Securities Act File No. 33-58248
Investment Company Act File No. 811-7502
==========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. 7 /x/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
Amendment No. 7 /x/
(Check appropriate box or boxes)
DREYFUS INTERNATIONAL EQUITY FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
It is proposed that this filing will become effective (check
appropriate box)
____ immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(i)
on (date) pursuant to paragraph (a)(i)
75 days after filing pursuant to paragraph (a)(ii)
on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
<PAGE>
Registrant has registered an indefinite number of its shares of its common
stock under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for its
fiscal year ended May 31, 1995 was filed on or about July 24, 1995.
<PAGE>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Dreyfus Emerging
Markets Fund
Items in
Part A of
Form N-1A Caption Page
1 Cover Cover
Page
2 Synopsis 3
3 Condensed Financial Information *
4 General Description of
Registrant 3, 24
5 Management of the Fund 7
5(a) Management's Discussion of
Fund's Performance *
6 Capital Stock and Other Securities 24
7 Purchase of Securities Being
Offered 9
8 Redemption or Repurchase 17
9 Pending Legal Proceedings *
Items in All Funds
Part B of
Form N-1A Caption Page
10 Cover Page B-1
11 Table of Contents B-1
12 General Information and History *
13 Investment Objectives and
Policies B-2
14 Management of the Fund B-13
15 Control Persons and Principal
Holders of Securities B-18
16 Investment Advisory and Other
Services B-18
17 Brokerage Allocation B-34
18 Capital Stock and Other
Securities B-37
19 Purchase, Redemption and
Pricing of Securities Being
Offered B-21, B-24,
B-30
20 Tax Status B-31
21 Underwriters B-1, B-21
22 Calculations of Performance Data B-36
23 Financial Statements B-45
Items in
Part C of
Form N-1A Caption Page
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under
Common Control with Registrant C-2
26 Number of Holders of Securities C-2
27 Indemnification C-2
28 Business and Other Connections
of Investment Adviser C-3
29 Principal Underwriters C-9
30 Location of Accounts and Records C-12
31 Management Services C-12
32 Undertakings C-13
- ----
* Omitted since answer is negative or inapplicable.
<PAGE>
PROSPECTUS ________ , 1996
DREYFUS EMERGING MARKETS FUND
Dreyfus Emerging Markets Fund (the "Fund") is a
separate diversified portfolio of Dreyfus International Funds,
Inc., an open-end, management investment company (the "Company"),
known as a mutual fund. The Fund's investment objective is long-
term capital growth. The Fund will invest principally in the
equity securities of foreign issuers in countries with emerging
markets.
You can invest, reinvest or redeem shares at any time
without charge or penalty.
You can purchase or redeem shares by telephone using
Dreyfus TeleTransfer.
The Dreyfus Corporation will professionally manage the
Fund's portfolio.
This Prospectus sets forth concisely information about
the Fund that you should know before investing. It should be
read and retained for future reference.
The Statement of Additional Information, dated ________
__, 1996, 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
144.
Mutual fund shares are not deposits or obligations of,
or guaranteed or endorsed by, any bank, and are not federally
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency. The net asset value of funds
of this type will fluctuate from time to time.
<PAGE>
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses. . . . . . . .
Description of the Fund . . . . . . . . . . .
Management of the Fund. . . . . . . . . . . .
How to Buy Shares . . . . . . . . . . . . . .
Shareholder Services. . . . . . . . . . . . .
How to Redeem Shares . . . . . . . . . . . .
Shareholder Services Plan . . . . . . . . . .
Dividends, Distributions and Taxes. . . . . .
Performance Information . . . . . . . . . . .
General Information . . . . . . . . . . . . .
Appendix. . . . . . . . . . . . . . . . . . .
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.
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees. . . . . . . . . . . . . . . . . . . 1.25%
Other Expenses . . . . . . . . . . . . . . . . . . . .__%
Total Fund Operating Expenses . . . . . . . . . . . __%
Example: 1 Year 3 Years
You would pay the following
expenses on a $1,000 invest-
ment, assuming (1) 5% annual
return and (2) redemption at
the end of each time period: $__ $__
________________________________________________________________
The amounts listed in the example should not be
considered as representative of 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 costs and expenses borne by the Fund, the
payment of which will reduce investors' annual return. Other
Expenses are based on estimated amounts for the current fiscal
year. The information in the foregoing table does not reflect
any fee waivers or expense reimbursement arrangements that may be
in effect. You can purchase Fund shares without charge directly
from the Fund's distributor; you may be charged a nominal fee if
you effect transactions in Fund shares through a Service Agent
(as defined below). For a further description of the various
costs and expenses incurred in the operation of the Fund, as well
as expense reimbursement or waiver arrangements, see "Management
of the Fund," "How to Buy Shares," "Shareholder Services Plan"
and "How to Redeem Shares."
DESCRIPTION OF THE FUND
Investment Objective
The Fund's investment objective is long-term capital
growth. It cannot be changed without approval by the holders of
a majority (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Fund's outstanding voting
shares. There can be no assurance that the Fund's investment
objective will be achieved.
Management Policies
Under normal circumstances, the Fund will invest at
least 65% of the value of its total assets in equity securities
of foreign issuers in countries having emerging markets. For
purposes of the Fund's operations, "emerging markets" will
consist of all countries determined by The Dreyfus Corporation to
have developing or emerging economies and markets. These
countries generally include every country in the world except the
United States, Canada, Japan, Australia and countries located in
Western Europe. The assets of the Fund ordinarily will be
invested in the securities of issuers in at least three different
emerging markets. The Fund does not anticipate that it will
invest more than 25% of the value of its total assets in the
securities of issuers in any one emerging market country.
Issuers whose principal activities are in emerging
markets countries include issuers (1) organized under the laws
of, (2) whose securities have their primary trading market in,
(3) deriving at least 50% of their revenues or profits from goods
sold, investments made, or services performed in, or (4) having
at least 50% of their assets located in, an emerging markets
country. The Dreyfus Corporation will base determinations as to
eligibility on publicly available information and inquiries made
to the companies.
The equity securities in which the Fund may invest
consist of common stocks and preferred stocks. Certain emerging
markets are closed in whole or in part to equity investments by
foreigners. The Fund may be able to invest in such markets
solely or primarily through investment vehicles, such as closed-
end investment companies, authorized by such emerging market
country's government. See "Appendix--Certain Portfolio
Securities--Closed-End Investment Companies."
While seeking desirable equity investments, 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 set forth under "Appendix--Certain Portfolio Securities--Money
Market Instruments." 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 all of
its assets in money market instruments. The Fund also may invest
in money market instruments in anticipation of investing cash
positions.
The Fund's annual portfolio turnover rate is not
expected to exceed 150%. Higher portfolio turnover rates usually
generate additional brokerage commissions and expenses and the
short-term gains realized from these transactions are taxable to
shareholders as ordinary income. In addition, the Fund currently
intends to engage in foreign currency transactions, options and
futures transactions and short-selling. See also "Investment
Considerations and Risks" and "Appendix--Investment Techniques"
below and "Investment Objective and Management Policies--
Management Policies" in the Statement of Additional Information.
Investment Considerations and Risks
General--The Fund's net asset value per share should be expected
to fluctuate. Investors should consider the Fund as a supplement
to an overall investment program and should invest only if they
are willing to undertake the risks involved. See "Investment
Objective and Management Policies--Management Policies" in the
Statement of Additional Information for a further discussion of
certain risks.
Equity Securities--Equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the
securities, and such fluctuations can be pronounced. Changes in
the value of the Fund's investments will result in changes in the
value of its shares and thus the Fund's total return to
investors.
The securities of the smaller companies in which the
Fund may invest may be subject to more abrupt or erratic market
movements than larger, more established companies, because these
securities typically are traded in lower volume and the issuers
typically are subject to a greater degree to changes in earnings
and prospects. This risk may be incurred by the Fund's investing
in issuers in emerging markets, as more fully described below.
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.
Because 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, seizure or nationalization
of foreign deposits or adoption of governmental restrictions
which might adversely affect the payment of principal and
interest on the foreign securities or restrict the payment of
principal and interest to investors located outside the country
of the issuer, whether from currency blockage or otherwise.
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.
The risks associated with investing in foreign
securities are often heightened for investments in developing or
emerging markets. These heightened risks include (i) greater
risks of expropriation, confiscatory taxation, nationalization,
and less social, political and economic stability; (ii) the small
current size of the markets for securities of emerging markets
issuers and the currently low or nonexistent volume of trading,
resulting in lack of liquidity and in price volatility; (iii)
certain national policies which may restrict the Fund's
investment opportunities including restrictions in investing in
issuers or industries deemed sensitive to relevant national
interests; and (iv) the absence of developed legal structures
governing private or foreign investment and private property. In
addition, some emerging market countries may have fixed or
managed currencies which are not free-floating against the U.S.
dollar. Further, certain emerging market currencies may not be
internationally traded. Certain of these currencies have
experienced a steady devaluation relative to the U.S. dollar. If
the Fund is unable to hedge the U.S. dollar value of securities
it owns denominated in such currencies, the Fund's net asset
value will be adversely affected. Many emerging markets
countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and
rapid fluctuations in inflation rates have had, and may continue
to have, negative effects on the economies and securities markets
of certain emerging market countries.
Foreign Currency Transactions--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. See "Appendix--Investment Techniques--Foreign
Currency Transactions."
Use of Derivatives--The Fund may invest in derivatives
("Derivatives"). These are financial instruments which derive
their performance, at least in part, from the performance of an
underlying asset, index or interest rate. The Derivatives the
Fund may use include options and futures. While Derivatives can
be used effectively in furtherance of the Fund's investment
objective, under certain market conditions, they can increase the
volatility of the Fund's net asset value, can decrease the
liquidity of the Fund's portfolio and make more difficult the
accurate pricing of the Fund's portfolio. See "Appendix--
Investment Techniques--Use of Derivatives" below and "Investment
Objective and Management Policies--Management Policies--
Derivatives" in the Statement of Additional Information.
Non-Diversified Status--The classification of the Fund as a "non-
diversified" investment company means that the proportion of the
Fund's assets that may be invested in the securities of a single
issuer is not limited by the 1940 Act. A "diversified"
investment company is required by the 1940 Act generally to
invest, with respect to 75% of its total assets, not more than 5%
of such assets in the securities of a single issuer. Since a
relatively high percentage of the Fund's assets may be invested
in the securities of a limited number of issuers, some of which
may be within the same industry, the Fund's portfolio may be more
sensitive to changes in the market value of a single issuer or
industry. However, to meet Federal tax requirements, at the
close of each quarter the Fund may not have more than 25% of its
total assets invested in any one issuer and, with respect to 50%
of total assets, not more than 5% of its total assets invested in
any one issuer. These limitations do not apply to U.S.
Government securities.
Simultaneous Investments--Investment decisions for the Fund are
made independently from those of the other investment companies
advised by The Dreyfus Corporation. If, however, such other
investment companies desire to invest in, or dispose of, the same
securities 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
Investment Adviser--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. The Dreyfus Corporation is a
wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-
owned subsidiary of Mellon Bank Corporation ("Mellon"). As of
, 199_, The Dreyfus Corporation managed or administered
approximately $ billion in assets for more than 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 Company, subject to the authority of the
Company's Board in accordance with Maryland law. The Fund's
primary portfolio manager is Kelly McDermott. She has held that
position since inception of the Fund and has been employed by The
Dreyfus Corporation since June 1992. Previously, Ms. McDermott
served in the institutional division of European Sales at Morgan
Stanley & Co. Incorporated, Salomon Brothers, Inc. and Kleinwort
Benson. The Fund's other portfolio managers are identified in
the Statement of Additional Information. The Dreyfus Corporation
also provides research services for the Fund and for other funds
advised by The Dreyfus Corporation through a professional staff
of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under
the Federal Bank Holding Company Act of 1956, as amended. Mellon
provides a comprehensive range of financial products and services
in domestic and selected international markets. Mellon is among
the twenty-five largest bank holding companies in the United
States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National
Association, Mellon Bank (MD), The Boston Company, Inc., AFCO
Credit Corporation and a number of companies known as Mellon
Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $209
billion in assets as of September 30, 1995, including
approximately $80 billion in proprietary mutual fund assets. As
of September 30, 1995, Mellon, through various subsidiaries,
provided non-investment services, such as custodial or
administration services, for more than $717 billion in assets,
including approximately $55 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund
has agreed to pay The Dreyfus Corporation a monthly fee at the
annual rate of 1.25% of the value of the Fund's average daily net
assets. The management fee is higher than that paid by most
other investment companies. 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 expense ratio of the Fund and increasing yield to
investors. The Fund will not pay The Dreyfus Corporation at a
later time for any amounts it may waive, nor will the Fund
reimburse The Dreyfus Corporation for any amounts it may assume.
In allocating brokerage transactions for the Fund, The
Dreyfus Corporation seeks to obtain the best execution of orders
at the most favorable net price. Subject to this determination,
The Dreyfus Corporation may consider, among other things, the
receipt of research services and/or the sale of shares of the
Fund or other funds in the Dreyfus Family of Funds as factors in
the selection of broker-dealers to execute portfolio transactions
for the Fund. See "Portfolio Transactions" in the Statement of
Additional Information.
Expenses--All expenses incurred in the operation of the Company
are borne by the Company, except to the extent specifically
assumed by The Dreyfus Corporation. The expenses borne by the
Company include: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or holders of
5% or more of the outstanding voting securities of The Dreyfus
Corporation or any of its affiliates, 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 independent
pricing services, costs of maintaining the Company's existence,
costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of preparing
and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses. Expenses attributable
to the Fund are charged against the assets of the Fund; other
expenses of the Company are allocated among the Company's
portfolios on the basis determined by the Company's Board,
including, but not limited to, proportionately in relation to the
net assets of each portfolio.
The Dreyfus Corporation may pay the Fund's distributor
for shareholder services from The Dreyfus Corporation's own
assets, including past profits but not including the management
fee paid by the Fund. The Fund's distributor may use part or all
of such payments to pay Service Agents in respect of these
services.
Distributor--The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One Exchange
Place, Boston, Massachusetts 02109. The Distributor's ultimate
parent is Boston Institutional Group, Inc.
Transfer and Dividend Disbursing Agent and Custodian--Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus
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, 90 Washington Street,
New York, New York 10286, is the Fund's Custodian.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may
be charged a nominal fee if you effect transactions in Fund
shares through a securities dealer, bank or other financial
institution (collectively, "Service Agents"). 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. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and
403(b)(7) Plans with only one participant is $750, with no
minimum for subsequent purchases. Individuals who open an IRA
also may open a non-working spousal IRA with a minimum initial
investment of $250. Subsequent investments in a spousal IRA must
be at least $250. The initial investment must be accompanied by
the 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
Company'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. Fund shares also are offered without
regard to the minimum initial investment requirements through
Dreyfus-Automatic Asset Builder, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to the
Dreyfus Step Program described under "Shareholder Services."
These services enable you to make regularly scheduled investments
and may provide you with a convenient way to invest for long-term
financial goals. You should be aware, however, that periodic
investment plans do not guarantee a profit and will not protect
an investor against loss in a declining market.
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" and should specify that you are
investing in the Fund. 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. 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 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# 8900______/Dreyfus International Funds,
Inc./Dreyfus Emerging Markets Fund, for purchase of Fund shares
in your name. The wire must include your Fund account number
(for new accounts, your Taxpayer Identification Number ("TIN")
should be included instead), account registration and dealer
number, if applicable. If your initial purchase of Fund shares
is by wire, you should call 1-800-645-6561 after completing your
wire payment to obtain your Fund account number. You should
include your Fund account number on the Account Application and
promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is
received. You may obtain further information about remitting
funds in this manner from your bank. All payments should be made
in U.S. dollars and, to avoid fees and delays, should be drawn
only on U.S. banks. A charge will be imposed if any check used
for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other
domestic financial institution that is an Automated Clearing
House member. You must direct the institution to transmit
immediately available funds through the Automated Clearing House
to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account
registration and Fund account number preceded by the digits
"1111."
Fund shares are sold on a continuous basis at the net
asset value per share next determined after an order in proper
form is received by the Transfer Agent or other agent. Net asset
value per share 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 is computed by dividing the value of the
Fund's net assets (i.e., the value of its assets less
liabilities) by the total number of Fund shares outstanding. The
Fund's investments are valued generally at market value or, where
market quotations are not readily available, at fair value as
determined by or under the direction of the Company's Board. For
further information regarding the methods employed in valuing the
Fund's investments, see "Determination of Net Asset Value" in the
Statement of Additional Information.
For certain institutions that have entered into
agreements with the Distributor, payment for the purchase of Fund
shares may be transmitted, and must be received by the Transfer
Agent, within three business days after the order is placed. If
such payment is not received within three business days after the
order is placed, the order may be canceled and the institution
could be held liable for resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of
the amount invested through such dealers in Fund shares by
employees participating in qualified or non-qualified employee
benefit plans or other programs where (i) the employers or
affiliated employers maintaining such plans or programs have a
minimum of 250 employees eligible for participation in such plans
or programs or (ii) such plan's or program's aggregate investment
in the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds
$1,000,000 ("Eligible Benefit Plans"). Shares of funds in the
Dreyfus Family of Funds then held by Eligible Benefit Plans will
be aggregated to determine the fee payable. The Distributor
reserves the right to cease paying these fees at any time. The
Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any
other source available to it.
Federal regulations require that you provide a
certified TIN upon opening or reopening an account. See
"Dividends, Distributions and Taxes" and the Account Application
for further information concerning this requirement. Failure to
furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
Dreyfus TeleTransfer Privilege--You may purchase shares (minimum
$500, maximum $150,000 per day) by telephone if you have checked
the appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder 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
shares by telephoning 1-800-645-6561 or, if you are calling from
overseas, call 516-794-5452.
SHAREHOLDER SERVICES
Fund Exchanges
You may purchase, in exchange for shares of the Fund,
shares of 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 service, you should consult your Service Agent
or call 1-800-645-6561 to determine if it is available and
whether any conditions are imposed on its use.
To request an exchange, you must give exchange
instructions to the Transfer Agent in writing or by telephone.
