PREMIER GROWTH FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this annual report on the activity of
the Premier Growth Fund, Inc. for the twelve-month period from November 1, 1995
through October 31, 1996. During that period, the Fund's Class A shares provided
a total return of 22.24%, Class B shares 21.29%, Class C shares 21.23% and Class
R shares, since their inception March 4, 1996, had a total return of 9.51%.*
During the same period, the Standard & Poor's 500 Composite Stock Price Index
provided a total return of 24.08%** and the Morgan Stanley Capital International
World Index provided a total return of 16.30%.***
Portfolio Composition At the close of the period, the Fund had industry
concentrations in consumer nondurables, financial services, technology and
health care and 3.9% of its net assets in short-term Treasuries. As investment
opportunities arise, in favorable market conditions, the short-term cash
equivalent assets will continue to be committed to high quality equity holdings.
Economic Outlook We have become considerably more secure in our forecast of a
lengthened period of moderate growth, with restrained inflation. We believe the
trend in economic data indicates that average annual Gross Domestic Product
(GDP) growth will slow to a rate of 1.5%. We believe wage pressures will
moderate, reflecting weaker job growth, and as a result, upcoming wage trends
will be less inflationary. General inflation, as measured by the GDP deflator,
should come in near 2.0% at an annual rate, as pricing flexibility remains an
exception - not the rule. The rise in oil prices, which has threatened this
constructive scenario, appears to be retracting, and commodity indices are also
presenting more positive trends. With economic fundamentals unfolding in this
promising mode, fixed-income prices should continue to rise. We expect long-term
interest rates to fluctuate in a lower trading range, and decline toward 6.0%,
or lower, next year.
Investment Strategy Investments made for the Premier Growth Fund emphasize
the highest quality, large capitalization companies, which we consider well
positioned to achieve consistent earnings growth from dominant positioning in
the U.S. and from rapidly expanding sales in international markets.
General
In general, investors favor companies that can generate above average
earnings growth in the context of slowing aggregate economic performance. We
believe that above average earnings growth will likely occur in companies which
exhibit one or more of the following characteristics: 1) the ability to expand
geographically, most often by selling branded consumer products to the growing
middle classes of the emerging economies, but sometimes also by offering
products to develop the infrastructure necessary for the operation of a modern
economy, such as telecommunications and financial services, 2) the capability,
through technological innovation, to develop new products that address new
markets, most notably found within the pharmaceutical and the electronics
industries, and 3) the willingness to restructure internal business processes
and achieve margin expansion and hence earnings growth even in the context of
sluggish revenue growth. Over the past year, the portfolio has emphasized
companies that have exhibited some or all of these characteristics, and such
emphasis was an important factor in the portfolio's overall performance last
year.
Investment Highlights
Although equity markets have achieved substantial gains during this
reporting period, they have also been subject to increased volatility. Excess
liquidity, particularly in the first half of 1996, fueled somewhat speculative
market conditions, and companies which reported earnings even marginally below
forecasts experienced sharp price declines. The Fund's strategy, emphasizing
high quality, large capitalization companies which are global leaders, has
achieved good results - as market sentiment has become more favorable to
companies which have a record of attaining consistent earnings growth.
The Fund had a strategic emphasis on companies in the consumer nondurables
sectors this reporting period, and this group led in performance returns during
the reporting period. Results were led by shares of Coca-Cola, Gillette and
L'Oreal A.D.R. The technology sector had the second strongest returns, led by
shares of Intel and General Electric. High quality pharmaceutical companies and
financial services holdings also contributed to the Fund's absolute return, with
particular strength in shares of Pfizer, Merck, Citicorp and Chase Manhattan
Corp. We continue to have a positive long-term outlook on equity markets. Thus,
during the reporting period, a wide variety of holdings in the Fund was
increased with new contributions. New positions were established with the
purchase of shares of Associates First Capital, British Petroleum, Caterpillar,
Compaq Computer, Hewlett-Packard, Marsh & McLennan and Walgreen. The positions
in AT&T, Ericsson, (LM)Telephone, Class B, A.D.R., Imation and Reader's Digest
Association Class A, were eliminated.
We appreciate your investment in Premier
Growth Fund, Inc. and we will continue to seek rewarding returns on your behalf.
