______________________________________________________________________________
PROSPECTUS MARCH 1, 1996
DREYFUS S&P 500 INDEX FUND
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DREYFUS S&P 500 INDEX FUND (THE "FUND") IS AN OPEN-END,
NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS AN INDEX FUND. THE
FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE INVESTMENT RESULTS THAT CORRESPOND
TO THE PRICE AND YIELD PERFORMANCE OF PUBLICLY-TRADED COMMON STOCKS IN THE
AGGREGATE, AS REPRESENTED BY THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX. IN ANTICIPATION OF TAKING A MARKET POSITION, THE FUND IS PERMITTED TO
PURCHASE AND SELL STOCK INDEX FUTURES. THE FUND IS NEITHER SPONSORED BY NOR
AFFILIATED WITH STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL COMPANIES,
INC.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S MANAGER.
DREYFUS HAS ENGAGED ITS AFFILIATE, MELLON EQUITY ASSOCIATES ("MELLON
EQUITY"), TO SERVE AS THE FUND'S INDEX FUND MANAGER AND PROVIDE DAY-TO-DAY
MANAGEMENT OF THE FUND'S INVESTMENTS. DREYFUS AND MELLON EQUITY ARE REFERRED
TO COLLECTIVELY AS THE "ADVISERS."
SHAREHOLDERS WHO REDEEM SHARES WITHIN SIX MONTHS OF THE OPENING OF
THEIR ACCOUNT WILL BE CHARGED A 1% REDEMPTION FEE WHICH WILL BE DEDUCTED FROM
REDEMPTION PROCEEDS. HOWEVER, THE REDEMPTION FEE WILL NOT BE APPLICABLE TO
SHARES HELD IN OMNIBUS ACCOUNTS.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MARCH 1, 1996, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM
TIME TO TIME.
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TABLE OF CONTENTS
PAGE
FEE TABLE.................................. 3
CONDENSED FINANCIAL INFORMATION............ 3
DESCRIPTION OF THE FUND.................... 4
MANAGEMENT OF THE FUND..................... 6
HOW TO BUY FUND SHARES..................... 7
HOW TO REDEEM FUND SHARES.................. 9
SHAREHOLDER SERVICES....................... 11
SHAREHOLDER SERVICES PLAN.................. 12
DIVIDENDS, DISTRIBUTIONS AND TAXES......... 12
PERFORMANCE INFORMATION.................... 13
GENERAL INFORMATION........................ 14
APPENDIX................................... 15
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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(This Page Intentionally Left Blank)
Page 2
<TABLE>
<CAPTION>
FEE TABLE
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fees (as percentage of amount redeemed)........................................ 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fee............................................................................ .30%
Other Expenses............................................................................ .25%
Total Fund Operating Expenses............................................................. .55%
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
_______ _______ ________ ________
You would pay the following expenses
on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $6 $18 $31 $69
</TABLE>
______________________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
______________________________________________________________________________
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. The information in the
foregoing table does not reflect any fee waivers or expense reimbursement
arrangements that may be in effect. You can purchase Fund shares without
charge directly from the Fund's distributor; you may be charged a nominal fee
if you effect transactions in Fund shares through a securities dealer, bank or
other financial institution. See "Management of the Fund," "How to Buy Fund
Shares," How to Redeem Fund Shares" and "Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Coopers
& Lybrand L.L.P., the Fund's independent accountants, whose report thereon
appears in the Statement of Additional Information. Further financial data
and related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995
------- ------ ------- ------- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $12.50 $10.86 $14.16 $15.16 $16.88 $16.41
------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net ...................... .17 .34 .41 .30 .39 .36
Net realized and unrealized gain (loss) on investments (1.81) 3.18 .97 1.86 .11 3.36
------- ------- ------- ------- ------ -------
TOTAL FROM INVESTMENT OPERATIONS.............. (1.64) 3.52 1.38 2.16 .50 3.72
_______ _______ ______ _____ ____ _____
DISTRIBUTIONS:
Dividends from investment income--net........ _ (.22) (.38) (.40) (.31) (.42)
Dividends from net realized gain on investments _ _ _ (.04) (.66) (1.33)
------- ------- ------- ------- ------ -------
TOTAL DISTRIBUTIONS _ (.22) (.38) (.44) (.97) (1.75)
_______ ______ _____ ______ _____ ______
Net asset value, end of year................. $10.86 $14.16 $15.16 $16.88 $16.41 $18.38
======= ======= ====== ====== ======= ======
TOTAL INVESTMENT RETURN.......................... (13.12%)(2) 32.85% 9.90% 14.49% 3.14% 25.68%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... _ _ _ .39% .61% .55%
Ratio of net investment income to average net assets 3.46%(2) 3.45% 3.04% 2.36% 2.26% 2.75%
Decrease reflected in above expense ratios due to undertakings1.42%(2) .78% .65% .14% .03% _
Decrease reflected in above expense ratios due to
redemption fee .08%(2) .10% _ _ _ _
Portfolio Turnover Rate...................... 1.21%(2) .69% 3.10% 3.77% 18.81% 3.66%
Net Assets, end of year (000's Omitted).............. $29,266 $69,211 $92,598 $281,403 $245,202 $336,147
(1) From January 2, 1990 (commencement of operations) to October 31, 1990.
(2) Not annualized.
</TABLE>
Page 3
Further information about the Fund's performance is contained in
the Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide investment results
that correspond to the price and yield performance of publicly-traded common
stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index* (the "Index"). It cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of the Fund's outstanding voting
shares. There can be no assurance that the Fund's investment objective will
be achieved.
MANAGEMENT POLICIES
The Fund attempts to duplicate the investment results of the Index,
which is composed of 500 selected common stocks, most of which are listed on
the New York Stock Exchange. Standard & Poor's, a division of the McGraw-Hill
Companies, Inc., chooses the stocks to be included in the Index solely on a
statistical basis. The Fund attempts to be fully invested at all times in the
stocks that comprise the Index and stock index futures as described below
and, in any event, at least 80% of the Fund's net assets will be so invested.
Inclusion of a stock in the Index in no way implies an opinion by Standard &
Poor's, a division of the McGraw-Hill Companies, Inc., as to its
attractiveness as an investment. The Fund uses the Index as the standard
performance comparison because it represents approximately 70% of the total
market value of all common stocks and is well known to investors. An
investment in the Fund involves risks similar to those of investing in common
stocks.
The weightings of stocks in the Index are based on each stock's
relative total market capitalization; that is, its market price per share
times the number of shares outstanding. Because of this weighting, as of
November 30, 1995, 46.3% of the Index was composed of the 50 largest
companies. The Advisers generally select stocks for the Fund's portfolio in
the order of their weightings in the Index beginning with the heaviest
weighted stocks. With respect to the Fund's assets invested in the stocks in
the Index, the percentage of such assets invested in each stock is
approximately the same as the percentage it represents in the Index.
No attempt is made to manage the portfolio in the traditional sense
using economic, financial and market analysis. The Fund is managed using a
computer program to determine which stocks are to be purchased or sold to
replicate the Index to the extent feasible. From time to time, administrative
adjustments may be made in the Fund's portfolio because of changes in the
composition of the Index, but such changes should be infrequent.
The Fund believes that the indexing approach described above is an
effective method of substantially duplicating percentage changes in the
Index. It is a reasonable expectation that there will be a close correlation
between the Fund's performance and that of the Index in both rising and
falling markets. The Fund will attempt to achieve a correlation between the
performance of its portfolio and that of the Index of at least 0.95, without
taking into account expenses. A correlation of 1.00 would indicate perfect
correlation, which would be achieved when the Fund's net asset value,
including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the Index. The
Fund's ability to correlate its performance with the Index, however, may be
affected by, among other things, changes in securities markets, the manner in
which the Index is calculated by Standard & Poor's, a division of the
McGraw-Hill Companies, Inc., and the timing of purchases and
redemptions. In the future, the Fund's Board, subject to the approval of
shareholders, may select another index if such a standard of comparison is
deemed to be more representative of the performance of common stocks.
- -----------------------
*"Standard & Poor's 500," "S&PRegistration Mark" and "S&P 500Registration Mark
"are trademarks of Standard & Poor's, a division of the McGraw-Hill Companies,
Inc., and have been licensed for use by the Fund. The Fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's, a division of the McGraw-Hill
Companies, Inc.
Page 4
The Fund's ability to duplicate the performance of the Index also
depends to some extent on the size of the Fund's portfolio and the size of
cash flows into and out of the Fund. Investment changes to accommodate these
cash flows are made to maintain the similarity of the Fund's portfolio to the
Index to the maximum practicable extent.
From time to time to increase its income, the Fund may lend
securities from its portfolio. See "Appendix _ Investment Techniques." When
the Fund has cash reserves, the Fund may invest in money market instruments
consisting of U.S. Government securities, time deposits, certificates of
deposit, bankers' acceptances, high-grade commercial paper, and repurchase
agreements. See the Statement of Additional Information for a description of
these instruments. The Fund also may purchase stock index futures in
anticipation of taking a market position when, in the opinion of the
Advisers, available cash balances do not permit an economically efficient
trade in the cash market. The Fund also may sell stock index futures to
terminate existing positions it may have as a result of its purchases of
stock index futures. See also "Investment Considerations and Risks" and
"Appendix _ Investment Techniques" below, and "Investment Objective and
Management Policies" in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- The Fund's net asset value per share should be expected to
fluctuate. Investors should consider the Fund as a supplement to an overall
investment program and should invest only if they are willing to undertake
the risks involved. See "Investment Objective and Management
Policies_Management Policies" in the Statement of Additional Information for
a further discussion of certain risks.
EQUITY SECURITIES -- Equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors.
FOREIGN SECURITIES -- Since the stocks of some foreign issuers are included
in the Index, the Fund's portfolio may contain securities of such foreign
issuers which may subject the Fund to additional investment risks with
respect to those securities that are different in some respects from those
incurred by a fund which invests only in securities of domestic issuers. Such
risks include future political and economic developments, the possible
imposition of withholding taxes on income payable on the securities, the
possible establishment of exchange controls or the adoption of other foreign
governmental restrictions which might adversely affect an investment in these
securities and the possible seizure or nationalization of foreign deposits.
