DREYFUS INTERNATIONAL STOCK INDEX FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
It is a pleasure to introduce to you the manager of Dreyfus International
Stock Index Fund, Susan M. Ellison of Mellon Capital Management.
Susan is a Senior Vice President and Director of Equity Portfolio
Management for Mellon Capital Management and a Dreyfus officer. She has
worked for Mellon Capital since June of 1988 and is currently responsible for
managing over $52 billion in U.S. and international equity portfolios. She
directs a staff of 18 portfolio managers and support personnel. She holds a
B.S. in Finance from San Francisco State University, was awarded her
Chartered Financial Analyst charter in 1993, and is a member of the Security
Analysts of San Francisco and the Association for Investment Management and
Research.
We have great confidence in the abilities of Susan M. Ellison and her
experienced team to manage assets on your behalf.
Sincerely,
[Stephen Canter signature logo]
Stephen Canter
Chief Investment Officer
The Dreyfus Corporation
DREYFUS INTERNATIONAL STOCK INDEX FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus International Stock Index Fund began operations June 30, 1997.
Thus the Fund was in existence just four months on the date selected for its
fiscal year-end, October 31, 1997. This is the time span covered by this
letter.
The brief period of the Fund's existence coincided with the fiscal and
monetary problems that beset Southeast Asia during the summer and fall, with
consequences for equity markets in other parts of the world.
The Fund's total return for the June-October period was -9.84%.* The
total return for the Fund's baseline index, the Morgan Stanley Capital
International Europe, Australasia, Far East (MSCI-EAFERegistration Mark) Free
Index was -8.46% for the same period.** The difference is accounted for by
characteristics of the MSCI-EAFE Free Index (see below) and by the Fund's
operating costs.
Economic Review
Continental Europe's current economic climate is best described by
overwhelming confidence that Economic and Monetary Union (EMU) will take
place as scheduled. Success for EMU appeared less likely earlier in the year
after the new French Government raised objections to the agreement. However,
most of those objections have been resolved, and the markets are now priced
with the expectation that EMU will occur as planned. Additionally, it appears
that Spain, Portugal and Italy will be included in the agreement from the
onset. The outlook for Europe on the whole is for high growth with low
(German-style) inflation for the coming years. Currently, weak European
currencies continue to stimulate strong demand for European exports.
The economy in the United Kingdom has probably been operating above
potential recently. The U.K. monetary authorities have already raised
short-term interest rates to combat potential inflationary pressure, but we
may still see above-trend growth in the economy into early next year. The
possibility of the Pound joining in the European Currency sooner rather than
later has brought bond yields down and bolstered equity markets to some
degree as well.
Economic recovery still has not materialized in Japan. The recent crisis
in the emerging markets of Asia hit Japan at a very bad time. While the
economy contracted in the first half of 1997, it is expected to grow at a
slow pace for the second half of the year. Growth should rebound to healthier
levels during 1998. In the meantime, the Japanese Government appears
committed to the path of deregulation, and the banking sector seems likely to
unwind cross holdings. Both of these items will promote long-term economic
and financial health but have caused some concern among market participants
in the short run.
About the Benchmark
Your investment in the Dreyfus International Stock Index Fund mirrors the
MSCI-EAFE Free Index, which tracks the equity markets of 20 countries. To
represent each country, MSCI selects companies for the Index that they
determine to be the most liquid securities within each representative
industry. This Index is designed to cover approximately 60% of the market
capitalization within each country and is designed to cover only stocks with
sufficient "free float" and minimal cross-ownership. Significant structural
changes may occur four times each year, if necessary, to maintain the desired
coverage and industry representation goals of the Index.
The MSCI-EAFE Free Index covers only those companies available to foreign
investors.
About MSCI Returns
When comparing your Fund's return to MSCI-EAFE Free returns, it is
important to understand a simplifying assumption built into the calculation
of published Index returns. While many companies in this Index pay dividends
once or twice each year, MSCI adds one twelfth of that company's annual
expected yield to each month's total return. Because of this income
smoothing, monthly Index returns will not be equivalent to the actual return
that would be achieved from
an investment in the Index. This happens because the Fund's return is
calculated only with actual dividends received during the period. Also, Net
Total Return is generally quoted and represents the return that would be
available from a Luxembourg investor's perspective. Since U.S. investors are
subject to different tax withholding treaties, the return of a U.S. investor
will vary slightly from the return shown by the Index.
About the Fund
The Fund maintains benchmark weights in all 20 countries and is invested
in a subset of the 1,075 individual companies comprising the 20 country
indices. Because this is a passively managed index fund, no judgments are
made regarding the relative performance of one security over another.