Sincerely,
[Fayez Sarofim signature logo]
Fayez Sarofim
Portfolio Manager
November 20, 1996 New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid,
without taking into account the maximum initial sales charge in the case of
Class A shares or the applicable contingent deferred sales charge imposed on
redemptions in the case of Class B shares and Class C shares.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The Standard
& Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of
U.S. stock market performance.
***SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Unlike the Fund which may
invest in various types of securities and engage in different investment
techniques, the Morgan Stanley Capital International World Index is an unmanaged
index of global stock market performance, consisting of equity securities.
PREMIER GROWTH FUND, INC. OCTOBER 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER GROWTH FUND,
INC. CLASS A SHARES AND
CLASS B SHARES AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[Exhibit A:
$17,055
Standard & Poor's 500
Composite Stock Price
Index*
Dollars
$15,587
Premier Growth Fund
(Class B Shares)
$15,561
Premier Growth Fund
(Class A Shares)
*Source: Lipper Analytical Services, Inc.]
Average Annual Total Returns
<TABLE>
<CAPTION>
Class A Shares Class B Shares
- ---------------------------------------------------------- ----------------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 10/31/96 Sales Charge Sales Charge (4.5%) Period Ended 10/31/96 Redemption Redemption*
- --------- ------- -------- --------- ----- --------
<S> <C> <C> <C> <C> <C>
1 Year 22.24% 16.76% 1 Year 21.29% 17.29%
From Inception (7/15/93) 15.95 14.34 From Inception (7/15/93) 15.06 14.40
</TABLE>
<TABLE>
<CAPTION>
Actual Aggregate Total Return
Class C Shares Class R Shares
- ---------------------------------------------------------- -------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 10/31/96 No Redemption Redemption** Period Ended 10/31/96
- ---------- ------ --------- ----------
<S> <C> <C> <C>
1 Year 21.23% 20.23% From Inception (3/4/96) 9.51%
From Inception (6/21/95) 19.12 19.12
</TABLE>
Past performance is not predictive of future performance. The above graph
compares a $10,000 investment made in each of the Class A shares and Class B
shares of Premier Growth Fund, Inc. on 7/15/93 (Inception Date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock Price Index on that
date. For comparative purposes, the value of the Index on 6/30/93 is used as the
beginning value on 7/15/93. All dividends and capital gain distributions are
reinvested. Performance for Class C and Class R shares will vary from the
performance of both Class A and Class B shares shown above due to differences in
charges and expenses. The Fund's performance shown in the line graph takes into
account the maximum initial sales charge on Class A shares and the maximum
contingent deferred sales charge on Class B shares and all other applicable fees
and expenses. The Standard & Poor's 500 Composite Stock Price Index is a widely
accepted, unmanaged index of overall stock market performance, which does not
take into account charges, fees and other expenses. Further information relating
to Fund performance, including expense reimbursements, if applicable, is
contained in the Financial Highlights section of the Prospectus and elsewhere in
this report.
* The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
PREMIER GROWTH FUND, INC.
STATEMENT OF INVESTMENTS OCTOBER 31, 1996
Common Stocks-96.6% Shares Value
<S> <C> <C> <C>
------- ------
Aerospace & Electronics-10.6% Emerson Electric....................... 10,000 $ 890,000
General Electric....................... 40,000 3,870,000
Hewlett-Packard........................ 40,000 1,765,000
Intel.................................. 35,000 3,845,625
Motorola............................... 10,000 460,000
Philips Electronics NV A.D.R........... 40,000 1,410,000
Texas Instruments...................... 5,000 240,625
-------
12,481,250
-------
Auto Related-1.3% Ford Motor............................. 50,000 1,562,500
-------
Banking-7.9% Chase Manhattan........................ 30,000 2,572,500
Citicorp............................... 30,000 2,970,000
Deutsche Bank A.D.R.................... 40,000 1,867,500
HSBC Holdings A.D.R.................... 5,500 1,122,000
Union Bank of Switzerland.............. 4,010 771,336
-------
9,303,336
-------
Capital Goods-2.3% AlliedSignal........................... 25,000 1,637,500
Caterpillar............................ 16,000 1,098,000
-------
2,735,500
-------
Chemicals-5.7% Air Liquide A.D.R...................... 70,000 2,152,500
Dow Chemical........................... 11,500 894,125
duPont (EI) de Nemours................. 20,000 1,855,000
