Registration Nos. 33-62626
811-7770
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 4 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
/X/
Amendment No. 4 /X/
(Check appropriate box or boxes)
DREYFUS ASSET ALLOCATION FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212)
922-6130
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2594
Approximate Date of Proposed Public Offering: As soon as
practicable after this Registration Statement is declared
effective.
It is proposed that this filing will become effective
(check appropriate box)
immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of Rule 485
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information *
4 General Description of Registrant 4, 40
5 Management of the Fund 24
5(a) Management's Discussion of Fund's
Performance *
6 Capital Stock and Other Securities 40
7 Purchase of Securities Being Offered 25
8 Redemption or Repurchase 33
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
10 Cover Page B-1
11 Table of Contents B-1
12 General Information and History *
13 Investment Objectives and Policies B-2
14 Management of the Fund B-10
15 Control Persons and Principal Holders B-12
of Securities
16 Investment Advisory and Other Services B-12
17 Brokerage Allocation and Other Practices B-25
18 Capital Stock and Other Securities B-27
19 Purchase, Redemption and Pricing of B-14,
Securities Being Offered B-16, B-22
20 Tax Status *
21 Underwriters B-14
22 Calculations of Performance Data B-26
23 Financial Statements B-29
Items in
Part C of
Form N-1A
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under Common C-3
Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-14
- ---------
*Omitted since answer is negative or inapplicable.
PROSPECTUS _____ __, 1994
DREYFUS ASSET ALLOCATION FUND, INC.
Dreyfus Asset Allocation Fund, Inc. (the "Fund") is an
open-end, management investment company, known as a mutual fund.
The Fund permits you to invest in three separate non-diversified
portfolios (each, a "Portfolio"): Dreyfus Total Return
Portfolio, which seeks to maximize total return; Dreyfus Income
Portfolio, which seeks to maximize current income, with a
secondary goal of capital appreciation; and Dreyfus Growth
Portfolio, which seeks capital appreciation. Each portfolio will
follow an investment strategy that actively allocates the
Portfolio's assets among common stocks, U.S. Treasury Notes and
Bonds and short-term money market instruments. In addition to
usual investment practices, each Portfolio may use speculative
investment techniques such as short-selling, borrowing for
investment purposes, and futures and options transactions.
You can invest, reinvest or redeem shares at any time
without charge or penalty imposed by the Fund. You can purchase
or redeem shares by telephone using Dreyfus TeleTransfer.
The Dreyfus Corporation professionally manages each
Portfolio.
Shares of each Portfolio bear certain costs pursuant to
a Distribution Plan adopted in accordance with Rule 12b-1 under
the Investment Company Act of 1940 and a Shareholder Services
Plan.
This Prospectus sets forth concisely information about
the Fund that you should know before investing. It should be
read and retained for future reference.
Part B (also known as the Statement of Additional
Information), dated ____________, 1994, which may be revised from
time to time, provides a further discussion of certain areas in
this Prospectus and other matters which may be of interest to
some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. For
a free copy, write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-645-6561. When
telephoning, ask for Operator 666.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. THE NET ASSET VALUE OF FUNDS
OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses. . . . . . . .
Condensed Financial Information . . . . . . .
Description of the Fund . . . . . . . . . . .
Management of the Fund. . . . . . . . . . . .
How to Buy Fund Shares. . . . . . . . . . . .
Shareholder Services. . . . . . . . . . . . .
How to Redeem Fund Shares . . . . . . . . . .
Distribution Plan and Shareholder
Services Plan. . . . . . . . . . . . . . . .
Dividends, Distributions and Taxes. . . . . .
Performance Information . . . . . . . . . . .
General Information . . . . . . . . . . . . .
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.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Dreyfus Dreyfus Dreyfus
Total Return Income Growth
Portfolio Portfolio Portfolio
Management Fees .75% .75% .75%
12b-1 Fees .50% .50% .50%
Other Expenses .61% .61% .61%
Total Portfolio
Operating Expenses 1.86% 1.86% 1.86%
Example:
You would pay the
following expenses on a $1,000
investment, assuming (1) 5%
annual return and (2) redemption
at the end of each time period:
1 Year . . . . . . . $19 $19 $19
3 Years . . . . . . . $58 $58 $58
5 Years. . . . . . . $101 $101 $101
10 Years. . . . . . . $218 $218 $218
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, EACH
PORTFOLIO'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN
ACTUAL RETURN GREATER OR LESS THAN 5%.
________________________________________________________________
The purpose of the foregoing table is to assist you in
understanding the various costs and expenses borne by the Fund,
and therefore indirectly by investors, the payment of which will
reduce investors' return on an annual basis. Other Expenses and
Total Fund Operating Expenses are based on estimated amounts.
The information in the foregoing table does not reflect any fee
waivers or expense reimbursement arrangements that may be in
effect. Certain Service Agents (as defined below) may charge
their clients direct fees for effecting transactions in a
relevant Portfolio's shares; such fees are not reflected in the
foregoing table. Long-term investors could pay more in 12b-1
fees than the economic equivalent of paying a front-end sales
charge. For a further description of the various costs and
expenses incurred in the operation of the Fund, as well as
expense reimbursement or waiver arrangements, see "Management of
the Fund," "How to Buy Fund Shares" and "Distribution Plan and
Shareholder Services Plan."
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. No
financial data is available for the Dreyfus Income Portfolio and
the Dreyfus Growth Portfolio which had not commenced operations
as of the date of this Prospectus.
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 the
period July 1, 1993 (commencement of operations) to April 30,
1994 for the Fund. This information has been derived from
information provided in the Fund's financial statements.
PER SHARE DATA:
Net asset value, beginning of period. . . . . . . . . . . $12.50
Investment Operations:
Investment income--net. . . . . . . . . . . . . . . . . . .24
Net realized and unrealized gain (loss) on investments. . (.11)
Total from Investment Operations . . . . . . . . . . . . .13
DISTRIBUTIONS:
Dividends from investment income-net. . . . . . . . . . . (.13)
Dividends from net realized gain on investments . . . . . (.01)
Total Distributions . . . . . . . . . . . . . . . . . . . (.14)
Net asset value, end of period. . . . . . . . . . . . . . $12.49
TOTAL INVESTMENT RETURN .99%*
RATIOS / SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets. . . . . .16%*
Ratio of net investment income to average net assets . . 2.48%*
Decrease reflected in above expense ratio due to
undertaking by The Dreyfus Corporation. . . . . . . . . 1.58%*
Portfolio Turnover Rate. . . . . . . . . . . . . . . . . ----
Net Assets, end of period (000's omitted). . . . . . . . $51,063
___________________________
* Not annualized.
Further information about the Fund's performance is
contained in the Fund's annual report for the fiscal year ending
April 30, 1994, and may be obtained without charge by writing to
the address or calling the number set forth on the cover page of
this Prospectus.
DESCRIPTION OF THE FUND
General--The Fund is a "series fund," which is a mutual fund
divided into separate portfolios. Each Portfolio is treated as a
separate entity for certain matters under the Investment Company
Act of 1940 and for other purposes, and a shareholder of one
Portfolio is not deemed to be a shareholder of any other
Portfolio. As described below, for certain matters Fund
shareholders vote together as a group; as to others they vote
separately by Portfolio.
Investment Objectives--Dreyfus Total Return Portfolio seeks to
maximize total return, consisting of capital appreciation and
current income. Dreyfus Income Portfolio seeks to maximize
current income, with a secondary goal of capital appreciation.
Dreyfus Growth Portfolio seeks capital appreciation. Each
Portfolio's investment objective cannot be changed without
approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of such Portfolio's outstanding
voting shares. There can be no assurance that a Portfolio's
investment objective will be achieved.
Management Policies--Each Portfolio seeks to achieve its
investment objective by following an asset allocation strategy
that contemplates shifts, which may be frequent, among common
stocks, U.S. Treasury Notes and Bonds with remaining maturities
at the time of purchase of at least one year, and short-term
money market instruments. The Portfolio's differ only with
respect to the types of common stocks in which they may invest
and their asset class weightings.
Dreyfus Total Return Portfolio's asset class
weightings, under normal circumstances, are anticipated to be 55%
in common stocks, 35% in U.S. Treasury Notes and Bonds and 10% in
short-term money market instruments. The Portfolio's investments
in common stocks will consist of those included in the Standard &
Poor's 500 Stock Index* (the "S&P 500 Index").
* "Standard & Poor's," "S&P 500Registered sign are trademarks of
Standard & Poors's Corporation. The Fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's Corporation.
Dreyfus Income Portfolio's asset class weightings,
under normal circumstances, are anticipated to be 55% in U.S.
Treasury Notes and Bonds, 35% in common stocks and 10% in short-
term money market instruments. The Portfolio's investments in
common stocks will consist of those included in the S&P 500
Index.
Dreyfus Growth Portfolio's asset class weightings,
under normal circumstances, are anticipated to be 80% in common
stocks and 20% in debt instruments consisting of U.S. Treasury
Notes and Bonds and short-term money market instruments. The
Portfolio's investments in common stocks will consist of those
included in the Wilshire 4500 Index, which is composed of common
stocks of approximately 6,000 predominantly medium- and small-
capitalization companies that are not included in the S&P 500
Index.
The Dreyfus Corporation has broad latitude in selecting
the class of investments and market sectors in which each
Portfolio will invest. Each Portfolio will not be managed as a
balanced portfolio and is not required to maintain a portion of
its investments in each of its permitted investment types at all
times. Thus, during the course of a business cycle, for example,
a Portfolio may invest solely in common stocks (except for
Dreyfus Income Portfolio), U.S. Treasury Notes and Bonds or
short-term money market instruments, or in a combination of these
classes of investments. The asset allocation mix for each
Portfolio will be determined by The Dreyfus Corporation at any
given time in light of its assessment of current economic
conditions and investment opportunities. Some of the factors
that The Dreyfus Corporation may consider in determining each
Portfolio's asset allocation mix include the following: (1)
level and direction of long-term interest rates versus short-term
interest rates; (2) historical investment returns for each asset
class in which the Fund can invest relative to the prevailing
business cycle; and (3) general economic conditions, such as
current inflation, unemployment and capacity utilization figures,
that could affect investments. The asset allocation mix selected
will be a primary determinant of a Portfolio's investment
performance. Under certain market conditions, limiting a
Portfolio's asset allocation among these asset classes may
inhibit its ability to achieve its investment objective.
Common Stocks--The common stocks in which the Dreyfus Total
Return Portfolio and the Dreyfus Income Portfolio invest will
consist of those included in the S&P 500 Index. The common
stocks in which the Dreyfus Growth Portfolio invests will consist
of those included in the Wilshire 4500 Index.
U.S. Treasury Notes and Bonds--Each Portfolio invests in U.S.
Treasury Notes and Bonds with remaining maturities at the time of
purchase by the Portfolio of at least one year. Under normal
circumstances, the dollar-weighted average maturity of this
portion of each Portfolio's investments is expected to range
between 3 and 10 years.
Money Market Instruments--The short-term money market instruments
in which each Portfolio invests consist of U.S. Government
securities, bank obligations, including certificates of deposit,
time deposits and bankers' acceptances and other short-term
obligations of domestic or foreign banks, domestic savings and
loan associations and other banking institutions having total
assets in excess of $1 billion; commercial paper, and repurchase
agreements, as set forth under "Certain Portfolio Securities"
below. A Portfolio may invest up to 100% of its assets in money
market instruments, but at no time will such Portfolio's
investments in bank obligations, including time deposits, exceed
25% of its assets.
Investment Techniques
Each Portfolio also may engage in various investment and hedging
techniques such as leveraging, short-selling, options and futures
transactions, and lending portfolio securities, each of which
involves risk. See "Risk Factors" below. Options and futures
transactions involve so-called "derivative securities."
Leverage Through Borrowing--Each Portfolio may borrow for
investment purposes. This borrowing, which is known as
leveraging, generally will be unsecured, except to the extent a
Portfolio enters into reverse repurchase agreements described
below. The Investment Company Act of 1940 requires each
Portfolio to maintain continuous asset coverage (that is, total
assets including borrowings, less liabilities exclusive of
borrowings) of 300% of the amount borrowed. If the 300% asset
coverage should decline as a result of market fluctuations or
other reasons, a Portfolio may be required to sell some of its
portfolio holdings within three days to reduce the debt and
restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities
at that time. Leveraging may exaggerate the effect on net asset
value of any increase or decrease in the market value of the
Portfolio's investment securities. Money borrowed for leveraging
will be subject to interest costs that may or may not be
recovered by appreciation of the securities purchased; in certain
cases, interest costs may exceed the return received on the
securities purchased. Each Portfolio also may be required to
maintain minimum average balances in connection with such
borrowing or to pay a commitment or other fee to maintain a line
of credit; either of these requirements would increase the cost
of borrowing over the stated interest rate.
Among the forms of borrowing in which each Portfolio
may engage is the entry into reverse repurchase agreements with
banks, brokers or dealers. These transactions involve the
transfer by a Portfolio of an underlying debt instrument in
return for cash proceeds based on a percentage of the value of
the security. The Portfolio retains the right to receive
interest and principal payments on the security. At an agreed
upon future date, the Portfolio repurchases the security at
principal, plus accrued interest. In certain types of
agreements, there is no agreed upon repurchase date and interest
payments are calculated daily, often based on the prevailing
overnight repurchase rate. Each Portfolio will maintain in a
segregated custodial account cash or U.S. Government securities
or other high quality liquid debt securities at least equal to
the aggregate amount of its reverse repurchase obligations, plus
accrued interest, in certain cases, in accordance with releases
promulgated by the Securities and Exchange Commission. The
Securities and Exchange Commission views reverse repurchase
transactions as collateralized borrowings by the relevant
Portfolio. These agreements, which are treated as if
reestablished each day, are expected to provide the Portfolios
with a flexible borrowing tool.
