- -------------------------------------------------------------------------------
PROSPECTUS JANUARY 17, 1994
PREMIER GLOBAL INVESTING
- --------------------------------------------------------------------------------
PREMIER GLOBAL INVESTING (THE "FUND") IS AN OPEN-END, NON-
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL
FUND. ITS GOAL IS CAPITAL GROWTH. THE FUND INVESTS PRINCIPALLY IN
PUBLICLY ISSUED COMMON STOCKS OF FOREIGN AND DOMESTIC ISSUERS, AS
WELL AS OTHER SECURITIES OF A BROAD RANGE OF FOREIGN AND DOMESTIC
COMPANIES AND GOVERNMENTS.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
BY THIS PROSPECTUS, CLASS A AND CLASS B SHARES OF THE FUND ARE
BEING OFFERED. CLASS A SHARES ARE SUBJECT TO A SALES CHARGE
IMPOSED AT THE TIME OF PURCHASE AND CLASS B SHARES ARE SUBJECT TO
A CONTINGENT DEFERRED SALES CHARGE IMPOSED ON REDEMPTIONS MADE
WITHIN SIX YEARS OF PURCHASE. OTHER DIFFERENCES BETWEEN THE TWO
CLASSES INCLUDE THE SERVICES OFFERED TO AND THE EXPENSES BORNE BY
EACH CLASS AND CERTAIN VOTING RIGHTS, AS DESCRIBED HEREIN. THE
FUND OFFERS THESE ALTERNATIVES SO AN INVESTOR MAY CHOOSE THE
METHOD OF PURCHASING SHARES THAT IS MOST BENEFICIAL GIVEN THE
AMOUNT OF THE PURCHASE, THE LENGTH OF TIME THE INVESTOR EXPECTS TO
HOLD THE SHARES AND OTHER CIRCUMSTANCES.
--------------
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION),
DATED JANUARY 17, 1994, WHICH MAY BE REVISED FROM TIME TO TIME,
PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS
AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE
FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-
0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 666.
--------------
THE FUND'S 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 FUND'S SHARES INVOLVE
CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE FUND'S SHARE PRICE AND INVESTMENT RETURN FLUCTUATE AND ARE
NOT GUARANTEED.
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
FEE TABLE.................................................. 2
CONDENSED FINANCIAL INFORMATION............................ 3
ALTERNATIVE PURCHASE METHODS............................... 3
DESCRIPTION OF THE FUND.................................... 4
MANAGEMENT OF THE FUND..................................... 19
HOW TO BUY FUND SHARES..................................... 20
SHAREHOLDER SERVICES....................................... 23
HOW TO REDEEM FUND SHARES.................................. 26
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN............ 30
DIVIDENDS, DISTRIBUTIONS AND TAXES......................... 30
PERFORMANCE INFORMATION.................................... 31
GENERAL INFORMATION........................................ 32
- -------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
------- -------
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................... 4.50% --
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)...... -- 4.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees........................................ .75% .75%
12b-1 Fees............................................. -- .75%
Service Fees........................................... .25% .25%
Other Expenses......................................... .67% .67%
Total Fund Operating Expenses.......................... 1.67% 2.42%
<TABLE>
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) except where noted,
redemption at the end of each time period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS*
------ ------- ------- --------
<S> <C> <C> <C> <C>
CLASS A: $61 $95 $132 $234
CLASS B: $65 $105 $149 $239
ASSUMING NO REDEMPTION OF
CLASS B SHARES: $25 $75 $129 $239
--------------------------
</TABLE>
*Ten-year figures assume conversion of Class B shares to
Class A shares at the end of the sixth year following the date of purchase.
- -------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
- -------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that the investors will bear, directly or
indirectly, the payment of which will reduce investors' return on an
annual basis. For Class A shares, Other Expenses are based on data for the
Fund's fiscal year ended October 31, 1993. For Class B shares, Other
Expenses and Total Fund Operating Expenses are estimated based on
expenses incurred by the Class A shares. Prior to January 15, 1993, Class
A shares were subject to 12b-1 fees but no service fees. Long-term
investors in Class B shares could pay more in 12b-1 fees than the
economic equivalent of paying a front-end sales charge. Certain Service
Agents (as defined below) may charge their clients direct fees for
effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares"
and "Distribution Plan and Shareholder Services Plan."
(2)
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young, the Fund's independent auditors, whose report thereon appears in
the Fund's Statement of Additional Information. Further financial data and
related notes are included in the Fund's 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 information provided in the Fund's
financial statements.
<TABLE>
CLASS A SHARES CLASS B SHARES
------------------- --------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
-------------------
PER SHARE DATA: 1992(1) 1993 1993(2)
------------------- ------
<S> <C> <C> <C>
Net asset value, beginning of year........................................... $12.50 $13.68 $13.51
------ ------ ------
INVESTMENT OPERATIONS:
Investment income(loss)-net.................................................. .05 .10 (.01)
Net realized and unrealized gain on investments.............................. 1.13 2.01 1.99
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS.......................................... 1.18 2.11 1.98
------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net......................................... -- (.09) --
Dividends from net realized gain on investments.............................. -- (.12) --
------ ------ ------
TOTAL DISTRIBUTIONS....................................................... -- (.21) --
------ ------ ------
Net asset value, end of year................................................. $13.68 $15.58 $15.49
====== ====== ======
TOTAL INVESTMENT RETURN(3)..................................................... 9.44%(4) 15.66% 14.66%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...................................... 1.76%(4) 1.66% 1.96%(4)
Ratio of dividends on securities sold short to average net assets............ -- .01% .01%(4)
Ratio of net investment income (loss) to average net assets.................. .74%(4) .98% (.18)%(4)
Portfolio Turnover Rate...................................................... 208.70%(4) 179.28% 179.28%
Net Assets, end of year(000's Omitted)....................................... $35,669 $75,066 $40,897
- ---------------------------
</TABLE>
(1) From January 31, 1992 (commencement of operations) to October 31,
1992.
(2) From January 15, 1993 (commencement of initial offering) through
October 31, 1993.
(3) Exclusive of sales charge.
(4) Not annualized.
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.
ALTERNATIVE PURCHASE METHODS
The Fund offers you two methods of purchasing Fund shares; you may
choose the Class of shares that best suits your needs, given the amount of
your purchase, the length of time you expect to hold your shares and any
other relevant circumstances. Each Class A and Class B share represents
an identical pro rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a maximum
initial sales charge of 4.50% of the public offering price imposed at the
time of purchase. The initial sales charge may be reduced or waived for
certain purchases. See "How to Buy Fund Shares-Class A Shares." These
shares are subject to an annual service fee at the rate of .25 of l% of the
value of the average daily net assets of Class A. See "Distribution Plan
and Shareholder Services Plan-Shareholder Services Plan."
Class B shares are sold at net asset value per share with no initial
sales charge at the time of purchase; as a result, the entire purchase price
is immediately invested in the Fund. Class B shares are subject to a
maximum 4% contingent deferred sales charge ("CDSC"), which is
assessed only if you redeem Class B shares within six years of purchase.
See "How to Buy Fund Shares-Class B Shares" and "How to Redeem Fund
Shares -- Contingent Deferred Sales Charge-Class B Shares." These shares
also are subject to an annual service fee at the rate of .25 of l% of the
value of the average daily net assets of Class B. In addition, Class B
shares are subject to an annual distribution fee at the rate of .75 of l% of
the value of the average daily net assets of Class B. See "Distribution Plan
and Shareholder Services Plan." The distribution fee paid by Class B will
cause such Class to have a higher expense ratio and to pay lower dividends
than Class A. Approximately six years after the
(3)
date of
purchase, Class B shares automatically will convert to Class A shares,
based on the relative net asset values for shares of each Class, and will
no longer be subject to the distribution fee. Class B shares that have been
acquired through the reinvestment of dividends and distributions will be
converted on a pro rata basis together with other Class B shares, in the
proportion that a shareholder's Class B shares converting to Class A
shares bears to the total Class B shares not acquired through the
reinvestment of dividends and distributions.
You should consider whether, during the anticipated life of your
investment in the Fund, the accumulated distribution fee and CDSC on
Class B shares prior to conversion would be less than the initial sales
charge on Class A shares purchased at the same time, and to what extent,
if any, such differential would be offset by the return of Class A. In this
regard, investors qualifying for reduced initial sales charges who expect
to maintain their investment for an extended period of time might
consider purchasing Class A shares because the accumulated continuing
distribution fees on Class B shares may exceed the initial sales charge on
Class A shares during the life of the investment. Generally, Class A shares
may be more appropriate for investors who invest $100,000 or more in
Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE - The Fund's goal is to provide you with capital
growth. The Fund's investment objective cannot be changed without
approval by the holders of a majority (as defined in the Investment
Company Act of 1940) 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 invests principally in publicly issued
common stocks of foreign and domestic issuers. The Fund may invest in
convertible securities, preferred stocks and debt securities of foreign and
domestic issuers, when management believes that such securities offer
opportunities for capital growth. Under normal circumstances, the Fund
will invest a substantial portion of its assets in the securities of issuers
located in at least three countries. The Fund may invest in the securities
of foreign companies which are not publicly traded in the United States
and the debt securities of foreign governments. The Fund may invest
without restriction in companies in, or governments of, developing
countries. Developing countries have economic structures that are
generally less diverse and mature, and political systems that are less
stable, than those of developed countries. The markets of developing
countries may be more volatile than the markets of more mature
economies; however, such markets may provide higher rates of return to
investors. See "Risk Factors -- Investing in Foreign Securities."
There are no limitations on the type, size or dividend paying record of
companies or industries in which the Fund may invest, the principal
criteria for investment being that the securities provide opportunities for
capital growth. The Fund's policy is to purchase marketable securities
which are not restricted as to public sale, subject to the limited exception
set forth under "Certain Portfolio Securities-Illiquid Securities" below. The
Fund will be alert to favorable investment opportunities in companies involved
in prospective acquisitions, reorganizations, spinoffs, consolidations and
liquidations. These latter securities will often involve greater risk than may
be found in the investment securities of other companies.
The debt securities in which the Fund may invest must be rated at least
Caa by Moody's Investors Service, Inc. ("Moody's") or at least CCC by
Standard & Poor's Corporation ("S&P"), Fitch Investors Service, Inc.
("Fitch") or Duff & Phelps, Inc. ("Duff") or, if unrated, deemed to be of
comparable quality by The Dreyfus Corporation. Securities rated Caa by
Moody's and CCC by S&P, Fitch and Duff are considered to have
predominantly speculative characteristics with respect to the issuer's
capacity to pay interest and repay principal and to be of poor standing. The
Fund intends to invest less than 35% of its net assets in debt securities
rated lower than investment grade by Moody's, S&P, Fitch and Duff. See
"Risk Factors-Lower Rated Securities" below for a discussion of certain
risks, and "Appendix" in the Statement of Additional Information.
The Fund may invest in money market instruments consisting of U.S.
Government securities, certificates of deposit, time deposits, bankers'
acceptances, short-term investment grade corporate bonds and other
short-term debt instruments, and repurchase agreements, as described
under "Certain Portfolio Securities" below.
(4)
Under normal market conditions, the Fund does not expect to have a substantial
portion of its assets invested in money market instruments. However, when The
Dreyfus Corporation determines that adverse market conditions exist, the
Fund may adopt a temporary defensive posture and invest its entire
portfolio in money market instruments. To the extent the Fund is so
invested, the Fund's investment objective may not be achieved.
INVESTMENT TECHNIQUES - The Fund may engage in various investment
techniques, such as foreign exchange transactions, leveraging, short-
selling, options and futures transactions and lending portfolio securities,
each of which involves risk. See "Risk Factors-Other Investment
Considerations" below.
FOREIGN CURRENCY TRANSACTIONS - The Fund may engage in currency
exchange transactions consistent with its investment objective or to
hedge its portfolio. The Fund will conduct its currency exchange
transactions either on a spot (i.e., cash) basis at the rate prevailing in the
currency exchange market, or through entering into forward contracts to
purchase or sell currencies. A forward currency exchange contract
involves an obligation to purchase or sell a specific currency at a future
date, which must be more than two days from the date of the contract, at
a price set at the time of the contract. Transaction hedging is the
purchase or sale of forward currency with respect to specific receivables
or payables of the Fund generally arising in connection with the purchase
or sales of its portfolio securities. Forward currency exchange contracts
are entered into in the interbank market conducted directly between
currency traders (typically commercial banks or other financial
institutions) and their customers.
The Fund also may combine forward currency exchange contracts
with investments in securities denominated in other currencies.
The Fund also may maintain short positions in forward currency
exchange transactions, which would involve the Fund agreeing to exchange
an amount of a currency it did not currently own for another currency at a
future date in anticipation of a decline in the value of the currency sold
relative to the currency the Fund contracted to receive in the exchange.
This type of short selling would be subject to segregation or asset
coverage requirements similar to those described in "Leverage Through
Borrowing" and "Short-Selling" below.
OPTIONS ON FOREIGN CURRENCY - The Fund may purchase and sell call and
put options on foreign currency for the purpose of hedging against changes
in future currency exchange rates. Call options convey the right to buy the
underlying currency at a price which is expected to be lower than the spot
price of the currency at the time the option expires. Put options convey
the right to sell the underlying currency at a price which is anticipated to
be higher than the spot prices of the currency at the time the option
expires. The Fund may use foreign currency options for the same purposes
as forward currency exchange and futures transactions, as described
herein. See also "Call and Put Options on Specific Securities" and
"Currency Futures and Options on Currency Futures" below.
LEVERAGE THROUGH BORROWING - The Fund may borrow for investment
purposes. This borrowing, which is known as leveraging, generally will be
unsecured, except to the extent the Fund enters into reverse repurchase
agreements described below. The Investment Company Act of 1940
requires the Fund to maintain continuous asset coverage (that is, total
assets including borrowings, less liabilities exclusive of borrowings) of
300% of the amount borrowed. If the 300% asset coverage should decline
as a result of market fluctuations or other reasons, the Fund may be
required to sell some of its portfolio holdings within three days to reduce
the debt and restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities at that
time. Leveraging may exaggerate the effect on net asset value of any
increase or decrease in the market value of the Fund's portfolio. Money
borrowed for leveraging will be subject to interest costs that may or may
not be recovered by appreciation of the securities purchased; in certain
cases, interest costs may exceed the return received on the securities
purchased. The Fund also may be required to maintain minimum average
balances in connection with such borrowing or to pay a commitment or
other fee to maintain a line of credit; either of these requirements would
increase the cost of borrowing over the stated interest rate.
Among the forms of borrowing in which the Fund may engage is the
entry into reverse repurchase agreements with banks, brokers or dealers.
These transactions involve the transfer by the Fund of an underlying debt
instrument in return for cash proceeds based on a percentage of the value
of the security. The Fund
(5)
retains the right to receive
interest and principal payments on the security. At an agreed upon future
date, the Fund repurchases the security at principal, plus accrued interest.
In certain types of agreements, there is no agreed upon repurchase date
and interest payments are calculated daily, often based on the prevailing
overnight repurchase rate. The Fund will maintain in a segregated
custodial account cash or U.S. Government securities or other high quality
liquid debt securities at least equal to the aggregate amount of its
reverse repurchase obligations, plus accrued interest, in certain cases, in
accordance with releases promulgated by the Securities and Exchange
Commission. The Securities and Exchange Commission views reverse
repurchase transactions as collateralized borrowings by the Fund. These
agreements, which are treated as if reestablished each day, are expected
to provide the Fund with a flexible borrowing tool.
SHORT-SELLING - The Fund may make short sales, which are transactions
in which the Fund sells a security it does not own in anticipation of a
decline in the market value of that security. To complete such a
transaction, the Fund must borrow the security to make delivery to the
buyer. The Fund then is obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement. The price at
such time may be more or less than the price at which the security was
sold by the Fund. Until the security is replaced, the Fund is required to pay
to the lender amounts equal to any dividends or interest which accrue
during the period of the loan. To borrow the security, the Fund also may be
required to pay a premium, which would increase the cost of the security
sold. The proceeds of the short sale will be retained by the broker, to the
extent necessary to meet margin requirements, until the short position is
closed out.
Until the Fund closes its short position or replaces the borrowed
security, the Fund will: (a) maintain a segregated account, containing cash
or U.S. Government securities, at such a level that (i) the amount
deposited in the account plus the amount deposited with the broker as
collateral will equal the current value of the security sold short and (ii)
the amount deposited in the segregated account plus the amount deposited
with the broker as collateral will not be less than the market value of the
security at the time it was sold short; or (b) otherwise cover its short
position.
The Fund will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on
which the Fund replaces the borrowed security. The Fund will realize a
gain if the security declines in price between those dates. This result is
the opposite of what one would expect from a cash purchase of a long
position in a security. The amount of any gain will be decreased, and the
amount of any loss increased, by the amount of any premium or amounts in
lieu of dividends or interest the Fund may be required to pay in connection
with a short sale.
The Fund may purchase call options to provide a hedge against an
increase in the price of a security sold short by the Fund. When the Fund
purchases a call option it has to pay a premium to the person writing the option
and a commission to the broker selling the option. If the option is exercised by
the Fund, the premium and the commission paid may be more than the amount of the
brokerage commission charged if the security were to be purchased directly. See
"Call and Put Options on Specific Securities" below.
The Fund anticipates that the frequency of short sales will vary
substantially under different market conditions, and it does not intend
that any specified portion of its assets, as a matter of practice, will be
invested in short sales. However, no securities will be sold short if, after
effect is given to any such short sale, the total market value of all
securities sold short would exceed 25% of the value of the Fund's net
assets. The Fund may not sell short the securities of any single issuer
listed on a national securities exchange to the extent of more than 5% of
the value of the Fund's net assets. The Fund may not sell short the
securities of any class of an issuer to the extent, at the time of the
transaction, of more than 5% of the outstanding securities of that class.
In addition to the short sales discussed above, the Fund may make short
sales "against the box," a transaction in which the Fund enters into a
short sale of a security which the Fund owns. The proceeds of the short
sale will be held by a broker until the settlement date at which time the
Fund delivers the security to close the short position. The Fund receives
the net proceeds from the short sale. The Fund at no time will have more
than 15% of the value of its net assets in deposits on short sales against
the box. It currently is anticipated that the Fund will make short sales
against the box for purposes of protecting the value of the Fund's net
assets.
(6)
CALL AND PUT OPTIONS ON SPECIFIC SECURITIES - The Fund may invest up
to 5% of its assets, represented by the premium paid, in the purchase of
call and put options in respect of specific securities (or groups or
"baskets" of specific securities) in which the Fund may invest. The Fund
may write covered call and put option contracts to the extent of 20% of
the value of its net assets at the time such option contracts are written.
A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security or securities at the
exercise price at any time during the option period. Conversely, a put
option gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security or securities at the exercise price
at any time during the option period. A covered call option sold by the
Fund, which is a call option with respect to which the Fund owns the
underlying security or securities, exposes the Fund during the term of the
option to possible loss of opportunity to realize appreciation in the
market price of the underlying security or securities or to possible
continued holding of a security or securities which might otherwise have
been sold to protect against depreciation in the market price. A covered
put option sold by the Fund exposes the Fund during the term of the option
to a decline in price of the underlying security or securities. A put option
sold by the Fund is covered when, among other things, cash or liquid
securities are placed in a segregated account with the Fund's custodian to
fulfill the obligation undertaken.
To close out a position when writing covered options, the Fund may
make a "closing purchase transaction," which involves purchasing an
option on the same security or securities with the same exercise price
and expiration date as the option which it has previously written. To close
out a position as a purchaser of an option, the Fund may make a "closing
sale transaction," which involves liquidating the Fund's position by
selling the option previously purchased. The Fund will realize a profit or
loss from a closing purchase or sale transaction depending upon the
difference between the amount paid to purchase an option and the amount
received from the sale thereof
The Fund intends to treat certain options in respect of specific
securities that are not traded on a national securities exchange by the
Fund as illiquid securities. See "Certain Portfolio Securities_Illiquid
Securities" below.
The Fund will purchase options only to the extent permitted by the
policies of state securities authorities in states where shares of the Fund
are qualified for offer and sale.
STOCK INDEX OPTIONS - The Fund may purchase and write put and call
options on stock indexes listed on national securities exchanges or traded
in the over-the-counter market. A stock index fluctuates with
changes in the market values of the stocks included in the index.
The effectiveness of purchasing or writing stock index options will
depend upon the extent to which price movements in the Fund's portfolio
correlate with price movements of the stock index selected. Because the
value of an index option depends upon movements in the level of the index
rather than the price of a particular stock, whether the Fund will realize a
gain or loss from the purchase or writing of options on an index depends
upon movements in the level of stock prices in the stock market generally
or, in the case of certain indexes, in an industry or market segment, rather
than movements in the price of a particular stock. Accordingly, successful
use by the Fund of options on stock indexes will be subject to The Dreyfus
Corporation's ability to predict correctly movements in the direction of
the stock market generally or of a particular industry. This requires
different skills and techniques than predicting changes in the price of
individual stocks.
When the Fund writes an option on a stock index, the Fund will place in
a segregated account with its custodian cash or liquid securities in an
amount at least equal to the market value of the underlying stock index
and will maintain the account while the option is open or otherwise will
cover the transaction.
