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PROSPECTUS MARCH 1, 1997
AS REVISED JUNE 2, 1997
DREYFUS PREMIER WORLDWIDE GROWTH FUND, INC.
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Dreyfus Premier Worldwide Growth Fund, Inc. (the "Fund") is an
open-end, diversified, management investment company, known as a mutual fund.
The Fund's primary investment objective is to provide you with long-term
capital growth consistent with the preservation of capital. Current income is
a secondary objective. The Fund invests principally in equity securities
issued by foreign and domestic issuers located throughout the world.
By this Prospectus, the Fund is offering four Classes of shares _
Class A, Class B, Class C and Class R _ which are described herein. See
"Alternative Purchase Methods."
You can purchase or redeem all Classes of shares by telephone using
the TeleTransfer Privilege.
The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
adviser. Dreyfus has engaged Fayez Sarofim &Co. ("Sarofim") to serve as the
Fund's sub-investment adviser and provide day-to-day management of the Fund's
investments. Dreyfus and Sarofim are referred to collectively as the
"Advisers."
This Prospectus sets forth concisely information about the Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated March 1, 1997, which
may be revised from time to time, provides a further discussion of certain
areas in this Prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The Securities and Exchange Commission
maintains a Web site (http://www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. For a free copy of the Statement of
Additional Information, write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-554-4611. When telephoning, ask
for Operator 144.
Mutual fund shares are not deposits or obligations of, or guaranteed
or endorsed by, any bank, and are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency. Mutual fund shares involve certain investment risks, including the
possible loss of principal.
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These securities have not been approved or disapproved by the securities and
exchange commission or any state securities commission nor has the securities
and exchange commission or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary
is a criminal offense.
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Table of Contents
Fee Table....................................................... 3
Condensed Financial Information................................. 4
Alternative Purchase Methods.................................... 4
Description of the Fund......................................... 5
Management of the Fund.......................................... 7
How to Buy Shares............................................... 8
Shareholder Services............................................ 11
How to Redeem Shares............................................ 14
Distribution Plan and Shareholder Services Plan................. 17
Dividends, Distributions and Taxes.............................. 17
Performance Information......................................... 19
General Information............................................. 19
Appendix........................................................ 20
Page 2
<TABLE>
<CAPTION>
Fee Table
CLASS A CLASS B CLASS C CLASS R
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................... 5.75% None None None
Maximum Deferred Sales Charge Imposed
on Redemptions (as a percentage
of the amount subject to charge) None* 4.00% 1.00% None
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
Management Fees (after fee waiver)................ .63% .63% .63% .63%
12b-1 Fees........................................ None .75% .75% None
Other Expenses (after fee waiver)................. .62% .62% .62% .37%
Total Fund Operating Expenses (after fee waiver).. 1.25% 2.00% 2.00% 1.00%
Example
You would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) except where noted, redemption
at the end of each time period: CLASS A CLASS B CLASS C CLASS R
1 Year................................... $70 $60/$20** $30/$20** $10
3 Years.................................. $95 $93/$63** $63 $32
5 Years.................................. $122 $128/$108** $108 $55
10 Years................................... $200 $196*** $233 $122
</TABLE>
* A contingent deferred sales charge of 1.00% may be assessed on certain
redemptions of Class A shares purchased without an initial sales charge
as part of an investment of $1 million or more.
** Assuming no redemption of shares.
*** Ten year figure assumes conversion of Class B shares to Class A shares
at the end of the sixth year following the date of purchase.
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The amounts listed in the example should not be considered as representative
of past or future expenses and actual expenses may be greater or less than
those indicated. Moreover, while the example assumes a 5% annual return, the
Fund's actual performance will vary and may result in an actual return
greater or less than 5%.
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The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. The expenses noted
above have been restated to reflect an undertaking by The Dreyfus Corporation
that if, in the fiscal year ending October 31, 1997, Fund expenses, including
the management fee, but exclusive of the 12b-1 fee, exceed 1.25% of the value
of the Fund's average net assets for the fiscal year, The Dreyfus Corporation
may waive its management fee or bear certain expenses of the Fund to the
extent of such excess expenses. The expenses noted above, without
reimbursement, would have been: Management Fees _ .75% for each class; Other
Expenses _ .65% with respect to Class C, and Total Fund Operating Expenses
_ 1.37% with respect to Class A, 2.12% with respect to Class B, 2.15% with
respect to Class C, and 1.12% with respect to Class R. Long-term investors in
Class B or Class C shares could pay more in 12b-1 fees than the economic
equivalent of paying a front-end sales charge. Certain Service Agents (as
defined below) may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the foregoing
table. See "Management of the Fund," "How to Buy Shares," "How to Redeem
Shares" and "Distribution Plan and Shareholder Services Plan."
Page 3
Condensed Financial Information
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
Financial Highlights
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS R SHARES
______________________________ __________________________ ________________
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
_____________________________ _____________________________ ________________ ______________
PER SHARE DATA 1993(1) 1994 1995 1996 1993(1) 1994 1995 1996 1995(2) 1996 1996(3)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $12.50 $13.21 $14.03 $16.41 $12.50 $13.17 $13.89 $16.22 $15.56 $16.22 $18.03
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income (loss)_net (.01) .16 .20 .13 (.03) .09 .12 .04 (.01) .14 .03
Net realized and unrealized
gain on investments....... .72 .66 2.39 3.50 .70 .63 2.34 3.42 .67 3.29 1.69
_______ ______ ______ ______ ______ ______ ______ ______ _____ ______ ___---
TOTAL FROM INVESTMENT OPERATIONS .71 .82 2.59 3.63 .67 .72 2.46 3.46 .66 3.43 1.72
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
DISTRIBUTIONS:
Dividends from investment
income-net _ _ (.21) (.14) _ _ (.13) (.09) _ (.13) _
Dividends from net realized gain
on investments............ _ _ _ (.01) _ _ _ (.01) _ (.01) (.01)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total Distributions....... _ _ (.21) (.15) _ _ (.13) (.10) _ (.14) (.01)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Net asset value, end of year $13.21 $14.03 $16.41 $19.89 $13.17 $13.89 $16.22 $19.58 $16.22 $19.51 $19.74
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(4).. 5.68%(5) 6.21% 18.77% 22.24% 5.36%(5) 5.47% 17.88% 21.29% 4.71%(5) 21.23% 9.51%(5)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets........ .77%(5) 1.33% 1.22% 1.25% 1.14%(5) 2.07% 1.98% 2.00% 1.56%(5) 2.04% .75%(5)
Ratio of net investment income
(loss) to average net assets (.12%)(5) 1.49% 1.59% .98% (.53%)(5) .71% .84% .24% (.63%)(5) .19% .48%(5)
Decrease reflected in above
expense ratios due to
undertakings by Dreyfus... .88%(5) .75% .53% .12% 1.01%(5) .75% .46% .12% .73%(5) .11% .07%(5)
Portfolio Turnover Rate... _ .71% 1.16% 1.24% _ .71% 1.16% 1.24% 1.16% 1.24% 1.24%
Average commission rate paid(6) _ _ _ $.0814 _ _ _ $.0814 _ $.0814 $.0814
Net Assets, end of year
(000's omitted) $3,338 $8,075 $18,822 $42,098 $2,554 $10,867 $32,555 $74,833 $48 $1,086 $155
</TABLE>
(1) From July 15, 1993 (commencement of operations) to October 31, 1993.
(2) From June 21, 1995 (commencement of initial offering) to October 31,1995.
(3) From March 4, 1996 (commencement of initial offering) to October 31, 1996.
(4) Exclusive of sales load.
(5) Not annualized.
(6) 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.
Further information about the Fund's performance is contained in
its annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this Prospectus.
Alternative Purchase Methods
The Fund offers you four methods of purchasing Fund shares. Orders
for purchases of Class R shares, however, may be placed only for certain
eligible investors as described below. If you are not eligible to purchase
Class R shares, you may choose from Class A, Class B and Class C the Class of
shares that best suits your needs, given the amount of your purchase, the
length of time you expect to hold your shares and any other relevant
circumstances. Each share represents an identical pro rata interest in the
Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a maximum
initial sales charge of 5.75% of the public offering price imposed at the
time of purchase. For shareholders beneficially owning Class A shares on
November 30, 1996, Class A shares are sold at net asset value per share plus
a maximum initial sales charge of 4.50% of the public offering price imposed
at the time of purchase. The initial sales charge may be reduced or waived
for certain purchases. See "How to Buy Shares_Class A Shares." These shares
are subject to an annual service fee at the rate of .25 of 1% of the value of
the average daily net assets of Class A. See "Distribution Plan and
Shareholder Services Plan_Shareholder Services Plan."
Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 4% contingent deferred sales charge ("CDSC"), which is
assessed if you redeem Class B shares within six years of purchase. See "How
to Buy Shares_Class B Shares" and "How to Redeem Shares_Contingent Deferred
Sales Charge_Class B Shares." These shares also are subject to an annual
service fee at the rate of .25 of 1% of the value of the average daily
Page 4
net assets of Class B. In addition, Class B shares are subject to an annual
distribution fee at the rate of .75 of 1% of the value of the average daily
net assets of Class B. See "Distribution Plan and Shareholder Services Plan."
The distribution fee paid by Class B will cause such Class to have a higher
expense ratio and to pay lower dividends than Class A. Approximately six
years after the date of purchase, Class B shares automatically will convert
to Class A shares, based on the relative net asset values for shares of each
such Class, and will no longer be subject to the distribution fee. Class B
shares that have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together with other Class
B shares, in the proportion that a shareholder's Class B shares converting to
Class A shares bears to the total Class B shares not acquired through the
reinvestment of dividends and distributions.
Class C shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class C shares are
subject to a 1% CDSC, which is assessed only if you redeem Class C shares
within one year of purchase. See "How to Buy Shares _ Class C Shares" and
"How to Redeem Shares _ Contingent Deferred Sales Charge _ Class C Shares."
These shares also are subject to an annual service fee at the rate of .25 of
1%, and an annual distribution fee at the rate of .75 of 1%, of the value of
the average daily net assets of Class C. See "Distribution Plan and
Shareholder Services Plan." The distribution fee paid by Class C will cause
such Class to have a higher expense ratio and to pay lower dividends than
Class A.
Class R shares may not be purchased directly by individuals,
although eligible institutions may purchase Class R shares for certain
accounts maintained by individuals. Class R shares are sold at net asset
value per share only to institutional investors acting for themselves or in a
fiduciary, advisory, agency, custodial or similar capacity for qualified or
non-qualified employee benefit plans, including pension, profit-sharing,
SEP-IRAs and other deferred compensation plans, whether established by corpora
tions, partnerships, non-profit entities or state and local governments, but
not including IRAs or IRA "Rollover Accounts." Class R shares are not subject
to an annual service fee or distribution fee.
The decision as to which Class of shares is more beneficial to you
depends on the amount and the intended length of your investment. If you are
not eligible to purchase Class R shares, you should consider whether, during
the anticipated life of your investment in the Fund, the accumulated
distribution fee and CDSC, if any, on Class B or Class C shares would be
less than the initial sales charge on Class A shares purchased at the same
time, and to what extent, if any, such differential would be offset by the
return of Class A. Additionally, investors qualifying for reduced initial
sales charges who expect to maintain their investment for an extended period
of time might consider purchasing Class A shares because the accumulated
continuing distribution fees on Class B or Class C shares may exceed the
initial sales charge on Class A shares during the life of the investment.
Finally, you should consider the effect of the CDSC period and any conversion
rights of the Classes in the context of your own investment time frame. For
example, while Class C shares have a shorter CDSC period than Class B shares,
Class C shares do not have a conversion feature and, therefore, are subject
to an ongoing distribution fee. Thus, Class A and Class B shares may be more a
ttractive than Class C shares to investors with longer term investment
outlooks. Generally, Class A shares may be more appropriate for investors who
invest $100,000 or more in Fund shares.
Description of the Fund
Investment Objectives
The Fund's primary investment objective is to provide you with
long-term capital growth consistent with the preservation of capital. Current
income is a secondary objective. The Fund's investment objectives cannot be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of the Fund's
outstanding voting shares. There can be no assurance that the Fund's
investment objectives will be achieved.
Management Policies
The Fund invests principally in equity securities issued by foreign
and domestic issuers located throughout the world. Equity securities include
common stock, convertible securities and preferred stocks. The Fund may
invest in debt securities that management believes offer opportunities for
capital growth. At any one time, the Fund may invest substantial portions of
its assets in issuers in one or more countries, although the Fund ordinarily
will seek to invest its assets in the securities of issuers located in at
least three countries. Under normal circumstances, the Fund will invest at
least 25% of its net assets in the securities of non-U.S. issuers and at
least 25% of its net assets in the securities of U.S. issuers. The Fund may
invest up to 25% of its total assets in the securities of issuers having
their principal business activities in the same industry, regardless of
country.
There are no limitations on the type, size, operating history or
dividend paying record of companies or industries in which the Fund may
invest, the principal criteria for investment being that the securities
provide opportunities for capital growth. The Fund's policy is to purchase
marketable securities which are not restricted as to public sale, subject to
the limited exception set forth under "Appendix _ Certain Portfolio
Securities_Illiquid Securities."
The debt securities in which the Fund may invest must be rated at
least Caa by Moody's Investors Service, Inc. ("Moody's") or at least CCC by
Standard & Poor's Ratings Group ("S&P"), Fitch Investors Service, L.P.
("Fitch")
Page 5
or Duff & Phelps Credit Rating Co. ("Duff") or, if unrated, deemed
to be of comparable quality by the Advisers. Securities rated Caa by Moody's
or CCC by S&P, Fitch or Duff are of poor standing and may be in default. The
Fund intends to invest less than 35% of its net assets in debt securities
rated lower than investment grade by Moody's, S&P, Fitch and Duff or, if
unrated, deemed to be of comparable quality by the Advisers. See "Investment
Considerations and Risks_Lower Rated Securities" below for a discussion of
certain risks, and "Appendix" in the Statement of Additional Information.
While seeking desirable investments, the Fund may invest in money
market instruments consisting of U.S. Government securities, certificates of
deposit, time deposits, bankers' acceptances, short-term investment grade
corporate bonds and other short-term debt instruments, and repurchase
agreements, as set forth under "Appendix_Certain Portfolio Securities_Money
Market Instruments." Under normal market conditions, the Fund does not expect
to have a substantial portion of its assets invested in money market
instruments. However, when the Advisers determine that adverse market
conditions exist, the Fund may adopt a temporary defensive posture and invest
all of its assets in money market instruments. TheFund also may invest in
money market instruments in anticipation of investing cash positions.