USE OF DERIVATIVES -- The Fund may invest, to a limited extent, in
derivatives ("Derivatives"). These are financial instruments, which derive
their performance, at least in part, from the performance of an underlying
asset, index or interest rate. The Derivatives the Fund may use include stock
index futures. While Derivatives can be used effectively in furtherance of
the Fund's investment objective, under certain market conditions, they can
increase the volatility of the Fund's net asset value, can decrease the
liquidity of the Fund's investments and make more difficult the accurate
pricing of the Fund's portfolio. See "Appendix _Investment Techniques _ Use
of Derivatives" below and " Investment Objective and Management Policies _
Management Policies _ Derivatives" in the Statement of Additional
Information.
NON-DIVERSIFIED STATUS -- The Fund's classification as a "non-diversified"
investment company means that the proportion of the Fund's assets that may be
invested in the securities of a single issuer is not limited by the 1940 Act.
A "diversified" investment company is required by the
1940 Act, generally, with respect to 75% of its total assets, to invest not
more than 5% of such assets in the securities of a single issuer. Since a
relatively high percentage of the Fund's assets may be invested in the
securities of a limited number of issuers, some of which may be within the
same economic sector, the Fund's portfolio may be more susceptible to any
single economic, political or regulatory occurrence than the portfolio
securities of a diversified investment company.
Page 5
However, to meet Federal tax requirements, at the close of each
quarter the Fund may not have more than 25% of its total assets invested in
any one issuer and, with respect to 50% of total assets, not more than 5% of
its total assets invested in any one issuer. The Fund may not invest more
than 25% of its assets in any one industry. These limitations do not apply to
U.S. Government securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are made
independently from those of the other accounts and investment companies that
may be managed by Dreyfus or Mellon Equity. However, if such other accounts
or investment companies are prepared to invest in, or desire to dispose of,
securities in which the Fund invests, available investments or opportunities
for sales will be allocated equitably to each. In some cases, this procedure
may adversely affect the size of the position obtained for or disposed of by
the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
ADVISERS -- Dreyfus, located at 200 Park Avenue, New York, New York 10166,
was formed in 1947 and serves as the Fund's manager. Dreyfus is a
wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Bank Corporation ("Mellon"). As of January 31, 1996,
Dreyfus managed or administered approximately $82 billion in assets for
approximately 1.7 million investor accounts nationwide.
Dreyfus supervises and assists in the overall management of the
Fund's affairs under a Management Agreement with the Fund, subject to the
authority of the Fund's Board in accordance with Maryland law.
Dreyfus has engaged Mellon Equity, located at 500 Grant Street,
Pittsburgh, Pennsylvania 15258, to serve as the Fund's index fund manager.
Mellon Equity, a registered investment adviser formed in 1957, is an indirect
wholly-owned subsidiary of Mellon and, thus, an affiliate of Dreyfus. As of
December 31, 1995, Mellon Equity and its employees managed approximately $8.8
billion in assets and served as the investment adviser of 62 other investment
companies.
Mellon Equity, subject to the supervision and approval of Dreyfus,
provides the day-to-day management of the Fund's investments, as well as
statistical information, under an Index Management Agreement with Dreyfus,
subject to the overall authority of the Fund's Board in accordance with
Maryland law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including Dreyfus, Mellon managed more than $209 billion in
assets as of September 30, 1995, including approximately $80 billion in
proprietary mutual fund assets. As of September 30, 1995, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $717 billion in assets, including
approximately $ 55 billion in mutual fund assets.
Pursuant to the terms of the Management Agreement, the Fund has
agreed to pay Dreyfus a monthly fee at the annual rate of .295 of 1% of the
value of the Fund's average daily net assets. Under the Fund's
Index Management Agreement, Dreyfus has agreed to pay Mellon Equity a monthly
fee at the annual rate of .095 of 1% of the Fund"s average daily net assets,
which fee includes payment for the provision of custody services in the Fund
by Boston Safe Deposit and Trust Company.
Prior to November 13, 1995, Wells Fargo Nikko Investment Advisors
("WFNIA") served as the Fund's index fund manager pursuant to an Index
Management Agreement with the Fund and Dreyfus served as the Fund's
administrator pursuant to an Administration Agreement with the Fund. Pursuant
to such agreements, for the fiscal year ended October 31, 1995, the Fund paid
WFNIA and Dreyfus .10% and .20%, respectively, of the value of the Fund's
average daily net assets.
Page 6
The imposition of the Fund's management fees, as well as other
operating expenses, will have the effect of reducing investors' return and
will affect the Fund's ability to track the Index exactly. From time to time,
Dreyfus and/or Mellon Equity or one of their affiliates may waive receipt of
their fees and/or voluntarily assume certain expenses of the Fund, which
would have the effect of lowering the overall expense ratio of the Fund and
increasing yield to investors at the time such amounts are waived or assumed,
as the case may be. The Fund will not pay Dreyfus and/or Mellon Equity or
their affiliates at a later time for any amounts which may be waived, nor
will the Fund reimburse Dreyfus and/or Mellon Equity or their affiliates for
any amounts which may be assumed.
Dreyfus may pay the Fund's distributor for shareholder services
from Dreyfus' own assets, including past profits but not including the
management fee paid by the Fund. The Fund's distributor may use part or all
of such payments to pay securities dealers or others in respect of these
services.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT -- Boston Safe Deposit
and Trust Company, One Boston Place, Boston, Massachusetts 02108 ("Boston
Safe"), is the Custodian of the Fund's investments. Boston Safe is an
indirect subsidiary of Mellon. Dreyfus Transfer, Inc., a wholly-owned
subsidiary of Dreyfus, P.O. Box 9671, Providence, Rhode Island 02903, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent").
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, Boston, Massachusetts
02109. The Distributor's ultimate parent is Boston Institutional Group, Inc.
HOW TO BUY FUND SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Stock certificates are issued
only upon your written request. No certificates are issued for fractional
shares. The Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a securities dealer, bank or other financial institution which has
made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment must be
accompanied by the Fund's Account Application. For full-time or part-time
employees of Dreyfus or any of its affiliates or subsidiaries, directors of
Dreyfus, Board members of a fund advised by Dreyfus, members of the Fund's
Board, or the spouse or minor child of any of the foregoing, the minimum
initial investment is $1,000. For full-time or part-time employees of Dreyfus
or any of its affiliates or subsidiaries who elect to have a portion of their
pay directly deposited into their Fund account, the minimum initial
investment is $50. The Fund reserves the right to offer Fund shares without
regard to minimum purchase requirements to employees participating in certain
qualified or non-qualified employee benefit plans or other programs where
contributions or account information can be transmitted in a manner and form
acceptable to the Fund. The Fund reserves the right to vary further the
initial and subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be
made payable to "Dreyfus S&P 500 Index Fund" or, if for Dreyfus retirement
plan accounts, to "The Dreyfus Trust Company, Custodian." Payments to open
new accounts which are mailed should be sent to Dreyfus S&P 500 Index Fund,
P.O. Box 6647, Providence, Rhode Island 02940-6647, together with your
Account Application. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be enclosed. For
Dreyfus retirement plan accounts, both initial and subsequent investments
should be sent to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. Neither initial nor subsequent
investments should be made by third party check. Purchase orders may be
delivered in person only to a Dreyfus Financial Center. THESE ORDERS WILL BE
FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY.
Page 7
For the location of the nearest Dreyfus Financial Center, please call one of
the telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900119527/Dreyfus S&P 500
Index Fund, for purchase of Fund shares in your name. The wire must include
your Fund account number (for new accounts, your Taxpayer Identification
Number ("TIN") should be included instead), account registration and dealer
number, if applicable. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Fund's
Account Application and promptly mail the Account Application to the Fund, as
no redemptions will be permitted until the Account Application is received.
You may obtain further information about remitting funds in this manner from
your bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds $1,000,000. Shares of funds in
the Dreyfus Family of Funds then held by such employee benefit plans or
programs will be aggregated to determine the fee payable. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Fund shares are sold on a continuous basis at the net asset value
per share next determined after your order is received by the Transfer Agent
or other agent. If an order is received in proper form by the Transfer Agent
by the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time) on a given day, Fund shares will be
purchased at the net asset value determined as of such close of trading on
that day. Otherwise, Fund shares will be purchased at the net asset value
determined as of the close of trading on the floor of the New York Stock
Exchange on the next business day. To permit the Fund to invest your money as
promptly as possible after receipt, thereby maximizing the Fund's ability to
track the Index, you are urged to transmit your purchase order in proper form
so that it may be received by the Transfer Agent prior to 12:00 noon, New York
time, on the day you want your purchase order to be effective.
The Fund's net asset value per share is determined as of the close
of trading on the floor of the New York Stock Exchange on each day the New
York Stock Exchange is open for business. For purposes of
Page 8
determining net asset value per share, futures contracts will be valued 15
minutes after the close of trading on the floor of the New York Stock
Exchange. Net asset value per share is computed by dividing the value of the
Fund's net assets (i.e., the value of its assets less liabilities) by the
total number of shares outstanding. The Fund's investments are valued based
on market value, or where market quotations are not readily available, based
on fair value as determined in good faith by the Fund's Board. For further
information regarding the methods employed in valuing Fund investments, see
"Determination of Net Asset Value" in the Statement of Additional
Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
HOW TO REDEEM FUND SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value, which may be more or less than their
original cost. To maximize the Fund's ability to track the Index, you are
urged to transmit your redemption requests so that they may be received by
the Transfer Agent prior to 12:00 noon, New York time, on the day you want
your redemption request to be effective.
You will be charged a 1% redemption fee upon the redemption of Fund
shares where the redemption occurs within the initial six-month period
following the opening of your account. This redemption fee will be deducted
from your redemption proceeds and retained by the Fund. It is expected that,
as a result of this fee, the Fund will be able to track the Index more
closely. No redemption fee will be charged upon the redemption of shares
purchased through omnibus accounts, nor will the redemption fee be used to
pay fees imposed for various Fund services. The redemption fee may be waived,
modified or discontinued and reintroduced at any time or from time to time.
In addition, securities dealers, banks and other financial institutions may
charge their clients a nominal fee for effecting redemptions of Fund shares.
Any certificates representing Fund shares being redeemed must be submitted
with the redemption request.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption request
in accordance with the procedures described below, except as provided by the
rules of the Securities and Exchange Commission. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE FOR A PERIOD OF EIGHT BUSINESS
DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK OR THE DREYFUS-
AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED.
THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE
PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
The Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
Page 9
PROCEDURES
You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent, through the Wire
Redemption Privilege or the Telephone Redemption Privilege. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities. The Fund reserves the
right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege, you authorize the Transfer Agent to act on telephone instructions
from any person representing himself or herself to be you, and reasonably
believed by the Transfer Agent to be genuine. The Fund will require the
Transfer Agent to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that instructions are genuine and, if it
does not follow such procedures, the Fund or the Transfer Agent may be liable
for any losses due to unauthorized or fraudulent instructions. Neither the
Fund nor the Transfer Agent will be liable for following telephone
instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption of Fund shares. In such cases, you should consider using
the other redemption procedures described herein. Use of these other
redemption procedures may result in your redemption request being processed
at a later time than it would have been if telephone redemption had been
used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may redeem
shares by written request mailed to Dreyfus S&P 500 Index Fund, P.O. Box
6647, Providence, Rhode Island 02940-6647, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
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. If you
have any questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
Your written redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised or administered by
Dreyfus. The 1% redemption fee, described above, if applicable, may be
charged upon such redemption (depending upon how long your Fund account has
been open or the type of account from which shares are being redeemed) and
your redemption proceeds will be invested in shares of the other fund on the
next business day. Before you make such a request, you must obtain and should
review a copy of the current prospectus of the fund being purchased. Upon
request, proceeds from the redemption of shares of the Fund by an employee
benefit plan will applied to purchase shares of other funds in the Dreyfus
Family of Funds on the date of redemption, if the plan's
Page 10
recordkeeper has entered into an appropriate agency agreement with the Fund
and such other funds. Prospectuses may be obtained by calling 1-800-645-6561.
The prospectus will contain information concerning minimum investment
requirements and other conditions that may apply to your purchase. No other
fees currently are charged shareholders directly in connection with this
procedure, although the Fund reserves the right, upon not less than 60 days'
written notice, to charge shareholders a nominal fee in accordance with rules
promulgated by the Securities and Exchange Commission. This procedure may be
modified or terminated at any time upon not less than 60 days' notice to
shareholders.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. You also may direct that redemption proceeds be paid by
check (maximum $150,000 per day)made out to the owners of record and mailed
to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired within any
30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are not
eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 1-516-794-5452.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares for
which the certificates have been issued, are not eligible for this Privilege.
SHAREHOLDER SERVICES
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark -- Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. This Privilege may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization form
with the Transfer Agent. You may obtain the necessary authorization form by
calling 1-800-645-6561. You may cancel your participation in this Privilege
or change the amount of purchase at any time by mailing written notification
to Dreyfus S&P 500 Index Fund, P.O. Box 6647, Providence, Rhode Island
02940-6647, or, if for Dreyfus retirement plan accounts, to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427, and
the notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee, although no such fee currently is contemplated.
RETIREMENT PLANS -- The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You 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.
Page 11
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, an amount not to exceed an annual rate of .25 of 1% of the value of
the Fund's average daily net assets 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 as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment income and
distributes net realized securities gains, if any, once a year, but 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"),
in all events in a manner consistent with the provisions of the 1940 Act. The
Fund will automatically reinvest dividends and distributions from securities
gains, if any, in additional Fund shares at net asset value or, at your
option, pay them in cash. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest them in additional Fund shares at net asset value. If
applicable, the 1% redemption fee, described under "How to Redeem Fund
Shares," will be charged upon certain redemptions of Fund shares received
through the automatic reinvestment of dividends or distributions. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Dividends paid by the Fund derived from net investment income and
distributions from net realized short-term securities gains of the Fund will
be taxable to U.S. shareholders as ordinary income whether received in cash
or reinvested in Fund shares. Depending on the composition of the Fund's
income, a portion of the dividends from net investment income may qualify for
the dividends received deduction allowable to certain corporate shareholders.
Distributions from net realized long-term securities gains of the Fund will
be taxable to U.S. shareholders as long-term capital gains for Federal income
tax purposes, regardless of how long shareholders have held their Fund shares
and whether such distributions are received in cash or reinvested in Fund
shares. The Code provides that the net long-term capital gain of an
individual will generally not be subject to Federal income tax at a rate in
excess of 28%. Dividends and distributions may be subject to state and local
taxes.
Dividends derived from net investment income and distributions from
net realized short-term securities gains paid by the Fund to a foreign
investor generally are subject to U.S. nonresident withholding taxes at the
rate of 30%, unless the foreign investor claims the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term
securities gains paid by the Fund to a foreign investor as well as the
proceeds of any redemptions from a foreign investor's account, regardless of t
he extent to which gain or loss may be realized, generally will not be
subject to U.S. nonresident withholding tax. However, such distributions may
be subject to backup withholding, as described below, unless the foreign
investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions is
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a
Page 12
result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax withheld as
a result of backup withholding does not constitute an additional tax imposed
on the record owner of the account, and may be claimed as a credit on the
record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended October 31, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interest of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For the purpose of advertising, performance is calculated on the
basis of average annual total return and/or total return.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at the end of
the period. Advertisements of the Fund's performance will include the Fund's
average annual total return for one, five and ten year periods, or for
shorter time periods depending upon the length of time during which the Fund
has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. Performance information, such
as that described above, may not provide a basis for comparison with other
investments or other investment companies using a different method of
calculating performance.
Comparative performance information may be used from time to time
in advertising or marketing the Fund's shares, including data from Standard &
Poor's 500 Composite Stock Price Index, Standard & Poor's MidCap 400 Index,
Lipper Analytical Services, Inc., the Dow Jones Industrial Average, Money
Magazine, Morningstar, Inc. and other industry publications. The Fund also
may cite in its advertisements or in reports or other communications to
shareholders, historical performance of unmanaged indices 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 the aggregate amount of
assets committed to index investing by pension funds and/or other
institutional investors, and may refer to or discuss then-current or past
economic or financial conditions, developments or events.
Page 13
GENERAL INFORMATION
The Fund was incorporated under Maryland law on October 6, 1989,
and commenced operations on January 2, 1990. On November 13, 1995, the Fund,
which is incorporated under the name Peoples Index Fund, Inc., began
operating under the name Dreyfus S&P 500 Index Fund. The Fund is authorized
to issue 200 million shares of Common Stock, par value $.001 per share. Each
share has one vote.
Unless otherwise required by the 1940 Act, ordinarily it will not
be necessary for the Fund to hold annual meetings of shareholders. As a
result, Fund shareholders may not consider each year the election of
Directors or the appointment of accountants. However, pursuant to the Fund's
By-Laws, the holders of at least 10% of the shares outstanding and entitled
to vote may require the Fund to hold a special meeting of shareholders for
purposes of removing a Director from office and the holders of at least 25%
of such shares may require the Fund to hold a special meeting of shareholders
for any other purpose. Fund shareholders may remove a Director by the
affirmative vote of a majority of the Fund's outstanding voting shares. In
addition, the Fund's Board will call a meeting of shareholders for the
purpose of electing Directors if, at any time, less than a majority of the
Directors then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
you confirmation statements of account.
Shareholder inquiries may be made by writing to the Fund at l44
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free l-800-645-6561. In New York City, call
1-718-895-1206; outside the U.S. and Canada, call 516-794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
The Fund is not sponsored, endorsed, sold or promoted by Standard &
Poor's Corporation ("S&P"). S&P makes no representation or warranty, express
or implied, to the owners of the Fund or any member of the public regarding
the advisability of investing in securities generally or in the Fund
particularly or the ability of the S&P 500 Index to track general stock
market performance. S&P's only relationship to the Fund is the licensing of
certain trademarks and trade names of S&P and of the S&P 500 Index which is
determined, composed and calculated by S&P without regard to the Fund. S&P
has no obligation to take the needs of the Fund or the owners of the Fund
into consideration in determining, composing or calculating the S&P 500
Index. S&P is not responsible for and has not participated in the calculation
of the Fund's net asset value, nor is S&P a distributor of the Fund. S&P has
no obligation or liability in connection with the administration, marketing
or trading of the Fund.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, OWNERS OF THE FUND, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR
ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Page 14
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY -- The Fund is permitted to borrow money only for temporary
or emergency (not leveraging) purposes, in an amount up to 15% of the value
of its total assets (including the amount borrowed) valued at 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 Fund's total
assets, the Fund will not make any additional investments.
USE OF DERIVATIVES -- Although the Fund will not be a commodity pool,
Derivatives subject the Fund to the rules of the Commodity Futures Trading
Commission which limit the extent to which the Fund can invest in certain
derivatives. The Fund may invest in stock index futures contracts for hedging
purposes without limit. However, the Fund may not invest in such contracts
for other purposes if the sum of the amount of initial margin deposits, other
than for bona fide hedging purposes, exceed 5% of the liquidation value of the
Fund's assets, after taking into account unrealized profits and unrealized
losses on such contracts.
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. In connection with such
loans, the Fund continues to be entitled to payments in amounts equal to the
interest, dividends or other distributions payable on the loaned securities.
Loans of portfolio securities afford the Fund an opportunity to earn interest
on the amount of the loan and at the same time to earn income on the loaned
securities' collateral. Loans of portfolio securities may not exceed 30% of
the value of the Fund's total assets. In connection with such loans, the Fund
will receive collateral consisting of cash, U.S. Government securities or
irrevocable letters of credit which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. Such loans are terminable by the Fund at any time upon specified
notice. The Fund might experience risk of loss if the institution with which
it has engaged in a portfolio loan transaction breaches its agreement with
the Fund.
Page 15
Dreyfus
S&P 500
Index Fund
Prospectus
(LION LOGO)
Registration Mark
Copy Rights 1996 Dreyfus Service Corporation 078p030196
DREYFUS S&P 500 INDEX FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MARCH 1, 1996
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus S&P 500 Index Fund (the "Fund"), dated March 1, 1996, 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
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation ("Dreyfus") serves as the Fund's manager.
Dreyfus has engaged its affiliate, Mellon Equity Associates ("Mellon
Equity"), to serve as the Fund's index fund manager and provide day-to-day
management of the fund's investments. Dreyfus and Mellon Equity are
referred to collectively as the "Advisers."