Instead, the Fund is constructed to duplicate the risk and return
characteristics of the benchmark MCSI-EAFE Free Index. Figure 1 shows the
country exposures of this Fund compared to October 31, 1997 MSCI-EAFE Free
Index country weights. The percentages in Figure 1 take into account the
Fund's holdings not only in common stocks, but also in preferred stocks and
futures. In addition to maintaining correct country and currency exposures,
the Fund samples to match industry weights and overall characteristics of the
total Index.
[Exhibit A:
<TABLE>
<CAPTION>
Figure 1
Country Exposures 10/31/97
Weight
Country
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund- 28.6% 20.8% 9.1% 7.2% 7.4% 5.6% 3.8% 2.8% 2.6% 2.8% 2.6% 1.1% 1.0% 1.1% 0.9% 1.0% 0.5% 0.4% 0.4% 0.3%
Index-28.7% 21.1% 9.2% 7.3% 7.1% 5.6% 3.7% 2.8% 2.6% 2.6% 2.5% 1.2% 1.1% 1.0% 0.9% 0.8% 0.6% 0.4% 0.4% 0.4%]
</TABLE>
About the Performance
The period from June 30, 1997 to October 31, 1997 (Fund inception through
the close of the fiscal year) proved to be a
particularly challenging one for international investors. Foreign equity
markets underperformed U.S. equity markets - the MSCI-EAFE Free Index was
down sharply with a net total return of -8.46% while the S&P 500 Index had a
gain of 3.90% over the same time period. As reported above, your investment
in the Dreyfus International Stock Index Fund during this period returned
- -9.84%. Several of the EAFE countries were responsible for most of the market
decline, the Malaysian Index being down nearly 54% during the period and the
Singapore, Hong Kong and Japan Indexes down 33%, 30% and 21% respectively.
European markets did well, outperforming U.S. markets, with Finland and Italy
each up more than 10% over the period, and Ireland, U.K., and Denmark up more
than 7% each, as reported by MSCI. At the end of November, the Fund will
begin investing in Portugal, as it will be added to the MSCI-EAFE Free Index
at that time.
We appreciate your investment in Dreyfus International Stock Index Fund
and look forward to handling investments for you in the future.
Sincerely,
[Susan M. Ellison signature logo]
Susan M. Ellison
Portfolio Manager
December 3, 1997
San Francisco, CA
* Total return includes reinvestment of dividends and any capital gains
paid.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - The Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE Registration Mark) Free
Index is an unmanaged index composed of a sample of companies representative
of the market structure of European and Pacific Basin countries. The Index
reflects actual investable opportunities for global investors with stocks
that are free of foreign ownership limits or legal restrictions at the
security or country level. The Index is the property of Morgan Stanley & Co.,
Incorporated. Figures include reinvestment of dividends.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF INVESTMENTS OCTOBER 31, 1997
Common Stocks-78.8% Shares Value
___________ ___________
<S> <C> <C> <C>
Australia-2.2% Amcor............................................. 1,500 $ 7,081
Boral............................................. 2,852 7,506
Broken Hill Proprietary........................... 2,000 19,846
CSR............................................... 2,400 8,345
Coca-Cola Amatil.................................. 1,309 9,857
Coles Myer........................................ 2,600 12,515
Foster's Brewing Group............................ 4,700 8,931
General Property Trust (Units).................... 2,800 5,025
ICI Australia..................................... 700 5,271
Lend Lease........................................ 608 12,460
M.I.M. Holdings................................... 3,900 3,431
News.............................................. 4,813 23,066
North............................................. 1,734 4,549
Pacific Dunlop.................................... 2,500 5,343
Pioneer International............................. 2,100 5,557
Rio Tinto......................................... 800 9,740
Santos............................................ 1,400 6,443
Southcorp......................................... 1,400 4,700
WMC............................................... 2,700 9,596
Westfield Trust................................... 2,900 5,531
Westpac Banking................................... 4,200 24,474
___________
199,267
___________
Austria-.3% Bau Holding....................................... 150 9,320
Lenzing........................................(a) 180 10,086
Universale-Bau.................................... 290 10,060
___________
29,466
___________
Belgium-1.1% Barco......... ..................... 140 26,958
Cimenteries CBR Cementbedrijven................... 50 4,357
Fortis............................................ 50 9,473
Glaverbel......................................... 250 36,192
Royale Belge...................................... 70 18,497
Union Miniere..................................(a) 100 7,309
___________
102,786
___________
Denmark-1.1% Bang & Olufsen Holding, Cl. B..................... 100 6,096
Carlsberg, Cl. A.................................. 100 5,182
Carlsberg, Cl. B.................................. 100 5,258
Danisco........................................... 100 5,655
Den Danske Bank................................... 100 11,278
J. Lauritzen Holding...........................(a) 100 9,145
Novo Nordisk, Cl. B............................... 200 21,642
Tele Danmark, Cl. B............................... 400 23,471
Unidanmark, Cl. A................................. 200 13,504
___________
101,231
___________
Finland-1.0% Merita, Cl. A..................................... 2,000 9,764
Nokia, Cl. A...................................... 500 43,612
Nokia, Cl. K...................................... 250 21,951
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Common Stocks (continued) Shares Value
___________ ___________
Finland (continued) UPM-Kymmene....................................... 750 $ 16,528
___________
91,855
___________
France-4.3% Alcatel Alsthom................................... 200 24,091
Axa-UAP........................................... 500 34,180