The Fund invests for long-term growth rather than short-term
profits; however, a limited amount of short-term trading can be expected in
order to maintain a flexible portfolio strategy. The Fund's annual portfolio
turnover rate is not expected to exceed 100%. The Fund also may engage in
various investment techniques, such as foreign currency transactions. For a
discussion of the investment techniques and their related risks, see
"Investment Considerations and Risks" below and "Appendix_Investment
Techniques."
Investment Considerations and Risks
General _ The Fund's net asset value per share should be expected to
fluctuate. Investors should consider the Fund as a supplement to an overall
investment program and should invest only if they are willing to undertake
the risks involved. See "Investment Objectives and Management Policies" in
the Statement of Additional Information for a further discussion of certain
risks.
Equity Securities _ Equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of the Fund's portfolio
securities will result in changes in the value of its shares and thus the
Fund's total return to investors.
The securities of the smaller companies in which the Fund may invest may be
subject to more abrupt or erratic market movements than larger, more
established companies, because these securities typically are traded in lower
volume and the issuers typically are more subject to changes in earnings and
prospects.
Fixed-Income Securities _ Even though interest-bearing securities are
investments which promise a stable stream of income, the prices of such
securities generally are inversely affected by changes in interest rates and,
therefore, are subject to the risk of market price fluctuations. The values
of fixed-income securities also may be affected by changes in the credit
rating or financial condition of the issuer. Certain securities purchased by
the Fund, such as those rated Baa or lower by Moody's and BBB or lower by
S&P, Fitch and Duff, may be subject to such risk with respect to the issuing
entity and to greater market fluctuations than certain lower yielding, higher
rated fixed-income securities. Once the rating of a portfolio security has
been changed, the Fund will consider all circumstances deemed relevant in
determining whether to continue to hold the security. See "Lower Rated
Securities" and "Appendix_Certain Portfolio Securities_Ratings" below and
"Appendix" in the Statement of Additional Information.
Foreign Securities _ Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
Because evidences of ownership of such securities usually are held
outside the United States, the Fund will be subject to additional risks which
include possible adverse political and economic developments, seizure or
nationalization of foreign deposits and adoption of governmental restrictions
which might adversely affect or restrict the payment of principal, interest
and dividends on the foreign securities to investors located outside the
country of the issuers, whether from currency blockage or otherwise.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations.
Foreign Currency Transactions _ Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central
banks, or the failure to intervene, or by currency controls or political
developments in the United States or abroad. See "Appendix _ Investment
Techniques _ Foreign Currency Transactions."
Page 6
Lower Rated Securities _ The Fund may invest up to 35% of its net assets in
higher yielding (and, therefore, higher risk) debt securities such as those
rated Ba by Moody's or BB by S&P, Fitch or Duff or as low as Caa by Moody's
or CCC by S&P, Fitch or Duff (commonly known as junk bonds). They may be
subject to certain risks with respect to the issuing entity and to greater
market fluctuations than certain lower yielding, higher rated fixed-income
securities. The retail secondary market for these securities may be less
liquid than that of higher rated securities; adverse conditions could make it
difficult at times for the Fund to sell certain securities or could result in
lower prices than those used in calculating the Fund's net asset value. See
"Appendix _ Certain Portfolio Securities _ Ratings."
Simultaneous Investments _ Investment decisions for the Fund are made
independently from those of other investment companies or accounts advised by
Dreyfus or Sarofim. If, however, such other investment companies or accounts
desire to invest in, or dispose of, the same securities as the Fund,
available investments or opportunities for sales will be allocated equitably
to each of them. In some cases, this procedure may adversely affect the size
of the position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
Management of the Fund
Advisers _ Dreyfus, located at 200 Park Avenue, New York, New York 10166,
was formed in 1947 and serves as the Fund's investment adviser. Dreyfus is a
wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Bank Corporation ("Mellon"). As of April 30, 1997,
Dreyfus managed or administered approximately $83 billion in assets for
approximately 1.7 million investor accounts nationwide.
Dreyfus supervises and assists in the overall management of the
Fund's affairs under a Management Agreement with the Fund, subject to the
authority of the Fund's Board in accordance with Maryland law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCOCredit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including Dreyfus, Mellon managed more than $259 billion in
assets as of March 31, 1997, including approximately $88 billion in
proprietary mutual fund assets. As of March 31, 1997, Mellon, through various
subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $1.061 trillion in assets, including
approximately $58 billion in mutual fund assets.
Dreyfus has engaged Sarofim, located at Two Houston Center, Suite
2907, Houston, Texas 77010, to serve as the Fund's sub-investment adviser.
Sarofim, a registered investment adviser was formed in 1958. As of March 31,
1997, Sarofim managed approximately $33.4 billion in assets for three other
registered investment companies and provided investment advisory services to
discretionary accounts having aggregate assets of approximately $5 billion.
Sarofim, subject to the supervision and approval of Dreyfus,
provides investment advisory assistance and the day-to-day management of the
Fund's investments, as well as investment research and statistical
information, under a Sub-Investment Advisory Agreement with Dreyfus, subject
to the overall authority of the Fund's Board in accordance with Maryland law.
The Fund's primary portfolio manager is Fayez Sarofim. He has held
that position since the Fund's inception. Mr. Sarofim founded Fayez Sarofim &
Co. in 1958. The Fund's other portfolio managers are identified in the
Statement of Additional Information. Dreyfus and Sarofim also provide
research services for the Fund and for other funds advised by Dreyfus or
Sarofim, respectively, through a professional staff of portfolio managers and
securities analysts.
Under the Management Agreement, the Fund has agreed to pay Dreyfus
a monthly fee at the annual rate of .75 of 1% of the value of the Fund's
average daily net assets. For the fiscal year ended October 31, 1996, the
Fund paid Dreyfus a monthly management fee at the effective annual rate of
.63 of 1% of the value of the Fund's average daily net assets pursuant to an
undertaking in effect.
Under the Sub-Investment Advisory Agreement, Dreyfus has agreed to
pay Sarofim an annual fee, payable monthly, as set forth below:
<TABLE>
<CAPTION>
Annual Fee as a Percentage of
Fund's Average Daily
Total Assets Net Assets
______________ ________________________________
<S> <C>
0 to $25 million...................................... .11 of 1%
$25 million to $75 million............................ .18 of 1%
$75 million to $200 million........................... .22 of 1%
$200 million to $300 million.......................... .26 of 1%
$300 million or more.................................. .275 of 1%
</TABLE>
For the fiscal year ended October 31, 1996, Dreyfus paid Sarofim a
monthly sub-advisory fee at the effective annual rate of .10 of 1% of the
value of the Fund's average daily net assets pursuant to an agreement in
effect between Dreyfus and Sarofim.
Page 7
From time to time, Dreyfus may waive receipt of its fees and/or
voluntarily assume certain expenses of the Fund, which would have the effect
of lowering the expense ratio of the Fund and increasing yield to investors.
The Fund will not pay Dreyfus at a later time for any amounts it may waive,
nor will the Fund reimburse Dreyfus for any amounts it may assume.
In allocating brokerage transactions, the Advisers seek to obtain
the best execution of orders at the most favorable net price. Subject to this
determination, the Advisers may consider, among other things, the receipt of
research services and/or the sale of shares of the Fund or other funds
managed, advised or administered by Dreyfus or Sarofim as factors in the
selection of broker-dealers to execute portfolio transactions for the Fund.
See "Portfolio Transactions" in the Statement of Additional Information.
Dreyfus may pay the Fund's distributor for shareholder services
from Dreyfus' own assets, including past profits but not including the
management fee paid by the Fund. The Fund's distributor may use part or all
of such payments to pay Service Agents in respect of these services.
Distributor _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
Transfer and Dividend Disbursing Agent and Custodian _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Bank of New York, 90 Washington Street, New York, New
York 10286, is the Fund's Custodian.
How to Buy Shares
General _ Class A, Class B and Class C shares may be purchased only by
clients of certain financial institutions (which may include banks),
securities dealers ("Selected Dealers") and other industry professionals
(collectively, "Service Agents"), except that full-time or part-time
employees of Dreyfus or any of its affiliates or subsidiaries, directors of
Dreyfus, Board members of a fund advised by Dreyfus, including members of the
Fund's Board, or the spouse or minor child of any of the foregoing may
purchase Class A shares directly through the Distributor. Subsequent
purchases may be sent directly to the Transfer Agent or your Service Agent.
Class R shares are offered only to institutional investors acting
for themselves or in a fiduciary, advisory, agency, custodial or similar
capacity, for qualified or non-qualified employee benefit plans, including
pension, profit-sharing, SEP-IRAs and other deferred compensation plans,
whether established by corporations, partnerships, non-profit entities or
state and local governments ("Retirement Plans"). The term "Retirement Plans"
does not include IRAs or IRA "Rollover Accounts". Class R shares may be
purchased for a Retirement Plan only by a custodian, trustee, investment
manager or other entity authorized to act on behalf of such Plan.
Institutions effecting transactions in Class R shares for the accounts of
their clients may charge their clients direct fees in connection with such
transactions.
When purchasing Fund shares, you must specify which Class is being
purchased. Stock certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Fund reserves the right to
reject any purchase order.
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus, and to the extent permitted by
applicable regulatory authority, may charge their clients direct fees. You
should consult your Service Agent in this regard.
The minimum initial investment is $1,000. Subsequent investments
must be at least $100. However, the minimum initial investment for
Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only
one participant is $750, with no minimum for subsequent purchases.
Individuals who open an IRA also may open a non-working spousal IRA with a
minimum initial investment of $250. Subsequent investments in a spousal IRA
must be at least $250. The initial investment must be accompanied by the
Account Application. The Fund reserves the right to vary the initial and
subsequent investment minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed to certain
Retirement Plans. These limitations apply with respect to participants at the
plan level and, therefore, do not directly affect the amount that may be
invested in the Fund by a Retirement Plan. Participants and plan sponsors
should consult their tax advisers for details.
You may purchase Fund shares by check or wire, or through the TeleTr
ansfer Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds"or, if for Dreyfus retirement plan accounts, to "The
Dreyfus Trust Company, Custodian." Payments which are mailed should be sent
to Dreyfus Premier Worldwide Growth Fund, Inc., P.O. Box 6587, Providence,
Rhode Island 02940-6587. If you are opening a new account, please enclose
your Account Application indicating which Class of shares is being purchased.
For subsequent investments, your Fund account number should appear on the
check and an investment slip should be enclosed. For Dreyfus retirement plan
accounts, payments which are mailed should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Neither initial nor subsequent investments should be made by third party
check.
Page 8
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA# 8900117826/Dreyfus Premier
Worldwide Growth Fund, Inc. The wire must include your Fund account number
(for new accounts, your Taxpayer Identification Number ("TIN") should be
included instead), account registration and dealer number, if applicable, and
must indicate the Class of shares being purchased. If your initial purchase
of Fund shares is by wire, please call 1-800-554-4611 after completing your
wire payment to obtain your Fund account number. Please include your Fund
account number on the Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted until the
Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be made in
U.S. dollars and, to avoid fees and delays, should be drawn only on U.S.
banks. A charge will be imposed if any check used for investment in your
account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through compatible
computer facilities.
Fund shares also may be purchased through Dreyfus-Automatic Asset
BuilderRegistration Mark and the Government Direct Deposit Privilege
described under "Shareholder Services." These services enable you to make
regularly scheduled investments and may provide you with a convenient way to
invest for long-term financial goals. You should be aware, however, that
periodic investment plans do not guarantee a profit and will not protect an
investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number preceded by the digits "1111."
Fund shares are sold on a continuous basis. Net asset value per
share of each Class is determined as of the close of trading on the floor of
the New York Stock Exchange (currently 4:00 p.m., New York time), on each day
the New York Stock Exchange is open for business. Net asset value per share
of each Class is computed by dividing the value of the Fund's net assets
represented by such Class (i.e., the value of assets less liabilities) by the
total number of shares of such Class outstanding. The Fund's investments are
valued based on market value or, where market quotations are not readily
available, based on fair value as determined in good faith by the Fund's
Board. For further information regarding the methods employed in valuing the
Fund's investments, see "Determination of Net Asset Value" in the Statement
of Additional Information.
If an order is received in proper form by the Transfer Agent or
other agent by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time) on a business day, Fund shares
will be purchased at the public offering price determined as of the close of
trading on the floor of the New York Stock Exchange on that day. Otherwise,
Fund shares will be purchased at the public offering price determined as of
the close of trading on the floor of the New York Stock Exchange on the next
business day, except where shares are purchased through a dealer as provided
below.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the New York Stock Exchange on any business
day and transmitted to the Distributor or its designee by the close of its
business day (normally 5:15 p.m., New York time) will be based on the public
offering price per share determined as of the close of trading on the floor
of the New York Stock Exchange on that day. Otherwise, the orders will be
based on the next determined public offering price. It is the dealer's
responsibility to transmit orders so that they will be received by the
Distributor or its designee before the close of its business day. For certain
institutions that have entered into agreements with the Distributor, payment
for the purchase of Fund shares may be transmitted, and must be received by
the Transfer Agent, within three business days after the order is placed. If
such payment is not received within three business days after the order is
placed, the order may be canceled and the institution could be held liable
for resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in the Dreyfus
Family of Funds or certain other products made available by the Distributor
to such plans or programs exceeds $1,000,000 ("Eligible Benefit Plans").
Shares of funds in the Dreyfus Family of Funds then held by Eligible Benefit
Plans will be aggregated to determine the fee payable. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this require-
Page 9
ment. Failure to furnish a certified TIN to the Fund could subject you to a
$50 penalty imposed by the Internal Revenue Service (the "IRS").
Class A Shares _ The public offering price for Class A shares is the net
asset value per share of that Class plus, except for shareholders
beneficially owning Class A shares on November 30, 1996, a sales load as
shown below:
<TABLE>
<CAPTION>
Total Sales Load
____________________
As a % of As a % of Dealers' Reallowance
offering price net asset value as a % of
Amount of Transaction per share per share offering price
______________ _______________ _________________ _____________________
<S> <C> <C> <C>
Less than $50,000 5.75 6.10 5.00
$50,000 to less than $100,000 4.50 4.70 3.75
$100,000 to less than $250,000 3.50 3.60 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more -0- -0- -0-
</TABLE>
For shareholders who beneficially owned Class A shares on November
30, 1996, the public offering price for Class A shares is the net asset value
per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
Total Sales Load
____________________
As a % of As a % of Dealers' Reallowance
offering price net asset value as a % of
Amount of Transaction per share per share offering price
______________ _______________ __________________ _____________________
<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of Class A
shares purchased without an initial sales charge as part of an investment of
at least $1,000,000 and redeemed within one year of purchase. The Distributor
may pay Service Agents an amount up to 1% of the net asset value of Class A
shares purchased by their clients that are subject to a CDSC. The terms
contained in the section of the Fund's Prospectus entitled "How to Redeem
Shares _ Contingent Deferred Sales Charge" (other than the amount of the
CDSC and time periods) are applicable to the Class A shares subject to a CDSC.