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-6
Management Arrangements . . . . . . . . . . . . . . . . . . . . . . . .B-9
Shareholder Services Plan . . . . . . . . . . . . . . . . . . . . . . .B-12
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . .B-12
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . .B-13
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . . . . .B-14
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . .B-15
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . .B-15
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . .B-17
Performance Information . . . . . . . . . . . . . . . . . . . . . . . .B-17
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . .B-18
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Accountants . . . . . . . . . . . . . . . . .B-18
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-20
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . .B-21
Report of Independent Accountants . . . . . . . . . . . . . . . . . . .B-34
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the sections in the Fund's Prospectus entitled
"Description of the Fund" and "Appendix."
Other Portfolio Securities
Money Market Instruments. The Fund may invest, in the circumstances
described under "Description of the Fund - Management Policies" in the
Fund's Prospectus, in the following types of money market instruments.
U.S. Government Securities. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities are supported by the full faith and credit
of the U.S. Treasury; others, by the right of the issuer to borrow from the
Treasury; others, by discretionary authority of the U.S. Government to
purchase certain obligations from the agency or instrumentality; and
others, only by the credit of the agency or instrumentality. These
securities bear fixed, floating or variable rates of interest. While the
U.S. Government provides financial support for such U.S. Government-
sponsored agencies and instrumentalities, no assurance can be given that it
will always do so since it is not so obligated by law.
Repurchase Agreements. In a repurchase agreement, the Fund buys, and
the seller agrees to repurchase, a security at a mutually agreed upon time
and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. 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. Repurchase
agreements could involve risks in the event of a default or insolvency of
the other party to the agreement, including possible delays or restrictions
upon the Fund's ability to dispose of the underlying securities.
Bank Obligations. The Fund may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such
securities issued by foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, the Fund may be
subject to additional investment risks that are different in some respects
from those incurred by a fund which invests only in debt obligations of
U.S. domestic issuers.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
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 the drawer to pay the face
amount of the instruments upon maturity. The other short-term obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Commercial Paper. 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. ("Moody's") or A-1 by Standard & Poor's Ratings
Group, a division of The McGraw Hill Companies, Inc. ("S&P"), (b) issued by
companies having an outstanding unsecured debt issue currently rated at
least Aa by Moody's or at least AA- by S&P, or (c) if unrated, determined
by the Advisers to be of comparable quality to those rated obligations
which may be purchased by the Fund.
Management Policies
Lending Portfolio Securities. In connection with its securities
lending transactions, 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 Board 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.
Derivatives. The Fund may invest in Derivatives (as defined in the
Fund's Prospectus in anticipation of taking a market position when, in the
opinion of the Advisers, available cash balances do not permit an
economically efficient trade in the cash market. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Fund to invest
than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the portfolio as a whole. Derivatives permit the Fund to increase,
decrease or change the level of risk to which its portfolio is exposed in
much the same way as the Fund can increase, decrease or change the risk of
its portfolio by making investments in specific securities.
In addition, Derivatives may entail investment exposures that are
greater than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on the Fund's performance.
If the Fund invests in Derivatives at inappropriate times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. The Fund also could experience losses if its
Derivatives were poorly correlated with its other investments, or if the
Fund were unable to liquidate its position because of an illiquid secondary
market. The market for many Derivatives is, or suddenly can become,
illiquid. Changes in liquidity may result in significant, rapid and
unpredictable changes in the prices for Derivatives.
Stock Index Futures - A stock index future obligates the seller to
deliver (and the purchaser to take) and amount of cash equal to a specific
dollar amount times the difference between the value of a specific stock
index at the close of the last trading day of the contract and the price at
which the agreement is made. No physical delivery of the underlying stocks
in the index is made. The Fund purchases and sells futures contracts on
the stock index for which it can obtain the best price with consideration
also given to liquidity.
Using futures in anticipation of market transactions involves certain
risks. Although the Fund intends to purchase or sell futures contracts
only if there is an active market for such contracts, no assurance can be
given that a liquid market will exist for any particular contract at any
particular time. In addition, the price of stock index futures may not
correlate perfectly with the movement in the stock index due to certain
market distortions. First, all participants in the futures market are
subject to margin deposit and maintenance requirements. Rather than
meeting additional margin deposit requirements, investors may close futures
contracts through offsetting transactions which would distort the normal
relationship between the index and futures markets. Secondly, from the
point of view of speculators, the deposit requirements in the futures
market are less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures market
also may cause temporary price distortions. Because of the possibility of
price distortions in the futures market and the imperfect correlation
between movements in the stock index and movements in the price of stock
index futures, a correct forecast of general market trends still may not
result in a successful hedging transaction.
In connection with its futures transactions, the Fund may be required
to establish and maintain at its custodian bank a segregated account
consisting of cash or high quality money market instruments in an amount
equal to the market value of the underlying commodity less any amount
deposited as margin.
Investment Restrictions
The Fund has adopted the following investment restrictions as
fundamental policies, which cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940, as
amended (the "1940 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 Mellon Bank, N.A. or Boston
Safe Deposit and Trust Company, affiliates of the Advisers) 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 1940 Act, is indicated by an asterisk.
Directors of the Fund
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of 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 24, 1994 to December 31, 1994, he was a
director of Mellon Bank Corporation. He is Chairman of the Board of
Directors of Noel Group, Inc., a venture capital company; a trustee of
Bucknell University; and a director of the Muscular Dystrophy
Association, HealthPlan Services Corporation, Belding Heminway, Inc.,
a manufacturer and marketer of industrial threads, specialty yarns and
home furnishings and fabrics, Curtis Industries, Inc., a national
distributor of security products, chemicals, and automotive and other
hardware, Simmons Outdoor Corporation and Staffing Resources, Inc. He
is 52 years old and 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. He is 56 years old and
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. He is 50
years old and his address is 600 Atlantic Avenue, Boston,
Massachusetts 02210.
JOHN SZARKOWSKI, Director. Director Emeritus of Photography at The Museum
of Modern Art. Consultant in Photography. He is 70 years old and 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 Alumax, Comcast Corporation and The New England Electric
System, Nova Corporation, and a member of the Board of the Carter
Center of Emory University, the Council of Foreign Relations, the
National Park Foundation, 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. She is 65
years old and her address is c/o The Wexler Group, 1317 F Street,
N.W., Suite 600, Washington, D.C. 20004.
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 1940 Act,
will be selected and nominated by the Directors who are not "interested
persons" of the Fund.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Director by the Fund for the fiscal year ended
October 31, 1995, and by all other funds in the Dreyfus Family of Funds for
which such person is a Board member (the number of which is set forth in
parenthesis next to each Board member's total compensation) for the year
ended December 31, 1995, were as follows:
<TABLE>
<CAPTION>
(3) (5)
(2) Pension or (4) Total Compensation
(1) Aggregate Retirement Benefits Estimated Annual From Fund and
Name of Board Compensation From Accrued as Part of Benefits Upon Fund Complex
Member Fund* Fund's Expenses Retirement Paid to Board Member
<S> <C> <C> <C> <C>
Joseph S. DiMartino $4,153 none none $445,000 (93)
David P. Feldman $4,000 none none $ 85,631 (27)
Jack R. Meyer $4,500 none none $ 21,875 (4)
John Szarkowski $4,500 none none $ 21,875 (4)
Anne Wexler $4,500 none none $ 26,329 (16)
____________________________
* Amount does not include reimbursed expenses for attending Board meetings, which amounted to $507 for all Directors as a group.
</TABLE>
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief
Executive 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., the ultimate parent of which is Boston
Institutional Group, Inc. Prior to December 1991, she
served as Vice President and Controller, and later as Senior
Vice President, of The Boston Company Advisors, Inc. She is
38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice
President, General Counsel, Secretary and Clerk 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. He is 31 years
old.
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. He is 31 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary.
Assistant Vice President of the Distributor and an officer
of other investment companies advised or administered by
Dreyfus. She is 26 years old.
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. He is 33 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer 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. He is 60 years old.
MARGARET PARDO, Assistant Secretary. Legal Assistant with the
Distributor and an officer of other investment companies
advised or administered by Dreyfus. From June 1992 to April
1995, she was a Medical Coordination Officer at ORBIS
International. Prior to June 1992, she worked as Program
Coordinator at Physicians World Communications Group. She
is 27 years old.
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 22, 1995.
The following persons are known by the Fund to own of record 5% or
more of the Fund's voting securities outstanding on December 22, 1995:
Dreyfus Trust Company, as Trustee for FDC Incentive Savings Plan, 144 Glen
Curtiss Boulevard, Uniondale, New York 11556-0144--11.9%; Charles Schwab &
Company, Inc., 101 Montgomery Street, San Francisco, California 94104--
10.5%; Nationwide Qualified Plans, P.O. Box 182029, Columbus, Ohio 43218-
2029--10.5%.
MANAGEMENT ARRANGEMENTS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
Management Agreement. Dreyfus provides management services pursuant
to the Management Agreement (the "Management Agreement") dated November 13,
1995, with the Fund, which is subject (after May 14, 1997) to annual
approval by (i) the Fund's Board or (ii) vote of a majority (as defined in
the 1940 Act) of the outstanding voting securities of the Fund, provided
that in either event the continuance also is approved by a majority of the
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund or Dreyfus 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 November 3, 1995 and was last approved
by the Fund's Board, including a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of any party to the
Management Agreement, at a meeting held on August 9, 1995. The Management
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of the holders of a majority of the Fund's shares, or,
upon not less than 90 days' notice, by Dreyfus. The Management Agreement
will terminate automatically in the event of its assignment (as defined in
the 1940 Act).
The following persons are officers and/or directors of Dreyfus:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; Barbara E. Casey, Vice President-Dreyfus
Retirement Services; Diane M. Coffey, Vice President-Corporate
Communications; Elie M. Genadry, Vice President-Institutional Sales;
William F. Glavin, Jr., Vice President-Corporate Development; Henry D.
Gottmann, Vice President-Retail Sales and Service; Mark N. Jacobs, Vice
President-Legal and Secretary; Daniel C. Maclean, Vice President and
General Counsel; Jeffrey N. Nachman, Vice President-Mutual Fund Accounting;
Andrew S. Wasser, Vice President-Information Services; Katherine C.
Wickham, Vice President-Human Resources; Maurice Bendrihem, Controller;
Elvira Oslapas, Assistant Secretary; and Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene, Julian M. Smerling and
David B. Truman, directors.
