YEAR 2000 ISSUES (UNAUDITED)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund' s other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could have
an impact on the value of the fund's investments and its share price.
DREYFUS INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus International Growth Fund recorded a return of -12.96% for the
six-month period ended November 30, 1998.* This compares unfavorably with the
total return of 0.34% for the Morgan Stanley Capital International, Europe,
Australasia, Far East (EAFE((reg.tm))) Index for the same period.**
There are two major reasons for the difficult half year your Fund has
experienced. Both have to do with the turbulent world market conditions of
August and September, 1998. First, in an effort to protect assets during the
period of turmoil, your Fund's currency exposure was completely hedged. As you
may recall, Dreyfus International Growth Fund' s current policy is to hedge
currency exposure when, in my view, the U.S. Dollar has the potential to rise by
more than 10% against a given currency over a period of twelve to eighteen
months. This is a practical consideration since, in an international fund, most
of the stocks owned are denominated in foreign currency. Typically, when the
dollar rises, the value of the foreign currency, and thus the stock, falls.
Hedging seeks to offset this and is intended to be a defensive strategy. This
did not prove to be the case during the recent market turmoil. Even as investors
around the world rushed to invest in "safe haven" assets such as U.S. government
bonds, there proved not to be a coincident rush into dollars, as I had expected,
but a sell-off of the U.S. currency. Thus, the Fund's hedging strategy resulted
in losses in the August and September portion of the half year just ended.
The second major reason for the Fund's underperformance was its substantial
position in European financial stocks. The reader may recall financial stocks
around the world performed very poorly in August and September as the emerging
market crisis spread to Russia and a large U.S.-based investment fund required
financial support from its banks. Although most of the banks and insurance
companies held by your Fund were primarily involved in local European markets,
their stock prices declined as sharply as those of the large international banks
and more than many other non-financial stocks. A few examples of Dreyfus
International Growth Fund holdings that sustained such losses are the local
Finnish insurer Sampo Insurance, Dutch insurer ING Groep and Schweizerische
Lebensversicherungs-und Rettenanstalt. Prices of these issues have recovered
somewhat from their lows.
Beyond the difficulties described above, shares of a number of growth
companies held by your Fund performed quite well over the period. Two of these,
Colt Telecom and Olivetti, are entrants in the newly deregulated European
telecom market. As a result of very high levels of customer and revenue growth
and the prospect of high future profitability, Olivetti rose 83% and Colt 61%.
Other strong performers for the half year ending November 30, 1998, were the
German retailer Douglas Holding, up 22%, Dutch baby food producer Koninklijke
Numico, up 23%, and Japanese disk drive equipment maker Nidec, which more than
doubled.
CURRENT STRATEGY
Looking across world markets through the filter of our six screens - growth,
valuation, interest rates, liquidity, currency, and technical analysis - is not
an easy task in a world undergoing so much change. But let's take a moment and
survey the big picture before honing in on specific opportunities in each
region.
I currently anticipate that economic growth should be slow in 1999. The full
effect of the difficulties that began in Asian emerging markets in the summer
and fall of 1997 is hitting the developed economies in Europe and the U.S. now,
even while it is causing deeper problems for the already troubled Japanese
economy. The Dreyfus International Growth Fund research team currently estimates
that the strongest growth in both GDP and earnings will be in Continental
Europe. Global stock valuations had been rather stretched in the summer of 1998
but have become much more attractive following the sharp market correction of
August and September. Currently, stocks in Continental Europe are trading at an
average of nineteen times estimated 1999 earnings. Japanese stocks, while not
cheap based on projected earnings, exhibit attractive valuations in the areas of
price/book, price/sales and price/cash flow. Many emerging markets equities are
also cheap. Perhaps the best piece of news coming out of our six-factor analysis
at the moment is the likelihood of a broad decline in interest rates. The
Dreyfus International Growth Fund research team expects interest rates to
decline in both Continental Europe and the U.K. in 1999 and to remain low in the
rest of the world.
In my view, Continental Europe continues to look like an attractive place for
investment. In addition to a relatively favorable outlook for growth, valuation
and interest rates, I believe that three additional positive factors are worth
mentioning. First, Continental companies continue to restructure and move toward
the investment perspective of the shareholders. Second, private pension systems
and equity-oriented savings plans are beginning to find favor. Third,
Continental European governments have the financial resources to spur growth
with fiscal policy should they decide this is necessary. Where specific stocks
are concerned, the Dreyfus International Growth Fund investment team continues
to look for attractive growth at a reasonable price among many of the regional
banks and insurance companies on the Continent. Many of these are in the process
of restructuring. Among your Fund's core holdings in this area are Instituto
Bancario San Paolo di Torino of Italy, Skandia Forsakrings Insurance of Sweden
and Schweizerische Lebensversicherungs-und Rettenanstalt. As mentioned in the
first portion of this letter, the newly deregulated telecom services business
was a profitable investment area for your Fund in 1998. I currently anticipate
that it should continue to be an area of focused investment in 1999
Although I think that overall prospects for the U.K. are less buoyant than
those of the Continent, the Fund holds a number of U.K. stocks that I believe
have attractive growth prospects and valuations. Perhaps most interesting among
these is British Sky Broadcasting Group, one of the pioneers in the digital
television broadcasting industry in the country. Overall, however, your Fund
remains underweight in the U.K. market compared to that market's weight in the
EAFE Index.
Dreyfus International Growth Fund remains underweight in the Japanese market
as well. I believe calendar 1999 could be another year of declining GDP and
earnings in that market. Although, as I mentioned earlier, stocks appear cheap
on some measures in Japan, investor enthusiasm has been restrained by ongoing
questions not only about growth but also about the commitment of the Japanese
government and companies to reform. On the government level, deregulation of the
economy and reform of the banking system remain a stop-and-go process. Some
deregulatory steps have been taken in industries such as retailing but much more
needs to be done. In the bank sector, the government is moving to inject new
capital into the banks but, sadly, not to reform the practices under which loans
are made and bad loans are recognized and provided for on the balance sheet.
Some private companies are beginning to restructure and recognize shareholders
as the true owners of the company but this is a small minority at present.
In my previous letter to shareholders I remarked that, "I remain cautious on
emerging markets." I believe one can be a bit more sanguine today, but not
bullish. Economic growth is not, in my view, going to return to the Asian
emerging markets in 1999. These markets may become targets for investment in
your Fund during 1999, however, as visibility on renewed economic growth in the
year 2000 improves. I think that the picture in Latin America is more positive.
The Dreyfus International Growth Fund research team believes that Latin markets
have been unfairly painted with the "Asian emerging market" brush. Interest
rates have risen to very high levels to protect against capital outflows.
Economic growth is set to slow in the next few months as a result. But
far-reaching reforms are being enacted and implemented in the region's largest
nation, Brazil, that we believe should substantially relieve investor concerns.
As a result, your Fund has made new investments in both Brazil and Mexico near
the end of the half year. These large liquid stocks, valued at price-to-earnings
ratios of six to nine, represent some of the cheapest stocks in the world in our
view. As reforms take hold, valuations of these Latin stocks may rise to be more
in line with those seen in the rest of the world.
