LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report for the Dreyfus Balanced
Fund, Inc. covering the semi-annual period ended February 28, 1995. Since the
Fund's inception on September 30, 1992, its assets have grown rapidly and now
exceed $110 million. This includes an increase of over 34% in assets since
our August 31, 1994 report. The stock market remains near its all-time high
and prices on long-term Treasury issues have rallied significantly. We are
maintaining a cautious outlook toward the markets and continue to emphasize
capital preservation. Accordingly, we changed the Fund's asset allocation to
33% equity, 50% fixed income and 17% cash equivalents. This compares with 41%
equity, 48% fixed income and 11% cash equivalents six months ago.
For the six months ended February 28, 1995, your Fund provided a total
return of 5.11%.* This compares with a total return of 3.96% for the Standard
& Poor's 500 Composite Stock Price Index** and 3.26% for The Lehman Brothers
Aggregate Bond Index for the same period.***
EQUITY DISCIPLINE
The Fund's equity return was attained by employing our contrarian
discipline to identify undervalued issues with favorable prospects. The
pharmaceutical, health care and technology sectors continued to lead in
market performance. During the period, we added to our position in Merck &
Co., while establishing new positions in Bard (C.R.), Pfizer and Columbia/HCA
Healthcare and deleting our position in Johnson & Johnson. Special situations
again played a key role in our strategy. Viacom was sold after a substantial
profit. Our Viacom shares were received for the shares we tendered in
Blockbuster Entertainment. Gains were also realized in Pet, Atlantic
Richfield and Johnson & Johnson. Pet was purchased by Grand Metropolitan for
cash, and again, we were rewarded with a substantial gain. Technology was
also a profitable sector for the Fund. Equifax's stock price fell back during
the period, allowing us to acquire more shares. In the meantime, the stock
has moved back to near its historic high. Texas Instruments was also added
after the stock fell back. Exposure to the bank sector was initiated, with
shares of Citicorp and First Interstate Bancorp purchased to take advantage
of historically low valuation levels. Near the year's end, we added Deere &
Co. as another undervalued equity.
BOND STRATEGY
In the fixed-income portion of the Fund, we have remained defensive
during the period, although as the intrinsic value of the bond market
improved in late 1994 we did extend maturities modestly. We have emphasized
the use of very short or floating rate securities to protect principal, while
using a modest amount of long-term Treasury bonds when extending maturities.
This technique permits the portfolio to benefit from a flattening of the
yield curve, a situation we expect to occur as, we believe, the Federal
Reserve Board will continue to tighten through the first half of 1995.
Because the yields offered by corporate bonds and mortgages are very low
relative to those of Treasury bonds, we have continued to underweight those
sectors.
CONSOLIDATON AHEAD?
Forecasters disagree about just when the current economic cycle will end.
As a result, we have structured the Fund somewhat defensively so that it is
not as vulnerable to the vicissitudes of the market as more aggressive funds.
However, it could be that we are entering a consolidation phase. As evidence
of this, we have observed that the industries that have outperformed the S &
P most significantly over the past six months are the same sectors that
usually perform the best toward the end of an economic expansion. It should
be remembered that such a phase can last for quite a while. The bottom line
is that we believe your portfolio, allocated among equities, fixed-income
securities and cash, is well positioned to participate on the upside and yet
is also defensively postured vis-a-vis our investment strategy/discipline in
the event of a correction.
Sincerely,
(Ernest G. Wiggins Signature Logo)
Ernest G. Wiggins
Primary Portfolio Manager
(Donald C. Geogerian Signature Logo)
Donald C. Geogerian
Equity Portfolio Manager
(C. Matthew Olson, CFA Signature Logo)
C. Matthew Olson, CFA
Debt Portfolio Manager
March 17, 1995
New York, N.Y.
* Total return represents the change during the period in a
hypothetical account with dividends reinvested.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment
of income dividends and, where applicable, capital gain distributions.
