver, Cl. B Convertible 50,522
9,880 American Stores 267,995
18,396 Anheuser-Busch Cos. 933,597
4,968 Avon Products 314,226
3,395 (a) Bally Manufacturing 23,765
958 Bassett Furniture Industries 26,105
4,745 Brown-Forman 145,909
1,285 Brown Group 43,529
6,660 Brunswick 136,530
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
CONSUMER DISCRETIONARY (CONTINUED)
7,175 Charming Shoppes $ 52,019
24,596 Chrysler 1,199,055
89,625 Coca-Cola 4,503,656
5,754 Cooper Tire & Rubber 141,692
2,646 Coors (Adolph) 45,643
2,846 Cummins Engine 120,955
6,809 Dana 174,481
4,927 Dayton-Hudson 381,842
3,497 Delta Air Lines 182,281
7,896 Dillard Dept Stores, Cl. A 209,244
37,399 Disney (Walt) 1,472,586
23,144 Eastman Kodak 1,113,805
4,151 Echlin 127,643
70,136 Ford Motor 2,069,012
10,087 Gap 340,436
52,192 General Motors 2,061,584
8,665 Genuine Parts 313,023
15,390 Gillette 1,144,631
1,736 Goodrich (B.F.) 77,903
10,522 Goodyear Tire & Rubber 368,270
2,365 Handleman 26,606
5,394 Harcourt General 199,578
2,251 (a) Hartmarx 12,943
6,074 Hasbro 200,442
3,321 Hilton Hotels 201,336
7,742 International Flavors & Fragrances 339,680
3,195 Jostens 55,114
31,660 K mart 518,433
2,584 (a) King World Productions 91,732
24,871 Limited 457,005
5,518 Liz Claiborne 127,604
1,468 Longs Drug Stores 51,013
10,928 Lowe's Cos. 434,388
1,806 Luby's Cafeterias 41,764
8,661 Marriott International 253,334
12,365 Mattel 361,676
17,331 May Department Stores 652,079
7,384 Maytag 117,221
48,864 McDonald's 1,404,840
7,287 Melville 243,204
2,560 Mercantile Stores 116,480
5,138 NIKE, Cl. B 312,776
5,700 Nordstrom 280,725
981 Oshkosh B'Gosh 14,715
1,414 Outboard Marine 29,164
2,701 PACCAR 120,870
16,404 Penney (J.C.) 830,452
4,230 Pep Boys-Manny Moe & Jack 151,222
55,072 PepsiCo 1,927,520
3,263 Polaroid 109,718
15,173 (a) Price/Costco 238,975
7,102 (a) Promus Companies 210,397
5,739 Reebok International 228,843
5,927 Rite Aid 142,248
PEOPLES INDEX FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
CONSUMER DISCRETIONARY (CONTINUED)
11,258 Rubbermaid $ 309,595
2,797 Russell 83,910
928 SPX 16,124
4,005 Safety-Kleen 55,569
25,857 Seagram 798,335
2,846 (a) Shoney's 42,690
9,905 Southwest Airlines 234,006
1,291 Springs Industries 52,124
3,432 Stride Rite 47,619
5,061 TJX 79,711
2,006 TRINOVA 70,210
4,395 Tandy 194,479
19,983 (a) Toys R Us 769,345
4,231 (a) USAir Group 18,511
4,493 V.F. Corp 227,458
159,893 Wal-Mart Stores 3,757,485
8,600 Walgreen 356,900
7,054 Wendy's International 104,047
5,190 Whirlpool 269,880
9,158 Woolworth (F.W.) 141,949
3,088 (a) Zenith Electronics 42,846
------------
36,218,829
------------
ENERGY & RELATED-10.1%
6,515 Amerada Hess 324,121
34,561 Amoco 2,190,303
4,225 Ashland Oil 164,247
11,143 Atlantic Richfield 1,207,623
9,705 Baker Hughes 198,952
8,962 Burlington Resources 378,644
45,347 Chevron 2,040,615
7,229 Coastal 206,026
12,733 Dresser Industries 268,985
86,341 Exxon 5,428,690
2,474 Foster Wheeler 89,064
7,960 Halliburton 294,520
1,669 Helmerich & Payne 52,156
3,603 Kerr-McGee 176,997
2,269 Louisiana Land & Exploration 102,956
3,694 McDermott International 94,659
27,715 Mobil 2,383,490
21,684 Occidental Petroleum 474,338
6,768 Oryx Energy 98,136
3,221 Pennzoil 165,882
18,212 Phillips Petroleum 671,568
5,794 (a) Rowan Companies 44,179
37,239 Royal Dutch Petroleum 4,338,344
6,258 (a) Santa Fe Energy Resources 57,104
16,884 Schlumberger 991,935
7,417 Sun 238,271
18,077 Texaco 1,181,784
19,906 USX - Marathon 373,238
16,808 Unocal 491,634
------------
24,728,461
------------
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
FINANCE-9.8%