Compagnie de Saint Gobain......................... 200 28,660
Compagnie Generale des
Etablissements Michelin, Cl. B.................... 250 12,802
Elf Aquitaine..................................... 400 49,428
Groupe Danone..................................... 150 22,897
L'Air Liquide..................................... 150 23,234
L'OREAL........................................... 100 35,375
Moet Hennessy Louis Vuitton....................... 100 16,960
Pinault-Printemps-Redoute......................... 50 22,827
Promodes.......................................... 50 16,251
Rhone-Poulenc, Cl. A.............................. 700 30,468
Sanofi............................................ 250 23,710
Schneider......................................... 300 15,991
Total,Cl.B........................................ 400 44,305
___________
401,179
___________
Germany-6.5% Allianz........................................... 400 89,085
BASF.............................................. 1,350 45,804
Bayer............................................. 1,600 56,142
Daimler-Benz...................................... 1,150 77,036
Deutsche Bank..................................... 800 52,337
Deutsche Telekom.................................. 4,000 74,933
HERLITZ........................................... 100 7,087
Mannesmann........................................ 100 42,222
SAP............................................... 50 14,340
Siemens........................................... 1,250 76,920
STRABAG........................................(a) 100 7,192
VEBA.............................................. 500 27,868
Volkswagen........................................ 50 29,550
___________
600,516
___________
Hong Kong-2.7% Cathay Pacific Airways............................ 8,000 8,433
Cheung Kong Holdings.............................. 4,000 27,808
Hang Seng Bank.................................... 3,000 26,095
Hong Kong Telecommunications...................... 28,000 53,599
Hutchison Whampoa................................. 8,000 55,358
Hysan Development................................. 2,000 4,178
New World Development............................. 5,000 17,590
Shangri-La Asia................................... 5,000 3,719
Sino Land......................................... 6,000 3,880
Sun Hung Kai Properties........................... 2,000 14,745
Swire Pacific,Cl.A................................ 4,000 21,367
Wharf Holdings.................................... 6,000 12,261
Wing Lung Bank.................................... 1,000 4,268
___________
253,301
___________
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Common Stocks (continued) Shares Value
___________ ___________
Ireland-.4% Crean (James) (Units)............................. 3,400 $ 6,650
Fyffes............................................ 5,000 7,673
Jefferson Smurfit Group........................(a) 2,000 5,928
Waterford Wedgwood (Units)........................ 5,000 5,793
Woodchester Investments (Units)................... 2,500 9,216
___________
35,260
___________
Italy-3.8% Assicurazioni Generali............................ 1,300 29,029
Banca Commerciale Italiana........................ 4,300 11,792
Credito Italiano.................................. 8,300 22,221
ENI............................................... 12,000 67,834
Fiat.............................................. 7,700 24,431
Istituto Mobiliare Italiano....................... 1,400 12,674
Istituto Nazionale delle Assicurazioni............ 9,700 15,770
Mediaset.......................................... 2,800 12,753
Mediobanca........................................ 2,900 19,712
Montedison........................................ 18,400 14,891
Pirelli........................................... 3,500 8,913
Riunione Adriatica di Sicurta..................... 800 6,891
Telecom Italia.................................... 7,775 48,640
Telecom Italia (RNC).............................. 2,200 8,861
Telecom Italia Mobile............................. 10,000 36,922
Telecom Italia Mobile (RNC)....................... 3,800 7,767
___________
349,101
___________
Japan-20.3% Asahi Breweries................................... 1,000 14,788
Asahi Chemical Industry........................... 3,000 13,658
Asahi Glass....................................... 3,000 20,188
Bank of Tokyo-Mitsubishi.......................... 6,000 78,259
Bridgestone....................................... 2,000 43,200
Canon ............................................ 1,000 24,258
Dai Nippon Printing............................... 2,000 39,877
Daiichi Pharmaceutical............................ 1,000 14,206
Denso............................................. 2,000 43,200
Ebara............................................. 1,000 12,046
Eisai............................................. 1,000 15,702
Fanuc ............................................ 1,000 40,376
Fuji Bank......................................... 5,000 43,200
Fuji Photo Film................................... 1,000 36,222
.Fujitsu........................................... 3,000 32,899
.Hitachi........................................... 5,000 38,423
Honda Motor....................................... 1,000 33,646
Industrial Bank of Japan.......................... 4,000 39,545
Ito-Yokado........................................ 1,000 49,680
Japan Airlines.................................(a) 6,000 21,733
JUSCO............................................. 1,000 22,348
Kirin Brewery..................................... 2,000 16,782
.Komatsu........................................... 2,000 10,684
.Kubota............................................ 3,000 11,664
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Common Stocks (continued) Shares Value
___________ ___________
Japan (continued) Marui............................................. 1,000 $ 16,865
Matsushita Electric Industrial.................... 3,000 50,345
Mitsubishi........................................ 4,000 34,228
Mitsubishi Chemical............................... 1,000 2,251
Mitsubishi Electric............................... 5,000 16,657
Mitsubishi Estate................................. 3,000 37,883
