DREYFUS GROWTH OPPORTUNITY FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
It is a pleasure to once again have the opportunity to correspond with
you regarding the Dreyfus Growth Opportunity Fund, Inc. This report covers
the semi-annual period ended August 31, 1996, during which the Fund's total
return was 1.36%* compared to 2.96% for the Standard and Poor's 500 Composite
Stock Price Index.**
ECONOMIC REVIEW
The robust pace of the U.S. economy in the first half of the calendar
year was broken only temporarily by July's sluggishness. Somewhat faster
growth is again evident as summer ends. However, above-trend economic
expansion this year has raised fears of higher future inflation, even while
reported inflation remains tame. These inflation fears pushed bond yields
higher and built expectations for a Federal Reserve Board tightening.
This year's economic strength is due to robust domestic demand that has
kept inventories lean. Real Gross Domestic Product grew 3.4% in the first
half, driven largely by consumer spending and housing investment, although
homebuilding saw slower activity. Industrial output likewise surged, although
producers bent on meeting demand have been unable to also rebuild inventory.
Support for sustained consumer spending growth is coming from new jobs, wage
increases, low summer utility bills and a fall hike in the minimum wage. In
addition, new orders for exports and capital goods-both sluggish sectors this
summer-have recently reaccelerated. Corporate profits, however, are not
sharing this year's prosperity as profit growth is now decelerating.
Core consumer price inflation remains moderate, although rising food and
energy prices have begun to pull the overall inflation rate higher and wage
increases have accelerated in this year's tight labor market. As a result,
reports of a faster economic pace have boosted fears of accelerated inflation
and bond yields have risen substantially; short-term market rates have also
surged on expectations of a Federal Reserve tightening in coming months. So
far, long-term rates have risen more than short-term rates, forcing the yield
curve to steepen. A steep yield curve is usually supportive of sustained
growth in the real economy.
MARKET OVERVIEW
The securities markets remained robust, as we said, through a good part
of the last 12 months but stumbled in late June and July of this year. The
summer sell-off was due to a number of factors, among them the higher price
levels and price-to-earnings ratios that many stocks had already achieved,
and indications that corporate profits might not be as strong in the last
half of the year as in the first half. The overriding influence, however, was
the market's anticipation of what the Federal Reserve might do about interest
rates.
In late 1995 and early 1996, the Fed was preoccupied with offsetting
economic weakness, and that occasioned the series of cuts in short-term rates
initiated by the Fed, the last one occurring at the end of January, 1996.
After that, through August 31, the Fed adopted a hands-off posture in regard
to interest rates. However, the stock and bond markets expected the Fed to
shift gears and slam on the monetary brakes as the economy continued to
expand.
These fears of an anti-inflation move by the Fed were particularly acute
in June and July, leading to a sharp shakeout in security prices-among bonds
as well as stocks. The technology stocks were affected the most, but large
capitalization blue chips also experienced setbacks. Bond prices slumped as
interest rates rose.
As July gave way to August, the markets appeared to make an adjustment to
the interest rate outlook, and regained some of the ground lost earlier.
However, high anxiety still prevailed as the country moved into the Fall
season, bringing with it the unknowns of the pending Presidential and
Congressional elections.
FUNDAMENTAL ANALYSIS
We are practitioners of, and passionate believers in, fundamental
security analysis. This method of determining the value of a security starts
with our analysts and often our portfolio managers communicating directly
with the management of companies which are either current investments or are
being considered for investment in Dreyfus mutual funds. Not only do we
interview management by telephone on a regular basis, but we also
periodically visit corporate headquarters, divisional headquarters, factories
and distribution outlets. We meet with senior management and talk with all
levels of employees, as well as a company's customers and competitors. It is
through the mosaic of information collected in these meetings that investment
decisions begin to be made.
It is a massive undertaking for us, especially given the thousands of
securities which are available for investment on a worldwide basis. It can
only be accomplished with an experienced and dedicated team of security
analysts. Dreyfus currently employs 35 individuals who specialize in this
analytical work, one of the largest efforts of any mutual fund firm. Our
analysts are solely dedicated to finding the best investments for our
clients, the mutual fund shareholders. Their work is proprietary: It is only
distributed internally to our portfolio managers, and forms the basis for
security selection in the mutual funds.
Much like the complete and thorough mixture of information that we build
to make investment decisions, our analysts form a diverse mix of individuals.
Some are specialists in certain types of securities, while others are
industry specialists who concentrate on securities within a particular sector
of the economy. Most have actual industry experience in their particular
field of specialization. For example, our three-person health care team
includes a retired physician, a former medical researcher for the U.S. Army,
and a former health care lobbyist to Congress. Some are relatively young and
some are veterans, providing a blend of energy and experience. This diversity
is beneficial to the investment process. Investments are best made by
thinking somewhat differently from everyone else who is making similar
investments. Ideally, one tries to make investment choices a bit sooner than
other investors. The reason, of course, is that through an increase in demand
for ownership of a security the price of that security rises.