The Standard & Poor's 500 Composite Stock Price Index is a widely
accepted unmanaged index of U.S. stock market performance.
*** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - The Lehman Brothers
Aggregate Bond Index is a widely accepted unmanaged index of corporate,
government and government agency debt instruments.
<TABLE>
<CAPTION>
DREYFUS BALANCED FUND, INC FEBRUARY 28, 1995
ASSET ALLOCATION
[Exhibit A]
<S> <C> <C>
FIVE LARGEST SECTORS
U.S. Government and Agencies............................................... 33.9%
Pharmaceuticals............................................................ 7.5
Other...................................................................... 7.1
Banking.................................................................... 4.5
Electronics................................................................ 3.9
TEN LARGEST EQUITY HOLDINGS
Amgen...................................................................... 2.0%
Texas Instruments.......................................................... 2.0
Merck & Co................................................................. 2.0
Chelsea GCA Realty......................................................... 2.0
Equifax.................................................................... 1.9
Teradyne................................................................... 1.9
Schering-Plough............................................................ 1.7
Manor Care................................................................. 1.7
International Business Machines............................................ 1.7
Nike, Cl. B................................................................ 1.6
TEN LARGEST FIXED INCOME SECURITY HOLDINGS
U.S. Treasury Bonds, 7 1/4%, 5/15/2016..................................... 8.6%
U.S. Treasury Bonds, 7 1/2%, 11/15/2016.................................... 2.9
U.S. Department of Housing and Urban Development,
Gtd. Participation Ctfs., Ser. 95-A, 8.15%, 8/1/2000....................... 2.8
U.S. Treasury Notes, 5 %, 1/31/1999..................................... 2.3
Federal Home Loan Banks,
Consolidated Bonds, 7.31%, 1/4/1996.................................... 2.3
Ameritech Capital Funding, Notes (Gtd. by Ameritech), 6.363%, 1998......... 1.8
First USA Credit Card Master Trust, Asset Backed Ctfs., Ser. 1994-5,
Cl. A, 6.265%, 2000................................................... 1.8
Federal Home Loan Banks, Medium-Term Notes, 7 5/8%, 10/14/1999............. 1.8
Premier Auto Trust 1994-2, Asset Backed Ctfs., Cl. A-3, 6.35%, 2000........ 1.8
U.S. Treasury Notes, 6 3/8%, 1/15/2000..................................... 1.7
All percentages shown above are based on Total Net Assets.
Portfolio composition is subject to change.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BALANCED FUND, INC.
STATEMENT OF INVESTMENTS FEBRUARY 28, 1995 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES--49.5% AMOUNT VALUE
-------------- -------------
<S> <C> <C>
BANKING--2.8% BankAmerica, Sub. Notes,
7.20%, 2006.......................... $ 1,000,000 $ 935,000
Fleet Mortgage Group, Medium-Term Notes,
6.725%, 1996......................... 650,000 (a) 647,563
Nationsbank, Sr. Medium-Term Notes,
6 3/8%, 1995......................... 1,500,000 (a) 1,500,930
--------------
3,083,493
--------------
FINANCE--2.7% Ameritech Capital Funding, Notes
(Gtd. by Ameritech),