FUTURES TRANSACTIONS - IN GENERAL - The Fund will not be a commodity
pool. However, as a substitute for a comparable market position in the
underlying securities and for hedging purposes, the Fund may engage in
futures and options on futures transactions, as described below.
The Fund may trade futures contracts and options on futures contracts in
U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange, or,
(7)
to the extent permitted under applicable law, on exchanges located
outside the United States, such as the London International Financial
Futures Exchange and the Sydney Futures Exchange Limited. Foreign
markets may offer advantages such as trading in commodities that are not
currently traded in the United States or arbitrage possibilities not
available in the United States. Foreign markets, however, may have
greater risk potential than domestic markets. See "Risk Factors_Foreign
Commodity Transactions" below.
The Fund's commodities transactions must constitute bona fide hedging
or other permissible transactions pursuant to regulations promulgated by
the Commodity Futures Trading Commission (the "CFTC"). In addition, the
Fund may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity
options, other than for bona fide hedging transactions, would exceed 5% of
the liquidation value of the Fund's assets, after taking into account
unrealized profits and unrealized losses on such contracts it has entered
into; provided, however, that in the case of an option that is in-the-money
at the time of purchase, the in-the-money amount may be excluded in
calculating the 5%. Pursuant to regulations and/or published positions of
the Securities and Exchange Commission, the Fund may be required to
segregate cash or high quality money market instruments in connection
with its commodities transactions in an amount generally equal to the
value of the underlying commodity. The segregation of such assets will
have the effect of limiting the Fund's ability to otherwise invest those
assets.
Initially, when purchasing or selling futures contracts the Fund will be
required to deposit with its custodian in the broker's name an amount of
cash or cash equivalents up to approximately 10% of the contract amount.
This amount is subject to change by the exchange or board of trade on
which the contract is traded and members of such exchange or board of
trade may impose their own higher requirements. This amount is known as
"initial margin" and is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of
the futures position, assuming all contractual obligations have been
satisfied. Subsequent payments, known as "variation margin," to and from
the broker will be made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known
as "marking-to-market." At any time prior to the expiration of a futures
contract, the Fund may elect to close the position by taking an opposite
position, at the then prevailing price, which will operate to terminate the
Fund's existing position in the contract.
Although the Fund intends to purchase or sell futures contracts only
if there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any
particular time. Many futures exchanges and boards of trade limit the
amount of fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in
a particular contract, no trades may be made that day at a price beyond
that limit or trading may be suspended for specified periods during the
trading day. Futures contract prices could move to the limit for several
consecutive trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and potentially subjecting the
Fund to substantial losses. If it is not possible, or the Fund determines
not, to close a futures position in anticipation of adverse price
movements, the Fund will be required to make daily cash payments of
variation margin. In such circumstances, an increase in the value of the
portion of the portfolio being hedged, if any, may offset partially or
completely losses on the futures contract. However, no assurances can be
given that the price of the securities being hedged will correlate with the
price movements in a futures contract and thus provide an offset to losses
on the futures contract.
In addition, to the extent the Fund is engaging in a futures transaction
as a hedging device, due to the risk of an imperfect correlation between
securities in the Fund's portfolio that are the subject of a hedging
transaction and the futures contract used as a hedging device, it is
possible that the hedge will not be fully effective in that, for example,
losses on the portfolio securities may be in excess of gains on the futures
contract or losses on the futures contract may be in excess of gains on the
portfolio securities that were the subject of the hedge. In futures
contracts based on indexes, the risk of imperfect correlation increases as
the composition of the Fund's portfolio varies from the composition of the
index. In an effort to compensate for the imperfect correlation of
movements in the price of the securities being hedged and movements in
the price of futures contracts,
(8)
the Fund may buy or sell
futures contracts in a greater or lesser dollar amount than the dollar
amount of the securities being hedged if the historical volatility of the
futures contract has been less or greater than that of the securities. Such
"over hedging" or "under hedging" may adversely affect the Fund's net
investment results if market movements are not as anticipated when the
hedge is established.
Successful use of futures by the Fund also is subject to The Dreyfus
Corporation's ability to predict correctly movements in the direction of
the market or interest rates. For example, if the Fund has hedged against
the possibility of a decline in the market adversely affecting the value of
securities held in its portfolio and prices increase instead, the Fund will
lose part or all of the benefit of the increased value of securities which it
has hedged because it will have offsetting losses in its futures positions.
In addition, in such situations, if the Fund has insufficient cash, it may
have to sell securities to meet daily variation margin requirements. Such
sales of securities may but will not necessarily, be at increased prices
which reflect the rising market. The Fund may have to sell securities at a
time when it may be disadvantageous to do so.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put)
at a specified exercise price at any time during the option exercise period.
The writer of the option is required upon exercise to assume an offsetting
futures position (a short position if the option is a call and a long position
if the option is a put). Upon exercise of the option, the assumption of
offsetting futures positions by the writer and holder of the option will be
accompanied by delivery of the accumulated cash balance in the writer's
futures margin amount which represents the amount by which the market
price of the futures contract, at exercise, exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Call options sold by the Fund with respect to futures contracts will be
covered by, among other things, entering into a long position in the same
contract at a price no higher than the strike price of the call option, or by
ownership of the instruments underlying, or instruments the prices of
which are expected to move relatively consistently with the instruments
underlying, the futures contract. Put options sold by the Fund with respect
to futures contracts will be covered in the same manner as put options on
specific securities as described above.
STOCK INDEX FUTURES AND OPTIONS ON STOCK INDEX FUTURES - The Fund
may purchase and sell stock index futures contracts and options on stock
index futures contracts.
A stock index future obligates the seller to deliver (and the purchaser
to take) an amount of cash equal to a specific dollar amount times the
difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is
made. No physical delivery of the underlying stocks in the index is made. With
respect to stock indexes that are permitted investments, the Fund intends to
purchase and sell futures contracts on the stock index for which it can obtain
the best price with consideration also given to liquidity.
The Fund may use index futures as a substitute for a comparable market
position in the underlying securities.
There can be no assurance of the Fund's successful use of stock index
futures as a hedging device. In addition to the possibility that there may
be an imperfect correlation, or no correlation at all, between movements
in the stock index future and the portion of the portfolio being hedged, the
price of stock index futures may not correlate perfectly with the
movement in the stock index because of certain market distortions. First,
all participants in the futures market are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which would distort the normal relationship between the
index and futures markets. Secondly, from the point of view of
speculators, the deposit requirements in the futures market are less
onerous than margin requirements in the securities market. Therefore,
increased participation by speculators in the futures market also may
cause temporary price distortions. Because of the possibility of price
distortions in the futures market and the imperfect correlation between
movements in the stock index and movements in the price of stock index
futures, a correct forecast of general market trends by The Dreyfus
Corporation still may not result in a successful hedging transaction.
(9)
INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE
FUTURES CONTRACTS - The Fund may invest in interest rate futures
contracts and options on interest rate futures contracts as a substitute
for a comparable market position and to hedge against adverse movements
in interest rates.
To the extent the Fund has invested in interest rate futures contracts
or options on interest rate futures contracts as a substitute for a
comparable market position, the Fund will be subject to the investment
risks of having purchased the securities underlying the contract.
The Fund may purchase call options on interest rate futures contracts
to hedge against a decline in interest rates and may purchase put options
on interest rate futures contracts to hedge its portfolio securities
against the risk of rising interest rates.
The Fund may sell call options on interest rate futures contracts to
partially hedge against declining prices of portfolio securities. If the
futures price at expiration of the option is below the exercise price, the
Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's
portfolio holdings. The Fund may sell put options on interest rate futures
contracts to hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contracts. If the futures price at
expiration of the option is higher than the exercise price, the Fund will
retain the full amount of the option premium which provides a partial
hedge against any increase in the price of securities which the Fund
intends to purchase. If a put or call option sold by the Fund is exercised,
the Fund will incur a loss which will be reduced by the amount of the
premium it receives. Depending on the degree of correlation between
changes in the value of its portfolio securities and changes in the value of
its futures positions, the Fund's losses from existing options on futures
may to some extent be reduced or increased by changes in the value of its
portfolio securities.
The Fund also may sell options on interest rate futures contracts as
part of closing purchase transactions to terminate its options positions.
No assurance can be given that such closing transactions can be effected
or that there will be correlation between price movements in the options
on interest rate futures and price movements in the Fund's portfolio
securities which are the subject of the hedge. In addition, the Fund's
purchase of such options will be based upon predictions as to anticipated
interest rate trends, which could prove to be inaccurate.
CURRENCY FUTURES AND OPTIONS ON CURRENCY FUTURES - The Fund may
purchase and sell currency futures contracts and options thereon. See
"Call and Put Options on Specific Securities" above. By selling foreign
currency futures, the Fund can establish the number of
U.S. dollars it will receive in the delivery month for a certain amount of a
foreign currency. In this way, if the Fund anticipates a decline of a foreign
currency against the U.S. dollar, the Fund can attempt to fix the U.S. dollar
value of some or all of the securities held in its portfolio that are
denominated in that currency. By purchasing foreign currency futures, the
Fund can establish the number of U.S. dollars it will be required to pay for
a specified amount of a foreign currency in the delivery month. Thus, if
the Fund intends to buy securities in the future and expects the U.S. dollar
to decline against the relevant foreign currency during the period before
the purchase is effected, the Fund, for the price of the currency future,
can attempt to fix the price in U.S. dollars of the securities it intends to
acquire.
The purchase of options on currency futures will allow the Fund, for the
price of the premium it must pay for the option, to decide whether or not
to buy (in the case of a call option) or to sell (in the case of a put option)
a futures contract at a specified price at any time during the period
before the option expires. If the Fund in purchasing an option has been
correct in its judgment concerning the direction in which the price of a
foreign currency would move as against the U.S. dollar, it may exercise the
option and thereby take a futures position to hedge against the risk it had
correctly anticipated or close out the option position at a gain that will
offset, to some extent, currency exchange losses otherwise suffered by
the Fund. If exchange rates move in a way the Fund did not anticipate, the
Fund will have incurred the expense of the option without obtaining the
expected benefit. As a result, the Fund's profits on the underlying
securities transactions may be reduced or overall losses incurred.
OPTIONS ON SWAPS - The Fund may purchase cash-settled options on
interest rate swaps, interest rate swaps denominated in foreign currency
and equity index swaps in pursuit of its investment objective. Interest
rate swaps involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest (for example, an
exchange of floating-rate payments for fixed-rate payments) denominated
in U.S. dollars or for-
(10)
eign currency. Equity index swaps involve the
exchange by the Fund with another party of cash flows based upon the
performance of an index or a portion of an index of securities which
usually include dividends. A cash-settled option on a swap gives the
purchaser the right, but not the obligation, in return for the premium paid,
to receive an amount of cash equal to the value of the underlying swap as
of the exercise date. These options typically are purchased in privately
negotiated transactions from financial institutions, including securities
brokerage firms.
LENDING PORTFOLIO SECURITIES - From time to time, the Fund may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain
transactions. Such loans may not exceed 331/3% of the value of the Fund's
total assets. In connection with such loans, the Fund will receive
collateral consisting of cash, U.S. Government securities or irrevocable
letters of credit which will be maintained at all times in an amount equal
to at least 100% of the current market value of the loaned securities. The
Fund can increase its income through the investment of such collateral.
The Fund continues to be entitled to payments in amounts equal to the
interest, dividends or other distributions payable on the loaned security
and receives interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. The Fund might experience
risk of loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
FUTURE DEVELOPMENTS - The Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other derivative investment which are not presently contemplated
for use by the Fund or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the
Fund's investment objective and legally permissible for the Fund. Before
entering into such transactions or making any such investment, the Fund
will provide appropriate disclosure in its prospectus.
FORWARD COMMITMENTS - The Fund may purchase securities on a when-
issued or forward commitment basis, which means that the price is fixed
at the time of commitment, but delivery and payment ordinarily take place
a number of days after the date of the commitment to purchase. The Fund
will make commitments to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities before
the settlement date if it is deemed advisable. The Fund will not accrue income
in respect of a security purchased on a when-issued or forward
commitment basis prior to its stated delivery date.
Securities purchased on a when-issued or forward commitment basis
and certain other securities held in the Fund's portfolio are subject to
changes in value (both generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a when issued or forward commitment basis may
expose the Fund to risk because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued or
forward commitment basis can involve the additional risk that the yield
available in the market when the delivery takes place actually may be
higher than that obtained in the transaction itself. A segregated account
of the Fund consisting of cash, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at least equal at all
times to the amount of the when-issued or forward commitments will be
established and maintained at the Fund's custodian bank. Purchasing
securities on a when-issued or forward commitment basis when the Fund
is fully or almost fully invested may result in greater potential
fluctuations in the value of the Fund's net assets and its net asset value
per share.
CERTAIN PORTFOLIO SECURITIES
AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS - The
Fund's assets may be invested in the securities of foreign issuers in the
form of American Depositary Receipts ("ADRs") and European Depositary
Receipts ("EDRs"). These securities may not necessarily be denominated in
the same currency as the securities into which they may be converted. ADRs
are receipts typically issued by a United States bank or trust company
which evidence ownership of underlying securities issued by a foreign
corporation. EDRs, which are sometimes referred to as Continental
Depositary Receipts ("CDRs"), are receipts issued in Europe
typically by non-United States banks and trust companies that evidence
ownership of either foreign or domestic securities. Generally, ADRs in
registered form are designed for use in the United States securities
markets and EDRs and CDRs in bearer form are designed for use in Europe.
The Fund may invest in ADRs, EDRs
(11)
and CDRs through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by
the issuer of the underlying security and a depositary, whereas a
depositary may establish an unsponsored facility without participation by
the issuer of the deposited security. Holders of unsponsored depositary
receipts generally bear all the costs of such facilities and the depositary
of an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the deposited securities.
CONVERTIBLE SECURITIES - The Fund may purchase convertible securities,
which are fixed-income securities, such as bonds or preferred stock,
which may be converted at a stated price within a specified period of time
into a specified number of shares of common stock of the same or a
different issuer. Convertible securities are senior to common stock in a
corporation's capital structure, but usually are subordinated to non-
convertible debt securities. While providing a fixed-income stream
(generally higher in yield than the income derivable from common stock
but lower than that afforded by a non-convertible debt security), a
convertible security also affords an investor the opportunity, through its
conversion feature, to participate in the capital appreciation of the
common stock into which it is convertible.
In general, the market value of a convertible security is the higher of
its "investment value" (i.e., its value as a fixed-income security) or its
"conversion value" (i.e., the value of the underlying shares of common
stock if the security is converted). As a fixed-income security, the market
value of a convertible security generally increases when interest rates
decline and generally decreases when interest rates rise. However, the
price of a convertible security also is influenced by the market value of
the security's underlying common stock. Thus, the price of a convertible
security generally increases as the market value of the underlying stock
increases, and generally decreases as the market value of the underlying
stock declines. Investments in convertible securities generally entail less risk
than investments in the common stock of the same issuer.
U.S. GOVERNMENT SECURITIES - The Fund may purchase securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities,
which include U.S. Treasury securities that differ in their interest rates,
maturities and times of issuance. Treasury Bills have initial maturities of
one year or less, Treasury Notes have initial maturities of one to ten
years; and Treasury Bonds generally have initial maturities of greater
than ten years. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National
Mortgage Association pass through certificates, are supported by the full
faith and credit of the U.S. Treasury; others, such as those of the Federal
Home Loan Banks, by the right of the issuer to borrow from the Treasury;
others, such as those issued by the Federal National Mortgage Association,
by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of the
agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government-
sponsored agencies or instrumentalities, no assurance can be given that it
will always do so, because the U.S. Government is not obligated to do so by
law. The Fund will invest in such securities only when it is satisfied that
the credit risk with respect to the issuer is minimal.
ZERO COUPON SECURITIES - The Fund may invest in zero coupon U.S.
Treasury securities, which are Treasury Notes and Bonds that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. The Fund also may invest in zero coupon
securities issued by corporations and financial institutions which consti-
tute a proportionate ownership of the issuer's pool of underlying U.S.
Treasury securities. A zero coupon security pays no interest to its holder
during its life and is sold at a discount to its face value at maturity. The
amount of the discount fluctuates with the market price of the security.
The market prices of zero coupon securities generally are more volatile
than the market prices of securities that pay interest periodically and are
likely to respond to a greater degree to changes in interest rates than
non-zero coupon securities having similar maturities and credit qualities.
(12)
BANK OBLIGATIONS - The Fund may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries of domestic banks, foreign branches
of domestic banks, and domestic and foreign branches of foreign banks,
domestic savings and loan associations and other banking institutions.
With respect to such securities issued by foreign branches of domestic
banks, foreign subsidiaries of domestic banks, and domestic and foreign
branches of foreign banks, the Fund maybe subject to additional
investment risks that are different in some respects from those incurred
by a fund which invests only in debt obligations of U.S. domestic issuers.
Such risks include possible future political and economic developments,
the possible imposition of foreign withholding taxes on interest income
payable on the securities, the possible establishment of exchange controls
or the adoption of other foreign governmental restrictions which might
adversely affect the payment of principal and interest on these securities
and the possible seizure or nationalization of foreign deposits.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. The
Fund will invest in time deposits of domestic banks that have total assets
in excess of one billion dollars. Time deposits which may be held by the
Fund will not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the Federal Deposit
Insurance Corporation. The Fund will not invest more than 10% of the value
of its net assets in time deposits that are illiquid and in other illiquid
securities.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. The other short-term obligations may
include uninsured, direct obligations bearing fixed, floating or variable
interest rates.
REPURCHASE AGREEMENTS - Repurchase agreements involve the
acquisition by the Fund of an underlying debt instrument, subject to an
obligation of the seller to repurchase, and the Fund to resell, the
instrument at a fixed price usually not more than one week after its
purchase. The Fund's custodian or sub-custodian will have custody of, and
will hold in a segregated account, securities acquired by the Fund under a
repurchase agreement. Repurchase agreements are considered by the staff
of the Securities and Exchange Commission to be loans by the Fund. In an
attempt to reduce the risk of incurring a loss on repurchase agreements,
the Fund will enter into repurchase agreements only with domestic banks
with total assets in excess of one billion dollars, or primary government
securities dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the Fund may invest, and will
require that additional securities be deposited with it if the value of the
securities purchased should decrease below resale price. The Dreyfus
Corporation will monitor on an ongoing basis the value of the collateral to
assure that it always equals or exceeds the repurchase price. Certain
costs may be incurred by the Fund in connection with the sale of the
securities if the seller does not repurchase them in accordance with the
repurchase agreement. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the securities, realization on the
securities by the Fund may be delayed or limited. The Fund will consider
on an ongoing basis the creditworthiness of the institutions with which it
enters into repurchase agreements.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS -
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper
purchased by the Fund will consist only of direct obligations which, at the
time of their purchase, are (a) rated not
lower than Prime-1 by Moody's, A-1 by S&P, F-1 by Fitch or Duff-1 by Duff, (b)
issued by companies having an outstanding unsecured debt issue currently
rated not lower than Aa3 by Moody's or AA - by S&P, Fitch or Duff, or (c) if
unrated, determined by The Dreyfus Corporation to be of comparable
quality to those rated obligations which may be purchased by the Fund. The
Fund may purchase floating and variable rate demand notes and bonds,
which are obligations ordinarily having stated maturities in excess of one
year, but which permit the holder to demand payment of principal at any
time or at specified intervals. Variable rate demand notes
(13)
include variable amount master demand notes, which are obligations that permit
the Fund to invest fluctuating amounts at varying rates of interest pursuant to
direct arrangements between the Fund, as lender, and the borrower. These
notes permit daily changes in the amounts borrowed. As mutually agreed
between the parties, the Fund may increase the amount under the notes at
any time up to the full amount provided by the note agreement, or decrease
the amount, and the borrower may repay up to the full amount of the note
without penalty. Because these obligations are direct lending
arrangements between the lender and borrower, it is not contemplated
that such instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they are
redeemable at face value, plus accrued interest, at any time. Accordingly,
where these obligations are not secured by letters of credit or other
credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. In
connection with floating and variable rate demand note obligations, The
Dreyfus Corporation will consider, on an ongoing basis, earning power,
cash flows and other liquidity ratios of the borrower, and the borrower's
ability to pay principal and interest on demand. Such obligations
frequently are not rated by credit rating agencies, and the Fund may invest
in them only if at the time of an investment the borrower meets the
criteria set forth above for other commercial paper issuers.
MORTGAGE-RELATED SECURITIES _ The Fund may invest in mortgage-
related securities which are collateralized by pools of mortgage loans
assembled for sale to investors by various governmental agencies, such as
Government National Mortgage Association and government-related
organizations such as Federal National Mortgage Association and Federal
Home Loan Mortgage Corporation, as well as by private issuers such as
commercial banks, savings, loan institutions, mortgage banks and private
mortgage insurance companies, and similar foreign entities. The
mortgage-related securities in which the Fund may invest include those
with fixed, floating and variable interest rates, those with interest rates
that change based on multiples of changes in interest rates and those with
interest rates that change inversely to changes in interest rates, as well
as stripped mortgage-backed securities which are derivative multiclass
mortgage securities. Stripped mortgage-backed securities usually are
structured with two classes that receive different proportions of interest
and principal distributions on a pool of mortgage-backed securities or
whole loans. A common type of stripped mortgage-backed security will
have one class receiving some of the interest and most of the principal
from the mortgage collateral, while the other class will receive most of
the interest and the remainder of the principal. In the most extreme case,
one class will receive all of the interest (the interest only or "IO" class),
while the other class will receive all of the principal (the principal-only
or "PO" class). Although certain mortgage-related securities are
guaranteed by a third party or otherwise similarly secured, the market
value of the security, which may fluctuate, is not so secured. If the Fund
purchases a mortgage-related security at a premium, all or part of the
premium may be lost if there is a decline in the market value of the
security, whether resulting from changes in interest rates or prepayments
in the underlying mortgage collateral. As with other interest-bearing
securities, the prices of certain mortgage-backed securities are inversely
affected by changes in interest rates, while others, which the Fund may
purchase, may be structured so that their interest rates will fluctuate
inversely (and thus their price will increase as interest rates rise and
decrease as interest rates fall) in response to changes in interest rates.