PORTFOLIO FOCUS
Investment results during the semi-annual period benefited from holdings
such as Newell, Reebok International, Storage Technology, Intel, Chase
Manhattan, PMI Group, Sandoz AG, Warner-Lambert, AlliedSignal, Price/Costco
and NorAm Energy. Performance results were penalized by holdings including
Sensormatic Electronics, First Brands, Grand Casinos, Westinghouse Electric,
Olin and AT&T.
Thank you for your trust and the privilege of managing your assets. All
of Dreyfus continues to work diligently on your behalf.
Sincerely,
[Timothy M. Ghriskey signature logo]
Timothy M. Ghriskey
Portfolio Manager
September 12, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
** 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.
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS AUGUST 31, 1996 (UNAUDITED)
COMMON STOCKS-98.9% SHARES VALUE
------- -------
<S> <C> <C>
COMMERCIAL SERVICES-1.9% Sensormatic Electronics................ 421,000 $ 7,735,875
-------
CONSUMER DURABLES-2.3% Newell................................. 300,000 9,337,500
-------
CONSUMER
NON-DURABLES-11.4% First Brands 360,000 8,190,000
Jones Apparel Group.................... 36,300 (a) 2,010,113
Kimberly-Clark......................... 113,100 8,864,212
Philip Morris Cos...................... 95,000 8,526,250
Reebok International................... 265,000 9,540,000
Warnaco Group, Cl. A................... 380,000 9,405,000
-------
46,535,575
-------
CONSUMER SERVICES-1.3% Grand Casinos.......................... 292,500 (a) 5,301,563
-------
ELECTRONIC
TECHNOLOGY-13.4% Digital Equipment...................... 200,000 (a) 7,725,000
Intel.................................. 125,000 9,976,563
Lockheed Martin........................ 100,000 8,412,500
Perkin-Elmer........................... 180,000 9,337,500
Storage Technology..................... 290,000 (a) 10,983,750
United Technologies.................... 74,000 8,343,500
-------
54,778,813
-------
ENERGY MINERALS-8.4% Amerada Hess........................... 180,000 9,157,500
Phillips Petroleum..................... 215,000 8,707,500
Tosco.................................. 165,000 7,920,000
Unocal................................. 245,000 8,391,250
-------
34,176,250
-------
FINANCE-8.2% Ahmanson (H.F.)........................ 360,000 9,090,000
Chase Manhattan........................ 115,000 8,553,125
Fleet Financial Group.................. 195,000 8,141,250
PMI Group.............................. 160,000 7,820,000
-------
33,604,375
-------
HEALTH SERVICES-3.1% Columbia/HCA Healthcare................ 155,000 8,738,125
Value Health........................... 239,000 (a) 3,794,125
-------
12,532,250
-------
HEALTH TECHNOLOGY-8.8% Baxter International................... 195,000 8,701,875
Bristol-Myers Squibb................... 100,000 8,775,000
Sandoz AG.............................. 6,700 7,963,046
Warner-Lambert......................... 180,000 10,710,000
-------
36,149,921
-------
INDUSTRIAL SERVICES-1.0% Cooper Cameron......................... 80,000 (a) 4,220,000
-------
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1996 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------- -------
NON-ENERGY MINERALS-2.1% CEMEX, S.A............................. 2,045,000 $ 8,476,963
-------
PROCESS INDUSTRIES-11.8% Hoechst................................ 241,000 8,439,879
National Service Industries............ 230,000 8,740,000
Tenneco................................ 160,000 7,960,000
Union Carbide.......................... 195,000 8,433,750
Westinghouse Electric.................. 462,500 7,573,437
Witco.................................. 240,000 7,260,000
-------
48,407,066
-------
PRODUCER
MANUFACTURING-8.6% AlliedSignal........................... 150,000 9,262,500
Masco.................................. 280,000 8,155,000
Olin................................... 105,000 8,321,250
Raychem................................ 135,000 9,264,375
-------
35,003,125
-------
RETAIL STORES-6.2% K mart................................. 745,000 7,450,000
Pier 1 Imports......................... 565,000 9,463,750
Price/Costco........................... 434,000 (a) 8,625,750
-------
25,539,500
-------
TRANSPORTATION-2.0% Burlington Northern Santa Fe........... 100,000 8,000,000
-------
UTILITIES-8.4% AT&T................................... 125,000 6,562,500
Entergy................................ 290,000 7,358,750
Hong Kong Telecom, A.D.R............... 490,000 8,268,750
NorAm Energy........................... 830,000 12,138,750
-------
34,328,750
-------
TOTAL COMMON STOCKS
(cost $394,684,145).................. $404,127,526
=======
PRINCIPAL
SHORT-TERM INVESTMENTS-2.3% AMOUNT
-------
U.S. GOVERNMENT AGENCIES; Federal Home Loan Mortgage,
5.18%, 9/3/1996
(cost $9,367,303).................... $ 9,370,000 $ 9,367,303
=======
TOTAL INVESTMENTS (cost $404,051,448)....................................... 101.2% $413,494,829
==== =======
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (1.2%) $ (4,851,639)
==== =======
NET ASSETS.................................................................. 100.0% $408,643,190
==== =======
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See independent accountants' review report and notes to financial statements.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1996 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $404,051,448)--see statement.................................... $413,494,829
Cash.................................................................... 221,934