Short-Selling--Each Portfolio may make short sales, which are
transactions in which the Portfolio sells a security it does not
own in anticipation of a decline in the market value of that
security. To complete such a transaction, the Portfolio must
borrow the security to make delivery to the buyer. The Portfolio
then is obligated to replace the security borrowed by purchasing
it at the market price at the time of replacement. The price at
such time may be more or less than the price at which the
security was sold by the Portfolio. Until the security is
replaced, the Portfolio is required to pay to the lender amounts
equal to any dividends, interest or other distributions which
accrue during the period of the loan. To borrow the security,
the Portfolio also may be required to pay a premium, which would
increase the cost of the security sold. The proceeds of the
short sale will be retained by the broker, to the extent
necessary to meet margin requirements, until the short position
is closed out.
Until a Portfolio closes its short position or replaces
the borrowed security, the Portfolio will: (a) maintain a
segregated account, containing cash or U.S. Government
securities, at such a level that (i) the amount deposited in the
account plus the amount deposited with the broker as collateral
will equal the current value of the security sold short and (ii)
the amount deposited in the segregated account plus the amount
deposited with the broker as collateral will not be less than the
market value of the security at the time it was sold short; or
(b) otherwise cover its short position.
A Portfolio will incur a loss as a result of the short
sale if the price of the security increases between the date of
the short sale and the date on which the Portfolio replaces the
borrowed security. A Portfolio will realize a gain if the
security declines in price between those dates. This result is
the opposite of what one would expect from a cash purchase of a
long position in a security. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of
any premium or amounts in lieu of dividends, interest or other
distributions the Portfolio may be required to pay in connection
with a short sale.
Each Portfolio may purchase call options to provide a
hedge against an increase in the price of a security sold short
by the Portfolio. When a Portfolio purchases a call option it
has to pay a premium to the person writing the option and a
commission to the broker selling the option. If the option is
exercised by the Portfolio, the premium and the commission paid
may be more than the amount of the brokerage commission charged
if the security were to be purchased directly. See "Call and Put
Options on Specific Securities" below.
The Fund anticipates that the frequency of short sales
on behalf of a Portfolio will vary substantially under different
market conditions, and it does not intend that any specified
portion of a Portfolio's assets, as a matter of practice, will be
invested in short sales. However, no securities will be sold
short if, after effect is given to any such short sale, the total
market value of all securities sold short by a Portfolio would
exceed 25% of the value of such Portfolio's net assets.
In addition to the short sales discussed above, each
Portfolio may make short sales "against the box," a transaction
in which the Portfolio enters into a short sale of a security
which the Fund owns. The proceeds of the short sale will be held
by a broker until the settlement date at which time the Fund
delivers the security to close the short position. The Fund
receives the net proceeds from the short sale. The Fund at no
time will have more than 15% of the value of a Portfolio's net
assets in deposits on short sales against the box.
Call and Put Options on Specific Securities--Each Portfolio may
invest up to 5% of its assets, represented by the premium paid,
in the purchase of call and put options in respect of specific
securities (or groups or "baskets" of specific securities) in
which the Portfolio may invest. Each Portfolio may write covered
call and put option contracts to the extent of 20% of the value
of its net assets at the time such option contracts are written.
A call option gives the purchaser of the option the right to buy,
and obligates the writer to sell, the underlying security or
securities at the exercise price at any time during the option
period. Conversely, a put option gives the purchaser of the
option the right to sell, and obligates the writer to buy, the
underlying security or securities at the exercise price at any
time during the option period. A covered call option sold by a
Portfolio, which is a call option with respect to which the
Portfolio owns the underlying security or securities, exposes the
Portfolio during the term of the option to possible loss of
opportunity to realize appreciation in the market price of the
underlying security or securities or to possible continued
holding of a security or securities which might otherwise have
been sold to protect against depreciation in the market price
thereof. A covered put option sold by a Portfolio exposes the
Portfolio during the term of the option to a decline in price of
the underlying security or securities. A put option sold by a
Portfolio is covered when, among other things, cash or liquid
securities are placed in a segregated account with the Fund's
custodian to fulfill the obligation undertaken.
To close out a position when writing covered options, a
Portfolio may make a "closing purchase transaction," which
involves purchasing an option on the same security or securities
with the same exercise price and expiration date as the option
which it has previously written. To close out a position as a
purchaser of an option, a Portfolio may make a "closing sale
transaction," which involves liquidating the Portfolio's position
by selling the option previously purchased. A Portfolio will
realize a profit or loss from a closing purchase or sale
transaction depending upon the difference between the amount paid
to purchase an option and the amount received from the sale
thereof.
The Fund intends to treat options in respect of
specific securities that are not traded on a national securities
exchange and the securities underlying covered call options
written by the Portfolios as illiquid securities. See "Certain
Portfolio Securities--Illiquid Securities" below.
Each Portfolio will purchase options only to the extent
permitted by the policies of state securities authorities in
states where shares of the Portfolios are qualified for offer and
sale.
Stock Index Options--Each Portfolio may purchase and write put
and call options on stock indexes listed on U.S. securities
exchanges or traded in the over-the-counter market. A stock
index fluctuates with changes in the market values of the stocks
included in the index.
The effectiveness of purchasing or writing stock index
options will depend upon the extent to which price movements in
the Portfolio's investments correlate with price movements of the
stock index selected. Because the value of an index option
depends upon movements in the level of the index rather than the
price of a particular stock, whether a Portfolio will realize a
gain or loss from the purchase or writing of options on an index
depends upon movements in the level of stock prices in the stock
market generally or, in the case of certain indexes, in an
industry or market segment, rather than movements in the price of
a particular stock. Accordingly, successful use by each
Portfolio of options on stock indexes will be subject to The
Dreyfus Corporation's ability to predict correctly movements in
the direction of the stock market generally or of a particular
industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.
When a Portfolio writes an option on a stock index, the
Portfolio will place in a segregated account with its custodian
cash or liquid securities in an amount at least equal to the
market value of the underlying stock index and will maintain the
account while the option is open or otherwise will cover the
transaction.
Futures Transactions - In General--The Fund is not a commodity
pool. However, as a substitute for a comparable market position
in the underlying securities and for hedging purposes, each
Portfolio may engage in futures and options on futures
transactions as described below.
Each Portfolio's commodities transactions must
constitute bona fide hedging or other permissible transactions
pursuant to regulations promulgated by the Commodity Futures
Trading Commission. In addition, a Portfolio may not engage in
such transactions if the sum of the amount of initial margin
deposits and premiums paid for unexpired commodity options, other
than for bona fide hedging transactions, would exceed 5% of the
liquidation value of the Portfolio's assets, after taking into
account unrealized profits and unrealized losses on such
contracts it has entered into; provided, however, that in the
case of an option that is in-the-money at the time of purchase,
the in-the-money amount may be excluded in calculating the 5%.
Pursuant to regulations and/or published positions of the
Securities and Exchange Commission, each Portfolio may be
required to segregate cash or high quality money market
instruments in connection with its commodities transactions in an
amount generally equal to the value of the underlying commodity.
To the extent a Portfolio engages in the use of futures and
options on futures other than for bona fide hedging purposes, the
Portfolio may be subject to additional risk.
Initially, when purchasing or selling futures contracts
a Portfolio will be required to deposit with the Fund's custodian
in the broker's name an amount of cash or cash equivalents up to
approximately 10% of the contract amount. This amount is subject
to change by the exchange or board of trade on which the contract
is traded and members of such exchange or board of trade may
impose their own higher requirements. This amount is known as
"initial margin" and is in the nature of a performance bond or
good faith deposit on the contract which is returned to the
Portfolio upon termination of the futures position, assuming all
contractual obligations have been satisfied. Subsequent
payments, known as "variation margin," to and from the broker
will be made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and
short positions in the futures contract more or less valuable, a
process known as "marking-to-market." At any time prior to the
expiration of a futures contract, the Portfolio may elect to
close the position by taking an opposite position at the then
prevailing price, which will operate to terminate the Portfolio's
existing position in the contract.
Although each Portfolio intends to purchase or sell
futures contracts only if there is an active market for such
contracts, no assurance can be given that a liquid market will
exist for any particular contract at any particular time. Many
futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified
periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of
futures positions and potentially subjecting a Portfolio to
substantial losses. If it is not possible, or the Portfolio
determines not, to close a futures position in anticipation of
adverse price movements, the Portfolio will be required to make
daily cash payments of variation margin. In such circumstances,
an increase in the value of the portion of a Portfolio's
securities being hedged, if any, may offset partially or
completely losses on the futures contract. However, no assurance
can be given that the price of the securities being hedged will
correlate with the price movements in a futures contract and thus
provide an offset to losses on the futures contract.
In addition, to the extent the Fund is engaging in a
futures transaction as a hedging device, due to the risk of an
imperfect correlation between securities owned by a Portfolio
that are the subject of a hedging transaction and the futures
contract used as a hedging device, it is possible that the hedge
will not be fully effective in that, for example, losses on the
portfolio securities may be in excess of gains on the futures
contract or losses on the futures contract may be in excess of
gains on the portfolio securities that were the subject of the
hedge. In futures contracts based on indexes, the risk of
imperfect correlation increases as the composition of a
Portfolio's securities vary from the composition of the index.
In an effort to compensate for the imperfect correlation of
movements in the price of the securities being hedged and
movements in the price of futures contracts, the Portfolio may
buy or sell futures contracts in a greater or lesser dollar
amount than the dollar amount of the securities being hedged if
the historical volatility of the futures contract has been less
or greater than that of the securities. Such "over hedging" or
"under hedging" may adversely affect a Portfolio's net investment
results if market movements are not as anticipated when the hedge
is established.
Successful use of futures by a Portfolio also is
subject to The Dreyfus Corporation's ability to predict correctly
movements in the direction of the market or interest rates. For
example, if a Portfolio has hedged against the possibility of a
decline in the market adversely affecting the value of securities
held in its portfolio and prices increase instead, the Portfolio
will lose part or all of the benefit of the increased value of
securities which it has hedged because it will have offsetting
losses in its futures positions. In addition, in such
situations, if the Portfolio has insufficient cash, it may have
to sell securities to meet daily variation margin requirements.
Such sales of securities may, but will not necessarily, be at
increased prices which reflect the rising market. The Portfolio
may have to sell securities at a time when it may be
disadvantageous to do so.
An option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a position in a
futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise
price at any time during the option exercise period. The writer
of the option is required upon exercise to assume an offsetting
futures position (a short position if the option is a call and a
long position if the option is a put). Upon exercise of the
option, the assumption of offsetting futures positions by the
writer and holder of the option will be accompanied by delivery
of the accumulated cash balance in the writer's futures margin
account which represents the amount by which the market price of
the futures contract, at exercise, exceeds, in the case of a
call, or is less than, in the case of a put, the exercise price
of the option on the futures contract.
Call options sold by a Portfolio with respect to
futures contracts will be covered by, among other things,
entering into a long position in the same contract at a price no
higher than the strike price of the call option, or by ownership
of the instruments underlying, or instruments the prices of which
are expected to move relatively consistently with the instruments
underlying, the futures contract. Put options sold by a
Portfolio with respect to futures contracts will be covered in
the same manner as put options on specific securities as
described above.
Stock Index Futures and Options on Stock Index Futures--Each
Portfolio may purchase and sell stock index futures contracts and
options on stock index futures contracts.
A stock index future obligates the seller to deliver
(and the purchaser to take) an amount of cash equal to a specific
dollar amount times the difference between the value of a
specific stock index at the close of the last trading day of the
contract and the price at which the agreement is made. No
physical delivery of the underlying stocks in the index is made.
With respect to stock indexes that are permitted investments,
each Portfolio intends to purchase and sell futures contracts on
the stock index for which it can obtain the best price with
consideration also given to liquidity.
The price of stock index futures may not correlate
perfectly with the movement in the stock index because of certain
market distortions. First, all participants in the futures
market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through
offsetting transactions which would distort the normal
relationship between the index and futures markets. Secondly,
from the point of view of speculators, the deposit requirements
in the futures market are less onerous than margin requirements
in the securities market. Therefore, increased participation by
speculators in the futures market also may cause temporary price
distortions.
Interest Rate Futures Contracts and Options on Interest Rate
Futures Contracts--Each Portfolio may invest in interest rate
futures contracts and options on interest rate futures contracts
as a substitute for a comparable market position and to hedge
against adverse movements in interest rates.
To the extent a Portfolio has invested in interest rate
futures contracts or options on interest rate futures contracts
as a substitute for a comparable market position, the Portfolio
will be subject to the investment risks of having purchased the
securities underlying the contract.
Each Portfolio may purchase call options on interest
rate futures contracts to hedge against a decline in interest
rates and may purchase put options on interest rate futures
contracts to hedge its portfolio securities against the risk of
rising interest rates.
Each Portfolio may sell call options on interest rate
futures contracts to partially hedge against declining prices of
its portfolio securities. If the futures price at expiration of
the option is below the exercise price, the Portfolio will retain
the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in such
Portfolio's holdings. Each Portfolio may sell put options on
interest rate futures contracts to hedge against increasing
prices of the securities which are deliverable upon exercise of
the futures contract. If the futures price at expiration of the
option is higher than the exercise price, the Portfolio will
retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities
which the Portfolio intends to purchase. If a put or call option
sold by a Portfolio is exercised, the Portfolio will incur a loss
which will be reduced by the amount of the premium it receives.