Though the value of a mortgage-related security may decline when
interest rates rise, the converse is not necessarily true, since in periods
of declining interest rates the mortgages underlying the security are more
likely to prepay. For this and other reasons, a mortgage-related security's
stated maturity may be shortened by unscheduled prepayments on the
underlying mortgages and, therefore, it is not possible to predict
accurately the security's return to the Fund. Moreover, with respect to
stripped mortgage-backed securities, if the underlying mortgage
securities experience greater than anticipated prepayments of
principal, the Fund may fail to fully recoup its initial investment in these
securities even if the securities are rated in the highest rating category
by a nationally recognized statistical rating organization. In addition,
regular payments received in respect of mortgage related securities
include both interest and principal. No assurance can be given as to the
return the Fund will receive when these amounts are reinvested. The Fund
also may invest in collateralized mortgage obligations structured on pools
of mortgage pass-through certificates or mortgage loans. Collateralized
mortgage obligations will be
(14)
purchased only if rated in one of the two highest rating categories by a
nationally recognized statistical rating
organization such as Moody's, S&P, Fitch or Duff, or, if unrated, deemed to
be of comparable quality by The Dreyfus Corporation. For further
discussion concerning the investment considerations involved see "Risks
Factors-Other Investment Considerations" below, and "Investment
Objective and Management Policies- Portfolio Securities-Mortgage-
Related Securities" in the Fund's Statement of Additional Information.
MUNICIPAL OBLIGATIONS - Municipal obligations are debt obligations
issued by states, territories and possessions of the United States and the
District of Columbia and their political subdivisions, agencies and
instrumentalities, or multistate agencies or authorities. While in general,
municipal obligations are tax exempt securities having relatively low
yields as compared to taxable, non-municipal obligations of similar
quality, certain issues of municipal obligations, both taxable and non-
taxable, offer yields comparable and in some cases greater than the yields
available on other permissible Fund investments. Municipal obligations
generally include debt obligations issued to obtain funds for various
public purposes as well as certain industrial development bonds issued by
or on behalf of public authorities. Municipal obligations are classified as
general obligation bonds, revenue bonds and notes. General obligation
bonds are secured by the issuer's pledge of its faith, credit and taxing
power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Industrial
development bonds, in most cases, are revenue bonds and generally do not
carry the pledge of the credit of the issuing municipality, but generally
are guaranteed by the corporate entity on whose behalf they are issued.
Notes are short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a bond sale,
collection of taxes or receipt of other revenues. Municipal obligations
include municipal lease/purchase agreements which are similar to
installment purchase contracts for property or equipment issued by
municipalities. Municipal obligations bear fixed, floating or variable rates
of interest which are determined in some instances by formulas under
which the municipal obligation's interest rate will change directly or
inversely to changes in interest rates or an index, or multiples thereof, in
many cases subject to a maximum and minimum. Certain municipal
obligations are subject to redemption at a date earlier than their stated
maturity pursuant to call options, which may be separated from the
related municipal obligations and purchased and sold separately. The Fund
also may acquire call options on specific municipal obligations. The Fund
generally would purchase these call options to protect the Fund from the
issuer of the related municipal obligation redeeming, or other holder of
the call option from calling away, the municipal obligation before
maturity. The Fund will invest in municipal obligations, the ratings of
which correspond with the ratings of other permissible Fund investments.
Dividends received by shareholders on Fund shares which are attributable
to interest income received by the Fund from municipal obligations
generally will be subject to Federal income tax. It is currently the Fund's
intention to invest no more than 25% of its assets in municipal
obligations. However, this percentage may be varied from time to time
without shareholder approval.
WARRANTS - The Fund may invest up to 2% of its net assets in warrants,
except that this limitation does not apply to warrants acquired in units or
attached to securities . A warrant is an instrument issued by a
corporation which gives the holder the right to subscribe to a specified
amount of the corporation's capital stock at a set price for a specified
period of time.
CLOSED-END INVESTMENT COMPANIES - The Fund may invest in securities
issued by closed-end investment companies which principally invest in
securities of foreign issuers. Under the Investment Company Act of 1940,
the Fund's investment in such securities currently is limited to (i) 3% of
the total voting stock of any one
investment company, (ii) 5% of the Fund's net assets with respect to any one
investment company and (iii) 10% of the Fund's net assets in the aggregate.
Investments in the securities of other investment companies may involve
duplication of advisory fees and certain other expenses.
ILLIQUID SECURITIES - The Fund may invest up to 10% of the value of its
net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that
(15)
are subject to legal or contractual restrictions on resale, repurchase
agreements providing for settlement in more than seven days after notice,
certain options traded in the over-the-counter market and securities used
to cover such options, and certain mortgage-backed securities, such as certain
collateralized mortgage obligations and stripped mortgage-backed securities.
As to these securities, the Fund is subject to a risk that should the Fund
desire to sell them when a ready buyer is not available at a price the Fund
deems representative of their value, the value of the Fund's net assets could be
adversely affected. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a lapse
of time between the Fund's decision to sell any such security and the
registration of the security permitting sale. During any such period, the
price of the securities will be subject to market fluctuations. However, if
a substantial market of qualified institutional buyers develops pursuant
to Rule 144A under the Securities Act of 1933, as amended, for certain
unregistered securities held by the Fund, the Fund intends to treat such
securities as liquid securities in accordance with procedures approved by
the Fund's Board of Directors. Because it is not possible to predict with
assurance how the market for restricted securities pursuant to Rule 144A
will develop, the Fund's Board of Directors has directed The Dreyfus
Corporation to monitor carefully the Fund's investments in such securities
with particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
RATINGS - The ratings of the various rating agencies represent their
opinions as to the quality of the obligations which they undertake to rate. It
should be emphasized, however, that
ratings are relative and subjective and, although ratings may be useful in
evaluating the safety of interest and principal payments, they do not
evaluate the market value risk of such obligations. Therefore, although
these ratings may be an initial criterion for selection of portfolio
investments, The Dreyfus Corporation also will evaluate such obligations
and the ability of their issuers to pay interest and principal. The Fund will
rely on The Dreyfus Corporation's judgment, analysis and experience in
evaluating the creditworthiness of an issuer. In this evaluation, The
Dreyfus Corporation will take into consideration, among other things, the
issuer's financial resources, its sensitivity to economic conditions and
trends, the quality of the issuer's management and regulatory matters. It
also is possible that a rating agency might not timely change the rating on
a particular issue to reflect subsequent events. Once the rating of a
security in the Fund's portfolio has been changed, The Dreyfus Corporation
will consider all circumstances deemed relevant in determining whether
the Fund should continue to hold the security.
CERTAIN FUNDAMENTAL POLICIES - The Fund may (i) purchase securities of
any company having less than three years' continuous operation (including
operations of any predecessors) if such purchase does not cause the value
of the Fund's investments in all such companies to exceed 5% of the value
of its total assets; (ii) borrow money and pledge, hypothecate, mortgage
or otherwise encumber its assets, but only as stated in this Prospectus
and the Fund's Statement of Additional Information; (iii) invest up to 25%
of the value of its total assets in the securities of issuers in a single
industry; and (iv) invest up to 10% of its net assets in repurchase
agreements providing for settlement in more than seven days after notice
and in other securities that are illiquid. This paragraph describes
fundamental policies that cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940)
of the Fund's outstanding voting shares. See "Investment Objective and
Management Policies-Investment Restrictions" in the Statement of
Additional Information.
RISK FACTORS
INVESTING IN FOREIGN SECURITIES - Foreign securities markets generally
are not as developed or efficient as those in the United States. Securities
of some foreign issuers are less liquid and more volatile than securities
of comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States. The issuers of
some of these securities, such as foreign bank obligations, may be subject
to less stringent or different regulations than are U.S. issuers. In addition,
there may be less publicly available information about a non-U.S. issuer,
and
(16)
non-U.S. issuers generally are not subject to uniform accounting and
financial reporting standards, practices and requirements comparable to
those applicable to U.S. issuers.
Because stock certificates and other evidences of ownership of such
securities usually are held outside the United States, the Fund will be
subject to additional risks which include possible adverse political and
economic developments, possible seizure or nationalization of foreign
deposits and possible adoption of governmental restrictions that might
adversely affect the payment of principal and interest on the foreign
securities or might restrict the payment of principal and interest to
investors located outside the country of the issuers, whether from
currency blockage or otherwise. Custodial expenses for a portfolio of non-
U.S. securities generally are higher than for a portfolio of U.S. securities.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations. Some currency exchange
costs may be incurred when the Fund changes investments from one
country to another.
Furthermore, some of these securities may be subject to brokerage
taxes levied by foreign governments, which have the effect of increasing
the cost of such investment and reducing the realized gain or increasing
the realized loss on such securities at the time of sale. Income received
by the Fund from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax conventions
between certain countries and the United States, however, may reduce or
eliminate such taxes. All such taxes paid by
the Fund will reduce its net income available for distribution to investors.
FOREIGN CURRENCY EXCHANGE - Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central
banks, or the failure to intervene, or by currency controls or political
developments in the United States or abroad.
The foreign currency market offers less protection against defaults in
the forward trading of currencies than is available when trading in
currencies occurs on an exchange. Since a forward currency contract is not
guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
FOREIGN COMMODITY TRANSACTIONS - Unlike trading on domestic
commodity exchanges, trading on foreign commodity exchanges is not
regulated by the CFTC and may be subject to greater risks than trading on
domestic exchanges. For example, some foreign exchanges are principal
markets so that no common clearing facility exists and a trader may look
only to the broker for performance of the contract. In addition, unless the
Fund hedges against fluctuations in the exchange rate between the U.S.
dollar and the currencies in which trading is done on foreign exchanges,
any profits that the Fund might realize in trading could be eliminated by
adverse changes in the exchange rate, or the Fund could incur losses as a
result of those changes. Transactions on foreign exchanges may include
both commodities which are traded on domestic exchanges and those
which are not.
LOWER RATED SECURITIES - You should carefully consider the relative
risks of investing in the higher yielding (and, therefore, higher risk) debt
securities in which the Fund may invest. These are securities such as
those rated Ba by Moody's or BB by S&P, Fitch or Duff or as
low as Caa by Moody's or CCC by S&P, Fitch or Duff. They generally are not
meant for short-term investing and may be subject to certain risks with
respect to the issuing entity and to greater market fluctuations than
certain lower yielding, higher rated fixed-income securities. Securities
rated Ba by Moody's are judged to have speculative elements; their future
cannot be considered as well assured and often the protection of interest
and principal payments may be very moderate. Securities rated BB by S&P,
Fitch or Duff are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face major
ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments. Securities rated Caa by
(17)
Moody's or CCC by S&P, Fitch or Duff are of poor standing and may be in default
or have current identifiable vulnerability to default. Such obligations, though
high yielding, are characterized by great risk. See "Appendix" in the Fund's
Statement of Additional Information for a general description of Moody's,
S&P, Fitch and Duff securities ratings. Although these ratings may be an
initial criterion for selection of portfolio investments, The Dreyfus
Corporation also will evaluate these securities and the ability of the
issuers of such securities to pay interest and principal. The Fund's ability
to achieve its investment objective may be more dependent on The Dreyfus
Corporation's credit analysis than might be the case for a fund that
invested in higher rated securities. See "Certain Portfolio
Securities-Ratings" above.
The market price and yield of securities rated Ba or lower by Moody's
and BB or lower by S&P, Fitch and Duff are more volatile than those of
higher rated securities. Factors adversely affecting the market price and
yield of these securities will adversely affect the Fund's net asset value.
In addition, the retail secondary market for these securities may be less
liquid than that of higher rated securities; adverse conditions could make
it difficult at times for the Fund to sell certain securities or could result
in lower prices than those used in calculating the Fund's asset value.
The market values of certain lower rated debt securities tend to reflect
individual corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates, and tend to be more sensitive to economic conditions than
are higher rated securities. Companies that issue such debt securities
often are highly leveraged and may not have available to them more
traditional methods of financing. Therefore, the risk associated with
acquiring the securities of such issuers generally is greater than is the
case with higher rated securities. See "Investment Objective and
Management Policies-Risk Factors_Lower Rated Securities" in the Fund's
Statement of Additional Information.
OTHER INVESTMENT CONSIDERATIONS - The Fund's net asset value is not
fixed and should be expected to fluctuate. You should purchase Fund shares
only as a supplement to an overall investment program and only if you are
willing to undertake the risks involved.
The use of investment techniques such as short-selling, engaging in
financial futures and options transactions, leverage through borrowing,
purchasing securities on a forward commitment basis and lending
portfolio securities, and the purchase of certain stripped mortgage-
backed securities and zero coupon securities, involves greater risk than
that incurred by many other funds with similar objectives. Using these
techniques may produce higher than normal portfolio turnover and may
affect the degree to which the Fund's net asset value fluctuates.
Portfolio turnover may vary from year to year, as well as within a year.
The amount of portfolio activity will not be a limiting factor when making
portfolio decisions. Under normal market conditions, the Fund's portfolio
turnover rate generally will not exceed 150%. Higher portfolio turnover
rates are likely to result in comparatively greater brokerage commissions.
In addition, short-term gains realized from portfolio transactions are
taxable to shareholders as ordinary income. See "Portfolio Transactions"
in the Statement of Additional Information.
For the portion of the Fund's portfolio invested in equity securities,
investors should be aware that equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the securities, and
that fluctuations can be pronounced. Changes in the value of the Fund's
portfolio securities, regardless of whether the securities are equity or
debt, will result in changes in the value of a Fund share and thus the
Fund's total return to investors.
For the portion of the Fund's portfolio invested in debt securities,
investors should be aware that even though interest-bearing securities
are investments which promise a stable stream of income, the prices of
such securities are inversely affected by changes in interest rates and,
therefore, are subject to the risk of market price fluctuations. Certain
securities that may be purchased by the Fund, such as those with interest
rates that fluctuate directly or indirectly based on multiples of a stated
index, are designed to be highly sensitive to changes in interest rates and
can subject the holders thereof to extreme reductions of yield and
possibly loss of principal. The value of fixed-income securities also may
be affected by changes in the credit rating or financial condition of the
issuing entities.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years
(18)
unless money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for
the leased property.
No assurance can be given as to the liquidity of the market for certain
mortgage-backed securities, such as collateralized mortgage obligations
and stripped mortgage-backed securities. Determination as to the
liquidity of such securities are made in accordance with guidelines
established by the Fund's Board of Directors. In accordance with such
guidelines, The Dreyfus Corporation monitors the Fund's investments in
such securities with particular regard to trading activity, availability of
reliable price information and other relevant information.
The Fund's classification as a "non-diversified" investment company
means that the proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Investment Company Act
of 1940. A "diversified" investment company is required by the
Investment Company Act of 1940 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 and to hold not more than 10% of the voting securities
of any single issuer. However, the Fund intends to conduct its operations
so as to qualify as a "regulated investment company" for purposes of the
Internal Revenue Code of 1986, as amended (the "Code"), which requires
that, at the end of each quarter of its
taxable year, (i) at least 50% of the market value of the Fund's total
assets be invested in cash, U.S. Government securities, the securities of
other regulated investment companies and other securities, with such
other securities of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of the Fund's
total assets and 10% of the outstanding voting securities of such issuer,
and (ii) not more than 25% of the value of its total assets be invested in
the securities of any one issuer (other than U.S. Government securities or
the securities of other regulated investment companies). Since a
relatively high percentage of the Fund's assets may be invested in the
securities of a limited number of issuers, some of which may be within
the same industry or economic sector, the Fund's portfolio securities may
be more susceptible to any single economic, political or regulatory
occurrence than the portfolio securities of a diversified investment
company.
Investment decisions for the Fund are made independently from those of
other investment companies advised by The Dreyfus Corporation. However,
if such other investment companies are prepared to invest in, or desire to
dispose of, securities of the type in which the Fund invests at the same
time as the Fund, available investments or opportunities for sales will be
allocated equitably to each investment company. 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
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment
adviser. As of December 31, 1993, The Dreyfus Corporation managed or
administered approximately $78 billion in assets for more than 1.9
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. The Fund's primary investment officer
is Howard Stein. He has held that position since October 1993 and has been
Chief Executive Officer of The Dreyfus Corporation since 1965. The Fund's
other investment officers are identified under "Management of the Fund"
in the Fund's Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund as well as for
other funds advised by The Dreyfus Corporation through a professional
staff of portfolio managers and security analysts.
For the fiscal year ended October 31, 1993, the Fund paid The Dreyfus
Corporation a monthly fee at the annual rate of .75 of 1% of the value of
the Fund's average daily net assets. From time to time, The Dreyfus
Corporation 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 at the
time such amounts are waived or assumed, as the case may be. The Fund
will not pay The Dreyfus Corporation at a
(19)
later time for any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume. The management fee is higher than
that paid by most other investment companies.
The Dreyfus Corporation may pay Dreyfus Service Corporation for
shareholder and distribution services from its own monies, including past
profits but not including the management fee paid by the Fund. Dreyfus
Service Corporation may pay part or all of these payments to securities
dealers or others for servicing and distribution.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are
not insured by the Federal Deposit Insurance Corporation.
You can purchase Fund shares through Dreyfus Service Corporation or
certain financial institutions (which may include banks), securities
dealers and other industry professionals (collectively, "Service Agents")
that have entered into agreements with Dreyfus Service Corporation.
Service Agents may receive different levels of compensation for selling
different Classes of shares.
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in
this Prospectus, and, to the extent permitted by applicable regulatory
authority, may charge their clients direct fees which would be in addition
to any amounts which might be received under the Shareholder Services
Plan. Each Service Agent has agreed to transmit to its clients a schedule
of such fees. You should consult your Service Agent in this regard.
When purchasing Fund shares, you must specify whether the purchase is
for Class A or Class B shares. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a client
of a Service Agent which has made an aggregate minimum initial purchase
for its customers of $2,500. Subsequent investments must be at least
$100. The initial investment must be accompanied by the Fund's Account
Application. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries, directors of The
Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Fund's Board, or the spouse or
minor child of any of the foregoing, the minimum initial investment is
$1,000. For full-time or part-time employees of The Dreyfus Corporation
or any of its affiliates or subsidiaries who elect to have a portion of their
pay directly deposited into their Fund account, the minimum initial
investment is $50. The Fund reserves the right to offer Fund shares
without regard to minimum purchase requirements to employees
participating in certain qualified or non-qualified employee benefit plans
or other programs where
contributions or account information can be
transmitted in a manner and form acceptable to the Fund. The Fund
reserves the right to vary further the initial and subsequent investment
minimum requirements at any time.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable
to "The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open
new accounts which are mailed should be sent to The Dreyfus Family of
Funds, P.O. Box 9387, Providence, Rhode Island 02940-9387, together with
your Account Application indicating which Class of shares is being
purchased. For subsequent investments, your Fund account number should
appear on the check and an investment slip should be enclosed and sent to
The Dreyfus Family of Funds, P.O. Box 105, Newark, New Jersey 07101-
0105. For Dreyfus retirement plan accounts, both initial and subsequent
investments should be sent to The Dreyfus Trust Company, Custodian, P.O.
Box 6427, Providence, Rhode Island 02940-6427. Neither initial nor
subsequent investments should be made by third party check. Purchase
orders may be delivered in person only to a Dreyfus Financial Center.
THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED
ONLY UPON
(20)
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
#8900202955/Premier Global Investing_Class A shares, or DDA
#8900115173/Premier Global Investing_Class B shares, as the case may
be, for purchase of Fund shares in your name. The wire must include your
Fund account number (for new accounts, please include your Taxpayer
Identification Number ("TIN") instead), account registration and dealer
number, if applicable. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your
wire payment to obtain your Fund account number. Please include your
Fund account number on the Fund's Account Application and promptly mail
the Account Application to the Fund, as no redemptions will be permitted
until the Account Application is received. You may obtain further
information about remitting funds in this manner from your bank. All
payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check
used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS "1111."
Fund shares are sold on a continuous basis. Net asset value per share of
each Class is determined as of the close of trading on the floor of the New
York Stock Exchange (currently 4:00 p.m., New York time), on each day the
New York Stock Exchange is open for business. For purposes of determining
net asset value, options and futures contracts will be valued 15 minutes
after the close of trading on the floor of the New York Stock Exchange. Net
asset value per share of each Class is computed by dividing the value of
the Fund's net assets represented by such Class (i.e., the value of its
assets less liabilities) by the total number of shares of such Class
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 Board of Directors. Certain securities may
be valued by an independent pricing service approved by the Board of
Directors and are valued at fair value as determined by the pricing
service. For further information regarding the methods employed in
valuing Fund investments, see "Determination of Net Asset Value" in the
Fund's Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Fund could subject
you to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
If an order is received by the Transfer Agent or other 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 business day, Fund shares will be purchased at
the public offering price determined as of the close of trading on the floor
of the New York Stock Exchange on that day. Otherwise, Fund shares will
be purchased at the public offering price determined as of the close of
trading on the floor of the New York Stock Exchange on the next business
day, except where shares are purchased through a dealer as provided
below.