Letter of Intent and Right of Accumulation apply to such purchases of Class
A shares.
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with the
Distributor pertaining to the sale of Fund shares (or which otherwise have a
brokerage related or clearing arrangement with an NASD member firm or
financial institution with respect to the sale of Fund shares) may purchase
Class A shares for themselves directly or pursuant to an employee benefit
plan or other program, or for their spouses or minor children, at net asset
value, provided that they have furnished the Distributor with such
information as it may request from time to time in order to verify
eligibility for this privilege. This privilege also applies to full-time
employees of financial institutions affiliated with NASD member firms whose
full-time employees are eligible to purchase Class A shares at net asset
value. In addition, Class A shares are offered at net asset value to
full-time or part-time employees of Dreyfus or any of its affiliates or subsid
iaries, directors of Dreyfus, Board members of a fund advised by Dreyfus,
including members of the Fund's Board, or the spouse or minor child of any of
the foregoing.
Class A shares are offered at net asset value without a sales load
to employees participating in Eligible Benefit Plans. Class A shares also may
be purchased (including by exchange) at net asset value without a sales load
for Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds
from a qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan,
provided that, at the time of such distribution, such qualified retirement
plan or Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an
Eligible Benefit Plan and all or a portion of such plan's assets were
invested in funds in the Dreyfus Premier Family of Funds or the Dreyfus
Family of Funds or certain other products made available by the Distributor
to such plans, or (b) invested all of its assets in certain funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds or certain
other products made available by the Distributor to such plans.
Class A shares may be purchased at net asset value through certain
broker-dealers and other financial institutions which have entered into an
agreement with the Distributor, which includes a requirement that such shares
be sold for the benefit of clients participating in a "wrap account" or a
similar program under which such clients pay a fee to such broker-dealer or
other financial institution.
Class A shares also may be purchased at net asset value, subject to
appropriate documentation, through a broker-dealer or other financial
institution with the proceeds from the redemption of shares of a registered
open-end management investment company not managed by Dreyfus or its
affiliates. The purchase of Class A shares of the Fund must be made within 60
days of such redemption and the shareholder must have either (i) paid an
initial sales
Page 10
charge or a CDSC or (ii) been obligated to pay at any time durin
g the holding period, but did not actually pay on redemption, a CDSC with
respect to such redeemed shares.
Class A shares also may be purchased at net asset value, subject to
appropriate documentation, by (i) qualified separate accounts maintained by
an insurance company pursuant to the laws of any State or territory of the
United States, (ii) a State, county or city or instrumentality thereof, (iii)
a charitable organization (as defined in Section 501(c)(3) of the Code)
investing $50,000 or more in Fund shares, and (iv) a charitable remainder
trust (as defined in Section 501(c)(3) of the Code).
The dealer reallowance may be changed from time to time but will
remain the same for all dealers. The Distributor, at its expense, may provide
additional promotional incentives to dealers that sell shares of funds
advised by Dreyfus which are sold with a sales load, such as Class A shares.
In some instances, those incentives may be offered only to certain dealers
who have sold or may sell significant amounts of shares.
Class B Shares _ The public offering price for Class B shares is the net
asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on certain redemptions of
Class B shares as described under "How to Redeem Shares." The Distributor
compensates certain Service Agents for selling Class B and Class C shares at
the time of purchase from the Distributor's own assets. The proceeds of the
CDSC and the distribution fee, in part, are used to defray these expenses.
Class C Shares _ The public offering price for Class C shares is the net
asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on redemptions of Class C
shares made within the first year of purchase. See "Class B Shares" above and
"How to Redeem Shares."
Class R Shares _ The public offering price for Class R shares is the net
asset value per share of that Class.
Right of Accumulation _ Class A Shares _ Reduced sales loads apply to any
purchase of Class A shares, shares of other funds in the Dreyfus Premier
Family of Funds, shares of certain other funds advised by Dreyfus which are
sold with a sales load and shares acquired by a previous exchange of such
shares (hereinafter referred to as "Eligible Funds"), by you and any related
"purchaser" as defined in the Statement of Additional Information, where the
aggregate investment, including such purchase, is $50,000 or more. If, for
example, you previously purchased and still hold Class A shares of the Fund,
or of any other Eligible Fund or combination thereof, with an aggregate
current market value of $40,000 and subsequently purchase Class A shares of
the Fund or an Eligible Fund having a current value of $20,000, the sales
load applicable to the subsequent purchase would be reduced to 4.5% of the
offering price. All present holdings of Eligible Funds may be combined to
determine the current offering price of the aggregate investment in
ascertaining the sales load applicable to each subsequent purchase. Class A
shares purchased by shareholders beneficially owning Class A shares on
November 30, 1996 are subject to a different sales load schedule, as
described above under "Class A Shares."
To qualify for reduced sales loads, at the time of purchase you or
your Service Agent must notify the Distributor if orders are made by wire, or
the Transfer Agent if orders are made by mail. The reduced sales load is
subject to confirmation of your holdings through a check of appropriate
records.
TeleTransfer Privilege _ You may purchase shares (minimum $500, maximum
$150,000 per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between the bank account designated in one of these documents and
your Fund account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
The Fund may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the TeleTransfer Privilege, you may request a T
eleTransfer purchase of shares by calling
1-800-554-4611 or, if you are calling from overseas, call
516-794-5452.
Shareholder Services
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard.
Fund Exchanges
Clients of certain Service Agents may purchase, in exchange for
shares of a Class, shares of the same Class in certain other funds managed or
administered by Dreyfus, to the extent such shares are offered for sale in
your state of residence. These funds have different investment objectives
which may be of interest to you. You also may exchange your Fund shares that
are subject to a CDSC for shares of Dreyfus Worldwide Dollar Money Market
Fund, Inc. The shares so purchased will be held in a special account created
solely for this purpose ("Exchange Account"). Exchanges of shares from an
Exchange Account only can be made into certain other funds managed or
administered by Dreyfus. No CDSC is charged when an investor exchanges into
an Exchange Account; however, the applicable CDSC will be imposed when shares
are redeemed from an Exchange Account or other applicable Fund account.
Page 11
Upon redemption, the applicable CDSC will be calculated without regard to the
time such shares were held in an Exchange Account. See "How to Redeem Shares."
Redemption proceeds for Exchange Account shares are paid by Federal wire or
check only. Exchange Account shares also are eligible for the Auto-Exchange
Privilege, Dividend Sweep and the Automatic Withdrawal Plan. To use this
service, you should consult your Service Agent or call 1-800-554-4611 to
determine if it is available and whether any conditions are imposed on its
use. With respect to Class R shares held by Retirement Plans, exchanges may
be made only between a shareholder's Retirement Plan account in one fund and
such shareholder's Retirement Plan account in another fund.
To request an exchange, your Service Agent acting on your behalf
must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-554-4611. Except in the case of
personal retirement plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which the exchange is
being made. The ability to issue exchange instructions by telephone is given
to all Fund shareholders automatically, unless you check the applicable "No"
box on the Account Application, indicating that you specifically refuse this
Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by calling
1-800-554-4611, or by oral request from any of the authorized signatories on
the account by calling 1-800-554-4611. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including over
The Dreyfus TouchRegistration Mark automated telephone system) by calling
1-800-554-4611. If you are calling from overseas, call 516-794-5452. See "How
to Redeem Shares_Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Wire Redemption Privilege,
Telephone Redemption Privilege, TeleTransfer Privilege and the
dividend/capital gain distribution option (except for Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges of Class A
shares into funds sold with a sales load. No CDSC will be imposed on Class B
or Class C shares at the time of an exchange; however, Class B or Class C
shares acquired through an exchange will be subject on redemption to the
higher CDSC applicable to the exchanged or acquired shares. The CDSC
applicable on redemption of the acquired Class B or Class C shares will be cal
culated from the date of the initial purchase of the Class B or Class C
shares exchanged, as the case may be. If you are exchanging Class A shares
into a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load, if the
shares you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions paid with respect
to the foregoing categories of shares. To qualify, at the time of the
exchange you must notify the Transfer Agent or your Service Agent must notify
the Distributor. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal administrative fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The availability of
Fund Exchanges may be modified or terminated at any time upon notice to
shareholders. See "Dividends, Distributions and Taxes."
Auto-Exchange Privilege
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of the same Class of other funds in the Dreyfus Premier
Family of Funds or certain other funds in the Dreyfus Family of Funds of
which you are a shareholder. With respect to Class R shares held by
Retirement Plans, exchanges pursuant to the Auto-Exchange Privilege may be
made only between a shareholder's Retirement Plan account in one fund and
such shareholder's Retirement Plan account in another fund. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth day of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges of Class A
shares into funds sold with a sales load. No CDSC will be imposed on Class B
or Class C shares at the time of an exchange; however, Class B or Class C
shares acquired through an exchange will be subject on redemption to the
higher CDSC applicable to the exchanged or acquired shares. The CDSC
applicable on redemption of the acquired Class B or Class C shares will be
calculated from the date of the initial purchase of the Class B or Class C
shares exchanged, as the case may be. See "Shareholder Services" in the
Statement of Additional Information. The right to exercise this Privilege may
be mod-
Page 12
ified or canceled by the Fund or the Transfer Agent. You may modify or
cancel your exercise of this Privilege at any time by mailing written
notification to Dreyfus Premier Worldwide Growth Fund, Inc., P.O. Box 6587,
Providence, Rhode Island 02940-6587. The Fund may charge a service fee for the
use of this Privilege. No such fee currently is contemplated. For more
information concerning this Privilege and the funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds eligible to participate in
this Privilege, or to obtain an Auto-Exchange Authorization Form, please call
toll free 1-800-554-4611. See "Dividends, Distributions and Taxes."
Dreyfus-Automatic Asset BuilderRegistration Mark
Dreyfus-Automatic Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. At your option, the bank account
designated by you will be debited in the specified amount, and Fund shares
will be purchased, once a month, on either the first or fifteenth day, or
twice a month, on both days. Only an account maintained at a domestic financia
l institution which is an Automated Clearing House member may be so
designated. To establish a Dreyfus-Automatic Asset Builder account, you must
file an authorization form with the Transfer Agent. You may obtain the
necessary authorization form by calling 1-800-554-4611. You may cancel your
participation in this Privilege or change the amount of purchase at any time
by mailing written notification to Dreyfus Premier Worldwide Growth Fund,
Inc., P.O. Box 6587, Providence, Rhode Island 02940-6587, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427, and the notification will be
effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
Government Direct Deposit Privilege
Government Direct Deposit Privilege enables you to purchase Fund
shares (minimum of $100 and maximum of $50,000 per transaction) by having
Federal salary, Social Security, or certain veterans', military or other
payments from the Federal government automatically deposited into your Fund
account. You may deposit as much of such payments as you elect. To enroll in
Government Direct Deposit, you must file with the Transfer Agent a completed
Direct Deposit Sign-Up Form for each type of payment that you desire to
include in the Privilege. The appropriate form may be obtained from your
Service Agent or by calling 1-800-554-4611. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any time to
terminate your participation by notifying in writing the appropriate Federal
agency. Further, the Fund may terminate your participation upon 30 days'
notice to you.
Dividend Options
Dividend Sweep enables you to invest automatically dividends or
dividends and capital gain distributions, if any, paid by the Fund in shares
of the same Class of another fund in the Dreyfus Premier Family of Funds or
the Dreyfus Family of Funds of which you are a shareholder. Shares of the
other fund will be purchased at the then-current net asset value; however, a
sales load may be charged with respect to investments in shares of a fund
sold with a sales load. If you are investing in a fund that charges a sales
load, you may qualify for share prices which do not include the sales load or
which reflect a reduced sales load. If you are investing in a fund that
charges a CDSC, the shares purchased will be subject on redemption to the
CDSC, if any, applicable to the purchased shares. See "Shareholder Services"
in the Statement of Additional Information. Dividend ACH permits you to
transfer electronically dividends or dividends and capital gain
distributions, if any, from the Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may charge a fee for this
service.
For more information concerning these privileges, or to request a
Dividend Options Form, please call toll free 1-800-554-4611. You may cancel
these privileges by mailing written notification to Dreyfus Premier Worldwide
Growth Fund, Inc., P.O. Box 6587, Providence, Rhode Island 02940-6587. To
select a new fund after cancellation, you must submit a new Dividend Options
Form. Enrollment in or cancellation of these privileges is effective three
business days following receipt. These privileges are available only for
existing accounts and may not be used to open new accounts. Minimum
subsequent investments do not apply for Dividend Sweep. The Fund may modify
or terminate these privileges at any time or charge a service fee. No such
fee currently is contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for Dividend Sweep.
Automatic Withdrawal Plan
The Automatic Withdrawal Plan permits you to request withdrawal of
a specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account. Particular Retirement Plans,
including Dreyfus sponsored retirement plans, may permit certain participants
to establish an automatic withdrawal plan from such Retirement Plans.
Participants should consult their Retirement Plan sponsor and tax adviser for
details. Such a withdrawal plan is different than the Automatic Withdrawal
Plan. An application for the Automatic Withdrawal Plan can be obtained by
calling 1-800-554-4611. The Automatic Withdrawal Plan may be ended at any
time by you, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Page 13
No CDSC with respect to Class B shares will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the
amounts withdrawn under the plan do not exceed on an annual basis 12% of the
account value at the time the shareholder elects to participate in the
Automatic Withdrawal Plan. Withdrawals with respect to Class B shares under
the Automatic Withdrawal Plan that exceed on an annual basis 12% of the value
of the shareholder's account will be subject to a CDSC on the amounts exceeding
12% of the initial account value. Withdrawals with respect to Class A
shares subject to a CDSC and Class C shares under the Automatic Withdrawal
Plan will be subject to any applicable CDSC. Purchases of additional Class A
shares where the sales load is imposed concurrently with withdrawals of Class
A shares generally are undesirable.
Retirement Plans
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-554-4611; or for
SEP-IRAs, 401(k) Salary Reduction Plans, and 403(b)(7) Plans, please call
1-800-322-7880.