Depending on the degree of correlation between changes in the
value of its portfolio securities and changes in the value of its
futures positions, a Portfolio's losses from existing options on
futures may to some extent be reduced or increased by changes in
the value of its portfolio securities.
Each Portfolio also may sell options on interest rate
futures contracts as part of closing purchase transactions to
terminate its options positions. No assurance can be given that
such closing transactions can be effected or that there will be a
correlation between price movements in the options on interest
rate futures and price movements in a Portfolio's securities
which are the subject of the hedge. In addition, a Portfolio's
purchase of such options will be based upon predictions as to
anticipated interest rate trends, which could prove to be
inaccurate.
Future Developments--Each Portfolio may take advantage of
opportunities in the area of options and futures contracts and
options on futures contracts and any other derivative investments
which are not presently contemplated for use by the Fund or which
are not currently available but which may be developed, to the
extent such opportunities are both consistent with the
Portfolio's investment objective and legally permissible for the
Portfolio. Before entering into such transactions or making any
such investment on behalf of a Portfolio, the Fund will provide
appropriate disclosure in its prospectus.
Lending Portfolio Securities--From time to time, each Portfolio
may lend securities from its portfolio to brokers, dealers and
other financial institutions needing to borrow securities to
complete certain transactions. Such loans may not exceed 33-1/3%
of the value of such Portfolio's total assets. In connection
with such loans, the Portfolio will receive collateral consisting
of cash, U.S. Government securities or irrevocable letters of
credit which will be maintained at all times in an amount equal
to at least 100% of the current market value of the loaned
securities. Each Portfolio can increase its income through the
investment of such collateral. A Portfolio engaging in the
portfolio loan transaction continues to be entitled to payments
in amounts equal to the interest, dividends or other
distributions payable on the loaned security and receives
interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. A Portfolio might
experience risk of loss if the institution with which it has
engaged in a portfolio loan transaction breaches its agreement
with the Portfolio.
Forward Commitments-- Each Portfolio may purchase debt securities
on a when-issued or forward commitment basis, which means that
the price is fixed at the time of commitment, but delivery and
payment ordinarily take place a number of days after the date of
the commitment to purchase. A Portfolio will make commitments to
purchase such securities only with the intention of actually
acquiring the securities, but the Portfolio may sell these
securities before the settlement date if it is deemed advisable.
A Portfolio will not accrue income in respect of a security
purchased on a when-issued or forward commitment basis prior to
its stated delivery date.
Securities purchased on a when-issued or forward
commitment basis and certain other debt securities held by the
Fund are subject to changes in value (both 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 when-issued or forward commitment basis may expose
a Portfolio to risk because they may experience such fluctuations
prior to their actual delivery. Purchasing debt securities on a
when-issued or forward commitment 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. A segregated account of the Fund
consisting of cash, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at least
equal at all times to the amount of the when-issued or forward
commitments will be established and maintained at the Fund's
custodian bank. Purchasing debt securities on a when-issued or
forward commitment basis when a Portfolio is fully or almost
fully invested may result in greater potential fluctuation in the
value of the Portfolio's net assets and its net asset value per
share.
Certain Portfolio Securities
U.S. Government Securities--Each Portfolio may purchase
securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, which include U.S. Treasury
securities that differ in their interest rates, maturities and
times of issuance. Treasury Bills have initial maturities of one
year or less; Treasury Notes have initial maturities of one to
ten years; and Treasury Bonds generally have initial maturities
of greater than ten years. Some obligations issued or guaranteed
by U.S. Government agencies and instrumentalities, for example,
Government National Mortgage Association pass-through
certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan
Banks, by the right of the issuer to borrow from the U.S.
Treasury; others, such as those issued by the Federal National
Mortgage Association, by discretionary authority of the U.S.
Government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate
based on generally recognized reference rates or the relationship
of rates. While the U.S. Government provides financial support
to such U.S. Government-sponsored agencies or instrumentalities,
no assurance can be given that it will always do so, because the
U.S. Government is not obligated to do so by law.
Zero Coupon Securities--Each Portfolio 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. Each
Portfolio also may invest in zero coupon securities 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 amount of the discount fluctuates with
the market price of the security. 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.
Repurchase Agreements--Repurchase agreements involve the
acquisition by a Portfolio of an underlying debt instrument,
subject to an obligation of the seller to repurchase, and the
Portfolio to resell, the instrument at a fixed price, usually not
more than one week after its purchase. The Fund's custodian or
subcustodian will have custody of, and will hold in a segregated
account, securities acquired by a Portfolio under a repurchase
agreement. Repurchase agreements are considered by the staff of
the Securities and Exchange Commission to be loans by the
Portfolio which enters into them. In an attempt to reduce the
risk of incurring a loss on a repurchase agreement, a Portfolio
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
Portfolio may invest, and will require that additional securities
be deposited with it if the value of the securities purchased
should decrease below resale price. The Dreyfus Corporation will
monitor on an ongoing basis the value of the collateral to assure
that it always equals or exceeds the repurchase price. Certain
costs may be incurred in connection with the sale of the
securities if the seller does not repurchase them in accordance
with the repurchase agreement. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Portfolio may be
delayed or limited. The Fund will consider on an ongoing basis
the creditworthiness of the institutions with which a Portfolio
enters into repurchase agreements.
Bank Obligations--Each Portfolio may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term
obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and
foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to
such securities issued by foreign branches of domestic banks,
foreign subsidiaries 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. Such risks include possible future political
and economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities,
the possible establishment of exchange controls or the adoption
of other foreign governmental restrictions which might adversely
affect the payment of principal and interest on these securities
and the possible seizure or nationalization of foreign deposits.
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 at a stated
interest rate. Time deposits which may be held by each Portfolio
will not benefit from insurance from the Bank Insurance Fund or
the Savings Association Insurance Fund administered by the
Federal Deposit Insurance Corporation. Each Portfolio will not
invest more than 15% of the value of its net assets in time
deposits that are illiquid and in other illiquid securities.
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 of 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 and Other Short-Term Corporate Obligations--
Commercial paper consists of short-term, unsecured promissory
notes issued to finance short-term credit needs. The commercial
paper purchased by a Portfolio will consist only of direct
obligations which, at the time of their purchase, are (a) rated
not lower than Prime-1 by Moody's Investors Service, Inc.
("Moody's"), A-1 by S&P, F-1 by Fitch Investors Service, Inc.
("Fitch") or Duff-1 by Duff & Phelps, Inc. ("Duff"), (b) issued
by companies having an outstanding unsecured debt issue currently
rated not lower than Aa3 by Moody's or AA- by S&P, Fitch or Duff,
or (c) if unrated, determined by The Dreyfus Corporation to be of
comparable quality to those rated obligations which may be
purchased by the Portfolio. Each Portfolio may purchase
floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of one
year, but which permit the holder to demand payment of principal
at any time or at specified intervals. Variable rate demand
notes include variable amount master demand notes, which are
obligations that permit the Portfolios 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. As
mutually agreed between the parties, the Fund may increase the
amount under the notes at any time up to the full amount provided
by the note agreement, or decrease the amount, and the borrower
may repay up to the full amount of the note without penalty.
Because these obligations are direct lending arrangements between
the lender and borrower, it is not contemplated that such
instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they
are redeemable at face value, plus accrued interest, at any time.
Accordingly, where these obligations are not secured by letters
of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. In connection with floating
and variable rate demand obligations, The Dreyfus Corporation
will consider, on an ongoing basis, earning power, cash flow and
other liquidity ratios of the borrower, and the borrower's
ability to pay principal and interest on demand. Such
obligations frequently are not rated by credit rating agencies,
and the Portfolios may invest in them only if at the time of an
investment the borrower meets the criteria set forth above for
other commercial paper issuers.
Illiquid Securities--Each Portfolio 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 Portfolio's investment objective. Such
securities may include securities that are not readily
marketable, such as certain securities that are subject to legal
or contractual restrictions on resale, repurchase agreements
providing for settlement in more than seven days after notice,
and certain options traded in the over-the-counter market and
securities used to cover such options. As to these securities, a
Portfolio 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 Portfolio's
net assets could be adversely affected. When purchasing
securities that have not been registered under the Securities Act
of 1933, as amended, and are not readily marketable, the Fund
will endeavor to obtain the right to registration at the expense
of the issuer. Generally, there will be a lapse of time between
the Fund's decision to sell any such security and the
registration of the security permitting sale. During any such
period, the price of the securities will be subject to market
fluctuations. However, if a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the
Securities Act of 1933, as amended, for certain unregistered
securities held by the Fund, the Fund intends to treat such
securities as liquid securities in accordance with procedures
approved by the Fund's Board of Directors. Because it is not
possible to predict with assurance how the market for restricted
securities pursuant to Rule 144A will develop, the Fund's Board
of Directors has directed The Dreyfus Corporation to monitor
carefully each Portfolio's investments in such securities with
particular regard to trading activity, availability of reliable
price information and other relevant information. To the extent
that, for a period of time, qualified institutional buyers cease
purchasing such restricted securities pursuant to Rule 144A, the
Portfolio's investing in such securities may have the effect of
increasing the level of illiquidity in such Portfolio's
investments during such period.
Certain Fundamental Policies
Each Portfolio may (i) borrow money to the extent
permitted under the Investment Company Act of 1940; and (ii)
invest up to 25% of the value of its total assets in the
securities of issuers in a single industry, provided that there
is no such limitation on investments in securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities. This paragraph describes fundamental policies
that cannot be changed as to a Portfolio without approval by the
holders of a majority (as defined in the Investment Company Act
of 1940) of the Portfolio's outstanding voting shares. See
"Investment Objective and Management Policies--Investment
Restrictions" in the Fund's Statement of Additional Information.
Certain Additional Non-Fundamental Policies
Each Portfolio may (i) purchase securities of any
company having less than three years' continuous operation
(including operations of any predecessors) if such purchase does
not cause the value of such Portfolio's investments in all such
companies to exceed 5% of the value of its total assets; (ii)
pledge, hypothecate, mortgage or otherwise encumber its assets,
but only to secure permitted borrowings; and (iii) invest up to
15% of the value of its net assets in repurchase agreements
providing for settlement in more than seven days after notice and
in other illiquid securities. See "Investment Objective and
Management Policies--Investment Restrictions" in the Fund's
Statement of Additional Information.
Risk Factors
Certain Investment Techniques--The use of investment techniques
such as short-selling, engaging in financial futures and options
transactions, leverage through borrowing, purchasing securities
on a forward commitment basis and lending portfolio securities
involves greater risk than that incurred by many other funds with
a similar objective. Using these techniques may produce higher
than normal portfolio turnover and may affect the degree to which
a Portfolio's net asset value fluctuates. Portfolio turnover may
vary from year to year, as well as within a year. Under normal
market conditions, the portfolio turnover rate of a Portfolio
generally will not exceed 100%. Higher portfolio turnover rates
are likely to result in comparatively greater brokerage
commissions or transaction costs. See "Portfolio Transactions"
in the Fund's Statement of Additional Information.
The Fund's ability to engage in certain short-term
transactions may be limited by the requirement that, to qualify
as a regulated investment company, each Portfolio must earn less
than 30% of its gross income from the disposition of securities
held for less than three months. This 30% test limits the extent
to which a Portfolio may sell securities held for less than three
months, effect short sales of securities held for less than three
months, write options expiring in less than three months and
invest in certain futures contracts, among other strategies.
However, portfolio turnover will not otherwise be a limiting
factor in making investment decisions.
Equity Securities--Investors should be aware that equity
securities fluctuate in value, often based on factors unrelated
to the value of the issuer of the securities, and that
fluctuations can be pronounced. Changes in the value of a
Portfolio's equity securities will result in changes in the value
of the Portfolio's shares and thus the Portfolio's yield and
total return to investors.
Fixed-Income Securities--Investors should be aware that even
though interest-bearing securities are investments which promise
a stable stream of income, the prices of such securities are
inversely affected by changes in interest rates and, therefore,
are subject to the risk of market price fluctuations. Thus, if
interest rates have increased from the time a security was
purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from
the time a security was purchased, such security, if sold, might
be sold at a price greater than its cost. In either instance, if
the security was purchased at face value and held to maturity, no
gain or loss would be realized. The value of U.S. Treasury
securities also will be affected by the supply and demand, as
well as the perceived supply and demand, for such securities.
Investing in Foreign Securities--Since the stocks of some foreign
issuers are included in the S&P 500 Index and the Wilshire 4500
Index, a Portfolio's investments may contain securities of such
foreign issuers which may subject the Portfolios to additional
investment risks with respect to those securities that are
different in some respects from those incurred by a fund which
invests only in securities of domestic issuers. Such risks
include future political and economic developments, the possible
imposition of withholding taxes on income payable on the
securities, the possible establishment of exchange controls or
the adoption of other foreign governmental restrictions which
might adversely affect an investment in these securities and the
possible seizure or nationalization of foreign deposits. No
Portfolio will invest more than 20% of the value of its assets in
the common stocks of foreign issuers. See "Certain Portfolio
Securities--Bank Obligations" above.
Other Investment Considerations--Each Portfolio's net asset value
per share is not fixed and should be expected to fluctuate. You
should purchase Portfolio shares only as a supplement to an
overall investment program and only if you are willing to
undertake the risks involved.