Mitsubishi Heavy Industries....................... 8,000 39,279
Mitsubishi Paper Mills............................ 2,000 5,300
Mitsubishi Trust & Banking........................ 1,000 12,295
Mitsui & Co....................................... 4,000 30,340
Murata Manufacturing.............................. 1,000 40,542
Mycal............................................. 1,000 9,554
NEC............................................... 3,000 32,898
NKK............................................... 8,000 11,099
Nippon Express.................................... 2,000 10,767
Nippon Steel...................................... 16,000 32,965
Nippon Telegraph & Telephone...................... 3 25,422
Nissan Motor...................................... 6,000 31,951
Nomura Securities................................. 5,000 58,154
Osaka Gas......................................... 6,000 13,259
Sakura Bank....................................... 8,000 32,633
Sankyo............................................ 1,000 32,982
Sanyo Electric.................................... 2,000 6,646
Sekisui House..................................... 3,000 25,671
Sharp............................................. 2,000 15,535
Shiseido.......................................... 1,000 13,625
Sumitomo Bank..................................... 4,000 42,536
Sumitomo Chemical................................. 4,000 14,256
Sumitomo Electric Industries...................... 2,000 26,418
Sumitomo Metal Industries......................... 7,000 14,015
Takeda Chemical Industries........................ 2,000 54,499
Tohoku Electric Power............................. 1,000 16,283
Tokai Bank........................................ 5,000 29,160
Tokio Marine & Fire Insurance..................... 4,000 39,877
Tokyo............................................. 4,000 16,615
Tokyo Electric Power.............................. 3,000 57,323
Tokyo Gas......................................... 6,000 13,758
Toppan Printing................................... 2,000 25,089
Toray Industries.................................. 3,000 16,698
Tostem............................................ 1,000 13,874
Toyoda Automatic Loom Works....................... 1,000 19,606
Toyota Motor...................................... 4,000 111,323
Yamazaki Baking................................... 1,000 13,791
___________
1,880,851
___________
Malaysia-1.0% AMMB Holdings..................................... 1,000 1,639
Commerce Asset Holding............................ 2,000 1,564
Edaran Otomobil Nasional.......................... 1,000 3,157
Golden Plus Holdings.............................. 3,000 1,768
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Common Stocks (continued) Shares Value
___________ ___________
Malaysia (continued) Kemayan........................................... 5,000 $ 1,910
Magnum............................................ 5,000 3,924
Malayan Banking................................... 2,000 7,758
Malaysia International Shipping................... 3,000 5,052
Malaysian Resources............................... 2,667 1,588
Nestle............................................ 1,000 5,082
Pilecon Engineering............................... 4,000 1,648
RHB Capital....................................... 2,000 1,684
Rashid Hussain.................................... 1,000 1,729
Resorts World..................................... 3,000 5,368
Rothmans of Pall Mall............................. 1,000 8,044
Sime Darby........................................ 6,000 8,660
Telekom Malaysia.................................. 5,000 13,006
Tenaga Nasional................................... 5,000 10,825
United Engineers.................................. 2,000 4,751
YTL............................................... 4,000 4,450
YTL, Cl. A........................................ 2,000 2,153
YTL (Warrants).................................... 400 -
___________
95,760
___________
Netherlands-5.6% ABN-Amro Holding.................................. 1,000 20,105
Akzo Nobel........................................ 200 35,181
Elsevier.......................................... 1,600 25,092
Heineken.......................................... 50 8,119
Hollandsche Beton Groep........................... 300 6,001
IHC Caland........................................ 200 12,279
ING Groep......................................... 1,010 42,326
KLM-Royal Dutch AirLines.......................... 200 6,767
Koninklijke Ahold................................. 1,212 30,973
Philips Electronics............................... 500 39,078
Royal PTT Nederland............................... 1,500 57,229
Royal Dutch Petroleum............................. 3,600 190,107
Unilever.......................................... 800 42,452
___________
515,709
___________
New Zealand-.4% Brierley Investments.............................. 6,400 4,941
Carter Holt Harvey................................ 4,200 7,322
Telecom Corporation of New Zealand................ 4,400 21,315
___________
33,578
___________
Norway-.5% Kvaerner.......................................... 250 12,903
Norsk Hydro....................................... 500 27,559
Orkla, Cl. A...................................... 100 9,205
___________
49,667
___________
Singapore-1.0% City Developments................................. 2,000 8,386
DBS Land.......................................... 2,000 3,405
Fraser & Neave.................................... 1,000 5,019
Keppel............................................ 2,000 6,328
Oversea-Chinese Banking........................... 2,000 11,118
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Common Stocks (continued) Shares Value
___________ ___________
Singapore (continued) Parkway Holdings.................................. 2,000 $ 5,057
Singapore Airlines................................ 2,000 14,994
Singapore Technologies Industrial................. 2,000 2,745
Singapore Telecommunications...................... 13,000 20,648
United Overseas Bank.............................. 2,000 11,055
___________
88,755
___________
Spain-2.6% Autopistas Concesionaria Espanola................. 630 8,129