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 by calling 1-800-645-
6561. 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. The ability to issue exchange
instructions by telephone is given to all Fund shareholders
automatically, unless you check the applicable "No" box on the
Account Application, indicating that you specifically refuse this
Privilege. The Telephone Exchange Privilege may be established
for an existing account by written request, signed by all
shareholders on the account, or by a separate signed Shareholder
Services Form, also available by calling 1-800-645-6561. If you
have established the Telephone Exchange Privilege, you may
telephone exchange instructions by calling 1-800-645-6561, or, if
you are calling from overseas, call 516-794-5452. See "How to
Redeem Shares--Procedures." 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: Telephone Exchange
Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TeleTransfer Privilege and the
dividend/capital gain distribution option (except for Dreyfus
Dividend Sweep) 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 into funds sold with a sales load. If you are
exchanging 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 the exchange you must notify
the Transfer Agent or your Service Agent must notify the
Distributor. 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
availability of Fund Exchanges may be modified or terminated at
any time upon notice to shareholders. See "Dividends,
Distributions and Taxes."
Dreyfus Auto-Exchange Privilege
Dreyfus Auto-Exchange Privilege enables you to invest
regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares 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 day 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 into funds sold with a sales load. See "Shareholder
Services" in the Statement of Additional Information. The right
to exercise this Privilege may be modified or canceled by the
Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Fund may charge a
service fee for the use of this Privilege. No such fee currently
is contemplated. See "Dividends, Distributions and Taxes." 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 BuilderR
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 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 by calling 1-800-645-6561. 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 9671, Providence, Rhode Island
02940-9671, or, if for Dreyfus retirement plan accounts, to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective
three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No
such fee currently is contemplated.
Dreyfus Government Direct Deposit Privilege
Dreyfus Government Direct Deposit Privilege enables you
to purchase Fund shares (minimum of $100 and maximum of $50,000
per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in
Dreyfus Government Direct Deposit, you must file with the
Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege.
The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in
this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal
agency. The Fund may terminate your participation upon 30 days'
notice to you.
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
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 by calling 1-800-645-6561. 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 the Distributor, 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.
Dreyfus Step Program
Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment
requirements through Dreyfus-Automatic Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings
Plan. To establish a Dreyfus Step Program account, you must
supply the necessary information on the Account Application and
file the required authorization form(s) with the Transfer Agent.
For more information concerning this Program, or to request the
necessary authorization form(s), please call toll free 1-800-782-
6620. You may terminate your participation in this Program at
any time by discontinuing your participation in Dreyfus-Automatic
Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan, as the case may be, as provided
under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to
purchase Fund shares through the Dreyfus Step Program in
conjunction with a Dreyfus-sponsored retirement plan may do so
only for IRAs, SEP-IRAs and IRA "Rollover Accounts."
Dreyfus Dividend Options
Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another fund
in the Dreyfus Family of Funds of which you are a shareholder.
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 that charges a contingent deferred sales charge, the
shares purchased will be subject on redemption to the contingent
deferred sales charge, if any, applicable to the purchased
shares. See "Shareholder Services" in the Statement of
Additional Information. Dreyfus Dividend ACH permits you to
transfer electronically dividends or dividends and capital gain
distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so
designated. Banks may charge a fee for this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call toll free 1-800-645-
6561. You may cancel these privileges by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. To select a new fund after
cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective
three business days following receipt. These privileges are
available only for existing accounts and may not be used to open
new accounts. Minimum subsequent investments do not apply for
Dreyfus Dividend Sweep. The Fund may modify or terminate these
privileges 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 Dreyfus Dividend
Sweep.
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 by calling 1-800-645-6561. There is a service charge of
50 cents 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.
Retirement Plans
The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans.
Plan support services also are available. You can obtain details
on the various plans by calling the following numbers toll free:
for Keogh Plans, please call 1-800-358-5566; for IRAs and IRA
"Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call 1-
800-322-7880.
HOW TO REDEEM SHARES
General
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent
as described below. When a request is received in proper form,
the Fund will redeem the shares at the next determined net asset
value.
The Fund imposes no charges when shares are redeemed.
Service Agents may charge their clients 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 subse-
quently submit a written redemption request to the Transfer
Agent, the redemption proceeds will be transmitted to you prompt-
ly upon bank clearance of your purchase check, Dreyfus TeleTrans-
fer 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.
Procedures
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the
appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form
with the Transfer Agent, through the Wire Redemption Privilege,
the Telephone Redemption Privilege or the Dreyfus TeleTransfer
Privilege. Other redemption procedures may be in effect for
clients of certain Service Agents. The Fund makes available to
certain large institutions the ability to issue redemption
instructions through compatible computer facilities. The Fund
reserves the right to refuse any request made by wire or
telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
You may redeem shares by telephone if you have checked
the appropriate box on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select
a telephone redemption privilege or telephone exchange privilege
(which is granted automatically unless you refuse it), you
authorize the Transfer Agent to act on telephone instructions
from any person representing himself or herself to be you, and
reasonably believed by the Transfer Agent to be genuine. The
Fund will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent
instructions. 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 pro-
cedures described herein. Use of these other redemption
procedures may result in your redemption request being processed
at a later time than it would have been if telephone redemption
had been used. During the delay, the Fund's net asset value may
fluctuate.
Regular Redemption--Under the regular redemption procedure, you
may redeem shares by written request mailed to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, or,
if for Dreyfus retirement plan accounts, to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. 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 guar-
anteed. 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.
You also may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and
mailed to your address. Redemption proceeds of less than $1,000
will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of
not more than $250,000 wired within any 30-day period. You may
telephone redemption requests by calling 1-800-645-6561 or, if
you are calling from overseas, call 516-794-5452. The Statement
of Additional Information sets forth instructions for
transmitting redemption requests by wire. 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 request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check
and mailed to your address. You may telephone redemption
instructions by calling 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452. 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 request by telephone that
redemption proceeds (minimum $500 per day) be transferred between
your Fund account and your bank account. Only a bank account
maintained in a domestic financial institution which is an
Automated Clearing House member may be 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 not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TeleTransfer
Privilege, you may request a Dreyfus TeleTransfer redemption of
shares by telephoning 1-800-645-6561 or, if you are calling from
overseas, call 516-794-5452. Shares held under Keogh Plans, IRAs
or other retirement plans, and shares issued in certificate form,
are not eligible for this Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan,
pursuant to which it pays the Distributor for the provision of
certain services to Fund shareholders a fee at the annual rate of
.25 of 1% of the value of the Fund's average daily net assets.
The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information,
and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents in respect of
these services. The Distributor determines the amounts to be
paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Internal Revenue Code of 1986, as amended
(the "Code"), the Fund is treated as a separate entity for
purposes of qualification and taxation as a regulated investment
company. The Fund ordinarily pays dividends from its net invest-
ment 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 1940 Act. The Fund will not make distributions
from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may
choose whether to receive dividends and distributions in cash or
to reinvest in additional shares at net asset value. All
expenses are accrued daily and deducted before declaration of
dividends to investors.
Dividends derived from net investment income, together
with distributions from net realized short-term securities gains
and all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund
will be taxable to U.S. shareholders as ordinary income whether
received in cash or reinvested in additional 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 all or a portion of any gains realized from the sale or other
disposition of certain 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.
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.
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will
receive periodic summaries of your account which will include
information as to dividends and distributions from securities
gains, if any, paid during the year.
Federal regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends, distributions from net realized securities
gains and the proceeds of any redemption, regardless of the
extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct or
that such shareholder has not received notice from the IRS of
being subject to backup withholding as a result of a failure to
properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to
properly report taxable dividend and interest income on a Federal
income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any
tax withheld as a result of backup withholding does not consti-
tute 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.
It is expected that the Fund will qualify as a
"regulated investment company" under the Code so long as 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. 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 may be
calculated on the basis of average annual total return and/or
total return.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment was
purchased with an initial payment of $1,000 and that the
investment was redeemed at the end of a stated period of time,
after giving effect to the reinvestment of dividends and
distributions during the period. The return is expressed as a
percentage rate which, if applied on a compounded annual basis,
would result in the redeemable value of the investment at the end
of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for one, five and
ten year periods, or for shorter periods depending upon the
length of time during which the Fund has operated.
Total return is computed on a per share basis and
assumes the reinvestment of dividends and distributions. Total
return generally is expressed as a percentage rate which is
calculated by combining the income and principal changes for a
specified period and dividing by the net asset value per share at
the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return.
Performance will vary from time to time and past
results are not necessarily representative of future results.
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., Standard &
Poor's 500 Stock Index, Standard & Poor's MidCap 400 Index,
Wilshire 5000 Index, the Dow Jones Industrial Average, Money
Magazine, Morningstar, Inc. and other industry publications.
GENERAL INFORMATION
The Company was incorporated under Maryland law on
January 27, 1993 and commenced operations on June 29, 1993.
Before March __, 1996, the Company's name was Dreyfus
International Equity Fund, Inc. The Company is authorized to
issue 400 million shares of Common Stock (with 100 million
allocated to the Fund), par value $.001 per share. Each share
has one vote.
Unless otherwise required by the 1940 Act, ordinarily
it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider
each year the election of Board members or the appointment of
auditors. However, pursuant to the Company's By-Laws, the
holders of at least 10% of the shares outstanding and entitled to
vote may require the Company to hold a special meeting of
shareholders for purposes of removing a Board member from office
or for any other purpose. Shareholders may remove a Board member
by the affirmative vote of a majority of the Company's
outstanding voting shares. In addition, the Board will call a
meeting of shareholders for the purpose of electing Board members
if, at any time, less than a majority of the Board members then
holding office have been elected by shareholders.
The Company is a "series fund," which is a mutual fund
divided into separate portfolios, each of which is treated as a
separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one portfolio is not deemed to
be a shareholder of any other portfolio. For certain matters
shareholders vote together as a group; as to others they vote
separately by portfolio. By this Prospectus, shares of the Fund
are being offered. Other portfolios are sold pursuant to other
offering documents.
To date, the Board has authorized the creation of two
series of shares. All consideration received by the Company for
shares of one of the series and all assets in which such
consideration is invested will belong to that series (subject
only to the rights of creditors of the Company) and will be
subject to the liabilities related thereto. The income
attributable to, and the expenses of, one series are treated
separately from those of the other series. The Company has the
ability to create, from time to time, new series without
shareholder approval.
The Transfer Agent maintains a record of your ownership
and sends you confirmations and statements of account.
Shareholder inquiries may be made by writing to the
Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-
0144, or by calling toll free 1-800-645-6561. In New York City,
call 1-718-895-1206; outside the U.S. and Canada, call 516-794-
5452.
<PAGE>
APPENDIX
Investment Techniques
Foreign Currency Transactions--Foreign currency transactions may
be entered into for a variety of purposes, including: to fix in
U.S. dollars, between trade and settlement date, the value of a
security the Fund has agreed to buy or sell; or to hedge the U.S.
dollar value of securities the Fund already owns, particularly in
which the foreign security is denominated; or to gain exposure to
the foreign currency in an attempt to realize gains.
Foreign currency transactions may involve, for example,
the Fund's purchase of foreign currencies for U.S. dollars or the
maintenance of short positions in foreign currencies, 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. The Fund's success in these transactions will depend
principally on The Dreyfus Corporation's ability to predict
accurately the future exchange rates between foreign currencies
and the U.S. dollar.
Short-Selling--In these transactions, the Fund sells a security
it does not own in anticipation of a decline in the market value
of the security. To complete the transaction, the Fund must
borrow the security to make delivery to the buyer. The Fund is
obligated to replace the security borrowed by purchasing it
subsequently 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, which would result in a loss
or gain, respectively.
Securities will not 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 make a short sale which results in the Fund
having sold short in the aggregate more than 5% of the
outstanding securities of any class of an issuer.
The Fund also may make short sales "against the box,"
in which the Fund enters into a short sale of a security it owns
in order to hedge an unrealized gain on the security. At no time
will more than 15% of the value of the Fund's net assets be in
deposits on short sales against the box.
Borrowing Money--The Fund is permitted to borrow to the extent
permitted under the 1940 Act, which permits an investment company
to borrow in an amount up to 33-1/3% of the value of such
company's total assets. The Fund currently intends to borrow
money only for temporary or emergency (not leveraging) purposes,
in an amount up to 15% of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at
the time the borrowing is made. While borrowings exceed 5% of
the Fund's total assets, the Fund will not make any additional
investments.
Use of Derivatives--The Fund may invest in the types of
Derivatives enumerated under "Description of the Fund--Investment
Considerations and Risks--Use of Derivatives." These instruments
and certain related risks are described more specifically under
"Investment Objective and Management Policies--Management
Policies--Derivatives" in the Statement of Additional
Information.
Although the Fund will not be a commodity pool,
Derivatives subject the Fund to the rules of the Commodity
Futures Trading Commission which limit the extent to which the
Fund can invest in certain Derivatives. The Fund may invest in
futures contracts and options with respect thereto for hedging
purposes without limit. However, the Fund may not invest in such
contracts and options for other purposes if the sum of the amount
of initial margin deposits and premiums paid for unexpired
options with respect to such contracts, other than for bona fide
hedging purposes, exceed 5% of the liquidation value of the
Fund's assets, after taking into account unrealized profits and
unrealized losses on such contracts and options; 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% limitation.
The Fund may invest up to 5% of its assets, represented
by the premium paid, in the purchase of call and put options.
The Fund may write (i.e., sell) 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. When required by the
Securities and Exchange Commission, the Fund will set aside
permissible liquid assets in a segregated account to cover its
obligations relating to its transactions in Derivatives. To
maintain this required cover, the Fund may have to sell portfolio
securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at a reasonable
price.
Certain Portfolio Securities
Closed-End Investment Companies--The Fund may invest in
securities issued by closed-end investment companies which
principally invest in securities in which the Fund invests.
Under the 1940 Act, the Fund's investment in such securities,
subject to certain exceptions, 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.
Foreign Government Obligations; Securities of Supranational
Entities--The Fund may invest in obligations issued or guaranteed
by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities that are determined
by The Dreyfus Corporation to be of comparable quality to the
other obligations in which the Fund may invest. Supranational
entities include international organizations designated or
supported by governmental entities to promote economic
reconstruction or development and international banking
institutions and related government agencies. Examples include
the International Bank for Reconstruction and Development (the
World Bank), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank.
Money Market Instruments--The Fund may invest in the following
types of money market instruments.
U.S. Government Securities. Securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities include U.S. Treasury securities that differ in
their interest rates, maturities and times of issuance. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities are supported by the full faith and credit of
the U.S. Treasury; others by the right of the issuer to borrow
from the Treasury; others by discretionary authority of the U.S.
Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies and
instrumentalities, no assurance can be given that it will always
do so since it is not so obligated by law.
Repurchase Agreements. In a repurchase agreement, the
Fund buys, and the seller agrees to repurchase, a security at a
mutually agreed upon time and price (usually within seven days).
The repurchase agreement thereby determines the yield during the
purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security.
Repurchase agreements could involve risks in the event of a
default or insolvency of the other party to the agreement,
including possible delays or restrictions upon the Fund's ability
to dispose of the underlying securities. The Fund may enter into
repurchase agreements with certain banks or non-bank dealers.
Bank Obligations. The Fund may purchase certificates
of deposit, time deposits, bankers' acceptances and other short-
term obligations issued by domestic banks, foreign subsidiaries
or foreign branches of domestic banks, domestic and foreign
branches of foreign banks, domestic savings and loan associations
and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, the
Fund may be 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. See
"Description of the Fund--Investment Considerations and Risks--
Foreign Securities."
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 (in no event
longer than seven days) at a stated interest rate.
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 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.
Commercial Paper. 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
Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's
Ratings Group, a division of The McGraw Hill Companies, Inc.
("S&P"), (b) issued by companies having an outstanding unsecured
debt issue currently rated at least A3 by Moody's or A- by S&P,
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.
Illiquid Securities--The Fund may invest up to 15% 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 are subject to legal or contractual
restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, and certain
privately negotiated, non-exchange traded options and securities
used to cover such options. 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.
No person has been authorized to give any
information or to make any representations other than those
contained in this Prospectus and in the Fund's official sales
literature in connection with the offer of the Fund's shares,
and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Fund.
This Prospectus does not constitute an offer in any State in
which, or to any person to whom, such offering may not lawfully
be made.
<PAGE>
DREYFUS INTERNATIONAL FUNDS, INC.
DREYFUS INTERNATIONAL EQUITY FUND
DREYFUS EMERGING MARKETS FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
_________, 1996
This Statement of Additional Information, which is not
a prospectus, supplements and should be read in conjunction with
the current Prospectus of the series named above (each, a "Fund")
of Dreyfus International Funds, Inc. (the "Company"), dated
_________, 1996, as each may be revised from time to time. To
obtain a copy of the relevant Fund's Prospectus, please write to
a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as each
Fund's investment adviser. The Manager has engaged M&G
Investment Management Limited ("M&G") to serve as Dreyfus
International Equity Fund's sub-investment adviser and provide
day-to-day management of the Fund's investments, subject to the
Manager's supervision.
Premier Mutual Fund Services, Inc. (the "Distributor")
is the distributor of each Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . B-2
Management of the Company . . . . . . . . . . . . . . B-13
Management Agreement. . . . . . . . . . . . . . . . . B-18
Purchase of Shares . . . . . . . . . . . . . . . . . B-21
Distribution Plan and Shareholder Services Plan . . . B-22
Redemption of Shares. . . . . . . . . . . . . . . . . B-24
Shareholder Services. . . . . . . . . . . . . . . . . B-27
Determination of Net Asset Value. . . . . . . . . . . B-30
Dividends, Distributions and Taxes. . . . . . . . . . B-31
Portfolio Transactions. . . . . . . . . . . . . . . . B-34
Performance Information . . . . . . . . . . . . . . . B-36
Information About the Funds . . . . . . . . . . . . . B-37
Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors . . . . B-37
Appendix. . . . . . . . . . . . . . . . . . . . . . . B-39
Financial Statements. . . . . . . . . . . . . . . . . B-45
Report of Independent Auditors. . . . . . . . . . . . B-56
<PAGE>
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be
read in conjunction with the sections in each Fund's Prospectus
entitled "Description of the Fund" and "Appendix."
Portfolio Securities
Depositary Receipts. These securities may be purchased
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.
Repurchase Agreements. The Fund's custodian or sub-
custodian will have custody of, and will hold in a segregated
account, securities acquired by a 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 a
repurchase agreement, each Fund will enter into repurchase
agreements only with domestic banks with total assets in excess
of $1 billion, 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 the
resale price.