Orders for the purchase of Fund shares received by dealers by the close
of trading on the floor of the New York Stock Exchange on any business day
and transmitted to Dreyfus Service Corporation by the close of its
business day (normally 5: 15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the floor of the New York Stock Exchange on that day. Otherwise, the
orders will be based on the next determined public offering price. It is the
dealer's responsibility to transmit orders so that they will be received by
Dreyfus Service Corporation before the close of its business day.
(21)
CLASS A SHARES - The public offering price for Class A shares is the net
asset value per share of that Class plus a sales load as shown below:
<TABLE>
TOTAL SALES LOAD
-------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
- --------------------- -------------- --------------- -------------------
<S> <C> <C> <C>
Less than $50,000........................ 4.50 4.70 4.25
$50,000 to less than $100,000............ 4.00 4.20 3.75
$100,000 to less than $250,000........... 3.00 3.10 2.75
$250,000 to less than $500,000........... 2.50 2.60 2.25
$500,000 to less than $1,000,000......... 2.00 2.00 1.75
$1,000,000 to less than $3,000,000....... 1.00 1.00 1.00
$3,000,000 to less than $5,000,000....... .50 .50 .50
$5,000,000 and over...................... .25 .25 .25
</TABLE>
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with
Dreyfus Service Corporation pertaining to the sale of Fund shares (or
which otherwise have a brokerage related or clearing arrangement with an
NASD member firm or financial institution with respect to the sale of
Fund shares) may purchase Class A shares for themselves directly or
pursuant to an employee benefit plan or other program, or for their
spouses or minor children, at net asset value, provided that they have
furnished Dreyfus Service Corporation with such information as it may
request from time to time in order to verify eligibility for this privilege.
This privilege also applies to full-time employees of financial
institutions affiliated with NASD member firms whose full-time
employees are eligible to purchase Class A shares at net asset value. In
addition, Class A shares are offered at net asset value to full-time or
part-time employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a
fund advised by The Dreyfus Corporation, including members of the Fund's
Board, or the spouse or minor child of any of the foregoing. Class A shares
purchased in connection with the Dreyfus Managed Portfolio program will
be purchased at net asset value.
Class A shares will be offered at net asset value without a sales load
to 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 initial investment in the Dreyfus Family of Funds or
certain other products made available by Dreyfus Service Corporation to
such plans or programs exceeds one million dollars ("Eligible Benefit
Plans"). The determination of the number of employees eligible for
participation in a plan or program shall be made on the date Class A
shares are first purchased by or on behalf of employees participating in
such plan or program and on each subsequent January 1st. Dreyfus Service
Corporation may pay dealers a fee of up to .5% of the amount invested
through such dealers in Class A shares at net asset value by employees
participating in Eligible Benefit Plans. All present holdings of shares of
funds in the Dreyfus Family of Funds by Eligible Benefit Plans will be
aggregated to determine the fee payable with respect to each such
purchase of Fund shares. Dreyfus Service Corporation reserves the right to
cease paying these fees at any time. Dreyfus Service Corporation 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.
Class A shares also may be purchased (including by exchange) at net
asset value without a sales load for Dreyfus-sponsored IRA "Rollover
Accounts" with the distribution proceeds from a qualified retirement plan
or a Dreyfus-sponsored 403(b)(7) plan, provided that, at the time of such
distribution, such qualified retirement plan or Dreyfus-sponsored
403(b)(7) plan (a) satisfied the requirements set forth under either clause
(i) or clause (ii) in the preceding paragraph and all or a portion of such
plan's assets were invested in funds in the Dreyfus Family of Funds or
certain other products made available by Dreyfus Service Corporation to
such plans, or (b) invested all of its assets in certain funds in the Dreyfus
Family of Funds or certain other products made available by Dreyfus
Service Corporation to such plans.
(22)
For fiscal 1993, Dreyfus Service Corporation retained $521,435 from
sales loads on Class A shares. The dealer reallowance may be changed
from time to time but will remain the same for all dealers. Dreyfus
Service Corporation, at its expense, may provide additional promotional
incentives to dealers that sell shares of funds advised by The Dreyfus
Corporation which are sold with a sales load, such as the Fund. In some
instances, those incentives may be offered only to certain dealers who
have sold or may sell significant amounts of shares. Dealers receive a
larger percentage of the sales load from Dreyfus Service Corporation than
they receive for selling most other funds.
CLASS B SHARES - The public offering price for Class B shares is the net
asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on certain redemptions
of Class B shares as described under "How to Redeem Fund Shares."
Dreyfus Service Corporation compensates certain Service Agents for
selling Class B shares at the time of purchase from Dreyfus Service
Corporation's own assets. The proceeds of the CDSC and the distribution
fee, in part, are used to defray these expenses. In fiscal 1993, $13,873
was retained by Dreyfus Service Corporation from the CDSC on Class B
shares.
RIGHT OF ACCUMULATION - CLASS A SHARES - Reduced sales loads apply
to any purchase of Class A shares, shares of certain other funds advised
by The Dreyfus Corporation which are sold with a sales load and shares
acquired by a previous exchange of shares purchased with a sales load
(hereinafter referred to as "Eligible Funds"), by you and any related
"purchaser" as defined in the Statement of Additional Information, where
the aggregate investment including such purchase, is $50,000 or more. If,
for example, you previously purchased and still hold Class A shares of the
Fund, or of any other Eligible Fund or combination thereof, with an
aggregate current market value of $40,000 and subsequently purchase
Class A shares of the Fund or an Eligible Fund having a current value of
$20,000, the sales load applicable to the subsequent purchase would be
reduced to 4% of the offering price. All present holdings of Eligible Funds
may be combined to determine the current offering price of the aggregate
investment in ascertaining the sales load applicable to each subsequent
purchase.
To qualify for reduced sales loads, at the time of purchase you or your
Service Agent must notify Dreyfus Service Corporation if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if you have
checked the appropriate box and supplied the necessary information on the
Fund's Account Application or have filed an Optional Services Form with
the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may
modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas,
call 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents
may impose certain conditions on their clients which are different from
those described in this Prospectus. You should consult your Service Agent
in this regard.
EXCHANGE PRIVILEGE - The Exchange Privilege enables you to purchase, in
exchange for Class A or Class B shares of the Fund, shares of the same
Class in certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be
of interest to you. If you desire to use this Privilege, you should consult
your Service Agent or Dreyfus Service Corporation to determine if it is
available and whether any conditions are imposed on its use.
To use this Privilege, you or your Service Agent acting on your behalf
must give exchange instructions to the Transfer Agent in writing, by wire
or by telephone. If you previously have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-
4060 or, if you are calling
(23)
from overseas, call 1-401-455-3306. See "How
to Redeem Fund Shares-Procedures." Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained from
Dreyfus Service Corporation. Except in the case of Personal Retirement
Plans, the shares being exchanged must have a current value of at least
$500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
Telephone exchanges may be made only if the appropriate "YES" box has
been checked on the Account Application, or a separate signed Optional
Services Form is on file with the Transfer Agent. Upon an exchange into a
new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Exchange Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus
TELETRANSFER Privilege and the dividend/capital gain distribution option
(except for the Dreyfus Dividend Sweep Privilege) selected by the
investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges of Class
A shares into funds sold with a sales load. No CDSC will be imposed on
Class B shares at the time of an exchange; however, Class B shares
acquired through an exchange will be subject on redemption to the higher
CDSC applicable to the exchanged or acquired shares. The CDSC applicable
on redemption of the acquired Class B shares will be calculated from the
date of the initial purchase of the Class B shares exchanged. If you are
exchanging Class A shares into a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which
reflect a reduced sales load, if the shares of the fund from which you are
exchanging were: (a) purchased with a sales load, (b) acquired by a
previous exchange from shares purchased with a sales load, or (c) acquired
through reinvestment of dividends or distributions paid with respect to
the foregoing categories of shares. To qualify, at the time of your
exchange you must notify the Transfer Agent or your Service Agent must
notify Dreyfus Service Corporation. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional Information. No
fees currently are charged shareholders directly in connection with
exchanges, 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. The
Fund reserves the right to reject any exchange request in whole or in part.
The Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE - Dreyfus Auto-Exchange Privilege
permits you to invest regularly (on a semimonthly, monthly,
quarterly or annual basis), in exchange for Class A or Class B shares of the
Fund, in shares of the same Class of certain other funds in the Dreyfus
Family of Funds of which you are currently an investor. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the
first and/or fifteenth of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges of Class
A shares into funds sold with a sales load. No CDSC will be imposed on
Class B shares at the time of an exchange; however, Class B shares
acquired through an exchange will be subject on redemption to the higher
CDSC applicable to the exchanged or acquired shares. The CDSC applicable
on redemption of the acquired Class B shares will be calculated from the
date of the initial purchase of the Class B shares exchanged. See
"Shareholder Services" in the Statement of Additional Information. The
right to exercise this Privilege may be modified or cancelled by the Fund
or the Transfer Agent. You may modify or cancel your exercise of this
Privilege at any time by writing to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. The Fund may charge a
service fee for this Privilege. No such fee currently is contemplated. The
exchange of shares of one fund for shares of another is treated for Federal
income tax purposes as a sale of the shares given in exchange by the
shareholder
(24)
and, therefore, an exchanging shareholder may realize a
taxable gain or loss. For more information
concerning this Privilege and the funds in the Dreyfus Family of Funds
eligible to participate in this Privilege, or to obtain a Dreyfus Auto-
Exchange Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER - 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. 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 from Dreyfus Service Corporation. You may cancel your
participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 6527, Providence, Rhode Island 02940-6527, 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.
AUTOMATIC WITHDRAWAL PLAN - The Automatic Withdrawal Plan permits
you to request withdrawal of a specified dollar amount (minimum of $50)
on either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be obtained
from Dreyfus Service Corporation. There is a service charge of $.50 for
each withdrawal check. The Automatic Withdrawal Plan may be ended at
any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Class B shares withdrawn pursuant to the Automatic Withdrawal Plan
will be subject to any applicable CDSC. Any correspondence with respect
to the Automatic Withdrawal Plan should be addressed to The Dreyfus
Family of Funds, P.O. Box 6527, Providence, Rhode Island 02940-6527, or,
if for Dreyfus retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
DREYFUS DIVIDEND SWEEP PRIVILEGE - Dreyfus Dividend Sweep Privilege
enables you to invest automatically dividends or dividends and capital
gain distributions, if any, paid by the Fund in shares of the same class of
another fund in the Dreyfus Family of Funds of which you are an investor.
Shares of the other fund will be purchased at the then-current net asset
value; however, a sales load may be charged with respect to investments
in shares of a fund sold with a sales load. If you are investing in a fund
that charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load. If you are
investing in a fund or class that charges a CDSC, the shares
purchased will be subject on redemption to the CDSC, if any, applicable to
the purchased shares. See "Shareholder Services" in the Statement of
Additional Information. For more information concerning this Privilege
and the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to request a Dividend Sweep Authorization Form, please call
toll free 1-800-645-6561. You may cancel this Privilege by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 6527, Providence,
Rhode Island 02940-6527. To select a new fund after cancellation, you
must submit a new authorization form. Enrollment in or cancellation of
this Privilege is effective three business days following receipt. This
Privilege is available only for existing accounts and may not be used to
open new accounts. Minimum subsequent investments do not apply. The
Fund may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated. Shares held under
Keogh Plans, IRAs or other retirement plans are not eligible for this
Privilege.
DREYFUS PAYROLL SAVINGS PLAN - Dreyfus Payroll Savings Plan permits
you to purchase Fund shares (minimum of $100 per transaction)
automatically on a regular basis. Depending upon your employer's
direct deposit program, you may have part or all of your paycheck
transferred to your existing Dreyfus account electronically through the
Automated Clearing House system at each pay period. To establish a
Dreyfus Payroll Savings Plan account, you must file an authorization form
with your employer's payroll department. Your
(25)
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form from Dreyfus Service
Corporation. You may change the amount of purchase or cancel the authorization
only by written notification to your employer. It is the sole responsibility
of your employer, not Dreyfus Service Corporation, The Dreyfus Corporation, the
Fund, the Transfer Agent or any other person, to arrange for transactions
under the Dreyfus Payroll Savings Plan. 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. For details, please contact Dreyfus
Group Retirement Plans, a division of Dreyfus Service Corporation, by
calling toll free 1-800-358-5566.
LETTER OF INTENT - CLASS A SHARES - By signing a Letter of Intent form,
available from Dreyfus Service Corporation, you become eligible for the
reduced sales load applicable to the total number of Eligible Fund shares
purchased in a 13-month period pursuant to the terms and conditions set
forth in the Letter of Intent. A minimum initial purchase of $5,000 is
required. To compute the applicable sales load, the offering price of
shares you hold (on the date of submission of the Letter of Intent) in any
Eligible Fund that may be used toward "Right of Accumulation" benefits
described above may be used as a credit toward completion of the Letter
of Intent. However, the reduced sales load will be applied only to new
purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in the
Letter of Intent for payment of a higher sales load if you do not purchase
the full amount indicated in the Letter of Intent. The escrow will be
released when you fulfill the terms of the Letter of Intent by purchasing
the specified amount. If your purchases qualify for a further sales load
reduction, the sales load will be adjusted to reflect your total purchase at
the end of 13 months. If total purchases are less than the amount
specified, you will be requested to remit an amount equal to the
difference between the sales load actually paid and the sales load
applicable to the aggregate purchases actually made. If such remittance is
not received within 20 days, the Transfer Agent, as attorney-in-fact
pursuant to the terms of the Letter of Intent, will redeem an appropriate
number of Class A shares held in escrow to realize the difference. Signing
a Letter of Intent does not bind you to purchase, or the Fund to sell, the
full amount indicated at the sales load in effect at the time of signing,
but you must complete the intended purchase to obtain the reduced sales
load. At the time you purchase Class A shares, you must indicate your
intention to do so under a Letter of Intent.
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your Class A or Class B 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 as
described below. If you hold Fund shares of more than one Class, any
request for redemption must specify the Class of shares being redeemed.
If you fail to specify the Class of shares to be redeemed or if you own
fewer shares of the Class than specified to be redeemed, the redemption
request may be delayed until the Transfer Agent receives further
instructions from you or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC) when
shares are redeemed directly through Dreyfus Service Corporation. Service
Agents may charge a nominal fee for effecting redemptions of Fund shares.
Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed
may be more or less than their original cost, depending upon the Fund's
then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-
AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO
(26)
YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER
PURCHASE 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 OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER
RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS
TELETRANSFER PURCHASE 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.
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES - A CDSC
payable to Dreyfus Service Corporation is imposed on any redemption of
Class B shares which reduces the current net asset value of your Class B
shares to an amount which is lower than the dollar amount of all payments
by you for the purchase of Class B shares of the Fund held by you at the
time of redemption. No CDSC will be imposed to the extent that the net
asset value of the Class B shares redeemed does not exceed (i) the current
net asset value of Class B shares acquired through reinvestment of
dividends or capital gain distributions, plus (ii) increases in the net asset
value of your Class B shares above the dollar amount of all your payments
for the purchase of Class B shares of the Fund held by you at the time of
redemption.
If the aggregate value of the Class B shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC
may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years from the time you purchased the Class
B shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the
purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
CDSC AS A
% OF AMOUNT
YEAR SINCE INVESTED OR
PURCHASE PAYMENT REDEMPTION
WAS MADE PROCEEDS
- ---------------- -----------
First............................ 4.00
Second........................... 4.00
Third............................ 3.00
Fourth........................... 3.00
Fifth............................ 2.00
Sixth............................ 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible
rate. It will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends
and distributions; then of amounts representing the increase in net asset
value of Class B shares above the total amount of payments for the
purchase of Class B shares made during the preceding six years; then of
amounts representing the cost of shares purchased six years prior to the
redemption; and finally, of amounts representing the cost of shares held
for the longest period of time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10 per share
for a cost of $1,000. Subsequently,
(27)
the shareholder acquired 5 additional
shares through dividend reinvestment. During the second year after the
purchase the investor decided to redeem $500 of his or her investment.
Assuming at the time of the redemption the net asset value had
appreciated to $12 per share, the value of the investor's shares would be
$1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of
$9.60.
WAIVER OF CDSC - The CDSC will be waived in connection with (a)
redemptions made within one year after the death or disability, as defined
in Section 72(m)(7) of the Code, of the shareholders, (b) redemptions by
Eligible Benefit Plans, (c) redemptions as a result of a combination of any
investment company with the Fund by merger, acquisition of assets or
otherwise, (d) a distribution following retirement under a tax-deferred
retirement plan or upon attaining age 701/2 in the case of an IRA or Keogh
plan or custodial account pursuant to section 403(b) of the Code, and (e)
redemptions by such shareholders as the Securities and Exchange
Commission or its staff may permit. If the Directors of the Fund
determine to discontinue the waiver of the CDSC, the disclosure in the
Fund's prospectus will be revised appropriately. Any Fund shares subject
to a CDSC which were purchased prior to the termination of such waiver
will have the CDSC waived as provided in the Fund's prospectus at the
time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you must
notify the Transfer Agent or your Service Agent must notify Dreyfus
Service Corporation. Any such qualification is subject to confirmation of
your entitlement.
PROCEDURES - You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, through the Wire
Redemption Privilege, through the Telephone Redemption Privilege, or
through Dreyfus TELETRANSFER Privilege. Other redemption procedures
may be in effect for investors who effect transactions in Fund shares
through Service Agents. The Fund makes available to certain large
institutions the ability to issue redemption instructions through
compatible computer facilities.
Your redemption request may direct that the redemption proceeds be
used to purchase shares of other funds advised or administered by The
Dreyfus Corporation that are not available through the Exchange Privilege.
The applicable CDSC will be charged upon the redemption of Class B
shares. Your redemption proceeds will be invested in shares of the other
fund on the next business day. Before you make such a request,
you must obtain and should review a copy of the current prospectus of
the fund being purchased. Prospectuses may be obtained from Dreyfus
Service Corporation. The prospectus will contain information concerning
minimum investment requirements and other conditions that may apply to
your purchase.
You may redeem or exchange Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have
filed an Optional Services Form with the Transfer Agent. If you select a
telephone redemption or exchange privilege, you authorize the Transfer
Agent to act on telephone instructions from any person representing
himself or herself to be you, or a representative of your Service Agent,
and reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as requiring
a form of personal identification, to
confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses
due to unauthorized or fraudulent instructions. Neither the Fund nor the
Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange 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 your shares by written request mailed to The Dreyfus Family of
Funds, P.O. Box 6527, Providence, Rhode Island 02940-6527, or, if
(28)
for Dreyfus retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427. Written
redemption requests must specify the Class of shares being redeemed.
Redemption requests may be delivered in person only to a Dreyfus
Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests must be signed
by each shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP"), and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed
under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
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. To establish the Wire Redemption Privilege,
you must check the appropriate box and supply the necessary information
on the Fund's Account Application or file an Optional Services Form with
the Transfer Agent. You 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 only up to $250,000 wired
within any 30-day period. You may telephone redemption requests by
calling 1-800-221-4060 or, if you are calling from overseas, call 1-401-
455-3306. The Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address, and may limit
the amount involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares held under Keogh Plans,
IRAs or other retirement plans, and shares for which certificates have
been issued, are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE -- You may redeem Fund shares
(maximum $150,000 per day) by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed an
Optional Services Form with the Transfer Agent. The redemption proceeds
will be paid by check and mailed to your address. You may telephone
redemption instructions by calling 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306. The Fund reserves the right to
refuse any request made by telephone, including requests made shortly
after a change of address, and may limit the amount involved or the
number of telephone redemption requests. This Privilege may be modified
or terminated at any time by the Transfer Agent or the Fund. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for which certificates
have been issued, are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE - You may redeem Fund shares
(minimum $500 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account
Application or have filed an Optional Services Form with the Transfer
Agent. The proceeds will be transferred between your Fund account and the
bank account designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an Automated
Clearing House member may be so designated. Redemption proceeds will be
on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request or, at your
request, paid by check (maximum $150,000 per day) and mailed to your
address. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account only up to $250,000 within any 30-day period. The Fund reserves
the right to refuse any request made by telephone, including
(29)
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 this
Privilege at any time or charge a service fee upon notice to shareholders.
No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or if you are calling from overseas, call 1-401-455-
3306. Shares held under Keogh Plans, IRAs or other Dreyfus retirement
plans, and shares issued in certificate form, are not eligible for this
Privilege.
REINVESTMENT PRIVILEGE - CLASS A - You may reinvest up to the number
of Class A shares you have redeemed, within 30 days of redemption, at the
then-prevailing net asset value without a sales load, or reinstate your
account for the purpose of exercising the Exchange Privilege. The
Reinvestment Privilege may be exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The Class A and Class B shares are subject to a Shareholder Services
Plan and the Class B shares only are subject to a Distribution Plan.