7,815 Aetna Life & Casualty $ 360,467
8,100 Ahmanson (H.F.) & Co 154,912
3,013 Alexander & Alexander Services 61,013
34,370 American Express 1,056,877
14,531 American General 399,602
22,046 American International Group 2,064,057
28,394 Banc One 819,877
7,447 Bank Of Boston 214,101
25,789 BankAmerica 1,121,821
5,493 Bankers Trust New York 366,658
6,737 Barnett Banks 279,585
3,644 Beneficial 142,571
7,298 Boatmen's Bancshares 216,203
5,033 CIGNA 331,549
12,886 Chase Manhattan 463,896
17,597 Chemical Banking 668,686
6,074 Chubb 424,421
27,050 Citicorp 1,291,637
3,844 Continental 58,141
9,989 CoreStates Financial 258,465
12,567 Federal Home Loan 684,902
6,485 First Chicago 317,765
5,589 First Fidelity Bancorp 251,505
5,633 First Interstate Bancorp 450,640
11,871 First Union 534,195
9,855 Fleet/Norstar Financial Group 337,534
5,747 General Re 643,664
4,249 Golden West Financial 165,711
9,208 Great Western Financial 164,593
6,540 Household International 229,718
3,469 Jefferson-Pilot 188,193
16,960 Key 485,480
6,559 Lincoln National 237,764
6,643 Mellon Bank 369,517
13,519 Merrill Lynch & Co 532,311
13,449 Morgan (J.P.) & Co 832,157
11,131 NBD Bancorp 342,278
10,388 National City 281,775
22,127 Norwest 542,112
16,313 PNC Financial 383,356
6,893 Providian 218,853
4,426 SAFECO 221,853
5,875 St. Paul Cos. 256,297
24,478 Sears, Roebuck & Co 1,211,661
8,137 Shawmut National 167,826
8,509 SunTrust Banks 430,768
5,071 Torchmark 186,993
4,849 Transamerica 238,207
22,603 Travelers 785,440
5,213 UNUM 239,146
5,904 USF & G 80,442
1,555 USLIFE 50,926
6,941 U.S. Bancorp 171,790
11,954 Wachovia 400,459
3,772 Wells Fargo 560,614
------------
23,950,984
------------
PEOPLES INDEX FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
GENERAL BUSINESS-7.2%
34,299 (a) Airtouch Communications $ 1,024,683
5,177 American Greetings 141,720
9,792 Automatic Data Processing 571,608
7,418 Block (H & R) 329,174
4,335 CBS 259,558
10,751 Capital Cities/ABC 893,677
6,668 Circuit City Stores 170,034
18,229 (a) cisco Systems 549,149
16,556 Comcast, Cl. A 271,104
11,847 Dean Witter Discovery 457,590
5,690 Deluxe 160,742
6,382 Dial 131,629
10,754 Donnelley (R.R.) & Sons 337,407
6,939 Dow Jones & Co 207,303
11,770 Dun & Bradstreet 690,016
3,906 (a) Federal Express 237,289
7,619 First Data 381,902
10,237 Gannett 491,376
2,101 Harland (John H) 44,909
8,112 ITT 715,884
5,256 Interpublic Group Cos. 173,448
3,690 Knight-Ridder 190,035
10,345 MBNA 276,729
5,097 Marsh & Mclennan 382,275
3,450 McGraw-Hill 257,887
1,010 Meredith 49,490
29,413 Minnesota Mining & Manufacturing 1,628,745
10,221 Morton International 291,299
2,106 (a) National Education 10,267
3,393 National Service Industries 90,763
19,135 NationsBank 947,183
7,267 New York Times 164,416
4,303 (a) Rollins Environmental Services 25,280
7,313 Salomon 287,035
5,963 Service Corporation International 158,765
4,520 TRW 322,050
40,151 (a) Tele-Communications, Cl. A 908,416
3,895 Teledyne 66,702
6,120 Textron 312,120
26,362 Time Warner 935,851
8,935 Times Mirror 291,504
4,712 Tribune 247,969
8,733 United Technologies 550,179
24,238 (a) Viacom, Cl. B 951,342
7,320 Whitman 120,780
------------
17,707,284
------------
MANUFACTURING-6.8%
2,912 ASARCO 91,364
7,862 Air Products & Chemicals 375,410
15,634 Alcan Aluminium 418,209
6,163 Aluminum Co. Of America 525,396
24,308 American Barrick Resources 580,353
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
MANUFACTURING (CONTINUED)
7,181 (a) Armco $ 51,165
3,889 Avery Dennison 130,768
2,103 Ball 59,410
3,569 Bemis 88,333
7,586 (a) Bethlehem Steel 144,134
6,244 (a) Crown Cork & Seal 242,735