Commercial Paper and Other Short-Term Corporate
Obligations. These instruments include variable amount master
demand notes, which are obligations that permit a 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. 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. Such obligations frequently are not rated by credit
rating agencies, and a Fund may invest in them only if at the
time of an investment the borrower meets the criteria set forth
in the Fund's Prospectus for other commercial paper issuers.
Convertible Securities. Convertible securities may be
converted at either a stated price or stated rate into underlying
shares of common stock. Convertible securities have
characteristics similar to both fixed-income and equity
securities. Convertible securities generally are subordinated to
other similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common stock, of the
same issuer. Because of the subordination feature, however,
convertible securities typically have lower ratings than similar
non-convertible securities.
Although to a lesser extent than with fixed-income
securities, the market value of convertible securities tends to
decline as interest rates increase and, conversely, tends to
increase as interest rates decline. In addition, because of the
conversion feature, the market value of convertible securities
tends to vary with fluctuations in the market value of the
underlying common stock. A unique feature of convertible
securities is that as the market price of the underlying common
stock declines, convertible securities tend to trade increasingly
on a yield basis, and so may not experience market value declines
to the same extent as the underlying common stock. When the
market price of the underlying common stock increases, the prices
of the convertible securities tend to rise as a reflection of the
value of the underlying common stock. While no securities
investments are without risk, investments in convertible
securities generally entail less risk than investments in common
stock of the same issuer.
Convertible securities are investments that provide for
a stable stream of income with generally higher yields than
common stocks. There can be no assurance of current income
because the issuers of the convertible securities may default on
their obligations. A convertible security, in addition to
providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the
holder to benefit from increases in the market price of the
underlying common stock. There can be no assurance of capital
appreciation, however, because securities prices fluctuate.
Convertible securities, however, generally offer lower interest
or dividend yields than non-convertible securities of similar
quality because of the potential for capital appreciation.
Illiquid Securities. When purchasing securities that
have not been registered under the Securities Act of 1933, as
amended, and are not readily marketable, each Fund will endeavor,
to the extent practicable, 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, where a substantial market of
qualified institutional buyers has developed for certain
unregistered securities purchased by the Fund pursuant to Rule
144A under the Securities Act of 1933, as amended, the Fund
intends to treat such securities as liquid securities in
accordance with procedures approved by the Company's Board.
Because it is not possible to predict with assurance how the
market for specific restricted securities sold pursuant to Rule
144A will develop, the Company's Board has directed the Manager
(and M&G with respect to Dreyfus International Equity Fund) to
monitor carefully the relevant 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, a Fund's investing in such securities may
have the effect of increasing the level of illiquidity in its
investment portfolio during such period.
Management Policies
Leverage. For borrowings for investment purposes, the
Investment Company Act of 1940, as amended (the "1940 Act"),
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 required
coverage should decline as a result of market fluctuations or
other reasons, the Fund may be required to sell some of its
portfolio securities within three days to reduce the amount of
its borrowings and restore the 300% asset coverage, even though
it may be disadvantageous from an investment standpoint to sell
securities at that time. The Fund also may be required to
maintain minimum average balances in connection with such
borrowing or 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. To the extent the Fund
enters into a reverse repurchase agreement, 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.
Short-Selling. In these transactions, a Fund sells a
security it does not own in anticipation of a decline in the
market value of the security. To complete the transaction, the
Fund must borrow the security to make delivery to the buyer. The
Fund is obligated to replace the security borrowed by purchasing
it subsequently 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, which would result in a
loss or gain, respectively.
Securities will not 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 a Fund's
net assets. A 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 a Fund's net assets. A
Fund may not make a short sale which results in the Fund having
sold short in the aggregate more than 5% of the outstanding
securities of any class of an issuer.
A Fund also may make short sales "against the box," in
which the Fund enters into a short sale of a security it owns in
order to hedge an unrealized gain on the security. At no time
will more than 15% of the value of the Fund's net assets be in
deposits on short sales against the box.
Until a Fund closes its short position or replaces the
borrowed security, it will: (a) maintain a segregated account,
containing cash or U.S. Government securities, at such a level
that 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; or (b) otherwise cover its
short position.
Lending Portfolio Securities. (Dreyfus International
Equity Fund only) In connection with its securities lending
transactions, Dreyfus International Equity 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 Company's Board must terminate the loan and
regain the right to vote the securities if a material event
adversely affecting the investment occurs.
Derivatives. A Fund may invest in Derivatives (as
defined in the relevant Fund's Prospectus) for a variety of
reasons, including to hedge certain market risks, to provide a
substitute for purchasing or selling particular securities or to
increase potential income gain. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Fund to
invest than "traditional" securities would.
Derivatives can be volatile and involve various types
and degrees of risk, depending upon the characteristics of the
particular Derivative and the portfolio as a whole. Derivatives
permit a Fund to increase or decrease the level of risk, or
change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease
the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
Derivatives may entail investment exposures that are
greater than their cost would suggest, meaning that a small
investment in Derivatives could have a large potential impact on
a Fund's performance.
If a Fund invests in Derivatives at inappropriate times
or judges market conditions incorrectly, such investments may
lower the Fund's return or result in a loss. A Fund also could
experience losses if its Derivatives were poorly correlated with
its other investments, or if the Fund were unable to liquidate
its position because of an illiquid secondary market. The market
for many Derivatives is, or suddenly can become, illiquid.
Changes in liquidity may result in significant, rapid and
unpredictable changes in the prices for Derivatives.
A Fund may invest up to 5% of its assets, represented
by the premium paid, in the purchase of call and put options. A
Fund may write (i.e., sell) 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. When required by the
Securities and Exchange Commission, a Fund will set aside
permissible liquid assets in a segregated account to cover its
obligations relating to its purchase of Derivatives. To maintain
this required cover, a Fund may have to sell portfolio securities
at disadvantageous prices or times since it may not be possible
to liquidate a Derivative position at a reasonable price.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are
guaranteed by the clearing agency which is the issuer or
counterparty to such Derivatives. This guarantee usually is
supported by a daily payment system (i.e., margin requirements)
operated by the clearing agency in order to reduce overall credit
risk. As a result, unless the clearing agency defaults, there is
relatively little counterparty credit risk associated with
Derivatives purchased on an exchange. By contrast, no clearing
agency guarantees over-the-counter Derivatives. Therefore, each
party to an over-the-counter Derivative bears the risk that the
counterparty will default. Accordingly, the Manager (and M&G
with respect to Dreyfus International Equity Fund) will consider
the creditworthiness of counterparties to over-the-counter
Derivatives in the same manner as it would review the credit
quality of a security to be purchased by a Fund. Over-the-
counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the
only investor with sufficient understanding of the Derivative to
be interested in bidding for it.
Futures Transactions--In General. A Fund may enter into 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, if permitted in its Prospectus, 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 opportunities or arbitrage possibilities not available in
the United States. Foreign markets, however, may have greater
risk potential than domestic markets. For example, some foreign
exchanges are principal markets so that no common clearing
facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits that a
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. Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not
regulated by the Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to
a Fund which could adversely affect the value of the Fund's net
assets. Although each 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.
Successful use of futures by a Fund also is subject to
the ability of the Manager (and M&G with respect to Dreyfus
International Equity Fund) to predict correctly movements in the
direction of the relevant market and, to the extent the
transaction is entered into for hedging purposes, to ascertain
the appropriate correlation between the transaction being hedged
and the price movements of the futures contract. For example, if
a Fund uses futures to hedge against the possibility of a decline
in the market value of securities held in its portfolio and the
prices of such securities instead increase, 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. Furthermore, if in such circumstances the
Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. A Fund may have to
sell such securities at a time when it may be disadvantageous to
do so.
Pursuant to regulations and/or published positions of
the Securities and Exchange Commission, a 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 a
Fund's ability otherwise to invest those assets.
Specific Futures Transactions. A Fund may purchase and sell
stock index futures contracts. A stock index future obligates
the Fund to pay or receive an amount of cash equal to a fixed
dollar amount specified in the futures contract multiplied by the
difference between the settlement price of the contract on the
contract's last trading day and the value of the index based on
the stock prices of the securities that comprise it at the
opening of trading in such securities on the next business day.
A Fund may purchase and sell currency futures. A
foreign currency future obligates the Fund to purchase or sell an
amount of a specific currency at a future date at a specific
price.
Dreyfus International Equity Fund may purchase and sell
interest rate futures contracts. An interest rate future
obligates the Fund to purchase or sell an amount of a specific
debt security at a future date at a specific price.
Options--In General. A Fund may purchase and write (i.e., sell)
call or put options with respect to specific securities. 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, or at a specific date. 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 written by a Fund is a call
option with respect to which a Fund owns the underlying security
or otherwise covers the transaction by segregating cash or other
securities. A put option written by a Fund is covered when,
among other things, cash or liquid securities having a value
equal to or greater than the exercise price of the option are
placed in a segregated account with the Fund's custodian to
fulfill the obligation undertaken. The principal reason for
writing covered call and put options is to realize, through the
receipt of premiums, a greater return than would be realized on
the underlying securities alone. A Fund receives a premium from
writing covered call or put options which it retains whether or
not the option is exercised.
There is no assurance that sufficient trading interest
to create a liquid secondary market on a securities exchange will
exist for any particular option or 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 of the 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 may otherwise
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.
Specific Options Transactions. A Fund may purchase and sell call
and put options in respect of specific securities (or groups or
"baskets" of specific securities) or stock indices listed on
national securities exchanges or traded in the over-the-counter
market. An option on a stock index is similar to an option in
respect of specific securities, except that settlement does not
occur by delivery of the securities comprising the index.
Instead, the option holder receives an amount of cash if the
closing level of the stock index upon which the option is based
is greater than, in the case of a call, or less than, in the case
of a put, the exercise price of the option. Thus, the effective-
ness of purchasing or writing stock index options will depend
upon price movements in the level of the index rather than the
price of a particular stock.
A Fund may purchase and sell call and put options on
foreign currency. These options convey the right to buy or sell
the underlying currency at a price which is expected to be lower
or higher than the spot price of the currency at the time the
option is exercised or expires.
Dreyfus Emerging Markets Fund also may purchase cash-
settled options on equity index swaps in pursuit of its
investment objective. 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 includes 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.
Successful use by a Fund of options will be subject to
the ability of the Manager (and M&G with respect to Dreyfus
International Equity Fund) to predict correctly movements in the
prices of individual stocks, the stock market generally, foreign
currencies or interest rates. To the extent such predictions are
incorrect, a Fund may incur losses.
Future Developments. A Fund may take advantage of
opportunities in the area of options and futures contracts and
options on futures contracts and any other Derivatives 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 or
Statement of Additional Information.
Forward Commitments. A Fund may purchase securities on
a forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date
of the commitment to purchase. The payment obligation and the
interest rate that will be received on a forward commitment or
when-issued security are fixed when the Fund enters into the
commitment, but the Fund does not make a payment until it
receives delivery from the counterparty. A Fund will commit 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. 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 commitments will be established and maintained at the
Fund's custodian bank.
Securities purchased on a forward commitment or when-
issued basis are subject to changes in value (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 forward commitment or when-issued basis
may expose a Fund to risks because they may experience such
fluctuations prior to their actual delivery. Purchasing
securities on a when-issued 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. Purchasing securities on a forward
commitment or when-issued basis when a Fund is fully or almost
fully invested may result in greater potential fluctuation in the
value of the Fund's net assets and its net asset value per share.
Investment Restrictions
Each Fund has adopted investment restrictions numbered
1 through 8 as fundamental policies, which cannot be changed
without approval by the holders of a majority (as defined in the
1940 Act) of a Fund's outstanding voting shares. Investment
restrictions numbered 9 through 14 are not fundamental policies
and may be changed by vote of a majority of the Company's Board
members at any time. Neither Fund may:
1. Invest more than 25% of the value of its total
assets in the securities of issuers in any single 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.
2. Invest in commodities, except that the Fund may
purchase and sell options, forward contracts, futures contracts,
including those related to indices, and options on futures
contracts or indices.
3. Purchase, hold or deal in real estate, 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 or issued by companies that invest or deal in real
estate or real estate investment trusts.
4. Borrow money, except to the extent permitted under
the 1940 Act (which currently limits borrowing to no more than
33-1/3% of the value of the Fund's total assets). For purposes
of this Investment Restriction, the entry into options, forward
contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices shall not
constitute borrowing.
5. Make loans to others, except through the purchase
of debt obligations and the entry into repurchase agreements.
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 Company's Board.
6. Act as an underwriter of securities of other
issuers, except to the extent the Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
7. Issue any senior security (as such term is defined
in Section 18(f) of the 1940 Act), except to the extent the
activities permitted in Investment Restriction Nos. 2, 4, 11 and
12 may be deemed to give rise to a senior security.
8. Purchase securities on margin, but the Fund may
make margin deposits in connection with transactions in options,
forward contracts, futures contracts, including those related to
indices, and options on futures contracts or indices.
9. Purchase securities of any company having less than
three years' continuous operations (including operations of any
predecessor) 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.
10. Invest in the securities of a company for the
purpose of exercising management or control, but the Fund will
vote the securities it owns in its portfolio as a shareholder in
accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except
to the extent necessary to secure permitted borrowings and to the
extent related to the purchase of securities on a when-issued or
forward commitment basis and the deposit of assets in escrow in
connection with writing covered put and call options and
collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts,
including those relating to indices, and options on futures
contracts or indices.
12. Purchase, sell or write puts, calls or
combinations thereof, except as described in the relevant Fund's
Prospectus and Statement of Additional Information.
13. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
15% of the value of the Fund's net assets would be so invested.
14. Purchase securities of other investment companies,
except to the extent permitted under the 1940 Act.
If a percentage restriction is adhered to at the time
of investment, a later change in percentage resulting from a
change in values or assets will not constitute a violation of
such restriction.
Each Fund may invest, notwithstanding any other
investment restriction (whether or not fundamental), all of its
assets in the securities of a single open-end management
investment company with substantially the same fundamental
investment objective, policies and restrictions as the Fund.
The Company may make commitments more restrictive than
the restrictions listed above so as to permit the sale of Fund
shares in certain states. Should the Company determine that a
commitment is no longer in the best interest of the Fund and its
shareholders, the Company reserves the right to revoke the
commitment by terminating the sale of such Fund's shares in the
state involved.
MANAGEMENT OF THE COMPANY
Board members and officers of the Company, together
with information as to their principal business occupations
during at least the last five years, are shown below. Each Board
member who is deemed to be an "interested person" of the Company,
as defined in the 1940 Act, is indicated by an asterisk.
Board Members of the Company
* JOSEPH S. DiMARTINO, Chairman of the Board. Since January
1995, Chairman of the Board of various funds in the Dreyfus
Family of Funds. For more than five years prior thereto, he
was President, a director and, until August 1994, Chief
Operating Officer of the Manager and Executive Vice
President and a director of Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager and, until August 24,
1994, the Company's distributor. From August 1994 until
December 31, 1994, he was a director of Mellon Bank
Corporation. He is also Chairman of the Board of Directors
of Noel Group, Inc., a venture capital company; a trustee of
Bucknell University; and a director of The Muscular
Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway Company, Inc., a manufacturer and marketer
of industrial threads, specialty yarns, home furnishings and
fabrics, Curtis Industries, Inc., a national distributor of
security products, chemicals and automotive and other
hardware, and Staffing Resources, Inc. He is 52 years old
and his address is 200 Park Avenue, New York, New York
10166.
*DAVID P. FELDMAN, Board Member. 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. He is 56 years old and his
address is One Oak Way, Berkeley Heights, New Jersey 07922.
JOHN M. FRASER, JR., Board Member. President of Fraser
Associates, a service company for planning and arranging
corporate meetings and other events. From September 1975 to
June 1978, he was Executive Vice President of Flagship
Cruises, Ltd. Prior thereto, he was Senior Vice President
and Resident Director of the Swedish-American Line for the
United States and Canada. He is 74 years old and his
address is 133 East 64th Street, New York, New York 10021.
ROBERT R. GLAUBER, Board Member. Research Fellow, Center for
Business and Government at the John F. Kennedy School of
Government, Harvard University, since January 1992. He was
Under Secretary of the Treasury for Finance at the U.S.
Treasury Department, from May 1989 to January 1992. For
more than five years prior thereto, he was a Professor of
Finance at the Graduate School of Business Administration of
Harvard University and, from 1985 to 1989, Chairman of its
Advanced Management Program. He is 56 years old and his
address is 79 John F. Kennedy Street, Cambridge,
Massachusetts 02138.
JAMES F. HENRY, Board Member. President of the CPR Institute for
Dispute Resolution, a non-profit organization principally
engaged in the development of alternatives to business
litigation. He was of counsel to the law firm of Lovejoy,
Wasson & Ashton from October 1975 to December 1976 and from
October 1979 to June 1983, and was a partner of the firm
from January 1977 to September 1979. He was President and a
director of the Edna McConnell Clark Foundation, a
philanthropic organization, from September 1971 to December
1976. Mr. Henry is 65 years old and his address is c/o CPR
Institute for Dispute Resolution, 366 Madison Avenue, New
York, New York 10017.
ROSALIND GERSTEN JACOBS, Board Member. Director of Merchandise
and Marketing for Corporate Property Investors, a real
estate investment company. From 1974 to 1976, she was owner
and manager of a merchandise and marketing consulting firm.
Prior to 1974, she was a Vice President of Macy's, New York.
Mrs. Jacobs is 70 years old and her address is c/o Corporate
Property Investors, 305 East 47th Street, New York, New York
10017.
IRVING KRISTOL, Board Member. John M. Olin Distinguished Fellow
of the American Enterprise Institute for Public Policy
Research, co-editor of The Public Interest magazine, and an
author or co-editor of several books. From May 1981 to
December 1994, he was a consultant to the Manager on
economic matters; from 1969 to 1988, he was Professor of
Social Thought at the Graduate School of Business
Administration, New York University; and from September 1969
to August 1979, he was Henry R. Luce Professor of Urban
Values at New York University. Mr. Kristol is 76 years old
and his address is c/o The Public Interest, 1112 16th
Street, N.W., Suite 530, Washington, D.C. 20036.
DR. PAUL A. MARKS, Board Member. President and Chief Executive
Officer of Memorial Sloan-Kettering Cancer Center. He was
Vice President for Health Sciences and Director of the
Cancer Center at Columbia University from 1973 to 1980, and
Professor of Medicine and of Human Genetics and Development
at Columbia University from 1968 to 1982. He is also a
director of Pfizer, Inc., a pharmaceutical company, Life
Technologies, Inc., a life science company producing
products for cell and molecular biology and microbiology,
and Tularik, Inc., a biotechnology company, and a general
partner of LINC Venture Lease Partners II, L.P., a limited
partnership engaged in leasing. Dr. Marks is 69 years old
and his address is c/o Memorial Sloan-Kettering Cancer
Center, 1275 York Avenue, New York, New York 10021.