Receivable for investment securities sold............................... 1,468,939
Dividends receivable.................................................... 821,868
Receivable for subscriptions to Common Stock subscribed................. 21,000
Prepaid expenses........................................................ 81,593
-------
416,110,163
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 346,940
Payable for Common Stock redeemed....................................... 3,786,591
Payable for investment securities purchased............................. 3,280,350
Accrued expenses........................................................ 53,092 7,466,973
------ -------
NET ASSETS.................................................................. $408,643,190
=======
REPRESENTED BY:
Paid-in capital......................................................... $351,365,234
Accumulated undistributed investment income--net........................ 2,306,656
Accumulated undistributed net realized gain on investments.............. 45,527,460
Accumulated net unrealized appreciation on investments
and foreign currency transactions..................................... 9,443,840
-------
NET ASSETS at value applicable to 42,179,857 shares outstanding
(100 million shares of $.01 par value Common Stock authorized).......... $408,643,190
=======
NET ASSET VALUE, offering and redemption price per share
($408,643,190 / 42,179,857 shares)...................................... $9.69
=======
See independent accountants' review report and notes to financial statements.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED AUGUST 31, 1996 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $34,372 foreign taxes withheld at source)...... $ 4,088,390
Interest.............................................................. 365,721
-------
TOTAL INCOME.................................................... $ 4,454,111
EXPENSES:
Management fee--Note 3(a)............................................. 1,577,177
Shareholder servicing costs--Note 3(b)................................ 543,053
Directors' fees and expenses--Note 3(c)............................... 35,177
Professional fees..................................................... 29,145
Registration fees..................................................... 24,912
Custodian fees-Note 3(b).............................................. 23,051
Prospectus and shareholders' reports.................................. 5,438
Miscellaneous......................................................... 1,139
-------
TOTAL EXPENSES.................................................. 2,239,092
-------
INVESTMENT INCOME--NET.......................................... 2,215,019
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 4:
Net realized gain on investments and foreign currency transactions...... $45,522,225
Net realized gain on forward currency exchange contracts................ 735,145
-------
NET REALIZED GAIN..................................................... 46,257,370
Net unrealized (depreciation) on investments and foreign currency transactions... (42,372,858)
-------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 3,884,512
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 6,099,531
=======
See independent accountants' review report and notes to financial statements.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
FEBRUARY 29, AUGUST 31, 1996
1996 (UNAUDITED)
-------- ----------
OPERATIONS:
Investment income--net............................................... $ 3,652,873 $ 2,215,019
Net realized gain on investments..................................... 50,930,644 46,257,370
Net unrealized appreciation (depreciation) on investments for the period 42,207,027 (42,372,858)
------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 96,790,544 6,099,531
------- -------
DIVIDENDS TO SHAREHOLDERS:
From investment income-net........................................... (4,560,750) --
From net realized gain on investments................................ (49,121,207) --
In excess of net realized gain on investments........................ (729,910) --
------- -------
TOTAL DIVIDENDS.................................................... (54,411,867) --
------- -------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................ 328,651,642 130,099,183
Dividends reinvested................................................. 52,738,775 --
Cost of shares redeemed.............................................. (376,842,186) (146,795,077)
------- -------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.. 4,548,231 (16,695,894)
------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ 46,926,908 (10,596,363)
NET ASSETS:
Beginning of period.................................................. 372,312,645 419,239,553
------- -------
End of period (including undistributed investment income-net:
$91,637 and $2,303,656, respectively).............................. $ 419,239,553 $ 408,643,190
======= =======
SHARES SHARES
------- -------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................................................... 34,615,381 13,306,177
Shares issued for dividends reinvested............................... 5,855,690 --
Shares redeemed...................................................... (39,577,869) (14,984,467)
------- -------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING...................... 893,202 (1,678,290)
======= =======
</TABLE>
See independent accountants' review report and notes to financial statements.