Letter of Intent _ Class A Shares
By signing a Letter of Intent form, which can be obtained by
calling 1-800-554-4611, you become eligible for the reduced sales load
applicable to the total number of Eligible Fund shares purchased in a
13-month period pursuant to the terms and conditions set forth in the Letter
of Intent. A minimum initial purchase of $5,000 is required. To compute the
applicable sales load, the offering price of shares you hold (on the date of
submission of the Letter of Intent) in any Eligible Fund that may be used towa
rd "Right of Accumulation" benefits described above may be used as a credit
toward completion of the Letter of Intent. However, the reduced sales load
will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated
in the Letter of Intent for payment of a higher sales load if you do not
purchase the full amount indicated in the Letter of Intent. The escrow will
be released when you fulfill the terms of the Letter of Intent by purchasing
the specified amount. If your purchases qualify for a further sales load
reduction, the sales load will be adjusted to reflect your total purchase at
the end of 13 months. If total purchases are less than the amount specified,
you will be requested to remit an amount equal to the difference between the
sales load actually paid and the sales load applicable to the aggregate
purchases actually made. If such remittance is not received within 20 days,
the Transfer Agent, as attorney-in-fact pursuant to the terms of the Letter
of Intent, will redeem an appropriate number of Class A shares of the Fund
held in escrow to realize the difference. Signing a Letter of Intent does not
bind you to purchase, or the Fund to sell, the full amount indicated at the
sales load in effect at the time of signing, but you must complete the
intended purchase to obtain the reduced sales load. At the time you purchase
Class A shares, you must indicate your intention to do so under a Letter of
Intent. Purchases pursuant to a Letter of Intent will be made at the
then-current net asset value plus the applicable sales load in effect at the
time such Letter of Intent was executed.
How to Redeem Shares
General
You may request redemption of shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value as described below. If you hold Fund shares
of more than one Class, any request for redemption must specify the Class of
shares being redeemed. If you fail to specify the Class of shares to be
redeemed or if you own fewer shares of the Class than specified to be
redeemed, the redemption request may be delayed until the Transfer Agent
receives further instructions from you or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC) when
shares are redeemed. Service Agents may charge their clients a fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current net asset value.
Distributions from qualified Retirement Plans, IRAs (including IRA
"Rollover Accounts") and certain non-qualified deferred compensation plans,
except distributions representing returns of non-deductible contributions to
the Retirement Plan or IRA, generally are taxable income to the participant.
Distributions from such a Retirement Plan or IRA to a participant prior to
the time the participant reaches age 591\2 or becomes permanently disabled
may subject the participant to an additional 10% penalty tax imposed by the
IRS. Participants should consult their tax advisers concerning the timing and
consequences of distributions from a Retirement Plan or IRA. Participants in
qualified Retirement Plans will receive a disclosure statement describing the
consequences of a distribution from such a Plan from the administrator,
trustee or custodian of the Plan, before receiving the distribution. The Fund
will not report to the IRS redemptions of Fund shares by qualified Retirement
Plans, IRAs or certain non-qualified deferred
Page 14
compensation plans. The administrator, trustee or custodian of such Retirement
Plans and IRAs will be responsible for reporting distributions from such Plans
and IRAs to the IRS.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption request
in proper form, except as provided by the rules of the Securities and
Exchange Commission. However, if you have purchased Fund shares by check, by
the TeleTransfer Privilege or through Dreyfus-Automatic Asset
BuilderRegistration Mark and subsequently submit a written redemption request
to the Transfer Agent, the redemption proceeds will be transmitted to you
promptly upon bank clearance of your purchase check, TeleTransfer purchase
or Dreyfus-Automatic Asset Builder order, which may take up to eight business
days or more. In addition, the Fund will reject requests to redeem shares
pursuant to the TeleTransfer Privilege for a period of eight business days
after receipt by the Transfer Agent of the purchase check, the TeleTransfer
purchase or the Dreyfus-Automatic Asset Builder order against which such
redemption is requested. These procedures will not apply if your shares were
purchased by wire payment, or if you otherwise have a sufficient collected
balance in your account to cover the redemption request. Prior to the time
any redemption is effective, dividends on such shares will accrue and be
payable, and you will be entitled to exercise all other rights of beneficial
ownership. Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
The Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
Contingent Deferred Sales Charge
Class B Shares _ A CDSC payable to the Distributor is imposed on any
redemption of Class B shares which reduces the current net asset value of
your Class B shares to an amount which is lower than the dollar amount of all
payments by you for the purchase of Class B shares of the Fund held by you at
the time of redemption. No CDSC will be imposed to the extent that the net
asset value of the Class B shares redeemed does not exceed (i) the current
net asset value of Class B shares acquired through reinvestment of dividends
or capital gain distributions, plus (ii) increases in the net asset value of
your Class B shares above the dollar amount of all your payments for the
purchase of Class B shares of the Fund held by you at the time of redemption.
If the aggregate value of Class B shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC may
be applied to the then-current net asset value rather than the purchase
price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment for
the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month. The
following table sets forth the rates of the CDSC:
<TABLE>
<CAPTION>
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
_____________ ________________
<S> <C>
First........................................... 4.00
Second.......................................... 4.00
Third........................................... 3.00
Fourth.......................................... 3.00
Fifth........................................... 2.00
Sixth........................................... 1.00
</TABLE>
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of Class B shares
above the total amount of payments for the purchase of Class B shares made
during the preceding six years; then of amounts representing the cost of
shares purchased six years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of time within the
applicable six-year period.
For example, assume an investor purchased 100 shares at $10 a share
for a cost of $1,000. Subsequently, the shareholder acquired 5 additional
shares through dividend reinvestment. During the second year after the
purchase the investor decided to redeem $500 of his or her investment.
Assuming at the time of the redemption the net asset value had appreciated to
$12 per share, the value of the investor's shares would be $1,260 (105 shares
at $12 per share). The CDSC would not be applied to the value of the
reinvested dividend shares and the amount which represents appreciation
($260). Therefore, $240 of the $500 redemption proceeds ($500 minus $260)
would be charged at a rate of 4% (the applicable rate in the second year
after purchase) for a total CDSC of $9.60.
Class C Shares _ A CDSC of 1% payable to the Distributor is imposed on any
redemption of Class C shares within one year of the date of purchase. The
basis for calculating the payment of any such CDSC will be the method used in
calculating the CDSC for Class B shares. See "Contingent Deferred Sales
Charge _ Class B Shares" above.
Page 15
Waiver of CDSC _ The CDSC may be waived in connection with (a) redemptions
made within one year after the death or disability, as defined in Section
72(m)(7) of the Code, of the shareholder, (b) redemptions by employees
participating in Eligible Benefit Plans, (c) redemptions as a result of a
combination of any investment company with the Fund by merger, acquisition of
assets or otherwise, (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 701\2 in the case of an
IRA or Keogh plan or custodial account pursuant to Section 403(b) of the Code
and (e) redemptions pursuant to the Automatic Withdrawal Plan, as described
in the Fund's Prospectus. If the Fund's Board determines to discontinue the
waiver of the CDSC, the disclosure in the Fund's Prospectus will be revised
appropriately. Any Fund shares subject to a CDSC which were purchased prior
to the termination of such waiver will have the CDSC waived as provided in
the Fund's Prospectus at the time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you
must notify the Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
entitlement.
Procedures
You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services form with the Transfer Agent, through the TeleTra
nsfer Privilege. If you are a client of a Selected Dealer, you may redeem
shares through the Selected Dealer. Other redemption procedures may be in
effect for clients of certain Service Agents or institutions. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities. The Fund reserves the
right to refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount involved or the
number of such requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated. Shares held under Keogh Plans, IRAs or
other retirement plans, and shares for which certificates have been issued,
are not eligible for the TeleTransfer Privilege.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select the TeleTransfer redempti
on privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions (including over The Dreyfus TouchRegistration Mark automated
telephone system) from any person representing himself or herself to be you,
or a representative of your Service Agent, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a TeleTransfer redemption or exchange of Fund shares. In such cases,
you should consider using the other redemption procedures described herein.
Use of these other redemption procedures may result in your redemption
request being processed at a later time than it would have been if
TeleTransfer redemption had been used. During the delay, the Fund's net
asset value may fluctuate.
Regular Redemption _ Under the regular redemption procedure, you may redeem
shares by written request mailed to Dreyfus Premier Worldwide Growth Fund,
Inc., P.O. Box 6587, Providence, Rhode Island 02940-6587 or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. Written redemption requests must
be signed by each shareholder, including each owner of a joint account, and
each signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. If you have any questions with respect to signature-guarantees,
please contact your Service Agent or call the telephone number listed on the
cover of this Prospectus.
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
TeleTransfer Privilege _ You may request by telephone that redemption
proceeds (minimum $500 per day) be transferred between your Fund account and
your bank account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
Redemption proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the TeleTransfer Privilege for transfer to their
bank account not more than $250,000 within any 30-day period.
Page 16
If you have selected the TeleTransfer Privilege, you may request a T
eleTransfer redemption by calling 1-800-554-4611 or, if you are calling from
overseas, call 516-794-5452.
Redemption Through a Selected Dealer _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent prior to the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m., New York time), the redemption request
will be effective on that day. If a redemption request is received by the
Transfer Agent after the close of trading on the floor of the New York Stock
Exchange, the redemption request will be effective on the next business day.
It is the responsibility of the Selected Dealer to transmit a request so that
it is received in a timely manner. The proceeds of the redemption are
credited to your account with the Selected Dealer. See "How to Buy Shares"
for a discussion of additional conditions or fees that may be imposed upon
redemption.
In addition, the Distributor or its designee will accept orders
from Selected Dealers with which the Distributor has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by
dealers by the close of trading on the floor of the New York Stock Exchange
on any business day and transmitted to the Distributor or its designee prior
to the close of its business day (normally 5:15 p.m., New York time) are
effected at the price determined as of the close of trading on the floor of
the New York Stock Exchange on that day. Otherwise, the shares will be
redeemed at the next determined net asset value. It is the responsibility of
the Selected Dealer to transmit orders on a timely basis. The Selected Dealer
may charge the shareholder a fee for executing the order. This repurchase
arrangement is discretionary and may be withdrawn at any time.
Reinvestment Privilege _ Upon written request, you may reinvest up to the
number of Class A or Class B shares you have redeemed, within 45 days of
redemption, at the then-prevailing net asset value without a sales load, or
reinstate your account for the purpose of exercising Fund Exchanges. Upon
reinvestment, with respect to Class B shares, or Class A shares if such
shares were subject to a CDSC, the shareholder's account will be credited
with an amount equal to the CDSC previously paid upon redemption of the Class
A or Class B shares reinvested. The Reinvestment Privilege may be exercised
only once.
Distribution Plan and Shareholder Services Plan
(Class A, Class B and Class C Only)
Class B and Class C shares are subject to a Distribution Plan and
Class A, Class B and Class C shares are subject to a Shareholder Services
Plan.
Distribution Plan
Under the Distribution Plan, adopted pursuant to Rule 12b-1 under
the 1940 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.
Shareholder Services Plan
Under the Shareholder Services Plan, the Fund pays the Distributor
for the provision of certain services to the holders of Class A, Class B and
Class C shares a fee at the annual rate of .25 of 1% of the value of the
average daily net assets of each such Class. 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.
TheDistributor may make payments to Service Agents in respect of these
services. The Distributor determines the amounts to be paid to Service
Agents.
Dividends, Distributions and Taxes
The Fund ordinarily pays dividends from its net investment income
and distributes net realized securities gains, if any, once a year, but the
Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the 1940 Act. The Fund will not make distributions
from net realized securities gains unless capital loss carryovers, if any,
have been utilized or have expired. You may choose whether to receive
dividends and distributions in cash or to reinvest in additional Fund shares
of the same Class from which they were paid at net asset value without a
sales load. Dividends and distributions paid in cash to Retirement Plans,
however, may be subject to additional tax as described below. All expenses
are accrued daily and deducted before the declaration of dividends. Dividends
paid by each Class will be calculated at the same time and in the same manner
and will be of the same amount, except that the expenses attributable solely
to a particular Class will be borne exclusively by that Class. Class B and
Class C shares will receive lower per share dividends than Class A shares
which will receive lower per share dividends than Class R shares because of
the higher expenses borne by the relevant Class. See "Fee Table."
Dividends paid by the Fund to qualified Retirement Plans, IRAs
(including IRA "Rollover Accounts") or certain non-qualified deferred
compensation plans ordinarily will not be subject to taxation until the
proceeds are distributed from the Retirement Plan or IRA. The Fund will not
report dividends paid to such Plans and IRAs to the
Page 17
IRS. Generally, distributions from such Retirement Plans and IRAs, except
those representing returns of non-deductible contributions thereto, will be
taxable as ordinary income and, if made prior to the time the participant
reaches age 591\2, generally will be subject to an additional tax equal to 10%
of the taxable portion of the distribution. If the distribution from such a
Retirement Plan (other than certain governmental or church plans) or IRAs for
any taxable year following the year in which the participant reaches age 701\2
is less than the "minimum required distribution" for that taxable year, an
excise tax equal to 50% of the deficiency may be imposed by the IRS. The
administrator, trustee or custodian of such a Retirement Plan or IRA will be
responsible for reporting distributions from such Plans and IRAs to the IRS.
Participants in qualified Retirement Plans will receive a disclosure statement
describing the consequences of a distribution from such a Plan from the
administrator, trustee or custodian of the Plan prior to receiving the
distribution. Moreover, certain contributions to a qualified Retirement Plan
or IRA in excess of the amounts permitted by law may be subject to an
excise tax.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in Fund shares.
Distributions from net realized long-term securities gains of the Fund will
be taxable to U.S. shareholders as long-term capital gains for Federal income
tax purposes, regardless of how long shareholders have held their Fund shares
and whether such distributions are received in cash or reinvested in Fund
shares. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess of
28%. Dividends and distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by the
Fund to a foreign investor as well as the proceeds of any redemptions from a
foreign investor's account, regardless of the extent to which gain or loss
may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions
will be mailed to you annually. You also will receive periodic summaries of
your account which will include information as to dividends and distributions
from securities gains, if any, paid during the year.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize, or an
exchange on behalf of a Retirement Plan which is not tax exempt may result
in, a taxable gain or loss.
The Code provides for the "carryover" of some or all of the sales
load imposed on Class A shares if an investor exchanges his Class A shares
for shares of another fund advised or administered by Dreyfus within 91 days
of purchase and such other fund reduces or eliminates its otherwise
applicable sales load for the purpose of the exchange. In this case, the
amount of the sales load charged the investor for Class A shares, up to the
amount of the reduction of the sales load charge on the exchange, is not inclu
ded in the basis of the investor's Class A shares for purposes of computing
gain or loss on the exchange, and instead is added to the basis of the fund
shares received on the exchange.