6,397 Cyprus Amax Minerals 170,320
19,183 Dow Chemical 1,409,950
47,287 DuPont (E.I.) de Nemours 2,819,487
1,416 Eastern Enterprises 36,816
7,824 Echo Bay Mines 95,844
4,365 Ecolab 93,302
6,749 Engelhard 158,601
2,544 (a) FMC 155,184
2,920 Federal Paper Board 87,600
1,443 First Mississippi 30,303
6,557 Grace (W.R.) & Co. 259,821
4,933 Great Lakes Chemical 289,814
2,777 Hercules 324,215
9,517 Homestake Mining 178,444
8,097 Inco 243,922
3,131 (a) Inland Steel Industries 111,933
8,697 International Paper 647,926
5,659 James River 129,450
11,220 Kimberly-Clark 577,830
5,328 Mallinckrodt Group 161,838
9,314 (a) Maxus Energy 44,241
4,112 Mead 204,058
8,206 Monsanto 624,682
6,924 Moore 125,498
668 NACCO Industries 39,412
4,820 Nalco Chemical 155,445
6,020 Newmont Mining 249,078
6,099 Nucor 376,613
2,984 Ogden 64,156
14,801 PPG Industries 603,141
4,933 Phelps Dodge 302,763
2,872 Pittston 79,339
16,610 Placer Dome 359,191
9,432 Praxair 218,115
4,320 Reynolds Metals 239,220
4,731 Rohm & Haas 285,634
5,171 Scott Paper 341,932
3,462 Sigma Aldrich 120,305
6,218 (a) Stone Container 104,152
3,841 Temple-Inland 181,487
5,284 USX- US Steel 198,150
4,821 Union Camp 228,998
10,482 Union Carbide 347,216
4,631 Westvaco 162,085
7,255 Williams Cos. 210,395
6,287 Worthington Industries 139,886
------------
16,695,069
------------
PEOPLES INDEX FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
SHELTER-2.5%
2,568 Armstrong World Industries $ 106,572
2,656 Boise Cascade 70,384
2,105 Centex 46,836
6,507 Champion International 240,759
2,132 Crane 57,830
19,045 Federal National
Mortgage Association 1,447,420
3,187 Fleetwood Enterprises 73,301
6,248 Georgia-Pacific 461,571
31,373 Home Depot 1,427,471
2,811 Johnson Controls 139,847
2,257 Kaufman & Broad Home 29,341
7,612 Louisiana-Pacific 233,118
10,889 Masco 258,614
10,952 Newell 229,992
3,052 (a) Owens Corning Fiberglas 98,809
2,061 Potlatch 78,833
1,873 Pulte 38,631
5,975 Sherwin-Williams 194,934
733 Skyline 14,477
2,983 Snap-on Tools 94,710
3,113 Stanley Works 123,742
14,287 Weyerhaeuser 560,765
------------
6,027,957
------------
TRANSPORTATION-1.3%
5,262 (a) AMR 290,068
6,234 Burlington Northern 310,921
7,235 CSX 524,537
5,434 Conrail 295,474
2,546 (a) Consolidated Freightways 56,967
9,453 Norfolk Southern 595,539
2,764 Roadway Services 158,239
5,433 Ryder System 127,675
13,214 (a) Santa Fe Pacific 203,165
14,300 Union Pacific 698,912
2,007 Yellow Freight Systems 39,137
------------
3,300,634
------------
UTILITIES-12.7%
12,829 American Electric Power 410,528
109,148 American Telephone & Telegraph 6,003,140
38,233 Ameritech 1,543,657
10,238 Baltimore Gas & Electric 238,033
30,296 Bell Atlantic 1,586,753
34,481 BellSouth 1,836,113
11,199 Carolina Power & Light 295,374
13,204 Central & South West 297,090
10,225 Cinergy 236,458
3,481 (a) Columbia Gas System 97,033
16,283 Consolidated Edison 405,040
6,422 Consolidated Natural Gas 232,798
10,233 Detroit Edison 269,895
11,768 Dominion Resources 436,887
SHARES COMMON STOCKS (CONTINUED) VALUE
- ----------- ----------------
UTILITIES (CONTINUED)
14,257 Duke Power $ 564,934
17,436 Enron 564,491
4,595 Enserch 65,479
15,863 Entergy 370,798
13,209 FPl Group 437,548
66,487 GTE 2,044,475
9,103 Houston Industries 317,467
45,075 MCI Communications 1,036,725
3,633 NICOR 88,554
29,290 NYNEX 1,149,633
9,986 Niagara Mohawk Power 137,308
8,522 Noram Energy 51,132
4,678 Northern States Power 207,586
1,850 ONEOK 32,606
10,595 Ohio Edison 203,954
5,722 Pacific Enterprises 123,023
29,938 Pacific Gas & Electric 673,605
29,498 Pacific Telesis Group 932,874
19,583 PacifiCorp 345,150