6.30%, 1998.......................... 2,000,000 (a) 2,001,966
CoreStates Capital, Sr. Medium-Term Notes,
6.60%, 1996.......................... 1,000,000 (a) 997,500
--------------
2,999,466
--------------
INDUSTRIAL--.5% TRINOVA, Sr. Sinking Fund Deb.,
9.55%, 2018.......................... 520,000 550,789
--------------
OIL AND GAS--.6% Southern California Gas, First Mortgage,
Ser. DD, 7 1/2%, 2023................ 700,000 630,287
--------------
POLLUTION CONTROL--.7% Waste Management, Notes,
4 5/8%, 1996......................... 750,000 732,723
--------------
TELECOMMUNICATIONS--.4% Southern Bell Telephone & Telegraph, Deb.,
8 1/2%, 2029......................... 500,000 494,730
--------------
FOREIGN--.8% Korea Development Bank, Bonds,
7.90%, 2002.......................... 150,000 147,568
The Metropolis of Tokyo, Bonds
(Gtd. by Tokyo),
9 1/4%, 1998......................... 700,000 744,203
--------------
891,771
--------------
OTHER--7.1% Case Equipment Loan Trust 1994-A,
Asset Backed Ctfs.,
Cl. A-2, 4.65%, 1999................. 1,219,364 1,184,612
First USA Credit Card Master Trust,
Asset Backed Ctfs.,
Ser. 1994-5, Cl. A, 6.265%, 2000..... 2,000,000 (a) 2,001,250
GMAC 1993-B Grantor Trust,
Asset Backed Ctfs.,
Cl. A, 4%, 1998...................... 324,319 315,822
Household Affinity Credit Card Master Trust 1,
Credit Card Participation Ctfs.,
Ser. 1994-1, Cl. A, 6.275%, 2001..... 950,000 (a) 946,586
Premier Auto Trust 1994-2,
Asset Backed Ctfs.,
Cl. A-3, 6.35%, 2000................. 1,985,000 1,950,883
DREYFUS BALANCED FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1995 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
-------------- --------------
OTHER (CONTINUED) Signet Master Trust,
Asset Backed Ctfs.,
Ser. 1994-1, Cl. A, 6 1/4%, 1999..... $ 1,500,000 (a) $ 1,499,063
World Omni 1992-A Grantor Trust,
Asset Backed Ctfs.,
Cl. A, 4 3/4%, 1998.................. 15,208 15,002
--------------
7,913,218
--------------
U.S. GOVERNMENT
AND AGENCIES--33.9% Federal Farm Credit Banks,
Consolidated Systemwide Medium-Term Notes,
5.60%, 8/26/1997..................... 250,000 240,600
Federal Home Loan Banks:
Consolidated Bonds:
7 7/8%, 3/27/1995................ 950,000 950,594
7.31%, 1/4/1996.................. 2,500,000 2,512,500
Medium-Term Notes,
7 5/8%, 10/14/1999............... 2,000,000 1,962,500
Federal Home Loan Mortgage Corp., Deb.:
6.40%, 6/30/1998..................... 1,200,000 (a) 1,192,500
6.54%, 2/28/2001 .................... 2,000,000 1,909,376
Federal National Mortgage Association:
Principal Strips, Real Estate Mortgage
Investment Conduit,
Ser. 93-146B, Zero Coupon, 8/31/1997(b) 900,000 751,500
Real Estate Mortgage Investment Conduit,
Ser. 91-169, Cl. PG, 6 3/4%, 10/25/2017 1,332,012 1,323,941
Student Loan Marketing Association, Notes,
5.315%, 6/30/1995.................... 1,800,000 1,800,349
U.S. Department of Housing and
Urban Development, Gtd. Participation Ctfs.,
Ser. 95-A, 8.15%, 8/1/2000........... 3,000,000 3,105,000
U.S. Treasury Bonds:
7 1/4%, 5/15/2016.................... 9,950,000 9,612,635
7 1/2%, 11/15/2016................... 3,300,000 3,273,188
U.S. Treasury Notes:
3 7/8%, 8/31/1995.................... 750,000 741,504
7 1/2%, 1/31/1996.................... 750,000 757,148
5 1/2%, 7/31/1997.................... 750,000 727,852
6%, 11/30/1997....................... 750,000 733,594
5 5/8%, 1/31/1998.................... 700,000 676,375
5 1/8%, 3/31/1998.................... 350,000 332,773
