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PROSPECTUS MARCH 1, 1996
DREYFUS EDISON ELECTRIC INDEX FUND, INC.
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DREYFUS EDISON ELECTRIC INDEX FUND, INC. (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 OF INVESTOR-OWNED COMPANIES ENGAGED IN THE GENERATION, TRANSMISSION
OR DISTRIBUTION OF ELECTRIC ENERGY, AS REPRESENTED BY AN INDEX COMPRISING THE
COMMON STOCKS OF COMPANIES THAT ARE MEMBERS OF THE EDISON ELECTRIC INSTITUTE
("EEI"). THE FUND IS NOT SPONSORED BY EEI.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY.
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."
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 THAT 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>
TABLE OF CONTENTS
Page
<S> <C> <C>
Annual Fund Operating Expenses.................... 3
Condensed Financial Information................... 3
Description of the Fund........................... 4
Management of the Fund............................ 6
How to Buy Shares................................. 7
How to Redeem Shares.............................. 9
Shareholder Services.............................. 11
Shareholder Services Plan......................... 11
Dividends, Distributions and Taxes................ 11
Performance Information........................... 12
General Information............................... 13
Appendix.......................................... 14
</TABLE>
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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>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<S> <C> <C>
Management Fee ............................................................................... .25%
Other Expenses................................................................................ .55%
Total Fund Operating Expenses ................................................................ .80%
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: $8 $26 $44 $99
</TABLE>
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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%.
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The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund, the payment of which will reduce
investors' annual return. 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 Shares,"
"How to Redeem 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>
Year Ended October 31,
-------------------------------------------------
1992(1) 1993 1994 1995
------------ ----------- ---------- ----------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year.......................... $12.50 $13.05 $14.69 $11.27
------------ ----------- ---------- ----------
Investment Operations:
Investment income--net ..................................... .60 .62 .72 .72
Net realized and unrealized gain (loss) on investments...... .51 1.66 (3.23) 2.04
------------ ----------- ---------- ----------
Total from Investment Operations............................ 1.11 2.28 (2.51) 2.76
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Distributions:
Dividends from investment income-net........................ (.56) (.63) (.70) (.75)
Dividends from net realized gain on investments............. -- (.01) (.21) --
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Total Distributions......................................... (.56) (.64) (.91) (.75)
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Net asset value, end of year................................ $13.05 $14.69 $11.27 $13.28
============ =========== ========== ==========
Total Investment Return....................................... 9.11%(2) 17.71% (17.41%) 25.34%
Ratios / Supplemental Data:
Ratio of expenses to average net assets .................... .24%(2) .75% .74% .80%
Ratio of net investment income to average net assets ....... 5.31%(2) 4.80% 5.66% 5.92%
Decrease reflected in above expense ratios due to undertakings .95%(2) .09% -- --
Portfolio Turnover Rate..................................... 2.76%(2) 14.14% 8.92% 5 9.75%
Net Assets, end of year (000's omitted)..................... $36,861 $117,835 $71,587 $79,993
(1) From December 6, 1991 (commencement of operations) to October 31, 1992.
(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 of investor-owned companies engaged in the
production, transmission or distribution of electric energy, as represented
by an index comprising the common stocks of companies that are members of EEI
(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 approximately 101 publicly-traded common stocks of EEI
member companies. EEI is a trade association representing 180 investor-owned
companies engaged in the generation, transmission and distribution of
electric energy. EEI members generate approximately three-fourths of the
nation's electricity and make up 99% of the investor-owned segment of the
United States electric utility industry. The Fund attempts to be fully
invested at all times in the stocks that comprise the Index, and, in any
event, at least 80% of the Fund's net assets will be so invested. Because the
Fund's portfolio is concentrated in the securities of such companies, the
shares of the Fund are particularly affected by developments in the electric
utility industry. See "Investment Considerations and Risks" below.
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. However, no such stock will represent
less than .10% of the Index regardless of such stock's relative total market
capitalization. Because of this weighting, as of December 31, 1995, 35.4% of
the Index was composed of the ten largest companies in EEI. 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 Fund's portfolio in the traditional
sense using economic, financial and market analysis. The Fund is managed
using a computer program to determine which securities 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. The composition of the Index will
change only in response to changes in the composition of the publicly-traded
common stocks of EEI member companies, such as when electric utility
companies consolidate or join or resign from EEI.