Norsk Hydro A.D.R...................... 40,000 1,835,000
-------
6,736,625
-------
Energy-8.8% Chevron................................ 25,000 1,643,750
Elf Aquitaine A.D.S.................... 15,000 601,875
Exxon 27,000 2,392,875
Mobil 15,000 1,751,250
Royal Dutch Petroleum.................. 17,000 2,811,375
Total, Cl. B, A.D.S.................... 30,594 1,193,166
-------
10,394,291
-------
Financial-3.5% Associates First Capital, Cl. A........ 4,200 182,175
Berkshire Hathaway..................... 65 2,106,000
Eurafrance............................. 4,263 1,859,338
-------
4,147,513
-------
Food, Beverage &
Tobacco-15.5% Coca-Cola............................... 80,000 4,040,000
Guinness PLC, A.D.R.................... 55,000 2,007,500
Kellogg................................ 15,000 952,500
LVMH Moet Hennessy Louis Vuitton A.D.S. 50,050 2,296,045
Nestle A.D.R........................... 40,000 2,165,000
PepsiCo................................ 70,000 2,073,750
Philip Morris Cos...................... 38,000 3,519,750
PREMIER GROWTH FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1996
Common Stocks (continued) Shares Value
------- ------
Food, Beverage &
Tobacco (continued) Sara Lee................................ 5,000 $ 177,500
Seagram................................ 30,000 1,136,250
-------
18,368,295
-------
Health Care-13.7% Abbott Laboratories.................... 35,000 1,771,875
American Home Products................. 35,000 2,143,750
Johnson & Johnson...................... 63,000 3,102,750
Merck.................................. 50,000 3,706,250
Pfizer................................. 38,000 3,144,500
Roche Holdings A.D.S................... 30,000 2,261,250
-------
16,130,375
-------
Insurance-3.8% AXA.................................... 35,361 2,203,377
Marsh & McLennan....................... 15,000 1,561,875
Zuerich Versicherung................... 2,500 681,908
-------
4,447,160
-------
Leisure Time-3.0% Disney (Walt).......................... 15,000 988,125
Eastman Kodak.......................... 18,000 1,435,500
McDonalds.............................. 25,000 1,109,375
-------
3,533,000
-------
Media/Entertainment-1.5% News A.D.S............................. 12,000 271,500
Pearson PLC............................ 125,288 1,553,670
-------
1,825,170
-------
Metals-.3%. Debeers Consolidated Mining A.D.R 10,000 295,000
-------
Multi Industry-1.9% Eaux (Generale Des).................... 6,000 715,415
Minnesota Mining & Manufacturing....... 20,000 1,532,500
-------
2,247,915
-------
Office & Business
Equipment-1.9% Compaq Computer......................... 25,000 (a) 1,740,625
Electronic Data Systems................ 10,000 450,000
-------
2,190,625
-------
Oil-Integrated-1.6% British Petroleum A.D.S................. 15,000 1,929,375
-------
Paper & Forest Products-.7% International Paper..................... 20,000 855,000
-------
Personal Care-8.8% Estee Lauder, Cl. A..................... 20,000 860,000
Gillette................................ 40,000 2,990,000
International Flavor & Fragrances...... 20,000 827,500
L'Oreal A.D.R.......................... 38,000 2,567,375
Procter & Gamble....................... 30,000 2,970,000
Unilever N.V. A.D.R.................... 1,500 229,312
-------
10,444,187
-------
------- ------
Retail-2.0% Walgreen............................... 35,000 $ 1,321,250
Wal-Mart Stores........................ 40,000 1,065,000
-------
2,386,250
-------
Utilities-1.8% Veba.................................. 40,000 2,128,327
-------
TOTAL COMMON STOCKS
(cost $92,144,432)................... $114,141,694
=======
Preferred Stocks-.7%
Media/Entertainment News A.D.S., Cum., $.4428
(cost $843,628)...................... 45,000 $ 798,750
=======
Principal
Corporate Bonds-.0% Amount
-------
Zuerich International,
2%, 3/1/2001
(cost $3,384)........................ $ 5,000 $ 3,971
=======
Short-Term Investments-3.9%
U.S. Treasury Bills: 5.15%, 11/14/1996...................... $ 25,000 $ 24,956
5.11%, 11/21/1996...................... 10,000 9,973
5.07%, 11/29/1996...................... 446,000 444,319
5.19%, 12/5/1996....................... 485,000 482,711
5.06%, 12/12/1996...................... 790,000 785,497
4.885%, 1/9/1997....................... 521,000 516,035
5.36%, 1/16/1997....................... 1,409,000 1,394,121
5.30%, 1/23/1997....................... 971,000 959,804
-------
TOTAL SHORT-TERM INVESTMENTS
(cost $4,617,608).................... $ 4,617,416
=======
TOTAL INVESTMENTS (cost $97,609,052)........................................ 101.2% $119,561,831
====== =======
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (1.2%) $ (1,388,189)
====== =======
NET ASSETS.................................................................. 100.0% $118,173,642
====== =======
Notes to Statement of Investments:
(a) Non-income producing.