5%, 1/31/1999........................ 2,725,000 2,541,063
6 3/8%, 1/15/2000.................... 1,970,000 1,914,901
7 1/2%, 5/15/2002.................... 750,000 765,117
--------------
37,825,010
--------------
TOTAL BONDS AND NOTES
(cost $56,013,409)................... $ 55,121,487
==============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BALANCED FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1995 (UNAUDITED)
COMMON STOCKS--33.6% SHARES VALUE
-------------- -------------
<S> <C> <C> <C>
AUTOMOBILES--.6% Excel Industries 50,800 $ 704,850
--------------
BANKING--1.7% Citicorp 18,700 841,500
First Interstate Bancorp............... 12,700 1,033,463
--------------
1,874,963
--------------
CHEMICALS--1.2% Grow Group 92,700 1,332,563
--------------
CONGLOMERATES--2.0% Toys R Us 26,000 (c) 724,750
Wal-Mart Stores........................ 64,800 1,539,000
--------------
2,263,750
--------------
CONSUMER--3.5% Fluor 20,300 989,625
Nike, Cl. B............................ 25,000 1,796,875
Topps.................................. 179,500 1,099,438
--------------
3,885,938
--------------
ELECTRONICS--3.9% Teradyne 57,700 (c) 2,098,837
Texas Instruments...................... 28,800 2,268,000
--------------
4,366,837
--------------
ENVIRONMENTAL--.8% Wheelabrator Technologies 62,900 864,875
--------------
FINANCIAL SERVICES--1.9% Equifax 69,500 2,145,813
--------------
HEALTH CARE--2.9% Bard (C.R.) 37,300 997,775
Columbia/HCA Healthcare................ 24,900 1,030,237
Pfizer................................. 15,000 1,241,250
--------------
3,269,262
--------------
HOUSING--.6% Beazer Homes USA 47,900 (c) 700,538
--------------
MACHINERY--1.0% Deere & Co 13,900 1,065,088
--------------
OIL & GAS--.9% Schlumberger Ltd 17,500 995,312
--------------
PHARMACEUTICALS--7.5% Amgen 32,900 (c) 2,270,100
Manor Care............................. 64,500 1,910,813
Merck & Co............................. 52,400 2,220,450
Schering-Plough........................ 24,500 1,920,188
--------------
8,321,551
--------------
REAL ESTATE--3.4% Chelsea GCA Realty 82,900 2,207,213
Horizon Outlet Centers................. 66,900 1,613,963
--------------
3,821,176
--------------
TECHNOLOGY--1.7% International Business Machines 25,000 1,881,250
--------------
TOTAL COMMON STOCKS
(cost $32,932,933)................... $ 37,493,766
=============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BALANCED FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1995 (UNAUDITED)
PRINCIPAL
SHORT-TERM INVESTMENTS--16.2% AMOUNT VALUE
-------------- -------------
<S> <C> <C>
COMMERCIAL PAPER--2.7% General Electric,
5.90%, 3/9/1995...................... $ 3,000,000 $ 2,992,412
--------------
U.S. TREASURY BILLS--13.5% 4%, 3/9/1995 15,120,000 15,102,310
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $18,094,722)................... $ 18,094,722
==============
TOTAL INVESTMENTS (cost $107,041,064) ................................. 99.3% $ 110,709,975
====== ==============
CASH AND RECEIVABLES (NET) .......................................... .7% $ 748,362
====== ==============
NET ASSETS.................................................................. 100.0% $ 111,458,337
====== ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Variable rate security--interest rate subject to periodic change.
(b) This date represents the projected maturity date, the stated
maturity date is 5/25/2023.