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 dividends 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, particularly
those affecting the electric utility industry, and the timing of purchases
and redemptions. In the future, the Fund's Board, subject to the
Page 4
approval of shareholders, may select or develop another index if such a
standard of comparison is deemed to be more representative of the performance
of the common stocks of EEI member companies.
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.
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.
The securities of the smaller companies in which the Fund may
invest may be subject to more abrupt or erratic market movements than larger,
more established companies, because these securities typically are traded in
lower volume and the issuers typically are subject to a greater degree to
changes in earnings and prospects.
INVESTING IN THE ELECTRIC UTILITY INDUSTRY -- Because the Fund's portfolio is
concentrated in the electric utility industry, the Fund is subject to greater
risk of loss due to unfavorable developments associated with such industry
than an investment company with a portfolio that is not so concentrated. In
particular, the Fund will be affected by developments associated with
investor-owned companies engaged in the production, transmission and
distribution of electric energy that are members of EEI. Electric utility
companies historically have been subject to the risks of increases in fuel
and other operating costs, high interest costs on borrowings needed for
capital construction programs, costs associated with compliance with
environmental and nuclear safety regulations, and changes in the regulatory
climate. In particular, regulatory changes with respect to nuclear and
conventionally fueled generating facilities could increase costs or impair
the ability of investor-owned electric utility companies to operate such
facilities, thus reducing such utility companies' earnings or resulting in
losses. There also can be no assurance that regulatory policies or accounting
standard changes will not negatively affect investor-owned electric utility
companies' earnings or dividends.
NON-DIVERSIFIED STATUS _ The classification of the Fund 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, the Fund's portfolio may be more
sensitive to changes in the market value of a single issuer. 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. 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
advised by Dreyfus or Mellon Equity. However, if such other accounts or
investment companies desire to invest in, or dispose of, the same securities
as the
PAGE 5
Fund, 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, 1995,
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 serves 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 .245 of 1% of the
value of the Fund's average daily net assets. Under the 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, and Mellon
Equity has agreed to pay for the provision of custody services to 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 .15%, respectively, of the value of the Fund's
average daily net assets.
The imposition of the Fund's management fee, 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 may waive receipt of its 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. The Fund will
not pay Dreyfus at a later time for any amounts Dreyfus may waive, nor will
the Fund reimburse Dreyfus for any amounts Dreyfus may assume.
PAGE 6
In allocating brokerage transactions for the Fund, the Advisers seek
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, the Advisers may consider, among other things,
the receipt of research services and/or the sale of shares of the Fund or
other funds advised by Dreyfus or Mellon Equity as factors in the selection
of broker-dealers to execute portfolio transactions for the Fund. See
"Portfolio Transactions" in the Statement of Additional Information.
Dreyfus may pay the Fund's distributor for shareholder services from
its 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, banks or other financial institutions in respect
of these services.
EEI _ Pursuant to an agreement with Dreyfus, EEI has agreed to provide
certain statistical and factual information with respect to the companies
which comprise EEI and the general economic condition of the electric utility
industry. As compensation for such services, Dreyfus has agreed to pay EEI
out of its own funds, including past profits or any other source available to
it, a monthly fee at the annual rate of .075 of 1% of the value of the Fund's
average daily net assets over $25 million. EEI has no responsibility with
respect to the Fund's investments.
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.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
Transfer, Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). Boston Safe Deposit and Trust
Company, an indirect subsidiary of Mellon, One Boston Place, Boston,
Massachusetts 02109, is the Custodian of the Fund's investments.
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. The Fund's shares are available
for purchase by pension and profit-sharing plans. The Fund does not issue
share certificates. 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.
You may purchase Fund shares by check or wire. Checks should be made
payable to "Dreyfus Edison Electric Index Fund, Inc." For subsequent
investments, your Fund account number also should appear on the check.
Payments which are mailed should be sent to Dreyfus Edison Electric Index
Fund, Inc., P.O. Box 6647, Providence, Rhode Island 02940-6647, together with
your investment slip or, when opening a new account, your Account
Application. Payments to purchase shares for Dreyfus retirement plan accounts
should be mailed 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. 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 #8900188278/Dreyfus Edison
Electric Index Fund, Inc., 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
PAGE 7
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 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."