DISTRIBUTION PLAN - Under the Distribution Plan, adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, the Fund pays
Dreyfus Service Corporation for advertising, marketing and distributing
Class B shares at an annual rate of .75 of 1% of the value of the average
daily net assets of Class B. Under the Distribution Plan, Dreyfus Service
Corporation may make payments to Service Agents in respect of these
services. Dreyfus Service Corporation determines the amounts to be paid
to Service Agents. Service Agents receive such fees in respect of the
average daily value of Class B shares owned by their clients. From time to
time, Dreyfus Service Corporation may defer or waive receipt of fees
under the Distribution Plan while retaining the ability to be paid by the
Fund under the Distribution Plan thereafter. The fees payable to Dreyfus
Service Corporation under the Distribution Plan for advertising, marketing
and distributing Class B shares and for payments to Service Agents are
payable without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN - Under the Shareholder Services Plan, the
Fund pays Dreyfus Service Corporation for the provision of certain
services to the holders of Class A and Class B shares a fee at the annual
rate of .25 of 1% of the value of the average daily net assets of Class A
and Class B. 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 share-
holder accounts. Dreyfus Service Corporation may make payments to Service
Agents in respect of these services. Dreyfus Service Corporation
determines the amounts to be paid to Service Agents. Each Service Agent
is required to disclose to its clients any compensation payable to it by the
Fund pursuant to the Shareholder Services Plan and any other
compensation payable by their clients in connection with the investment
of their assets in Class A or Class B shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares and pays dividends from net investment
income and distributes net realized securities gains, if any, once a year,
but it may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. 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 dividends and distributions in cash or to reinvest in
additional Fund shares of the same Class at net asset value without a
sales load. All expenses are accrued daily and deducted before the
declaration of dividends to investors. Dividends paid by each Class will be
calculated at the same time and in the same manner and will be of the
same amount, except that the expenses attributable solely to Class A or
Class B will be borne exclusively by such Class. Class B shares will
receive lower per share dividends than Class A shares because of the
higher expenses borne by Class B. See "Fee Table."
Dividends derived from net investment income, together with
distributions from net realized short-term
(30)
securities gains and gains from the sale or other disposition of market discount
bonds, paid by the Fund will be taxable to U.S. shareholders as ordinary income
whether received in cash or reinvested in Fund shares. Distributions from net
realized long-term securities gains of the Fund will be taxable to U.S.
shareholders as long-term capital gains for Federal income tax purposes,
regardless of how long shareholders have held their Fund shares and
whether such distributions are received in cash or reinvested in Fund
shares. The Code provides that the net 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, together with
distributions from net realized short-term securities gains and gains
from the sale or other disposition of market discount bonds, paid by the
Fund to a foreign investor generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign investor claims
the benefit of a lower rate specified in a tax treaty. Distributions from
net realized long-term securities gains paid by the Fund to a foreign
investor as well as the proceeds of any redemptions from a foreign
investor's account, regardless of 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.
The Code provides for the "carryover" of some or all of the sales load
imposed on Class A shares if an investor exchanges his Class A shares for
shares of another fund advised by The Dreyfus Corporation within 91 days
of purchase and such other fund reduces or eliminates its otherwise
applicable sales load for the purpose of the exchange. In this case, the
amount of the sales load charged the investor for Class A shares, up to the
amount of the reduction of the sales load charged on the exchange, is not
included in the basis of such investor's Class A shares for purposes of
computing gain or loss on the exchange, and instead is added to the basis
of the fund shares received on the exchange.
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, 1993 as a "regulated investment company"
under the Code. The Fund intends to so qualify if such qualification is in
the best interests 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. In
addition, the Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment
income and capital gains.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of shares is
calculated on the basis of average annual total return. Advertisements
also may include performance calculated on the basis of total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capi-
(31)
tal gains distributions made
by the Fund during the measuring period were reinvested in shares of the
same Class. Class A total return figures include the maximum initial sales
charge and Class B total return figures include any applicable CDSC. These
figures also take into account any applicable service and distribution fees.
As a result, at any given time, the performance of Class B should be
expected to be lower than that of Class A. Performance for each Class will
be calculated separately.
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 average annual total return of Class A and Class B for one, five
and ten year periods, or for shorter periods depending upon the length of
time during which the Fund has operated. Computations of average annual
total return for periods of less than one year represent an annualization of
the Fund's actual total return for the applicable period.
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
maximum offering price 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.
Total return also may be calculated by using the net asset value per share
at the beginning of the period instead of the maximum offering price per
share at the beginning of the period for Class A shares or without giving
effect to any applicable CDSC at the end of the period for Class B shares.
Calculations based on the net asset value per share do not reflect the
deduction of the applicable sales charge which, if reflected, would reduce
the performance quoted.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type
and quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Morgan Stanley Capital International
(2)World Index, Standard & Poor's 500 Composite Stock Price Index,
Standard & Poor's MidCap 400 Index, the Dow Jones Industrial Average,
Morningstar, Inc. and other industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on November 21, 1991,
and commenced operations on January 31, 1992. On October 4, 1993, the
Fund, which is incorporated under the name Dreyfus Global Investing, Inc.,
began operating under the name Premier Global Investing. The Fund is
authorized to issue 600 million shares of Common Stock, par value $.001
per share. The Fund's shares are classified into two classes. Each share
has one vote and shareholders will vote in the aggregate and not by class
except as otherwise required by law or when class voting is permitted by
the Board of Directors. However, holders of Class A and Class B shares
will be entitled to vote on matters submitted to shareholders pertaining
to the Shareholder Service Plan and only holders of Class B shares will be
entitled to vote on matters submitted to shareholders pertaining to the
Distribution Plan.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year
the election of Directors or the appointment of 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 Director from office
and for any other purpose. Fund share-
(32)
holders may remove a Director by the affirmative vote of a majority of the
Fund's outstanding voting shares. In addition, the Board of Directors will
call a meeting of shareholders for the purpose of electing Directors if, at any
time, less than a majority of the Directors then holding office have been
elected by shareholders.
The Transfer Agent maintains a record of your ownership and will send
you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11566-0144, or by calling toll
free 1-800-645-6561. In New York City, call 1-718-895-1206 (outside
New York City, call collect); on Long Island, call 794-5200.
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.
(33)
PREMIER GLOBAL INVESTING
CLASS A and CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 17, 1994
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Premier Global Investing (the "Fund"), dated January 17, 1994, as it may be
revised from time to time. To obtain a copy of the Fund's Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call the following numbers:
Outside New York State -- Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
(Outside New York City -- Call Collect)
On Long Island -- Call 794-5200
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . B-10
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . B-13
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . B-14
Distribution Plan and Shareholder Services Plan . . . . . . . . . . B-16
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . B-17
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . . . B-19
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . B-23
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . B-24
Performance Information . . . . . . . . . . . . . . . . . . . . . . B-26
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . B-27
Information About the Fund. . . . . . . . . . . . . . . . . . . . . B-28
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . B-28
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . B-35
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . B-48
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund."
Portfolio Securities
Bank Obligations
Domestic commercial banks organized under Federal law are supervised
and examined by the Comptroller of the Currency and are required to be
members of the Federal Reserve System and to have their deposits insured by
the Federal Deposit Insurance Corporation (the "FDIC"). Domestic banks
organized under state law are supervised and examined by state banking
authorities but are members of the Federal Reserve System only if they elect
to join. In addition, state banks whose certificates of deposit ("CDs") may
be purchased by the Fund are insured by the FDIC (although such insurance
may not be of material benefit to the Fund, depending on the principal
amount of the CDs of each bank held by the Fund) and are subject to Federal
examination and to a substantial body of Federal law and regulation. As a
result of Federal or state laws and regulations, domestic branches of
domestic banks whose CDs may be purchased by the Fund generally are
required, among other things, to maintain specified levels of reserves, are
limited in the amounts which they can loan to a single borrower and are
subject to other regulations designed to promote financial soundness.
However, not all of such laws and regulations apply to the foreign branches
of domestic banks.
Obligations of foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks, such as CDs and time deposits ("TDs"), may be general obligations of
the parent banks in addition to the issuing branch, or may be limited by the
terms of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of domestic banks.
These risks include foreign economic and political developments, foreign
governmental restrictions that may adversely affect payment of principal and
interest on the obligations, foreign exchange controls and foreign
withholding and other taxes on interest income. These foreign branches and
subsidiaries are not necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as mandatory reserve
requirements, loan limitations, and accounting, auditing and financial
record keeping requirements. In addition, less information may be publicly
available about a foreign branch of a domestic bank or about a foreign bank
than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal or state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which the branch is
located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of their assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state. The
deposits of Federal and State Branches generally must be insured by the FDIC
if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks, by foreign
subsidiaries of domestic banks, by foreign branches of foreign banks or by
domestic branches of foreign banks, the Manager carefully evaluates such
investments on a case-by-case basis.
The Fund may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than $1 billion in
assets, which are members of the FDIC, provided the Fund purchases any such
CD in a principal amount of not more than $100,000, which amount would be
fully insured by the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the FDIC. Interest payments on such a CD are
not insured by the FDIC. The Fund will not own more than one such CD per
such issuer.
Mortgage-Related Securities
Government Agency Securities. Mortgage-related securities issued by
the Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed
as to the timely payment of principal and interest by GNMA and such
guarantee is backed by the full faith and credit of the United States. GNMA
is a wholly-owned U.S. Government corporation within the Department of
Housing and Urban Development. GNMA certificates also are supported by the
authority of GNMA to borrow funds from the U.S. Treasury to make payments
under its guarantee.
Government Related Securities. Mortgage-related securities issued by
the Federal National Mortgage Association ("FNMA") include FNMA Guaranteed
Mortgage Pass-Through Certificates (also known as "Fannie Maes") which are
solely the obligations of FNMA and are not backed by or entitled to the full
faith and credit of the United States. FNMA is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are
guaranteed as to timely payment of principal and interest by FNMA.
Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates
(also known as "Freddie Macs" or "PCs"). FHLMC is a corporate
instrumentality of the United States created pursuant to an Act of Congress,
which is owned entirely by Federal Home Loan Banks. Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan Bank and do not
constitute a debt or obligation of the United States or of any Federal Home
Loan Bank. Freddie Macs entitle the holder to timely payment of interest,
which is guaranteed by FHLMC. FHLMC guarantees either ultimate collection
or timely payment of all principal payments on the underlying mortgage
loans. When the FHLMC does not guarantee timely payment of principal, FHLMC
may remit the amount due on account of its guarantee of ultimate payment of
principal at any time after default on an underlying mortgage, but in no
event later than one year after it becomes payable.
Management Policies
The Fund engages in the following practices in furtherance of its
objective.
Options Transactions. The Fund may engage in options transactions,
such as purchasing or writing covered call or put options. The principal
reason for writing covered call options is to realize, through the receipt
of premiums, a greater return than would be realized on the Fund's portfolio
securities alone. In return for a premium, the writer of a covered call
option forfeits the right to any appreciation in the value of the underlying
security above the strike price for the life of the option (or until a
closing purchase transaction can be effected). Nevertheless, the call
writer retains the risk of a decline in the price of the underlying
security. Similarly, the principal reason for writing covered put options
is to realize income in the form of premiums. The writer of a covered put
option accepts the risk of a decline in the price of the underlying
security. The size of the premiums that the Fund may receive may be
adversely affected as new or existing institutions, including other
investment companies, engage in or increase their option-writing activities.
Options written ordinarily will have expiration dates between one and
nine months from the date written. The exercise price of the options may be
below, equal to or above the market values of the underlying securities at
the time the options are written. In the case of call options, these
exercise prices are referred to as "in-the-money," "at-the-money" and "out-
of-the-money," respectively. The Fund may write (a) in-the-money call
options when the Manager expects that the price of the underlying security
will remain stable or decline moderately during the option period, (b) at-
the-money call options when the Manager expects that the price of the
underlying security will remain stable or advance moderately during the
option period and (c) out-of-the-money call options when the Manager expects
that the premiums received from writing the call option plus the
appreciation in market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. In these circumstances, if the market price of the
underlying security declines and the security is sold at this lower price,
the amount of any realized loss will be offset wholly or in part by the
premium received. Out-of-the-money, at-the-money and in-the-money put
options (the reverse of call options as to the relation of exercise price to
market price) may be utilized in the same market environments that such call
options are used in equivalent transactions.
So long as the Fund's obligation as the writer of an option continues,
the Fund may be assigned an exercise notice by the broker-dealer through
which the option was sold, requiring the Fund to deliver, in the case of a
call, or take delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation terminates when the
option expires or the Fund effects a closing purchase transaction. The Fund
can no longer effect a closing purchase transaction with respect to an
option once it has been assigned an exercise notice.
While it may choose to do otherwise, the Fund generally will purchase
or write only those options for which the Manager believes there is an
active secondary market so as to facilitate closing transactions. There is
no assurance that sufficient trading interest to create a liquid secondary
market on a securities exchange will exist for any particular option at any
particular time, and for some options no such secondary market may exist. A
liquid secondary market in an option may cease to exist for a variety of
reasons. In the past, for example, higher than anticipated trading activity
or order flow, or other unforeseen events, at times have rendered certain
clearing facilities inadequate and resulted in the institution of special
procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be
no assurance that similar events, or events that otherwise may interfere
with the timely execution of customers' orders, will not recur. In such
event, it might not be possible to effect closing transactions in particular
options. If as a covered call option writer the Fund is unable to effect a
closing purchase transaction in a secondary market, it will not be able to
sell the underlying security until the option expires or it delivers the
underlying security upon exercise or it otherwise covers its position.
Stock Index Options. The Fund may purchase and write put and call
options on stock indexes listed on national securities exchanges or traded
in the over-the-counter market. A stock index fluctuates with changes in
the market values of the stocks included in the index.
Options on stock indexes are similar to options on stock except that
(a) the expiration cycles of stock index options are monthly, while those of
stock options are currently quarterly, and (b) the delivery requirements are
different. Instead of giving the right to take or make delivery of a stock
at a specified price, an option on a stock index gives the holder the right
to receive a cash "exercise settlement amount" equal to (i) the amount, if
any, by which the fixed exercise price of the option exceeds (in the case of
a put) or is less than (in the case of a call) the closing value of the
underlying index on the date of exercise, multiplied by (ii) a fixed "index
multiplier." Receipt of this cash amount will depend upon the closing level
of the stock index upon which the option is based being greater than, in the
case of a call, or less than, in the case of a put, the exercise price of
the option. The amount of cash received will be equal to such difference
between the closing price of the index and the exercise price of the option
expressed in dollars times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount. The writer may offset its position in stock index options prior to
expiration by entering into a closing transaction on an exchange or it may
let the option expire unexercised.
Futures Contracts and Options on Futures Contracts. Upon exercise of
an option, the writer of the option delivers to the holder of the option the
futures position and the accumulated balance in the writer's futures margin
account, which represents the amount by which the market price of the
futures contract exceeds, in the case of a call, or is less than, in the
case of a put, the exercise price of the option on the futures contract.
The potential loss related to the purchase of options on futures contracts
is limited to the premium paid for the option (plus transaction costs).
Because the value of the option is fixed at the time of sale, there are no
daily cash payments to reflect changes in the value of the underlying
contract; however, the value of the option does change daily and that change
would be reflected in the net asset value of the Fund.
Foreign Currency Transactions. The Fund may not hedge with respect to
a particular currency to an extent greater than the aggregate market value
(at the time of making such sale) of the securities held in its portfolio
denominated or quoted in or currently convertible into that particular
currency. If the Fund enters into a hedging transaction, it will deposit
with its custodian cash or readily marketable securities in a segregated
account of the Fund in an amount at least equal to the value of the Fund's
total assets committed to the consummation of the forward contract. If the
value of the securities placed in the segregated account declines,
additional cash or securities will be placed in the account so that the
value of the account will equal the amount of the Fund's commitment with
respect to the contract. Hedging transactions may be made from any foreign
currency into U.S. dollars or into other appropriate currencies.
At or before the maturity of a forward contract, the Fund either may
sell a portfolio security and make delivery of the currency, or retain the
security and offset its contractual obligation to deliver the currency by
purchasing a second contract pursuant to which the Fund will obtain, on the
same maturity date, the same amount of the currency which it is obligated to
deliver. If the Fund retains the portfolio security and engages in an
offsetting transaction, the Fund, at the time of execution of the offsetting
transaction, will incur a gain or loss to the extent movement has occurred
in forward contract prices. Should forward prices decline during the period
between the Fund's entering into a forward contract for the sale of a
currency and the date it enters into an offsetting contract for the purchase
of the currency, the Fund will realize a gain to the extent the price of the
currency it has agreed to sell exceeds the price of the currency it has
agreed to purchase. Should forward prices increase, the Fund will suffer a
loss to the extent the price of the currency it has agreed to purchase
exceeds the price of the currency it has agreed to sell.
The cost to the Fund of engaging in currency transactions varies with
factors such as the currency involved, the length of the contract period and
the market conditions then prevailing. Because transactions in currency
exchange usually are conducted on a principal basis, no fees or commissions
are involved. The use of forward currency exchange contracts does not
eliminate fluctuations in the underlying prices of the securities, but it
does establish a rate of exchange that can be achieved in the future. If a
devaluation generally is anticipated, the Fund may not be able to contract
to sell the currency at a price above the devaluation level it anticipates.
The requirements for qualification as a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"), may cause the
Fund to restrict the degree to which it engages in currency transactions.
See "Dividends, Distributions and Taxes."
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund can
increase its income through the investment of the cash collateral. For
purposes of this policy, the Fund considers collateral consisting of U.S.
Government securities or irrevocable letters of credit issued by banks whose
securities meet the standards for investment by the Fund to be the
equivalent of cash. From time to time, the Fund may return to the borrower
or a third party which is unaffiliated with the Fund, and which is acting as
a "placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection
with the loan; and (6) while voting rights on the loaned securities may pass
to the borrower, the Fund's Board of Directors must terminate the loan and
regain the right to vote the securities if a material event adversely
affecting the investment occurs. These conditions may be subject to future
modification.
Risk Factors--Lower Rated Securities. The Fund is permitted to invest
in securities rated below Baa by Moody's Investors Service, Inc. ("Moody's")
and below BBB by Standard & Poor's Corporation ("S&P"), Fitch Investors
Service, Inc. ("Fitch") and Duff & Phelps, Inc. ("Duff") and as low as Caa
by Moody's or CCC by S&P, Fitch or Duff. Such securities, though higher
yielding, are characterized by risk. See in the Prospectus "Description of
the Fund--Risk Factors--Lower Rated Securities" for a discussion of certain
risks and the Appendix for a general description of Moody's, S&P, Fitch and
Duff ratings. Although ratings may be useful in evaluating the safety of
interest and principal payments, they do not evaluate the market value risk
of these securities. The Fund will rely on the Manager's judgment, analysis
and experience in evaluating the creditworthiness of an issuer. See in the
Prospectus "Description of the Fund--Certain Portfolio Securities--Ratings."
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities and will fluctuate over time. These securities are
considered by S&P, Moody's, Fitch and Duff, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation and generally will involve more
credit risk than securities in the higher rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with the higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
not have sufficient revenues to meet their interest payment obligations.
The issuer's ability to service its debt obligations also may be affected
adversely by specific corporate developments, forecasts, or the
unavailability of additional financing. The risk of loss because of default
by the issuer is significantly greater for the holders of these securities
because such securities generally are unsecured and often are subordinated
to other creditors of the issuer.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these securities does exist, it
generally is not as liquid as the secondary market for higher rated
securities. The lack of a liquid secondary market may have an adverse
impact on market price and yield and the Fund's ability to dispose of
particular issues when necessary to meet the Fund's liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid secondary market for
certain securities also may make it more difficult for the Fund to obtain
accurate market quotations for purposes of valuing the Fund's portfolio and
calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play
a greater role in valuation because less reliable, objective data may be
available.
These securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt severely
the market for such securities and may have an adverse impact on the value
of such securities. In addition, it is likely that any such economic
downturn could adversely affect the ability of the issuers of such
securities to repay principal and pay interest thereon and increase the
incidence of default for such securities.
The Fund may acquire these securities during an initial offering.
Such securities may involve special risks because they are new issues. The
Fund has no arrangement with the Distributor or any other persons concerning
the acquisition of such securities, and the Manager will review carefully
the credit and other characteristics pertinent to such new issues.
Lower rated zero coupon securities, in which the Fund may invest up to
5% of its net assets, involve special considerations. The credit risk
factors pertaining to lower rated securities also apply to lower rated zero
coupon securities. Such zero coupon securities carry an additional risk in
that, unlike securities which pay interest throughout the period to
maturity, the Fund will realize no cash until the cash payment date unless a
portion of such securities are sold and, if the issuer defaults, the Fund
may obtain no return at all on its investment. See "Dividends,
Distributions and Taxes."
Investment Restrictions. The Fund has adopted the following
restrictions as fundamental policies. These restrictions cannot be changed
without approval by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "Act")) of the Fund's outstanding
voting shares. The Fund may not:
1. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
2. Invest in commodities, except that the Fund may invest in futures
contracts and options on futures contracts as described in the Fund's
Prospectus and this Statement of Additional Information.
3. Purchase, hold or deal in real estate, real estate investment
trust securities, real estate limited partnership interests, or oil, gas or
other mineral leases or exploration or development programs, but the Fund
may purchase and sell securities that are secured by real estate and may
purchase and sell securities issued by companies that invest or deal in real
estate.