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1996
Cost Value
------- ------
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $ 97,609,052 $119,561,831
Cash....................................... 572,530
Receivable from subscriptions to Common Stock 728,408
Dividends and interest receivable.......... 123,703
Prepaid expenses and other assets.......... 62,933
-------
121,049,405
-------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 54,532
Due to Distributor......................... 70,994
Payable for investment securities purchased 2,155,315
Payable for shares of Common Stock redeemed 520,168
Accrued expenses and other liabilities..... 74,754
-------
2,875,763
-------
NET ASSETS.................................................................. $118,173,642
=======
REPRESENTED BY: Paid-in capital............................ $ 95,837,510
Accumulated undistributed investment income-net 323,995
Accumulated net realized gain (loss) on investments 58,828
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 21,953,309
-------
NET ASSETS.................................................................. $118,173,642
</TABLE>
<TABLE>
<CAPTION>
=======
NET ASSET VALUE PER SHARE
----------------
Class A Class B Class C Class R
------- ------ ------- -------
<S> <C> <C> <C> <C>
Net Assets................................. $42,098,457 $74,833,341 $1,086,469 $155,375
Shares Outstanding......................... 2,116,721 3,822,809 55,696 7,871
NET ASSET VALUE PER SHARE.................. $19.89 $19.58 $19.51 $19.74
==== ==== ==== ====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
PREMIER GROWTH FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1996
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME: Cash dividends (net of $104,197 foreign taxes withheld
at source)............................. $ 1,713,906
Interest................................... 192,856
------
Total Income......................... $ 1,906,762
EXPENSES: Investment advisory-Note 2(a).............. $ 640,511
Distribution fees-Note 2(b)................ 408,385
Shareholder servicing costs-Note 2(c)...... 335,510
Registration fees.......................... 66,217
Professional fees.......................... 45,619
Prospectus and shareholders' reports....... 20,965
Directors' fees and expenses-Note 2(d)..... 18,012
Custodian fees............................. 17,373
Miscellaneous.............................. 25,438
------
Total Expenses....................... 1,578,030
Less-reduction in investment advisory fee due to
undertaking-Note 2(a).................. (102,124)
------
Net Expenses......................... 1,475,906
------
INVESTMENT INCOME-NET....................................................... 430,856
------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 3:
Net realized gain (loss) on investments.... $ 149,286
Net unrealized appreciation (depreciation) on investments 15,559,521
------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 15,708,807
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $16,139,663
======
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1996 October 31, 1995
--------- ---------
<S> <C> <C>
OPERATIONS:
Investment income-net.................................................... $ 430,856 $ 363,224
Net realized gain (loss) on investments.................................. 149,286 (64,990)
Net unrealized appreciation (depreciation) on investments................ 15,559,521 5,456,383
------- -------
Net Increase (Decrease) in Net Assets Resulting from Operations...... 16,139,663 5,754,617
------- -------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares......................................................... (186,456) (126,276)
Class B shares......................................................... (189,905) (107,367)
Class C shares......................................................... (837) _-
Class R shares......................................................... _- _-
Net realized gain on investments:
Class A shares......................................................... (9,137) _-
Class B shares......................................................... (16,193) _-
Class C shares......................................................... (162) _-
Class R shares......................................................... (12) _-
------- -------
Total Dividends...................................................... (402,702) (233,643)
------- -------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares......................................................... 23,283,402 10,672,133
Class B shares......................................................... 43,175,407 23,316,171
Class C shares......................................................... 1,090,692 47,427
Class R shares......................................................... 164,554 _-