Banco Bilbao Vizcaya.............................. 1,200 32,038
Banco Central Hispanoamericano.................... 600 11,201
Corporacion Bancaria de Espana.................... 300 16,637
Endesa............................................ 1,600 30,089
Iberdrola......................................... 2,200 26,273
Repsol............................................ 700 29,307
Tabacalera, Cl. A................................. 300 21,579
Telefonica de Espana.............................. 1,500 40,872
Union Electrica Fenosa............................ 2,100 20,034
___________
236,159
___________
Sweden-2.5% ABB, Cl. A........................................ 1,600 18,671
Astra, Cl. A...................................... 1,900 30,661
Atlas Copco , Cl. A............................... 300 8,802
Electrolux, Cl. B................................. 200 16,538
Hennes & Mauritz, Cl. B........................... 500 20,439
Securitas, Cl. B.................................. 180 4,801
Skandia Forsakrings............................... 200 9,336
Skandinaviska Enskilda Banken, Cl. A.............. 900 9,722
Skanska, Cl. B.................................... 600 23,126
Svenska Cellulosa, Cl. B.......................... 500 11,203
Svenska Handelsbanken, Cl. A...................... 300 9,482
Telefonaktiebolaget LM Ericsson, Cl. B............ 1,300 57,215
Volvo, Cl. B...................................... 600 15,684
___________
235,680
___________
Switzerland-7.1% ABB............................................... 20 5,169
Adecco............................................ 50 15,886
Credit Suisse Group............................... 450 63,372
Georg Fischer (Bearer)............................ 5 6,661
Georg Fischer (Registered)........................ 20 5,169
Holderbank Financiere Glarus, Cl. B............... 30 24,139
Jelmoli Holding (Bearer).......................... 20 17,421
Jelmoli Holding (Registered)...................... 50 8,710
Moevenpick Holding (Bearer)....................... 30 10,816
Nestle (Registered)............................... 75 105,647
Novartis.......................................... 100 156,570
Roche Holding..................................... 1 8,785
SMH (Bearer)...................................... 20 11,152
SMH (Registered).................................. 50 6,551
Schindler Holding................................. 5 5,515
Schindler Holding (Registered).................... 5 6,069
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Common Stocks (continued) Shares Value
___________ ___________
Switzerland (continued) Schweizerischer Bankverein........................ 100 $ 26,880
Sika Finanz (Bearer).............................. 50 14,707
Schweizerische Rueckuersicherungs-Gesellschaft.... 30 45,172
Union Bank of Switzerland (Bearer)................ 50 57,545
Union Bank of Switzerland (Registered)............ 50 11,530
Valora Holding.................................... 30 6,426
Zurich Versicherungs-Gesellschaft................. 100 41,267
___________
661,159
___________
United Kingdom-14.4% B.A.T. Industries................................. 6,400 55,988
BTR............................................... 7,000 23,632
Barclays.......................................... 2,500 62,613
Bass.............................................. 2,000 27,780
Boots............................................. 2,100 30,084
British Aerospace................................. 200 5,308
British Airways................................... 2,300 22,455
British Petroleum................................. 7,000 102,864
British Sky Broadcasting Group.................... 4,000 28,383
British Telecommunications........................ 11,000 83,590
Cable & Wireless.................................. 5,100 40,723
Cadbury Schweppes................................. 2,300 23,150
General Electric.................................. 6,400 40,877
Glaxo Wellcome.................................... 4,043 86,676
Granada Group..................................... 2,000 27,578
Grand Metropolitan................................ 4,800 43,320
Guinness.......................................... 4,500 40,235
HSBC Holdings..................................... 2,000 46,970
HSBC Holdings (75P)............................... 950 23,665
Imperial Chemical Industries...................... 1,700 25,095
J Sainsbury....................................... 4,200 35,051
Lloyds TSB Group.................................. 6,000 74,984
Marks & Spencer................................... 6,500 65,968
Reed International................................ 2,600 25,711
Reuters Holdings.................................. 3,000 32,560
Royal & Sun Alliance Insurance Group.............. 3,600 34,513
SmithKline Beecham................................ 4,000 37,912
Tesco............................................. 5,000 40,029
Unilever.......................................... 5,200 38,730
Vodafone Group.................................... 7,100 38,708
Zeneca Group...................................... 2,000 63,108
___________
1,328,260
___________
TOTAL COMMON STOCKS
(cost $8,143,860)............................. $7,289,540
===========
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Preferred Stocks-.5% Shares Value
___________ ___________
Australia-.2% News.............................................. 3,625 $ 16,098
___________
Austria-.1% Bau Holding- Vorzug............................... 180 8,914
___________
Germany-.2% SAP-Vorzug........................................ 50 14,891
STRABAG........................................(a) 100 6,844
___________
21,735
___________
TOTAL PREFERRED STOCKS
(cost $45,231)................................ $ 46,747
===========
Principal
Short-Term Investments-19.1% Amount Value
___________ ___________
United States; U.S. Treasury Bills:
4.92%, 12/18/97..............................(b) $1,571,000 $1,560,946
4.92%, 12/26/97................................. 203,000 201,449
___________
TOTAL SHORT-TERM INVESTMENTS
(cost $1,762,373)............................. $1,762,395
===========
TOTAL INVESTMENTS (cost $9,951,464)................................................ 98.4% $9,098,682