With respect to individual investors and certain non-qualified
Retirement Plans, Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be realized,
paid to a shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax withheld as
a result of backup withholding does not constitute an additional tax imposed
on the record owner of the account, and may be claimed as a credit on the
record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended October 31, 1996 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
Page 18
Performance Information
For purposes of advertising, performance for each Class of shares
will be calculated on the basis of average annual total return and/or total
return. These total return figures reflect changes in the price of the shares
and assume that any income dividends and/or capital gains distributions made
by the Fund during the measuring period were reinvested in shares of the same
Class. Class A total return figures include the maximum initial sales charge
and Class B and Class C total return figures include any applicable CDSC.
These figures also take into account any applicable service and distribution
fees. As a result, at any given time, the performance of Class B and Class C
should be expected to be lower than that of Class A and the performance of
Class A, Class B and Class C should be expected to be lower than that of
Class R. Performance for each Class will be calculated separately.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at the end of
the period. Advertisements of the Fund's performance will include the Fund's
average annual total return of Class A, Class B and Class C for one, five and
ten year periods, or for shorter periods depending upon the length of time
the Fund has operated. Computations of average annual total return for
periods of less than one year represent an annualization of the Class's
actual total return for the applicable period.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value (or maximum offering price in the case of Class A) per share at the
beginning of the period. Advertisements may include the percentage rate of
total return or may include the value of a hypothetical investment at the end
of the period which assumes the application of the percentage rate of total
return. Total return also may be calculated by using the net asset value per
share at the beginning of the period instead of the maximum offering price
per share at the beginning of the period for Class A shares or without giving
effect to any applicable CDSC at the end of the period for Class B or Class C
shares. Calculations based on the net asset value per share do not reflect
the deduction of the applicable sales charge on Class A shares which, if
reflected, would reduce the performance quoted.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time
in advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Morgan Stanley Capital International World Index,
Standard & Poor's 500 Composite Stock Price Index, Standard & Poor's MidCap
400 Index, the Dow Jones Industrial Average, Morningstar, Inc. and other
industry publications.
General Information
The Fund was incorporated under Maryland law on February 5, 1993,
and commenced operations on July 15, 1993. Before March 1, 1997, the Fund's
name was Premier Growth Fund, Inc., and, from March 1, 1997 to April 9, 1997,
its name was Dreyfus Premier Growth Fund, Inc. The Fund is authorized to
issue 400 million shares of Common Stock, par value $.001 per share. The
Fund's shares are classified into four classes _ Class A,Class B, Class C
and Class R. Each share has one vote and shareholders will vote in the
aggregate and not by class except as otherwise required by law. However, only
holders of Class B or Class C shares, as the case may be, will be entitled to
vote on matters submitted to shareholders pertaining to the Distribution
Plan.
Unless otherwise required by the 1940 Act, ordinarily it will not
be necessary for the Fund to hold annual meetings of shareholders. As a
result, Fund shareholders may not consider each year the election of Board
members or the appointment of auditors. However, pursuant to the Fund's
By-Laws, the holders of at least 10% of the shares outstanding and entitled
to vote may require the Fund to hold a special meeting of shareholders for
purposes of removing a Board member from office or for any other purpose.
Fund shareholders may remove a Board member by the affirmative vote of a
majority of the Fund's outstanding shares. In addition, the Board will call a
meeting of shareholders for the purpose of electing Board members if, at any
time, less than a majority of the Board members then holding office have been
elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
you confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by
writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144.
Page 19
Appendix
Investment Techniques
Foreign Currency Transactions _ Foreign currency transactions may be entered
into for a variety of purposes, including: to fix in U.S. dollars, between
trade and settlement date, the value of a security the Fund has agreed to buy
or sell; to hedge the U.S. dollar value of securities the Fund already owns,
particularly if it expects a decrease in the value of the currency in which
the foreign security is denominated; or to gain exposure to the foreign
currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies, which would involve the Fund agreeing to
exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency the Fund contracted to receive in the
exchange. The Fund's success in these transactions will depend principally on
the Advisers' ability to predict accurately the future exchange rates between
foreign currencies and the U.S. dollar.
Borrowing Money _ The Fund is permitted to borrow to the extent permitted
under the 1940 Act, which permits an investment company to borrow in an
amount up to 331\3% of the value of its total assets. The Fund currently
intends to borrow money only for temporary or emergency (not leveraging)
purposes, in an amount up to 15% of the value of its total assets (including
the amount borrowed) valued at the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the Fund's total assets, the Fund will not make any
additional investments.
Forward Commitments _ The Fund may purchase securities on a forward
commitment or when-issued basis, which means delivery and payment take place
a number of days after the date of the commitment to purchase. The payment
obligation and the interest rate receivable on a forward commitment or
when-issued security are fixed when the Fund enters into the commitment, but
the Fund does not make payment until it receives delivery from the
counterparty. The Fund will commit to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. A
segregated account of the Fund consisting of permissible liquid assets at
least equal at all times to the amount of the commitments will be established
and maintained at the Fund's custodian bank.
Certain Portfolio Securities
Convertible Securities _ Convertible securities may be converted at either a
stated price or stated rate into underlying shares of common stock.
Convertible securities have characteristics similar to both fixed-income and
equity securities. Convertible securities generally are subordinated to
other similar but non-convertible securities of the same issuer, although
convertible bonds, as corporate debt obligations, enjoy seniority in right of
payment to all equity securities, and convertible preferred stock is senior
to common stock, of the same issuer. Because of the subordination feature,
however, convertible securities typically have lower ratings than similar
non-convertible securities.
Depositary Receipts _ The Fund may invest in the securities of foreign
issuers in the form of American Depositary Receipts ("ADRs"), European
Depositary Receipts ("EDRs") and other forms of depositary receipts. These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts typically
issued by a United States bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation. EDRs, which are
sometimes referred to as Continental Depositary Receipts ("CDRs"), are
receipts issued in Europe typically by non-United States banks and trust
companies that evidence ownership of either foreign or domestic securities.
Generally, ADRs in registered form are designed for use in the United States
securities markets and EDRs and CDRs in bearer form are designed for use in
Europe.
Zero Coupon Securities _ The Fund may invest in zero coupon U.S. Treasury
securities, which are Treasury Notes and Bonds that have been stripped of
their unmatured interest coupons, the coupons themselves and receipts or
certificates representing interests in such stripped debt obligations and
coupons. Zero coupon securities also are issued by corporations and
financial institutions which constitute a proportionate ownership of the
issuer's pool of underlying U.S. Treasury securities. A zero coupon security
pays no interest to its holder during its life and is sold at a discount to
its face value at maturity. The market prices of zero coupon securities
generally are more volatile than the market prices of securities that pay
interest periodically and are likely to respond to a greater degree to
changes in interest rates than non-zero coupon securities having similar
maturities and credit qualities.
Warrants _ A warrant is an instrument issued by a corporation which gives
the holder the right to subscribe to a specified amount of the corporation's
capital stock at a set price for a specified period of time. The Fund may
invest up to 5% of its net assets in warrants, except that this limitation
does not apply to warrants purchased by the Fund that are sold in units with,
or attached to, other securities. Included in such amount, but not to exceed
2% of the value of the Fund's net assets, may be warrants which are not
listed on the New York or American Stock Exchange.
Page 20
Money Market Instruments _ The Fund may invest in the following types of
money market instruments.
U.S. Government Securities. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides financial
support to such U.S. Government-sponsored agencies and instrumentalities, no
assurance can be given that it will always do so since it is not so obligated
by law.
Repurchase Agreements. In a repurchase agreement, the Fund buys,
and the seller agrees to repurchase, a security at a mutually agreed upon
time and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a
default or insolvency of the other party to the agreement, including possible
delays or restrictions upon the Fund's ability to dispose of the underlying
securities. The Fund may enter into repurchase agreements with certain banks
or non-bank dealers.
Bank Obligations. The Fund may purchase certificates of deposit,
time deposits, bankers' acceptances and other short-term obligations issued
by domestic banks, foreign subsidiaries or foreign branches of domestic
banks, domestic and foreign branches of foreign banks, domestic savings and
loan associations and other banking institutions. With respect to such
securities issued by foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, the Fund may be
subject to additional investment risks that are different in some respects
from those incurred by a fund which invests only in debt obligations of U.S.
domestic issuers. See "Description of the Fund_Investment Considerations and
Risks_Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer. These
instruments reflect the obligation both of the bank and the drawer to pay the
face amount of the instrument upon maturity. The other short-term
obligations may include uninsured, direct obligations bearing fixed, floating
or variable interest rates.
Commercial Paper. Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of direct
obligations which, at the time of their purchase, are (a) rated not lower
than Prime-1 by Moody's, A-1 by S&P, F-1 by Fitch or Duff-1 by Duff, (b)
issued by companies having an outstanding unsecured debt issue currently
rated at least A3 by Moody's or A- by S&P, Fitch or Duff, or (c) if unrated,
determined by the Advisers to be of comparable quality to those rated
obligations which may be purchased by the Fund.
Illiquid Securities _ The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objectives. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
Ratings _ Securities rated Ba by Moody's are judged to have speculative
elements; their future cannot be considered as well assured and often the
protection of interest and principal payments may be very moderate.
Securities rated BB by S&P, Fitch or Duff are regarded as having
predominantly speculative characteristics and, while such obligations have
less near-term vulnerability to default than other speculative grade debt,
they face major ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to inadequate capacity to
meet timely interest and principal payments. Securities rated Caa by Moody's
are of poor standing and may be in default or there may be present elements
of danger with respect to principal or interest. S&P, Fitch and Duff
typically assign a CCC rating to debt which has a current identifiable
vulnerability to default and is dependent upon favorable business, financial
and economic conditions to meet timely payments of interest and repayment of
principal. Such securities, though high yielding, are characterized by great
risk. See "Appendix" in the Statement of Additional Information for a
general description of securities ratings.
The ratings of Moody's, S&P, Fitch and Duff represent their
opinions as to the quality of the obligations which they undertake to rate.
Ratings are relative and subjective and, although ratings may be useful in
evaluating the safety of interest and principal payments, they do not
evaluate the market value risk of such obligations. Although these
Page 21
ratings may be an initial criterion for selection of portfolio investments,
the Advisers also will evaluate these securities and the ability of the
issuers of such securities to pay interest and principal. The Fund's ability
to achieve its investment objectives may be more dependent on the Advisers'
credit analysis than might be the case for a fund that invested in higher
rated securities.
No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus and in the
Fund's official sales literature in connection with the offer of the Fund's
shares, and, if given or made, such other information or representations must
not be relied upon as having been authorized by the Fund. This Prospectus
does not constitute an offer in any State in which, or to any person to whom,
such offering may not lawfully be made.
Page 22
Copy Rights1997 Dreyfus Service Corporation
070p060297 Page 23
Dreyfus Premier
worldwide growth fund, inc.
Prospectus
March 1, 1997
As Revised June 2, 1997
[Lion:Cover]
DREYFUS PREMIER WORLDWIDE GROWTH FUND, INC.
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MARCH 1, 1997
AS REVISED, JUNE 2, 1997
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Premier Worldwide Growth Fund, Inc. (the "Fund"), dated March 1,
1997, as it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
adviser and administrator. Dreyfus has engaged Fayez Sarofim & Co.
("Sarofim") to serve as the Fund's sub-investment adviser and to provide day-
to-day management of the Fund's investments, subject to the supervision of
Dreyfus. Dreyfus and Sarofim are referred to collectively as the
"Advisers."
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies B-2
Management of the Fund B-7
Management Agreement B-11
Purchase of Shares B-14
Distribution Plan and Shareholder Services Plan B-15
Redemption of Shares B-17
Shareholder Services B-18
Determination of Net Asset Value B-21
Dividends, Distributions and Taxes B-22
Portfolio Transactions B-24
Performance Information B-25
Information About the Fund B-26
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors B-26
Appendix B-28
Financial Statements B-35
Report of Independent Auditors B-46
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections in the Fund's Prospectus entitled "Description of the
Fund" and "Appendix."
Portfolio Securities
Repurchase Agreements. The Fund's custodian or subcustodian will have
custody of, and will hold in a segregated account, securities acquired by
the Fund under a repurchase agreement. Repurchase agreements are considered
by the staff of the Securities and Exchange Commission to be loans by the
Fund. In an attempt to reduce the risk of incurring a loss on a repurchase
agreement, the Fund will enter into repurchase agreements only with domestic
banks with total assets in excess of $1 billion, or primary government
securities dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the Fund may invest, and will
require that additional securities be deposited with it if the value of the
securities purchased should be decreased below resale price.
Commercial Paper and Other Short-Term Corporate Obligations. These
instruments include variable amount master demand notes, which are
obligations that permit the Fund to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the Fund, as
lender, and the borrower. These notes permit daily changes in the amounts
borrowed. Because these obligations are direct lending arrangements between
the lender and the borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest, at any time. Accordingly, where these obligations
are not secured by letters of credit or other credit support arrangements,
the Fund's right to redeem is dependent on the ability of the borrower to
pay principal and interest on demand. Such obligations frequently are not
rated by credit rating agencies, and the Fund may invest in them only if at
the time of an investment the borrower meets the criteria set forth in the
Fund's Prospectus for other commercial paper issuers.
Depositary Receipts. These securities may be purchased through
"sponsored" or "unsponsored" facilities. A sponsored facility is
established jointly by the issuer of the underlying security and a
depositary, whereas a depositary may establish an unsponsored facility
without participation by the issuer of the deposited security. Holders of
unsponsored depositary receipts generally bear all the costs of such
facilities and the depositary of an unsponsored facility frequently is under
no obligation to distribute shareholder communications received from the
issuer of the deposited security or to pass through voting rights to the
holders of such receipts in respect of the deposited securities.
Convertible Securities. Although to a lesser extent than with fixed-
income securities, the market value of convertible securities tends to
decline as interest rates increase and, conversely, tends to increase as
interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in
the market value of the underlying common stock. A unique feature of
convertible securities is that as the market price of the underlying common
stock declines, convertible securities tend to trade increasingly on a yield
basis, and so may not experience market value declines to the same extent as
the underlying common stock. When the market price of the underlying common
stock increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock. While no securities
investments are without risk, investment in convertible securities generally
entail less risk than investments in common stock of the same issuer.
Convertible securities are investment that provide for a stable stream
of income with generally higher yields than common stocks. There can be no
assurance of current income because the issuers of the convertible
securities may default on their obligations. A convertible security, in
addition to providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the holder to
benefit from increases in the market price of the underlying common stock.
There can be no assurance of capital appreciation, however, because
securities prices fluctuate. Convertible securities, however, generally
offer lower interest or dividend yields than non-convertible securities of
similar quality because of the potential for capital appreciation.
Foreign Government Obligations; Securities of Supranational Entities.