(c) Non-income producing.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BALANCED FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $107,041,064)-see statement..................................... $110,709,975
Cash.................................................................... 260,078
Interest and dividends receivable....................................... 760,400
Receivable for investment securities sold............................... 78,223
Receivable for shares of Common Stock subscribed........................ 25,929
Prepaid expenses........................................................ 21,860
Due from The Dreyfus Corporation........................................ 5,330
--------------
111,861,795
LIABILITIES:
Payable for Common Stock redeemed....................................... $337,445
Accrued expenses and other liabilities.................................. 66,013 403,458
---------- --------------
NET ASSETS ................................................................ $111,458,337
==============
REPRESENTED BY:
Paid-in capital......................................................... $104,626,956
Accumulated undistributed investment income_net......................... 479,740
Accumulated undistributed net realized gain on investments.............. 2,682,730
Accumulated net unrealized appreciation on investments_Note 3........... 3,668,911
--------------
NET ASSETS at value applicable to 7,943,883 outstanding shares of
Common Stock, equivalent to $14.03 per share (300 million shares of
$.001 par value authorized)............................................. $111,458,337
==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BALANCED FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 28, 1995 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest.............................................................. $1,784,415
Cash dividends........................................................ 335,986
------------
TOTAL INCOME...................................................... $2,120,401
EXPENSES:
Management fee_Note 2(a).............................................. 271,931
Shareholder servicing costs_Note 2(b)................................. 133,815
Professional fees..................................................... 30,261
Registration fees..................................................... 16,567
Directors' fees and expenses_Note 2(c)................................ 8,424
Custodian fees........................................................ 7,734
Prospectus and shareholders' reports.................................. 3,441
Miscellaneous......................................................... 7,674
------------
TOTAL EXPENSES.................................................... 479,847
------------
INVESTMENT INCOME--NET............................................ 1,640,554
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments_Note 3................................. $2,930,926
Net unrealized appreciation on investments.............................. 483,364
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 3,414,290
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $5,054,844
============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BALANCED FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
AUGUST 31, FEBRUARY 28, 1995
1994 (UNAUDITED)
-------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income-net.................................................. $ 2,163,346 $ 1,640,554
Net realized gain on investments....................................... 1,084,707 2,930,926
Net unrealized appreciation on investments for the period.............. 1,806,069 483,364
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. 5,054,122 5,054,844
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net.................................................. (1,997,395) (1,589,950)
Net realized gain on investments....................................... (595,034) (839,686)
-------------- --------------
TOTAL DIVIDENDS...................................................... (2,592,429) (2,429,636)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 70,591,550 34,954,779
Dividends reinvested................................................... 2,564,031 2,387,266
Cost of shares redeemed................................................ (41,084,328) (11,357,240)
-------------- --------------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............... 32,071,253 25,984,805
-------------- --------------
TOTAL INCREASE IN NET ASSETS..................................... 34,532,946 28,610,013
NET ASSETS:
Beginning of period.................................................... 48,315,378 82,848,324
-------------- --------------
End of period (including undistributed investment income-net:
$429,136 in 1994 and $479,740 in 1995)............................... $ 82,848,324 $111,458,337
============== ==============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 5,252,861 2,566,221
Shares issued for dividends reinvested................................. 194,979 178,783
Shares redeemed........................................................ (3,049,797) (838,556)
-------------- --------------
NET INCREASE IN SHARES OUTSTANDING................................... 2,398,043 1,906,448
============== ==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BALANCED FUND, INC
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 period indicated. This
information has been derived from the Fund's financial statements.
SIX MONTHS ENDED
YEAR ENDED AUGUST 31, FEBRUARY 28, 1995
-----------------------
PER SHARE DATA: 1993(1) 1994 (UNAUDITED)
------- ------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period....................... $12.50 $13.28 $13.72
------- ------- -------
INVESTMENT OPERATIONS:
Investment income_net...................................... .39 .41 .23
Net realized and unrealized gain on investments............ .71 .59 .46
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS......................... 1.10 1.00 .69
------- ------- -------
DISTRIBUTIONS:
Dividends from investment income_net....................... (.32) (.42) (.25)
Dividends from net realized gain on investments............ -- (.14) (.13)
------- ------- -------
TOTAL DISTRIBUTIONS...................................... (.32) (.56) (.38)
------- ------- -------
Net asset value, end of period............................. $13.28 $13.72 $14.03
======= ======= =======
TOTAL INVESTMENT RETURN........................................ 8.88%(2) 7.73% 5.11%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................... .23%(2) .69% .53%(2)
Ratio of net investment income to average net assets....... 3.46%(2) 3.26% 1.80%(2)
Decrease reflected in above expense ratios due to undertakings
by the Manager........................................... 1.13%(2) .41% --
Portfolio Turnover Rate.................................... 46.42%(2) 58.22% 26.27%(2)
Net Assets, end of period (000's Omitted).................. $48,315 $82,848 $111,458
- ----------------------
(1) From September 30, 1992 (commencement of operations) to August 31, 1993.