======= ===========
CASH AND RECEIVABLES (NET)......................................................... 1.6% $ 147,464
======= ===========
NET ASSETS......................................................................... 100.0% $9,246,146
======= ===========
Notes to Statement of Investments:
(a) Non-income producing.
(b) Partially held by the custodian in a segregated account as
collateral for open futures positions.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF FINANCIAL FUTURES OCTOBER 31, 1997
Market Value Unrealized
Covered (Depreciation)
Financial Futures Long: Contracts by Contracts Expiration at 10/31/97
- ---------------------- ------------ -------------- ------------- -------------
Australian All Ordinaries.................... 1 $ 44,620 December '97 $ (6,187)
CAC 40....................................... 3 276,156 December '97 (29,279)
Deutsche Aktienindex......................... 1 213,481 December '97 (12,467)
Financial Times 100.......................... 3 583,183 December '97 (15,805)
Nikkei 300................................... 36 746,165 December '97 (95,639)
__________
$(159,377)
==========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1997
Cost Value
____________ ____________
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $ 9,951,464 $ 9,098,682
Cash....................................... 58,006
Cash denominated in foreign currencies..... 32,429 31,115
Dividends and interest receivable.......... 17,460
Receivable for futures variation margin-Note 3(a) 10,775
Net unrealized appreciation on forward
currency exchange contracts-Note 3(a)....... 35,106
____________
9,251,144
____________
LIABILITIES: Due to The Dreyfus Corporation............. 2,916
Due to Distributor......................... 2,082
____________
4,998
____________
NET ASSETS.................................................................. $ 9,246,146
============
REPRESENTED BY: Paid-in capital............................ $10,252,997
Accumulated undistributed investment income-net61,291
Accumulated net realized gain (loss) on investments, foreign
currency transactions and forward currency
exchange contracts.......................... (90,075)
Accumulated net unrealized appreciation (depreciation)
on investments, foreign currency transactions and
forward currency exchange contracts [including
($159,377) net unrealized (depreciation) on
financial futures] ................................... (978,067)
____________
NET ASSETS.................................................................. $ 9,246,146
============
SHARES OUTSTANDING
(200 million shares of $.001 par value Common Stock authorized)............. 820,153
NET ASSET VALUE, offering and redemption price per share.................... $11.27
=======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF OPERATIONS
FROM JUNE 30, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1997
INVESTMENT INCOME
INCOME: Cash dividends (net of $6,292 foreign taxes
withheld at source).................... $ 38,603
Interest................................... 42,876
___________
Total Income......................... $ 81,479
EXPENSES: Management fee-Note 2(a)................... 11,776
Shareholder servicing costs-Note 2(b)...... 8,412
___________
Total Expenses....................... 20,188
___________
INVESTMENT INCOME-NET....................................................... 61,291
___________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 3:
Net realized gain (loss) on investments and foreign currency
transactions........................... $ 20,928
Net realized gain (loss) on forward currency
exchange contracts..................... (109,643)
Net realized gain(loss) on financial futures (1,360)
___________
Net Realized Gain (Loss)............. (90,075)
Net unrealized appreciation (depreciation) on investments,
foreign currency transactions and forward currency
exchange contracts [including ($159,377) net unrealized
(depreciation) on financial futures] ............... (978,067)
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (1,068,142)
___________
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $(1,006,851)
===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL STOCK INDEX FUND
STATEMENT OF CHANGES IN NET ASSETS
FROM JUNE 30, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1997
<S> <C>
OPERATIONS:
Investment income-net..................................................................... $ 61,291
Net realized gain (loss) on investments................................................... (90,075)
Net unrealized appreciation (depreciation) on investments................................. (978,067)
____________
Net Increase (Decrease) in Net Assets Resulting from Operations......................... (1,006,851)
____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................................. 10,301,736
Cost of shares redeemed................................................................... (48,739)
____________
Increase (Decrease) in Net Assets from Capital Stock Transactions...................... 10,252,997
____________
Total Increase (Decrease) in Net Assets............................................... 9,246,146
NET ASSETS:
Beginning of Period....................................................................... ----
____________
End of Period............................................................................. $ 9,246,146
============
Undistributed investment income-net......................................................... $ 61,291
____________
Shares
____________
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................................... 824,343
Shares redeemed........................................................................... (4,190)
____________
Net Increase (Decrease) in Shares Outstanding........................................... 820,153
============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL STOCK INDEX FUND
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 the period from June 30, 1997
(commencement of operations) to October 31, 1997. This information has been
derived from the Fund's financial statements.