As manager of Dreyfus International Growth Fund, I look forward to
communicating with you again in 1999 in the annual shareholder letter.
Sincerely,
[Signature logo Ron Chapman]
Ron Chapman
Portfolio Manager
December 18, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE((reg.tm) )) Index is an
unmanaged index composed of a sample of companies representative of the market
structure of European and Pacific Basin countries. The return indicated includes
net dividends reinvested. The Index is the property of Morgan Stanley & Co.,
Incorporated.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL GROWTH FUND
- ------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS NOVEMBER 30, 1998 (UNAUDITED)
Common Stocks--93.5% Shares Value
- ------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
Brazil--3.8% Compania de Saneamento Basico do Estado
de Sao Paolo . . . . . . . . . . . . . . . . . . . . 9,000 $ 988,764
Embratel Participacoes, ADR . . . . . . . . . . . . . . 10,600 169,600
Tele Celular Sul Participacoes, ADR . . . . . . . . . . 1,060 24,115
Tele Centro Oeste Celular Participacoes, ADR . . . . . 3,533 16,783
Tele Centro Sul Participacoes, ADR . . . . . . . . . . 11,720 668,773
Tele Leste Celular Participacoes, ADR . . . . . . . . . 212 8,864
Tele Nordeste Celular Participacoes, ADR . . . . . . . 530 13,879
Tele Norte Celular Participacoes, ADR . . . . . . . . . 212 8,679
Tele Norte Leste Participacoes, ADR . . . . . . . . . . 10,600 180,200
Tele Sudeste Celular Participacoes, ADR . . . . . . . . 2,120 57,240
Telecomunicoaes Brasileiras, ADR . . . . . . . . . . . 10,600 1,822
Telemig Celular Participacoes, ADR . . . . . . . . . . 530 16,364
Telesp Celular Participacoes, ADR . . . . . . . . . . . 4,240 111,300
____________
2,266,383
____________
Canada--.2% Canadian Conquest Exploration . . . . . . . . . . . . . 275,000 (a) 134,540
____________
Finland--1.0% Sampo Insurance . . . . . . . . . . . . . . . . . . . . 18,000 618,221
____________
France--8.4% Accor . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 660,235
Alcatel . . . . . . . . . . . . . . . . . . . . . . . . 8,000 1,059,192
Axa . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 1,035,248
Pathe . . . . . . . . . . . . . . . . . . . . . . . . . 4,000 845,100
Suez Lyonnaise des Eaux . . . . . . . . . . . . . . . . 3,400 672,242
Vivendi . . . . . . . . . . . . . . . . . . . . . . . . 3,300 747,174
Vivendi (Warrants) . . . . . . . . . . . . . . . . . . 7,500 (a) 15,185
____________
5,034,376
____________
Germany--8.8% Douglas Holding . . . . . . . . . . . . . . . . . . . . 14,650 916,273
Hoechst . . . . . . . . . . . . . . . . . . . . . . . . 36,000 1,546,377
Linde . . . . . . . . . . . . . . . . . . . . . . . . 1,100 624,381
Mannesmann . . . . . . . . . . . . . . . . . . . . . . 8,000 866,179
Muenchener Rueckverisicherungs-Gesellschaft . . . . . . 1,700 782,393
Viag . . . . . . . . . . . . . . . . . . . . . . . . . 850 524,103
____________
5,259,706
____________
Ireland--6.1% Bank of Ireland . . . . . . . . . . . . . . . . . . . . 93,000 1,911,336
Jurys Hotel Group . . . . . . . . . . . . . . . . . . . 145,000 1,117,515
Ryanair, ADS . . . . . . . . . . . . . . . . . . . . . 23,000 (a) 626,750
____________
3,655,601
____________
Italy--10.4% Banca Nazionale del Lavoro . . . . . . . . . . . . . . 250,000 (a) 700,745
Banca Popolare Di Brescia . . . . . . . . . . . . . . . 30,000 680,745
ENI . . . . . . . . . . . . . . . . . . . . . . . . . . 110,000 681,705
Instituto Bancario San Paolo di Torino . . . . . . . . 85,000 1,392,987
Instituto Nazionale delle Assicurazioni . . . . . . . . 275,000 725,246
Olivetti . . . . . . . . . . . . . . . . . . . . . . . 450,000 (a) 1,182,474
Telecom Italia . . . . . . . . . . . . . . . . . . . . 90,000 729,389
Unione Immobiliare . . . . . . . . . . . . . . . . . . 275,000 (a) 137,785
____________
6,231,076
____________
DREYFUS INTERNATIONAL GROWTH FUND
- ------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------- ------------- -------------
Japan--13.3% Daikin Industries . . . . . . . . . . . . . . . . . . . 42,000 $ 368,167
East Japan Railway . . . . . . . . . . . . . . . . . . 48 278,560
Fujikura . . . . . . . . . . . . . . . . . . . . . . . 60,000 334,564
Hitachi . . . . . . . . . . . . . . . . . . . . . . . . 46,000 276,661
Honda Motor . . . . . . . . . . . . . . . . . . . . . . 20,000 717,503
Hosiden . . . . . . . . . . . . . . . . . . . . . . . . 20,000 346,577
Kao . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 567,347
Mitsubishi Estate . . . . . . . . . . . . . . . . . . . 60,000 572,704
Mitsui Chemicals . . . . . . . . . . . . . . . . . . . 120,000 409,074
NTT Mobile Communications Network . . . . . . . . . . . 11 419,626
Nidec . . . . . . . . . . . . . . . . . . . . . . . . . 4,000 446,411
Nintendo . . . . . . . . . . . . . . . . . . . . . . . 5,000 463,049
Ryohin Keikaku . . . . . . . . . . . . . . . . . . . . 3,500 397,711
SHIMANO . . . . . . . . . . . . . . . . . . . . . . . . 18,000 470,436
Sekisui House . . . . . . . . . . . . . . . . . . . . . 30,000 291,709
Sumitomo Trust & Banking Co. . . . . . . . . . . . . . 293,000 917,966
TDK . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 662,960
____________
7,941,025
____________
Mexico--4.6% Grupo Televisa, GDS . . . . . . . . . . . . . . . . . . 63,700 (a) 1,620,369
Telefonos de Mexico, ADR . . . . . . . . . . . . . . . 24,400 1,136,125
____________
2,756,494
____________
Netherlands--5.0% ING Groep . . . . . . . . . . . . . . . . . . . . . . . 12,000 687,778
Koninklijke Numico . . . . . . . . . . . . . . . . . . 23,000 993,196
Koninklijke (Royal) Philips Electronics . . . . . . . . 12,000 760,010
Koninklijke (Royal) Philips Electronics, ADR . . . . . 9,000 569,813
____________
3,010,797
____________
Norway--2.0% Merkantildata . . . . . . . . . . . . . . . . . . . . . 110,000 1,189,030
____________
Portugal--1.8% Banco Commercial Portugues . . . . . . . . . . . . . . 25,000 762,995
Portugal Telecom . . . . . . . . . . . . . . . . . . . 7,000 304,553
____________
1,067,548
____________
South Africa--1.3% Liberty Life Association of Africa . . . . . . . . . . 15,000 256,489
Primedia . . . . . . . . . . . . . . . . . . . . . . . 45,000 125,740
Primedia (Rights) . . . . . . . . . . . . . . . . . . . 4,727 (a) 125
Real Africa Holdings . . . . . . . . . . . . . . . . . 128,606 (a) 378,565
____________
760,919
____________
Spain--10.3% Adolfo Dominquez . . . . . . . . . . . . . . . . . . . 13,000 (a) 291,947
Aldeasa . . . . . . . . . . . . . . . . . . . . . . . . 16,000 594,238
Banco Santander . . . . . . . . . . . . . . . . . . . . 75,000 1,535,925
Centros Commerciales Pryca . . . . . . . . . . . . . . 25,000 597,883
Dogi . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 (a) 505,033
Repsol . . . . . . . . . . . . . . . . . . . . . . . . 13,000 738,216
Telefonica . . . . . . . . . . . . . . . . . . . . . . 40,000 1,882,680
____________
6,145,922
____________
DREYFUS INTERNATIONAL GROWTH FUND
- ------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------- ------------- -------------
Sweden--4.4% Fastighets AB Balder . . . . . . . . . . . . . . . . . 3,000 (a) $ 28,340
Electrolux, Cl. B . . . . . . . . . . . . . . . . . . . 46,250 703,594
Netcom, Cl. B . . . . . . . . . . . . . . . . . . . . . 18,000 (a) 693,412
Skandia Forsakrings . . . . . . . . . . . . . . . . . . 45,000 637,652
Svenska Handelsbanken, Cl. A . . . . . . . . . . . . . 15,000 603,607
____________
2,666,605
____________
Switzerland--2.9% Nestle . . . . . . . . . . . . . . . . . . . . . . . . 250 519,937
Schweizerische Lebensverisicherungs-und Retenanstalt . 875 612,450
UBS . . . . . . . . . . . . . . . . . . . . . . . . . . 2,025 609,940
____________
1,742,327
____________
United Kingdom--8.2% British Petroleum . . . . . . . . . . . . . . . . . . . 65,000 1,013,758
British Sky Broadcasting Group . . . . . . . . . . . . 120,000 992,220
Colt Telecom . . . . . . . . . . . . . . . . . . . . . 95,000 (a) 1,241,761
Diageo . . . . . . . . . . . . . . . . . . . . . . . . 62,208 697,116
Granada . . . . . . . . . . . . . . . . . . . . . . . . 20,000 312,256