(2) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS BALANCED FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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, until August 24, 1994, acted as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. Dreyfus
Service Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
(A) PORTFOLIO VALUATION: Most debt securities (excluding short-term
investments) are valued each business day by an independent pricing service
("Service") approved by the Board of Directors. Debt securities for which
quoted bid prices are readily available and are representative of the bid
side of the market in the judgment of the Service are valued at the mean
between the quoted bid prices (as obtained by the Service from dealers in
such securities) and asked prices (as calculated by the Service based upon
its evaluation of the market for such securities). Other debt securities are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from dealers;
and general market conditions. Other securities are valued at the average of
the most recent bid and asked prices in the market in which such securities
are primarily traded, or at the last sales price for securities traded
primarily on an exchange or the national securities market. In the absence of
reported sales of securities traded primarily on an exchange or national
securities market, the average of the most recent bid and asked prices is
used. 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 denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid quarterly.
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.
On March 30, 1995, the Board of Directors declared a cash dividend of
$.112 per share from undistributed investment income-net, payable on March
31, 1995 (ex-dividend date), to shareholders of record as of the close of
business on March 30, 1995.
(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
DREYFUS BALANCED FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
the applicable provisions of the Internal Revenue Code, and to make
distributions of taxable income sufficient to relieve it from substantially
all Federal income and excise taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .60 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides that the Fund may deduct from the fee to be paid to the Manager, or
the Manager will bear such excess expense, to the extent required by state
law, 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 most stringent
state expense limitation applicable to the Fund presently requires
reimbursement of expenses in any full fiscal year that such expenses
(exclusive of certain expenses as described above) exceed 2 1/2% of the first
$30 million, 2% of the next $70 million and 1 1/2% of the excess over $100
million of the average value of the Fund's net assets in accordance with
California "blue-sky" regulations. There was no expense reimbursement for the
six months ended February 28, 1995.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of
1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the six months
ended February 28, 1995, the Fund was charged an aggregate of $113,304
pursuant to the Shareholder Services Plan.
(C) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each director who is not an "affiliated person"
receives an annual fee of $1,000 and an attendance fee of $250 per meeting.
The Chairman of the Board receives an additional 25% of such compensation.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
other than short-term securities, during the six months ended February 28,
1995, amounted to $37,227,417 and $21,346,967, respectively.
At February 28, 1995, accumulated net unrealized appreciation on
investments was $3,668,911, consisting of $6,016,976 gross unrealized
appreciation and $2,348,065 gross unrealized depreciation.
At February 28, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS BALANCED FUND, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS BALANCED FUND, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Balanced Fund, Inc., including the statement of investments, as of
February 28, 1995, and the related statements of operations and changes in
net assets and financial highlights for the six month period ended February
28, 1995. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
August 31, 1994 and financial highlights for each of the two years in the
period ended August 31, 1994 and in our report dated October 4, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP signature logo)
New York, New York
April 7, 1995
(Dreyfus `D' logo)
DREYFUS BALANCED FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 222SA952
Balanced
Fund, Inc.
Semi-Annual
Report
February 28, 1995
Dreyfus Balanced Fund, Inc. February 28, 1995
Asset Allocation
|---------------------------------------------------------|
|Bonds and Notes 49.5%|
|Common Stocks 33.6%|
|Cash Equivalents 16.9%|
|---------------------------------------------------------|