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period....................................................... $12.50
______
Investment Operations:
Investment income-net...................................................................... .07
Net realized and unrealized gain (loss)
on investments........................................................................... (1.30)
______
Total from Investment Operations........................................................... (1.23)
______
Net asset value, end of period............................................................. $11.27
======
TOTAL INVESTMENT RETURN...................................................................... (9.84%)(1,2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................................................... .20%(1)
Ratio of net investment income to average net assets....................................... .62%(1)
Portfolio Turnover Rate.................................................................... .16%(1)
Average commission rate paid (3)........................................................... $.0314
Net Assets, end of period (000's Omitted).................................................. $9,246
(1) Not annualized.
(2) Exclusive of redemption fee.
(3) The Fund is required to disclose its average commission rate paid per share for purchases and sales of investment
securities.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS INTERNATIONAL STOCK INDEX FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus International Stock Index Fund (the "Fund") is a series of
Dreyfus Index Funds, Inc. (the "Company") which is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering three series, including the Fund. The Fund's investment objective is
to provide investment results that correspond to the net dividend and total
return performance of equity securities of international issuers in the aggreg
ate, as represented by the Morgan Stanley Capital International Europe,
Australia, Far East (Free) Index. The Dreyfus Corporation ("Dreyfus") serves
as the Fund's investment advisor. Boston Safe Deposit and Trust Company, an
affiliate of Dreyfus, is the Fund's custodian. Dreyfus is a direct subsidiary
of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation. Premier Mutual Fund Services, Inc.
(the "Distributor") is the distributor of the Fund's shares, which are sold
to the public without a sales charge.
As of October 31, 1997, MBIC Investment Corp., an indirect subsidiary of
Mellon Bank Corporation, held 800,000 shares of the Fund.
The Company accounts separately for the assets, liabilities and
operations of each fund. Expenses directly attributable to each fund are
charged to that fund's operations; expenses which are applicable to all funds
are allocated among them on a pro rata basis.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including financial
futures) are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the
national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available. Investments
denominated in foreign currencies are translated to U.S. dollars at the
prevailing rates of exchange. Forward currency exchange contracts are valued
at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions and the difference
between the amounts of dividends, interest and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than investmen
ts in securities, resulting from changes in exchange rates. Such gains and
losses are included with net realized and unrealized gain or loss on
investments.
(c) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(d) 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 gains, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gains can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such
gains.
DREYFUS INTERNATIONAL STOCK INDEX FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by complying with
the applicable provisions of the Internal Revenue Code, and to make
distributions of taxable income sufficient to relieve it from substantially
all Federal income and excise taxes.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement ("Agreement") with Dreyfus, the
management fee is computed at the annual rate of .35 of 1% of the value of
the Fund's average daily net assets, and is payable monthly. Under the terms
of the Agreement, Dreyfus has agreed to pay all the expenses of the Fund,
except brokerage commission, taxes, interest, Shareholder Services Plan fees,
fees and expenses of non-interested Directors (including counsel fees) and
extraordinary expenses. In addition, Dreyfus is required to reduce its fee in
an amount equal to the Fund's allocable portion of fees and expenses of the
non-interested Directors (including counsel). Each Director receives an
annual fee of $2,500 and an attendance fee $500 per meeting and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation. These fees pertain to the following
funds: Dreyfus S&P 500 Index Fund, Dreyfus International Stock Index Fund and
Dreyfus Small Cap Stock Index Fund. These fees and expenses are charged and
allocated to each series based on net assets. Amounts required to be paid by
the Company directly to the non-interested Directors, that would be applied
to offset a portion of the management fee payable to Dreyfus, are in fact
paid directly by Dreyfus to the non-interested Directors.