Dreyfus maintains office facilities on behalf of the Fund, and
furnishes the Fund statistical and research data, clerical help,
accounting, data processing, bookkeeping and internal auditing and certain
other required services to the Fund. Dreyfus also may make such
advertising and promotional expenditures, using its own resources, as it
from time to time deems appropriate.
Index Management Agreement. Mellon Equity provides investment
advisory assistance and day-to-day management of the Fund's investments
pursuant to the Index Management Agreement (the "Index Management
Agreement") dated November 13, 1995 between Mellon Equity and Dreyfus. The
Index Management Agreement is subject (after May 14, 1997) to annual
approval by (i) the Fund's Board or (ii) vote of a majority (as defined in
the 1940 Act) of the Fund's outstanding voting securities, provided that in
either event the continuance also is approved by a majority of the Fund's
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund or Mellon Equity, by vote cast in person at a meeting called
for the purpose of voting on such approval. The Index Management Agreement
was approved by shareholders on November 3, 1995, and was approved by the
Fund's Board, including a majority of Board members who are not "interested
persons" of any party to the Index Management Agreement, at a meeting held
on August 9, 1995. The Index Management Agreement is terminable without
penalty (i) by Dreyfus on 60 days' notice, (ii) by the Fund's Board or by
vote of the holders of a majority of the Fund's shares on 60 days' notice,
or (iii) by Mellon Equity on not less than 90 days' notice. The Index
Management Agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act) or upon the termination of the
Management Agreement for any reason.
The following persons are executive officers and/or directors of
Mellon Equity: Phillip R. Roberts, Chairman of the Board; William P.
Rydell, President and Chief Executive Officer; and W. Keith Smith,
Director.
Mellon Equity provides day-to-day management of the Fund's investments
in accordance with the stated policies of the Fund, subject to the
supervision of Dreyfus and approval of the Fund's Board. All purchases and
sales are reported for the Board's review at the meeting subsequent to such
transactions. Mellon Equity has agreed to pay for the custody services
provided to the Fund by Boston Safe Deposit and Trust Company.
Expenses. All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by Dreyfus
and/or Mellon Equity. The expenses borne by the Fund include:
organizational costs, taxes, interest, loan commitment fees, interest and
distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
Dreyfus or Mellon Equity or any of their affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory fees,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining the Fund's existence,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of preparing and printing
prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders, costs of
shareholder's reports and meetings, and any extraordinary expenses.
As compensation for Dreyfus' services, the Fund has agreed to pay
Dreyfus a monthly fee at the annual rate of .295 of 1% of the value of the
Fund's average daily net assets. As compensation for Mellon Equity's
services, Dreyfus has agreed to pay Mellon Equity a monthly fee at the
annual rate of .095 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 shareholders.
From April 4, 1990 to November 13, 1995, Wells Fargo Nikko Investment
Advisers ("WFNIA") served as the Fund's index fund manager. Pursuant to
prior index management agreements with WFNIA, the Fund agreed to pay a
monthly fee at the annual rate of .10 of 1% of the value of the Fund's
average daily net assets. For the fiscal years ended October 31, 1993,
1994 and 1995, the index management fees payable to the prior index fund
managers amounted to $181,636, $274,298 and $280,472, respectively.
However, the index management fees were reduced by $67,985 and $30,232 in
the fiscal years ended October 31, 1993 and 1994, respectively, pursuant to
undertakings by WFNIA.
Prior to November 13, 1995, Dreyfus served as the Fund's administrator
pursuant to an administration agreement with the Fund. As compensation for
its administrative services, the Fund agreed to pay Dreyfus a monthly fee
at the annual rate of .20 of 1% of the value of the Fund's average daily
net assets. For the fiscal years ended October 31, 1993, 1994 and 1995,
the administrative fees payable to Dreyfus amounted to $363,272, $548,596
and $560,944, respectively, which were reduced by $189,824 and $60,463 in
the fiscal years ended October 31, 1993 and 1994, respectively, pursuant to
undertakings by Dreyfus.
Dreyfus (and to a limited extent, Mellon Equity) have agreed that if
in any fiscal year the aggregate expenses of the Fund (including fees
pursuant to the Management 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 Dreyfus, and Dreyfus may deduct from the
fees paid to Mellon Equity or Dreyfus and Mellon Equity will bear, such
excess expense in proportion to their management fee and index management
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 Dreyfus and Mellon Equity 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, 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
Fund's Board for its review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board, and by Board members
who are not "interested persons" (as defined in the 1940 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 cast in person at a meeting called for the purpose of voting on
the Plan, and was cast approved by the Board at a meeting held on May 3,
1995. The Plan is terminable at any time by vote of a majority of the
Board members who are not "interested persons" (as defined in the 1940 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, 1995, $395,475 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 on
a best effort basis 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 Dreyfus Transfer Inc., (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 ($1,000 minimum) 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, or to a correspondent
bank if the investor's bank is not a member of the Federal Reserve System.
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 Fund's Board. Expenses and fees, including the
management fee (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, 1995 as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended
(the "Code"). 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 the 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
The Advisers assume 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 the Advisers 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 the Advisers based upon their 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, 1993, 1994 and 1995, the Fund paid total brokerage commissions
of $50,389, $111,012 and $22,591, respectively, none of which was paid to
the Distributor. There were no spreads or concessions on principal
transactions in fiscal 1993, 1994 and 1995.
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, 5 and 5.830 year
periods ended October 31, 1995 was 25.68%, 16.69% and 11.46%, 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, 1995 was 88.23%. 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.
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 November 13, 1995, the Fund, which is incorporated under the name
Peoples Index Fund, Inc., began operating under the name Dreyfus S&P 500
Index Fund.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT ACCOUNTANTS
Dreyfus Transfer, Inc., a wholly owned subsidiary of Dreyfus, P.O. Box
9671, Providence, Rhode Island 02903, serves as the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the
Fund, the Transfer Agent arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications
between shareholders and the Fund and the payment of dividends and
distributions payable by the Fund. For these services, the Transfer Agent
receives a monthly fee computed on the basis of the number of shareholder
accounts it maintains for the Fund during the month, and is reimbursed for
certain out-of-pocket expenses.
Boston Safe Deposit and Trust Company (the "Custodian"), an indirect
wholly-owned subsidiary of Mellon Bank Corporation, is located at One
Boston Place, Boston, Massachusetts 02108, and serves as the custodian of
the Fund. Under its Custody Agreement with the Fund, the Custodian holds
the Fund's portfolio securities and keeps all necessary accounts and
records. The Custodian's fees for its services to the Fund are paid by
Mellon Equity.
Neither the Transfer Agent nor the Custodian 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.
APPENDIX
Description of S&P A-1 Commercial Paper Ratings:
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the number 1, 2 or 3 to
indicate the relative degree of safety. Paper rated A-1 indicates that the
degree of safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) sign designation.
Description of Moody's Prime-1 Commercial Paper Ratings:
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
<TABLE>
<CAPTION>
Peoples Index Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments October 31, 1995
Shares Common Stocks--98.7% Value
----------- ------------
<S> <C> <C>
Capital Goods--18.8%
16,778 AMP .............................. $ ,658,537
7,964 Advanced Micro Devices ........... 190,141
4,320 Alco Standard .................... 382,320
21,864 Allied-Signal .................... 929,220
9,131(a) Amdahl ........................... 84,462
2,962(a) Andrew ........................... 125,145
9,288 Apple Computer ................... 337,271
13,630(a) Applied Materials ................ 683,204
3,648 Autodesk ......................... 124,032
6,609 Black & Decker ................... 223,880
26,341 Boeing ........................... 1,728,628
2,352 Briggs & Stratton ................ 94,962
16,380 Browning-Ferris Industries ....... 477,068
13,451(a) CUC International ................ 465,741
15,338 Caterpillar ...................... 860,845
3,496(a) Ceridian ......................... 152,076
2,594 Cincinnati Milacron .............. 66,796
34,185 Columbia/HCA Healthcare .......... 1,679,338
20,383(a) Compaq Computer .................. 1,136,352
18,462 Computer Associates
International .................. 1,015,410
4,312(a) Computer Sciences ................ 288,365
8,403 Cooper Industries ................ 283,601
17,708 Corning .......................... 462,622
1,879(a) Cray Research .................... 38,989
8,841(a) DSC Communications ............... 327,117
12,176 Darden Restaurants ............... 138,502
2,782(a) Data General ..................... 31,993
6,645 Deere & Co. ...................... 593,897
11,335(a) Digital Equipment ................ 613,507
8,766 Dover ............................ 346,257
3,960 EG & G ........................... 73,755
6,311 Eastman Chemical ................. 375,505
6,031 Eaton ............................ 309,089
17,308 Emerson Electric ................. 1,233,195
6,341 Fluor ............................ 358,267
15,631(a) Freeport McMoran Copper .......... 355,605
4,838 General Dynamics ................. 267,904
130,495 General Electric ................. 8,253,809
3,608 General Signal ................... 115,005