DREYFUS GROWTH OPPORTUNITY 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.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED FEBRUARY, AUGUST 31,1996
--------------------------------------------------
PER SHARE DATA: 1992 1993 1994 1995 1996 (UNAUDITED)
---- ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $10.27 $13.20 $12.21 $10.89 $ 8.67 $ 9.56
---- ---- ---- ---- ---- ----
INVESTMENT OPERATIONS:
Investment income (loss)-net.......... .11 .01 (.02) .10 .10 .05
Net realized and unrealized gain (loss)
on investments...................... 2.95 (.98) 1.30 (.38) 2.19 .08
---- ---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS.... 3.06 (.97) 1.28 (.28) 2.29 .13
---- ---- ---- ---- ---- ----
DISTRIBUTIONS:
Dividends from investment income-net.. (.13) (.02) - (.09) (.12) -
Dividends from net realized gain
on investments...................... .- - (2.60) (1.80) (1.26) -
Dividends in excess of net realized gain
on investments...................... .- - - (.05) (.02) -
---- ---- ---- ---- ---- ----
TOTAL DISTRIBUTIONS................. (.13) (.02) (2.60) (1.94) (1.40) -
---- ---- ---- ---- ---- ----
Net asset value, end of period........ $13.20 $12.21 $10.89 $ 8.67 $ 9.56 $ 9.69
==== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN................... 29.91% (7.36%) 11.07% (2.11%) 27.37% 1.36%(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .95% 1.00% 1.09% 1.10% 1.04% .53%(1)
Ratio of net investment income (loss) to
average net assets.................. .85% .11% (.14%) 1.09% .91% .53%(1)
Portfolio Turnover Rate............... 56.95% 90.03% 194.59% 242.75% 268.40% 74.06%(1)
Average commission rate paid (2)...... .- - - - $.0790 $.0889
Net Assets, end of period (000's Omitted) $631,436 $569,791 $463,323 $372,313 $419,240 $408,643
(1) Not annualized.
(2) For fiscal years beginning September 1, 1995, the Fund is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.
</TABLE>
See independent accountants' review report and notes to financial statements.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Growth Opportunity Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company. The Fund's investment objective is to provide
long-term capital growth consistent with the preservation of capital. The
Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon"). Premier
Mutual Fund Services, Inc. acts as the distributor of the Fund's shares,
which are sold to the public without a sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options)
are valued at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available. 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. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of
exchange. Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discounts on investments, is recognized on
the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net 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. This may result in distributions
that are in excess of investment income-net and net realized gain on a fiscal
year basis. 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.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2-LINE OF CREDIT:
The Fund participates with other Dreyfus-managed Funds in a $300 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ended August 31, 1996, the Fund did not
borrow under the line of credit.
NOTE 3-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 value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage
commissions and extraordinary expenses, exceed 1 1\2% of the average value of
the Fund's net assets for any full fiscal year. No expense reimbursement was
required for the six months ended August 31, 1996.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the six months ended August 31, 1996, the Fund was charged an
aggregate of $329,295 pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $135,994 during the six months ended August 31,
1996.
Effective May 10, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. For the period from May
10, 1996 through August 31, 1996, $5,775 was paid to Mellon pursuant to the
custody agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the six months ended August 31, 1996, amounted to $297,979,403 and
$303,804,975, respectively.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Fund enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. When executing forward currency exchange
contracts, the Fund is obligated to buy or sell a foreign currency at a
specified rate on a certain date in the future. With respect to sales of
forward currency exchange contracts, the Fund would incur a loss if the value
of the contract increases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to
purchases of forward currency exchange contracts, the Fund would incur a loss
if the value of the contract decreases between the date the forward contract
is opened and the date the forward contract is closed. The Fund realizes a
gain if the value of the contract increases between those dates. The Fund is
also exposed to credit risk associated with counterparty nonperformance on
these forward currency exchange contracts which is typically limited to the
unrealized gains on such contracts that are recognized in the statement of
assets and liabilities. At August 31, 1996, there were no forward currency
exchange contracts outstanding.
(B) At August 31, 1996, accumulated net unrealized appreciation on
investments was $9,443,381, consisting of $25,381,985 gross unrealized
appreciation and $15,938,604 gross unrealized depreciation.
At August 31, 1996, 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 GROWTH OPPORTUNITY FUND, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS GROWTH OPPORTUNITY FUND, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Growth Opportunity Fund, Inc., including the statement of
investments, as of August 31, 1996, and the related statements of operations
and changes in net assets and financial highlights for the six month period
ended August 31, 1996. 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
February 29, 1996 and financial highlights for each of the five years in the
period ended February 29, 1996 and in our report dated April 2, 1996, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
[Ernst and Young LLP signature logo]
New York, New York
October 7, 1996
[Dreyfus lion "d" logo]
DREYFUS GROWTH
OPPORTUNITY FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 018SA968
[Dreyfus logo]
Growth Opportunity
Fund, Inc.
Semi-Annual
Report
August 31, 1996