8,392 Panhandle Eastern 197,212
2,377 Peoples Energy 67,150
15,397 Philadelphia Electric 394,548
17,021 Public Service Enterprise Group 446,801
31,085 SCEcorp 431,304
6,024 Sonat 195,780
45,128 Southern 891,278
41,878 Southwestern Bell 1,753,641
24,055 Sprint 784,794
11,860 Tenneco 524,805
15,676 Texas Utilities 511,430
2,901 Transco Energy 41,702
14,891 Unicom 322,018
7,075 Union Electric 253,816
31,627 U.S. West 1,189,966
------------
31,242,386
------------
TOTAL COMMON STOCKS
(cost $215,291,301) $239,078,320
============
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS-3.0%
U.S. TREASURY BILLS:
$ 400,000 (b) 4.59%, 12/22/94 $ 395,167
5,088,000 4.86%, 1/5/95 5,025,926
1,883,000 5%, 1/26/95 1,858,990
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $7,280,083) $ 7,280,083
============
TOTAL INVESTMENTS
(cost $222,571,384) 100.5% $246,358,403
====== ============
LIABILITIES, LESS CASH
AND RECEIVABLES (.5%) $ (1,156,336)
====== ============
NET ASSETS 100.0% $245,202,067
====== ============
See notes to financial statements.
</TABLE>
PEOPLES INDEX FUND, INC.
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Wholly held by the custodian in a segregrated account as collateral
for open financial futures positions.
<TABLE>
STATEMENT OF FINANCIAL FUTURES OCTOBER 31, 1994
MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
FINANCIAL FUTURES LONG; CONTRACTS BY CONTRACTS EXPIRATION AT 10/31/94
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
Standard & Poor's 500........................ 19 $4,488,275 December '94 $53,900
===========
See notes to financial statements.
</TABLE>
<TABLE>
PEOPLES INDEX FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $222,571,384)_see statement..................................... $246,358,403
Cash.................................................................... 4,980
Dividends and interest receivable....................................... 497,722
Receivable for subscriptions to Common Stock............................ 146
Prepaid expenses ....................................................... 38,572
--------------
246,899,823
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 126,963
Due to Wells Fargo Nikko Investment Advisors............................ 63,482
Due to Wells Fargo Institutional Trust Company, N. A.................... 13,433
Payable for investment securities purchased............................. 1,134,110
Payable for Common Stock redeemed....................................... 136,207
Payable for futures variation margin_Note 3(a).......................... 44,500
Accrued expenses........................................................ 179,061 1,697,756
------------ --------------
NET ASSETS ................................................................ $245,202,067
==============
REPRESENTED BY:
Paid-in capital......................................................... $199,783,056
Accumulated undistributed investment income_net......................... 4,833,921
Accumulated undistributed net realized gain on investments.............. 16,744,171
Accumulated net unrealized appreciation on investments (including $53,900
gross unrealized appreciation on financial futures)_Note 3(b)......... 23,840,919
--------------
NET ASSETS at value applicable to 14,938,169 shares outstanding
(200 million shares of $.001 par value Common Stock authorized)......... $245,202,067
==============
NET ASSET VALUE, offering and redemption price per share
($245,202,067 / 14,938,169 shares)...................................... $16.41
=======
See notes to financial statements.