2,610 Giddings & Lewis ................. 42,086
3,960 Grainger (W.W.) .................. 247,500
3,703 Harnischfeger Industries ......... 116,645
2,948 Harris ........................... 171,353
39,414 Hewlett-Packard .................. 3,650,722
9,757 Honeywell ........................ 409,794
9,043 Illinois Tool Works .............. 525,624
8,180 Ingersoll-Rand ................... 289,368
63,460 Intel ............................ 4,434,268
Capital Goods (continued)
3,579(a) Intergraph ....................... $ 43,395
43,779 International Business Machines .. 4,257,508
15,462 Lockheed Martin .................. 1,053,349
13,244 Loral ............................ 392,354
8,753 McDonnell Douglas ................ 715,558
15,886 Micron Technology ................ 1,121,949
45,138(a) Microsoft ........................ 4,513,800
2,469 Morrison Knudsen ................. 16,049
45,409 Motorola ......................... 2,979,966
9,523(a) National Semiconductor ........... 232,123
5,783(a) Navistar International ........... 59,276
19,529 Northern Telecommunications ...... 703,044
3,838 Northrop ......................... 219,726
28,438(a) Novell ........................... 469,227
33,365(a) Oracle Systems ................... 1,455,548
8,816 Pall ............................. 214,890
5,670 Parker-Hannifin .................. 191,363
3,256 Perkin-Elmer ..................... 114,367
11,677 Pitney Bowes ..................... 509,409
3,405 Raychem .......................... 157,907
18,862 Raytheon ......................... 822,855
16,780 Rockwell International ........... 746,710
10,114 Santa Fe Pacific Gold ............ 99,876
5,948 Scientific-Atlanta ............... 73,607
12,218(a) Silicon Graphics ................. 406,249
7,340(a) Sun Microsystems ................. 572,520
8,955(a) Tandem Computers ................. 100,744
2,571 Tektronix ........................ 152,332
6,797(a) Tellabs .......................... 231,098
14,518 Texas Instruments ................ 990,854
1,562 Thomas & Betts ................... 100,944
8,635 Times Mirror Company New ......... 250,414
2,421 Timken ........................... 97,444
5,861 Tyco Laboratories ................ 356,055
13,211(a) Unisys ........................... 74,311
3,111(a) Varity ........................... 112,773
37,377 WMX Technologies ................. 1,051,227
4,079(a) Western Atlas .................... 178,965
30,139 Westinghouse Electric ............ 425,712
8,331 Xerox ............................ 1,080,946
886 Zurn Industries .................. 22,149
------------
63,138,365
------------
Consumer Basic--16.9%
6,314(a) Alza ............................. 138,908
61,129 Abbott Laboratories .............. 2,429,878
19,565 Albertson's ...................... 650,536
4,942 Allergan ......................... 145,171
14,575 American Brands .................. 624,903
23,872 American Home Products ........... 2,115,656
<PAGE>
Peoples Index Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
Shares Common Stocks (continued) Value
----------- ------------
Consumer Basic (continued)
20,392 Amgen ............................ $ 978,816
41,653 Archer-Daniels-Midland ........... 671,655
4,296 Bard (C.R.) ...................... 121,362
4,462 Bausch & Lomb .................... 154,497
21,373 Baxter International ............. 825,532
5,127 Becton Dickinson & Co. ........... 333,255
8,155(a) Beverly Enterprises .............. 95,821
8,857(a) Biomet ........................... 147,248
11,692(a) Boston Scientific ................ 492,526
39,063 Bristol-Myers Squibb ............. 2,978,554
11,231 CPC International ................ 745,458
19,275 Campbell Soup .................... 1,009,528
4,098 Clorox ........................... 294,032
11,206 Colgate-Palmolive ................ 776,016
3,272 Community Psychiatric
Centers ........................ 35,583
18,933 ConAgra .......................... 731,287
2,885 Fleming Cos. ..................... 65,273
12,176 General Mills .................... 698,598
4,564 Giant Food ....................... 146,619
2,916 Great Atlantic & Pacific Tea ..... 59,049
18,774 Heinz (H.J.) ..................... 872,991
5,992 Hershey Foods .................... 358,022
49,709 Johnson & Johnson ................ 4,051,284
16,867 Kellogg .......................... 1,218,641
9,425(a) Kroger ........................... 314,559
21,239 Lilly (Eli) & Co. ................ 2,052,218
4,849 Manor Care ....................... 158,805
17,832 Medtronic ........................ 1,029,798
95,340 Merck & Co ....................... 5,482,050
3,472 Millipore ........................ 122,822
48,622 Pfizer ........................... 2,789,687
64,750 Philip Morris Cos ................ 5,471,375
6,504 Pioneer Hi Bred International .... 322,761
4,852 Premark International ............ 224,405
52,968 Procter & Gamble ................. 4,290,408
10,322 Quaker Oats ...................... 352,238
8,073 Ralston-Purina Group ............. 479,334
4,026(a) Ryan's Family Steak Houses ....... 31,202
3,566(a) St Jude Medical .................. 189,890
36,938 Sara Lee ......................... 1,085,054
28,668 Schering-Plough .................. 1,537,322
1,815 Shared Medical Systems ........... 70,104
5,226 Super Valu Stores ................ 160,700
14,050 Sysco ............................ 426,769
15,373(a) Tenet Healthcare ................. 274,792
15,064 UST .............................. 451,920
12,351 Unilever, N.V. ................... 1,617,981
Consumer Basic (continued)
13,391 United Healthcare ................ $ 711,397
11,928 U.S. Health Care Systems ......... 459,228
4,362 U.S. Surgical Corp. .............. 106,868
17,414 Upjohn ........................... 883,760
10,376 Warner-Lambert ................... 883,256
5,840 Winn-Dixie Stores ................ 379,599
8,981 Wrigley (Wm.) Jr. ................ 417,616
------------
56,744,617
------------
Consumer Discretionary--13.8%
2,091 Alberto-Culver, Cl. B
Convertible .................... 65,605
11,380 American Stores .................. 339,978
19,696 Anheuser-Busch Cos. .............. 1,299,936
5,268 Avon Products .................... 374,687
3,495(a) Bally Entertainment .............. 38,445
1,058 Bassett Furniture Industries ..... 21,292
5,345 Brown-Forman ..................... 203,778
1,385 Brown Group ...................... 19,044
7,360 Brunswick ........................ 143,520
7,975 Charming Shoppes ................. 22,928
29,431 Chrysler ......................... 1,519,375
97,220 Coca-Cola ........................ 6,987,688
6,454 Cooper Tire & Rubber ............. 149,249
2,946 Coors (Adolph) ................... 52,660
3,146 Cummins Engine ................... 110,503
7,809 Dana ............................. 200,106
5,527 Dayton-Hudson .................... 379,981
3,897 Delta Air Lines .................. 255,741
8,696 Dillard Department
Stores, CI. A .................. 235,879
40,109 Disney (Walt) .................... 2,311,281
26,344 Eastman Kodak .................... 1,649,793
4,551 Echlin ........................... 162,698
82,812 Ford Motor ....................... 2,380,845
5,885(a) Fruit of the Loom ................ 102,252
11,087 Gap .............................. 436,551
57,592 General Motors ................... 2,519,650
9,465 Genuine Parts .................... 375,051
34,180 Gillette ......................... 1,653,458
2,036 Goodrich (B.F.) .................. 134,122
11,722 Goodyear Tire & Rubber............ 445,436
2,465 Handleman ........................ 19,104
5,594 Harcourt General ................. 221,662
6,774 Hasbro ........................... 206,607
3,721 Hilton Hotels .................... 249,307
8,542 International Flavors &
Fragrances ..................... 412,152
<PAGE>
Peoples Index Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
Shares Common Stocks (continued) Value
----------- ------------
Consumer Discretionary (continued)
3,395 Jostens .......................... $ 76,812
35,360 K mart ........................... 287,300
2,784(a) King World Productions ........... 97,092
27,471 Limited .......................... 504,780
5,818 Liz Claiborne .................... 165,086
4,494 Loews ............................ 658,933
1,568 Longs Drug Stores ................ 62,720
12,328 Lowe's Cos. ...................... 332,856
1,806 Luby's Cafeterias ................ 37,475
9,661 Marriott International............ 356,249
17,031 Mattel ........................... 489,641
19,131 May Department Stores ............ 750,892
8,284 Maytag ........................... 157,396
53,564 McDonald's ....................... 2,196,124
8,087 Melville ......................... 258,784
2,860 Mercantile Stores ................ 128,343
11,076 Nike, Cl. B ...................... 628,563
6,300 Nordstrom ........................ 233,494
1,514 Outboard Marine .................. 31,416
3,001 PACCAR ........................... 125,292
17,504 Penney (J.C.) .................... 737,356
4,730 Pep Boys-Manny Moe & Jack ........ 103,469
60,672 PepsiCo .......................... 3,200,448
3,463 Polaroid ......................... 148,043
14,973(a) Price/Costco ..................... 254,541
7,902(a) Promus Companies ................. 195,575
6,039 Reebok International ............. 205,326
6,427 Rite-Aid ......................... 173,529
12,158 Rubbermaid ....................... 317,628
2,997 Russell .......................... 74,176
4,405 Safety-Kleen ..................... 67,727
28,657 Seagram .......................... 1,031,652
3,046(a) Shoney's ......................... 33,887
11,005 Southwest Airlines ............... 220,100
1,591 Springs Industries ............... 68,214
3,732 Stride Rite ...................... 41,985
5,561 TJX Cos. ......................... 75,074
4,996 Tandy ............................ 246,678
21,283(a) Toys R Us ........................ 465,566
2,206 Trinova .......................... 62,044
4,831 USAir Group ...................... 65,821
4,893 V.F. ............................. 234,251
176,993. Wal-Mart Stores .................. 3,827,473
19,000 Walgreen ......................... 541,499
7,854 Wendy's International ............ 156,097
5,690 Whirlpool ........................ 301,569
10,158 Woolworth (F. W.) ................ 148,560
3,488(a) Zenith Electronics ............... 29,211
------------
46,307,111
------------
Energy & Related--8.7%
7,215 Amerada Hess ..................... $ 325,577
38,261 Amoco ............................ 2,443,921
4,925 Ashland Oil ...................... 155,753
12,343 Atlantic Richfield ............... 1,317,615
10,905 Baker Hughes ..................... 214,011
9,762 Burlington Resources ............. 351,432
50,247 Chevron .......................... 2,349,047
8,029 Coastal .......................... 259,939
14,033 Dresser Industries ............... 291,185
95,741 Exxon ............................ 7,312,219
2,774 Foster Wheeler ................... 104,025
8,760 Halliburton ...................... 363,540
1,869 Helmerich & Payne ................ 48,360
4,003 Kerr-McGee ....................... 220,665
2,569 Louisiana Land &
Exploration .................... 90,878
4,194 McDermott International .......... 66,580
30,515 Mobil ............................ 3,074,386
24,484 Occidental Petroleum ............. 526,406
7,968 Oryx Energy ...................... 91,632
3,521 Pennzoil ......................... 132,918
20,212 Phillips Petroleum ............... 651,837