DR. MARTIN PERETZ, Board Member. Editor-in-Chief of The New
Republic magazine and a lecturer in Social Studies at
Harvard University, where he has been a member of the
faculty since 1965. He is a trustee of The Center for Blood
Research at the Harvard Medical School and a director of
LeukoSite Inc., a biopharmaceutical company. Dr. Peretz is
56 years old and his address is c/o The New Republic, 1220
19th Street, N.W., Washington, D.C. 20036.
BERT W. WASSERMAN, Board Member. Financial Consultant. From
January 1990 to March 1995, Executive Vice President and
Chief Financial Officer, and, from January 1990 to March
1993, a director of Time Warner Inc; from 1981 to 1990, he
was a member of the office of the President and a director
of Warner Communications, Inc. He is also a member of the
Chemical Bank National Advisory Board and a director of The
New Germany Fund, Mountasia Entertainment International,
Inc. and the Lillian Vernon Corporation. Mr. Wasserman is
63 years old and his address is 126 East 56th Street, Suite
12 North, New York, New York 10022-3613.
For so long as the Company's plans described in the
section captioned "Distribution Plan and Shareholder Services
Plan" remain in effect, the Board members who are not "interested
persons" of the Company, as defined in the 1940 Act, will be
selected and nominated by the Board members who are not
"interested persons" of the Company.
The Company typically pays its Board members an annual
retainer and a per meeting fee and reimburses them for their
expenses. The Chairman of the Board receives an additional 25%
of such compensation. Emeritus Board members are entitled to
receive an annual retainer and a per meeting fee of one-half the
amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Company for the
fiscal year ended May 31, 1995, and by all other funds in the
Dreyfus Family of Funds for which such person is a Board member
(the number of which is set forth in parenthesis next to each
Board member's total compensation) for the year ended December
31, 1994, were as follows:
<TABLE>
<CAPTION>
(5)
(3) Total Compensation
(2) Pension or (4) From Company and
(1) Aggregate Retirement Benefits Estimated Annual Fund Complex
Name of Board Compensation Accrued as Part of Benefits Upon Paid to Board
Member From Company* Company's Expenses Retirement Member
<S> <S> <S> <S> <S>
Joseph S. DiMartino $5,625** none none $445,000***(93)
David P. Feldman $2,171 none none $85,631(37)
John M. Fraser, Jr. $4,500 none none $46,766(14)
Robert R. Glauber $4,500 none none $79,696(20)
James F. Henry $4,500 none none $44,946(10)
Rosalind Gersten
Jacobs $4,500 none none $57,638(20)
Irving Kristol $4,500 none none $44,946(10)
Dr. Paul A. Marks $4,500 none none $44,946(10)
Dr. Martin Peretz $4,500 none none $44,946(10)
Bert W. Wasserman $4,500 none none $40,720(10)
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $541 for all Board members as a group.
** Estimated amount for the current fiscal year ending May 31, 1996.
*** Estimated amount for the year ended December 31, 1995.
</TABLE>
Officers of the Company
MARIE E. CONNOLLY, President and Treasurer. President and Chief
Executive Officer of the Distributor and an officer of other
investment companies advised or administered by the Manager.
From December 1991 to July 1994, she was President and Chief
Compliance Officer of Funds Distributor, Inc., the ultimate
parent of which is Boston Institutional Group, Inc. Prior
to December 1991, she served as Vice President and
Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice
President and General Counsel of the Distributor and an
officer of other investment companies advised or
administered by the Manager. From February 1992 to July
1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as
an Associate at Ropes & Gray. He is 31 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary.
Associate General Counsel of the Distributor and an officer
of other investment companies advised or administered by the
Manager. From September 1992 to August 1994, he was an
attorney with the Board of Governors of the Federal Reserve
System. He is 30 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary.
Assistant Vice President of the Distributor and an officer
of other investment companies advised or administered by the
Manager. She is 26 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer.
Senior Vice President of the Distributor and an officer of
other investment companies advised or administered by the
Manager. From 1988 to August 1994, he was manager of the
High Performance Fabric Division of Springs Industries Inc.
He is 33 years old.
JOSEPH S. TOWER, III, Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the
Distributor and an officer of other investment
companies advised or administered by the Manager. From July
1988 to August 1994, he was employed by The Boston Company,
Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 33 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer
of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1984
to July 1994, he was Assistant Vice President in the Mutual
Fund Accounting Department of the Manager. He is 60 years
old.
MARGARET PARDO, Assistant Secretary. Legal Assistant with
the Distributor and an officer of other investment companies
advised or administered by the Manager. From June 1992 to
April 1995, she was a Medical Coordinator Officer at ORBIS
International. Prior to June 1992, she worked as Program
Coordinator at Physicians World Communications Group. She
is 27 years old.
The address of each officer of the Company is 200 Park
Avenue, New York, New York 10166.
The Company's Board members and officers, as a group,
owned less than 1% of each Fund's voting securities outstanding
on January 16, 1996.
MANAGEMENT AGREEMENT
The following information supplements and should be
read in conjunction with the section in each Fund's Prospectus
entitled "Management of the Company."
Management Agreement. The Manager provides management
services pursuant to the Management Agreement (the "Agreement")
dated August 24, 1994, as amended March __, 1996, with the
Company. As to each Fund, the Agreement is subject to annual
approval by (i) the Company's Board or (ii) vote of a majority
(as defined in the 1940 Act) of the outstanding voting
securities
of such Fund, provided that in either event the continuance also
is approved by a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Company
or the Manager, by vote cast in person at a meeting called for
the purpose of voting on such approval. The Agreement was
approved by shareholders on August 2, 1994 in respect of Dreyfus
International Equity Fund, and was last approved by the
Company's
Board, including a majority of the Board members who are not
"interested persons" of any party to the Agreement, at a meeting
held on March __, 1996. As to each Fund, the Agreement is
terminable without penalty, on 60 days' notice, by the Company's
Board or by vote of the holders of a majority of such Fund's
shares, or, on not less than 90 days' notice, by the Manager.
The Agreement will terminate automatically, as to the relevant
Fund, in the event of its assignment (as defined in the 1940
Act).
The following persons are officers and/or directors of
the Manager: Howard Stein, Chairman of the Board and Chief
Executive Officer; W. Keith Smith, Vice Chairman of the Board;
Christopher M. Condron, President, Chief Operating Officer and a
director; Stephen E. Canter, Vice Chairman, Chief Investment
Officer and a director; Lawrence S. Kash, Vice Chairman
- --Distribution and a director; Philip L. Toia, Vice Chairman
- --Operations and Administration and a director; William T.
Sandalls, Jr., Senior Vice President and Chief Financial
Officer;
Barbara E. Casey, Vice President--Dreyfus Retirement Services;
Diane M. Coffey, Vice President--Corporate Communications; Elie
M. Genadry, Vice President--Institutional Sales; William F.
Glavin, Jr., Vice President--Corporate Development; Mark N.
Jacobs, Vice President-- Legal and Secretary; Daniel C. Maclean,
Vice President and General Counsel; Jeffrey N. Nachman, Vice
President--Mutual Fund Accounting; Andrew S. Wasser, Vice
President--Information Services; Maurice Bendrihem, Controller;
Elvira Oslapas, Assistant Secretary; and Mandell L. Berman,
Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene and
Julian M. Smerling, directors.
M&G provides investment advisory assistance and day-to-
day management of Dreyfus International Equity Fund's
investments
pursuant to the Sub-Investment Advisory Agreement (the "Sub-
Advisory Agreement") dated August 24, 1994 between M&G and the
Manager. The Sub-Advisory Agreement is subject to annual
approval by (i) the Company's Board or (ii) vote of a majority
(as defined in the 1940 Act) of Dreyfus International Equity
Fund's outstanding voting securities, provided that in either
event the continuance also is approved by a majority of the
Board members who are not "interested persons" (as defined in
the 1940 Act) of the Company or the Manager or M&G, by vote cast
in person at a meeting called for the purpose of voting on such
approval. The Sub-Advisory Agreement was approved by
shareholders of Dreyfus International Equity Fund on August 2,
1994 and was last approved by the Company's Board including a
majority of the Board
members who are not "interested persons" of any party to the
Sub-Advisory Agreement, at a meeting held on June 5, 1995. The
Sub-Advisory Agreement is terminable without penalty (i) by the
Manager on 60 days' notice, (ii) by the Company's Board or by
vote of the holders of a majority of Dreyfus International
Equity
Fund's shares on 60 days' notice, or (iii) by M&G on not less
than 90 days' notice. The Sub-Advisory Agreement will terminate
automatically in the event of its assignment (as defined in the
1940 Act) or upon the termination of the Management Agreement
for any reason.
The following persons are officers and/or directors of
M&G: David L. Morgan, Chairman of the Board; Richard S. Hughes
and Michael G.A. McLintock, Managing Directors; John P. Allard,
John W. Boeckmann, Gordon P. Craig, James H.S. Denham, Charles
C.M. Glass, Patrick A. Harrington, Martin E. Harrison, Robert
A.R. Hayes, David J. Hutchins, Paul R. Marsh, Nigel D. Morrison,
Roger D. Nightingale, William J. Nott, Neil A. Pegrum, J.
Christopher Whitaker, and M. Theodora Zemek, directors; and
Anthony J. Ashplant, Secretary.
The Manager manages each Fund's investments in
accordance with the stated policies of such Fund, subject to the
approval of the Company's Board. M&G provides day-to-day
management of Dreyfus International Equity Fund's portfolio,
subject to the supervision of the Manager and the approval of
the
Company's Board. The Manager (and M&G with respect to Dreyfus
International Equity Fund) is responsible for investment
decisions, and provides the Funds with portfolio managers who
are authorized by the Board to execute purchases and sales of
securities. Dreyfus International Equity Fund's portfolio
managers are Kelly McDermott, David L. Morgan and John
Christopher Whitaker. Dreyfus Emerging Markets Fund's portfolio
manager is Kelly McDermott. The Manager and M&G also maintain
research departments, each with a professional staff of
portfolio
managers and securities analysts who provide research services
for the Funds as well as for other funds advised by the Manager.
All purchases and sales are reported for the Board's review at
the meeting subsequent to such transactions.
The Manager maintains office facilities on behalf of
the Funds, and furnishes statistical and research data, clerical
help, accounting, data processing, bookkeeping and internal
auditing and certain other required services to the Funds. The
Manager also may make such advertising and promotional
expenditures, using its own resources, as it from time to time
deems appropriate.
Expenses. All expenses incurred in the operation of
the Company are borne by the Company, except to the extent
specifically assumed by the Manager or M&G. The expenses borne
by the Company include: organizational costs, taxes, interest,
loan commitment fees, interest and distributions paid on
securities sold short, brokerage fees and commissions, if any,
fees of Board members who are not officers, directors, employees
or holders of 5% or more of the outstanding voting securities of
the Manager or M&G or any of their affiliates, 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 Company's existence, costs of independent
pricing
services, costs attributable to investor services (including,
without limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses. Expenses attributable
to a particular Fund are charged against the assets of that
Fund;
other expenses of the Company are allocated between the Funds on
the basis determined by the Board, including, but not limited
to, proportionately in relation to the net assets of each Fund.
As compensation for the Manager's services to the
Company, the Company has agreed to pay the Manager a monthly
management fee at the annual rate of .75 of 1% of the value of
Dreyfus International Equity Fund's average daily net assets,
and
1.25% of the value of Dreyfus Emerging Markets Fund's average
daily net assets. All fees and expenses are accrued daily and
deducted before declaration of dividends to shareholders. For
the period from June 29, 1993 (commencement of operations)
through May 31, 1994 and for the fiscal year ended May 31, 1995,
the management fees payable by Dreyfus International Equity Fund
amounted to $731,828 and $1,181,098, respectively; however,
pursuant to undertakings in effect, the Manager reduced its fee
by $174,169 in fiscal 1994, resulting in a net fee paid by
Dreyfus International Equity Fund of $557,659 for that period.
As compensation for M&G's services, the Manager has
agreed to pay M&G a monthly fee at the annual rate of .30 of 1%
of the value of Dreyfus International Equity Fund's average
daily
net assets. For the period from June 29, 1993 (commencement of
operations) through May 31, 1994 and for the fiscal year ended
May 31, 1995, the sub-investment advisory fee payable by the
Manager amounted to $316,827 and $475,057, respectively;
however,
pursuant to undertakings in effect, the sub-investment advisory
fee was reduced by $51,342 in fiscal 1994, resulting in a net
fee paid by the Manager of $265,485 for that period.
As to each Fund, 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. 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 a Fund's net assets
increases.
PURCHASE OF SHARES
The following information supplements and should be
read in conjunction with the section in each Fund's Prospectus
entitled "How to Buy Shares."
The Distributor. The Distributor serves as each Fund's
distributor on a best efforts basis 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. In some states,
certain financial institutions effecting transactions in Fund
shares may be required to register as dealers pursuant to state
law.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer
purchase orders may be made at any time. Purchase orders
received by 4:00 p.m., New York time, on any business day that
Dreyfus Transfer, Inc., the Fund's transfer and dividend
disbursing agent (the "Transfer Agent"), and the New York Stock
Exchange are open for business will be credited to the
shareholder's Fund account on the next bank business day
following such purchase order. Purchase orders made after 4:00
p.m., New York time, on any business day the Transfer Agent and
the New York Stock Exchange are open for business, or orders
made
on Saturday, Sunday or any Fund holiday (e.g., when the New York
Stock Exchange is not open for business), will be credited to
the shareholder's Fund account on the second bank business day
following such purchase order. To qualify to use the Dreyfus
TeleTransfer Privilege, the initial payment for purchase of
shares must be drawn on, and redemption proceeds paid to, the
same bank and account as are designated on the Account
Application or Shareholder 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 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.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be
read in conjunction with the section in Dreyfus International
Equity Fund's Prospectus entitled "Distribution Plan and
Shareholder Services Plan" or in Dreyfus Emerging Market Fund's
Prospectus entitled "Shareholder Services Plan."
Distribution Plan. (Dreyfus International Equity Fund
only) Rule 12b-1 (the "Rule") adopted by the Securities and
Exchange Commission under the 1940 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 Company's Board has adopted such
a plan with respect to Dreyfus International Equity Fund (the
"Distribution Plan") pursuant to which the Company reimburses
the
Distributor for distributing Dreyfus International Equity Fund's
shares and pays the Manager, Dreyfus Service Corporation and any
affiliate of either of them for advertising and marketing
relating to Dreyfus International Equity Fund. 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 Company's Board believes that
there is a reasonable likelihood that the Distribution Plan will
benefit Dreyfus International Equity Fund and its shareholders.
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 Board for its review. In
addition, the Distribution Plan provides that it may not be
amended to increase materially the cost which shareholders may
bear pursuant to the Distribution Plan without shareholder
approval and that other material amendments of the Distribution
Plan must be approved by the Company's Board and by the Board
members who are not "interested persons" (as defined in the 1940
Act) of the Company 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 of the Board members cast in
person at a meeting called for the purpose of voting on the
Distribution
Plan. The Distribution Plan was so approved on June 5, 1995.
The Distribution Plan may be terminated at any time by vote of a
majority of the Board members 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 Dreyfus International Equity Fund's
shares.
For the period August 24, 1994 (effective date of
Distribution Plan) through May 31, 1995, the amount payable by
Dreyfus International Equity Fund under the Distribution Plan
was
$613,282, of which $588,856 was charged for advertising and
marketing Dreyfus International Equity Fund's shares and $24,426
was charged for preparing, printing and distributing
prospectuses and statements of additional information.
Shareholder Services Plan. The Company has adopted a
Shareholder Services Plan, pursuant to which the Company pays
the
Distributor for the provision of certain services to each Fund's
shareholders. The services provided may include personal
services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Company and providing
reports
and other information, and services related to the maintenance
of such shareholder accounts. Under the Shareholder Services
Plan,
the Distributor may make payments to Service Agents in respect
of these services.
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 Board for its
review. In addition, the Shareholder Services Plan provides
that
material amendments must be approved by the Company's Board and
by the Board members who are not "interested persons" (as
defined
in the 1940 Act) of the Company 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. As to
each Fund, the Shareholder Services Plan is subject to annual
approval by such vote of the Board members cast in person at a
meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan was so approved on
March __, 1996. The Shareholder Services Plan is terminable
with
respect to each Fund at any time by vote of a majority of the
Board members who are not "interested persons" 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.
For the period from August 24, 1994 (effective date of
Shareholder Services Plan) through May 31, 1995, Dreyfus
International Equity Fund was charged $294,456 pursuant to the
Shareholder Services Plan.
Prior Service Plan. As of August 24, 1994, the Company
terminated its then-existing Distribution Plan with respect to
Dreyfus International Equity Fund. That Distribution Plan,
adopted pursuant to Rule 12b-1 under the 1940 Act, provided for
payments to Dreyfus Service Corporation, as the Company's
distributor prior to such date, for advertising, marketing and
distributing Dreyfus International Equity Fund's shares at the
annual rate of .50% of the value of the Fund's average daily net
assets. For the period from June 1, 1994 through August 23,
1994, Dreyfus International Equity Fund was charged $203,340
pursuant to such plan, of which $198,543 was charged for
advertising, marketing and distributing shares and $4,797 was
charged for preparing, printing and distributing prospectuses
and statements of additional information.
As of August 24, 1994, the Company also terminated its
then-existing Shareholder Services Plan, which provided for
payments to be made to Dreyfus Service Corporation for expenses
related to the provision of shareholder services. For the
period
June 1, 1994 through August 23, 1994, Dreyfus International
Equity Fund was charged $99,243 pursuant to such plan.
REDEMPTION OF SHARES
The following information supplements and should be
read in conjunction with the section in each Fund's Prospectus
entitled "How to Redeem 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 Company will initiate
payment for shares redeemed pursuant to this Privilege on the
next business day after receipt by the Transfer Agent of the
redemption request in proper form. Redemption proceeds ($1,000
minimum) will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account
Application or Shareholder Services Form, or to a correspondent
bank if the investor's bank is not a member of the Federal
Reserve System. 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
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 Company has committed
itself to pay in cash all redemption requests by any shareholder
of record of a Fund, limited in amount during any 90-day period
to the lesser of $250,000 or 1% of the value of such 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 reserves the right to make
payments in whole or in part in securities (which may include
non-marketable 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 such event, the securities would be valued in
the same manner as the Fund's securities are valued. If the
recipient sold such securities, brokerage charges would be
incurred.