Dividends reinvested:
Class A shares......................................................... 176,387 118,079
Class B shares......................................................... 169,618 92,549
Class C shares......................................................... 495 _-
Class R shares......................................................... 12 _-
Cost of shares redeemed:
Class A shares......................................................... (5,991,442) (2,206,613)
Class B shares......................................................... (10,896,083) (5,078,376)
Class C shares......................................................... (145,253) _-
Class R shares......................................................... (16,060) _-
------- -------
Increase (Decrease) in Net Assets from Capital Stock Transactions.... 51,011,729 26,961,370
------- -------
Total Increase (Decrease) in Net Assets............................ 66,748,690 32,482,344
NET ASSETS:
Beginning of Period...................................................... 51,424,952 18,942,608
------- -------
End of Period............................................................ $118,173,642 $ 51,424,952
======= =======
UNDISTRIBUTED INVESTMENT INCOME-NET........................................ $ 323,995 $ 270,337
------- -------
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
SHARES
--------------------------------------
Year Ended Year Ended
October 31, 1996 October 31, 1995
--------- ---------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Class A
----
Shares sold............................................................ 1,286,569 709,874
Shares issued for dividends reinvested................................. 10,197 8,918
Shares redeemed........................................................ (327,228) (147,256)
----- -----
Net Increase (Decrease) in Shares Outstanding 969,538 571,536
===== =====
Class B
----
Shares sold............................................................ 2,405,562 1,554,836
Shares issued for dividends reinvested................................. 9,872 7,027
Shares redeemed........................................................ (599,714) (337,253)
----- -----
Net Increase (Decrease) in Shares Outstanding 1,815,720 1,224,610
===== =====
Class C (1)
----
Shares sold............................................................ 60,822 2,940
Shares issued for dividends reinvested................................. 28 _-
Shares redeemed........................................................ (8,094) _-
----- -----
Net Increase (Decrease) in Shares Outstanding 52,756 2,940
===== =====
Class R (2)
----
Shares sold............................................................ 8,710 _-
Shares issued for dividends reinvested................................. 1 _-
Shares redeemed........................................................ (840) _-
----- -----
Net Increase (Decrease) in Shares Outstanding 7,871 _-
===== =====
(1) From June 21, 1995 (commencement of initial offering) to October 31, 1995.
(2) From March 4, 1996 (commencement of initial offering) to October 31, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------
Year Ended October 31,
------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA: 1996 1995 1994 1993(1)
--- --- --- ---
Net asset value, beginning of period..................... $16.41 $14.03 $13.21 $12.50
--- --- --- ---
Investment Operations:
Investment income (loss)-net............................. .13 .20 .16 (.01)
Net realized and unrealized gain (loss)
on investments......................................... 3.50 2.39 .66 .72
--- --- --- ---
Total from Investment Operations......................... 3.63 2.59 .82 .71
--- --- --- ---
Distributions:
Dividends from investment income-net..................... (.14) (.21) .- .-
Dividends from net realized gain on investments.......... (.01) .- .- .-
--- --- --- ---
Total Distributions...................................... (.15) (.21) .- .-
--- --- --- ---
Net asset value, end of period........................... $19.89 $16.41 $14.03 $13.21
=== === === ===
TOTAL INVESTMENT RETURN(2)................................... 22.24% 18.77% 6.21% 5.68% (3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................. 1.25% 1.22% 1.33% .77% (3)
Ratio of net investment income
to average net assets.................................. .98% 1.59% 1.49% (.12%) (3)
Decrease reflected in above expense ratios
due to undertakings by the Manager..................... .12% .53% .75% .88% (3)
Portfolio Turnover Rate.................................. 1.24% 1.16% .71% .-
Average commission rate paid(4).......................... $.0814 .- .- .-
Net Assets, end of period (000's Omitted)................ $42,098 $18,822 $8,075 $3,338
(1) From July 15, 1993 (commencement of operations) to October 31, 1993.
(2) Exclusive of sales load.
(3) Not annualized.