Vodafone . . . . . . . . . . . . . . . . . . . . . . . 45,000 664,699
____________
4,921,810
____________
United States--1.0% Exxon . . . . . . . . . . . . . . . . . . . . . . . . . 8,300 623,019
____________
TOTAL COMMON STOCKS
(cost $51,058,142) . . . . . . . . . . . . . . . . . $56,025,399
============
Preferred Stocks--5.5%
- --------------------------------------------------------------------------------
Brazil: Companhia Energetica de Minas Gerais . . . . . . . . . 50,251 $ 1,271,452
Telecomunicacoes de Sao Paulo . . . . . . . . . . . . . 12,000 2,037,453
____________
TOTAL PREFERRED STOCKS
(cost $3,486,718) . . . . . . . . . . . . . . . . . $ 3,308,905
============
TOTAL INVESTMENTS (cost $54,544,860) . . . . . . . . . . . . . . . . . . . . . . . 99.0% $59,334,304
====== ============
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0% $ 583,352
====== ============
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $59,917,656
====== ============
Notes to Statement of Investments:
- ---------------------------------------------------------------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1998 (UNAUDITED)
Cost Value
____________ ____________
ASSETS: Investments in securities--See Statement of Investments . . . . $54,544,860 $59,334,304
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,137,368
Receivable for investment securities sold . . . . . . . . . . . 2,275,796
Net unrealized appreciation on forward currency
exchange contracts--Note 4(a) . . . . . . . . . . . . . . . 826,765
Dividends receivable . . . . . . . . . . . . . . . . . . . . . 245,847
Receivable for shares of Common Stock subscribed . . . . . . . 22,358
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 9,236
____________
63,851,674
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . . . . 43,582
Due to Distributor . . . . . . . . . . . . . . . . . . . . . . 36,582
Payable for investment securities purchased . . . . . . . . . . 3,759,524
Payable for shares of Common Stock redeemed . . . . . . . . . . 7,733
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . 86,597
____________
3,934,018
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $59,917,656
____________
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . $55,858,749
Accumulated investment (loss) . . . . . . . . . . . . . . . . . (967,791)
Accumulated net realized gain (loss) on investments . . . . . . (586,631)
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions . . . . . . 5,613,329
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $59,917,656
============
SHARES OUTSTANDING
(300 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 4,599,263
NET ASSET VALUE, offering and redemption price per share--Note 3(e). . . . . . . . . . . . $13.03
=======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME
INCOME: Cash dividends (net of $80,250 foreign taxes
withheld at source) . . . . . . . . . . . . . . . . . . . . $ 510,567
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,186
_____________
Total Income . . . . . . . . . . . . . . . . . . . . . . $ 534,753
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . . . . . . . . 248,330
Shareholder servicing costs--Note 3(b,c) . . . . . . . . . . . 298,274
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . 51,817
Professional fees . . . . . . . . . . . . . . . . . . . . . . . 24,400
Registration fees . . . . . . . . . . . . . . . . . . . . . . . 17,146
Prospectus and shareholders' reports--Note 3(b) . . . . . . . 16,706
Directors' fees and expenses--Note 3(d) . . . . . . . . . . . 13,937
Loan commitment fees--Note 2 . . . . . . . . . . . . . . . . . 195
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 13,522
_____________
Total Expenses . . . . . . . . . . . . . . . . . . . . . 684,327
_____________
INVESTMENT (LOSS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (149,574)
_____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and foreign currency
transactions . . . . . . . . . . . . . . . . . . . . . . . . $ 1,399,762
Net realized gain (loss) on forward currency exchange contracts . . (3,845,303)
_____________
Net Realized Gain (Loss) . . . . . . . . . . . . . . . . (2,445,541)
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions . . . . . . . . . . . . . (7,168,358)
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . (9,613,899)
_____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . $ (9,763,473)
============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
November 30, 1998 Year Ended
(Unaudited) May 31, 1998
________________ ________________
OPERATIONS:
Investment (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (149,574) $ (591,393)
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . (2,445,541) 8,771,053
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . (7,168,358) 4,023,701
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . (9,763,473) 12,203,361
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (49,648)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . -- (9,448,032)
________________ ________________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (9,497,680)
________________ ________________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . 20,895,997 718,709,466
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 8,967,189
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,141,809) (741,149,267)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . (8,245,812) (13,472,612)
________________ ________________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . (18,009,285) (10,766,931)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,926,941 88,693,872
________________ ________________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 59,917,656 $ 77,926,941
================ ================
Shares Shares
________________ ________________
CAPITAL SHARE TRANSACTIONS:
Shares sold 1,552,898 46,522,459
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . -- 686,615
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,160,888) (47,606,404)
________________ ________________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . (607,990) (397,330)
================ ================
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL GROWTH FUND
- -----------------------------------------------------------------------------
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
November 30, 1998 Year Ended May 31,
___________________________________________________
PER SHARE DATA: (Unaudited) 1998 1997 1996 1995 1994(1)
____________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . $14.97 $15.83 $15.49 $13.74 $15.20 $12.50
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . .12 (.12) (.02) .09 .01 .05
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . (2.06) 1.17 1.11 1.66 (1.19) 2.74
_______ _______ _______ _______ _______ _______
TOTAL FROM INVESTMENT OPERATIONS . . . . . . . . (1.94) 1.05 1.09 1.75 (1.18) 2.79
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . -- (.01) (.09) -- (.01) (.02)
Dividends in excess of investment income--net . . -- -- (.03) -- (.02) (.04)
Dividends from net realized gain on investments . . -- (1.90) (.63) -- (.25) (.03)
_______ _______ _______ _______ _______ _______
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . . . -- (1.91) (.75) -- (.28) (.09)
_______ _______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . $13.03 $14.97 $15.83 $15.49 $13.74 $15.20
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . (12.96%)(2) 8.42% 7.36% 12.74% (7.81%) 22.32%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets . . 1.04%(2) 1.92% 1.98% 2.04% 1.92% 1.71%(2)
Ratio of interest expense and loan commitment
fees to average net assets . . . . . . . . . -- .27% -- -- -- --
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . . . (.23%)(2) (.70%) (.18%) .62% .09% .11%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . -- -- -- -- -- .16%(2)
Portfolio Turnover Rate . . . . . . . . . . . . . 100.72%(2) 167.19% 158.04% 96.45% 40.15% 51.32%(2)
Net Assets, end of period (000's Omitted) . . . . $59,918 $77,927 $88,694 $102,710 $137,909 $179,907
- ------------
(1) From June 29, 1993 (commencement of operations) to May 31, 1994.