</TABLE>
<TABLE>
PEOPLES INDEX FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $38,176 foreign taxes withheld at source)...... $ 7,488,195
Interest.............................................................. 388,218
-------------
TOTAL INCOME.................................................... $ 7,876,413
EXPENSES:
Index management fee_Note 2(a)........................................ 274,298
Administration fee_Note 2(a).......................................... 548,596
Shareholder servicing costs_Note 2(b)................................. 743,357
Professional fees..................................................... 46,835
Registration fees..................................................... 40,608
Custodian fees_Note 2(a).............................................. 38,774
Prospectus and shareholders' reports.................................. 27,379
Directors' fees and expenses_Note 2(c)................................ 18,621
Miscellaneous......................................................... 29,156
-------------
1,767,624
Less_reduction in index management fee and administration fee due to
undertakings and reduction in expenses due to redemption fee_Note 2(a,d) 91,694
-------------
TOTAL EXPENSES.................................................. 1,675,930
--------------
INVESTMENT INCOME--NET.......................................... 6,200,483
--------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments_Note 3(a).............................. $19,083,937
Net realized (loss) on financial futures_Note 3(a)...................... (372,704)
-------------
NET REALIZED GAIN............................................... 18,711,233
Net unrealized (depreciation) on investments [including ($34,325)
net unrealized (depreciation) on financial futures]_Note 3(b)......... (18,291,976)
--------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 419,257
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 6,619,740
==============
See notes to financial statements.
</TABLE>
<TABLE>
PEOPLES INDEX FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED OCTOBER 31,
--------------------------------
1993 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 4,296,279 $ 6,200,483
Net realized gain on investments........................................ 1,859,821 18,711,233
Net unrealized appreciation (depreciation) on investments for the year.. 17,964,279 (18,291,976)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 24,120,379 6,619,740
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net................................................... (2,523,142) (5,373,357)
Net realized gain on investments........................................ (220,775) (11,440,051)
-------------- --------------
TOTAL DIVIDENDS....................................................... (2,743,917) (16,813,408)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 105,146,252 153,302,049
Proceeds from acquisition of Dreyfus Index Fund_Note 1.................. 128,791,946 ___
Dividends reinvested.................................................... 2,296,866 13,583,900
Cost of shares redeemed................................................. (68,806,372) (192,893,713)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..... 167,428,692 (26,007,764)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... 188,805,154 (36,201,432)
NET ASSETS:
Beginning of year....................................................... 92,598,345 281,403,499
-------------- --------------
End of year (including undistributed investment income_net:
$4,006,795 in 1993 and $4,833,921 in 1994)............................ $281,403,499 $245,202,067
============== ==============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 6,534,448 9,481,323
Shares issued in connection with acquisition of Dreyfus Index Fund_Note 1 8,156,551 ___
Shares issued for dividends reinvested.................................. 148,857 852,724
Shares redeemed......................................................... (4,277,025) (12,068,037)
-------------- --------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... 10,562,831 (1,733,990)
============== ==============
See notes to financial statements.
</TABLE>
PEOPLES INDEX FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to Page 3 of the Fund's Prospectus dated February 28,
1995.
PEOPLES INDEX FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. Wells Fargo
Nikko Investment Advisors ("WFNIA") serves as the Fund's index manager. Wells
Fargo Investment Advisors ("WFIA"), the predecessor index manager of the
Fund, and The Nikko Securities Co., Ltd. and an affiliate ("Nikko") each own
50% of WFNIA. Wells Fargo Institutional Trust Company, N.A. ("WFITC"), an
affiliate of WFNIA, is the custodian of the Fund's investments. The Dreyfus
Corporation ("Dreyfus") serves as the Fund's administrator. Dreyfus Service
Corporation, until August 24, 1994, acted as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. Dreyfus
Service Corporation is a wholly-owned subsidiary of Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
On November 18, 1992, the Board of Directors approved an Agreement and
Plan of Reorganization providing for the transfer of all or substantially all
of the assets and liabilities of Dreyfus Index Fund to the Fund in a tax free
exchange for shares of Common Stock of the Fund at net asset value and the
assumption of stated liabilities (the "Exchange"). The Exchange was approved
by Dreyfus Index Fund shareholders on April 30, 1993, and became effective
after the close of business on May 7, 1993, at which time the Fund issued
8,156,551 shares valued at $15.79 per share to Dreyfus Index Fund in exchange
for 7,041,659 shares of Dreyfus Index Fund valued at $18.29 per share,
representing net assets of $128,791,946, including $14,201,004 of unrealized
appreciation, $274,566 of undistributed income and undistributed net realized
gains of $7,656,452. The combined net assets immediately after the Exchange
was $253,203,509.