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 relevant 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 each Fund's Prospectus
entitled "Shareholder Services."
Fund Exchanges. Shares of funds purchased by exchange
will be purchased on the basis of relative net asset value per
share as follows:
A. Exchanges for shares of funds that are offered
without a sales load will be made without a
sales load.
B. Shares of funds purchased without a sales load
may be exchanged for shares of other funds sold
with a sales load, and the applicable sales load
will be deducted.
C. Shares of funds purchased with a sales load may
be exchanged without a sales load for shares of
other funds sold without a sales load.
D. Shares of funds purchased with a sales load,
shares of funds acquired by a previous exchange
from shares purchased with a sales load and
additional shares acquired through reinvestment
of dividends or distributions of any such funds
(collectively referred to herein as "Purchased
Shares") may be exchanged for 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.
To accomplish an exchange under item D above, share-
holders must notify the Transfer Agent of their prior ownership
of fund shares and their account number.
To request an exchange, an investor or the investor's
Service Agent acting on the investor's behalf must give exchange
instructions to the Transfer Agent in writing or by telephone.
The ability to issue exchange instructions by telephone is given
to all Fund shareholders automatically, unless the investor
checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this
Privilege.
By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic 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 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 plans,
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 the funds in the Dreyfus Family of Funds.
To exchange shares held in a personal retirement plan account,
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 a 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 "Fund Exchanges." 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 the investor's 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.
Fund Exchanges and the 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.
Shareholder Services Forms and prospectuses of the
other funds may be obtained by calling 1-800-645-6561. The
Company reserves the right to reject any exchange request in
whole or in part. The Fund Exchanges service or the 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. Automatic Withdrawal may be
terminated at any time by the investor, the Company or the
Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows
investors to invest on the payment date their dividends or
dividends and capital gain distributions, if any, from a Fund in
shares of another fund in the Dreyfus Family of Funds of which
the investor is a shareholder. Shares 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 by a fund may
be invested without imposition of a sales load
in shares of other funds that are offered
without a sales load.
B. Dividends and distributions paid by a fund which
does not charge a sales load may be invested in
shares of other funds sold with a sales load,
and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in 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 by a fund may
be invested in shares of other funds that impose
a contingent deferred sales charge ("CDSC") and
the applicable CDSC, if any, will be imposed
upon redemption of such shares.
Corporate Pension/Profit-Sharing and Retirement Plans.
The Company makes available to corporations a variety of
prototype pension and profit-sharing plans including a 401(k)
Salary Reduction Plan. In addition, the Company makes available
Keogh Plans, IRAs, including SEP-IRAs and IRA "Rollover
Accounts," and 403(b)(7) Plans. Plan support services also are
available.
Investors who wish to purchase Fund shares in
conjunction with a Keogh Plan, a 403(b)(7) Plan or an IRA,
including a 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 for subsequent
purchases. The minimum initial investment for Dreyfus-sponsored
Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only one
participant, is ordinarily $750, with no minimum for subsequent
purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum investment of $250.
Each 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 each Fund's Prospectus
entitled "How to Buy Shares."
Valuation of Portfolio Securities. Each Fund's
securities, including covered call options written by a 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 U.S. dollars at the midpoint of the New York
interbank market spot exchange rate as quoted on the day of such
translation or, if no such rate is quoted on such date, such
other quoted market exchange rate as may be determined to be
appropriate by the Manager (and M&G with respect to Dreyfus
International Equity Fund). Forward currency contracts will be
valued at the current cost of offsetting the contract. If a
Fund
has to obtain prices as of the close of trading on various
exchanges throughout the world, the calculation of net asset
value may not take place contemporaneously with the
determination
of prices of certain of the Funds' securities. Short-term
investments are carried at amortized cost, which approximates
value. Expenses and fees, including the management fee and fees
pursuant to the Distribution Plan and Shareholder Services Plan,
are accrued daily and taken into account for the purpose of
determining the net asset value of a Fund's shares.
Restricted securities, as well as securities or other
assets for which recent market quotations are not readily
available, or are not valued by a pricing service approved by
the
Board, are valued at fair value as determined in good faith by
the Board. The Board will review the method of valuation on a
current basis. In making their good faith valuation of
restricted securities, the Board members 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 if the Board members 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.
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 each Fund's Prospectus
entitled "Dividends, Distributions and Taxes."
Management of the Company believes that Dreyfus
International Equity Fund has qualified for the fiscal year
ended
May 31, 1995 as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). It is
expected that Dreyfus Emerging Markets Fund will qualify as a
regulated investment company under the Code. Each Fund intends
to continue to so qualify if such qualification is in the best
interests of its shareholders. As a regulated investment
company, each Fund will pay no Federal income tax on net
investment income and net realized securities gains to the
extent
that such income and gains are distributed to shareholders in
accordance with applicable provisions of the Code. To qualify
as a regulated investment company, the Fund must distribute at
least
90% of its net income (consisting of net investment income and
net short-term capital gain) to its shareholders, derive less
than 30% of its annual gross income from gain on the sale of
securities held for less than three months, and meet certain
asset diversification and other requirements. 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 net
asset
value of the shares below the cost of the investment. Such a
dividend or distribution would be a return of investment in an
economic sense, although taxable as stated above. In addition,
the Code provides that if a shareholder holds shares of a 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 long-term capital
loss to the extent of the capital gain distribution received.
Depending upon the composition of a Fund's income, the
entire amount or a portion of the dividends paid by such Fund
from net investment income may qualify for the dividends
received
deduction allowable to qualifying U.S. corporate shareholders
("dividends received deduction"). In general, dividend income
of
a Fund distributed to qualifying corporate shareholders will be
eligible for the dividends received deduction only to the extent
that such Fund's income consists of dividends paid by U.S.
corporations. However, Section 246(c) of the Code provides that
if a qualifying corporate shareholder has disposed of Fund
shares
not held for 46 days or more and has received a dividend from
net investment income with respect to such shares, the portion
designated by the Fund as qualifying for the dividends received
deduction will not be eligible for such shareholder's dividends
received deduction. 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.
A 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). A 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 foreign currencies (including foreign currency
denominated bank deposits) and non-U.S. dollar denominated
securities (including debt instruments and certain forward
contracts and options) may be treated as ordinary income or loss
under Section 988 of the Code. In addition, all or a portion of
any gains realized from the sale or other 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, any gain or loss
realized by a Fund from certain forward contracts and options
transactions 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 exercise or lapse of such contracts and options as
well as from closing transactions. In addition, any such
contracts or options remaining unexercised at the end of a
Fund's
taxable year will be treated as sold for their then fair market
value, resulting in additional gain or loss to such Fund
characterized in the manner described above.
Offsetting positions held by a Fund involving certain
foreign currency forward contracts or 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 1256 and 988 of the Code. As such,
all or a portion of any short or long-term capital gain from
certain "straddle" transactions may be recharacterized to
ordinary income.
If a Fund were treated as entering into "straddles" by
reason of its engaging in certain forward contracts or options
transactions, such "straddles" would be characterized as "mixed
straddles" if the forward contracts or options transactions
comprising a part of such "straddles" were governed by Section
1256 of the Code. A Fund may make one or more elections with
respect to "mixed straddles." Depending on which election is
made, if any, the results to a Fund may differ. If no election
is made, to the extent the "straddle" and conversion transaction
rules apply to positions established by a Fund, losses realized
by a Fund will be deferred to the extent of unrealized gain in
the offsetting position. 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 gains may be treated as short-term
capital gains or ordinary income.
If a Fund invests in an entity that is classified as a
"passive foreign investment company" ("PFIC") for Federal income
tax purposes, the operation of certain provisions of the Code
applying to PFICs could result in the imposition of certain
Federal income taxes on the Fund. In addition, gain realized
from the sale or other disposition of PFIC securities may be
treated as ordinary income under Section 1291 of the Code.
Investment by a 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 a Fund to recognize
income prior to the receipt of cash payments. For example, a
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,
a 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.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing
orders on behalf of the Company 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 M&G with respect to Dreyfus International Equity
Fund) 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 will include those that supplement the
Manager's
(and M&G's with respect to Dreyfus International Equity Fund)
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 M&G with respect to Dreyfus
International Equity Fund) and the Manager's (and M&G's with
respect to Dreyfus International Equity Fund) fees are not
reduced as a consequence of the receipt of such supplemental
information. Such information may be useful to the Manager in
serving both the Company and other funds which it advises and,
conversely, supplemental information obtained by the placement
of
business of other clients may be useful to the Manager (and M&G
with respect to Dreyfus International Equity Fund) in carrying
out its obligations to the Company.
Sales of Fund shares by a broker may be taken into
consideration, and brokers also will be 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 may, in certain cases,
result from two or more funds advised or administered by the
Manager being engaged simultaneously in the purchase or sale of
the same security. Certain of a Fund's transactions in
securities of foreign issuers may not benefit from the
negotiated
commission rates available to a Fund for transactions in
securities of domestic issuers. When transactions are executed
in the over-the-counter market, each Fund will deal with the
primary market makers unless a more favorable price or execution
otherwise is obtainable. 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.
Portfolio turnover may vary from year to year as well
as within a year. It is anticipated that in any fiscal year the
turnover rate of a Fund may approach the 150% level. In periods
in which extraordinary market conditions prevail, the Manager
(and M&G with respect to Dreyfus International Equity Fund) will
not be deterred from changing a Fund's investment strategy as
rapidly as needed, in which case higher turnover rates can be
anticipated which would result in greater brokerage expenses.
The overall reasonableness of brokerage commissions paid is
evaluated by the Manager (and M&G with respect to Dreyfus
International Equity Fund) 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 June 29, 1993 (commencement of
operations) through May 31, 1994 and for the fiscal year ended
May 31, 1995, Dreyfus International Equity Fund paid total
brokerage commissions of $894,844 and $573,515, respectively,
none of which was paid to the Distributor. There were no gross
spreads and concessions on principal transactions during such
periods.
PERFORMANCE INFORMATION
The following information supplements and should be
read in conjunction with the section in each Fund's Prospectus
entitled "Performance Information."
Dreyfus Emerging Markets Fund had not commenced
operations as of the date hereof. Accordingly, no performance
information is available for that Fund.
Dreyfus International Equity Fund's average annual
return for the 1 and 1.923 year periods ended May 31, 1995 was
- -7.81% and 6.45%, respectively. Average annual total return is
calculated by determining the ending redeemable value of an
investment purchased 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.
Dreyfus International Equity Fund's total return for
the period June 29, 1993 (commencement of operations) through
May 31, 1995 was 12.77%. Total return for a Fund is calculated
by subtracting the amount of the Fund's net asset value 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 net asset value per share at the
beginning of the period.
Comparative performance may be used from time to time
in advertising a 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, Inc. and other industry publications. From time to
time, a 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 a 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 a Fund may include
biographical information relating to its portfolio manager, and
may refer to or include commentary by the Fund's portfolio
manager relating to investment strategy, asset growth, current
or
past business, political, economic or financial conditions and
other matters of general interest to investors. Such materials
with respect to Dreyfus International Equity Fund also may
describe awards bestowed upon M&G or refer to M&G's clients. A
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. Advertising materials for each Fund also may
include information concerning retirement and investing for
retirement, may refer to the approximate number of then-current
Fund shareholders and may refer to Lipper or Morningstar ratings
and related analysis supporting the ratings.
INFORMATION ABOUT THE FUNDS
The following information supplements and should be
read in conjunction with the section in each 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. Fund shares are of one class and have equal
rights as to dividends and in liquidation. Shares have no
preemptive, subscription or conversion rights and are freely
transferable.
Rule 18f-2 under the 1940 Act provides that any matter
required to be submitted under the provisions of the 1940 Act or
applicable state law or otherwise to the holders of the
outstanding voting securities of an investment company, such as
the Company, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the
outstanding shares of each series affected by such matter. Rule
18f-2 further provides that a series shall be deemed to be
affected by a matter unless it is clear that the interests of
each series in the matter are identical or that the matter does
not affect any interest of such series. However, the Rule
exempts the selection of independent accountants and the
election of Board members from the separate voting requirements
of the Rule.
Each Fund will send annual and semi-annual financial
statements to all its shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, P.O. Box 9671, Providence, Rhode Island 02940-9671,
is the Company's transfer and dividend disbursing agent. Under
a
transfer agency agreement with the Company, the Transfer Agent
arranges for the maintenance of shareholder account records for
each Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and
distributions payable by each Fund. For these services, the
Transfer Agent receives a monthly fee computed on the basis of
the number of shareholder accounts it maintains for the Fund
during the month, and is reimbursed for certain out-of-pocket
expenses. The Bank of New York, 90 Washington Street, New York,
New York 10286, is the Company's custodian. Neither the
Transfer
Agent nor The Bank of New York has any part in determining the
investment policies of each Fund or which securities are to be
purchased or sold by a Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York,
New York 10004-2696, as counsel for the Company, has rendered
its opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares being sold
pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York,
New York 10019, independent auditors, have been selected as
auditors of the Company.
<PAGE>
APPENDIX
Description of certain ratings assigned by Standard &
Poor's Ratings Group ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, L.P. ("Fitch") and Duff &
Phelps Credit Rating Co. ("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.
S&P's letter ratings may be modified by the addition of
a plus (+) or a 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
An S&P commercial paper rating is a current assessment
of the likelihood of timely payment of debt having an original
maturity of no more than 365 days. Issues assigned an A rating
are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 1, 2 and
3 to indicate the relative degree of safety.
A-1
This designation 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 (+) designation.
A-2
Capacity for timely payment on issues with this
designation is strong. However, the relative degree of safety
is not as high as for issues designated A-1.
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
generally are 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 charac-
teristics and in fact have speculative characteristics as well.
Moody's applies the numerical modifiers 1, 2 and 3 to
show relative standing within the major rating categories,
except
in the Aaa category. 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.
Issuers (or related supporting institutions) rated
Prime-2 (P-2) have a strong capacity for repayment of short-term
promissory obligations. This ordinarily will be evidenced by
many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Fitch
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.
Plus (+) and minus (-) signs are used with a rating
symbol to indicate the relative position of a credit within the
rating category. Plus and minus signs, however, are not used in
the AAA category covering 12-36 months.
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+.
F-2
Good Credit Quality. Issues carrying this rating have
a satisfactory degree of assurance for timely payments, but the
margin of safety is not as great as the F-1+ and F-1 categories.
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. There may be considerable variability in risk for
bonds in this category during economic cycles.
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. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals.