(2) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL GROWTH FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus International Growth Fund (the "Fund") is a separate non-diversified
series of Dreyfus International Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering two series including the Fund. The Fund's investment objective is to
provide investors with capital growth. The Dreyfus Corporation (the "Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a sales
load.
The Company accounts separately for the assets, liabilities and operations of
each fund. Expenses directly attributable to each fund are charged to that
fund' s operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in the 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 and the difference between the amount 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. Under the terms of the custody agreement, the Fund receives net
earnings credits based on available cash balances left on deposit.
DREYFUS INTERNATIONAL GROWTH FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(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 of 1986, as amended (the "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.
(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 Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
November 30, 1998, the Fund did not borrow under the Facility.
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .75 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, the Fund (a) reimburses the Distributor for payments to certain
Service Agents (a securities dealer, financial institution or other industry
professional) for distributing the Fund' s shares and (b) pays the Manager,
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, 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. During the period
ended November 30, 1998, the Fund was charged $173,909 pursuant to the Plan.
(c) Under the Shareholder Services Plan, the Fund pays the Distributor at an
annual rate of .25 of 1% of the value of the Fund's average daily net assets for
the provision of certain services. 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.
DREYFUS INTERNATIONAL GROWTH FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
to Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the period ended November 30, 1998,
the Fund was charged $82,777 pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended November 30, 1998, the Fund was charged $34,009 pursuant to the transfer
agency agreement.
(D) Each director who is not an "affiliated person" as defined in the Act
receives from the Company 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.
(E) A 1% redemption fee is charged and retained by the Fund (including on
redemptions through the use of the Fund Exchanges privilege) on shares redeemed
within six months of their issuance.
NOTE 4--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts, during
the period ended November 30, 1998 amounted to $65,903,584 and $77,011,283,
respectively.
In addition, the following summarizes open forward currency exchange
contracts at November 30, 1998:
<TABLE>
<CAPTION>
FOREIGN
CURRENCY UNREALIZED
FORWARD CURRENCY EXCHANGE CONTRACTS AMOUNTS PROCEEDS VALUE APPRECIATION
_______________________________________ _____________ _____________ _____________ _____________
Sales:
<S> <C> <C> <C> <C>
British Pounds, expiring 2/2/99 3,000,000 $ 4,995,750 $ 4,938,000 $ 57,750
German Deutschemark, expiring 2/2/99 50,000,000 30,314,054 29,599,811 714,243
Japanese Yen, expiring 1/20/99 700,000,000 5,776,531 5,721,759 54,772
__________
TOTAL $826,765
==========
</TABLE>
The Fund enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings. When executing forward currency exchange contracts, the Fund
is obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract increases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
decreases between those dates. With respect to purchases of forward currency
exchange contracts, the Fund would incur a loss if the value of the contract
decreases between the date the forward contract is opened and the date the
forward contract is closed. The Fund realizes a gain if the value of the
contract increases between those dates. The Fund is also exposed to credit risk
associated with counter party nonperformance on these forward currency exchange
contracts which is typically limited to the unrealized gain on each open
contract.
DREYFUS INTERNATIONAL GROWTH FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(B) At November 30, 1998, accumulated net unrealized appreciation on
investments and forward currency exchange contracts was $5,616,209, consisting
of $10,312,609 gross unrealized appreciation and $4,696,400 gross unrealized
depreciation.
At November 30, 1998, 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 lion "d" logo (reg.tm)
Dreyfus logo (reg.tm)
DREYFUS INTERNATIONAL
GROWTH FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 095SA9811
International
Growth Fund
Semi-Annual
Report
November 30, 1998
YEAR 2000 ISSUES (UNAUDITED)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund' s other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could have
an impact on the value of the fund's investments and its share price.
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
The Dreyfus Emerging Markets Fund's performance declined by -13.05%* during
the six-month fiscal period ended November 30, 1998, continuing a difficult
period for the emerging markets asset class. This performance was better than
the -16.42% decline for the Morgan Stanley Capital International Emerging
Markets Free (MSCI/EMF) Index for the same six-month period.**
The emerging markets asset class has fallen dramatically since July 1997, when
Thailand devalued the baht and other regional currencies followed suit,
negatively affecting the Asian economy. For the five years ending November 30,
1998, the emerging markets, as measured by the MSCI/EMF Index, have declined by
- -6.17% annualized. This is during a period when the MSCI World Index rose 15.68%
annualized and MSCI/EAFE (Europe, Australasia, Far East) rose 9.87%
annualized.*** This dramatic underperformance of the emerging markets has been
caused by the poor global economic outlook, declining commodity prices, and
currency instability. These markets tend to act like cyclical stocks, and
generally are most affected by world growth. Slowing global growth tends to
negatively affect the emerging markets the most, as seen recently. Conversely,
strong global growth can have a positive impact on these countries.
EMERGING MARKETS AND COMMODITY PRICES
The correlation of emerging market equities to the CRB (Commodities Research
Bureau) Index is generally very high. Falling commodity prices negatively affect
the emerging world because many of the countries are dependent on commodities.