Federal income tax law requires the holder of a zero
coupon security or of certain pay-in-kind bonds to accrue income
with respect to these securities prior to the receipt of cash
payments. To maintain its qualification as a regulated
investment company and avoid liability for Federal income taxes,
each Portfolio may be required to distribute such income accrued
with respect to these securities and may have to dispose of such
securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
The Fund's classification as a "non-diversified"
investment company means that the proportion of each Portfolio's
assets that may be invested in the securities of a single issuer
is not limited by the Investment Company Act of 1940. A
"diversified investment company is required by the Investment
Company Act of 1940 generally, with respect to 75% of its total
assets, to invest not more than 5% of such assets in the
securities of a single issuer and to hold not more than 10% of
the outstanding voting securities of a single issuer. However,
each Portfolio intends to conduct its operations so as to qualify
as a "regulated investment company" for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), which requires
that, at the end of each quarter of its taxable year, (i) at
least 50% of the market value of each Portfolio's total assets be
invested in cash, U.S. Government securities, the securities of
other regulated investment companies and other securities, with
such other securities of any one issuer limited for the purposes
of this calculation to an amount not greater than 5% of the value
of each Portfolio's total assets and 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of
the value of each Portfolio's total assets be invested in the
securities of any one issuer (other than U.S. Government
securities or the securities of other regulated investment
companies). Since a relatively high percentage of the Fund's
assets may be invested in the securities of a limited number of
issuers, some of which may be within the same industry or
economic sector, the Fund's securities may be more susceptible to
any single economic, political or regulatory occurrence than the
securities of a diversified investment company.
Investment decisions for each Portfolio are made
independently from those of other investment companies or
accounts advised by The Dreyfus Corporation. However, if such
other investment companies or accounts are prepared to invest in,
or desire to dispose of, securities of the type in which a
Portfolio invests at the same time as such Portfolio, available
investments or opportunities for sales will be allocated
equitably to each. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by
the Portfolio or the price paid or received by the Portfolio.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the
Fund's investment adviser. The Dreyfus Corporation is a wholly-
owned subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Bank Corporation ("Mellon"). As of July 31,
1994, The Dreyfus Corporation managed or administered
approximately $70 billion in assets for more than 1.9 million
investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the
overall management of the Fund's affairs under a Management
Agreement with the Fund, subject to the overall authority of the
Fund's Board of Directors in accordance with Maryland law. The
primary investment officer of each Portfolio is Ernest G.
Wiggins, Jr., who, from 1992 to 1993, was President of Gabelli
International. Prior thereto, Mr. Wiggins held various positions
with Fidelity Management and Research. The Fund's other
investment officers are identified under "Management of the Fund"
in the Fund's Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund as well
as for other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and security analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under
the Federal Bank Holding Company Act of 1956, as amended. Mellon
provides a comprehensive range of financial products and services
in domestic and selected international markets. Mellon is among
the twenty-five largest bank holding companies in the United
States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National
Association, Mellon Bank (MD), The Boston Company, Inc., AFCO
Credit Corporation and a number of companies known as Mellon
Financial Services Corporations. Through its subsidiaries,
Mellon managed more than $130 billion in assets as of July 31,
1994, including approximately $6 billion in mutual fund assets.
As of June 30, 1994, various subsidiaries of Mellon provided non-
investment services, such as custodial or administration
services, for more than $747 billion in assets, including $97
billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund
has agreed to pay The Dreyfus Corporation a monthly fee at the
annual rate of .75 of 1% of the value of each Portfolio's average
daily net assets. The management fee is higher than that paid by
most other investment companies. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect
of lowering the overall expense ratio of the Fund and increasing
yield to investors at the time such amounts are waived or
assumed, as the case may be. The Fund will not pay The Dreyfus
Corporation at a later time for any amounts it may waive, nor
will the Fund reimburse The Dreyfus Corporation for any amounts
it may assume. For the period July 1, 1993 (commencement of
operations) through April 30, 1994, no management fee was paid by
the Fund with respect to the Dreyfus Total Return Portfolio.
All expenses incurred in the operation of the Fund will
be borne by the Fund, except to the extent specifically assumed
by The Dreyfus Corporation. The expenses to be borne by the Fund
include: organizational costs, taxes, interest, loan commitment
fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Directors who are
not officers, directors, employees or holders of 5% or more of
the outstanding voting securities of The Dreyfus Corporation,
Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining the Fund's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of
preparing and printing certain prospectuses and statements of
additional information, and any extraordinary expenses. Expenses
attributable to a particular Portfolio are charged against the
assets of that Portfolio; other expenses of the Fund are
allocated between the Portfolios on the basis determined by the
Board of Directors, including, but not limited to,
proportionately in relation to the net assets of each Portfolio.
In addition, the Fund is subject to an annual
distribution fee for advertising, marketing and distributing
Portfolio shares and an annual service fee for ongoing personal
services relating to shareholder accounts and services related to
the maintenance of shareholder accounts. See "Distribution Plan
and Shareholder Services Plan."
The Dreyfus Corporation may pay the Fund's Distributor
for shareholder services from The Dreyfus Corporation's own
assets, including the management fee paid by the Fund. The
Distributor may use part or all of such payments to pay
securities dealers or others in respect of these services.
The Shareholder Services Group, Inc., a subsidiary of
First Data Corporation, P.O. Box 9671, Providence, Rhode Island
02940-9671, is the Fund's Transfer and Dividend Disbursing Agent
(the "Transfer Agent"). The Bank of New York, 110 Washington
Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Premier Mutual Fund Services,
Inc. (the "Distributor"), located at One Exchange Place, Boston,
Massachusetts 02109. The Distributor is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a
provider of mutual fund administration services, the parent
company of which is Boston Institutional Group, Inc.
You can purchase Portfolio shares through the
Distributor or certain financial institutions, securities dealers
and other industry professionals (collectively, "Service Agents")
that have entered into agreements with the Distributor. Stock
certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Fund reserves
the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if
you are a client of a Service Agent which has made an aggregate
minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. The initial investment must
be accompanied by the Fund's Account Application. For full-time
or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation,
Board members of a fund advised by The Dreyfus Corporation,
including members of the Fund's Board, or the spouse or minor
child of any of the foregoing, the minimum initial investment is
$1,000. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund
account, the minimum initial investment is $50. The Fund
reserves the right to offer Portfolio shares without regard to
minimum purchase requirements to employees participating in
certain qualified or non-qualified employee benefit plans or
other programs where contributions or account information can be
transmitted in a manner and form acceptable to the Fund. The
Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Portfolio shares by check or wire, or
through the Dreyfus TeleTransfer Privilege described below.
Checks should be made payable to "The Dreyfus Family of Funds,"
or, if for Dreyfus retirement plan accounts, to "The Dreyfus
Trust Company, Custodian." Payments to open new accounts which
are mailed should be sent to The Dreyfus Family of Funds, P.O.
Box 9387, Providence, Rhode Island 02940-9387, together with your
Account Application. For subsequent investments, your Fund
account number should appear on the check and an investment slip
should be enclosed and sent to The Dreyfus Family of Funds, P.O.
Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement
plan accounts, both initial and subsequent investments should be
sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor
subsequent investments should be made by third party check.
Purchase orders may be delivered in person only to a Dreyfus
Financial Center. These orders will be forwarded to the Fund and
will be processed only upon receipt thereby. For the location of
the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information."
Wire payments may be made if your 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, together with the applicable Portfolio's DDA#
as shown below, for purchase of Portfolio shares in your name:
DDA# 8900118202/Dreyfus Asset Allocation Fund,
Inc./Dreyfus Total Return Portfolio
DDA# /Dreyfus Asset Allocation Fund,
Inc./Dreyfus Income Portfolio
DDA# /Dreyfus Asset Allocation Fund,
Inc./Dreyfus Growth Portfolio
The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable.
If your initial purchase of Fund shares is by wire, please call
1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on
the Fund's Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted
until the Account Application is received. You may obtain
further information about remitting funds in this manner from
your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A
charge will be imposed if any check used for investment in your
account does not clear. The Fund makes available to certain
large institutions the ability to issue purchase instructions
through compatible computer facilities.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other
domestic financial institution that is an Automated Clearing
House member. You must direct the institution to transmit
immediately available funds through the Automated Clearing House
to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account
registration and your Fund account number preceded by the digits
"1111."
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 which would be in addition to any amounts
which might be received under Shareholder Services Plan. Each
Service Agent has agreed to transmit to its clients a schedule of
such fees. You should consult your Service Agent in this regard.
The Distributor may pay dealers a fee of up to .5% of
the amount invested through such dealers in Portfolio 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
one million dollars ("Eligible Benefit Plans"). The
determination of the number of employees eligible for
participation in a plan or program shall be made on the date Fund
shares are first purchased by or on behalf of employees
participating in such plan or program and on each subsequent
January 1st. All present holdings of shares of funds in the
Dreyfus Family of Funds by Eligible Benefit Plans will be
aggregated to determine the fee payable with respect to each
purchase of Portfolio shares. 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.
Shares of each Portfolio are sold on a continuous basis
at net asset value per share next determined after an order in
proper form is received by the Transfer Agent or other agent.
Net asset value per share is determined as of the close of
trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time), on each day the New York Stock
Exchange is open for business. For purposes of determining net
asset value, options and futures contracts will be valued 15
minutes after the close of trading on the floor of the New York
Stock Exchange. Net asset value per share is computed by
dividing the value of the Portfolio's net assets (i.e., the value
of its assets less liabilities) by the total number of such
Portfolio's shares outstanding. Each Portfolio's investments are
valued each business day generally by using available market
quotations or at fair value which may be determined by one or
more pricing services approved by the Board of Directors. For
further information regarding the methods employed in valuing the
Portfolios' investments, see "Determination of Net Asset Value"
in the Fund's Statement of Additional Information.
Federal regulations require that you provide a
certified TIN upon opening or reopening an account. See
"Dividends, Distributions and Taxes" and the Fund's Account
Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").
Dreyfus TeleTransfer Privilege
You may purchase Fund shares (minimum $500, maximum
$150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the
Fund's Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred
between the bank account designated in one of these documents and
your Fund account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer
Privilege, you may request a Dreyfus TeleTransfer purchase of
Portfolio shares by telephoning 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306.
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 in this Prospectus. You
should consult your Service Agent in this regard.
Exchange Privilege
The Exchange Privilege enables you to purchase, in
exchange for shares of a Portfolio, shares in one of the other
Portfolios or shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such
shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of
interest to you. The exchange privilege may be exercised twice
during the calendar year as described below. If you desire to
use this Privilege, you should consult your Service Agent or the
Distributor to determine if it is available and whether any other
conditions are imposed on its use.
To use this Privilege, you or your Service Agent acting
on your behalf must give exchange instructions to the Transfer
Agent in writing, by wire or by telephone. If you previously
have established the Telephone Exchange Privilege, you may
telephone exchange instructions by calling 1-800-221-4060 or, if
you are calling from overseas, call 1-401-455-3306. See "How to
Redeem Fund Shares--Procedures." Before any exchange into a fund
offered by another prospectus, 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 from
Dreyfus Service Corporation. 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. Telephone exchanges may
be made only if the appropriate "YES" box has been checked on the
Account Application, or a separate signed Shareholder Services
Form is on file with the Transfer Agent. 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: the Exchange
Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TeleTransfer Privilege and the
dividend/capital gain distribution option (except for Dreyfus
Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net
asset value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. If you are
exchanging into a fund that charges a sales load, you may qualify
for share prices which do not include the sales load or which
reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load,
(b) acquired by a previous exchange from shares of the fund
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 your exchange
you must notify the Transfer Agent or your Service Agent must
notify the Distributor. Any such qualification is subject to
confirmation of your holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the
Fund reserves the right, upon not less than 60 days' written
notice, to charge shareholders a nominal fee in accordance with
rules promulgated by the Securities and Exchange Commission. The
Fund reserves the right to reject any exchange request in whole
or in part. The Exchange Privilege may be modified or terminated
at any time upon notice to shareholders.
The exchange of shares of one fund for shares of
another is treated for Federal income tax purposes as a sale of
the shares given in exchange by the shareholder and, therefore,
an exchanging shareholder may realize a taxable gain or loss.
Dreyfus Auto-Exchange Privilege
Dreyfus Auto-Exchange Privilege enables you to invest
regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of a Portfolio, in shares of one
of the other Portfolios or shares of certain other funds in the
Dreyfus Family of Funds of which you are currently an investor.
The amount you designate, which can be expressed either in terms
of a specific dollar or share amount ($100 minimum), will be
exchanged automatically on the first and/or fifteenth day of the
month according to the schedule you have selected. Shares will
be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds
sold with a sales load. See "Shareholder Services" in the
Statement of Additional Information. The right to exercise this
Privilege may be modified or canceled by the Fund or the Transfer
Agent. You may modify or cancel your exercise of this Privilege
at any time by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
The Fund may charge a service fee for the use of this Privilege.
No such fee currently is contemplated. The exchange of shares of
one fund for shares of another is treated for Federal income tax
purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize
a taxable gain or loss. For more information concerning this
Privilege and the funds in the Dreyfus Family of Funds eligible
to participate in this Privilege, or to obtain a Dreyfus Auto-
Exchange Authorization Form, please call toll free 1-800-645-
6561.
Dreyfus-Automatic Asset Builder
Dreyfus-Automatic Asset Builder permits you to purchase
Portfolio shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Shares of a
Portfolio 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
Portfolio shares will be purchased, once a month, on either the
first or fifteenth day, or twice a month, on both days. Only an
account maintained at a domestic financial institution which is
an Automated Clearing House member may be so designated. To
establish a Dreyfus-Automatic Asset Builder account, you must
file an authorization form with the Transfer Agent. You may
obtain the necessary authorization form from Dreyfus Service
Corporation. You may cancel your participation in this Privilege
or change the amount of purchase at any time by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427,
and the notification will be effective three business days
following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee
currently is contemplated.
Dreyfus Government Direct Deposit Privilege
Dreyfus Government Direct Deposit Privilege enables you
to purchase Portfolio shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from
the Federal government automatically deposited into your Fund
account. You may deposit as much of such payments as you elect.