The Fund may invest in obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by the Advisers to be of comparable
quality to the other obligations in which the Fund may invest. Such
securities also include debt obligations of supranational entities.
Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the
Asian Development Bank and the InterAmerican Development Bank.
Management Policies
Forward Commitments. Securities purchased on a forward commitment or
when-issued basis are subject to changes in value (generally changing in the
same way, i.e., appreciating when interest rates decline and depreciating
when interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated, in the
level of interest rates. Securities purchased on a forward commitment or
when-issued basis may expose the Fund to risks because they may experience
such fluctuations prior to their actual delivery. Purchasing securities on
a forward commitment or when-issued basis can involve the additional risk
that the yield available in the market when the delivery takes place
actually may be higher than that obtained in the transaction itself.
Purchasing securities on a forward commitment or when-issued basis when the
Fund is fully or almost fully invested may result in greater potential
fluctuation in the value of the Fund's net assets and its net asset value
per share.
Investment Consideration and Risks
Lower Rated Securities. The Fund is permitted to invest in securities
rated Ba by Moody's Investors Service, Inc. ("Moody's") and BB by Standard &
Poor's Ratings Group ("S&P"), Fitch Investors Service, L.P. ("Fitch") and
Duff & Phelps Credit Rating Co. ("Duff," and with the other rating agencies,
the "Rating Agencies") and as low as Caa by Moody's or CCC by S&P, Fitch or
Duff. Such securities, though higher yielding, are characterized by risk.
See "Description of the Fund--Investment Considerations and Risks--Lower
Rated Securities" in the Prospectus for a discussion of certain risks and
the "Appendix" for a general description of the Rating Agencies' ratings.
Although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of these
securities. The Fund will rely on the Advisers' judgment, analysis and
experience in evaluating the creditworthiness of an issuer.
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities. These securities generally are considered by the Rating
Agencies to be predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation
and generally will involve more credit risk than securities in the higher
rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with the higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
not have sufficient revenues to meet their interest payment obligations.
The issuer's ability to service its debt obligations also may be affected
adversely by specific corporate developments, forecasts, or the
unavailability of additional financing. The risk of loss because of default
by the issuer is significantly greater for the holders of these securities
because such securities generally are unsecured and often are subordinated
to other creditors of the issuer.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these securities does exist, it
generally is not as liquid as the secondary market for higher rated
securities. The lack of a liquid secondary market may have an adverse
impact on market price and yield and the Fund's ability to dispose of
particular issues when necessary to meet the Fund's liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid secondary market for
certain securities also may make it more difficult for the Fund to obtain
accurate market quotations for purposes of valuing the Fund's securities and
calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play
a greater role in valuation because less reliable, objective data may be
available.
These securities may be particularly susceptible to economic downturns.
It is likely that any economic recession could disrupt severely the market
for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.
The Fund may acquire these securities during an initial offering. Such
securities may involve special risks because they are new issues. The Fund
has no arrangement with any persons concerning the acquisition of such
securities, and the Advisers will review carefully the credit and other
characteristics pertinent to such new issues.
The credit risk factors pertaining to lower rated securities also apply
to lower rated zero coupon securities. Zero coupon securities carry an
additional risk in that, unlike securities which pay interest throughout the
period to maturity, the Fund will realize no cash until the cash payment
date unless a portion of such securities are sold and, if the issuer
defaults, the Fund may obtain no return at all on its investment. See
"Dividends, Distributions and Taxes."
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 10 as
fundamental policies, which cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Fund's outstanding voting shares.
Investment restrictions numbered 11 through 17 are not fundamental policies
and may be changed by a vote of a majority of the Fund's Board members at
any time. The Fund may not:
1. Invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of the Fund's total assets may be
invested, and securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities may be purchased, without regard to any such
limitation.
2. Hold more than 10% of the outstanding voting securities of any
single issuer. This Investment Restriction applies only with respect to 75%
of the Fund's total assets.
3. Concentrate its investments in any particular industry or
industries, except that the Fund may invest up to 25% of the value of its
total assets in a single industry, provided that, when the Fund has adopted
a defensive posture, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
4. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
5. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but the Fund may
purchase and sell securities that are secured by real estate or issued by
companies that invest or deal in real estate.
6. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets). For purposes of this Investment Restriction, the
entry into options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices shall not
constitute borrowing.
7. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board.
8. Act as an underwriter of securities of other issuers, except to
the extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
9. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 4, 6 and 13 may be deemed to give rise to a
senior security.
10. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, including those relating to indices, and options on
futures contracts or indices.
11. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
12. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
13. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with writing covered put and call
options and the purchase of securities on a when-issued or forward
commitment basis and collateral and initial or variation margin arrangements
with respect to options, forward contracts, futures contracts, including
those relating to indices, and options on futures contracts or indices.
14. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Fund's Prospectus and Statement of Additional
Information.
15. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Fund's net assets would
be so invested.
16. Invest in securities of other investment companies, except to the
extent permitted under the 1940 Act.
17. Purchase or retain the securities of any issuer if the officers or
Board members of the Fund or the Advisers who own beneficially more than 1/2
of 1% of the securities of such issuer together own beneficially more than
5% of the securities of such issuer.
As a fundamental policy, the Fund may invest, notwithstanding any other
investment restriction (whether or not fundamental), all of the Fund's
assets in the securities of a single open-end management investment company
with substantially the same fundamental investment objectives, policies and
restrictions as the Fund.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
While not fundamental policies, the Fund has undertaken to comply with
the following limitations for the purpose of registering Fund shares for
sale in certain states: The Fund will not (i) invest in real estate limited
partnerships or in mineral leases, or (ii) invest more than 2% of its assets
in warrants not listed on the New York Stock Exchange or the American Stock
Exchange.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Board member who is deemed to be an "interested
person" of the Fund, as defined in the 1940 Act, is indicated by an
asterisk.
Board Members of the Fund
CLIFFORD L. ALEXANDER, JR., Board member. President of Alexander &
Associates, Inc., a management consulting firm. From 1977 to 1981, Mr.
Alexander served as Secretary of the Army and Chairman of the Board of
the Panama Canal Company, and from 1975 to 1977, he was a member of the
Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and
Alexander. He is a director of American Home Products Corporation,
Cognizant Corporation, a service provider of marketing information and
information technology, The Dun & Bradstreet Corporation, MCI
Communications Corporation, Mutual of America Life Insurance Company
and TLC Beatrice International Holdings, Inc. He is 63 years old and
his address is 400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Board member. Shad Professor of Law, New York University
School of Law. Professor Davis has been a member of the New York
University law faculty since 1983. Prior to that time, she served for
three years as a judge in the courts of New York State; was engaged for
eight years in the practice of law, working in both corporate and
non-profit sectors; and served for two years as a criminal justice
administrator in the government of the City of New York. She writes
and teaches in the fields of evidence, constitutional theory, family
law, social sciences and the law, legal process and professional
methodology and training. She is 54 years old and her address is c/o
New York University School of Law, 249 Sullivan Street, New York, New
York 10011.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. He is
Chairman of The Board of Noel Group, Inc., a venture capital company;
and a director of The Muscular Dystrophy Association, HealthPlan
Services Corporation, Carlyle Industries, Inc. (formerly Belding
Heminway Company, Inc.), a button packager and distributor, Curtis
Industries, Inc., a nationwide distributor of security products,
chemicals and automotive and other hardware, and Staffing Resources,
Inc. For more than five years prior to January 1995, he was President,
a director and, until August 1994, Chief Operating Officer of Dreyfus
and Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus and, until August
1994, the Fund's distributor. From August 1994 to December 31, 1994,
he was a director of Mellon Bank Corporation. He is 53 years old and
his address is 200 Park Avenue, New York, New York 10166.
ERNEST KAFKA, Board member. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. He is
Associate Clinical Professor of Psychiatry at Cornell Medical School.
For more than the past five years, Dr. Kafka has held numerous
administrative positions, including President of the NY Psychoanalytic
Society, and has published many articles on subjects in the field of
psychoanalysis. He is 64 years old and his address is 23 East 92nd
Street, New York, New York 10021.
SAUL B. KLAMAN, Board member. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of
the National Council of Savings Institutions until June 1985, Vice
Chairman of Golembe Associates and BEI Golembe, Inc. until 1989, and
Chairman Emeritus of BEI Golembe, Inc. until November 1992. He also
served as an Economist to the Board of Governors of the Federal Reserve
System and on several Presidential Commissions, and has held numerous
consulting and advisory positions in the fields of economics and
housing finance. He is 77 years old and his address is 431-B Dedham
Street, The Gables, Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Board member. President of Lincoln Center for the
Performing Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of
New York City from September 1979 until March 1984 and Commissioner of
the Department of Housing Preservation and Development of New York City
from February 1978 until September 1979. Mr. Leventhal was an
associate and then a member of the New York law firm of Poletti Freidin
Prashker Feldman and Gartner from 1974 to 1978. He was Commissioner of
Rent and Housing Maintenance for New York City from 1972 to 1973. Mr.
Leventhal also serves as Chairman of Citizens Union, an organization
which strives to reform and modernize City and State government. He is
54 years old and his address is 70 Lincoln Center Plaza, New York, New
York 10023-6583.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Board members of the Fund who are not "interested persons" of the Fund, as
defined in the 1940 Act, will be selected and nominated by the Board members
who are not "interested persons" of the Fund.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Fund for the fiscal year ended
October 31, 1996, and by all other funds in the Dreyfus Family of Funds for
which such person is a Board member (the number of which is set forth in
parenthesis next to each Board member's total compensation) for the year
ended December 31, 1996, is as follows:
Total
Compensation from
Aggregate Fund and Fund
Name of Board Compensation from Complex Paid to
Member Fund* Board Member
Clifford Alexander, Jr. $3,000 $ 82,436 (17)
Peggy C. Davis $3,000 $ 73,084 (15)
Joseph S. DiMartino $3,750 $517,075 (94)
Ernest Kafka $3,000 $ 69,584 (15)
Saul B. Klaman $3,000 $ 73,584(15)
Nathan Leventhal $2,500 $ 71,084 (15)
____________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $1,471 for all Board members as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by Dreyfus. From December
1991 to July 1994, she was President and Chief Compliance Officer of
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc. She is 39 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by Dreyfus. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc.
He is 32 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by Dreyfus. From March 1994 to November 1995,
he was Vice President and Division Manager for First Data Investor
Services Group. From 1989 to 1994, he was Vice President, Assistant
Treasurer and Tax Director - Mutual Funds of The Boston Company, Inc.
He is 40 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by Dreyfus. From September 1989 to July 1994, she was an
Assistant Vice President and Client Manager for The Boston Company,
Inc. She is 32 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Director of
Strategic Client Initiatives for Funds Distributor, Inc. and an officer
of other investment companies advised or administered by Dreyfus. From
December 1989 through November 1996, he was employed by GE Investments
where he held various financial, business development and compliance
positions. He also served as Treasurer of GE Funds and as Director of
the GE Investment Services. He is 35 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor and
an officer of other investment companies advised or administered by
Dreyfus. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by
Dreyfus. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston Company,
Inc. He is 27 years old.
MARK A. KARPE, Vice President and Assistant Secretary. Senior Paralegal of
the Distributor and an officer of other investment companies advised or
administered by Dreyfus. Prior to August 1993, he was employed as an
Associate Examiner at the National Association of Securities Dealers,
Inc. He is 27 years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor since September 1995 and an officer of
other investment companies advised or administered by Dreyfus. She is
27 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
The Fund's Board members and officers, as a group, owned less than 1%
of the Fund's shares outstanding on February 10, 1997.
The following shareholders owned of record or beneficially 5% or more
of the Fund's shares outstanding as of February 10, 1997: Class A - Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive E., Jacksonville, Fl 32246
- - owned of record 7.1%; Class B - Merrill Lynch Pierce Fenner & Smith, 4800
Deer Lake Drive E., Jacksonville, Fl 32246 - owned of record 10.4%; Class C
- - Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive E.,
Jacksonville, FL 32246 - owned of record 58.1%; Southwest Estate Trust CO
Dr. Joseph I. Miller, Jr., P.O. Box 1001, Atlanta, GA 30301-1001 - owned of
record 8.94%; Class R - Dreyfus Trust Company Trustee FBO The Philadelphia
Phillies 401(K) Incentive Savings Plan, 144 Glenn Curtiss Blvd., Uniondale,
NY 11556 - owned of record 32%; Hoenig & Co. Inc. 401(K) Profit Sharing Plan
FBO Alan Herzog, 4 International Drive, Rye Brook, NY 10573-1065 - owned of
record 29.6%; Mac & Co., P.O. Box 3198, Pittsburgh, PA 15230-3198 - owned of
record 12.3%; Dreyfus Trust Company, Trustee AMTEX Inc. Savings Retirement
Plan, 144 Glenn Curtiss Blvd., Uniondale, NY 11556 - owned of record 10.8%.
A shareholder who beneficially owned, directly or indirectly, 25% or more of
the Fund's voting securities may be deemed to be a "control person" (as
defined in the 1940 Act) of the Fund.
MANAGEMENT AGREEMENT
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
Management Agreement. Dreyfus supervises investment management of the
Fund pursuant to the Management Agreement (the "Management Agreement") dated
August 24, 1994 between Dreyfus and the Fund. The Management Agreement is
subject to annual approval by (i) the Fund's Board or (ii) vote of a
majority (as defined in the 1940 Act) of the Fund's outstanding voting
securities, provided that in either event its continuance also is approved
by a majority of the Fund's Board members who are not "interested persons"
(as defined in the 1940 Act) of the Fund or Dreyfus, by vote cast in person
at a meeting called for the purpose of voting on such approval. The
Management Agreement was approved by shareholders on August 3, 1994, and was
last approved by the Fund's Board, including a majority of the Board members
who are not "interested persons" of any party to the Management Agreement,
at a meeting held on January 8, 1997. The Management Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by
vote of the holders of a majority of the Fund's shares, or, on not less than
90 days' notice, by Dreyfus. The Management Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of Dreyfus: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman-Distribution and a director; William T. Sandalls, Jr.,
Senior Vice President and Chief Financial Officer; Mark N. Jacobs, Vice
President, General Counsel and Secretary; Patrice M. Koslowski, Vice
President-Corporate Communications; Mary Beth Leibig, Vice President-Human
Resources; Jeffrey N. Nachman, Vice President-Mutual Fund Accounting; Andrew
S. Wasser, Vice-President-Information Services; William V. Healey, Assistant
Secretary; and Mandell L. Berman, Burton C. Borgelt and Frank V. Cahouet,
directors.
Dreyfus maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. Dreyfus also may make such advertising and
promotional expenditures using its own resources, as it from time to time
deems appropriate.