Risk factors are small.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS MAY 31, 1995
COMMON STOCKS-88.7% SHARES VALUE
-------------- --------------
<S> <C> <C>
AUSTRALIA-2.8%.... Boral 700,000 $ 1,747,830
Broken Hill Proprietary 100,000 1,267,105
Mayne Nickless 200,000 869,610
-------------
3,884,545
-----------
AUSTRIA-.6%.......... Burgenland Holding (a) 24,000 874,748
------------
DENMARK-1.2%......... Tele Danmark A/S, Cl. B 30,000 1,701,549
--------------
FRANCE-6.5%........... BUT S.A. 7,000 1,456,688
Banque Nationale de Paris 31,400 1,549,126
Bollore Technologies S.A. (a) 8,850 871,629
Castorama Dubois Investissements S.A. (a) 7,350 1,175,645
Compagnie Financiere de Paribas S.A., Cl. A. 13,600 872,603
Compagnie Signaux et Equipements Electronique 22,619 1,556,081
Imetal................................. 9,000 1,028,002
Naf Naf S.A. 21,142 430,165
-----------
8,939,939
--------------
GERMANY-4.5%...........BASF AG 9,250 1,980,273
Continental AG 11,500 1,760,403
Etienne Aigner AG 4,000 1,613,588
Felten & Guilleaume Energietechnik 4,200 921,444
--------------
6,275,708
--------------
HONG KONG-3.7%....... China Light & Power 160,600 878,265
Citic Pacific 145,000 376,794
Dah Sing Financial Holdings 546,650 1,261,500
Lamex Holdings 5,934,000 1,027,998
Swire Pacific, Cl. A 140,000 1,081,448
Vtech Holdings 474,000 447,343
--------------
5,073,348
--------------
INDONESIA-1.8%..... PT Indofood Sukses Makmur (a) 557,000 2,433,434
--------------
ITALY-3.2%............. Edison S.P.A. 340,000 1,487,370
Fila Holding S.P.A., A.D.R. 42,600 1,027,725
Telecom Italia S.P.A. 720,000 1,888,957
--------------
4,404,052
--------------
JAPAN-24.0%............. Amway Japan 55,000 1,772,512
Anritsu Electric 120,000 1,212,796
Asahi Concrete Works 75,000 1,244,076
DDI 180 1,198,578
East Japan Railway 300 1,549,763
Fuji Bank 80,000 1,838,862
Hitachi Credit 100,000 1,848,341
Japan Airlines (a) 200,000 1,393,365
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
JAPAN (CONTINUED)...... Kurimoto 140,000 $ 1,411,611
Mitsubishi Bank 80,000 1,914,692
Mitsubishi Chemical 200,000 962,085
Mitsui Fudosan 125,000 1,405,509
NEC 150,000 1,599,526
Nippon Express 170,000 1,442,180
Nippon Telegraph & Telephone 200 1,658,768
Nissan Chemical Industries 210,000 1,231,635
P.S. 70,400 1,142,749
Sankyo 20,000 924,171
Seven Eleven Japan 22,000 1,629,147
Sharp 80,000 1,137,441
Sumitomo Bank 60,000 1,251,185
Sumitomo Metal Mining 160,000 1,266,351
Toshoku 220,000 1,217,299
Ushio 75,000 805,095
--------------
33,057,737
--------------
MALAYSIA-2.8%....... Hong Leong Credit Berhad 180,000 927,383
Leader Universal Holdings Berhad 166,666 581,472
Metacorp Berhad 150,000 517,241
Metacorp Berhad (Rights) (a) 62,666 74,742
Renong Berhad 950,000 1,757,404
--------------
3,858,242
--------------
NETHERLANDS-3.8%...... Ahrend Groep N.V. 11,000 1,328,653
Akzo N.V. 17,000 2,069,500
OCE-Van Der Grinten N.V. 35,000 1,876,937
--------------
5,275,090
--------------
SINGAPORE-3.7%........ Fraser & Neave 136,300 1,636,972
IPCO International 138,000 455,400
Robinson & Co. 272,000 1,271,485
Singapore Press Holdings 90,000 1,682,848
--------------
5,046,705
--------------
SPAIN-4.7% Hidroelectrica del Cantabrico S.A. 46,000 1,376,245
Iberdrola S.A. 234,000 1,638,955
Repsol S.A. 61,000 1,971,918
Uralita S.A. (a) 125,000 1,500,000
--------------
6,487,118
--------------
SWEDEN-2.1%............Autoliv AB 40,000 1,950,860
Volvo AB 57,000 1,003,124
--------------
2,953,984
--------------
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
SWITZERLAND-4.4%.......Baloise Holdings 900 $ 1,930,502
Compagnie Financiere Michelin (a) 3,650 1,493,822
Elektrowatt AG (Warrants) (a) 7,000 426,426
Motor-Columbus (a) 1,000 1,724,582
Pelikan Holding AG (a) 7,000 504,505
--------------
6,079,837
--------------
UNITED KINGDOM-18.9%...BAT Industries PLC 230,000 1,796,285
Booker PLC 270,000 1,838,394
British Steel PLC 750,000 2,100,459
British Telecommunications PLC 250,000 1,567,151
Burton Group PLC 1,000,000 1,390,375
Cookson Group PLC 390,000 1,490,403
Glaxo Wellcome PLC 120,000 1,386,244
Hammerson PLC 350,000 1,949,306
Harrisons & Crosfield PLC 650,000 1,590,589
Lloyds Bank PLC 150,000 1,557,617
Lucas Industries PLC 1,000,000 3,019,100
RTZ PLC 190,000 2,425,847
Royal Doulton PLC 500,000 2,129,260
Welsh Water PLC 175,000 1,796,364
--------------
26,037,394
--------------
TOTAL COMMON STOCKS
(cost $118,986,514) $122,383,430
==============
PREFERRED STOCKS-2.2%
GERMANY-1.1%.......... Herlitz AG 8,444 $ 1,550,756
SWITZERLAND-1.1%...... Merck AG 2,060 1,463,475
--------------
TOTAL PREFERRED STOCKS
(cost $3,073,664) $ 3,014,231
==============
TOTAL INVESTMENTS (cost $122,060,178)....................................... 90.9% $125,397,661
======== ==============
CASH AND RECEIVABLES (NET).................................................. 9.1% $ 12,511,490
- -------- ======== ==============
NET ASSETS.................................................................. 100.0% $137,909,151
======== ==============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $122,060,178)-see statement..................................... $125,397,661
Cash.................................................................... 9,911,234
Receivable for investment securities sold............................... 2,161,621
Dividends receivable.................................................... 685,275
Prepaid expenses........................................................ 99,071
--------------
138,254,862
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 85,325
Due to Distributor...................................................... 85,325
Payable for Common Stock redeemed....................................... 26,241
Accrued expenses........................................................ 148,820 345,711
---------- --------------
NET ASSETS ................................................................ $137,909,151
===============
REPRESENTED BY:
Paid-in capital......................................................... $144,850,746
Accumulated distributions in excess of investment income-net-Note 1(d).. (237,568)
Accumulated net realized (loss) on investments and
foreign currency transactions......................................... (10,051,903)
Accumulated net unrealized appreciation on investments
and foreign currency transactions..................................... 3,347,876
--------------
NET ASSETS at value applicable to 10,036,375 shares outstanding
(300 million shares of $.001 par value Common Stock authorized)......... $137,909,151
===============
NET ASSET VALUE, offering and redemption price per share
($137,909,151 / 10,036,375 shares)...................................... $13.74
========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED MAY 31, 1995
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Cash dividends (net of $417,080 foreign taxes withheld at source)..... $ 3,015,922
Interest.............................................................. 144,449
------------
TOTAL INCOME...................................................... $ 3,160,371
EXPENSES:
Management fee-Note 2(a).............................................. 1,181,098
Shareholder servicing costs-Note 2(b,c)............................... 1,404,431
Custodian fees........................................................ 216,524
Registration fees..................................................... 59,394
Professional fees..................................................... 46,665
Directors' fees and expenses-Note 2(d)................................ 42,518
Prospectus and shareholders' reports-Note 2(b)........................ 42,235
Miscellaneous......................................................... 23,408
------------
TOTAL EXPENSES.................................................... 3,016,273
--------------
INVESTMENT INCOME-NET............................................. 144,098
--------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments and foreign currency
transactions-Note 3(a)................................................ $(4,600,948)
Net realized (loss) on forward currency exchange
contracts-Note 3(a)................................................... (5,037,972)
------------
NET REALIZED (LOSS)................................................... (9,638,920)
Net unrealized (depreciation) on investments and foreign currency
transactions.......................................................... (2,647,103)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (12,286,023)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(12,141,925)
==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MAY 31,
--------------------------------
1994* 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 116,463 $ 144,098
Net realized gain (loss) on investments................................. 2,792,970 (9,638,920)
Net unrealized appreciation (depreciation) on investments for the year.. 5,994,979 (2,647,103)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 8,904,412 (12,141,925)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income-net.............................................. (136,536) (144,098)
In excess of investment income-net...................................... (286,348) (207,897)
From net realized gain on investments................................... (269,107) (2,933,301)
-------------- --------------
TOTAL DIVIDENDS....................................................... (691,991) (3,285,296)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 350,172,480 514,593,936
Dividends reinvested.................................................... 648,010 3,064,914
Cost of shares redeemed................................................. (179,226,393) (544,228,996)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..... 171,594,097 (26,570,146)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... 179,806,518 (41,997,367)
NET ASSETS:
Beginning of year....................................................... 100,000 179,906,518
-------------- --------------
End of year [including distributions in excess of investment
income-net: ($98,669) in 1994 and ($237,568) in 1995]................. $179,906,518 $137,909,151
============== ================
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 23,578,540 35,280,834
Shares issued for dividends reinvested.................................. 42,773 217,216
Shares redeemed......................................................... (11,796,511) (37,294,477)
-------------- --------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... 11,824,802 (1,796,427)
=============== ===============
* From June 29, 1993 (commencement of operations) to May 31, 1994.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY 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 year indicated. This information
has been derived from the Fund's financial statements.
YEAR ENDED MAY 31,
----------------------
PER SHARE DATA: 1994(1) 1995
------- -------
<S> <C> <C>
Net asset value, beginning of year............................................... $12.50 $15.20
------- -------
INVESTMENT OPERATIONS:
Investment income-net............................................................ .05 .01
Net realized and unrealized gain (loss) on investments
and foreign currency transactions.............................................. 2.74 (1.19)
------- -------
TOTAL FROM INVESTMENT OPERATIONS............................................... 2.79 (1.18)
------- -------
DISTRIBUTIONS:
Dividends from investment income-net............................................. (.02) (.01)
Dividends in excess of investment income-net..................................... (.04) (.02)
Dividends from net realized gain on investments.................................. (.03) (.25)
------- -------
TOTAL DISTRIBUTIONS............................................................ (.09) (.28)
------- -------
Net asset value, end of year..................................................... $15.20 $13.74
======= =======
TOTAL INVESTMENT RETURN.............................................................. 22.32%(2) (7.81%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......................................... 1.71%(2) 1.92%
Ratio of net investment income to average net assets............................. .11%(2) .09%
Decrease reflected in above expense ratios due to undertakings by Dreyfus........ .16%(2) -
Portfolio Turnover Rate.......................................................... 51.32%(2) 40.15%
Net Assets, end of year (000's Omitted)........................................... $179,907 $137,909
(1) From June 29, 1993 (commencement of operations) to May 31, 1994.
(2) Not annualized.
See notes to financial statements.
</TABLE>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
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. The Dreyfus Corporation ("Dreyfus") serves as the
Fund's investment adviser. M&G Investment Management Limited
("M&G") serves as the Fund's sub-investment adviser. Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus,
until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold to the public without a sales load.
Effective August 24, 1994, Dreyfus 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 FDI
Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned
subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc.
(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. Investments
denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(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.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are recorded
on the identified cost basis. Dividend income is recognized on
the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is
recognized on the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net 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.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Dividends in excess of investment income-net result from
Federal income tax distribution requirements, primarily
unrealized gains on Passive Foreign Investment Companies and
foreign currency transactions.
In accordance with a recently adopted Statement of Position
(SOP 93-02) certain differences resulting from the
classification of gains/losses recognized on foreign currency
transactions and Passive Foreign Investment Companies for book
and tax purposes and the recording of related distributions to
shareholders have been reclassified. The cumulative effect
of such differences totalling $164,098 was reclassified to
undistributed net investment income from undistributed net
realized gains. This reclassification had no effect on net
investment income, net realized gains and net assets.
During the year ended May 31, 1995, the Fund reclassified
$30,454 charged to undistributed investment income-net in prior
years to paid-in capital. In addition, the Fund reclassified
$202,643 and $20,034 charged to undistributed investment
income-net in prior years and net realized securities losses in
prior years, respectively, to paid-in capital.
(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.
The Fund has an unused capital loss carryover of
approximately $2,639,000 available for Federal income tax
purposes to be applied against future net securities profits, if
any realized subsequent to May 31, 1995. The carryover
does not include net realized securities losses from November 1,
1994 through May 31, 1995 which are treated, for Federal income
tax purposes, as arising in fiscal 1996. If not applied, the
carryover expires in fiscal 2003.
NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND
OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a Management Agreement with Dreyfus, 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. Dreyfus and M&G have agreed that if in any full fiscal
year the Fund's aggregate expenses, exclusive of interest,
taxes, brokerage and extraordinary expenses, exceed the expense
limitation of any state having jurisdiction over the Fund,
Dreyfus and M&G will bear the excess expense in proportion to
their management fee and sub-advisory fee 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. No expense reimbursement was
required for the year ended May 31, 1995.
Pursuant to a Sub-Investment Advisory Agreement between
Dreyfus and M&G, the sub-advisory fee is computed at the annual
rate of .30 of 1% of the average daily value of the Fund's net
assets and is payable monthly by Dreyfus.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) On August 2, 1994, the shareholders approved a revised
Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the
Act. Pursuant to the Plan, effective August 24, 1994, the Fund
(a) reimburses the Distributor for payments to certain Service
Agents for distributing the Fund's shares and (b) pays the
Manager, Dreyfus Service Corporation and any affiliate of either
of them for advertising and marketing relating to the Fund, at
an aggregate annual rate of .50 of 1% of the value of the Fund's
average daily net assets. The Distributor may pay one or more
Service Agents in respect of distribution services. The
Distributor determines the amounts, if any, to be paid to
Service Agents under the Plan and the basis on which such
payments are made. The fees payable under the Plan are payable
without regard to actual expenses incurred. The Plan also
separately provides 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.
Prior to August 24, 1994, the Fund's Distribution Plan
("prior Distribution Plan") provided that the Fund pay Dreyfus
Service Corporation at an annual rate of .50 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.
Dreyfus Service Corporation 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 Distribution Plan also
separately 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 prior Distribution 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 year ended May 31, 1995, $613,282 was charged to
the Fund pursuant to the Plan and $203,340 was charged to the
Fund pursuant to the prior Distribution Plan.
(C) Pursuant to the Fund's Shareholder Services Plan, the
Fund pays the Distributor 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. From June 1, 1994 through
August 23, 1994, $99,243 was charged to the Fund by Dreyfus
Service Corporation and from August 24, 1994 through May
31, 1995, $294,456 was charged to the Fund by the Distributor
pursuant to the Shareholder Services Plan.
(D) Prior to August 24, 1994, certain officers and directors
of the Fund were "affiliated persons," as defined in the Act, of
Dreyfus and/or Dreyfus Service Corporation. Each director who is
not an "affiliated person" receives an annual fee of $2,500 and
an attendance fee of $500 per meeting. The Chairman of the Board
receives an additional 25% of such compensation.
NOTE 3-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of
investment securities, excluding short-term securities and
forward currency exchange contracts, during the year ended May
31, 1995 amounted to $62,272,436 and $102,895,833, respectively.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund enters into forward exchange currency 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 contract increases between those dates.
The Fund is also exposed to credit risk associated with counter
party nonperformance on these forward currency exchange
contracts which is typically limited to the unrealized gains on
such contracts that are recognized in the statement of assets
and liabilities. At May 31, 1995, there were no open forward
currency exchange contracts.
(B) At May 31, 1995, accumulated net unrealized appreciation
on investments was $3,337,483, consisting of $11,195,422 gross
unrealized appreciation and $7,857,939 gross unrealized
depreciation, excluding foreign currency transactions.
At May 31, 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 INTERNATIONAL EQUITY FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS INTERNATIONAL EQUITY FUND, INC.
We have audited the accompanying statement of assets and
liabilities of Dreyfus International Equity Fund, Inc.,
including the statement of investments, as of May 31, 1995, 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 May 31, 1995 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 Dreyfus International Equity
Fund, Inc. at May 31, 1995, 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 LLP Signature Logo)
New York, New York
June 30, 1995
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS NOVEMBER 30, 1995 (UNAUDITED)
COMMON STOCKS-92.6% SHARES VALUE
_______ _______
<S> <C> <C>
AUSTRALIA-3.3% BTR Nylex...................................... 600,000 $
1,611,624
Boral.......................................... 800,000 1,893,584
_______
3,505,208
_______
FRANCE-6.4% BUT S.A........................................ 7,000 1,596,958
Banque Nationale de Paris...................... 31,400 1,388,713
Bollore Technologies S.A....................(a) 8,850 761,557
Castorama Dubois Investissements S.A........... 8,085 1,278,197
Compagnie Financiere de Paribas S.A., Cl.A..... 13,600 754,165
Imetal......................................... 9,000 1,044,627
_________
6,824,217
_________
GERMANY-4.0% Adidas AG...................................(a) 13,000 692,675
BASF AG........................................ 5,000 1,095,370
Etienne Aigner AG.............................. 4,000 1,857,636
Felten & Guilleaume Energietechnik............. 4,200 661,783
_________
4,307,464
_________
HONG KONG-4.6% HKR International.............................. 596,800 509,261
Hong Kong Land Holdings........................ 750,000 1,335,000
Lamex Holdings................................. 5,808,000 1,156,419
Shun Tak Holdings.............................. 1,700,000 1,153,921
Swire Pacific, Cl. A........................... 100,000 756,351
_________
4,910,952
_________
INDONESIA-.9% PT Indofood Sukses Makmur...................... 150,000 657,030
PT Telekomunikasi Indonesia, A.D.R..........(a) 15,000 315,000
_______
972,030
_______
ITALY-1.3% Edison S.P.A..................................... 340,000 1,358,724
_________
JAPAN-26.3% Amway Japan 55,000 2,237,745
Asahi Concrete Works............................. 24,000 261,176
DDI.............................................. 180 1,443,529
East Japan Railway.............................. 260 1,271,961
Hitachi Credit.................................. 100,000 1,813,726
Komori.......................................... 50,000 1,176,471
Kurimoto........................................ 140,000 1,413,726
Mitsubishi Bank................................. 80,000 1,741,176
Mitsubishi Chemical............................. 200,000 972,549
Mitsui Fudosan.................................. 125,000 1,544,118
NEC............................................. 130,000 1,656,863
NKK......................................... (a) 500,000 1,372,549
Nippon Express.................................. 170,000 1,471,667
Nippon Telegraph & Telephone.................... 204 1,662,000
Nissan Chemical Industries...................... 210,000 1,348,529
P.S............................................. 70,400 1,173,333
Sankyo.......................................... 19,500 927,206
Seven Eleven Japan.............................. 22,000 1,518,431
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
JAPAN (CONTINUED) Sumitomo Bank................................... 60,000 $ 1,152,941
Sumitomo Metal Mining........................... 160,000 1,394,510
Toshoku......................................... 100,000 525,490
______
28,079,696
__________
MALAYSIA-2.2% Hong Leong Credit Berhad........................ 120,000 477,730
Leader Universal Holdings Berhad................ 334,666 890,420
Metacorp Berhad................................. 107,667 244,023
Renong Berhad................................... 490,000 714,623
_________
2,326,796
_________
NETHERLANDS-5.5% Ahrend Groep N.V................................. 55,000 1,850,309
Akzo N.V......................................... 17,000 1,920,370
OCE-Van Der Grinten N.V.......................... 35,000 2,138,889
_________
5,909,568
_________
SINGAPORE-1.3% Overseas Union Bank............................... 220,000 1,395,761
_________
SPAIN-6.2% Hidroelectrica del Cantabrico S.A................. 46,000 1,476,773
Iberdrola S.A. ................................... 234,000 1,972,923
Repsol S.A. ...................................... 61,000 1,921,240
Uralita S.A. ..................................(a) 125,000 1,266,721
_________
6,637,657
_________
SWEDEN-2.0% Lindex AB......................................... 67,000 930,272
Volvo AB.......................................... 57,000 1,182,789
_________
2,113,061
_________
SWITZERLAND-5.7% Compagnie Financiere Michelin..................(a) 5,250 2,365,066
Elektrowatt AG (Warrants)......................(a) 14,000 1,029,324
Motor-Columbus.................................(a) 500 837,229
Pelikan Holding AG.............................(a) 7,000 630,684
Sulzer AG......................................... 2,150 1,187,846
_________
6,050,149
_________
UNITED KINGDOM-22.9% BAT Industries PLC............................... 210,000 1,791,247
Booker PLC....................................... 270,000 1,466,505