Russia, Mexico, and Venezuela are dependent on oil, Chile on copper, South
Africa and Peru on metals and mining. Falling commodity prices negatively affect
a country' s trade balance and budget deficit, further increasing its capital
outflows and putting pressure on its currency.
As value stock pickers, we were successful at outperforming our benchmarks,
both the MSCI/EMF and the Lipper Emerging Markets Funds Index during the
six-month period.(+) The Fund has avoided Russia and has limited exposure to
Turkey. Our value emphasis has enabled us to pick stocks with strong asset
backing that we believe can often hold up better in declining market
environments. Because we focus company by company, we look to add to stocks that
we view as mispriced when emotions run high. The emerging markets tend to be
very inefficient, and our disciplined investment approach looks to add value.
EFFECTS OF TAKEOVERS
During the past six months we have been fortunate to have several companies in
the portfolio that have been the object of takeovers. Ericsson Telecomunicacoes,
a Swedish telecommunications company, bought the minority shares of Ericsson
Brazil that we owned. Petronas Dagangan, a Malaysian oil and gas concern,
purchased Engen, a South African oil refiner. Koor Industries, an Israeli
conglomerate, has offered to purchase Tadiran Ltd., an Israeli defense and
telecommunications company. On a relative basis, these holdings have contributed
favorably to fund performance.
PLUS AND MINUS PERFORMERS
The best-performing stocks during the six months were concentrated within the
Asian region. During the past two months, many Asian markets rebounded quite
significantly, rising over 50% in U.S. dollar returns. The falling U.S. dollar,
lower global interest rates, and the belief that the worst of the economic
contraction is over have led to a significant rally in these markets. PT Indah
Kiat Pulp & Paper, an Indonesian pulp and paper company, rose 120%. SK Telecom,
a cellular phone company in South Korea, rose 50%. Two Singapore banks, United
Overseas Bank and Development Bank of Singapore, rose 48% and 26%, respectively.
Elsewhere, a Mexican Coca-Cola bottler, Embotelladora Argos, rose 44% as
Coca-Cola has purchased 20% of the company.
Many stocks declined sharply as well. Several South African holdings,
including Sasol, a synthetic fuels and chemical company, Edgars Stores, a
department store, and Barlow, a construction related company, fell sharply. Our
one Turkish holding, Uzel Makina Sanayii, ADR, fell 58%. ALFA, Ser. A, a Mexican
conglomerate, fell 47% and Linea Aerea Nacional Chile, ADS, a Chilean airline,
fell 46% . The underlying reasons for the declines generally were falling
commodity prices (Sasol and ALFA) or macroeconomic concerns at the country level
which caused recessionary conditions (Edgars, Barlow, Uzel Makina and Linea
Aerea Nacional Chile).
Our country weightings are determined by our stock selection. Modest shifts in
country weightings occurred over the past six months, but overall we continued
to be underweight in Asia (27.7% vs 36.6%), where the fundamentals were poor. We
were neutrally weighted in Latin America (34.8% vs 36.3% ) and slightly
overweighted in Emerging Europe (28.4% vs 27.1%). Within the Latin American
regions, we were overweight in Chile and Argentina and underweight in Brazil. In
Asia, we had only one holding in Taiwan and were overweight in China, Hong Kong
and Singapore. In Emerging Europe and Africa, we were light in Turkey but
favored companies in Poland, Hungary and Israel.
Generally, the Emerging Markets traded at a ratio under 1.2 price-to-book
value during the period. Your portfolio is diversified across 28 countries and
we continue to focus on stock selection, trying to pick good value for your
portfolio.
Sincerely,
[D. Kirk Henry signature]
D. Kirk Henry
Portfolio Manager
December 15, 1998
Boston, MA
* Total return includes reinvestment of dividends and any capital gains paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC.--The Morgan Stanley Capital
International Emerging Markets Free (MSCI/EMF) Index is a market capitalization
weighted index composed of companies representative of the market structure of
26 Emerging Market countries in Europe, Latin America and the Pacific Basin. The
MSCI/EMF Index excludes closed markets and those shares in otherwise free
markets which are not purchasable by foreigners. The Index is the property of
Morgan Stanley & Co. Incorporated and includes gross dividends reinvested.
***SOURCE: LIPPER ANALYTICAL SERVICES, INC.--The Morgan Stanley Capital
International World Index is an unmanaged index of global stock market
performance including the United States, Canada, Europe, Australia, New Zealand
and the Far East. The Morgan Stanley Capital International Europe, Australasia,
Far East (EAFE(reg.tm) ) Index is an unmanaged index composed of a sample of
companies representative of the market structure of European and Pacific Basin
countries. The Indices are the property of Morgan Stanley & Co. Incorporated and
include net dividends reinvested.
(+)The Lipper Emerging Markets Funds Index is an equally weighted performance
index of the 30 largest qualifying funds with an emerging markets objective.
<TABLE>
<CAPTION>
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS NOVEMBER 30, 1998 (UNAUDITED)
Common Stocks--90.4% Shares Value
- ------------------------------------------------------- ____________ ___________
<S> <C> <C>
Argentina--3.6% Banco Rio de la Plata, ADR . . . . . . . . . . . . . . 57,600 $ 676,800
Central Costanera . . . . . . . . . . . . . . . . . . 117,000 308,911
Telefonica de Argentina, ADS . . . . . . . . . . . . . 14,800 479,150