(4) For fiscal years beginning November 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and sales of
investment securities.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class B Shares
------------------------------------------------
Year Ended October 31,
------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA: 1996 1995 1994 1993(1)
--- --- --- ---
Net asset value, beginning of period..................... $16.22 $13.89 $13.17 $12.50
--- --- --- ---
Investment Operations:
Investment income (loss)-net............................. .04 .12 .09 (.03)
Net realized and unrealized gain (loss)
on investments......................................... 3.42 2.34 .63 .70
--- --- --- ---
Total from Investment Operations......................... 3.46 2.46 .72 .67
--- --- --- ---
Distributions:
Dividends from investment income-net..................... (.09) (.13) .- .-
Dividends from net realized gain on investments.......... (.01) .- .- .-
--- --- --- ---
Total Distributions...................................... (.10) (.13) .- .-
--- --- --- ---
Net asset value, end of period........................... $19.58 $16.22 $13.89 $13.17
=== === === ===
TOTAL INVESTMENT RETURN(2)................................... 21.29% 17.88% 5.47% 5.36% (3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................. 2.00% 1.98% 2.07% 1.14% (3)
Ratio of net investment income
to average net assets................................. .24% .84% .71% (.53%) (3)
Decrease reflected in above expense ratios
due to undertakings by the Manager..................... .12% .46% .75% 1.01% (3)
Portfolio Turnover Rate.................................. 1.24% 1.16% .71% .-
Average commission rate paid (4)......................... $.0814 .- .- .-
Net Assets, end of period (000's Omitted)................ $74,833 $32,555 $10,867 $2,554
(1) From July 15, 1993 (commencement of operations) to October 31, 1993.
(2) Exclusive of sales load.
(3) Not annualized.
(4) For fiscal years beginning November 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and sales of
investment securities.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PREMIER GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class C Shares Class R Shares
---------------------- ---------------------
Year Ended October 31, Year Ended
----------------------
<S> <C> <C> <C>
PER SHARE DATA: 1996 1995(1) October 31, 1996(2)
--- --- ----------
Net asset value, beginning of period.................... $16.22 $15.56 $18.03
--- --- ---
Investment Operations:
Investment income (loss)-net............................ .14 (.01) .03
Net realized and unrealized gain (loss)
on investments........................................ 3.29 .67 1.69
--- --- ---
Total from Investment Operations........................ 3.43 .66 1.72
--- --- ---
Distributions:
Dividends from investment income-net.................... (.13) .- .-
Dividends from net realized gain on investments......... (.01) .- (.01)
--- --- ---
Total Distributions..................................... (.14) .- (.01)
--- --- ---
Net asset value, end of period.......................... $19.51 $16.22 $19.74
=== === ===
TOTAL INVESTMENT RETURN(3).................................. 21.23% 4.71% (4) 9.51% (4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. 2.04% 1.56% (4) .75% (4)
Ratio of net investment income
to average net assets................................. .19% (.63%) (4) .48% (4)
Decrease reflected in above expense ratios
due to undertakings by the Manager.................... .11% .73% (4) .07% (4)
Portfolio Turnover Rate................................. 1.24% 1.16% 1.24%
Average commission rate paid (5)........................ $.0814 - $.0814
Net Assets, end of period (000's Omitted)............... $1,086 $48 $ 155
(1) From June 21, 1995 (commencement of initial offering) to October 31, 1995.
(2) From March 4, 1996 (commencement of initial offering) to October 31, 1996.
(3) Exclusive of sales load.
(4) Not annualized.
(5) For fiscal years beginning November 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and sales of
investment securities.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Growth Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 ("Act") as a diversified open-end management investment
company. The Fund's investment objective is to provide investors with
long-term capital growth consistent with the preservation of capital. The
Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser.
Fayez Sarofim & Co. ("Sarofim") serves as the Fund's sub-investment adviser.
Dreyfus is a direct subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue 100 million
shares of $.001 par value Common Stock in each of the following classes of
shares: Class A, Class B, Class C and Class R. Class A shares are subject to a
sales charge imposed at the time of purchase, Class B shares are subject to a
contingent deferred sales charge imposed at the time of redemption on
redemptions made within six years of purchase, Class C shares are subject to a
contingent deferred sales charge imposed at the time of redemption on
redemptions made within one year of purchase and Class R shares are sold at net
asset value per share only to institutional investors. Other differences between
the four Classes include the services offered to and the expenses borne by each
Class and certain voting rights.
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. 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.
PREMIER GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACT
IONS WITH AFFILIATES:
(a) Pursuant to an Investment Advisory Agreement with Dreyfus, the
investment advisory fee is computed at the annual rate of .75 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Investment
Advisory Agreement further provides that if in any full fiscal year the
aggregate expenses of the Fund, excluding interest, taxes, brokerage and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from payments to be made to
Dreyfus, or Dreyfus will bear the amount of such excess 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 12b-1 Distribution Plan fees 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.