British Steel PLC................................ 700,000 1,807,312
British Telecommunications PLC................... 290,000 1,674,968
Burton Group PLC................................. 800,000 1,554,480
Concentric PLC................................... 232,000 614,081
Cookson Group PLC................................ 350,000 1,654,963
Glaxo Wellcome PLC............................... 120,000 1,600,074
Hammerson PLC.................................... 275,000 1,426,342
Harrisons & Crosfield PLC........................ 650,000 1,437,053
Lloyds Bank PLC.................................. 140,000 1,859,256
Lucas Industries PLC............................. 940,000 2,660,670
RTZ PLC.......................................... 110,000 1,577,812
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
UNITED KINGDOM (CONTINUED) Royal Doulton PLC 500,000 $ 1,954,575
Welsh Water PLC................................. 125,003 1,316,788
__________
24,396,126
__________
TOTAL COMMON STOCKS
(cost $93,660,245)............................ $ 98,787,409
==========
PREFERRED STOCKS- 3.5%
GERMANY: Fresenius AG.................................... 3,000 $ 2,400,829
Herlitz AG...................................... 8,444 1,383,019
_________
TOTAL PREFERRED STOCKS
(cost $3,554,665)............................. $ 3,783,848
=========
PRINCIPAL
SHORT-TERM INVESTMENTS-2.6% AMOUNT
_______
UNITED STATES: U.S. Treasury Bills:
5.15%, 12/7/95.................................. $ 7,000 $ 6,994
5.57%, 12/21/95................................. 772,000 769,607
5.33%, 1/11/96.................................. 2,017,000 2,004,615
_________
TOTAL SHORT-TERM INVESTMENTS
(cost $2,781,362)............................. $ 2,781,216
=========
TOTAL INVESTMENTS (cost $99,996,272)................................................. 98.7% $105,352,473
==== ===========
CASH AND RECEIVABLES (NET)........................................................... 1.3% $ 1,393,476
==== =========
NET ASSETS........................................................................... 100.0% $106,745,949
===== ===========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $99,996,272)-see statement...................................... $105,352,473
Cash.................................................................... 672,727
Receivable for investment securities sold............................... 3,231,907
Dividends receivable.................................................... 545,431
Prepaid expenses........................................................ 81,753
___________
109,884,291
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 67,511
Due to Distributor...................................................... 67,511
Payable for Common Stock redeemed....................................... 1,568,245
Payable for investment securities purchased............................. 1,304,731
Accrued expenses........................................................ 130,344 3,138,342
___________ ___________
NET ASSETS.................................................................. $106,745,949
============
REPRESENTED BY:
Paid-in capital......................................................... $111,363,127
Accumulated undistributed investment income-net......................... 169,751
Accumulated net realized (loss) on investments.......................... (10,135,950)
Accumulated net unrealized appreciation on investments
and foreign currency transactions..................................... 5,349,021
_________
NET ASSETS at value applicable to 7,679,076 outstanding shares of
Common Stock, equivalent to $13.90 per share (300 million
shares of $.001 par value authorized)................................... $106,745,949
===========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED NOVEMBER 30, 1995 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $217,143 foreign taxes withheld at source)..... $1,488,245
Interest.............................................................. 166,800
_______
TOTAL INCOME.................................................... $1,655,045
EXPENSES:
Management fee-Note 2(a).............................................. 459,435
Shareholder servicing costs-Note 2(b,c)............................... 579,468
Custodian fees........................................................ 80,038
Professional fees..................................................... 33,700
Directors' fees and expenses-Note 2(d)................................ 22,869
Registration fees..................................................... 16,499
Prospectus and shareholders' reports-Note 2(b)........................ 16,065
Miscellaneous......................................................... 12,818
______
TOTAL EXPENSES.................................................. 1,220,892
_________
INVESTMENT INCOME-NET........................................... 434,153
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments and foreign currency
transactions-Note 3................................................... $ 56,474
Net unrealized appreciation on investments and foreign currency
transactions.......................................................... 2,001,145
_________
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 2,057,619
__________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,491,772
=========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
MAY 31, NOVEMBER 30, 1995
1995 (UNAUDITED)
________ ___________
<S> <C> <C>
OPERATIONS:
Investment income-net............................................... $ 144,098 $ 434,153
Net realized gain (loss) on investments............................. (9,638,920) 56,474
Net unrealized appreciation (depreciation) on investments for the period (2,647,103) 2,001,145
___________ _________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... (12,141,925) 2,491,772
___________ _________
DIVIDENDS TO SHAREHOLDERS:
From investment income-net.......................................... (144,098) __
In excess of investment income-net.................................. (207,897) __
From net realized gain on investments............................... (2,933,301) __
___________ _________
TOTAL DIVIDENDS................................................... (3,285,296) __
___________ _________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold....................................... 514,593,936 206,259,574
Dividends reinvested................................................ 3,064,914 __
Cost of shares redeemed............................................. (544,228,996) (239,914,548)
____________ ____________
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.......... (26,570,146) (33,654,974)
___________ ___________
TOTAL (DECREASE) IN NET ASSETS................................ (41,997,367) (31,163,202)
NET ASSETS:
Beginning of period................................................. 179,906,518 137,909,151
___________ ___________
End of period [including distributions in excess of investment income-net;
($237,568) and undistributed investment income-net;
$169,751, respectively]........................................... $ 137,909,151 $ 106,745,949
=========== ===========
SHARES SHARES
_______ _______
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 35,280,834 14,781,911
Shares issued for dividends reinvested.............................. 217,216 __
Shares redeemed..................................................... (37,294,477) (17,139,210)
___________ ___________
NET (DECREASE) IN SHARES OUTSTANDING.............................. (1,796,427) (2,357,299)
========== ==========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY 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 MAY 31, NOVEMBER 30, 1995
________________________
PER SHARE DATA: 1994(1) 1995 (UNAUDITED)
____ ____ ______
<S> <C> <C> <C>
Net asset value, beginning of period....................... $12.50 $15.20 $13.74
_____ ____ _____
INVESTMENT OPERATIONS:
Investment income-net...................................... .05 .01 .05
Net realized and unrealized gain (loss) on investments..... 2.74 (1.19) .11
_____ ______ _____
TOTAL FROM INVESTMENT OPERATIONS......................... 2.79 (1.18) .16
_____ ______ _____
DISTRIBUTIONS:
Dividends from investment income-net....................... (.02) (.01) __
Dividends in excess of investment income-net............... (.04) (.02) __
Dividends from net realized gain on investments............ (.03) (.25) __
_____ ______ _____
TOTAL DISTRIBUTIONS...................................... (.09) (.28) __
_____ ______ _____
Net asset value, end of period............................. $15.20 $13.74 $13.90
====== ====== =====
TOTAL INVESTMENT RETURN........................................ 22.32%(2) (7.81%) 1.16%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................... 1.71%(2) 1.92% 1.00%(2)
Ratio of net investment income to average net assets....... .11%(2) .09% .35%(2)
Decrease reflected in above expense ratios due to
undertakings by Dreyfus.................................. .16%(2) __ __
Portfolio Turnover Rate.................................... 51.32%(2) 40.15% 16.64%(2)
Net Assets, end of period (000's Omitted).................. $179,907 $137,909 $106,746
(1) From June 29, 1993 (commencement of operations) to May 31, 1994.
(2) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS INTERNATIONAL EQUITY 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. The Dreyfus Corporation ("Dreyfus") serves as the
Fund's investment adviser. M&G Investment Management Limited
("M&G") serves as the Fund's sub-investment adviser. Premier
Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares, which are sold to the public
without a sales load. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary
of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned
subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc. Dreyfus is a direct subsidiary
of Mellon Bank, N.A.
(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. Investments
denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(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 discount on investments, is
recognized on the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net 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.
Dividends in excess of investment income-net result from
Federal income tax distribution requirements, primarily
unrealized gains on Passive Foreign Investment Companies and
foreign currency transactions.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
In accordance with a recently adopted Statement of Position
(SOP 93-02) certain differences resulting from the
classification of gains/losses recognized on foreign currency
transactions and PFIC's for book and tax purposes and the
recording of related distributions to shareholders have been
reclassified. To reflect these reclassifications, during the six
months ended November 30, 1995 the Fund credited paid-in
capital $167,356 and charged accumulated undistributed net
investment income and accumulated net realized loss on
investments $26,835 and $140,521 respectively. During the year
ended May 31, 1995, the Fund charged paid-in capital $253,131,
and credited accumulated undistributed net investment
income and accumulated net realized loss on investments $68,998
and $184,132, respectively. These reclassifications had no
effect on net investment income, net realized gains and net
assets.
(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.
The Fund has an unused capital loss carryover of
approximately $2,639,000 available for Federal income tax
purposes to be applied against future net securities profits, if
any, realized subsequent to May 31, 1995. The carryover does not
include net realized securities losses from November 1, 1994
through May 31, 1995 which are treated, for Federal income tax
purposes, as arising in fiscal 1996. If not applied, the
carryover expires in fiscal 2003.
NOTE 2- INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND
OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a Management Agreement with Dreyfus, 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. Dreyfus and M&G have agreed that if in any full fiscal
year the Fund's aggregate expenses, exclusive of interest,
taxes, brokerage and extraordinary expenses, exceed the expense
limitation of any state having jurisdiction over the Fund,
Dreyfus and M&G will bear the excess expense in proportion to
their management fee and sub-advisory fee 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 (excluding
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. No expense reimbursement was
required for the six months ended November 30, 1995.
Pursuant to a Sub-Investment Advisory Agreement between
Dreyfus and M&G, the sub-advisory fee is computed at the annual
rate of .30 of 1% of the average daily value of the Fund's net
assets and is payable monthly by Dreyfus.
Effective December 1, 1995, Dreyfus Transfer, Inc., a
wholly-owned subsidiary of Dreyfus, serves as the Fund's
Transfer and Dividend Disbursing Agent.
(B) Pursuant to the Fund's Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act, the Fund (a) reimburses
the Distributor for payments to certain Service Agents for
distributing the Fund's shares and (b) pays the Manager, Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus and
any affiliate of DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
either of them for advertising and marketing relating to the
Fund, at an aggregate annual rate of .50 of 1% of the value of
the Fund's average daily net assets. The Distributor may pay one
of more Service Agents in respect of distribution services. The
Distributor determines the amounts, if any, to be paid to
Service Agents under the Plan and the basis on which such
payments are made. The fees payable under the Plan are payable
without regard to actual expenses incurred. The Plan also
separately provides 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 six months ended
November 30, 1995, $308,503 was charged to the Fund pursuant to
the Plan.
(C) Pursuant to the Fund's Shareholder Services Plan, the
Fund pays the Distributor 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. For the six months ended November 30,
1995, $153,145 was charged to the Fund by the Distributor
pursuant to the Shareholder Services Plan.
(D) Each director who is not an "affiliated person" as
defined in the Act receives from the Fund an annual fee of
$2,500 and an attendance fee of $500 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, excluding short-term securities, during the six
months ended November 30, 1995 amounted to $19,138,926 and
$44,098,561, respectively.
At November 30, 1995, accumulated net unrealized
appreciation on investments was $5,356,201, consisting of
$11,114,100 gross unrealized appreciation and $5,757,899 gross
unrealized depreciation, excluding foreign currency
transactions.
At November 30, 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).
<PAGE>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part B of the Registration Statement:
Statements of Investments -- May 31, 1995 and
November 30, 1995 (unaudited).
Statements of Assets and Liabilities -- May 31, 1995
and November 30, 1995 (unaudited).
Statements of Operations -- for the year ended
May 31, 1995 and for the six months ended November
30, 1995 (unaudited).
Statements of Changes in Net Assets -- for each of
the two years ended May 31, 1995 and for the six
months ended November 30, 1995 (unaudited).
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors,
dated June 30, 1995.
All schedules and other financial statement information, for
which provision is made in the applicable accounting regulations
of the Securities and Exchange Commission, are either omitted
because they are not required under the related instructions,
they are inapplicable, or the required information is presented
in the financial statements or notes thereto which are
included in Part B of the Registration Statement.
(b) Exhibits:
(1) Articles of Incorporation are incorporated by
reference to Exhibit (1) of Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A, filed September 28,
1995.
(2) By-Laws are incorporated by reference to Exhibit
(2) of Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed September 28, 1995.
(4) Speciment copy of Stock Certificate is incorporated
by reference to Exhibit (4) of Pre-Effective Amendment
No. 2 to the Registration Statement on Form N-1A, filed on
June 28, 1993.
(5)(a) Form of amended Management Agreement.
(5)(b) Sub-Investment Advisory Agreement is incorporated
by reference to Exhibit (5)(a) of Post-Effective Amendment
No. 5 to the Registration Statement on Form N-1A, filed
September 28, 1995.
(6)(a) Distribution Agreement is incorporated by reference
to Exhibit (6)(a) of Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A, filed September 28,
1995.
(6)(b) Form of Shareholder Services Agreement is
incorporated by reference to Exhibit (6)(b) of Post-Effective
Amendment No. 5 to the Registration Statement on Form N-1A,
filed September 28, 1995.
(8) Custody Agreement is incorporated by reference to
Exhibit (8) of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed on September 28,
1995.
(9) Shareholder Services Plan is incorporated by
reference to Exhibit (9) of Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A, filed September 28,
1995.
(10) Opinion, including consent, of Stroock & Stroock &
Lavan is incorporated by reference to Exhibit (10) of
Post-Effective Amendment No. 5 to the Registration Statement
on Form N-1A, filed September 28, 1995.
(11) Consent of Independent Auditors.
(15) Distribution Plan is incorporated by reference
to Exhibit (15) of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed September 28,
1995.
(16) Schedules of Computation of Performance Data are
incorporated by reference to Exhibit (16) of Post-Effective
Amendment No. 1 to the Registration Statement on Form N-1A,
filed on December 27, 1993.
(17) Financial Data Schedule.
Other Exhibits:
(a) Powers of Attorney are incorporated by
reference to Other Exhibits of Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A, filed on September 28,
1995.
(b) Assistant Secretary's Certificate is
incorporated by reference to Other Exhibits of Post-Effective
Amendment No. 5 to the Registration Statement on Form N-1A,
filed on September 28, 1995.
Item 25. Persons Controlled by or Under Common Control with
Registrant
Not applicable.
Item 26. Number of Holders of Securities
(2)
Number of Record
(1) Holders as of
Title of Class February 1, 1996
Common Stock, par value
$.001 per share
Dreyfus International Equity Fund 10,792
Dreyfus Emerging Markets Fund -0-
Item 27. Indemnification
The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is insured
or indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any
director, officer, underwriter or affiliated person for its
own protection, is incorporated by reference to Item 27 of Part
C of Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed on September 28, 1995.
Reference also is made to the Distribution Agreement
filed as Exhibit 6(a) to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A.
Item 28(a). Business and Other Connections of Investment
Adviser
The Dreyfus Corporation ("Dreyfus") and subsidiary
companies comprise a financial service organization whose
business
consists primarily of providing investment management services
as the investment adviser, manager and distributor for
sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other
investment companies. Dreyfus Service Corporation, a
wholly-owned
subsidiary of Dreyfus, is a registered broker-dealer.
Dreyfus Management, Inc., another wholly-owned subsidiary,
provides investment management services to various pension
plans, institutions and individuals.
Officers and Directors of Dreyfus
Name and Position with
Dreyfus Other Businesses
MANDELL L. BERMAN Real estate consultant and private
Director investor
29100 Northwestern Highway--Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation;
Member of the Board of Vintners
International
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation****;
Mellon Bank, N.A.****;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
HOWARD STEIN Chairman of the Board:
Chairman of the Board Dreyfus Acquisition Corporation*;
and Chief Executive The Dreyfus Consumer Credit
Officer Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++;
The Dreyfus Fund International
Limited+++++;
Dreyfus Partnership Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
World Balanced Fund+++;
Trustee:
Corporate Property Investors
New York, New York
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of the Board The Boston Company*****;
Vice Chairman of the Board:
Mellon Bank Corporation****;
Mellon Bank, N.A.****;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation****;
Operating Officer and The Boston Company*****;
Director Deputy Director:
Mellon Trust****;
Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****;
President:
Boston Safe Deposit and Trust
Company*****
STEPHEN E. CANTER Former Chairman and Chief Executive
Vice Chairman, Chief Officer:
Investment Officer and Kleinwort Benson Investment Management
a Director Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman--Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.***;
Director:
The Dreyfus Consumer Credit
Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company*****;
Laurel Capital Advisors****;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.****;
Boston Safe Deposit & Trust*****;
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund++++
JULIAN M. SMERLING None
Director
PHILIP L. TOIA Chairman of the Board and Trust
Vice Chairman-- Investment Officer:
Operations and The Dreyfus Trust Company++;
Administration Chairman of the Board and Chief
and a Director Executive Officer:
Major Trading Corporation*;
Director:
The Dreyfus Security Savings Bank,
F.S.B.+;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit
Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization***;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
WILLIAM T. SANDALLS, JR. None
Senior Vice President and
Chief Financial Officer
BARBARA E. CASEY President:
Vice President-- Dreyfus Retirement Services
Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.*****;
Dreyfus Service Corporation*
DIANE M. COFFEY None
Vice President--
Corporate Communications
ELIE M. GENADRY President:
Vice President-- Institutional Services Division of
Institutional Sales Dreyfus Service Corporation*;
Broker-Dealer Division of Dreyfus
Service Corporation*;
Group Retirement Plans Division of
Dreyfus Service Corporation*;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Vice President:
The Dreyfus Trust Company++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and Dreyfus Precious Metals, Inc.*;
General Counsel Director and Vice President:
The Dreyfus Consumer Credit
Corporation*;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*
JEFFREY N. NACHMAN None
Vice President--Mutual
Fund Accounting
WILLIAM F. GLAVIN, JR. Senior Vice President:
Vice President--Corporate The Boston Company Advisors,
Inc. Development 53 State Street
Exchange Place
Boston, Massachusetts 02109
ANDREW S. WASSER Vice President:
Vice President--Information Mellon Bank Corporation****
Services
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management,
Inc.***;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit
Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*;
Formerly, Vice President-Financial
Planning, Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President, Secretary and Director:
Vice President-- Lion Management, Inc.*;
Legal and Secretary
Secretary: The Dreyfus Consumer Credit
Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation*
* The address of the business so indicated is 200 Park
Avenue, New York, New York 10166.
** The address of the business so indicated is 80 Cutter
Mill Road, Great Neck, New York 11021.
*** The address of the business so indicated is 131 Second
Street, Lewes, Delaware 19958.
**** The address of the business so indicated is One Mellon
Bank Center, Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston
Place, Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium
Building, 80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One
Rockefeller Plaza, New York, New York 10020.
++++ The address of the business so indicated is 2
Boulevard Royal, Luxembourg.
+++++ The address of the business so indicated is Nassau,
Bahamas Islands.
Item 28(b). Business and Other Connections of Sub-Investment
Adviser
Registrant is fulfilling the requirement of this Item
28(b) to provide a list of the officers and directors of M&G
Investment Management Limited ("M&G"), the sub-investment
adviser to Registrant's Dreyfus International Equity Fund,
together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by M&G
or those of its officers and directors during the past two
years, by
incorporating by reference the information contained in the
Form ADV filed with the SEC pursuant to the Investment Advisers
Act of 1940 by M&G (SEC File No. 801-21981).