As compensation for Dreyfus' services, the Fund has agreed to pay
Dreyfus a monthly management fee at the annual rate of .75 of 1% of the
Fund's average daily net assets. For the fiscal years ended October 31,
1994, 1995 and 1996, the management fees payable amounted to $99,498,
$240,420 and $640,511, respectively, which fees were reduced by $99,498,
$148,716 and $102,124, respectively, resulting in no management fees being
paid in fiscal 1994, $91,704 being paid in fiscal 1995, and $538,387 being
paid in fiscal 1996.
Sub-Investment Advisory Agreement. Sarofim provides investment
advisory assistance and day-to-day management of the Fund's investments
pursuant to the Sub-Investment Advisory Agreement (the "Sub-Advisory
Agreement") dated August 24, 1994 between Sarofim and Dreyfus. The
Sub-Advisory Agreement is subject to annual approval by (i) the Fund's Board
or (ii) vote of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting securities, provided that in either event the continuance
also is approved by a majority of the Fund's Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or Sarofim, by
vote cast in person at a meeting called for the purpose of voting on such
approval. The Sub-Advisory Agreement was last approved by the Fund's Board,
including a majority of the Board members who are not "interested persons"
of any party to the Sub-Advisory Agreement, at a meeting held on January 8,
1997. Shareholders of the Fund approved the Sub-Advisory Agreement on
August 3, 1994. The Sub-Advisory Agreement is terminable without penalty
(i) by Dreyfus on 60 days' notice, (ii) by the Fund's Board or by vote of
the holders of a majority of the Fund's shares on 60 days' notice, or (iii)
by Sarofim on not less than 90 days' notice. The Sub-Advisory Agreement
will terminate automatically in the event of its assignment (as defined in
the 1940 Act) or upon the termination of the Management Agreement for any
reason.
The following persons are officers and/or directors of Sarofim: Fayez
S. Sarofim, Chairman of the Board and President; Raye G. White, Executive
Vice President, Secretary, Treasurer and a director; Russell M. Frankel,
Russell B. Hawkins, William K. McGee, Jr., Charles E. Sheedy and Ralph
Thomas, Senior Vice Presidents; and Nancy Daniel and James A. Reynolds, III,
Vice Presidents.
Sarofim provides day-to-day management of the Fund's investments in
accordance with the stated policies of the Fund, subject to the supervision
of Dreyfus and the approval of the Fund's Board. Dreyfus and Sarofim
provide the Fund with portfolio managers who are authorized by the Fund's
Board to execute purchases and sales of securities. The Fund's portfolio
managers are Russell B. Hawkins, Elaine Rees, Christopher Sarofim and Fayez
S. Sarofim. Dreyfus also maintains a research department with a
professional staff of portfolio managers and securities analysts who provide
research services for the Fund and other funds advised by Dreyfus.
Under the Sub-Advisory Agreement, Dreyfus has agreed to pay Sarofim a
monthly fee at the annual rate set forth in the Fund's Prospectus. For the
fiscal year ended October 31, 1994, no sub-advisory fee was paid by Dreyfus
to Sarofim pursuant to an agreement in effect between Dreyfus and Sarofim.
For the fiscal years ended October 31, 1995 and 1996, $15,125 and $84,976,
respectively, was paid by Dreyfus to Sarofim pursuant to an agreement in
effect between Dreyfus and Sarofim.
Expenses. All expenses incurred in the operation of the Fund are borne
by the Fund except to the extent specifically assumed by Dreyfus and/or
Sarofim. The expenses borne by the Fund include: organizational costs,
taxes, interest, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or holders of 5% or more
of the outstanding voting securities of Dreyfus or Sarofim or their
affiliates, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining corporate existence, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and meetings and any
extraordinary expenses. In addition, Class B and Class C shares are subject
to an annual distribution fee and Class A, Class B and Class C shares are
subject to an annual service fee. See "Distribution Plan and Shareholder
Services Plan."
Dreyfus has agreed that if in any fiscal year the aggregate expenses of
the Fund, exclusive of taxes, brokerage, interest and (with the prior
written consent of the necessary state securities commissions) extraordinary
expenses, but including the management fee, exceed the expense limitation of
any state having jurisdiction over the Fund, the Fund may deduct from the
payment to be made to Dreyfus under the Management Agreement, or Dreyfus
will bear, such excess expense to the extent required by state law. Such
deduction or payment, if any, will be estimated daily, and reconciled and
effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to Dreyfus is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as the Fund's distributor on a
best efforts basis pursuant to an agreement dated August 24, 1994 which is
renewable annually. The Distributor also acts as distributor for the other
funds in the Dreyfus Premier Family of Funds, funds in the Dreyfus Family of
Funds and for certain other investment companies. In some states, certain
financial institutions effecting transactions in Fund shares may be required
to register as dealers pursuant to state law.
For the fiscal year ended October 31, 1996, the Distributor retained
$36,872 from the sales loads on Class A shares and $97,671 and $558 from
contingent deferred sales charges ("CDSC") on Class B and Class C shares,
respectively. For the fiscal year ended October 31, 1995, the Distributor
retained $16,054 from the sales loads on Class A shares and $47,270 from the
CDSC on Class B shares. For the period from June 21, 1995 (commencement of
initial offering of Class C shares) through October 31, 1995, no amount was
retained by the Distributor from the CDSC on Class C shares. For the period
August 24, 1994 through October 31, 1994, the Distributor retained $1,076
from the sales loads on Class A shares and $7,699 from the CDSC on Class B
shares. For the period November 1, 1993 through August 23, 1994, Dreyfus
Service Corporation, as the Fund's distributor during such period, retained
$10,171 from sales loads on Class A shares and $34,556 from the CDSC on
Class B shares.
Sales Loads--Class A. The scale of sales loads applies to purchases of
Class A shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children, or a trustee or other fiduciary
purchasing securities for a single trust estate or a single fiduciary
account (including a pension, profit-sharing or other employee benefit trust
created pursuant to a plan qualified under Section 401 of the Internal
Revenue Code of 1986, as amended (the "Code")) although more than one
beneficiary is involved; or a group of accounts established by or on behalf
of the employees of an employer or affiliated employers pursuant to an
employee benefit plan or other program (including accounts established
pursuant to Sections 403(b), 408(k), and 457 of the Code); or an organized
group which has been in existence for more than six months, provided that it
is not organized for the purpose of buying redeemable securities of a
registered investment company and provided that the purchases are made
through a central administration or a single dealer, or by other means which
result in economy of sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Fund's Class A shares. The example assumes a purchase of Class
A shares aggregating less than $50,000 subject to the schedule of sales
charges set forth in the Fund's Prospectus at a price based upon the net
asset value of the Fund's Class A shares on October 31, 1996:
Class A shares:
NET ASSET VALUE per share................................... $19.89
Sales load for individual sales of shares aggregating less
than $50,000 - 5.75%* of offering price
(approximately 6.1% of net asset value per share)...... 1.21
Offering price to public.................................... $21.10
_________________
* Class A shares purchased by shareholders beneficially owning Class A
shares on November 30, 1996 are subject to a different sales load
schedule as described under "How to Buy Shares-Class A Shares" in the
Fund's Prospectus.
TeleTransfer Privilege. TeleTransfer purchase orders may be made at
any time. Purchase orders received by 4:00 p.m., New York time, on any
business day that Dreyfus Transfer, Inc., the Fund's transfer and dividend
disbursing agent (the "Transfer Agent"), and the New York Stock Exchange are
open for business will be credited to the shareholder's Fund account on the
next bank business day following such purchase order. Purchase orders made
after 4:00 p.m., New York time, on any business day the Transfer Agent and
the New York Stock Exchange are open for business, or orders made on
Saturday, Sunday or any Fund Holiday (e.g., when the New York Stock Exchange
is not open for business), will be credited to the shareholder's Fund
account on the second bank business day following such purchase order. To
qualify to use the TeleTransfer Privilege, the initial payment for purchase
of Fund shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular redemption are to be
wired to an account at any other bank, the request must be in writing and
signature-guaranteed. See "Redemption of Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plan and
Shareholder Services Plan."
Class B and Class C shares are subject to a Distribution Plan and Class
A, Class B and Class C shares are subject to a Shareholder Services Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the 1940 Act provides, among other things,
that an investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board
has adopted such a plan (the "Distribution Plan") with respect to Class B
and Class C shares, pursuant to which the Fund pays the Distributor for
distributing the relevant Class of shares. The Fund's Board believes that
there is a reasonable likelihood that the Distribution Plan will benefit the
Fund and the holders of Class B and Class C shares.
A quarterly report of the amounts expended under the Distribution Plan,
and the purposes for which such expenditures were incurred, must be made to
the Board for its review. In addition, the Distribution Plan provides that
it may not be amended to increase materially the costs which holders of
Class B or Class C shares may bear for distribution pursuant to the
Distribution Plan without the approval of the holders of such shares and
that other material amendments of the Distribution Plan must be approved by
the Fund's Board, and by the Board members who are not "interested persons"
(as defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Distribution Plan, or in any
agreements entered into in connection with the Distribution Plan, by vote
cast in person at a meeting called for the purpose of considering such
amendments. The Distribution Plan is subject to annual approval by such
vote of the Board members cast in person at a meeting called for the purpose
of voting on the Distribution Plan. The Distribution Plan was last so
approved by the Board at a meeting held on January 8, 1997. As to each such
Class of shares, the Distribution Plan may be terminated at any time by vote
of a majority of the Board members who are not "interested persons" and have
no direct or indirect financial interest in the operation of the
Distribution Plan or in any agreements entered into in connection with the
Distribution Plan or by vote of the holders of a majority of such Class of
shares.
For the fiscal year ended October 31, 1996, the Fund paid the
Distributor $404,553 with respect to Class B and $3,832 with respect to
Class C, under the Distribution Plan.
Shareholder Services Plan. The Fund has adopted a Shareholder Services
Plan, pursuant to which the Fund pays the Distributor for the provision of
certain services to the holders of Class A, Class B and Class C shares. The
Services provided may include personal services relating to the shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of such shareholder accounts. Under the Shareholder Services
Plan, the Distributor may make payments to certain financial institutions,
securities dealers and other financial industry professionals (collectively,
"Service Agents") in respect of these services.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Board for its review. In addition, the Shareholder
Services Plan provides that material amendments must be approved by the
Fund's Board, and by the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Shareholder Services Plan or in
any agreements entered into in connection with the Shareholder Services
Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Shareholder Services Plan is subject to
annual approval by such vote of the Board members cast in person at a
meeting called for the purpose of voting on the Shareholder Services Plan.
The Shareholder Services Plan was last so approved on January 8, 1997. As
to each such Class of shares, the Shareholder Services Plan is terminable at
any time by vote of a majority of the Board members who are not "interested
persons" and who have no direct or indirect financial interest in the
operation of the Shareholder Services Plan or in any agreements entered into
in connection with the Shareholder Services Plan.
For the fiscal year ended October 31, 1996, the Fund paid the
Distributor $77,297 with respect to Class A, $134,851 with respect to Class
B, and $1,277 with respect to Class C, pursuant to the Shareholder Services
Plan.
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Shares."
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption will
be effected as a TeleTransfer transaction through the Automated Clearing
House ("ACH") system unless more prompt transmittal specifically is
requested. Redemption proceeds will be on deposit in the investor's account
at an ACH member bank ordinarily two business days after receipt of the
redemption request. See "Purchase of Shares--TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchange Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification.
Redemption Commitment. The Fund is committed to pay in cash all
redemption requests by any shareholder of record, limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the value of the Fund's
net assets at the beginning of such period. Such commitment is irrevocable
without the prior approval of the Securities and Exchange Commission. In
the case of requests for redemption in excess of such amount, the Board
reserves the right to make payments in whole or in part in securities (which
may include non-marketable securities) or other assets in case of an
emergency or any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Fund's portfolio is
valued. If the recipient sold such securities, brokerage charges would be
incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of
its net asset value is not reasonably practicable, or (c) for such other
periods as the Securities and Exchange Commission by order may permit to
protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Fund Exchanges. Shares of any Class of the Fund may be exchanged for
shares of the respective Class of certain other funds advised or
administered by Dreyfus. Shares of the same Class of such other funds
purchased by exchange will be purchased on the basis of relative net asset
value per share as follows:
A. Exchanges for shares of funds that are offered without a
sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged for
shares of other funds sold with a sales load, and
the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales
load and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.
E. Shares of funds subject to a CDSC that are exchanged for shares of
another fund will be subject to the higher applicable CDSC of the
two funds, and for purposes of calculating CDSC rates and
conversion periods, if any, will be deemed to have been held since
the date the shares being exchanged were initially
purchased.
To accomplish an exchange under item D above, an investor's Service
Agent must notify the Transfer Agent of the investor's prior ownership of
Fund shares and the investor's account number.
To request an exchange, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this Privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer Agent
to act on telephonic instructions (including over The Dreyfus Touchr
automated telephone system) from any person representing himself or herself
to be the investor or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange.
Exchanges of Class R shares held by a Retirement Plan may be made only
between the investors' Retirement Plan account in one fund and such
investor's Retirement Plan account in another Fund.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for shares of the same Class of the fund into which the exchange is
being made. For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under
Simplified Employee Pension Plans ("SEP-IRAs") with only one participant,
the minimum initial investment is $750. To exchange shares held in
corporate plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, the minimum initial investment is $100 if the plan has at least
$2,500 invested among the funds in the Dreyfus Premier Family of Funds or
the Dreyfus Family of Funds. To exchange shares held in personal retirement
plans, the shares exchanged must have a current value of at least $100.
Auto-Exchange Privilege. Auto-Exchange permits an investor to
purchase, in exchange for shares of the Fund, shares of the same Class of
certain other funds in the Dreyfus Premier Family of Funds or the Dreyfus
Family of Funds. This Privilege is available only for existing accounts.