Fund shares are sold on a continuous basis at the net asset value per
share next determined after your order is received in proper form 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 3:00 p.m., New York time, on the day you want your purchase order to be
effective. Upon request, proceeds from the redemption of shares of other
funds in the Dreyfus Family of Funds by an employee benefit plan will be
applied to purchase Fund shares on the date of redemption, if the plan's
recordkeeper has entered into an appropriate agency agreement with the Fund
and such other funds.
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. 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.
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 ("Eligible Benefit
Plans"). Shares of funds in the Dreyfus Family of Funds then held by Eligible
Benefit Plans 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.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the 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").
PAGE 8
HOW TO REDEEM 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 request so that it may be received by the
Transfer Agent prior to 3:00 p.m., New York time, on the day you want your
redemption request to be effective.
The Fund imposes no charge when shares are redeemed. Securities
dealers, banks and other financial institutions may charge their clients a
nominal fee for effecting redemptions of Fund shares.
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.
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 the 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. Shares held under Keogh Plans, IRAs or
other retirement plans, and shares for which certificates have been issued,
are not eligible for the Wire Redemption or Telephone Redemption Privilege.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the 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.
PAGE 9
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 The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. 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-guarantee request.
Your written redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised or administered by
Dreyfus. Before you make such a request, you must obtain and should review a
copy of the current prospectus of the fund being purchased; and your
redemption proceeds will be invested in shares of such other fund on the next
business day. 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.
Upon request, proceeds from the redemption of shares of other funds
in the Dreyfus Family of Funds by an employee benefit plan will be applied to
purchase Fund shares on the date of redemption, if the plan's recordkeeper
has entered into an appropriate agency agreement with the Fund and such other
funds.
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.
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 516-794-5452.
PAGE 10
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 this Privilege or change the amount of
purchase at any time by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, 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. 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.
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 declares and pays dividends from its net
investment income quarterly, and automatically reinvests them in additional
Fund shares at net asset value or, at your option, pays them in cash. The
Fund will make distributions from net realized securities gains, if any,
generally 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 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. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Dividends paid by the Fund out of 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 additional 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
PAGE 11
certain U.S. corporations. 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 additional shares. The Code provides that
the net realized capital gain of an individual generally will 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 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 the 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 will
be 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 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.
Each investor should consult its 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.
PAGE 12
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 inv
estments 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 the Wilshire
5000 Index, Standard & Poor's 500 Composite Stock Price Index, Standard &
Poor's MidCap 400 Index, Lipper Analytical Services, Inc., the Dow Jones
Industrial Average, Morningstar, Inc. and other industry publications. The
Fund 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. In its advertisements, the Fund also may cite 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.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on March 20, 1991, and
commenced operations on December 6, 1991. The Fund is authorized to issue 200
million shares of Common Stock, par value $.001 per share. Each share has one
vote.
Under the terms of a License Agreement between the Fund and EEI, EEI
has granted the Fund a non-exclusive royalty free license to use the name
"Edison Electric." The license is to continue for successive ten year
periods, unless the Fund's investment objective is no longer to provide
investment results that correspond to the price and yield performance of
publicly-traded common stocks in the aggregate of investor-owned companies
engaged in the generation, transmission or distribution of electric energy,
as represented by an index comprising the common stocks of companies which
are members of EEI at which time the Fund has agreed to cease its use of the
name "Edison Electric."
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 Board members or
the appointment of auditors. 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 Board member from office and for any other purpose. Fund
shareholders may remove a Board member 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 Board members if,
at any time, less than a majority of the Board members then holding office
have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling 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.
PAGE 13
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.
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. The Fund continues to be
entitled to payments in amounts equal to the interest, dividends or other
distributions payable on the loaned securities which affords 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, and
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 portfolio a loan transaction breaches its
agreement with the Fund.
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.
PAGE 14
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PAGE 15
DREYFUS
Edison
Electric
Index Fund, Inc.
Prospectus
(LION LOGO)
Copy Rights 1996 Dreyfus Service Corporation
114p8030196
Registration Mark