Item 29. Principal Underwriters
(a) Other investment companies for which Registrant's
principal underwriter (exclusive distributor) acts as
principal underwriter or exclusive distributor:
15. Comstock Partners Strategy Fund, Inc.
16. Dreyfus A Bonds Plus, Inc.
17. Dreyfus Appreciation Fund, Inc.
18. Dreyfus Asset Allocation Fund, Inc.
19. Dreyfus Balanced Fund, Inc.
20. Dreyfus BASIC GNMA Fund
21. Dreyfus BASIC Money Market Fund, Inc.
22. Dreyfus BASIC Municipal Fund, Inc.
23. Dreyfus BASIC U.S. Government Money Market Fund
24. Dreyfus California Intermediate Municipal Bond Fund
25. Dreyfus California Tax Exempt Bond Fund, Inc.
26. Dreyfus California Tax Exempt Money Market Fund
27. Dreyfus Capital Value Fund (A Premier Fund)
28. Dreyfus Cash Management
29. Dreyfus Cash Management Plus, Inc.
30. Dreyfus Connecticut Intermediate Municipal Bond Fund
31. Dreyfus Connecticut Municipal Money Market Fund, Inc.
32. Dreyfus Edison Electric Index Fund, Inc.
33. Dreyfus Florida Intermediate Municipal Bond Fund
34. Dreyfus Florida Municipal Money Market Fund
35. The Dreyfus Fund Incorporated
36. Dreyfus Global Bond Fund, Inc.
37. Dreyfus Global Growth, L.P. (A Strategic Fund)
38. Dreyfus GNMA Fund, Inc.
39. Dreyfus Government Cash Management
40. Dreyfus Growth and Income Fund, Inc.
41. Dreyfus Growth and Value Fund, Inc.
42. Dreyfus Growth Opportunity Fund, Inc.
43. Dreyfus Institutional Money Market Fund
44. Dreyfus Institutional Short Term Treasury Fund
45. Dreyfus Insured Municipal Bond Fund, Inc.
46. Dreyfus Intermediate Municipal Bond Fund, Inc.
47. Dreyfus International Equity Fund, Inc.
48. Dreyfus International Recovery Fund, Inc.
49. The Dreyfus/Laurel Funds, Inc.
50. The Dreyfus/Laurel Funds Trust
51. The Dreyfus/Laurel Tax-Free Municipal Funds
52. The Dreyfus/Laurel Investment Series
53. Dreyfus Life and Annuity Index Fund, Inc.
54. Dreyfus LifeTime Portfolios, Inc.
55. Dreyfus Liquid Assets, Inc.
56. Dreyfus Massachusetts Intermediate Municipal Bond Fund
57. Dreyfus Massachusetts Municipal Money Market Fund
58. Dreyfus Massachusetts Tax Exempt Bond Fund
59. Dreyfus Michigan Municipal Money Market Fund, Inc.
60. Dreyfus Money Market Instruments, Inc.
61. Dreyfus Municipal Bond Fund, Inc.
62. Dreyfus Municipal Cash Management Plus
63. Dreyfus Municipal Money Market Fund, Inc.
64. Dreyfus New Jersey Intermediate Municipal Bond Fund
65. Dreyfus New Jersey Municipal Bond Fund, Inc.
66. Dreyfus New Jersey Municipal Money Market Fund, Inc.
67. Dreyfus New Leaders Fund, Inc.
68. Dreyfus New York Insured Tax Exempt Bond Fund
69. Dreyfus New York Municipal Cash Management
70. Dreyfus New York Tax Exempt Bond Fund, Inc.
71. Dreyfus New York Tax Exempt Intermediate Bond Fund
72. Dreyfus New York Tax Exempt Money Market Fund
73. Dreyfus Ohio Municipal Money Market Fund, Inc.
74. Dreyfus 100% U.S. Treasury Intermediate Term Fund
75. Dreyfus 100% U.S. Treasury Long Term Fund
76. Dreyfus 100% U.S. Treasury Money Market Fund
77. Dreyfus 100% U.S. Treasury Short Term Fund
78. Dreyfus Pennsylvania Intermediate Municipal
Bond Fund
79. Dreyfus Pennsylvania Municipal Money Market Fund
80. Dreyfus Short-Intermediate Government Fund
81. Dreyfus Short-Intermediate Municipal Bond Fund
82. Dreyfus Short-Term Income Fund, Inc.
83. The Dreyfus Socially Responsible Growth Fund, Inc.
84. Dreyfus Strategic Growth, L.P.
85. Dreyfus Strategic Income
86. Dreyfus Strategic Investing
87. Dreyfus Tax Exempt Cash Management
88. The Dreyfus Third Century Fund, Inc.
89. Dreyfus Treasury Cash Management
90. Dreyfus Treasury Prime Cash Management
91. Dreyfus Variable Investment Fund
92. Dreyfus-Wilshire Target Funds, Inc.
93. Dreyfus Worldwide Dollar Money Market Fund, Inc.
94. General California Municipal Bond Fund, Inc.
95. General California Municipal Money Market Fund
96. General Government Securities Money Market
Fund, Inc.
97. General Money Market Fund, Inc.
98. General Municipal Bond Fund, Inc.
99. General Municipal Money Market Fund, Inc.
100. General New York Municipal Bond Fund, Inc.
101. General New York Municipal Money Market Fund
102. Pacifica Funds Trust--Pacific American Money Market
Portfolio, Pacific American U.S. Treasury Portfolio
103. Peoples Index Fund, Inc.
104. Peoples S&P MidCap Index Fund, Inc.
105. Premier California Municipal Bond Fund
106. Premier Equity Funds, Inc.
107. Premier Global Investing, Inc.
108. Premier GNMA Fund
109. Premier Growth Fund, Inc.
110. Premier Insured Municipal Bond Fund
111. Premier Municipal Bond Fund
112. Premier New York Municipal Bond Fund
113. Premier State Municipal Bond Fund
(b)
<TABLE>
<CAPTION>
Name and principal Positions and offices with Positions and offices
business address Premier Mutual with Registrant
Fund Services, Inc.
- ------------------- -------------------------- ---------------------
<S> <C> <C>
Marie E. Connolly+ Director, President, Chief President and Treasurer
Executive Officer and
Compliance Officer
Joseph F. Tower, III+ Senior Vice President, Assistant Treasurer
Treasurer and Chief
Financial Officer
John E. Pelletier+ Senior Vice President, Vice President and Secretary
General Counsel, Secretary
and Clerk
Frederick C. Dey++ Senior Vice President
Vice President
and Assistant
Treasurer
Eric B. Fischman++ Vice President and Vice President and Assistant Secretary
Associate General Counsel
Paul Prescott+ Vice President None
Elizabeth Bachman+ Assistant Vice President Vice President and Assistant Secretary
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer Assistant Treasurer
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
+ Principal business address is One Exchange Place, Boston, Massachusetts 02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
</TABLE>
Item 30. Location of Accounts and Records
1. First Data Investors Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
Registrant hereby undertakes
(1) to file a post-effective amendment, using
financial statements which need not be certified, within four to
six months from the effective date of Registrant's 1933 Act
Registration Statement pertaining to its Dreyfus
Emerging Markets Fund.
(2) to call a meeting of shareholders for the purpose of
voting upon the question of removal of a director or
directors when requested in writing to do so by the holders of
at least 10% of the Registrant's outstanding shares of common
stock and in connection with such meeting to comply with the
provisions of Section 16(c) of the Investment Company Act of
1940 relating to shareholder communications.
(3) to furnish each person to whom a prospectus is
delivered with a copy of the Fund's latest Annual Report to
Shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant
certifies that it has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York,
and State of New York, on the 30th day of January, 1996.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
(Registrant)
By:/s/Marie E. Connolly*
Marie E. Connolly, President
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been
signed below by the following persons in the capacities and on
the dates indicated.
/s/Marie E. Connolly* President and Treasurer January 30, 1996
Marie E. Connolly (Principal Executive,
Financial and Accounting
Officer)
/s/Joseph S. DiMartino* Director January 30, 1996
Joseph S. DiMartino
/s/David P. Feldman* Director January 30, 1996
David P. Feldman
/s/John M. Fraser, Jr.* Director January 30, 1996
John M. Fraser, Jr.
/s/Robert R. Glauber* Director January 30, 1996
Robert R. Glauber
/s/James F. Henry* Director January 30, 1996
James F. Henry
/s/Rosalind Gersten Jacobs* Director January 30, 1996
Rosalind Gersten Jacobs
/s/Irving Kristol* Director January 30, 1996
Irving Kristol
/s/Paul A. Marks* Director January 30, 1996
Paul A. Marks*
/s/Martin Peretz* Director January 30, 1996
Martin Peretz
/s/Bert W. Wasserman* Director January 30, 1996
Bert W. Wasserman
/s/Eric B. Fischman
* By: Eric B. Fischman,
Attorney-in-Fact
DREYFUS INTERNATIONAL EQUITY FUND, INC.
Post-Effective Amendment No. 7 to
Registration Statement on Form N-1A under
the Securities Act of 1933 and
the Investment Company Act of 1940
EXHIBITS
INDEX TO EXHIBITS
Page
(5)(a) Form of Amended Management Agreement . . . .
(11) Consent of Independent Auditors. . . . . . .
(27) Financial Data Schedule. . . . . . . . . . .
<PAGE>
Exhibit (5)(a)
MANAGEMENT AGREEMENT
DREYFUS INTERNATIONAL FUNDS, INC.
200 Park Avenue
New York, New York 10166
August 24, 1994
As Amended, March __, 1996
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund"),
consisting of the series named on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a "Series"),
herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing
and reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter
documents and in the relevant Series' Prospectus and its
Statement of Additional Information as from time to time in
effect, copies of which have been or will be submitted to you,
and in such manner and to such extent as from time to time may
be approved by the Fund's Board. The Fund desires to employ you
to act as its investment adviser.
In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or
persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons
shall be paid by you and no obligation may be incurred on the
Fund's behalf in any such respect. We have discussed and concur
in your employing on this basis each sub-adviser named on
Schedule 1 hereto to act as the Fund's sub-investment adviser
(the "Sub-Investment Adviser") with respect to the Series
indicated on Schedule 1 hereto (the "Sub-Advised Series") to
provide day-to-day management of the Sub-Advised Series'
investments.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of each Series'
portfolio in accordance with such Series' investment objectives
and policies as stated in its Prospectus and the Statement of
Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment
research and will supervise each Series' investments and
conduct, or, with respect to the Sub-Advised Series, supervise,
a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of the Series' assets. You
will furnish to the Fund such statistical information, with
respect to the investments which a Series may hold or
contemplate purchasing, as the Fund may reasonably request. The
Fund wishes to be informed of important developments materially
affecting any Series' portfolio and shall expect you, on your
own initiative, to furnish to the Fund from time to time such
information as you may believe appropriate for this purpose.
In addition, you will supply office facilities (which
may be in your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and
stationery and office supplies; prepare reports to each Series'
stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of each Series'
shares; and generally assist in all aspects of the Fund's
operations. You shall have the right, at your expense, to
engage other entities to assist you in performing some or all of
the obligations set forth in this paragraph, provided each such
entity enters into an agreement with you in form and substance
reasonably satisfactory to the Fund. You agree to be liable for
the acts or omissions of each such entity to the same extent as
if you had acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that
neither you nor the Sub-Investment Adviser shall be liable
hereunder for any error of judgment or mistake of law or for any
loss suffered by one or more Series, provided that nothing
herein shall be deemed to protect or purport to protect you or
the Sub-Investment Adviser against any liability to the Fund or
a Series or to its security holders to which you would otherwise
be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties
hereunder, or to which the Sub-Investment Adviser would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties under its
Sub-Investment Advisory Agreement with you or by reason of its
reckless disregard of its obligations and duties under said
Agreement.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee at the rate set forth opposite each Series'
name on Schedule 1 hereto. Net asset value shall be computed on
such days and at such time or times as described in the relevant
Series' then-current Prospectus and the Statement of Additional
Information. The fee for the period from the date of the
commencement of the public sale of a Series' shares to the end
of the month during which such sale shall have been commenced
shall be pro-rated according to the proportion which such period
bears to the full monthly period, and upon any termination of
this Agreement before the end of any month, the fee for such
part of a month shall be pro-rated according to the proportion
which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to you,
the value of each Series' net assets shall be computed in the
manner specified in the Fund's charter documents for the
computation of the value of each Series' net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement and will pay
all fees of the Sub-Investment Adviser in connection with its
duties in respect of the Fund. All other expenses to be
incurred in the operation of the Fund (other than those borne by
the Sub-Investment Adviser) will be borne by the Fund, except to
the extent specifically assumed by you. The expenses to be
borne by the Fund include, without limitation, the following:
organizational costs, taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members
who are not officers, directors, employees or holders of 5% or
more of the outstanding voting securities of you or the Sub-
Investment Adviser or any affiliate of you or the Sub-Investment
Adviser, Securities and Exchange Commission fees and 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 independent pricing services, costs of
maintaining the Fund's existence, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and
for distribution to existing stockholders, costs of
stockholders' reports and meetings, and any extraordinary
expenses.
As to each Series, if in any fiscal year the aggregate
expenses of the Fund (including fees pursuant to this Agreement,
but excluding interest, taxes, brokerage and, with the prior
written consent of the necessary state securities commissions,
extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over the Series, the Fund may deduct
from the fees to be paid hereunder, or you will bear, such
excess expense to the extent required by state law. Your
obligation pursuant hereto will be limited to the amount of your
fees hereunder. 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 Fund understands that you and the Sub-Investment
Adviser now act, and that from time to time hereafter you or the
Sub-Investment Adviser may act, as investment adviser to one or
more other investment companies and fiduciary or other managed
accounts, and the Fund has no objection to your and the Sub-
Investment Adviser's so acting, provided that when the purchase
or sale of securities of the same issuer is suitable for the
investment objectives of two or more such companies or accounts
which have available funds for investment, the available
securities will be allocated in a manner believed to be
equitable to each company or account. It is recognized that in
some cases this procedure may adversely affect the price paid or
received by one or more Series or the size of the position
obtainable for or disposed of by one or more Series.
In addition, it is understood that the persons
employed by you to assist in the performance of your duties
hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict
your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render
services of whatever kind or nature.
Neither you nor the Sub-Investment Adviser shall be
liable for any error of judgment or mistake of law or for any
loss suffered by the Fund in connection with the matters to
which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on your part
in the performance of your duties or from reckless disregard by
you of your obligations and duties under this Agreement and, in
the case of the Sub-Investment Adviser, for a loss resulting
from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard
by it of its obligations and duties under its Sub-Investment
Advisory Agreement. Any person, even though also your officer,
director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting
solely for the Fund and not as your officer, director, partner,
employee or agent or one under your control or direction even
though paid by you.
As to each Series, this Agreement shall continue until
the date set forth opposite such Series' name on Schedule 1
hereto (the "Reapproval Date"), and thereafter shall continue
automatically for successive annual periods ending on the day of
each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company
Act of 1940) of such Series' outstanding voting securities,
provided that in either event its continuance also is approved
by a majority of the Fund's Board members who are not
"interested persons" (as defined in said Act) of any party to
this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. As to each Series, this
Agreement is terminable without penalty, on 60 days' notice, by
the Fund's Board or by vote of holders of a majority of such
Series' shares or, upon not less than 90 days' notice, by you.
This Agreement also will terminate automatically, as to the
relevant Series, in the event of its assignment (as defined in
said Act).
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other
entities may include the name "Dreyfus" as part of their name,
and that your corporation or its affiliates may enter into
investment advisory or other agreements with such other
entities. If you cease to act as the Fund's investment adviser,
the Fund agrees that, at your request, the Fund will take all
necessary action to change the name of the Fund to a name not
including "Dreyfus" in any form or combination of words.
The Fund is agreeing to the provisions of this
Agreement that limit the Sub-Investment Adviser's liability and
other provisions relating to the Sub-Investment Adviser so as to
induce the Sub-Investment Adviser to enter into its Sub-
Investment Advisory Agreement with you and to perform its
obligations thereunder. The Sub-Investment Adviser is expressly
made a third party beneficiary of this Agreement with rights as
respects the Sub-Advised Series to the same extent as if it had
been a party hereto.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS INTERNATIONAL FUNDS, INC.
By:______________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
SCHEDULE 1
Name of Series Annual
Fee as a
Percentage
of Average
Daily Net Reapproval Reapproval
Assets Date Day
Dreyfus Emerging
Markets Fund 1.25 June 14, 1997 June 14
Dreyfus International
Equity Fund* .75 June 14, 1996 June 14
* The Dreyfus Corporation has employed M&G Investmrnt Management Limited
to act as sub-investment adviser.
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Transfer and
Dividend Disbursing Agent, Custodian, Counsel and Independent Auditors" and
to the use of our report dated June 30, 1995, in this Registration
Statement (Form N-1A 33-58248) of Dreyfus International Equity Fund, Inc.
ERNST & YOUNG LLP
New York, New York
January 26, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 122060
<INVESTMENTS-AT-VALUE> 125398
<RECEIVABLES> 2847
<ASSETS-OTHER> 10010
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 138255
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 346
<TOTAL-LIABILITIES> 346
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 144851
<SHARES-COMMON-STOCK> 10036
<SHARES-COMMON-PRIOR> 11833
<ACCUMULATED-NII-CURRENT> (238)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10052)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3348
<NET-ASSETS> 137909
<DIVIDEND-INCOME> 3016
<INTEREST-INCOME> 144
<OTHER-INCOME> 0
<EXPENSES-NET> 3016
<NET-INVESTMENT-INCOME> 144
<REALIZED-GAINS-CURRENT> (9639)
<APPREC-INCREASE-CURRENT> (2647)
<NET-CHANGE-FROM-OPS> (12142)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (352)
<DISTRIBUTIONS-OF-GAINS> (2933)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 35281
<NUMBER-OF-SHARES-REDEEMED> (37294)
<SHARES-REINVESTED> 217
<NET-CHANGE-IN-ASSETS> (41997)
<ACCUMULATED-NII-PRIOR> (99)
<ACCUMULATED-GAINS-PRIOR> 2336
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1181
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3016
<AVERAGE-NET-ASSETS> 157480
<PER-SHARE-NAV-BEGIN> 15.20
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> (1.19)
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> (.25)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.74
<EXPENSE-RATIO> .019
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