(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. Short-term
investments are carried at amortized cost, which approximates value.
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) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid annually.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers,if any, it is the policy of the Fund not to distribute such gain.
PEOPLES INDEX FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2--MANAGEMENT FEE, ADMINISTRATION FEE AND OTHER TRANSACTIONS WITH
AFFILIATES:
(A) Fees paid by the Fund pursuant to the provisions of an Index
Management Agreement with WFNIA and an Administration Agreement with Dreyfus
are payable monthly. WFNIA and Dreyfus receive annual fees of .10 of 1% and
.20 of 1%, respectively, of the average daily value of the Fund's net assets.
The agreements further provide that if the aggregate expenses of the Fund,
exclusive of interest, taxes, brokerage and extraordinary expenses, exceed
the expense limitation of any state having jurisdiction over the Fund, the
Fund may deduct from the fees to be paid to each of WFNIA and Dreyfus, or
WFNIA and Dreyfus will bear, in the same proportion as in the agreements, the
amount of such excess to the extent required by state law. The most stringent
state expense limitation applicable to the Fund presently requires
reimbursement of expenses in any full fiscal year that such expenses exceed 2
1/2% of the first $30 million, 2% of the next $70 million, and 11/2% of the
excess over $100 million of the average value of the Fund's net assets in
accordance with California "blue sky" regulations. However, WFNIA and Dreyfus
had undertaken from November 1, 1993 through November 30, 1993 to reduce the
index management fee and the administration fee to the extent that the Fund's
aggregate expenses (excluding certain expenses as described above) exceeded
certain specified annual percentages of the Fund's average daily net assets.
Pursuant to the undertakings, WFNIA and Dreyfus reduced the index management
fee and the administration fee for the year ended October 31, 1994, $30,232
and $60,463, respectively.
In addition, WFITC earned $38,774 for custodian services provided to the
Fund.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
the Dreyfus Service Corporation an amount not to exceed an annual rate of .25
of 1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the year ended
October 31, 1994, the Fund was charged an aggregate of $602,702 pursuant to
the Shareholder Services Plan.
(C) Prior to August 24, 1994 certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each director who is not an "affiliated person"
receives an annual fee of $2,500 and an attendance fee of $500 per meeting.
(D) A 1% redemption fee is charged on certain redemptions of Fund shares
(including redemptions through use of the Exchange Privilege) where the
shares being redeemed were issued subsequent to a specified effective date
and the redemption or exchange occurs within a six-month period following the
date of issuance. During the period ended October 31, 1994, redemption fees
amounted to $999.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment
securities, other than short-term securities, for the year ended October 31,
1994 amounted to $49,479,267 and $85,587,749, respectively.
PEOPLES INDEX FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments (see the Statement of Financial Futures). 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. Accordingly, variation margin payments are made or
received 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 as of October
31, 1994 and their related unrealized market appreciation are set forth in
the Statement of Financial Futures.
(B) At October 31, 1994, accumulated net unrealized appreciation on
investments was $23,840,919, consisting of $33,425,620 gross unrealized
appreciation and $9,584,701 gross unrealized depreciation.
At October 31, 1994, 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).
PEOPLES INDEX FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
PEOPLES INDEX FUND, INC.:
We have audited the accompanying statement of assets and liabilities of
Peoples Index Fund, Inc. (the Fund), including the statements of investments
and financial futures, as of October 31, 1994, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and the financial
highlights for each of the four years in the period then ended and for the
period from January 2, 1990 (commencement of operations) to October 31, 1990.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1994, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Peoples Index Fund, Inc. as of October 31, 1994, the results of
its operations, the changes in its net assets, and the financial highlights
for the periods referred to above, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
December 16, 1994