4. Borrow money, except as described in the Fund's Prospectus and
this Statement of Additional Information. For purposes of this investment
restriction, the entry into options, futures contracts, including those
relating to indexes, and options on futures contracts or indexes shall not
constitute borrowing.
5. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with writing covered put and call
options and the purchase of securities on a when-issued or delayed-delivery
basis and collateral and initial or variation margin arrangements with
respect to options, futures contracts, including those relating to indexes,
and options on futures contracts or indexes.
6. Lend any funds or other assets except through the purchase of a
portion of an issue of publicly distributed bonds, debentures or other debt
securities, or the purchase of bankers' acceptances and commercial paper of
corporations. However, the Fund may lend its portfolio securities in an
amount not to exceed 33-1/3% of the value of its total assets. Any loans of
portfolio securities will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Board of Directors.
7. Act as an underwriter of securities of other issuers or enter
into repurchase agreements providing for settlement in more than seven days
after notice or purchase illiquid securities, if, in the aggregate, more
than 10% of the value of the Fund's net assets would be so invested.
8. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Fund's Prospectus and this Statement of
Additional Information.
9. Purchase warrants in excess of 2% of its net assets. For
purposes of this restriction, such warrants shall be valued at the lower of
cost or market, except that warrants acquired by the Fund in units or
attached to securities shall not be included within this 2% restriction.
10. Issue any senior security (as such term is defined in Section
18(f) of the Act), except as permitted in Investment Restriction Nos. 2, 4,
5 and 8.
11. Invest more than 25% of its assets in the securities of issuers
in any particular industry, provided that there shall be no limitation on
the purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
12. Invest in the securities of a company for the purpose of
exercising management or control.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values
or assets will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Directors of the Fund
GORDON J. DAVIS, Director. Since 1983, Mr. Davis has been a senior partner
with the law firm of Lord Day & Lord, Barrett Smith. Former Commissioner
of Parks and Recreation for the City of New York from 1978-1983.
He is also a Director of Consolidated Edison, a utility company, Phoenix
Home Life Insurance Company and a member of various other corporate and not-
for-profit boards. His address is 241 Central Park West, Apartment 16C, New
York, New York 10024.
*FIONA K. BIGGS, Director. Chartered Financial Analyst. Former President
and investment officer of the Fund. From 1987 to October 1993, an employee
of the Manager, and an officer of other investment companies advised by the
Manager. Her address is 117 East 72nd Street, New York, NY 10021.
*DAVID P. FELDMAN, Director. Chairman and Chief Executive Officer of AT&T
Investment Management Corporation. He is also a trustee of Corporate
Property Investors, a real estate investment company. His address is One
Oak Way, Berkeley Heights, New Jersey 07922.
LYNN MARTIN, Director. Ms. Martin is the holder of the Davee Chair at the
J.L. Kellogg Graduate School of Management, Northwestern University. During
the Spring Semester 1993, Ms. Martin was a Visiting Fellow at the Institute
of Policy, Kennedy School of Government, Harvard University. Ms. Martin
also is a consultant to the international accounting firm of Deloitte &
Touche, and chairwoman of its Council on the Advancement of Women and a
director of Ryder Systems Incorporated, a transportation company. From
January 1991 through January 1993, Ms. Martin served as Secretary of the
United States Department of Labor. From 1981 to 1991, she was United States
Congresswoman for the State of Illinois. She also is a Director of Harcourt
General Corporation, a publishing, insurance, and retailing company, and
Ameritech Corporation, a telecommunications and information company. Her
address is 3750 Lake Shore Drive, Apartment 10A, Chicago, Illinois 60613.
*EUGENE McCARTHY, Director. Writer and columnist; former Senator from
Minnesota from 1958-1970. Senator McCarthy is also a director of Harcourt
Brace Jovanovich, Inc., publishers. His address is P.O. Box 22, Woodville,
Virginia 22749.
DANIEL ROSE, Director. President and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and management
firm. He is also Chairman of the Housing Committee of The Real Estate Board
of New York, Inc. and a trustee of Corporate Property Investors, a real
estate investment company. His address is 380 Madison Avenue, New York, New
York 10017.
SALVATORE SARACENO, Director. Manager of commercial and residential real
estate projects. His address is 21-18 45th Avenue, Long Island City, New
York 11101.
*HOWARD STEIN, Director, President and Investment Officer. Chairman of the
Board and Chief Executive Officer of the Manager and Chairman of the Board
of the Distributor, and an officer, director, general partner or
trustee of other investment companies advised and administered by the
Manager. He is also a director of Avnet an electronic parts and equipment
company, and trustee of Corporate Property Investors, a real estate
investment company. His address is 200 Park Avenue, New York, New York
10166.
SANDER VANOCUR, Director. Since January 1992, President of Old Owl
Communications, a full-service communications firm, and since November 1989,
a director of the Damon Runyon-Walter Winchell Cancer Research Fund. From
June 1986 to December 1991, he was a Senior Correspondent of ABC News and,
from October 1986, he was Anchor of the ABC News program "Business World," a
weekly business program on the ABC television network. His address is 2928
P Street, N.W., Washington, DC 20007.
REX WILDER, Director. Financial Consultant. His address is 290 Riverside
Drive, New York, New York 10025.
The "non-interested" Directors and Mr. Feldman and Senator McCarthy
are also directors of Dreyfus New Jersey Municipal Bond Fund, Inc., trustees
of Florida Municipal Money Market Fund, Dreyfus New York Insured Tax Exempt
Bond Fund, Dreyfus Investors GNMA Fund, Dreyfus 100% U.S. Treasury
Intermediate Term Fund, Dreyfus 100% U.S. Treasury Long Term Fund, Dreyfus
100% U.S. Treasury Money Market Fund, Dreyfus 100% U.S. Treasury Short Term
Fund, and Managing General Partners of Dreyfus Strategic Growth, L.P. and
Dreyfus Global Growth, L.P. (A Strategic Fund). Messrs. Feldman, Rose and
Vanocur are also trustees of Dreyfus Basic U.S. Government Money Market
Fund, Dreyfus California Intermediate Municipal Bond Fund, Dreyfus
Connecticut Intermediate Municipal Bond Fund, Dreyfus Massachusetts
Intermediate Municipal Bond Fund, Dreyfus New Jersey Intermediate Municipal
Bond Fund, Dreyfus Bond Fund, Dreyfus Strategic Income, Dreyfus Strategic
Investing, and directors of Dreyfus Strategic Governments Income, Inc. and
FN Network Tax Free Money Fund, Inc. Mr. Feldman is also a director of
Dreyfus Life and Annuity Index Fund, Inc., Dreyfus-Wilshire Target Funds,
Inc., Peoples Index Fund, Inc. and Peoples S&P MidCap Index Fund, Inc. and a
trustee of Dreyfus Strategic Income and Dreyfus Strategic Investing.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Directors of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Directors who are
not "interested persons" of the Fund.
The Fund does not pay any remuneration to its officers and Directors
other than fees and expenses to Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totalled $14,972 for the fiscal year ended October 31,
1993, for such Directors as a group.
Officers of the Fund
MARK N. JACOBS, Vice President. Secretary and Deputy General Counsel of the
Manager and an officer of other investment companies advised or administered
by the Manager.
JEFFREY N. NACHMAN, Vice President and Treasurer. Vice President-Mutual Fund
Accounting of the Manager and an officer of other investment companies
advised or administered by the Manager.
THOMAS J. DURANTE, Controller. Senior Accounting Manager in the Fund
Accounting Department of the Manager and an officer of other investment
companies advised or administered by the Manager.
DANIEL C. MACLEAN, Secretary. Vice President and General Counsel of the
Manager, Secretary of the Distributor and an officer of other investment
companies advised or administered by the Manager.
A. THOMAS SMITH III, Assistant Secretary. Since August 1991, Assistant
General Counsel of the Manager. From January 1989 to August 1991, Senior
Associate with Willkie Farr & Gallagher, and from January 1986 to December
1988, staff attorney in the Chief Counsel's Office of the U.S. Securities
and Exchange Commission, Division of Investment Management.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the Manager
and other investment companies advised or administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of common stock outstanding on December 15, 1993.
The following persons are also officers and/or directors of the
Manager: Julian M. Smerling, Vice Chairman of the Board of Directors;
Joseph S. DiMartino, President, Chief Operating Officer and a director;
Alan M. Eisner, Vice President and Chief Financial Officer; David W. Burke,
Vice President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Elie M. Genadry, Vice President--Institutional Sales; Peter A.
Santoriello, Vice President; Robert H. Schmidt, Vice President; Kirk V.
Stumpp, Vice President; Philip L. Toia, Vice President--Fixed-Income
Research; John J. Pyburn, Assistant Vice President; Katherine C. Wickham,
Assistant Vice President--Human Resources; Maurice Bendrihem, Controller;
and Mandell L. Berman, Alvin E. Friedman, Lawrence M. Greene, Abigail Q.
McCarthy and David B. Truman, directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated December 20, 1991, as amended, with the
Fund, which is subject to annual approval by (i) the Fund's Board of
Directors or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in either event the
continuance also is approved by a majority of the Directors who are not
"interested persons" (as defined in the Act) of the Fund or the Manager, by
vote cast in person at a meeting called for the purpose of voting on such
approval. The Agreement is terminable without penalty, on 60 days' notice,
by the Fund's Board of Directors or by vote of the holders of a majority of
the Fund's shares, or, on not less than 90 days' notice, by the Manager.
The Agreement will terminate automatically in the event of its assignment
(as defined in the Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Directors. The Manager is responsible for investment decisions,
and provides the Fund with Investment Officers who are authorized by the
Board of Directors to execute purchases and sales of securities. The Fund's
Investment Officers are Barbara L. Kenworthy, Kelly McDermott, Howard Stein
and Wolodymyr Wronskyj. The Manager also maintains a research department
with a professional staff of portfolio managers and securities analysts who
provide research services for the Fund as well as for other funds advised by
the Manager. All purchases and sales are reported for the Directors' review
at the meeting subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: organizational costs, taxes, interest,
loan commitment fees, dividends and interest paid on securities sold short,
brokerage fees and commissions, if any, fees of Directors who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
maintaining the Fund's existence, costs of independent pricing services,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports and
corporate meetings, and any extraordinary expenses. Class A and Class B
shares are subject to an annual service fee for ongoing personal services
relating to shareholder accounts and services related to the maintenance of
shareholder accounts. In addition, Class B shares are subject to an annual
distribution fee for advertising, marketing and distributing Class B shares
pursuant to a distribution plan adopted in accordance with Rule 12b-1 under
the Act. See "Distribution Plan and Shareholder Services Plan."
The Manager pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities, and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services. The
Manager also may make such advertising and promotional expenditures, using
its own resources, as it from time to time deems appropriate.
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .75% of the value
of the Fund's average daily net assets. All fees and expenses are accrued
daily and deducted before declaration of distributions to shareholders. The
management fee for the period from January 31, 1992 (commencement of
operations) through October 31, 1992, and for the fiscal year ended October
31, 1993 amounted to $92,918 and $511,327, respectively.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed the expense limitation of any state having jurisdiction over the
Fund, the Fund may deduct from the payment to be made to the Manager under
the Agreement, or the Manager will bear, such excess expense to the extent
required by state law. Such deduction or payment, if any, will be estimated
daily, and reconciled and effected or paid, as the case may be, on a monthly
basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Sales Loads--Class A. The scale of sales loads applies to purchases
of Class A shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children, or a trustee or other fiduciary
purchasing securities for a single trust estate or a single fiduciary
account (including a pension, profit-sharing or other employee benefit trust
created pursuant to a plan qualified under Section 401 of the Code) although
more than one beneficiary is involved; or a group of accounts established by
or on behalf of the employees of an employer or affiliated employers
pursuant to an employee benefit plan or other program (including accounts
established pursuant to Sections 403(b), 408(k), and 457 of the Code); or an
organized group which has been in existence for more than six months,
provided that it is not organized for the purpose of buying redeemable
securities of a registered investment company and provided that the
purchases are made through a central administration or a single dealer, or
by other means which result in economy of sales effort or expense.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 a.m. and 4:00 p.m., New York time, on
any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To qualify to use
the Dreyfus TeleTransfer Privilege, the initial payment for purchase of Fund
shares must be drawn on, and redemption proceeds paid to, the same bank and
account as are designated on the Account Application or Optional Services
Form on file. If the proceeds of a particular redemption are to be wired to
an account at any other bank, the request must be in writing and signature-
guaranteed. See "Redemption of Fund Shares--Dreyfus TeleTransfer
Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
Offering Prices
Based upon the Fund's net asset value at the close of business on October
31, 1993 the maximum offering price of the Fund's shares would have been as
follows:
Class A shares:
NET ASSET VALUE per share. . . . . . . . . . . . . . . . . .$15.58
Sales load for individual sales of shares aggregating less
than $50,000 - 4.5 percent of offering price
(approximately 4.7 percent of net asset value per share) . .73
---
Offering price to public . . . . . . . . . . . . . . . . . .$16.31
------
Class B shares: ------
NET ASSET VALUE, redemption price and offering
price to public* . . . . . . . . . . . . . . . . . . . . .$15.49
------
------
*Class B shares are subject to a contingent deferred sales charge on certain
redemptions. See "How to Redeem Fund Shares" in the Fund's Prospectus.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Distribution
Plan and Shareholder Services Plan."
The Class A and Class B shares are subject to a Shareholder Services Plan
and the Class B shares only are subject to a Distribution Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the Act provides, among other things, that an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board of
Directors has adopted such a plan (the "Distribution Plan") with respect to
the Class B shares, pursuant to which the Fund pays the Distributor for
advertising, marketing and distributing Class B shares. Under the
Distribution Plan, the Distributor may make payments to certain financial
institutions, securities dealers and other financial industry professionals
(collectively, "Service Agents") in respect to these services. The Fund's
Board of Directors believes that there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and holders of its Class B shares.
In some states, certain other financial institutions effecting transactions
in Fund shares may be required to register as dealers pursuant to state law.
A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be
made to the Directors for their review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of Class B shares may bear for distribution pursuant to the
Distribution Plan without such shareholders' approval and that other
material amendments of the Distribution Plan must be approved by the Board
of Directors, and by the Directors who are not "interested persons" (as
defined in the Act) of the Fund and have no direct or indirect financial
interest in the operation of the Distribution Plan or in any agreements
entered into in connection with the Distribution Plan, by vote cast in
person at a meeting called for the purpose of considering such amendments.
The Distribution Plan is subject to annual approval by such vote cast in
person at a meeting called for the purpose of voting on the Distribution
Plan. The Distribution Plan was last approved by the Directors at a meeting
held on November 9, 1993. The Distribution Plan may be terminated at any
time by vote of a majority of the Directors who are not "interested persons"
and have no direct or indirect financial interest in the operation of the
Distribution Plan or in any agreements entered into in connection with the
Distribution Plan or by vote of the holders of a majority of Class B shares.
For the period from January 15, 1993 (effective date the of
Distribution Plan) through October 31, 1993, $107,752 was charged to the
Fund, with respect to Class B, under the Distribution Plan.
Shareholder Services Plan. The Fund has adopted a Shareholder
Services Plan, pursuant to which the Fund pays the Distributor for the
provision of certain services to the holders of Class A and Class B shares.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Directors for their review. In addition, the
Shareholder Services Plan provides that it may not be amended without
approval of the Directors, and by the Directors who are not "interested
persons" (as defined in the Act) of the Fund and have no direct or indirect
financial interest in the operation of the Shareholder Services Plan or in
any agreements entered into in connection with the Shareholder Services
Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Shareholder Services Plan is subject to
annual approval by such vote cast in person at a meeting called for the
purpose of voting on the Shareholder Services Plan. The Shareholder
Services Plan was last approved on November 9, 1993. The Shareholder
Services Plan is terminable at any time by vote of a majority of the
Directors who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Shareholder Services
Plan or in any agreements entered into in connection with the Shareholder
Services Plan.
For the period from January 15, 1993 (effective date of the
Shareholder Services Plan) through October 31, 1993, $114,462 was charged to
the Fund, with respect to Class A, and $35,917 was charged to the Fund, with
respect to Class B, under the Shareholders Services Plan.
Prior Rule 12b-1 Plan. As of January 15, 1993, the Fund terminated
its then existing Rule 12b-1 plan, which provided for payments to be made to
Service Agents for advertising, marketing and/or distributing Class A shares
and servicing holders of Class A shares. For the period November 1, 1992
through January 15, 1993, the total amount charged to and paid by the Fund,
with respect to Class A, under such plan was $30,278, of which $20,063 was
charged for advertising, marketing and servicing the Fund's shares and
$10,215 was charged for preparing, printing and distributing prospectuses
and statements of additional information and operating such plan.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege on
the next business day after receipt if the Transfer Agent receives the
redemption request in proper form. Redemption proceeds will be transferred
by Federal Reserve wire only to the commercial bank account specified by the
investor on the Account Application or Optional Services Form. Redemption
proceeds, if wired, must be in the amount of $1,000 or more and will be
wired to the investor's account at the bank of record designated in the
investor's file at the Transfer Agent, if the investor's bank is a member of
the Federal Reserve System, or to a correspondent bank if the investor's
bank is not a member. Fees ordinarily are imposed by such bank and usually
are borne by the investor. Immediate notification by the correspondent bank
to the investor's bank is necessary to avoid a delay in crediting the funds
to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-
7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies,
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Directors reserves the right to make payments in whole
or in part in securities or other assets in case of an emergency or any time
a cash distribution would impair the liquidity of the Fund to the detriment
of the existing shareholders. In this event, the securities would be valued
in the same manner as the Fund's portfolio is valued. If the recipient sold
such securities, brokerage charges would be incurred. In connection with a
redemption request where the Fund delivers in-kind securities instead of
cash on settlement date to an investor, the in-kind securities delivered
will be readily marketable securities to the extent available.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Exchange Privilege. Class A and Class B shares of the Fund may be
exchanged for shares of the respective Class of certain other funds advised
or administered by the Manager. Shares of the same class of such other
funds purchased by exchange will be purchased on the basis of relative net
asset value per share, as follows:
A. Class A shares of funds purchased without a sales load may be
exchanged for Class A shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a sales load
may be exchanged without a sales load for Class A shares of other funds sold
without a sales load.
C. Class A shares of funds purchased with a sales load, Class A
shares of funds acquired by a previous exchange from Class A shares
purchased with a sales load and additional Class A shares
acquired through reinvestment of dividends or distributions of any such
funds (collectively referred to herein as "Purchased Shares") may be
exchanged for Class A shares of other funds sold with a sales load (referred
to herein as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could have been
imposed in connection with the Purchased Shares (at the time the Purchased
Shares were acquired), without giving effect to any reduced loads, the
difference will be deducted.
D. Class B shares of any fund may be exchanged for Class B shares
of other funds without a sales load. Class B shares of any fund
exchanged for Class B shares of another fund will be subject to the higher
applicable contingent deferred sales charge ("CDSC") of the two funds and,
for purposes of calculating CDSC rates and conversion periods, will be
deemed to have been held since the date the class B shares being exchanged
were initially purchased.
To accomplish an exchange under item C above, shareholders must notify
the Transfer Agent of their prior ownership of such Class A shares and their
account number.
To use this Privilege, an investor, or the investor's Service Agent
acting on the investor's behalf, must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. Telephone exchanges may
be made only if the appropriate "YES" box has been checked on the Account
Application, or a separate signed Optional Services Form is on file with the
Transfer Agent. By using this Privilege, the investor authorizes the
Transfer Agent to act on telephonic, telegraphic or written exchange
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for Shares of the same class of the fund into which the
exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs and IRAs
set up under a Simplified Employee Pension Plan ("SEP-IRAs") with only one
participant, the minimum initial investment is $750. To exchange shares
held in Corporate 403(b)(7) Plans and SEP-IRAs with more than one
participant, the minimum initial investment is $100 if the plan has at least
$2,500 invested among shares of the same Class of the funds in the Dreyfus
Family of Funds. To exchange shares held in Personal Retirement Plans, the
shares exchanged must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of another fund in the Dreyfus Family of Funds. This Privilege is available
only for existing accounts. Shares will be exchanged on the basis of
relative net asset value as described above under "Exchange Privilege."
Enrollment in or modification or cancellation of this Privilege is effective
three business days following notification by the investor. An investor
will be notified if his account falls below the amount designated to be
exchanged under this Privilege. In this case, an investor's account will
fall to zero unless additional investments are made in excess of the
designated amount prior to the next Auto-Exchange transaction. Shares held
under IRA and other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and from regular
accounts to IRA accounts, but not from IRA accounts to regular accounts.
With respect to all other retirement accounts, exchanges may be made only
among those accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Optional Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange request
in whole or in part. The Exchange Privilege or Dreyfus Auto-Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. An Automatic Withdrawal Plan may be established by completing the
appropriate application available from the Distributor. There is a service
charge of $.50 for each withdrawal check. Automatic Withdrawal may be
terminated at any time by the investor, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan. Class B shares withdrawn pursuant to the
Automatic Withdrawal Plan will be subject to any applicable CDSC.