YPF Sociedad Anonima, ADS . . . . . . . . . . . . . . 25,000 737,500
____________
2,202,361
____________
Brazil--6.3% Aracruz Celulose, ADS . . . . . . . . . . . . . . . . 68,300 738,494
Companhia Brasileira de Distribuicao Grupo
Pao de Acucar, GDR . . . . . . . . . . . . . . . . 23,800 476,634
Companhia Vale do Rio Doce, ADS . . . . . . . . . . . 82,100 1,190,450
Telecomunicacoes Brasileiras, ADS . . . . . . . . . . 15,800 1,498,038
____________
3,903,616
____________
Chile--8.1% Administradora de Fondos de
Pensiones Provida, ADR . . . . . . . . . . . . . . 52,500 794,063
Banco BHIF, ADS . . . . . . . . . . . . . . . . . . . 33,300 328,838
Compania de Telecomunicaciones de Chile, ADS . . . . . 53,400 1,238,213
Cristalerias de Chile, ADS . . . . . . . . . . . . . . 34,100 473,138
Linea Aerea Nacional de Chile, ADS . . . . . . . . . . 129,400 711,281
Quinenco, ADR . . . . . . . . . . . . . . . . . . . . 71,100 674,166
Santa Isabel, ADR . . . . . . . . . . . . . . . . . . 89,925 769,983
____________
4,989,682
____________
China--2.8% Guangshen Railway, ADR . . . . . . . . . . . . . . . . 69,000 517,500
Huaneng Power International, ADR . . . . . . . . . . . 45,000 (a) 669,375
Shandong Huaneng Power . . . . . . . . . . . . . . . . 66,900 359,587
Yanzhou Coal Mining . . . . . . . . . . . . . . . . . 820,000 164,159
____________
1,710,621
____________
Czech Republic--.9% Ceske Energeticke Zavody . . . . . . . . . . . . . . . 21,300 (a) 454,009
Komercni Banka, GDR . . . . . . . . . . . . . . . . . 23,000 (a,b) 96,025
____________
550,034
____________
Egypt--1.8% Misr International Bank, GDR . . . . . . . . . . . . . 54,000 (b) 460,620
Paints & Chemical Industries, GDR . . . . . . . . . . 91,000 (b) 680,680
____________
1,141,300
____________
Greece--3.8% Aegek . . . . . . . . . . . . . . . . . . . . . . . . 27,500 144,227
Hellenic Technodomiki . . . . . . . . . . . . . . . . 60,000 414,995
Hellenic Telecommunication Organization . . . . . . . 5,955 148,823
Hellenic Telecommunication Organization, ADR . . . . . 111,855 (b) 1,356,242
Michaniki . . . . . . . . . . . . . . . . . . . . . . 47,300 260,557
____________
2,324,844
____________
Hong Kong--3.3% Beijing Datang Power Generation . . . . . . . . . . . 400,000 129,157
China Hong Kong Photo Products Holdings . . . . . . . 3,275,000 342,622
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ____________ ___________
Hong Kong (continued) Henderson Investment . . . . . . . . . . . . . . . . . 642,000 $ 410,449
Hongkong Electric Holdings . . . . . . . . . . . . . . 168,000 558,734
IDT International . . . . . . . . . . . . . . . . . . 2,393,000 352,344
Jiangxi Copper . . . . . . . . . . . . . . . . . . . . 3,500,000 214,724
____________
2,008,030
____________
Hungary--3.9% Fotex . . . . . . . . . . . . . . . . . . . . . . . . 475,658 254,409
Gedeon Richter . . . . . . . . . . . . . . . . . . . . 5,000 192,500
MOL Magyar Olaj-es Gazipari, GDR . . . . . . . . . . . 57,700 (b) 1,329,985
Pick Szeged . . . . . . . . . . . . . . . . . . . . . 3,048 124,133
Pick Szeged, GDR . . . . . . . . . . . . . . . . . . . 59,800 (b) 479,895
____________
2,380,922
____________
India--7.1% BSES . . . . . . . . . . . . . . . . . . . . . . . . . 43,000 (b) 521,375
Mahanagar Telephone Nigam . . . . . . . . . . . . . . 76,800 812,160
Mahindra & Mahindra . . . . . . . . . . . . . . . . . 62,000 (b) 232,500
Reliance Industries, GDR . . . . . . . . . . . . . . . 142,000 (b) 727,750
State Bank of India, GDR . . . . . . . . . . . . . . . 91,000 (b) 734,825
Steel Authority of India, GDR . . . . . . . . . . . . 170,500 (b) 323,950
Tata Engineering & Locomotive, GDR . . . . . . . . . . 30,700 (b) 86,881
Videsh Sanchar Nigam, GDR . . . . . . . . . . . . . . 95,000 (b) 971,375
____________
4,410,816
____________
Indonesia--1.7% PT Daya Guna Samudera . . . . . . . . . . . . . . . . 624,000 356,571
PT Indah Kiat Pulp & Paper . . . . . . . . . . . . . . 1,640,000 (a) 589,849
PT Indorama Synthetics . . . . . . . . . . . . . . . . 555,000 (a) 72,756
____________
1,019,176
____________
Israel--6.1% Bank Leumi Le-Israel . . . . . . . . . . . . . . . . . 757,000 1,050,309
Blue Square-Israel . . . . . . . . . . . . . . . . . . 40,950 499,078
Dor Energy . . . . . . . . . . . . . . . . . . . . . . 134,400 (a) 346,080
Koor Industries . . . . . . . . . . . . . . . . . . . 6,400 548,681
Supersol . . . . . . . . . . . . . . . . . . . . . . . 307,550 712,414
Tadiran . . . . . . . . . . . . . . . . . . . . . . . 17,200 615,975
____________
3,772,537
____________
Luxembourg--1.8% Quilmes Industrial, ADR . . . . . . . . . . . . . . . 115,500 1,090,031
____________
Malaysia--4.8% Berjaya Sports Toto . . . . . . . . . . . . . . . . . 729,000 (c) 585,499
Jaya Tiasa Holdings . . . . . . . . . . . . . . . . . 313,000 276,756
Kwantas . . . . . . . . . . . . . . . . . . . . . . . 251,000 143,333
Petronas Dagangan . . . . . . . . . . . . . . . . . . 553,000 356,538
Sime Darby . . . . . . . . . . . . . . . . . . . . . . 902,000 588,196
Telekom Malaysia . . . . . . . . . . . . . . . . . . . 418,000 573,647
Tenaga Nasional . . . . . . . . . . . . . . . . . . . 499,000 464,199
____________
2,988,168
____________
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ____________ ___________
Malta--.9% Maltacom, ADR . . . . . . . . . . . . . . . . . . . . 50,000 (a) $ 575,000
____________
Mexico--9.8% ALFA, Ser. A . . . . . . . . . . . . . . . . . . . . . 228,000 570,571
ARA . . . . . . . . . . . . . . . . . . . . . . . . . 239,000 (a) 582,548
Apasco . . . . . . . . . . . . . . . . . . . . . . . . 149,700 537,961
Carso Global Telecom . . . . . . . . . . . . . . . . . 222,700 547,179