(b) Under the Shareholder Services Plan, the Fund pays the Distributor
for the provision of certain services, a fee at the annual rate of .25 of 1%
of the value of the Fund's average daily net assets. 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. The Distributor may make payments to Service Agents (a securities
dealer, bank or other financial institution) in respect of these services.
The Distributor determines the amount to be paid to Service Agents. During
the period ended October 31, 1997, the Fund was charged $8,412 pursuant to
the Shareholder Services Plan.
(c) A 1% redemption fee is charged on certain redemptions of Fund shares
where the redemption occurs within the initial six-month period following the
opening of the account.
NOTE 3-SECURITIES TRANSACTIONS:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, forward currency exchange contracts and
financial futures, during the period ended October 31, 1997 amounted to
$8,202,192 and $9,834, respectively.
The following summarizes open forward currency exchange contracts at
October 31, 1997:
<TABLE>
<CAPTION>
Unrealized
Foreign Currency Appreciation
Forward Currency Exchange Contracts Amount Cost Value (Depreciation)
_________________________________ _______________ _____________ _____________ _____________
<S> <C> <C> <C> <C>
Purchases:
Australian Dollars, expiring 1/5/98...... 70,175 $ 51,028 $ 49,449 $ (1,579)
British Pounds, expiring 12/23/97........ 374,225 600,968 626,453 25,485
French Francs, expiring 1/5/98........... 1,813,600 308,645 315,044 6,399
German Deutsche Marks, expiring 12/23/97. 399,500 226,911 232,348 5,437
Japanese Yen, expiring 12/18/97.......... 101,116,000 845,946 845,310 (636)
________
TOTAL.................................. $35,106
========
</TABLE>
DREYFUS INTERNATIONAL STOCK INDEX FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency
exchange rates on its foreign portfolio holdings or to gain exposure in the
market. When executing forward currency exchange contracts, the Fund is
obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract increases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
decreases between those dates. With respect to purchases of forward currency
exchange contracts, the Fund would incur a loss if the value of the contract
decreases between the date the forward contract is opened and the date the
forward contract is closed. The Fund realizes a gain if the value of the
contract increases between those dates. The Fund is also exposed to credit
risk associated with counter party nonperformance on these forward currency
exchange contracts which is typically limited to the unrealized gain on each
open contract.
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 contract at the close of
each day's trading. Typically, variation margin payments are received or made
to reflect daily unrealized gains or losses. When the contracts are closed,
the Fund recognizes a realized gain or loss. These investments require
initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of
these deposits is determined by the exchange or Board of Trade on which the
contract is traded and is subject to change. Contracts open as of October 31,
1997, and their related unrealized market depreciation are set forth in the
Statement of Financial Futures.
(b) At October 31, 1997, accumulated net unrealized depreciation on
investments, cash denominated in foreign currencies, forward currency
exchange contracts and financial futures was $978,367, consisting of $290,677
gross unrealized appreciation and $1,269,044 gross unrealized depreciation.
At October 31, 1997, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS INTERNATIONAL STOCK INDEX FUND
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of
Dreyfus International Stock Index Fund
We have audited the accompanying statement of assets and liabilities,
including the statements of investments and financial futures, of Dreyfus
International Stock Index Fund, (one of the Series constituting Dreyfus Index
Funds, Inc.) as of October 31, 1997, and the related statements of
operations, and changes in net assets, and the financial highlights for the
period June 30, 1997 (commencement of operations) to October 31, 1997. 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 audit.
We conducted our audit 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1997, by correspondence
with the custodian. 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
audit provides 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 Dreyfus International Stock Index Fund of Dreyfus Index Funds,
Inc. at October 31, 1997, the results of its operations, the changes in its
net assets and the financial highlights for the periods June 30, 1997
(commencement of operations) to October 31, 1997, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
December 18, 1997
DREYFUS INTERNATIONAL STOCK INDEX FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal Tax law, the Fund elects to provide each
shareholder with their portion of the Fund's foreign taxes paid and the
income sourced from foreign countries. Accordingly, the Fund hereby makes the
following designations regarding its the period from June 30, 1997
(commencement of operations) to October 31, 1997:
-the total amount of taxes paid to foreign countries was $6,292
-the total amount of income sourced from foreign countries was $35,367
As required by Federal tax law rules, shareholders will receive
notification of their proportionate shares of foreign taxes paid and foreign
sourced income for the 1997 calendar year with Form 1099-DIV which will be
mailed by January 31, 1998.
Registration Mark
[Dreyfus lion "d" logo]
DREYFUS INTERNATIONAL STOCK INDEX FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02109
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 079AR9710
International Stock
Index Fund
Annual Report
October 31, 1997
Registration Mark
[Dreyfus logo]