To enroll in Dreyfus Government Direct Deposit, you must file
with the Transfer Agent a completed Direct Deposit Sign-Up Form
for each type of payment that you desire to include in the
Privilege. The appropriate form may be obtained from Dreyfus
Service Corporation. 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.
Dreyfus Dividend Options
Dreyfus Dividend Sweep Privilege enables you to invest
automatically dividends or dividends and capital gain
distributions, if any, paid by a Portfolio in shares of another
Portfolio of the Fund or shares of another fund in the Dreyfus
Family of Funds of which you are a shareholder. Shares of the
other fund will be purchased at the then-current net asset value;
however, a sales load may be charged with respect to investments
in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a
reduced sales load. If you are investing in a fund that charges
a contingent deferred sales charge, the shares purchased will be
subject on redemption to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits a shareholder to transfer electronically on
the payment date their dividends or dividends and capital gains,
if any, from the Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is
an Automated Clearing House member may be so designated. Banks
may charge a fee for this service.
For more information concerning these Privileges or to
request a Dividend Options Form, please call toll free 1-800-645-
6561. You may cancel these Privileges by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. Enrollment in or
cancellation of these Privileges is effective three business days
following receipt. These Privileges are available only for
existing accounts and may not be used to open new accounts.
Minimum subsequent investments do not apply for Dreyfus Dividend
Sweep. The Fund may modify or terminate these Privileges at any
time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans or IRAs are not
eligible for Dreyfus Dividend Sweep.
Dreyfus Payroll Savings Plan
Dreyfus Payroll Savings Plan permits you to purchase
Portfolio shares (minimum of $100 per transaction) automatically
on a regular basis. Depending upon your employer's direct
deposit program, you may have part or all of your paycheck
transferred to your existing Dreyfus account electronically
through the Automated Clearing House system at each pay period.
To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll
department. Your employer must complete the reverse side of the
form and return it to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. You may obtain the
necessary authorization form from Dreyfus Service Corporation.
You may change the amount of purchase or cancel the authorization
only by written notification to your employer. It is the sole
responsibility of your employer, not Dreyfus Service Corporation,
The Dreyfus Corporation, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Dreyfus
Payroll Savings Plan. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee
currently is contemplated.
Automatic Withdrawal Plan
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be
obtained from Dreyfus Service Corporation. There is a service
charge of 50 cents for each withdrawal check. The Automatic
Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
Retirement Plans
The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans.
Plan support services also are available. You can obtain details
on the various plans by calling the following numbers toll free:
for Keogh Plans, please call 1-800-358-5566; for IRAs and IRA
"Rollover Accounts," please call 1-800-645-6561; and for SEP-
IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please
call 1-800-322-7880.
HOW TO REDEEM FUND SHARES
General
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent
as described below. When a request is received in proper form,
the Fund will redeem the shares at the next determined net asset
value.
The Fund imposes no charges when shares are redeemed
directly through the Distributor. Service Agents may charge a
nominal fee for effecting redemptions of Portfolio shares. Any
certificates representing Portfolio 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 Portfolio's then-current net asset value.
The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent of
a redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission. However, if you
have purchased Fund shares by check, by Dreyfus TeleTransfer
Privilege or through Dreyfus-Automatic Asset Builder and subse-
quently submit a written redemption request to the Transfer
Agent, the redemption proceeds will be transmitted to you prompt-
ly upon bank clearance of your purchase check, Dreyfus TeleTrans-
fer purchase or Dreyfus-Automatic Asset Builder order, which may
take up to eight business days or more. In addition, the Fund
will reject requests to redeem shares by wire or telephone or
pursuant to the Dreyfus TeleTransfer Privilege for a period of
eight business days after receipt by the Transfer Agent of the
purchase check, the Dreyfus TeleTransfer purchase or the Dreyfus-
Automatic Asset Builder order against which such redemption is
requested. These procedures will not apply if your shares were
purchased by wire payment, or if you otherwise have a sufficient
collected balance in your account to cover the redemption
request. Prior to the time any redemption is effective,
dividends on such shares will accrue and be payable, and you will
be entitled to exercise all other rights of beneficial ownership.
Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
The Fund reserves the right to redeem your account at
its option upon not less than 45 days' written notice if your
account's net asset value is $500 or less and remains so during
the notice period.
Procedures
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, through the Wire Redemption
Privilege, through the Telephone Redemption Privilege or through
the Dreyfus TeleTransfer Privilege. Other redemption procedures
may be in effect for clients of certain Service Agents. The Fund
makes available to certain large institutions the ability to
issue redemption instructions through compatible computer
facilities.
You may redeem or exchange shares by telephone if you
have checked the appropriate box on the Fund's Account
Application or have filed a Shareholder Services Form with the
Transfer Agent. If you select a telephone redemption or exchange
privilege, you authorize the Transfer Agent to act on telephone
instructions 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 redemption or exchange of a Portfolio's
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 telephone
redemption had been used. During the delay, such Portfolio's net
asset value may fluctuate.
Regular Redemption--Under the regular redemption procedure, you
may redeem shares by written request mailed to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
Redemption requests may be delivered in person only to a Dreyfus
Financial Center. These requests will be forwarded to the Fund
and will be processed only upon receipt thereby. For the
location of the nearest Dreyfus Financial Center, please call one
of the telephone numbers listed under "General Information."
Redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guar-
anteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well
as from participants in the New York Stock Exchange Medallion
Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP") and the Stock Exchanges Medallion Program. If
you have any questions with respect to signature-guarantees,
please call one of the telephone numbers listed under "General
Information."
Redemption proceeds of at least $1,000 will be wired to
any member bank of the Federal Reserve System in accordance with
a written signature-guaranteed request.
Wire Redemption Privilege--You may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to your
account at a bank which is a member of the Federal Reserve
System, or a correspondent bank if your bank is not a member. To
establish the Wire Redemption Privilege, you must check the
appropriate box and supply the necessary information on the
Fund's Account Application or file a Shareholder Services Form
with the Transfer Agent. You may direct that redemption proceeds
be paid by check (maximum $150,000 per day) made out to the
owners of record and mailed to your address. Redemption proceeds
of less than $1,000 will be paid automatically by check. Holders
of jointly registered Fund or bank accounts may have redemption
proceeds of only up to $250,000 wired within any 30-day period.
You may telephone redemption requests by calling 1-800-221-4060
or, if you are calling from overseas, call 1-401-455-3306. The
Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address, and
may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at any time by the
Transfer Agent or the Fund. The Fund's Statement of Additional
Information sets forth instructions for transmitting redemption
requests by wire. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been
issued, are not eligible for this Privilege.
Telephone Redemption Privilege--You may redeem Fund shares
(maximum $150,000 per day) by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The
redemption proceeds will be paid by check and mailed to your
address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. 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 telephone redemption requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the
Fund. Shares held under Keogh Plans, IRAs or other retirement
plans, and shares for which certificates have been issued, are
not eligible for this Privilege.
Dreyfus TeleTransfer Privilege--You may redeem Fund shares
(minimum $500 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the
Fund's Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred
between your Fund account and the bank account designated in one
of these documents. Only such an 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 Dreyfus TeleTransfer
Privilege for transfer to their bank account only up to $250,000
within any 30-day period. 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
this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer
Privilege, you may request a Dreyfus TeleTransfer redemption of
Fund shares by telephoning 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306. Shares held under Keogh
Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Portfolio shares are subject to a Distribution Plan and
a Shareholder Services Plan.
Distribution Plan--Under the Distribution Plan, adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, the Fund
(a) reimburses the Distributor for payments to certain Service
Agents for distributing Portfolio shares and (b) pays the Dreyfus
Corporation, Dreyfus Service Corporation or any affiliate for
advertising and marketing relating to Portfolio shares at an
annual rate of .50 of 1% of the value of each Portfolio's average
daily net assets. The Distributor may pay one or more Service
Agents in respect of Distribution services. The Distributor
determines the amounts, if any, to be paid to Service Agents
under the Distribution Plan and the basis on which such payments
are made. The fees payable under the Distribution Plan are
payable without regard to actual expenses incurred.
The Fund bears the costs of preparing and printing
prospectuses and statements of additional information used for
regulatory purposes and for distribution to existing Fund
shareholders. Under the Distribution Plan, the Fund bears (a)
the costs of preparing, printing and distributing prospectuses
and statements of additional information used for other purposes
and (b) the costs associated with implementing and operating the
Distribution Plan, the aggregate of such amounts not to exceed in
any fiscal year of the Fund the greater of $100,000 or .005 of 1%
of the value of each Portfolio's average daily net assets for
such fiscal year.
Shareholder Services Plan--Under the Shareholder Services Plan,
the Fund pays the Distributor for the provision of certain
services to Portfolio shareholders a fee at the annual rate of
.25 of 1% of the value of each Portfolio's average daily net
assets. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of
shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. Each
Service Agent is required to disclose to its clients any
compensation payable to it by the Fund pursuant to the
Shareholder Services Plan and any other compensation payable by
their clients in connection with the investment of their assets
in Portfolio shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Code, each Portfolio of the Fund is treated
as a separate corporation for purposes of qualification and
taxation as a regulated investment company. Each Portfolio
ordinarily pays dividends from its net investment income and
distributes net realized securities gains, if any, once a year,
but it may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in
a manner consistent with the provisions of the Investment Company
Act of 1940. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any,
have been utilized or have expired. You may choose whether to
receive dividends and distributions in cash or to reinvest in
additional shares at net asset value. All expenses are accrued
daily and deducted before declaration of dividends to investors.
Dividends derived from net investment income, together
with distributions from net realized short-term securities gains
and gain from the sale or other disposition of certain market
discount bonds, paid by the Portfolios will be taxable to U.S.
shareholders as ordinary income whether received in cash or
reinvested in additional shares. Distributions from net realized
long-term securities gains of the Portfolios 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
Portfolio 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 gain from the sale or other disposition of certain market
discount bonds, paid by the Portfolios 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 Portfolios 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.
Federal regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends, distributions from net realized securities
gains and the proceeds of any redemption, regardless of the
extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct or
that such shareholder has not received notice from the IRS of
being subject to backup withholding as a result of a failure to
properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to
properly report taxable dividend and interest income on a Federal
income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any
tax withheld as a result of backup withholding does not consti-
tute an additional tax imposed on the record owner of the
account, and may be claimed as a credit on the record owner's
Federal income tax return.
Management of the Dreyfus Total Return Portfolio
believes that the Portfolio has qualified for the fiscal year
ended April 30, 1994, and it is expected that the Dreyfus Income
Portfolio and the Dreyfus Growth Portfolio will qualify, as a
"regulated investment company" under the Code so long as such
qualification is in the best interests of their shareholders.
Such qualification relieves each Portfolio of any liability for
Federal income tax to the extent its earnings are distributed in
accordance with applicable provisions of the Code. In addition,
each Portfolio is subject to a non-deductible 4% excise tax,
measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax adviser regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be
calculated on the basis of average annual total return and/or
total return.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in a
Portfolio 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 each Portfolio's performance
will include such Portfolio's average annual total return for
one, five and ten year periods, or for shorter periods depending
upon the length of time during which the Portfolio has operated.
Computations of average annual total return for periods of less
than one year represent an annualization of the Portfolio'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 per share at
the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return.
Performance will vary from time to time and past
results are not necessarily representative of future results.
You should remember that performance is a function of portfolio
management in selecting the type and quality of portfolio
securities and is affected by operating expenses. Performance
information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Comparative performance information may be used from
time to time in advertising or marketing the Fund's shares,
including data from Lipper Analytical Services, Inc.,
Morningstar, Inc., Standard & Poor's 500 Stock Index, the Dow
Jones Industrial Average, Moody's Bond Service Bond Index, Bond-
20 Bond Index, Wilshire 4500 Index and other industry
publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on May 12,
1993, and commenced operations on July 1, 1993. On ______, 1994,
the Fund commenced offering shares of the Dreyfus Income
Portfolio and the Dreyfus Growth Portfolio and the existing
portfolio of the Fund began operating as the Dreyfus Total Return
Portfolio. The Fund is authorized to issue 300 million shares of
Common Stock (with 100 million allocated to each Portfolio), par
value $.001 per share. Each share has one vote.
Unless otherwise required by the Investment Company Act
of 1940, 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 Directors 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 Director from office
or for any other purpose. Fund shareholders may remove a
Director by the affirmative vote of a majority of the Fund's
outstanding voting shares. In addition, the Board of Directors
will call a meeting of shareholders for the purpose of electing
Directors if, at any time, less than a majority of the Directors
then holding office have been elected by shareholders.
To date, the Board of Directors has authorized the
creation of three series of shares. All consideration received
by the Fund for shares of one of the Portfolios and all assets in
which such consideration is invested will belong to that
Portfolio (subject only to the rights of creditors of the Fund)
and will be subject to the liabilities related thereto. The
income attributable to, and the expenses of, one Portfolio are
treated separately from those of the other Portfolios. The Fund
has the ability to create, from time to time, new series without
shareholder approval.
Rule 18f-2 under the Investment Company Act of 1940
provides that any matter required to be submitted under the
provisions of the Investment Company Act of 1940 or applicable
state law or otherwise to the holders of the outstanding voting
securities of an investment company, such as the Fund, will not
be deemed to have been effectively acted upon unless approved by
the holders of a majority of the outstanding shares of each
Portfolio affected by such matter. Rule 18f-2 further provides
that a Portfolio shall be deemed to be affected by a matter
unless it is clear that the interests of each Portfolio in the
matter are identical or that the matter does not affect any
interest of such Portfolio. However, the Rule exempts the
selection of independent accountants and the election of
Directors from the separate voting requirements of the Rule.