6,294(a) Rowan Cos. ....................... 41,698
41,339 Royal Dutch Petroleum ............ 5,079,530
6,958(a) Santa Fe Energy Resources ........ 61,752
18,684 Schlumberger ..................... 1,163,079
5,822 Sun .............................. 166,655
19,977 Texaco ........................... 1,360,933
22,906 USX-Marathon Group ............... 406,582
19,008 Unocal ........................... 498,960
------------
29,171,115
------------
Finance--10.8%
8,715 Aetna Life & Casualty ............ 613,318
9,000 Ahmanson (H.F.) & ................ 225,000
3,413 Alexander & Alexander
Services ....................... 76,366
34,585 Allstate ......................... 1,270,999
37,587 American Express ................. 1,526,972
15,831 American General ................. 520,444
36,569 American International Group ..... 3,085,509
30,394 Banc One ......................... 1,025,798
8,647 Bank of Boston ................... 384,792
14,824 Bank of New York ................. 622,608
28,889 BankAmerica ...................... 1,661,118
5,993 Bankers Trust New York ........... 382,054
7,437 Barnett Banks .................... 410,894
4,044 Beneficial ....................... 198,156
9,681 Boatmen's Bancshares ............. 367,878
5,633 CIGNA ............................ 558,371
<PAGE>
Peoples Index Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
Shares Common Stocks (continued) Value
----------- ------------
Finance (continued)
13,486 Chase Manhattan .................. $ 768,702
19,474 Chemical Banking ................. 1,107,584
6,674 Chubb ............................ 599,826
30,650 Citicorp ......................... 1,988,419
10,789 CoreStates Financial ............. 392,450
13,967 Federal Home Loan Mortgage ....... 967,215
10,429 First Bank Systems ............... 518,843
6,885 First Chicago .................... 467,319
6,189 First Fidelity Bancorp ........... 404,606
5,807 First Interstate Bancorp ......... 749,103
13,271 First Union ...................... 658,573
10,855 Fleet/Norstar Financial Group .... 420,631
6,347 General Re ....................... 919,522
4,549 Golden West Financial ............ 228,019
10,508 Great Western Financial .......... 237,744
7,540 Household International .......... 424,125
3,669 Jefferson-Pilot .................. 242,154
17,560 KeyCorp .......................... 592,650
7,959 Lincoln National ................. 355,170
11,264 Mellon Bank ...................... 564,608
13,601 Merrill Lynch & Co ............... 754,856
14,449 Morgan (J.P.) & Co ............... 1,114,379
12,031 NBD Bancorp ..................... 457,178
11,388 National City .................... 351,605
25,046 Norwest........................... 738,857
17,713 PNC Financial .................... 464,966
7,293 Providian ........................ 286,250
4,355 Republic New York ................ 255,312
4,826 SAFECO ........................... 309,769
6,475 St. Paul Cos. .................... 328,606
30,055 Sears, Roebuck & Co. ............. 1,021,870
9,936 Shawmut National.................. 336,582
8,809 SunTrust Banks ................... 568,181
5,471 Torchmark ........................ 227,047
5,249 Transamerica ..................... 355,620
24,603 Travelers Group .................. 1,242,452
5,613 UNUM ............................. 295,384
8,604 USF & G .......................... 144,117
2,632 USLIFE ........................... 75,011
7,541 U.S. Bancorp ..................... 223,401
13,154 Wachovia ......................... 580,419
3,672 Wells Fargo ...................... 771,578
------------
36,440,980
------------
General Business--7.4%
38,099(a) Airtouch Communications .......... 1,085,822
5,777 American Greetings ............... 181,976
11,092 Automatic Data Processing ........ 793,078
8,118 Block (H & R) .................... 334,868
5,035 CBS .............................. 406,576
General Business (continued)
5,477(a) Cabletron Systems ................ $ 430,629
11,851 Capital Cities/ABC ............... 1,405,825
7,468 Circuit City Stores .............. 249,245
20,859(a) cisco Systems .................... 1,616,573
18,456 Comcast, Cl. A ................... 329,901
13,047 Dean Witter, Discover & Co. ...... 649,088
6,390 Deluxe ........................... 171,731
7,182 Dial ............................. 175,061
11,854 Donnelley (R. R.) & Sons ......... 432,671
7,439 Dow Jones & Co ................... 262,225
13,070 Dun & Bradstreet ................. 780,933
4,306(a) Federal Express .................. 353,630
17,142 First Data ....................... 1,133,515
10,787 Gannett .......................... 586,543
2,301 Harland (John H.) ................ 47,746
8,969 ITT .............................. 1,098,703
6,056 Interpublic Group of Cos. ........ 234,670
3,790 Knight-Ridder .................... 210,345
21,298 Laidlaw, Cl. B ................... 191,682
11,445 MBNA ............................. 422,034
5,597 Marsh & McLennan ................. 458,254
3,850 McGraw-Hill ...................... 315,219
2,120 Meredith ......................... 75,790
32,413 Minnesota Mining &
Manufacturing .................. 1,843,489
5,939 Morgan Stanley Group ............. 516,693
11,421 Morton International ............. 348,341
3,693 National Service Industries ...... 109,867
20,935 NationsBank ...................... 1,376,476
7,467 New York Times, Cl. A ............ 207,209
8,213 Salomon .......................... 296,695
7,963 Service Corporation
International .................. 319,515
5,020 TRW .............................. 330,065
50,228(a) Tele-Communications, Cl. A ....... 853,876
4,295 Teledyne ......................... 106,838
6,520 Textron .......................... 448,250
29,762 Time Warner ...................... 1,086,313
5,012 Tribune .......................... 316,383
9,533 United Technologies .............. 846,053
27,838(a) Viacom, Cl. B (non-voting) ....... 1,391,899
8,120 Whitman .......................... 172,549
------------
25,004,844
------------
Manufacturing--5.7%
3,212 ASARCO ........................... 103,587
8,662 Air Products & Chemicals ......... 447,176
17,334 Alcan Aluminium .................. 548,188
13,726 Aluminum Co. of America .......... 700,026
8,181(a) Armco ............................ 50,109
<PAGE>
Peoples Index Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
Shares Common Stocks (continued) Value
----------- ------------
Manufacturing (continued)
4,089 Avery Dennison ................... $ 182,983
2,303 Ball ............................. 63,620
27,208 Barrick Gold ..................... 629,185
3,969 Bemis Co ......................... 103,194
8,486(a) Bethlehem Steel .................. 111,379
6,944(a) Crown Cork & Seal ................ 242,172
7,097 Cyprus Amax Minerals ............. 185,409
20,737 Dow Chemical ..................... 1,423,077
42,789 Du Pont (E. I.) de Nemours ....... 2,668,964
1,516 Eastern Enterprises .............. 45,291
8,724 Echo Bay Mines ................... 78,516
4,965 Ecolab ........................... 143,985
11,073 Engelhard ........................ 275,441
2,844(a) FMC .............................. 203,702
3,520 Federal Paper Board .............. 147,840
7,257 Grace (W. R.) & Co. .............. 404,578
5,033 Great Lakes Chemical ............. 337,840
8,631 Hercules ......................... 460,680
10,617 Homestake Mining ................. 163,236
9,197 Inco Ltd ......................... 316,147
3,731 Inland Steel Industries .......... 87,212
19,594 International Paper .............. 724,978
6,359 James River ...................... 204,283
12,320 Kimberly-Clark ................... 894,740
5,928 Mallinckrodt Group ............... 205,998
4,212 Mead ............................. 242,717
8,906 Monsanto ......................... 932,904
7,724 Moore ............................ 147,722
668 NACCO Industries ................. 38,243
5,220 Nalco Chemical ................... 156,600
6,620 Newmont Mining ................... 249,905
6,699 Nucor ............................ 322,389
3,721 Ogden ............................ 84,653
15,601 PPG Industries ................... 663,043
5,333 Phelps Dodge ..................... 337,979
3,172 Pittston ......................... 87,230
18,410 Placer Dome ...................... 402,719
10,632 Praxair .......................... 287,064
4,920 Reynolds Metals .................. 247,845
5,231 Rohm & Haas ...................... 289,013
11,642 Scott Paper ...................... 619,937
3,862 Sigma Aldrich .................... 183,445
7,418 Stone Container .................. 122,397
4,341 Temple-Inland .................... 197,515
6,284 USX-US Steel Group ............... 187,734
5,421 Union Camp ....................... 275,792
10,582 Union Carbide .................... 400,792
7,846 Westvaco ......................... 217,726
7,855 Williams Cos. .................... 303,398
Manufacturing (continued)
6,987 Worthington Industries ........... $ 116,158
------------
19,268,456
------------
Shelter--2.4%
2,868 Armstrong World Industries ....... 170,288
3,656 Boise Cascade .................... 132,530
2,205 Centex ........................... 72,214
7,407 Champion International ........... 396,275
2,332 Crane ............................ 82,495
21,045 Federal National Mortgage
Association .................... 2,207,094
3,487 Fleetwood Enterprises ............ 71,484
7,048 Georgia-Pacific .................. 581,460
36,697 Home Depot ....................... 1,366,963
3,111 Johnson Controls ................. 181,216
2,357 Kaufman & Broad Home ............. 27,400
8,312 Louisiana-Pacific ................ 198,449
12,189 Masco ............................ 342,816
12,152 Newell ........................... 293,167
3,952(a) Owens-Corning Fiberglass ......... 167,466
2,261 Potlatch ......................... 95,245
2,073 Pulte ............................ 65,559
6,575 Sherwin-Williams ................. 247,384
3,083 Snap-On Tools .................... 130,642
3,413 Stanley Works .................... 162,970
15,687 Weyerhaeuser ..................... 692,188
4,209 Willamette Industries ............ 244,121
------------
7,929,426
------------
Transportation--1.4%
5,862(a) AMR .............................. 386,892
11,033 Burlington Northern
Santa Fe ....................... 925,393
8,135 CSX .............................. 681,306
6,034 Conrail .......................... 414,838
3,346 Consolidated Freightways ......... 77,795
10,053 Norfolk Southern ................. 776,594
2,964 Roadway Services ................. 132,639
6,033 Ryder System ..................... 145,546
15,800 Union Pacific .................... 1,032,925
2,107 Yellow ........................... 27,654
------------
4,601,582
------------
Utilities--12.8%
14,546 ALLTEL ........................... 445,471
122,292 AT&T ............................. 7,826,688
14,329 American Electric Power .......... 546,293
42,733 Ameritech ........................ 2,307,582
11,338 Baltimore Gas & Electric ......... 303,292
33,596 Bell Atlantic .................... 2,137,546
<PAGE>
Peoples Index Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
Shares Common Stocks (continued) Value
----------- ------------
Utilities (continued)
38,281 BellSouth ........................ $ 2,928,497
11,999 Carolina Power & Light ........... 392,967
14,804 Central & South West ............. 396,007
12,025 Cinergy .......................... 341,209
3,881(a) Columbia Gas System .............. 149,419
18,083 Consolidated Edison Co.