Dreyfus Dividend Sweep Privilege. Dreyfus Dividend Sweep Privilege
allows investors to invest on the payment date their dividends or dividends
and capital gain distributions, if any, from the Fund in shares of the same
Class of another fund in the Dreyfus Family of Funds of which the investor
is a shareholder. Shares of the same Class of other funds purchased
pursuant to this Privilege will be purchased on the basis of relative net
asset value per share as follows:
A. Dividends and distributions paid with respect to Class A shares
by a fund may be invested without imposition of a sales load in Class A
shares of other funds that are offered without a sales load.
B. Dividends and distributions paid with respect to Class A shares
by a fund which does not charge a sales load may be invested in Class A
shares of other funds sold with a sales load, and the applicable sales load
will be deducted.
C. Dividends and distributions paid with respect to Class A shares
by a fund which charges a sales load may be invested in Class A shares of
other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable to the
Offered Shares exceeds the maximum sales load charged by the fund from which
dividends or distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid with respect to Class B shares
by a fund may be invested without imposition of a sales load in Class B
shares of other funds and the applicable CDSC, if any, will be imposed upon
redemption of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans including a 401(k) Salary Reduction Plan. In addition,
the Fund makes available Keogh Plans, IRAs, including SEP-IRAs and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support services also are
available. For details, please contact the Dreyfus Group Retirement Plans,
a division of the Distributor, by calling toll free 1-800-358-5566.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including an SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans may
not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, is
$2,500 with no minimum or subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA may also open a non-
working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details on eligibility,
service fees and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. Portfolio securities, including
covered call options written by the Fund, are valued at the last sale price
on the securities exchange or national securities market on which such
securities primarily are traded. Securities not listed on an exchange or
national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except in the case of open short positions where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Any assets or liabilities initially expressed in terms of
foreign currency will be translated into dollars at the midpoint of the New
York interbank market spot exchange rate as quoted on the day of such
translation by the Federal Reserve Bank of New York or if no such rate is
quoted on such date, at the exchange rate previously quoted by the Federal
Reserve Bank of New York or at such other quoted market exchange rate as may
be determined to be appropriate by the Manager. Forward currency contracts
will be valued at the current cost of offsetting the contract. Because of
the need to obtain prices as of the close of trading on various exchanges
throughout the world, the calculation of net asset value does not take place
contemporaneously with the determination of prices of a majority of the
portfolio securities. Short-term investments are carried at amortized cost,
which approximates value. Any securities or other assets for which recent
market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors. Expenses and fees,
including the management fee (reduced by the expense limitation, if any) and
fees pursuant to the Shareholder Services Plan, with respect to the Class A
and Class B shares, and fees pursuant to the Distribution Plan, with respect
to the Class B shares only, are accrued daily and taken into account for the
purpose of determining the net asset value of the relevant Class shares.
Because of the difference in operating expenses incurred by each Class, the
per share net asset value of each Class will differ.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Board of Directors, are valued at fair value as
determined in good faith by the Board of Directors. The Board of Directors
will review the method of valuation on a current basis. In making their
good faith valuation of restricted securities, the Directors generally will
take the following factors into consideration: restricted securities which
are, or are convertible into, securities of the same class of securities for
which a public market exists usually will be valued at market value less the
same percentage discount at which purchased. This discount will be revised
periodically by the Board of Directors if the Directors believe that it no
longer reflects the value of the restricted securities. Restricted
securities not of the same class as securities for which a public market
exists usually will be valued initially at cost. Any subsequent adjustment
from cost will be based upon considerations deemed relevant by the Board of
Directors.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund has qualified as a "regulated
investment company" under the Code for the fiscal year ended October 31,
1993 and the Fund intends to continue to so qualify as long as such
qualification is in the best interests of its shareholders. Qualification
as a regulated investment company relieves the Fund from any liability for
Federal income taxes to the extent its earnings are distributed in
accordance with the applicable provisions of the Code. The term "regulated
investment company" does not imply the supervision of management or
investment practices or policies by any government agency.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the aggregate net asset value of his shares
below the cost of his investment. Such a dividend or distribution would be
a return on investment in an economic sense, although taxable as stated
above. In addition, the Code provides that if a shareholder holds shares of
the Fund for six months or less and has received a capital gain distribution
with respect to such shares, any loss incurred on the sale of such shares
will be treated as a long-term capital loss to the extent of the capital
gain distribution received.
Depending on the composition of the Fund's income, dividends paid by
the Fund from net investment income may qualify for the dividends received
deduction allowable to certain U.S. corporate shareholders ("dividends
received deduction"). In general, dividend income of the Fund distributed
to qualifying corporate shareholders will be eligible for the dividends
received deduction only to the extent that (i) the Fund's income consists of
dividends paid by U.S. corporations and (ii) the Fund would have been
entitled to the dividends received deduction with respect to such dividend
income if the Fund were not a regulated investment company. The dividends
received deduction for qualifying corporate shareholders may be further
reduced if the shares of the Fund held by them with respect to which
dividends are received are treated as debt-financed or deemed to have been
held for less than 46 days. In addition, the Code provides other
limitations with respect to the ability of a qualifying corporate
shareholder to claim the dividends received deduction in connection with
holding Fund shares.
The Fund may qualify for and may make an election permitted under
Section 853 of the Code so that shareholders may be eligible to claim a
credit or deduction on their Federal income tax returns for, and will be
required to treat as part of the amounts distributed to them, their pro rata
portion of qualified taxes paid or incurred by the Fund to foreign countries
(which taxes relate primarily to investment income). The Fund may make an
election under Section 853, provided that more than 50% of the value of the
Fund's total assets at the close of the taxable year consists of securities
in foreign corporations, and the Fund satisfies the applicable distribution
provisions of the Code. The foreign tax credit available to shareholders is
subject to certain limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or
loss realized from the disposition of non-U.S. dollar denominated securities
(including debt instruments, certain financial futures and options, and
certain preferred stock) may be treated as ordinary income or loss under
Section 988 of the Code. In addition, all or a portion of the gain realized
from the disposition of certain market discount bonds will be treated as
ordinary income under Section 1276. Finally, all or a portion of the gain
realized from engaging in "conversion transactions" may be treated as
ordinary income under Section 1258. "Conversion transactions" are defined
to include certain forward, futures, option and straddle transactions,
transactions marketed or sold to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss realized by the Fund from
certain financial futures and options transactions (other than those taxed
under Section 988 of the Code) will be treated as 60% long-term capital gain
or loss and 40% short-term capital gain or loss. Gain or loss will arise
upon the exercise or lapse of such futures and options as well as from
closing transactions. In addition, any such futures or options remaining
unexercised at the end of the Fund's taxable year will be treated as sold
for their then fair market value, resulting in additional gain or loss to
the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving financial futures and
options may constitute "straddles." Straddles are defined to include
"offsetting positions" in actively traded personal property. The tax
treatment of straddles is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, overrides or modifies the provisions of
Sections 988 and 1256. As such, all or a portion of any short- or long-term
capital gain from certain "straddle" transactions may be recharacterized as
ordinary income.
If a Fund were treated as entering into straddles by reason of its
futures or options transactions, such straddles could be characterized as
"mixed straddles" if the futures or options transactions comprising such
straddles were governed by Section 1256 of the Code. The Fund may make one
or more elections with respect to "mixed straddles." Depending upon which
election is made, if any, the results to the Fund may differ. If no
election is made, to the extent the straddle rules apply to positions
established by the Fund, losses realized by the Fund will be deferred to the
extent of unrealized gain in any offsetting positions. Moreover, as a
result of the straddle and conversion transaction rules, short-term capital
loss on straddle positions may be recharacterized as long-term capital loss,
and long-term capital gain may be recharacterized as short-term capital gain
or ordinary income.
Investment by the Fund in securities issued or acquired at a discount,
or providing for deferred interest or for payment of interest in the form of
additional obligations could under special tax rules, affect the amount,
timing and character of distributions to shareholders by causing the Fund to
recognize income prior to the receipt of cash payments. For example, the
Fund could be required to accrue a portion of the discount (or deemed
discount) at which the securities were issued each year and to distribute
such income in order to maintain its qualification as a regulated investment
company. In such case, the Fund may have to dispose of securities which it
might otherwise have continued to hold in order to generate cash to satisfy
these distribution requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
The offering of Class B shares commenced on January 15, 1993, and,
accordingly, only limited performance data are available for Class B at this
time.
The average annual total return for Class A for the 1 and 1.751 year
periods ended October 31, 1993 was 10.50% and 11.44%, respectively. The
average annual total return for Class B for the .795 year period ended
October 31, 1993 was 13.59%. Average annual total return is calculated by
determining the ending redeemable value of an investment purchased at
maximum offering price per share with a hypothetical $1,000 payment made at
the beginning of the period (assuming the reinvestment of dividends and
distributions), dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in the period)
and subtracting 1 from the result. A Class's average annual total return
figures calculated in accordance with such formula assume that in the case
of Class A the maximum sales load has been deducted from the hypothetical
initial investment at the time of purchase or in the case of Class B the
maximum applicable CDSC has been paid upon redemption at the end of the
period.
Total return is calculated by subtracting the amount of the Fund's
maximum offering price per share at the beginning of a stated period from
the net asset value per share at the end of the period (after giving effect
to the reinvestment of dividends and distributions during the period), and
dividing the result by the maximum offering price per share at the beginning
of the period. Total return also may be calculated based on the net asset
value per share at the beginning of the period instead of the maximum
offering price per share at the beginning of the period for Class A shares
or without giving effect to any applicable CDSC at the end of the period for
Class B shares. In such cases, the calculation would not reflect the
deduction of the sales load with respect to Class A shares or any applicable
CDSC with respect to Class B shares, which, if reflected, would reduce the
performance quoted. The total return for Class A for the period January 31,
1992 (commencement of operations) through October 31, 1993, based on maximum
offering price per share, was 20.88%. Based on net asset value per share,
the total return for Class A was 26.58% for this period. The total return
for Class B for the period January 15, 1993 (commencement of offering Class
B shares) through October 31, 1993, after giving effect to the maximum CDSC
per share, was 10.66%. The total return for Class B, without giving effect
to the maximum CDSC, was 14.66% for this period.
Comparative performance may be used from time to time in advertising
the Fund's shares, including data from Lipper Analytical Services, Inc.,
Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial
Average, Money Magazine, Morningstar ratings and related analyses supporting
the ratings and other industry publications. From time to time, the Fund
may compare its performance against inflation with the performance of other
instruments against inflation, such as short-term Treasury Bills (which are
direct obligations of the U.S. Government) and FDIC-insured bank money
market accounts. In addition, advertising for the Fund may indicate that
investors may consider diversifying their investment portfolios in order to
seek protection of the value of their assets against inflation. From time
to time, advertising materials for the Fund may refer to or discuss then-
current or past economic or financial conditions, development and/or events.
The Fund's advertising materials also may refer to the integration of the
world's securities markets, discuss the investment opportunities available
worldwide and mention the increasing importance of an investment strategy
including foreign investments.
PORTFOLIO TRANSACTIONS
The Manager supervises the placement of orders on behalf of the Fund
for the purchase or sale of portfolio securities. Allocation of brokerage
transactions, including their frequency, is made in the best judgment of the
Manager and in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most favorable
net price. Subject to this consideration, the brokers selected include
those that supplement the Manager's research facilities with statistical
data, investment information, economic facts and opinions. Information so
received is in addition to and not in lieu of services required to be
performed by the Manager and the Manager's fee is not reduced as a
consequence of the receipt of such supplemental information. Such
information may be useful to the Manager in serving both the Fund and other
clients which it advises and, conversely, supplemental information obtained
by the placement of business of other clients may be useful to the Manager
in carrying out its obligation to the Fund. Brokers also are selected
because of their ability to handle special executions such as are involved
in large block trades or broad distributions, provided the primary
consideration is met. Large block trades, in certain cases, may result from
two or more clients the Manager might advise being engaged simultaneously in
the purchase or sale of the same security. Certain of the Fund's
transactions in securities of foreign issuers may not benefit from the
negotiated commission rates available to the Fund for transactions in
securities of domestic issuers. Foreign exchange transactions are made with
banks or institutions in the interbank market at prices reflecting a mark-up
or mark-down and/or commission. When transactions are executed in the over-
the-counter market, the Fund will deal with the primary market makers unless
a more favorable price or execution otherwise is obtainable.
The Fund's portfolio turnover rate for the period January 31, 1992
(commencement of operations) through October 31, 1992 and for the fiscal
year ended October 31, 1993 was 208.70% and 179.28%, respectively.
Portfolio turnover may vary from year to year, as well as within a year.
High turnover rates are likely to result in comparatively greater brokerage
expenses. The overall reasonableness of brokerage commissions paid is
evaluated by the Manager based upon its knowledge of available information
as to the general level of commissions paid by other institutional investors
for comparable services.
For the period January 31, 1992 (commencement of operations) through
October 31, 1992 and for the fiscal year ended October 31, 1993, the Fund
paid total brokerage commissions of $69,897 and $532,812, respectively, none
of which was paid to the Distributor. The above figures for brokerage
commissions do not include gross spreads and concessions on principal
transactions, which, where determinable, amounted to $128,840 and $389,461,
respectively, none of which was paid to the Distributor.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Shares have no preemptive or subscription rights and are freely
transferable.
The Fund will send annual and semi-annual financial statements to all
its shareholders.
Effective October 4, 1993, the Fund, which is incorporated under the
name Dreyfus Global Investing, Inc., began operating under the name Premier
Global Investing.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a subsidiary
of First Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-
9671, is the Fund's transfer and dividend disbursing agent. Neither The
Bank of New York nor The Shareholder Services Group, Inc. has any part in
determining the investment policies of the Fund or which securities are to
be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York 10004-
2696, as counsel for the Fund, has rendered its opinion as to certain legal
matters regarding the due authorization and valid issuance of the shares of
common stock being sold pursuant to the Fund's Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of certain ratings assigned by Standard & Poor's
Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's"),
Fitch Investors Service, Inc. ("Fitch") and Duff & Phelps, Inc.
("Duff"):
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the highest rated issues only
in small degree.
A
Bonds rated A have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity
to pay interest and repay principal. Whereas they normally
exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for bonds
in this category than for bonds in higher rated categories.
BB
Debt rated BB has less near-term vulnerability to default
than other speculative grade debt. However, it faces major
ongoing uncertainties or exposure to adverse business, financial
or economic conditions which could lead to inadequate capacity to
meet timely interest and principal payment.
B
Debt rated B has a greater vulnerability to default but
presently has the capacity to meet interest payments and
principal repayments. Adverse business, financial or economic
conditions would likely impair capacity or willingness to pay
interest and repay principal.
CCC
Debt rated CCC has a current identifiable vulnerability to
default, and is dependent upon favorable business, financial and
economic conditions to meet timely payments of principal. In the
event of adverse business, financial or economic conditions, it
is not likely to have the capacity to pay interest and repay
principal.
S&P's letter ratings may be modified by the addition of a
plus (+) or minus (-) sign designation, which is used to show
relative standing within the major rating categories, except in
the AAA (Prime Grade) category.
Commercial Paper Rating
The designation A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what
generally are known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger
than in Aaa securities.
A
Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa
Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
Ba
Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate, and therefore not well safeguarded during both
good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing within the major rating categories, except in
the Aaa category and in the categories below B. The modifier 1
indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates a ranking in the lower end of a
rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper
rating assigned by Moody's. Issuers of P-1 paper must have a
superior capacity for repayment of short-term promissory
obligations, and ordinarily will be evidenced by leading market
positions in well established industries, high rates of return on
funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins in earnings coverage of fixed financial charges and high
internal cash generation, and well established access to a range
of financial markets and assured sources of alternate liquidity.
Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or class
of debt. The ratings take into consideration special features of
the issue, its relationship to other obligations of the issuer,
the current financial condition and operative performance of the
issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future
financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of
the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not quite as strong
as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated
F-1+.
A
Bonds rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have an adverse impact on these bonds
and, therefore, impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's
ability to pay interest and repay principal may be affected over
time by adverse economic changes. However, business and
financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While
bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of
principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity
throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics,
which, if not remedied, may lead to default. The ability to meet
obligations requires an advantageous business and economic
environment.
Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating
category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three
years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to meet
the issuer's obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The
risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.
A
Bonds rated A have protection factors which are average but
adequate. However, risk factors are more variable and greater in
periods of economic stress.
BBB
Bonds rated BBB are considered to have below average
protection factors but still considered sufficient for prudent
investment. Considerable variability in risk during economic
cycles.
BB
Bonds rated BB are below investment grade but are deemed by
Duff as likely to meet obligations when due. Present or
prospective financial protection factors fluctuate according to
industry conditions or company fortunes. Overall quality may
move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the
risk that obligations will not be met when due. Financial
protection factors will fluctuate widely according to economic
cycles, industry conditions and/or company fortunes. Potential
exists for frequent changes in quality rating within this
category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities.
Such bonds may be in default or have considerable uncertainty as
to timely payment of interest, preferred dividends and/or
principal. Protection factors are narrow and risk can be
substantial with unfavorable economic or industry conditions
and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol
(except AAA) to indicate the relative position of a credit within
the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating
assigned by Duff. Paper rated Duff-1 is regarded as having very
high certainty of timely payment with excellent liquidity factors
which are supported by ample asset protection. Risk factors are
minor.
suggest a susceptibility to impairment sometime in the future.
Baa
Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
Ba
Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate, and therefore not well safeguarded during both
good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing within the major rating categories, except in
the Aaa category and in the categories below B. The modifier 1
indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates a ranking in the lower end of a
rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper
rating assigned by Moody's. Issuers of P-1 paper must have a
superior capacity for repayment of short-term promissory
obligations, and ordinarily will be evidenced by leading market
positions in well established industries, high rates of return on
funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins in earnings coverage of fixed financial charges and high
internal cash generation, and well established access to a range
of financial markets and assured sources of alternate liquidity.
Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or class
of debt. The ratings take into consideration special features of
the issue, its relationship to other obligations of the issuer,
the current financial condition and operative performance of the
issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future
financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of
the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not quite as strong
as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated
F-1+.
A
Bonds rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have an adverse impact on these bonds
and, therefore, impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's
ability to pay interest and repay principal may be affected over
time by adverse economic changes. However, business and
financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While
bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of
principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity
throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics,
which, if not remedied, may lead to default. The ability to meet
obligations requires an advantageous business and economic
environment.
Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating
category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three
years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to meet
the issuer's obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The
risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.
A
Bonds rated A have protection factors which are average but
adequate. However, risk factors are more variable and greater in
periods of economic stress.
BBB
Bonds rated BBB are considered to have below average
protection factors but still considered sufficient for prudent
investment. Considerable variability in risk during economic
cycles.
BB
Bonds rated BB are below investment grade but are deemed by
Duff as likely to meet obligations when due. Present or
prospective financial protection factors fluctuate according to
industry conditions or company fortunes. Overall quality may
move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the
risk that obligations will not be met when due. Financial
protection factors will fluctuate widely according to economic
cycles, industry conditions and/or company fortunes. Potential
exists for frequent changes in quality rating within this
category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities.
Such bonds may be in default or have considerable uncertainty as
to timely payment of interest, preferred dividends and/or
principal. Protection factors are narrow and risk can be
substantial with unfavorable economic or industry conditions
and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol
(except AAA) to indicate the relative position of a credit within
the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating
assigned by Duff. Paper rated Duff-1 is regarded as having very
high certainty of timely payment with excellent liquidity factors
which are supported by ample asset protection. Risk factors are
minor.