The Transfer Agent maintains a record of your ownership
and sends you confirmations and statements of account.
Shareholder inquires may be made to your Service Agent
or by writing to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or by calling toll free, 1-800-
645-6561. In New York City, call 1-718-895-1206; on Long Island,
call 794-5254.
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 connec-
tion 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.
DREYFUS ASSET ALLOCATION FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
___________ __, 1994
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of Dreyfus Asset Allocation Fund, Inc.
(the "Fund"), dated ________ __, 1994, 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, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 794-5254
The Dreyfus Corporation (the "Manager") serves as the
Fund's investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor")
is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . B-8
Management Agreement. . . . . . . . . . . . . . . . . . B-12
Purchase of Fund Shares . . . . . . . . . . . . . . . . B-14
Distribution Plan and Shareholder Services Plan . . . . B-14
Redemption of Fund Shares . . . . . . . . . . . . . . . B-16
Shareholder Services. . . . . . . . . . . . . . . . . . B-18
Determination of Net Asset Value. . . . . . . . . . . . B-22
Dividends, Distributions and Taxes. . . . . . . . . . . B-23
Portfolio Transactions. . . . . . . . . . . . . . . . . B-25
Performance Information . . . . . . . . . . . . . . . . B-26
Information About the Fund. . . . . . . . . . . . . . . B-27
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . B-27
Financial Statements. . . . . . . . . . . . . . . . . . B-29
Report of Independent Auditors. . . . . . . . . . . . . B-40
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE
READ IN CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS
ENTITLED "DESCRIPTION OF THE FUND."
Bank Obligations. Domestic commercial banks organized under
Federal law are supervised and examined by the Comptroller of the
Currency and are required to be members of the Federal Reserve
System and to have their deposits insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Domestic banks organized
under state law are supervised and examined by state banking
authorities but are members of the Federal Reserve System only if
they elect to join. In addition, state banks whose certificates
of deposit ("CDs") may be purchased by each Portfolio are insured
by the FDIC (although such insurance may not be of material
benefit to the Fund, depending on the principal amount of the CDs
of each bank held by the Fund) and are subject to Federal
examination and to a substantial body of Federal law and
regulation. As a result of Federal or state laws and
regulations, domestic branches of domestic banks whose CDs may be
purchased by the Portfolios generally are required, among other
things, to maintain specified levels of reserves, are limited in
the amounts which they can loan to a single borrower and are
subject to other regulation designed to promote financial
soundness. However, not all of such laws and regulations apply
to the foreign branches of domestic banks.
Obligations of foreign branches of domestic banks,
foreign subsidiaries of domestic banks and domestic and foreign
branches of foreign banks, such as CDs and time deposits ("TDs"),
may be general obligations of the parent banks in addition to the
issuing branch, or may be limited by the terms of a specific
obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks.
These risks include foreign economic and political developments,
foreign governmental restrictions that may adversely affect
payment of principal and interest on the obligations, foreign
exchange controls and foreign withholding and other taxes on
interest income. These foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as mandatory
reserve requirements, loan limitations, and accounting, auditing
and financial record keeping requirements. In addition, less
information may be publicly available about a foreign branch of a
domestic bank or about a foreign bank than about a domestic bank.
Obligations of United States branches of foreign banks
may be general obligations of the parent bank in addition to the
issuing branch, or may be limited by the terms of a specific
obligation or by Federal or state regulation as well as
governmental action in the country in which the foreign bank has
its head office. A domestic branch of a foreign bank with assets
in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which
the branch is located if the branch is licensed in that state.
In addition, Federal branches licensed by the
Comptroller of the Currency and branches licensed by certain
states ("State Branches") may be required to: (1) pledge to the
regulator, by depositing assets with a designated bank within the
state, a certain percentage of their assets as fixed from time to
time by the appropriate regulatory authority; and (2) maintain
assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign
bank payable at or through all of its agencies or branches within
the state. The deposits of Federal and State Branches generally
must be insured by the FDIC if such branches take deposits of
less than $100,000.
In view of the foregoing factors associated with the
purchase of CDs and TDs issued by foreign branches of domestic
banks, by foreign subsidiaries of domestic banks, by foreign
branches of foreign banks or by domestic branches of foreign
banks, the Manager carefully evaluates such investments on a
case-by-case basis.
Investment Techniques
Options Transactions. Each Portfolio may engage in
options transactions, such as purchasing or writing covered call
or put options. The principal reason for writing covered call
options is to realize, through the receipt of premiums, a greater
return than would be realized on the Portfolio's securities
alone. In return for a premium, the writer of a covered call
option forfeits the right to any appreciation in the value of the
underlying security above the strike price for the life of the
option (or until a closing purchase transaction can be effected).
Nevertheless, the call writer retains the risk of a decline in
the price of the underlying security. Similarly, the principal
reason for writing covered put options is to realize income in
the form of premiums. The writer of a covered put option accepts
the risk of a decline in the price of the underlying security.
The size of the premiums that the Portfolios may receive may be
adversely affected as new or existing institutions, including
other investment companies, engage in or increase their option-
writing activities.
Options written ordinarily will have expiration dates
between one and nine months from the date written. The exercise
price of the options may be below, equal to or above the market
values of the underlying securities at the time the options are
written. In the case of call options, these exercise prices are
referred to as "in-the-money," "at-the-money" and "out-of-the-
money," respectively. Each Portfolio may write (a) in-the-money
call options when the Manager expects that the price of the
underlying security will remain stable or decline moderately
during the option period, (b) at-the-money call options when the
Manager expects that the price of the underlying security will
remain stable or advance moderately during the option period and
(c) out-of-the-money call options when the Manager expects that
the premiums received from writing the call option plus the
appreciation in market price of the underlying security up to the
exercise price will be greater than the appreciation in the price
of the underlying security alone. In these circumstances, if the
market price of the underlying security declines and the security
is sold at this lower price, the amount of any realized loss will
be offset wholly or in part by the premium received. Out-of-the-
money, at-the-money and in-the-money put options (the reverse of
call options as to the relation of exercise price to market
price) may be utilized in the same market environments that such
call options are used in equivalent transactions.
So long as the Portfolio's obligation as the writer of
an option continues, the Portfolio may be assigned an exercise
notice by the broker-dealer through which the option was sold,
requiring the Portfolio to deliver, in the case of a call, or
take delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation
terminates when the option expires or the Portfolio effects a
closing purchase transaction. The Portfolio can no longer effect
a closing purchase transaction with respect to an option once it
has been assigned an exercise notice.
While it may choose to do otherwise, each Portfolio
generally will purchase or write only those options for which the
Manager believes there is an active secondary market so as to
facilitate closing transactions. There is no assurance that
sufficient trading interest to create a liquid secondary market
on a securities exchange will exist for any particular option or
at any particular time, and for some options no such secondary
market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for
example, higher than anticipated trading activity or order flow,
or other unforeseen events, at times have rendered certain
clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on
certain types of orders or trading halts or suspensions in one or
more options. There can be no assurance that similar events, or
events that otherwise may interfere with the timely execution of
customers' orders, will not recur. In such event, it might not
be possible to effect closing transactions in particular options.
If as a covered call option writer a Portfolio is unable to
effect a closing purchase transaction in a secondary market, it
will not be able to sell the underlying security until the option
expires or it delivers the underlying security upon exercise or
it otherwise covers its position.
Stock Index Options. Each Portfolio may purchase and
write put and call options on stock indexes listed on national
securities exchanges or traded in the over-the-counter market. A
stock index fluctuates with changes in the market values of the
stocks included in the index.
Options on stock indexes are similar to options on
stock except that (a) the expiration cycles of stock index
options are generally monthly, while those of stock options are
currently quarterly, and (b) the delivery requirements are
different. Instead of giving the right to take or make delivery
of a stock at a specified price, an option on a stock index gives
the holder the right to receive a cash "exercise settlement
amount" equal to (i) the amount, if any, by which the fixed
exercise price of the option exceeds (in the case of a put) or is
less than (in the case of a call) the closing value of the
underlying index on the date of exercise, multiplied by (ii) a
fixed "index multiplier." Receipt of this cash amount will
depend upon the closing level of the stock index upon which the
option is based being greater than, in the case of a call, or
less than, in the case of a put, the exercise price of the
option. The amount of cash received will be equal to such
difference between the closing price of the index and the
exercise price of the option expressed in dollars times a
specified multiple. The writer of the option is obligated, in
return for the premium received, to make delivery of this amount.
The writer may offset its position in stock index options prior
to expiration by entering into a closing transaction on an
exchange or it may let the option expire unexercised.
Futures Contracts and Options on Futures Contracts.
Upon exercise of an option, the writer of the option will deliver
to the holder of the option the futures position and the
accumulated balance in the writer's futures margin account, which
represents the amount by which the market price of the futures
contract exceeds, in the case of a call, or is less than, in the
case of a put, the exercise price of the option on the futures
contract. The potential loss related to the purchase of options
on futures contracts is limited to the premium paid for the
option (plus transaction costs). Because the value of the option
is fixed at the time of sale, there are no daily cash payments to
reflect changes in the value of the underlying contract; however,
the value of the option does change daily and that change would
be reflected in the net asset value of the Portfolio.
Investment Company Securities. Each Portfolio may
invest in securities issued by other investment companies which
principally invest in securities of the type in which the
Portfolio invests. Under the Investment Company Act of 1940, as
amended (the "Act"), a Portfolio's investments in such
securities, subject to certain exceptions, currently are limited
to (i) 3% of the total voting stock of any one investment
company, (ii) 5% of the Portfolio's net assets with respect to
any one investment company and (iii) 10% of the Portfolio's net
assets in the aggregate. Investments in the securities of other
investment companies may involve duplication of advisory fees and
certain other expenses.
Lending Portfolio Securities. To a limited extent,
each Portfolio may lend its portfolio securities to brokers,
dealers and other financial institutions, provided it receives
cash collateral which at all times is maintained in an amount
equal to at least 100% of the current market value of the
securities loaned. By lending its securities, the Portfolio can
increase its income through the investment of the cash
collateral. For purposes of this policy, the Fund considers
collateral consisting of U.S. Government securities or
irrevocable letters of credit issued by banks whose securities
meet the standards for investment by the Portfolio to be the
equivalent of cash. From time to time, the Fund may return to
the borrower or a third party which is unaffiliated with the
Fund, and which is acting as a "placing broker," a part of the
interest earned from the investment of collateral received for
securities loaned.
The Securities and Exchange Commission currently
requires that the following conditions must be met whenever
portfolio securities are loaned: (1) the Portfolio must receive
at least 100% cash collateral from the borrower; (2) the borrower
must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the
Portfolio must be able to terminate the loan at any time; (4) the
Portfolio must receive reasonable interest on the loan, as well
as any dividends, interest or other distributions payable on the
loaned securities, and any increase in market value; (5) the
Portfolio may pay only reasonable custodian fees in connection
with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board of
Directors must terminate the loan and regain the right to vote
the securities if a material event adversely affecting the
investment occurs. These conditions may be subject to future
modification.
Investment Restrictions. Each Portfolio has adopted
investment restrictions numbered 1 through 8 as fundamental
policies. These restrictions cannot be changed, as to a
Portfolio, without approval by the holders of a majority (as
defined in the Act) of such Portfolio's outstanding voting
shares. Investment restrictions numbered 9 through 14 are not
fundamental policies and may be changed by vote of a majority of
the Fund's Directors at any time. No Portfolio may:
1. Invest in commodities, except that the Portfolio
may purchase and sell options, forward contracts, futures
contracts, including those relating to indexes, and options on
futures contracts or indexes.
2. Purchase, hold or deal in real estate, or oil, gas
or other mineral leases or exploration or development programs,
but the Portfolio may purchase and sell securities that are
secured by real estate or issued by companies that invest or deal
in real estate.
3. Borrow money, except to the extent permitted under
the Act. For purposes of this investment restriction, the entry
into options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts or
indexes shall not constitute borrowing.
4. Make loans to others, except through the purchase
of debt obligations and the entry into repurchase agreements.
However, the Portfolio 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 of Directors.
5. Act as an underwriter of securities of other
issuers, except to the extent the Portfolio may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
6. Invest more than 25% of the value of its assets in
the securities of issuers in any single industry, provided that,
there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
7. Issue any senior security (as such term is defined
in Section 18(f) of the Act), except to the extent the activities
permitted in Investment Restriction Nos. 1, 3, 10 and 11 may be
deemed to give rise to a senior security.
8. Purchase securities on margin, but the Portfolio
may make margin deposits in connection with transactions in
options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or indexes.
9. Invest in the securities of a company for the
purpose of exercising management or control, but the Portfolio
will vote the securities it owns in its portfolio as a
shareholder in accordance with its views.
10. Pledge, mortgage or hypothecate its assets, except
to the extent necessary to secure permitted borrowings and to the
extent related to the purchase of securities on a when-issued or
forward commitment basis and the deposit of assets in escrow in
connection with writing covered put and call options and
collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts,
including those relating to indexes, and options on futures
contracts or indexes.
11. Purchase, sell or write puts, calls or
combinations thereof, except as may be described in the Fund's
Prospectus and this Statement of Additional Information.
12. Purchase securities of any company having less
than three years' continuous operations (including operations of
any predecessors) if such purchase would cause the value of the
Portfolio's investments in all such companies to exceed 5% of the
value of its total assets.
13. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
15% of the value of the Portfolio's net assets would be so
invested.
14. Purchase securities of other investment companies,
except to the extent permitted under the Act.