Cintra . . . . . . . . . . . . . . . . . . . . . . . . 366,900 201,997
Controladora Comercial Mexicana, GDS . . . . . . . . . 37,300 475,575
Desc, Ser. B . . . . . . . . . . . . . . . . . . . . . 610,000 543,443
Embotelladora Argos . . . . . . . . . . . . . . . . . 867,500 1,042,042
Grupo Continental . . . . . . . . . . . . . . . . . . 63,000 146,563
Grupo Financiero Banorte, Ser. B . . . . . . . . . . . 443,000 (a) 320,166
Grupo Financiero Inbursa, Ser. B . . . . . . . . . . . 379,300 706,204
Tablex . . . . . . . . . . . . . . . . . . . . . . . . 37,108 (a) 63,518
Tubes de Acero de Mexico, ADR . . . . . . . . . . . . 48,000 339,000
____________
6,076,767
____________
Panama--1.0% Banco Latinoamericano de Exportaciones . . . . . . . . 35,500 636,781
____________
Peru--2.7% Telefonica del Peru, ADS . . . . . . . . . . . . . . . 112,000 1,659,000
____________
Philippines--1.8% First Philippine Holdings . . . . . . . . . . . . . . 771,360 460,660
Philippine Long Distance Telephone, ADS . . . . . . . 9,800 256,638
Universal Robina . . . . . . . . . . . . . . . . . . . 4,356,600 409,641
____________
1,126,939
____________
Poland--2.2% Bank Handlowy w Warszawie . . . . . . . . . . . . . . 32,000 385,763
KREDYT BANK, ADR . . . . . . . . . . . . . . . . . . . 30,800 (a,b) 494,340
Telekomunikacja Polska, ADR . . . . . . . . . . . . . 104,500 (a) 494,285
____________
1,374,388
____________
Portugal--1.1% Mota e Companhia . . . . . . . . . . . . . . . . . . . 49,000 691,432
____________
Singapore--1.5% Development Bank of Singapore . . . . . . . . . . . . 62,400 473,157
United Overseas Bank . . . . . . . . . . . . . . . . . 82,000 475,038
____________
948,195
____________
South Africa--7.0% AECI . . . . . . . . . . . . . . . . . . . . . . . . . 446,300 721,572
Barlow . . . . . . . . . . . . . . . . . . . . . . . . 216,885 1,095,802
Barlow, ADR . . . . . . . . . . . . . . . . . . . . . 11,461 (a) 53,007
Del Monte Royal Foods . . . . . . . . . . . . . . . . 1,045,000 (a) 266,286
Edgars Stores . . . . . . . . . . . . . . . . . . . . 97,250 358,900
Iscor . . . . . . . . . . . . . . . . . . . . . . . . 302,800 72,902
Polifin . . . . . . . . . . . . . . . . . . . . . . . 91,800 85,503
Pretoria Portland Cement . . . . . . . . . . . . . . . 91,100 648,394
Sasol . . . . . . . . . . . . . . . . . . . . . . . . 268,900 1,048,645
____________
4,351,011
____________
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ____________ ___________
South Korea--3.6% Kookmin Bank, ADR . . . . . . . . . . . . . . . . . . 74,263 $ 343,466
Pohang Iron & Steel . . . . . . . . . . . . . . . . . 12,400 701,386
SK Telecom . . . . . . . . . . . . . . . . . . . . . . 556 390,784
SK Telecom, ADR . . . . . . . . . . . . . . . . . . . 77,169 795,806
____________
2,231,442
____________
Taiwan--.5% China Steel, ADR . . . . . . . . . . . . . . . . . . . 22,700 (b) 299,073
____________
Thailand--.6% Ayudhya Insurance . . . . . . . . . . . . . . . . . . 10,000 (a) 39,557
Hana Microelectronics . . . . . . . . . . . . . . . . 65,100 (a) 162,075
Saha-Union . . . . . . . . . . . . . . . . . . . . . . 400,000 196,404
____________
398,036
____________
Turkey--.6% Uzel Makina Sanayii, ADR . . . . . . . . . . . . . . . 20,800 (b) 365,040
____________
United Kingdom--1.1% Billiton . . . . . . . . . . . . . . . . . . . . . . . 298,000 651,660
____________
TOTAL COMMON STOCKS
(cost $71,911,153) . . . . . . . . . . . . . . . . $55,876,902
____________
Preferred Stocks--3.8%
- -------------------------------------------------------
Brazil--3.3% Companhia Energetica de Minas Gerais . . . . . . . . . 29,517 $ 746,840
Companhia Paranaense de Energia-Copel . . . . . . . . 509,488
Petroleo Brasileiro . . . . . . . . . . . . . . . . . 5,400 768,539
____________
2,024,867
____________
Portugal--.5% Lusomundo . . . . . . . . . . . . . . . . . . . . . . 23,642 (a) 294,802
____________
TOTAL PREFERRED STOCKS
(cost $2,697,998) . . . . . . . . . . . . . . . . $ 2,319,669
____________
Principal
Short-Term Investments--6.2% Amount
- ------------------------------------------------------------------------------------------ ____________
U.S. Treasury Bills: 4.65%, 12/17/98 . . . . . . . . . . . . . . . . . . . $ 56,000 $ 55,893
4.10%, 12/24/98 . . . . . . . . . . . . . . . . . . . 775,000 772,799
4.14%, 12/31/98 . . . . . . . . . . . . . . . . . . . 443,000 441,370
4.02%, 1/7/99 . . . . . . . . . . . . . . . . . . . . 198,000 197,160
3.86%, 1/14/99 . . . . . . . . . . . . . . . . . . . . 866,000 861,618
4.30%, 1/21/99 . . . . . . . . . . . . . . . . . . . . 1,003,000 996,701
4.13%, 1/28/99 . . . . . . . . . . . . . . . . . . . . 301,000 298,899
4.32%, 2/4/99 . . . . . . . . . . . . . . . . . . . . 210,000 208,331
____________
TOTAL SHORT-TERM INVESTMENTS
(cost $3,833,665) . . . . . . . . . . . . . . . . $ 3,832,771
____________
TOTAL INVESTMENTS (cost $78,442,816) . . . . . . . . . . . . . . . . . . . . . . . . 100.4% $62,029,342
_______ ____________
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . (.4%) $ (235,190)
_______ ____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $61,794,152
_______ ____________
</TABLE>
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-Income producing.
(b)Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30, 1998,
these securities amounted to $9,160,556 or approximately 14.8% of net assets.
(c)As of September 1, 1998, the repatriation of proceeds received from the
sale of Malaysian securities has been blocked until at least 9/1/99. These
securities are considered illiquid and are being fair valued using methods
determined in good faith under the direction of the Board of Directors.