<TABLE>
Premier Global Investing
Statement of Investment October 31, 1993
Common Stocks-52.6%
SHARES VALUE
<S> <C> <C>
Aerospace & Defense-.6% CSF, Thomson.. 24,000 $ 664,104
---------
Agriculture-.6% Eridania Beghin-Say S.A... 5,000 732,430
-------
Aluminum-.4% Alcan Aluminium.. 25,000 512,500
-------
Automotive & Other Durable Goods-1.1%
Compania Interamericana de Automobiles S.A... 14,000 451,024
Detroit Diesel.. 2,000 70,000
Lucas Industries PLC.. 320,000 800,640
-------
1,321,664
---------
Banking-6.8% Banco Bilbao-Vizcaya S.A., A.D.S... 35,000 896,875
Banco De Galicia Y Buenos Aires S.A., A.D.R... 27,000 870,750
Banco Frances del Rio de la Plata S.A... 56,112 538,956
Banque Nationale de Paris, A.D.R...(a) 8,000 392,000
Compagnie Financiero de Suez.. 19,000 1,124,553
Grupo Financiero Banamex Accival S.A., Cl. B.. 90,000 475,020
Grupo Financiero Bancomer, Cl. B... 270,000 323,190
Malayan Banking Berhad.. 63,000 435,897
ONBAN Corp.. 9,900 348,975
Overseas Union Bank.. 120,000 605,280
Public Bank Berhad .. 120,000 123,840
Standard Chartered PLC.. 54,000 845,424
Warburg, S.G., Group PLC.. 64,800 886,464
-------
7,867,224
---------
Basic Industries-.2% Iwasaki Electric.. 24,000 125,208
Meiden Engineering.. 2,400 50,969
------
176,177
-------
Building Materials-1.3% Pilkington PLC.. 340,000 735,080
Tarmac PLC.. 368,000 746,304
-------
1,481,384
---------
Capital Goods-.3% Max.. 13,000 289,289
-------
Chemicals-1.1% Cabot.. 14,000 803,250
OM Group.. 25,000 425,000
-------
1,228,250
---------
Computer Software/Services-.8%
Capcom.. 10,000 852,260
Cornerstone Imaging.. 4,100 60,475
------
912,735
-------
Conglomerates-1.5% Commercial Del Plata.. 100,000 645,300
Hutchison Whampoa.. 298,100 1,122,346
---------
1,767,646
---------
Consumer Growth Staples-1.2% S. Megga International Holdings.. 3,408,400 1,376,994
---------
Consumer Non-Durables-1.1% Bic.. 6,390 1,320,206
---------
Country Fund-.3% R.O.C. Taiwan.. 35,000 336,875
-------
Distribution-.6% Canon Sales.. 7,000 193,907
Grainger (W.W.).. 8,000 437,000
-------
630,907
-------
Premier Global Investing
Statement of Investments October 31, 1993
Common Stocks-52.6% (continued)
SHARES VALUES
Electronics-.2% Varitronix International.. 150,000 $ 189,150
-------
Electrical Equipment-.4% Leader Universal Holdings.. 98,000 498,036
-------
Engineering/Construction-2.0% Deutsche Babcock AG..(b) 6,600 858,297
Toshiba Engineering & Construction.. 58,000 685,502
United Engineers Malaysia Berhad.. 160,000 756,800
------
2,300,599
---------
Finance-2.2% Credit Saison.. 34,000 901,000
Finance One.. 105,000 1,133,370
Quadrum Financial A.D.S... 24,000 546,000
-------
2,580,370
---------
Forest and Paper Products-1.4%
Fletcher Challenge.. 260,000 592,280
Maderas Y Sinteticos Sociedad, A.D.R... 17,000 306,000
Repola OY.. 50,000 741,850
-------
1,640,130
---------
Gas Gathering-.7% Aquila Gas Pipeline.. 56,500 847,500
-------
Gold Mining-1.3% Homestake Mining.. 80,000 1,540,000
---------
Health Services-1.7% American Health Care Management..(b) 60,000 382,500
Charter Medical..(b) 47,500 1,193,438
Community Psychiatric Centers.. 30,000 420,000
-------
1,995,938
---------
Homebuilding/Construction-1.6%
City Developments.. 169,600 748,614
Land & General Holdings Berhad.. 59,000 191,455
Straits Steamship.. 75,600 171,612
Wimpey, George, PLC.. 270,000 691,470
-------
1,803,151
----------
Insurance-2.4% Allianz Holding AG.. 710 1,205,207
National Mutual Asia.. 1,476,000 1,059,768
Swiss-Partner Re.. 24,000 552,000
-------
2,816,975
---------
Insurance-Property & Casualty-.2%
Paul Revere.. 11,000 275,000
-------
Investment Companies-.4% Brierley Investments.. 700,000 497,700
-------
Machinery/Diversified-.7% Mannesmann AG.. 3,900 789,270
Mannesmann AG (Rights).. 3,900 20,966
------
810,236
-------
Media/Entertainment-3.3% Boyd Gaming.. 41,000 825,125
Broadcasting Partners, Cl. A.. 1,200 20,400
International Cabletel.. 20,750 599,156
Iwerks Entertainment.. 4,000 137,000
Magnum Berhad.. 247,500 609,592
Resorts World Berhad.. 211,000 1,154,803
Television Broadcasts.. 120,000 437,880
-------
3,783,956
---------
Premier Global Investing
Statement of Investments (continued)October 31, 1993
Common Stocks-52.6% (continued)
SHARES VALUE
Medical Equipment-.3% Vision-Sciences.. 35,000 $ 367,500
-------
Offshore Drilling-.9% Arethusa Off-Shore.. 50,000 700,000
Dual Drilling.. 28,000 392,000
-------
1,092,000
---------
Oil & Gas Exploration/Production-4.1%
Conwest Exploration .. 55,000 927,410
Home Oil..(b) 65,000 1,027,813
Lasmo PLC.. 200,000 427,800
Parker & Parsley Petroleum.. 20,000 617,500
Pennzoil.. 22,000 1,259,500
Pogo Producing..(b) 16,000 292,000
Unit..(b) 45,000 174,375
-------
4,726,398
---------
Oil Service-1.6% Baker Hughes.. 33,000 742,500
Baroid.. 58,000 478,500
Tidewater.. 30,000 682,500
-------
1,903,500
---------
Real Estate-.1% Chelsea GCA Realty.. 5,000 147,500
-------
Restaurants-.4% HomeTown Buffet.. 15,000 420,000
Pollo Tropical.. 2,000 37,000
--------
457,000
--------
Retail-2.6% Aoyama Trading.. 7,000 524,195
Autobacs Seven.. 3,700 450,971
Farmacias Benavides S.A., Cl. B.. 150,000 680,550
Sears Roebuck de Mexico S.A., Cl. B.. 58,500 760,558
Seven-Eleven Japan.. 7,000 591,416
-------
3,007,690
--------
Steel-.8% British Steel PLC.. 470,000 900,990
-------
Telecommunications-4.2% Cable & Wireless PLC.. 124,000 917,848
DDI.. 17 993,629
Technology Resources Cl. A.. 250,000 791,750
Telefonica de Argentina S.A., Cl. B.. 100,000 527,300
Telefonos De Mexico S.A., A.D.R... 16,000 876,000
Vodafone Group PLC.. 96,000 785,952
-------
4,892,479
--------
Transportation-1.2% Sembawang Shipyard.. 71,000 590,933
Singapore Airlines .. 95,000 742,710
-------
1,333,643
---------
TOTAL COMMON STOCKS (cost $54,963,426).. $ 61,025,826
-----------
-----------
</TABLE>
Premier Global Investing
<TABLE>
Statement of Investments (continued)October 31, 1993
Call Options-.8%
Notional Value
Amount
<S> <C> <C>
French Franc Interest Rate Swap, July '95..(c,d,f) $30,482,642 $506,012
Contracts
Subject to
Call
Standard & Poor's 500 Index; December '93 @ 455.85.. (f) 29,531 394,972
--------
TOTAL CALL OPTIONS (cost $648,901).. $900,984
-------
-------
</TABLE>
<TABLE>
Short-Term Investments-47.2%
Principal
Amount
<S> <C> <C>
U.S. Treasury Bills-47.2% 2.987%, 11/18/1993.. $3,415,000 $3,410,181
3.009%, 11/26/1993.. 12,091,000 12,065,739
2.95%, 12/09/1993.. 1,373,000 1,368,725
2.92%, 12/16/1993.. 11,480,000 11,438,103
2.89%, 12/23/1993..(e) 10,910,000 10,864,457
2.948%, 1/06/1994.. 12,445,000 12,377,730
3.03%, 1/20/1994..(e) 3,270,000 3,247,976
---------
TOTAL SHORT-TERM INVESTMENTS (cost $54,772,911).. $54,772,911
-----------
-----------
TOTAL INVESTMENTS (cost $110,385,238)... 100.6% $116,699,721
LIABILITIES, LESS CASH AND RECEIVABLES.. (.6)% $(737,460)
-------------
-------------
NET ASSETS.............................. 100.0% $115,962,261
------------
------------
</TABLE>
Notes to Statement of Investments:
(a)Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1993, this security amounted to $392,000 or .34% of net assets.
(b)Non-income producing.
(c)Denominated in French Francs.
(d)Based on a fixed rate of 6.39% versus PIBOR, (Paris Interbank Offering
Rate).
(e)Partially held by the custodian in a segregated account as collateral for
open financial futures positions.
(f)Securities restricted as to public resale. Investments in restricted
securities with an aggregate value of $900,984 represents approximately .78%
of net assets:
<TABLE>
Acquisition Purchase Percentage of Valuation*
Date Price Net Assets
<S> <C> <C> <C> <C>
French Franc Interest Rate Swap,
July '95 7/28/93 $ .002 .44% $ .003
Standard & Poor's 500 Index December
'93 @ 455.85 8/19/93 8.43 .34 13.375
</TABLE>
*The valuation of this security has been determined in good faith under the
direction of the Board of Directors.
See notes to financial statements.
Premier Global Investing
Statement of Financial Futures October 31, 1993
<TABLE>
Number of Market Value Expiration Unrealized
Contracts Covered Appreciation
by Contracts at 10/31/93
<S> <C> <C> <C> <C>
Financial Futures Sold Short
Japanese Yen............................ 40 ($4,613,500) Dec. '93 $47,625
</TABLE>
Statement of Securities Sold Short October 31, 1993
Principal Value
Amount
Bonds
U.S. Treasury 5.75%, 8/15/2003
(proceeds $2,048,750)................... $2,000,000 $2,048,125
See notes to financial statements.
Premier Global Investing
Statement of Assets and Liabilities October 31, 1993
ASSETS:
Investments in securities, at value
(cost $110,385,238)-see statement....... $116,699,721
Cash.................................... 774,896
Receivable from broker for proceeds
on securities sold short................ 2,048,750
Receivable for investment securities
sold.................................... 1,404,632
Receivable for subscriptions to
Common Stock............................ 127,959
Dividends and interest receivable....... 85,248
Receivable for futures variation
margin-Note 3(a)........................ 80,315
Prepaid expenses........................ 72,797
-----------
121,294,318
LIABILITIES:
Due to The Dreyfus Corporation.......... $ 119,501
Payable for investment securities
purchased............................... 2,973,120
Securities sold short, at value
(proceeds $2,048,750)-see statement..... 2,048,125
Payable for shares of Common Stock
redeemed................................ 16,791
Accrued expenses........................ 174,520 5,332,057
--------- ------------
NET ASSETS.............................. $115,962,261
============
REPRESENTED BY:
Paid-in capital......................... $105,223,582
Accumulated undistributed investment
income-net.............................. 354,308
Accumulated undistributed net realized
gain on investments..................... 4,021,638
Accumulated net unrealized appreciation
on investments (including $47,625
net unrealized appreciation on
financial futures)-Note 3(b)............ 6,362,733
------------
NET ASSETS at value..................... $115,962,261
============
Shares of Common Stock outstanding:
Class A Shares (300 million shares
of $.001 par value authorized).......... 4,817,442
=========
Class B Shares (300 million shares
of $.001 par value authorized).......... 2,639,982
=========
NET ASSET VALUE per share:
Class A Shares ($75,065,687/4,817,442
shares)................................. $15.58
======
Class B Shares ($40,896,574/2,639,982
shares)................................. $15.49
======
See notes to financial statements.
Premier Global Investing
Statement of Operations year ended October 31, 1993
INVESTMENT INCOME:
Income:
Interest................................ $1,458,808
Cash dividends (net of $31,945
foreign taxes withheld at source)....... 287,888
----------
Total Income............................ $1,746,696
Expenses:
Management fee-Note 2(a)................ 511,327
Shareholder servicing costs-Note
2(b,c).................................. 267,723
Prospectus and shareholders' reports-Note
2(b)................................... 137,646
Distribution fees (Class B shares)-Note
2(b).................................... 107,752
Professional fees....................... 70,100
Custodian fees.......................... 61,519
Registration fees....................... 58,995
Directors' fees and expenses-Note
2(d).................................... 14,972
Dividends on securities sold short...... 1,925
Miscellaneous........................... 20,026
-------
Total Expenses.......................... 1,251,985
---------
INVESTMENT INCOME-NET................... 494,711
---------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain (loss) on investments
- -Note 3(a):
Long transactions (including options
transactions)........................... $4,044,369
Short sale transactions................. (38,870)
Net realized gain on financial
futures-Note 3(a):
Long transactions....................... 52,460
Short transactions...................... 243,694
-----------
Net Realized Gain....................... 4,301,653
Net unrealized appreciation on
investments and securities sold
short [including ($216,303) net
unrealized (depreciation) on financial
futures]................................ 6,349,196
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS.......................... 10,650,849
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... $11,145,560
===========
See notes to financial statements.
Premier Global Investing
Statement of Changes in Net Assets
Year Ended October 31,
----------------------
1992(1) 1993
------- ----
OPERATIONS:
Investment income-net................... $121,676 $494,711
Net realized gain on investments........ 69,424 4,301,653
Net unrealized appreciation on
investments for the year................ 13,537 6,349,196
---------- ----------
Net Increase In Net Assets Resulting
From Operations......................... 204,637 11,145,560
---------- ----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares.......................... - (262,079)
Class B shares.......................... - -
Net realized gain on investments:
Class A shares.......................... - (349,439)
Class B shares.......................... - -
---------- ----------
Total Dividends......................... - (611,518)
---------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.......................... 37,627,576 42,121,565
Class B shares.......................... - 38,860,345
Dividends reinvested:
Class A shares.......................... - 568,838
Class B shares.......................... - -
Cost of shares redeemed:
Class A shares.......................... (2,263,594) (11,183,307)
Class B shares.......................... - (607,841)
---------- ----------
Increase In Net Assets From Capital
Stock Transactions...................... 35,363,982 69,759,600
---------- ----------
Total Increase In Net Assets............ 35,568,619 80,293,642
NET ASSETS:
Beginning of year....................... 100,000 35,668,619
---------- ----------
End of year (including undistributed
investment income-net: $121,676
in 1992 and $354,308 in 1993)........... $35,668,619 $115,962,261
========== ==========
<TABLE>
Shares
------
Class A Class B
------- -------
Year Ended October 31, Year Ended
---------------------- October 31, 1993(2)
-------------------
1992(1) 1993
------- ----
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................. 2,765,133 2,945,764 2,681,279
Shares issued for dividends reinvested.. - 42,261 -
Shares redeemed......................... (165,927) (777,789) (41,297)
---------- ---------- ----------
Net Increase In Shares Outstanding...... 2,599,206 2,210,236 2,639,982
========== ========== ==========
(1)From January 31, 1992 (commencement of operations) to October 31, 1992.
(2)From January 15, 1993 (commencement of initial offering) to October 31,
1993.
</TABLE>
See notes to financial statements.
Premier Global Investing
Financial Highlights
Reference is made to page 2 of the Fund's Prospectus dated January
17, 1994.
See notes to financial statements.
Premier Global Investing
NOTES TO FINANCIAL STATEMENTS
NOTE 1-Significant Accounting Policies:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. Dreyfus
Service Corporation ("Distributor") acts as the distributor of the Fund's
shares. The Distributor is a wholly-owned subsidiary of The Dreyfus
Corporation ("Manager").
The Fund is incorporated under the name Dreyfus Global Investing, Inc.
and began operating under the name Premier Global Investing on October 4,
1993.
On November 9, 1992 the Fund's Board of Directors classified the Fund's
existing shares into Class A shares and authorized 300 million $.001 par
value Class B shares. The Fund began offering both Class A and Class B
shares on January 15, 1993. Class A shares are subject to a sales charge
imposed at the time of purchase and Class B shares are subject to a
contingent deferred sales charge imposed at the time of redemption on
redemptions made within six years of purchase. Other differences between
the two Classes include the services offered to and the expenses borne by
each Class and certain voting rights.
(a) Portfolio valuation: Investments in securities (including options
and financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an
exchange or the national securities market, or securities for which there
were no transactions, are valued at the average of the most recent bid and
asked prices, except for open short positions, where the asked price is used
for valuation purposes. Bid price is used when no asked price is
available. Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of the Board of
Directors. Short-term investments are carried at amortized cost, which
approximates value. Investments traded in foreign currencies are translated
to U.S. dollars at the prevailing rates of exchange.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Dividend income is recognized on the ex-dividend date and interest income,
including, where applicable, amortization of discount on investments, is
recognized on the accrual basis.
(c) Dividends to shareholders: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net and dividends from
net realized capital gain are normally declared and paid annually, but the
Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. To the extent that
net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the provisions
available to certain investment companies, as defined in applicable sections
of the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from all, or substantially all, Federal income
taxes.
Premier Global Investing
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2-Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the
average daily value of the Fund's net assets and is payable monthly. The
Agreement further provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, brokerage,
interest on borrowings and extraordinary expenses, exceed the expense
limitation of any state having jurisdiction over the Fund, the Fund may
deduct from the fee to be paid to Dreyfus, or Dreyfus will bear, such excess
expense to the extent required by state law. The most stringent state
expense limitation applicable to the Fund presently requires reimbursement
of expenses in any full fiscal year that such expenses (exclusive of
distribution expenses and certain expenses as described above) exceed 2 1/2%
of the first $30 million, 2% of the next $70 million and 1 1/2% of the excess
over $100 million of the average value of the Fund's net assets in
accordance with California "blue sky" regulations. There was no expense
reimbursement for the year ended October 31, 1993.
The Distributor retained $521,435 during the year ended October 31,
1993 from commissions earned on sales of the Fund's Class A shares.
The Distributor retained $13,873 during the period ended October 31,
1993 from contingent deferred sales charges imposed upon redemptions of the
Fund's Class B shares.
(b) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, effective January 15, 1993, the Fund
pays the Distributor, at an annual rate of .75 of 1% of the value of the
Fund's Class B shares average daily net assets, for costs and expenses in
connection with advertising, marketing and distributing the Fund's Class B
shares. The Distributor may make payments to one or more Service Agents (a
securities dealer, financial institution, or other industry professional)
based on the value of the Fund's Class B shares owned by clients of the
Service Agent.
Prior to January 15, 1993, the Fund's Service Plan ("prior Service
Plan") provided that the Fund pays the Distributor, at an annual rate of .25 of
1% of the value of the Fund's average daily net assets, for costs and expenses
in connection with advertising, marketing and distributing the Fund's shares
and for servicing shareholder accounts. The Distributor made payments to
one or more Service Agents based on the value of the Fund's shares owned by
clients of the Service Agent. The prior Service Plan also provided for the
Fund to bear the costs of preparing, printing and distributing certain of
the Fund's prospectuses and statements of additional information and costs
associated with implementing and operating the Plan, not to exceed the
greater of $100,000 or .005 of 1% of the Fund's average daily net assets for
any full fiscal year.
During the period ended October 31, 1993, $30,278 was charged to the
Fund pursuant to the prior Service Plan and $107,752 was charged pursuant to
the Class B Distribution Plan.
(c) Under the Shareholder Services Plan, effective January 15, 1993,
the Fund pays the Distributor, at an annual rate of .25 of 1% of the value
of the average daily net assets of Class A and Class B shares for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. The Distributor may
make payments to Service Agents in respect of these services. The
Distributor determines the amounts to be paid to Service Agents. For the
period ended October 31, 1993, $114,462 and $35,917 were charged to the
Class A and Class B shares, respectively, pursuant to the Shareholder
Services Plan.
(d) Certain officers and directors of the Fund are "affiliated
persons," as defined in the Act, of the Manager and/or the Distributor.
Each director who is not an "affiliated person" receives an annual fee of
$1,000 and an attendance fee of $250 per meeting.
Premier Global Investing
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3-Securities Transactions:
(a) The following summarizes the aggregate amount of purchases and
sales of investment securities and securities sold short, excluding
short-term securities and options transactions, during the year ended
October 31, 1993:
Purchases Sales
--------- -----
Long transactions....................... $91,630,381 $48,787,085
Short sale transactions................. 626,425 2,636,305
---------- ----------
Total................................... $92,256,806 $51,423,390
=========== ===========
The Fund is engaged in short-selling which obligates the Fund to
replace the security borrowed by purchasing the security at current market
value. The Fund would incur a loss if the price of the security increases
between the date of the short sale and the date on which the Fund replaces the
borrowed security. The Fund would realize a gain if the price of the
security declines between those dates. Until the Fund replaces the borrowed
security, the Fund will maintain daily, a segregated account with a broker
and custodian, of cash and/or U.S. Government securities sufficient to
cover its short position. Securities sold short at October 31, 1993 and
their related market values and proceeds are set forth in the Statement of
Securities Sold Short.
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments (see the Statement of Financial Futures). Typically,
investments in financial futures require the Fund to "mark to market" on a
daily basis, which reflects the change in the market value of the contract
at the close of each day's trading. Accordingly, variation margin payments
are made or received to reflect daily unrealized gains or losses. When the
contracts are closed, the Fund recognizes a realized gain or loss. These
investments require initial margin deposits with a custodian, which consist
of cash or cash equivalents, up to approximately 10% of the contract
amount. The amount of these deposits is determined by the exchange or Board
of Trade on which the contract is traded and is subject to change.
The Fund is engaged in trading restricted options, which are not exchange
traded. The Fund's exposure to credit risk associated with counter party
nonperformance on these investments is typically limited to the unrealized
gains inherent in such investments that are recognized in the statement of
assets and liabilities.
(b) At October 31, 1993, accumulated net unrealized appreciation on
investments was $6,362,733, consisting of $7,623,905 gross unrealized
appreciation and $1,261,172 gross unrealized depreciation.
At October 31, 1993, 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).
Premier Global Investing
Report of Ernst & Young, Independent Auditors
Shareholders and Board of Directors
Premier Global Investing
We have audited the accompanying statement of assets and liabilities of
Premier Global Investing, including the statements of investments, financial
futures and securities sold short, as of October 31, 1993, and the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended, and financial
highlights for each of the years indicated therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1993 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Global Investing at October 31, 1993, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the indicated years, in conformity with generally accepted
accounting principles.
Ernst & Young
New York, New York
December 8, 1993
Premier Global Investing
Important Tax Information (unaudited)
For Federal Tax purposes the Fund hereby designates $.075 per share
as a long-term capital gain distribution of the $.21 per share paid
on December 17, 1992.