With respect to Class R shares held by a Retirement Plan, exchanges may be
made only between the investor's Retirement Plan account in one Fund and
such investor's Retirement Plan account in another Fund. Shares will be
exchanged on the basis of relative net asset value as described above under
"Fund Exchanges." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An investor will be notified if his account falls below the
amount designated to be exchanged under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are made
in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible
for this Privilege. Exchanges of IRA shares may be made between IRA
accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between accounts
having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-554-4611. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Dividend Sweep. Dividend Sweep allows investors to invest
automatically their dividends or dividends and capital gain distributions,
if any, from the Fund in shares of the same Class of another fund in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds of which the
investor is a shareholder. Shares of the same Class of other funds
purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested without
imposition of a sales load in shares of other funds that are
offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge a
sales load may be invested in shares of other funds sold with a
sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds
the maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other Funds that impose a CDSC and the applicable CDSC,
if any, will be imposed upon redemption of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
Valuation of Portfolio Securities. The Fund's investment securities,
including covered call options written by the Fund, are valued at the last
sale price on the securities exchange or national securities market on which
such securities primarily are traded. Securities not listed on an exchange
or national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except in the case of open short positions where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Any assets or liabilities initially expressed in terms of
foreign currency will be translated into U.S. dollars at the midpoint of the
New York interbank market spot exchange rate as quoted on the day of such
translation by the Federal Reserve Bank of New York or if no such rate is
quoted on such date, at the exchange rate previously quoted by the Federal
Reserve Bank of New York or at such other quoted market exchange rate as may
be determined to be appropriate by the Advisers. Forward currency contracts
will be valued at the current cost of offsetting the contract. Because of
the need to obtain prices as of the close of trading on various exchanges
throughout the world, the calculation of net asset value may not take place
contemporaneously with the determination of prices of certain of the Fund's
securities. Short-term investments are carried at amortized cost, which
approximates value. Expenses and fees of the Fund, including the management
fee and fees pursuant to the Distribution Plan and Shareholder Services
Plan, are accrued daily and taken into account for the purpose of
determining the net asset value of Fund shares. Because of the difference
in operating expenses incurred by each Class, the per share net asset value
of each Class will differ.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Board, are valued at fair value as determined in
good faith by the Board. The Board will review the method of valuation on a
current basis. In making its good faith valuation of restricted securities,
the Board generally will take the following factors into consideration:
restricted securities which are, or are convertible into, securities of the
same class of securities for which a public market exists usually will be
valued at market value less the same percentage discount at which purchased.
This discount will be revised periodically by the Board if the Board members
believe that it no longer reflects the value of the restricted securities.
Restricted securities not of the same class as securities for which a public
market exists usually will be valued initially at cost. Any subsequent
adjustment from cost will be based upon considerations deemed relevant by
the Board.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Distributions
and Taxes."
Management of the Fund believes that the Fund has qualified for the
fiscal year ended October 31, 1996 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification
is in the best interests of its shareholders. As a regulated investment
company, the Fund will pay no Federal income tax on net investment income
and net realized securities gains to the extent that such income and gains
are distributed to shareholders in accordance with applicable provisions of
the Code. To qualify as a regulated investment company, the Fund must pay
out to its shareholders at least 90% of its net income (consisting of net
investment income and net short-term capital gain), must derive less than
30% of its annual gross income from gain on the sale of securities held for
less than three months, and must meet certain asset diversification and
other requirements. The term "regulated investment company" does not imply
the supervision of management or investment practices or policies by any
government agency.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of the shares below the
cost of the investment. Such a dividend or distribution would be a return
of investment in an economic sense, although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of the Fund
for six months or less and has received a capital gain distribution with
respect to such shares, any loss incurred on the sale of such shares will be
treated as long-term capital loss to the extent of the capital gain
distribution received.
Depending upon the composition of the Fund's income, the entire amount
or a portion of the dividends from net investment income may qualify for the
dividends received deduction allowable to qualifying U.S. corporate
shareholders ("dividends received deduction"). In general, dividend income
of the Fund distributed to the Fund's qualifying corporate shareholders will
be eligible for the dividends received deduction only to the extent that the
Fund's income consists of dividends paid by U.S. corporations. However,
Section 246(c) of the Code provides that if a qualifying corporate
shareholder has disposed of Fund shares not held for 46 days or more and has
received a dividend from net investment income with respect to such shares,
the portion designated by the Fund as qualifying for the dividends received
deduction will not be eligible for such shareholder's dividends received
deduction. In addition, the Code provides other limitations with respect to
the ability of a qualifying corporate shareholder to claim the dividends
received deduction in connection with holding Fund shares.
The Fund may qualify for and may make an election permitted under
Section 853 of the Code so that shareholders may be eligible to claim a
credit or deduction on their Federal income tax returns for, and will be
required to treat as part of the amounts distributed to them, their pro rata
portion of qualified taxes paid or incurred by the Fund to foreign countries
(which taxes relate primarily to investment income). The Fund may make an
election under Section 853 of the Code, provided that more than 50% of the
value of the Fund's total assets at the close of the taxable year consists
of securities in foreign corporations, and the Fund satisfies the applicable
distribution provisions of the Code. The foreign tax credit available to
shareholders is subject to certain limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or
loss realized from the disposition of foreign currencies (including foreign
currency denominated bank deposits) and non-US. dollar denominated
securities (including debt instruments and certain forward contracts and
options) may be treated as ordinary income or loss under Section 988 of the
Code. In addition, all or a portion of any gain realized from the sale or
other disposition of certain market discount bonds will be treated as
ordinary income under Section 1276 of the Code. Finally, all or a portion
of the gain realized from engaging in "conversion transactions" may be
treated as ordinary income under Section 1258 of the Code. "Conversion
transactions" are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce capital
gains, or transactions described in Treasury regulations to be issued in the
future.
Under Section 1256 of the Code, any gain or loss the Fund realizes from
certain forward contracts and options transactions will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such contracts and options
as well as from closing transactions. In addition, any such contracts or
options remaining unexercised at the end of the Fund's taxable year will be
treated as sold for their then fair market value, resulting in additional
gain or loss to the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving certain foreign
currency forward contracts or options may constitute "straddles."
"Straddles" are defined to include "offsetting positions" in actively traded
personal property. The tax treatment of "straddles" is governed by Sections
1092 and 1258 of the Code, which, in certain circumstances, overrides or
modifies the provisions of Sections 1256 and 988 of the Code. As such all
or a portion of any short-term or long-term capital gain from certain
"straddle" transactions may be recharacterized as ordinary income. If the
Fund were treated as entering into "straddles" by reason of its engaging in
certain forward contracts or options transactions, such "straddles" would be
characterized as "mixed straddles" if the forward contracts or options
transactions comprising a part of such "straddles" were governed by Section
1256 of the Code. The Fund may make one or more elections with respect to
"mixed straddles." Depending on which election is made, if any, the results
to the Fund may differ. If no election is made to the extent the "straddle"
rules apply to positions established by the Fund, losses realized by the
Fund will be deferred to the extent of unrealized gain in the offsetting
position. Moreover, as a result of the "straddle" rules, short-term capital
loss on "straddle" positions may be recharacterized as long-term capital
loss, and long-term capital gains may be treated as short-term capital gain
or ordinary income.
If the Fund invests in an entity that is classified as a "passive
foreign investment company" ("PFIC") for Federal income tax purposes, the
operation of certain provisions of the Code applying to PFICs could result
in the imposition of certain Federal income taxes on the Fund. In addition,
gain realized from the sale or other disposition of PFIC securities may be
treated as ordinary income under Section 1291 of the Code.
Investment by the Fund in securities issued at a discount or providing
for deferred interest or for payment of interest in the form of additional
obligations could under special tax rules affect the amount, timing and
character of distributions to shareholders by causing the Fund to recognize
income prior to the receipt of cash payments. For example, the Fund could
be required to accrue as income each year a portion of the discount (or
deemed discount) at which such securities were issued and to distribute such
income. In such case, the Fund may have to dispose of securities which it
might otherwise have continued to hold in order to generate cash to satisfy
these distribution requirements.
PORTFOLIO TRANSACTIONS
Dreyfus assumes general supervision over placing orders on behalf of
the Fund for the purchase or sale of investment securities. Allocation of
brokerage transactions, including their frequency, is made in Dreyfus' best
judgment and in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most favorable
net price. Subject to this consideration, the brokers selected will include
those that supplement the Advisers' research facilities with statistical
data, investment information, economic facts and opinions. Information so
received is in addition to and not in lieu of services required to be
performed by the Advisers and the Advisers' fees are not reduced as a
consequence of the receipt of such supplemental information.
Such information may be useful to Dreyfus in serving both the Fund and
other funds which it advises and to Sarofim in serving both the Fund and the
other funds or accounts it advises, and, conversely, supplemental
information obtained by the placement of business of other clients may be
useful to the Advisers in carrying out their obligations to the Fund. Sales
of Fund shares by a broker may be taken into consideration, and brokers also
will be selected because of their ability to handle special executions such
as are involved in large block trades or broad distributions, provided the
primary consideration is met. Large block trades may, in certain cases,
result from two or more funds advised or administered by Dreyfus being
engaged simultaneously in the purchase or sale of the same security.
Certain of the Fund's transactions in securities of foreign issuers may not
benefit from the negotiated commission rates available to the Fund for
transactions in securities of domestic issuers. When transactions are
executed in the over-the-counter market, the Fund will deal with the primary
market makers unless a more favorable price or execution otherwise is
obtainable.
Portfolio turnover may vary from year to year as well as within a year.
Under normal market conditions, it is anticipated that in any fiscal year
the turnover rate generally will be less than 100%. In periods in which
extraordinary market conditions prevail, the Advisers will not be deterred
from changing investment strategy as rapidly as needed, in which case higher
turnover rates can be anticipated which would result in greater brokerage
expenses. The overall reasonableness of brokerage commissions paid is
evaluated by Dreyfus based upon its knowledge of available information as to
the general level of commissions paid by other institutional investors for
comparable services.
For fiscal years ended October 31, 1994, 1995 and 1996, the Fund paid
brokerage commissions of $11,081, $29,626 and $46,668, respectively, none of
which was paid to the Distributor. There were no gross spreads or
concessions on principal transactions for the fiscal years ended October 31,
1994 and 1995. For the fiscal year ended October 31, 1996, the Fund paid
$12,610 in gross spreads or concessions on principal transactions.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance
Information."
The average annual total return for the 1 and 3.299 year periods ended
October 31, 1996 for Class A was 16.76% and 14.34%, respectively. The
average annual total return for Class B for such periods was 17.29% and
14.40%, respectively. The average annual total return for the 1 and 1.364
year periods ended October 31, 1996 for Class C was 20.23% and 19.12%,
respectively. The average annual total return for the 0.663 year period
ended October 31, 1996 for Class R was 14.69%. Average annual total return
is calculated by determining the ending redeemable value of an investment
purchased at net asset value (maximum offering price in the case of Class A)
per share with a hypothetical $1,000 payment made at the beginning of the
period (assuming the reinvestment of dividends and distributions), dividing
by the amount of the initial investment, taking the "n"th root of the
quotient (where "n" is the number of years in the period) and subtracting 1
from the result. A Class's average annual total return figures calculated
in accordance with such formula assume that in the case of Class A the
maximum sales load has been deducted from the hypothetical initial
investment at the time of purchase or in the case of Class B or Class C the
maximum applicable CDSC has been paid upon redemption at the end of the
period.
Total return is calculated by subtracting the amount of the Fund's net
asset value (maximum offering price in the case of Class A) per share at the
beginning of a stated period from the net asset value per share at the end
of the period (after giving effect to the reinvestment of dividends and
distributions during the period and any applicable CDSC), and dividing the
result by the net asset value (maximum offering price in the case of Class
A) per share at the beginning of the period. Total return also may be
calculated based on the net asset value per share at the beginning of the
period instead of the maximum offering price per share at the beginning of
the period for Class A shares or without giving effect to any applicable
CDSC at the end of the period for Class B or Class C shares. In such cases,
the calculation would not reflect the deduction of the sales load with
respect to Class A shares or any applicable CDSC with respect to Class B or
Class C shares, which, if reflected would reduce the performance quoted.
The total return for the Fund's Class A and Class B shares for the period
July 15, 1993 (commencement of operations) through October 31, 1996 was
55.61% and 55.87%, respectively. Based on net asset value per share for
Class A or without giving effect to the CDSC for Class B, the total return
for the Fund's Class A and Class B shares for this period was 62.96% and
58.87%, respectively. The total return for the Fund's Class C shares for
the period June 21, 1995 (commencement of initial offering) through October
31, 1996 was 26.95%. Without giving effect to the CDSC, the total return
for the Fund's Class C shares for this period was 26.95%. The total return
for the Fund's Class R shares for the period March 4, 1996 (commencement of
initial offering) through October 31, 1996 was 9.51%.
From time to time, advertising materials for the Fund may refer to the
fact that the Fund currently looks for successful companies with established
brands that are expanding into the world marketplace. From time to time,
advertising materials for the Fund may also refer to the clients of Sarofim,
such as large corporations, states, universities and other institutions and
organizations.
From time to time, advertising materials for the Fund may refer to
Morningstar ratings and related analyses supporting the rating.
From time to time, advertisements may include statistical data or
general discussions about the growth and development of Dreyfus Retirement
Services (in terms of new customers, assets under management, market share,
etc.) and its presence in the defined contribution plan market.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Shares have no preemptive or subscription rights and are freely
transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc. a wholly-owned subsidiary of Dreyfus, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Fund,
the Transfer Agent arranges for the maintenance of shareholder account
records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by the Fund. For these services, the Transfer Agent receives a
monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Fund during the month, and is reimbursed for certain out-
of-pocket expenses. For the period December 1, 1995 (effective date of
transfer agency agreement) through October 31, 1996, the Fund paid the
Transfer Agent $69,323. The Bank of New York, 90 Washington Street, New
York, New York 10286, is the Fund's custodian. Neither the Transfer Agent
nor The Bank of New York has any part in determining the investment policies
of the Fund or which securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the Fund's Prospectus
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of certain ratings assigned by S&P, Moody's, Fitch and
Duff:
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated
categories.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default,
and are dependent upon favorable business, financial and economic conditions
to meet timely payments of principal. In the event of adverse business,
financial or economic conditions, it is not likely to have the capacity to
pay interest and repay principal.
S&P's letter ratings may be modified by the addition of a plus (+) or
minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Rating
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. Issues assigned an A rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1,2 and 3 to indicate the relative degree of
safety.
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are denoted
with a plus sign (+) designation.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category.
The modifier 1 indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of a rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition and
operative performance of the issuer and of any guarantor, as well as the
political and economic environment that might affect the issuer's future
financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations requires
an advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.
Duff
AAA
Bond Ratings
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because
of economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection factors
but still considered sufficient for prudent investment. Considerable
variability in risk during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial
protection factors fluctuate according to industry conditions or company
fortunes. Overall quality may move up or down frequently within the
category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating
within this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such bonds
may be in default or have considerable uncertainty as to timely payment of
interest, preferred dividends and/or principal. Protection factors are
narrow and risk can be substantial with unfavorable economic or industry
conditions and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol (except AAA)
to indicate the relative position of a credit within the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor.
<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
Reference is hereby made to page 4 of the Fund's Prospectus dated
March 1, 1997, As Revised June 1, 1997.
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