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1998 (UNAUDITED)
Cost Value
___________ __________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $78,442,816 $62,029,342
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 948,635
Receivable for investment securities sold . . . . . . . . 528,823
Cash denominated in foreign currencies . . . . . . . . . 245,729 239,877
Dividends receivable . . . . . . . . . . . . . . . . . . 116,164
Receivable for shares of Common Stock subscribed . . . . 14,342
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 6,185
____________
63,883,368
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 65,542
Due to Distributor . . . . . . . . . . . . . . . . . . . 12,784
Payable for investment securities purchased . . . . . . . 1,335,566
Payable for shares of Common Stock redeemed . . . . . . . 617,744
Net unrealized (depreciation) on forward currency
exchange contracts--Note 4(a) . . . . . . . . . . . . . 75
Accrued expenses . . . . . . . . . . . . . . . . . . . . 57,505
____________
2,089,216
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $61,794,152
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $87,279,068
Accumulated undistributed investment income--net . . . . 763,078
Accumulated distributions in excess of net realized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . (9,828,548)
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions . . . (16,419,446)
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $61,794,152
____________
SHARES OUTSTANDING
(100 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 6,353,306
NET ASSET VALUE, offering and redemption price per share--Note 3(d). . . . . . . . . . . . $9.73
______
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME
INCOME: Cash dividends (net of $33,075 foreign taxes
withheld at source) . . . . . . . . . . . . . . . . . $ 852,796
Interest . . . . . . . . . . . . . . . . . . . . . . . . 117,530
_____________
Total Income . . . . . . . . . . . . . . . . . . . $ 970,326
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . . . . . 390,426
Shareholder servicing costs--Note 3(b) . . . . . . . . . 92,710
Custodian fees . . . . . . . . . . . . . . . . . . . . . 56,637
Professional fees . . . . . . . . . . . . . . . . . . . . 20,118
Registration fees . . . . . . . . . . . . . . . . . . . . 13,659
Directors' fees and expenses--Note 3(c) . . . . . . . . . 12,419
Prospectus and shareholders' reports . . . . . . . . . . 7,772
Loan commitment fees--Note 2 . . . . . . . . . . . . . . 166
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 3,603
_____________
Total Expenses . . . . . . . . . . . . . . . . . . 597,510
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372,816
_____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and
foreign currency transactions . . . . . . . . . . . . $ (8,641,386)
Net realized gain (loss) on forward currency
exchange contracts . . . . . . . . . . . . . . . . . . (118,863)
_____________
Net Realized Gain (Loss) . . . . . . . . . . . . . (8,760,249)
Net unrealized appreciation (depreciation) on
investments and foreign currency transactions . . . . (2,477,128)
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . (11,237,377)
_____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . $(10,864,561)
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
November 30, 1998 Year Ended
(Unaudited) May 31, 1998
___________________ ______________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 372,816 $ 367,207
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . (8,760,249) 592,701
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . (2,477,128) (17,360,962)
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . (10,864,561) (16,401,054)
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- (96,386)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . --- (1,261,036)
In excess of net realized gains on investments . . . . . . . . . . . . . . . . . --- (1,068,299)
_____________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- (2,425,721)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . 11,766,033 59,365,899
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- 1,898,156
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,935,308) (18,067,726)
Redemption fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- 76,713
_____________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . (2,169,275) 43,273,042
_____________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . (13,033,836) 24,446,267
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,827,988 50,381,721
_____________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 61,794,152 $ 74,827,988
_____________ _____________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . $ 763,078 $ 390,262
_____________ _____________
Shares Shares
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,212,584 4,449,674
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . --- 167,386
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,549,871) (1,472,834)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . (337,287) 3,144,226
_____________ _____________
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
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
November 30, 1998 Year Ended May 31,
_______________________
PER SHARE DATA: (Unaudited) 1998 1997(1)
_____________________ _______ _______
<S> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . $11.18 $14.21 $12.50
_______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . . . . .06 .04 .05
Net realized and unrealized gain (loss) on investments . . . . (1.51) (2.62) 1.70
_______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . . (1.45) (2.58) 1.75
_______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . -- (.02) (.02)
Dividends from net realized gain on investments . . . . . . . . -- (.24) (.02)
Dividends in excess of net realized gain on investments . . . . -- (.20) --
_______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . . . . -- (.46) (.04)
_______ _______ _______
Redemption fee added to paid-in capital . . . . . . . . . . . . -- .01 --
_______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . . $ 9.73 $11.18 $14.21
_______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . . . (13.05%)(2) (18.11%) 14.07%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . .96%(2) 1.94% 1.85%(2)
Ratio of net investment income to average net assets . . . . . .60%(2) .54% .70%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . . . . . . . . -- .00%(3) .36%(2)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 38.46%(2) 87.46% 52.52%(2)
Net Assets, end of period (000's Omitted) . . . . . . . . . . . $61,794 $74,828 $50,382
- -----------------------------
(1) From June 28, 1996 (commencement of operations) to May 31, 1997.
(2) Not annualized.
(3) Amount represents less than .01%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Emerging Markets Fund (the "Fund" ) is a separate non-diversified
series of Dreyfus International Funds, Inc. (the "Company"), which is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering two series, including the Fund. The Fund's investment objective is
long-term capital appreciation. The Dreyfus Corporation (the "Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a sales
charge.
The Company accounts separately for the assets, liabilities and operations of
each fund. Expenses directly attributable to each fund are charged to that
fund' s operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in the 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 and the difference between the amount 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. Under the terms of the custody agreement, the Fund received net
earnings credits of $8,662 during the period ended November 30, 1998 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(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 DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Code of 1986, as amended (the "Code"). This may result in distributions that
are in excess of net realized gain on a fiscal year basis. To the extent that
net realized capital gain can be offset by capital loss carryovers, if any, it
is the policy of the Fund not to distribute such gain.
(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 Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
November 30, 1998, the Fund did not borrow under the Facility.
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of 1.25% of the value of the Fund's average daily
net assets and is payable monthly.
(B) Under the Shareholder Services Plan, the Fund pays the Distributor at an
annual rate of .25 of 1% of the value of the Fund's average daily net assets for
the provision of certain services. 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 (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
November 30, 1998, the Fund was charged $78,085 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended November 30, 1998, the Fund was charged $10,836 pursuant to the transfer
agency agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Company 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.
(D) A 1% redemption fee is charged and retained by the Fund (including
redemptions through the use of the Fund Exchange privilege) on shares being
redeemed within six months of their issuance. During the period ended November
30, 1998, redemption fees retained by the Fund amounted to $28,809.
NOTE 4--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts, during
the period ended November 30, 1998 amounted to $22,533,111 and $23,190,430,
respectively.
<TABLE>
<CAPTION>
DREYFUS EMERGING MARKETS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
In addition, the following summarizes open forward currency exchange contracts
at November 30, 1998:
Foreign
Currency Unrealized
Forward Currency Exchange Contracts Amounts Cost Value (Depreciation)
_________________________________ ____________ _____________ ___________ ____________
Purchases:
_________
<S> <C> <C> <C> <C>
Mexican Peso, expiring 12/1/98 . . . . . . . . . . . 259,405 $25,992 $25,966 $(26)
South African Rand, expiring 12/1/98 . . . . . . . . 162,598 28,624 28,575 (49)
____
Total . . . . . . . . . . . . . . . . . . . . . . $(75)
____
</TABLE>
The Fund enters into forward currency exchange contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to settle foreign currency transactions. When executing forward
currency exchange contracts, the Fund is obligated to buy or sell a foreign
currency at a specified rate on a certain date in the future. With respect to
sales of forward currency exchange contracts, the Fund would incur a loss if the
value of the contract increases between the date the forward contract is opened
and the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to purchases
of forward currency exchange contracts, the Fund would incur a loss if the value
of the contract decreases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the value
of the contract increases between those dates. The Fund is also exposed to
credit risk associated with counter party nonperformance on these forward
currency exchange contracts which is typically limited to the unrealized gain on
each open contract.
(B) At November 30, 1998, accumulated net unrealized depreciation on
investments and forward currency exchange contracts was $16,413,549, consisting
of $2,075,496 gross unrealized appreciation and $18,489,045 gross unrealized
depreciation.
At November 30, 1998, 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).
[reg.tm logo]
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DREYFUS EMERGING MARKETS FUND
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 327SA9811
Emerging Markets
Fund
Semi-Annual
Report
November 30, 1998
February 1, 1999
Office of Records
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Washington, DC 20549
RE: Dreyfus International Funds, Inc.
Dreyfus Emerging Markets Fund
Dreyfus International Growth Fund
File No. 811-7502, CIK No. 897469
Dear Sir/Madam:
Enclosed is one (1) copy of each of the Semi-Annual Reports to
Shareholders for the above-referenced Funds for the period ended November
30, 1998, filed in compliance with the provisions of Section 30 of the
Investment Company Act of 1940, as amended.
Very truly yours,
Daniela Battistoni
DB
Enclosures