However, Dreyfus has undertaken from November 1, 1995 through October 31,
1997, to reduce the management fee paid by, or reimburse such excess expenses of
the Fund, to the extent that the Fund's aggregate annual expenses (excluding
12b-1 Distribution Plan fees and certain expenses as described above) exceed an
annual rate of 1.25% of the value of the Fund's average daily net assets. The
reduction in investment advisory fee, pursuant to the undertaking, amounted to
$102,124 for the period ended October 31, 1996.
The undertaking may be extended, modified or terminated by Dreyfus, provided
that the resulting expense reimbursement would not be less than the amount
required pursuant to the Agreement.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Sarofim,
Dreyfus has agreed to pay Sarofim a monthly sub-investment advisory fee,
computed at the following annual rates:
Annual Fee as a Percentage of
Total Net Assets Average Daily Net Assets
--------- --------------
0 to $25 million..................... .11 of 1%
$25 million up to $75 million......... .18 of 1%
$75 million up to $200 million........ .22 of 1%
$200 million up to $300 million....... .26 of 1%
In excess of $300 million........ .275 of 1%
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus, retained
$11,243 during the period ended October 31, 1996 from commissions earned on
sales of the Fund's shares.
(b) Under a Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, the Fund pays the Distributor for distributing the Fund's Class B
and Class C shares at an annual rate of .75 of 1% of the value of the average
daily net assets of Class B and Class C shares. During the period ended October
31, 1996, $404,553 was charged to the Fund for the Class B shares and $3,832 was
charged to the Fund for the Class C shares.
(c) Under the Shareholder Services Plan, the Fund pays the Distributor, at
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A, Class B and Class C shares 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. For the period ended October 31, 1996, $77,297, $134,851 and
$1,277 were charged to Class A, B and C shares, respectively, by the Distributor
pursuant to the Shareholder Services Plan. Effective December 1, 1995, the Fund
compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under
a transfer agency agreement for providing personnel and facilities to perform
transfer agency services for the Fund. Such compensation amounted to $69,323 for
the period from December 1, 1995 through October 31, 1996. (d) Each director who
is not an "affiliated person," as defined in the Act receives from the Fund an
annual fee of $1,500 and an attendance fee of $250 per meeting. The Chairman of
the Board receives an additional 25% of such compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended October 31, 1996,
amounted to $51,760,188 and $1,010,292, respectively. At October 31, 1996,
accumulated net unrealized appreciation on investments was $21,952,779,
consisting of $22,928,477 gross unrealized appreciation and $975,698 gross
unrealized depreciation. At October 31, 1996, the cost of investments for
Federal income tax purposes was substantially the same as the cost for financial
reporting purposes (see the Statement of Investments).
PREMIER GROWTH FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Directors
Premier Growth Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Premier Growth Fund, Inc., including the statement of investments, as of October
31, 1996, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the years indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Premier Growth Fund, Inc. at October 31, 1996, 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 and Young LLP signature logo]
New York, New York
December 3, 1996
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund designates 100% of the ordinary
dividends paid during the fiscal year ended October 31, 1996 as qualifying for
the corporate dividends received deduction. Shareholders will receive
notification in January 1997 of the percentage applicable to the preparation of
their 1996 income tax returns.
PREMIER GROWTH FUND, INC.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
Fayez Sarofim & Co.
Two Houston Center,
Suite 2907
Houston, TX 77010
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. 070/628AR9610
Annual Report
Premier Growth
Fund, Inc.
October 31, 1996
[Dreyfus lion/2hres logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN REMIER GROWTH GUND, INC.
CLASS A SHARES AND CLASS B SHARES AND THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX
EXHIBIT A:
PREMIER PREMIER STANDARD
GROWTH GROWTH & POOR'S
FUND FUND 500 COMPOSITE
PERIOD (CLASS A (CLASS B STOCK PRICE
SHARES) SHARES) INDEX*
7/15/93 9,549 10,000 10,000
10/31/93 10,092 10,536 10,470
10/31/94 10,718 11,112 10,874
10/31/95 12,730 13,099 13,745
10/31/96 15,561 15,587 17,055
* Source: Lipper Analytical Services, Inc.