Each Portfolio may invest, notwithstanding any other
investment restriction (whether or not fundamental), all of its
assets in the securities of a single open-end management
investment company with substantially the same fundamental
investment objective, policies and restrictions as the Portfolio.
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 Portfolio
shares in certain states. Should the Fund determine that a
commitment is no longer in the best interest of the Portfolio and
its shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of such Portfolio's shares in
the state involved.
MANAGEMENT OF THE FUND
Directors 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 Director who is
deemed to be an "interested person" of the Fund, as defined in
the Act, is indicated by an asterisk.
Directors and Officers of the Fund
LUCY WILSON BENSON, Director. President of Benson and
Associates, consultants to business and government.
Mrs. Benson is a director of Communications Satellite
Corporation, General RE Corporation, The Grumman
Corporation and Logistics Management Institute. She is
also a Trustee of the Alfred P. Sloan Foundation, Vice
Chairman of the Board of Trustees of Lafayette College,
Vice Chairman of the Citizens Network for Foreign
Affairs and a member of the Council on foreign
Relations. Mrs. Benson served as a consultant to the
U.S. Department of State and to SRI International from
1980 to 1981. From 1977 to 1980, she was Under
Secretary of State for Security Assistance, Science and
Technology. Her address is 46 Sunset Avenue, Amherst,
Massachusetts 01002.
* DAVID W. BURKE, Director. Since October 1990, Vice President
and Chief Administrative Officer of the Manager and an
officer, director or trustee of other investment
companies advised or administered by the Manager. From
1977 to 1990, Mr. Burke was involved in the management
of national television news, as Vice President and
Executive Vice President of ABC News, and subsequently
as President of CBS News. His address is 200 Park
Avenue, New York, New York 10166.
MARTIN D. FIFE, Director. President of Fife Associates, Inc.
and other companies engaged in the chemical and
plastics industries. His address is 30 Rockefeller
Plaza, New York, New York 10112.
WHITNEY I. GERARD, Director. Partner of the New York City law
firm of Chadbourne & Parke. His address is 30
Rockefeller Plaza, New York, New York 10112.
ROBERT R. GLAUBER, Director. Research Fellow, Center for
Business and Government at the John F. Kennedy School
of Government, Harvard University, since January 1992.
Mr. Glauber was Under Secretary of the Treasury for
Finance at the U.S. Treasury Department from May 1989
to January 1992. For more than five years prior
thereto, he was a Professor of Finance at the Graduate
School of Business Administration of Harvard University
and, from 1985 to 1989, Chairman of its Advanced
Management Program. His address is 79 John F. Kennedy
Street, Cambridge, Massachusetts 02138.
ARTHUR A. HARTMAN, Director. Senior consultant with APCO
Associates Inc. From 1981 to 1987, he was United
States Ambassador to the former Soviet Union. He is a
director of the Hartford Insurance Group and a member
of the advisory councils of several other companies,
research institutes and foundations. He is President
of the Harvard Board of Overseers. His address is 2738
McKinley Street, N.W., Washington, D.C. 20015.
GEORGE L. PERRY, Director. An economist and Senior Fellow at
the Brookings Institution since 1969. He is co-
director of the Brookings Panel on Economic Activity
and editor of its journal, The Brookings Papers. He is
also a director of the State Farm Mutual Automobile
Association and State Farm Life Insurance Company. His
address is 1775 Massachusetts Avenue, N.W., Washington,
D.C. 20015.
*HOWARD STEIN, Director, President and Investment Officer.
Chairman of the Board and Chief Executive Officer of
the Manager, Chairman of the Board of the Distributor
and an officer, director, trustee or general partner of
other investment companies advised or administered by
the Manager. His address is 200 Park Avenue, New York,
New York 10166.
PAUL WOLFOWITZ, Director. Dean of The Paul H. Nitze School of
Advanced International Studies at Johns Hopkins
University. From 1989 to 1993, Under Secretary of
Defense for Policy. From 1986 to 1989, he was the U.S.
Ambassador to the Republic of Indonesia. Before
assuming that post, he was Assistant Secretary of State
for East Asian and Pacific Affairs, Department of
State, from 1982 to 1986. In 1993, he was the George
F. Kennan Professor of National Security Strategy at
the National War College. His address is 1740
Massachusetts Avenue, N.W., Washington, D.C. 20036.
The "non-interested" Directors are also directors of
Dreyfus California Municipal Income, Inc., The Dreyfus Fund
Incorporated, Dreyfus Municipal Income, Inc., Dreyfus New York
Municipal Income, Inc., Dreyfus Short-Term Income Fund, Inc. and
Dreyfus Worldwide Dollar Money Market Fund, Inc., and The 401(k)
Fund, and trustees of Dreyfus Institutional Short-Term Treasury
Fund and Dreyfus Short-Intermediate Tax Exempt Bond Fund. Each
of the "non-interested" Directors, except Mr. Glauber, is also a
director of Dreyfus Liquid Assets, Inc. and a trustee of Dreyfus
Short-Intermediate Government Fund. Mrs. Benson also is a
director of The Dreyfus Socially Responsible Growth Fund, Inc.
and The Dreyfus Third Century Fund, Inc.
The Fund does not pay any remuneration to its officers
and Directors other than expenses to those Directors who are not
officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Manager, which totaled
$14,365, for the period July 1, 1993 (commencement of operations)
through April 30, 1994 for all such Directors as a group.
For so long as the Fund's plans described in the
section captioned "Distribution Plan and Shareholder Services
Plan" remain in effect, the Directors of the Fund who are not
"interested persons" of the Fund, as defined in the Act, will be
selected and nominated by the Directors who are not "interested
persons" of the Fund.
Officers of the Fund Not Listed Above
MARIE E. CONNOLLY, President and Treasurer. President and Chief
Operating Officer of the Distributor and an officer of
other investment companies advised or administered by
the Manager. Prior to joining the Distributor, an
officer of Funds Distributor, Inc. and The Boston
Company, Inc.
JOHN E. PELLETIER, Secretary. Senior Vice President and General
Counsel of the Distributor and an officer of other
investment companies advised or administered by the
Manager. Prior to joining the Distributor, an officer
of The Boston Company Advisors, Inc. and an associate
at Ropes & Gray and Sidley & Austin.
JOSEPH F. TOWER, III, Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the
Distributor and an officer of other investment
companies advised or administered by the Manager.
Prior to joining the Distributor, an officer of The
Boston Company, Inc., St. Regis Corporation and Yankee
Bank.
FREDERICK C. DEY, Assistant Treasurer. Senior Vice President of
the Distributor and an officer of other investment
companies advised or administered by the Manager.
Prior to joining the Distributor, a Manager of High
Performance Fabric Division of Springs Industries, Inc.
and an analyst at Lebow Industries.
ERIC B. FISCHMAN, Assistant Secretary. Associate General Counsel
of the Distributor and an officer of other investment
companies advised or administered by the Manager.
Prior to joining the Distributor, a Staff Attorney at
the Federal Reserve Board.
RUTH LIEBERT, Assistant Secretary. Assistant Vice President of
the Distributor and an officer of other investment
companies advised or administered by the Manager.
Prior to joining the Distributor, an officer of The
Managers Funds and The Rockland Center for the Arts.
The address of each officer of the Fund is Premier
Mutual Fund Services, Inc., One Exchange Place, Boston,
Massachusetts 02109.
Directors and officers of the Fund, as a group, owned
less than 1% of the shares of Common Stock of each Portfolio
outstanding on August 22, 1994.
The following persons are also officers and/or
directors of the Manager: Julian M. Smerling, Vice Chairman of
the Board of Directors; Joseph S. DiMartino, President, Chief
Operating Officer and a Director; Alan M. Eisner, Vice President
and Chief Financial Officer; David W. Burke, Vice President and
Chief Administrative Officer; Robert F. Dubuss, Vice President;
Elie M. Genadry, Vice President--Institutional Sales; Peter A.
Santoriello, Vice President; Philip L. Toia, Vice President; Kirk
V. Stumpp, Vice President--New Products Development; John J.
Pyburn and Katherine C. Wickham, Assistant Vice Presidents;
Maurice Bendrihem, Controller; and Mandell L. Berman, Alvin E.
Friedman, Lawrence M. Greene, Abigail Q. McCarthy and David B.
Truman, directors.
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."
The Manager provides management services pursuant to
the Management Agreement (the "Agreement") dated August 25, 1994
with the Fund. As to each Portfolio, the Agreement is subject to
annual approval by (i) the Fund's Board of Directors or (ii) vote
of a majority (as defined in the Act) of the outstanding voting
securities of the such Portfolio, provided that in either event
the continuance also is approved by a majority of the Directors
who are not "interested persons" (as defined in the Act) of the
Fund or the Manager, by vote cast in person at a meeting called
for the purpose of voting on such approval. As to each
Portfolio, the Agreement is terminable without penalty, on 60
days' notice, by the Fund's Board of Directors or by vote of the
holders of a majority of such Portfolio's shares, or, on not less
than 90 days' notice, by the Manager. The Agreement will
terminate automatically, as to the relevant Portfolio, in the
event of its assignment (as defined in the Act).
The Manager manages each Portfolio's investments in
accordance with the stated policies of such Portfolio, subject to
the approval of the Fund's Board of Directors. The Manager is
responsible for investment decisions, and provides the Fund with
Portfolio Managers who are authorized by the Board of Directors
to execute purchases and sales of securities. The Fund's
Portfolio Managers are Howard Stein, Jeffrey F. Friedman, Richard
B. Hoey and Ernest G. Wiggins, Jr. The Manager also maintains a
research department with a professional staff of portfolio
managers and securities analysts who provide research services
for the Fund as well as for other funds advised by the Manager.
All purchases and sales are reported for the Directors' review at
the meeting subsequent to such transactions.
All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by
the Manager. The expenses borne by the Fund include: organiza-
tional costs, taxes, interest, loan commitment fees, interest and
distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Directors who are not officers,
directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory
fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of maintaining
the Fund's existence, costs of independent pricing services,
costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and
printing certain prospectuses and statements of additional
information, and any extraordinary expenses. Expenses
attributable to a particular Portfolio are charged against the
assets of that Portfolio; other expenses of the Fund are
allocated between the Portfolios on the basis determined by the
Board of Directors, including, but not limited to,
proportionately in relation to the net assets of each Portfolio.
In addition, the Fund is subject to an annual
distribution fee for advertising, marketing and distributing
Portfolio shares and an annual service fee for ongoing personal
services relating to shareholder accounts and services related to
the maintenance of shareholder accounts. See "Distribution Plan
and Shareholder Services Plan."
The Manager pays the salaries of all officers and
employees employed by both it and the Fund, maintains office
facilities, and furnishes statistical and research data, clerical
help, accounting, data processing, bookkeeping and internal
auditing and certain other required services. The Manager also
may make such advertising and promotional expenditures, using its
own resources, as it from time to time deems appropriate.
As compensation for its services, the Fund has agreed
to pay the Manager a monthly management fee at the annual rate of
.75 of 1% of the value of each Portfolio's average daily net
assets. For the period July 1, 1993 (commencement of operations)
through April 30, 1994, a management fee of $232,788 was payable
by the Fund with respect to the Dreyfus Total Return Portfolio,
which amount was reduced by $232,788 pursuant to an undertaking
by the Manager, resulting in a net fee of $0.
As to each Portfolio, the Manager has agreed that if in
any fiscal year the aggregate expenses of the Portfolio,
exclusive of taxes, brokerage, interest on borrowings and (with
the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management
fee, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the payment
to be made to the Manager under the Agreement, or the Manager
will bear, such excess expense 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 the Manager is not
subject to reduction as the value of a Portfolio's net assets
increases.
PURCHASE OF FUND SHARES
The following information supplements and should be
read in conjunction with the section in the Fund's Prospectus
entitled "How to Buy Fund Shares."
The Distributor. The Distributor serves as the Fund's
distributor pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the other funds in
the Dreyfus Family of Funds and for certain other investment
companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer
purchase orders may be made between the hours of 8:00 a.m. and
4:00 p.m., New York time, on any business day that The
Shareholder Services Group, Inc., the Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to
the shareholder's Fund account on the next bank business day. To
qualify to use the Dreyfus 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 Fund
Shares--Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an
account with a minimum investment of $100 without filing a new
Account Application during the calendar year, 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."
Portfolio shares are subject to a Distribution Plan and
a Shareholder Services Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by
the Securities and Exchange Commission under the 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 of Directors has
adopted such a plan (the "Distribution Plan") with respect to the
Portfolios' shares, pursuant to which the Fund pays the
Distributor for advertising, marketing and distributing Portfolio
shares. Under the Distribution Plan, the Distributor may make
payments to certain financial institutions, securities dealers
and other financial industry professionals (collectively,
"Service Agents") in respect to these services. The Fund's Board
of Directors believes that there is a reasonable likelihood that
the Distribution Plan will benefit each Portfolio and its
shareholders. In some states, certain financial institutions
effecting transactions in Portfolio shares may be required to
register as dealers pursuant to state law.
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 Directors for their review.
In addition, the Distribution Plan provides that it may not be
amended to increase materially the costs which Portfolio
shareholders may bear for distribution pursuant to the
Distribution Plan without shareholder approval and that other
material amendments of the Distribution Plan must be approved by
the Board of Directors, and by the Directors who are not
"interested persons" (as defined in the 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 Directors cast in person at a meeting called for the purpose
of voting on the Distribution Plan. The Distribution Plan was so
approved by the Directors at a meeting held on August 25, 1994.
The Distribution Plan may be terminated at any time with respect
to each Portfolio by vote of a majority of the Directors 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 the Portfolio's
shares.