of New York .................... 549,271
7,222 Consolidated Natural Gas ......... 274,436
11,333 Detroit Edison ................... 382,489
13,368 Dominion Resources ............... 531,378
15,757 Duke Power ....................... 705,126
5,295 ENSERCH .......................... 76,778
19,436 Enron ............................ 668,113
17,563 Entergy .......................... 500,546
14,309 FPL Group ........................ 599,189
74,787 GTE .............................. 3,084,964
8,961 General Public Utilities ......... 280,031
10,103 Houston Industries ............... 468,527
52,202 MCI Communications ............... 1,301,787
3,833 NICOR ............................ 103,012
32,890 NYNEX ............................ 1,545,830
11,086 Niagara Mohawk Power ............. 119,175
9,522 Noram Energy ..................... 73,796
5,178 Northern States Power ............ 244,661
2,050 ONEOK ............................ 49,969
11,695 Ohio Edison ...................... 267,523
17,097 PECO Energy ...................... 500,087
6,522 Pacific Enterprises .............. 161,420
32,738 Pacific Gas & Electric ........... 961,679
32,998 Pacific Telesis Group ............ 1,002,314
21,883 PacifiCorp ....................... 413,042
11,568 Panhandle Eastern ................ 292,092
2,677 Peoples Energy ................... 76,964
Utilities (continued)
18,821 Public Service Enterprise
Group .......................... $ 552,867
46,978 SBC Communications Inc. .......... 2,624,896
34,285 SCEcorps ......................... 582,845
6,624 Sonat ............................ 190,440
51,328 Southern ......................... 1,225,456
26,855 Sprint ........................... 1,033,917
13,963 Tenneco .......................... 612,626
17,376 Texas Utilities .................. 638,567
16,491 Unicom ........................... 540,079
7,875 Union Electric ................... 307,124
36,296 U.S. West ........................ 1,728,596
------------
43,046,583
------------
TOTAL COMMON STOCKS
(cost $253,460,184) ............ $331,653,079
------------
------------
Principal
Amount SHORT-TERM INVESTMENTS--1.4%
-----------
U.S. Treasury Bills:
280,000 5.40% 11/9/95 .................... $ 276,406
245,000(b) 5.23% 12/21/95 ................... 242,254
1,038,000 5.28% 1/11/96 .................... 1,025,145
3,341,000 5.25% 1/18/96 .................... 3,299,685
------------
TOTAL SHORT-TERM
INVESTMENTS
(cost $4,843,490)............... $ 4,843,490
------------
------------
TOTAL INVESTMENTS
(cost $258,303,674).......................... 100.1% $336,496,569
------ ------------
------ ------------
LIABILITIES, LESS CASH
AND RECEIVABLES.............................. (0.1%) $ (349,383)
------ ------------
------ ------------
NET ASSETS .................................... 100.0% $336,147,186
------ ------------
------ ------------
</TABLE>
<TABLE>
<CAPTION>
Statement of Financial Futures October 31, 1995
FINANCIAL FUTURES PURCHASED:
- ----------------------------
Market Value Unrealized
Number of Covered (Depreciation)
Issuer Contracts by Contracts Expiration at 10/31/95
- ------ ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
Standard & Poor's 500........................ 6 $1,751,550 December '95 $(14,850)
Standard & Poor's 500........................ 8 2,354,800 March '96 (12,550)
---------
$(27,400)
---------
---------
</TABLE>
Notes to Statement of Investments:
- --------------------------------------------------------------------
(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.
<PAGE>
Peoples Index Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $258,303,674)--see statement.................................... $336,496,569
Cash.................................................................... 43,096
Dividends and interest receivable....................................... 522,275
Receivable for subscriptions to Common Stock............................ 109,462
Prepaid expenses........................................................ 28,352
--------------
337,199,754
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 57,278
Due to Wells Fargo Nikko Investment Advisors............................ 83,491
Due to Wells Fargo Institutional Trust Company, N.A..................... 5,144
Payable for futures variation margin--Note 3(a).......................... 16,050
Payable for investment securities purchased............................. 725,066
Accrued expenses........................................................ 165,539 1,052,568
-------- --------------
NET ASSETS.................................................................. $336,147,186
--------------
--------------
REPRESENTED BY:
Paid-in capital......................................................... $251,491,114
Accumulated undistributed investment income--net........................ 4,913,676
Accumulated net realized gain on investments............................ 1,576,901
Accumulated net unrealized appreciation on investments [including ($27,400)
net unrealized (depreciation) on financial futures]--Note 3(b)............. 78,165,495
--------------
NET ASSETS at value applicable to 18,288,321 shares outstanding
(200 million shares of $.001 par value Common Stock authorized)......... $336,147,186
--------------
--------------
NET ASSET VALUE, offering and redemption price per share
($336,147,186 / 18,288,321 shares)...................................... $18.38
------
------
</TABLE>
See notes to financial statements.
<PAGE>
Peoples Index Fund, Inc.
- ----------------------------------------------------------------------------
Statement of Operations Year ended October 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Cash dividends (net of $44,650 foreign taxes withheld at source)...... $7,073,811
Interest.............................................................. 629,732
----------
Total Income.................................................... $ 7,703,543
Expenses:
Index management fee--Note 2(a)....................................... 280,472
Administration fee--Note 2(a)......................................... 560,944
Shareholder servicing costs--Note 2(b)................................ 548,979
Professional fees..................................................... 60,376
Prospectus and shareholders' reports.................................. 8,055
Registration fees..................................................... 21,339
Directors' fees and expenses--Note 2(c)............................... 22,224
Custodian fees--Note 2(a)............................................. 23,625
Miscellaneous......................................................... 19,839
----------
Total Expenses.................................................. 1,545,853
-------------
INVESTMENT INCOME-NET........................................... 6,157,690
-------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 3(a)............................. $2,022,369
Net realized gain on financial futures--Note 3(a)....................... 2,288,271
----------
Net Realized Gain............................................... 4,310,640
Net unrealized appreciation on investments [including ($81,300)
net unrealized (depreciation) on financial futures]--Note 3(b)........ 54,324,576
-------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 58,635,216
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $64,792,906
-------------
-------------
</TABLE>
See notes to financial statements.
<PAGE>
Peoples Index Fund, Inc.
- -------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------------------
1994 1995
-------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................ $ 6,200,483 $ 6,157,690
Net realized gain on investments.................................. 18,711,233 4,310,640
Net unrealized appreciation (depreciation) on investments for the year (18,291,976) 54,324,576
-------------- ---------------
Net Increase In Net Assets Resulting From Operations............ 6,619,740 64,792,906
-------------- ---------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net........................................ (5,373,357) (6,077,935)
From net realized gain on investments............................. (11,440,051) (19,477,910)
-------------- ---------------
Total Dividends................................................. (16,813,408) (25,555,845)
-------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold..................................... 153,302,049 142,531,859
Dividends reinvested.............................................. 13,583,900 22,101,817
Cost of shares redeemed........................................... (192,893,713) (112,925,618)
-------------- ---------------
Increase (Decrease) In Net Assets From Capital Stock Transactions (26,007,764) 51,708,058
-------------- ---------------
Total Increase (Decrease) In Net Assets....................... (36,201,432) 90,945,119
NET ASSETS:
Beginning of year................................................. 281,403,499 245,202,067
-------------- ---------------
End of year (including undistributed investment income-net:
$4,833,921 in 1994 and $4,913,676 in 1995)...................... $245,202,067 $336,147,186
-------------- ---------------
-------------- ---------------
Shares Shares
-------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................................... 9,481,323 8,633,225
Shares issued for dividends reinvested............................ 852,724 1,546,663
Shares redeemed................................................... (12,068,037) (6,829,736)
-------------- ---------------
Net Increase (Decrease) In Shares Outstanding................... (1,733,990) 3,350,152
-------------- ---------------
-------------- ---------------
</TABLE>
See notes to financial statements.
<PAGE>
Peoples Index Fund, Inc.
- -----------------------------------------------------------------
Financial Highlights
Reference is made to page 3 of the Fund's Prospectus dated
March 1, 1996.
<PAGE>
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 a subsidiary of The Nikko Securities Co., Ltd. ("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
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services,
Inc. (the "Distributor") acts as the distributor of the Fund's shares, which
are sold to the public without a sales charge. The Distributor, located at
One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary
of FDI Distribution Services, Inc., a provider of mutual fund administration
services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc.,
the parent company of which is Boston Institutional Group, Inc.
Effective November 13, 1995, Dreyfus will serve as the Fund's manager and
Mellon Equity Associates, an affiliate of Dreyfus ("Mellon Equity"), will
serve as the Fund's index manager. In addition, Boston Safe Deposit and Trust
Company, an affiliate of Dreyfus, will serve as the Fund's custodian.
(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.
(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.
(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.
<PAGE>
Peoples Index Fund, Inc.
- --------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2--Investment Management 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
(exclusive of certain expenses as described above) exceed 2 1/2% of the first
$30 million, 2% of the next $70 million, and 1 1/2% of the excess over $100
million of the average value of the Fund's net assets in accordance with
California "blue sky" regulations. There was no expense reimbursement for the
year ended October 31, 1995.
In addition, WFITC earned $23,625 for custodian services provided to the
Fund.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets 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 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, 1995, the Fund was charged an aggregate of
$395,475 pursuant to the Shareholder Services Plan.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(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 year ended October 31, 1995, redemption fees
amounted to $9,513.
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, 1995
amounted to $46,057,627 and $9,911,112, respectively.
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 (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
<PAGE>
Peoples Index Fund, Inc.
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NOTES TO FINANCIAL STATEMENTS (continued)
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, 1995 and their related unrealized market appreciation are set
forth in the Statement of Financial Futures.
(b) At October 31, 1995, accumulated net unrealized appreciation on
investments was $78,165,495, consisting of $84,763,329 gross unrealized
appreciation and $6,597,834 gross unrealized depreciation.
At October 31, 1995, 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).
<PAGE>
Peoples Index Fund, Inc.
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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, 1995, 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 the ended, and the financial
highlights for each of the five years in the period then ended. 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, 1995 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., at October 31, 1995, 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 18, 1995