For the period July 1, 1993 (commencement of
operations) through April 30, 1994, the Fund was charged $179,099
for advertising, marketing and distributing shares of Dreyfus
Total Return Portfolio pursuant to the Distribution Plan, all of
which was reimbursed pursuant to an undertaking by the Manager.
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 each
Portfolio's shareholders.
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 Directors for
their review. In addition, the Shareholder Services Plan
provides that it may not be amended without approval of the
Directors, and by the Directors who are not "interested persons"
(as defined in the 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 Directors cast in person at a meeting called for
the purpose of voting on the Shareholder Services Plan. The
Shareholder Services Plan was so approved by the Directors at a
meeting held on August 25, 1994. The Shareholder Services Plan
is terminable at any time with respect to each Portfolio by vote
of a majority of the Directors who are not "interested persons"
and have no direct or indirect financial interest in the
operation of the Shareholder Services Plan or in any agreements
entered into in connection with the Shareholder Services Plan.
For the period July 1, 1993 (commencement of
operations) through April 30, 1994, the Fund was charged $77,596
with respect to Dreyfus Total Return Portfolio pursuant to the
Shareholder Services Plan all of which was reimbursed pursuant to
an undertaking by the Manager.
REDEMPTION OF FUND SHARES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE
READ IN CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS
ENTITLED "HOW TO REDEEM FUND SHARES."
Wire Redemption Privilege. By using this Privilege,
the investor authorizes the Transfer Agent to act on wire or
telephone redemption instructions from any person representing
himself or herself to be the investor, or a representative of the
investor's Service Agent, and reasonably believed by the Transfer
Agent to be genuine. Ordinarily, the Fund will initiate payment
for shares redeemed pursuant to this Privilege on the next
business day after receipt if the Transfer Agent receives the
redemption request in proper form. Redemption proceeds will be
transferred by Federal Reserve wire only to the commercial bank
account specified by the investor on the Account Application or
Shareholder Services Form. Redemption proceeds, if wired, must
be in the amount of $1,000 or more and will be wired to the
investor's account at the bank of record designated in the
investor's file at the Transfer Agent, if the investor's bank is
a member of the Federal Reserve System, or to a correspondent
bank if the investor's bank is not a member. Fees ordinarily are
imposed by such bank and usually are borne by the investor.
Immediate notification by the correspondent bank to the
investor's bank is necessary to avoid a delay in crediting the
funds to the investor's bank account.
Investors with access to telegraphic equipment may wire
redemption requests to the Transfer Agent by employing the
following transmittal code which may be used for domestic or
overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic
equipment may have the wire transmitted by contacting a TRT
Cables operator at 1-800-654-7171, toll free. Investors should
advise the operator that the above transmittal code must be used
and should also inform the operator of the Transfer Agent's
answer back sign.
To change the commercial bank or account designated to
receive redemption proceeds, a written request must be sent to
the Transfer Agent. This request must be signed by each
shareholder, with each signature guaranteed as described below
under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be
aware that if they have selected the Dreyfus TeleTransfer
Privilege, any request for a wire redemption will be effected as
a Dreyfus TeleTransfer transaction through the Automated Clearing
House ("ACH") system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in the
investor's account at an ACH member bank ordinarily two business
days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates
representing Fund shares to be redeemed must be submitted with
the redemption request. Written redemption requests must be
signed by each shareholder, including each holder of a joint
account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers,
credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges
Medallion Program. Guarantees must be signed by an authorized
signatory of the guarantor and "Signature-Guaranteed" must appear
with the signature. The Transfer Agent may request additional
documentation from corporations, executors, administrators,
trustees or guardians, and may accept other suitable verification
arrangements from foreign investors, such as consular
verification. For more information with respect to signature-
guarantees, please call one of the telephone numbers listed on
the cover.
Redemption Commitment. The Fund has committed itself
to pay in cash all redemption requests by any shareholder of
record of a Portfolio, limited in amount during any 90-day period
to the lesser of $250,000 or 1% of the value of such Portfolio'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 of Directors reserves the right
to make payments in whole or in part in securities or other
assets in case of an emergency or any time a cash distribution
would impair the liquidity of the Portfolio to the detriment of
the existing shareholders. In such event, the securities would
be valued in the same manner as the Portfolio's securities are
valued. If the recipient sold such securities, brokerage charges
would be incurred.
Suspension of Redemptions. The right of redemption may
be suspended or the date of payment postponed (a) during any
period when the New York Stock Exchange is closed (other than
customary weekend and holiday closings), (b) when trading in the
markets the 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."
Exchange Privilege. Shares of other Portfolios of the
Fund or 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.
To accomplish an exchange under item D above,
shareholders must notify the Transfer Agent of their prior
ownership of fund shares and their account number.
To use this Privilege, an investor or the investor's
Service Agent acting on the investor's behalf must give exchange
instructions to the Transfer Agent in writing, by wire or by
telephone. Telephone exchanges may be made only if the
appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is on
file with the Transfer Agent. By using this Privilege, the
investor authorizes the Transfer Agent to act on telephonic,
telegraphic or written exchange instructions from any person
representing himself or herself to be the investor or a
representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved
or the number of telephone exchanges permitted. Shares issued in
certificate form are not eligible for telephone exchange.
To establish a retirement plan by exchange, shares of
the fund being exchanged must have a value of at least the
minimum initial investment required for the fund into which the
exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs
and IRAs set up under a Simplified Employee Pension Plan ("SEP-
IRAs") with only one participant, the minimum initial investment
is $750. To exchange shares held in Corporate Plans, 403(b)(7)
Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500
invested among the funds in the Dreyfus Family of Funds. To
exchange shares held in a Retirement Plan account, the shares
exchanged must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange
permits an investor to purchase, in exchange for shares of a
Portfolio, shares of one of the other Portfolios of the Fund or
shares of another fund in the Dreyfus Family of Funds. This
Privilege is available only for existing accounts. Shares will
be exchanged on the basis of relative net asset value as set
forth under "Exchange Privilege" above. 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.
The Exchange Privilege and Dreyfus Auto-Exchange
Privilege are available to shareholders resident in any state in
which shares of the fund being acquired may legally be sold.
Shares may be exchanged only between accounts having identical
names and other identifying designations.
Shareholder Services Forms and prospectuses of the
other funds may be obtained from the Distributor, One Exchange
Place, Boston, Massachusetts 02109. The Fund reserves the right
to reject any exchange request in whole or in part. The Exchange
Privilege or the Dreyfus Auto-Exchange Privilege may be modified
or terminated at any time upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal
Plan permits an investor with a $5,000 minimum account to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis. Withdrawal payments are the
proceeds from sales of Fund shares, not the yield on the shares.
If withdrawal payments exceed reinvested dividends and distribu-
tions, the investor's shares will be reduced and eventually may
be depleted. An Automatic Withdrawal Plan may be established by
completing the appropriate application available from the
Distributor. There is a service charge of $.50 for each with-
drawal check. 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.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows
investors to invest on the payment date their dividends or
dividends and capital gain distributions, if any, from a
Portfolio in shares of another Portfolio of the Fund or shares of
another fund in the Dreyfus Family of Funds of which the investor
is a shareholder. Shares of other funds purchased pursuant to
this Privilege will be purchased on the basis of relative net
asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in
shares of other funds that are offered without a
sales load.
B. Dividends and distributions paid by a fund which
does not charge a sales load may be invested in
shares of other funds sold with a sales load, and
the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of
other funds sold with a sales load (referred to
herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares
exceeds the maximum sales load charged by the fund
from which dividends or distributions are being
swept, without giving effect to any reduced loads,
the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge and the
applicable contingent deferred sales charge, if
any, will be imposed upon redemption of such
shares.
Corporate Pension/Profit-Sharing and Retirement Plans.
The Fund makes available to corporations a variety of prototype
pension and profit-sharing plans including a 401(k) Salary
Reduction Plan. In addition, the Fund makes available Keogh
Plans, IRAs, including SEP-IRAs and IRA "Rollover Accounts," and
403(b)(7) Plans. Plan support services also are available. For
details, please contact the Dreyfus Group Retirement Plans, a
division of the Distributor, by calling toll free 1-800-358-5566.
Investors who wish to purchase Fund shares in
conjunction with a Keogh Plan, a 403(b)(7) Plan or an IRA,
including an SEP-IRA, may request from the Distributor forms for
adoption of such plans.
The entity acting as custodian for Keogh Plans,
403(b)(7) Plans or IRAs may charge a fee, payment of which could
require the liquidation of shares. All fees charged are
described in the appropriate form.
Shares may be purchased in connection with these plans
only by direct remittance to the entity acting as custodian.
Purchases for these plans may not be made in advance of receipt
of funds.
The minimum initial investment for corporate plans,
Salary Reduction Plans, 403(b)(7) Plans and SEP-IRAs with more
than one participant, is $2,500 with no minimum on subsequent
purchases. The minimum initial investment for Dreyfus-sponsored
Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only one
participant, is normally $750, with no minimum on subsequent
purchases. Individuals who open an IRA may also open a non-
working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan
and the appropriate form of Custodial Agreement for further
details on eligibility, service fees and tax implications, and
should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE
READ IN CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS
ENTITLED "HOW TO BUY FUND SHARES."
Valuation of Portfolio Securities. Each Portfolio's
securities, including covered call options written by a
Portfolio, are valued at the last sale price on the securities
exchange or national securities market on which such securities
primarily are traded. Short-term investments are carried at
amortized cost, which approximates value. 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 securities or other assets for which recent market quotations
are not readily available are valued at fair value as determined
in good faith by the Fund's Board of Directors. Expenses and
fees of the Fund, including the management fee paid by the Fund
and the distribution and service fees, are accrued daily and
taken into account for the purpose of determining the net asset
value of Fund shares.
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 of
Directors, are valued at fair value as determined in good faith
by the Board of Directors. The Board of Directors will review
the method of valuation on a current basis. In making their good
faith valuation of restricted securities, the Directors generally
will take the following factors into consideration: restricted
securities which are 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 of Directors
if the Directors 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 of
Directors.
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."
It is expected that the Dreyfus Total Return Portfolio
qualified as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended (the "Code") for the fiscal year
ended April 30, 1994, and each Portfolio intends to continue to
so qualify, as long as such qualification is in the best
interests of its shareholders. Qualification as a regulated
investment company relieves each Portfolio from any liability for
Federal income taxes to the extent its earnings are distributed
in accordance with applicable provisions of the Code. 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 his investment. Such a
dividend or distribution would be a return on 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 a long-term capital
loss to the extent of the capital gain distribution received.
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain and loss. However,
a portion of the gain or loss from the disposition of non-U.S.
dollar denominated securities (including debt instruments,
certain financial forward futures and option contracts and
certain preferred stock) may be treated as ordinary income or
loss under Section 988 of the Code. In addition, all or a
portion of the gain realized from the disposition of certain
market discount bonds will be treated as ordinary income under
Section 1276. Finally, all or a portion of the gain realized
from engaging in "conversion transactions" may be treated as
ordinary income under Section 1258. "Conversion transactions"
are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce
capital gains, or transactions described in Treasury regulations
to be issued in the future.
Under Section 1256 of the Code, any gain or loss
realized by a Portfolio from certain futures and 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 Portfolio's taxable year will be treated as sold
for their then fair market value, resulting in additional gain or
loss to such Portfolio characterized in the manner described
above.
Offsetting positions held by a Portfolio involving
certain 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 Section 1256 and 988. As such, all or a portion of
any short-term or long-term capital gain from certain "straddle"
transactions may be recharacterized to ordinary income.
If a Portfolio were treated as entering into
"straddles" by reason of its engaging in certain contracts or
options transactions, such "straddles" would be characterized as
"mixed straddles" if the contracts or options transactions
comprising a part of such "straddles" were governed by Section
1256 of the Code. A Portfolio may make one or more elections
with respect to "mixed straddles." Depending on which election
is made, if any, the results to the Portfolio may differ. If no
election is made to the extent the "straddle" rules apply to
positions established by the Portfolio, losses realized by the
Portfolio will be deferred to the extent of unrealized gain in
the offsetting position. Moreover, as a result of the "straddle"
and conversion transaction rules, short-term capital loss on
"straddle" positions may be recharacterized as long-term capital
loss, and long-term capital gains may be treated as short-term
capital gains or ordinary income.
Investment by a Portfolio in securities issued or
acquired at a discount, or providing for deferred interest or for
payment of interest in the form of additional obligations could
under special tax rules affect the amount, timing and character
of distributions to shareholders by causing a Portfolio to
recognize income prior to the receipt of cash payments. For
example, a Portfolio could be required to accrue a portion of the
discount (or deemed discount) at which the securities were issued
and to distribute such income in order to maintain its
qualification as a regulated investment company. In such case, a
Portfolio may have to dispose of securities which it might
otherwise have continued to hold in order to generate cash to
satisfy these distribution requirements.
PORTFOLIO TRANSACTIONS
The Manager supervises the placement of orders on
behalf of the Fund for the purchase or sale of portfolio
securities. Allocation of brokerage transactions, including
their frequency, is made in the Manager's 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 Manager's research
facilities with statistical data, investment information,
economic facts and opinions. Information so received is in
addition to and not in lieu of services required to be performed
by the Manager and the fee of the Manager is not reduced as a
consequence of the receipt of such supplemental information.
Such information may be useful to the Manager in serving both the
Fund and other clients which it advises and, conversely,
supplemental information obtained by the placement of business of
other clients may be useful to the Manager in carrying out its
obligation to the Fund. Brokers are also 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 clients the Manager might advise
being engaged simultaneously in the purchase or sale of the same
security. Certain of each Portfolio's transactions in securities
of foreign issuers may not benefit from the negotiated commission
rates available to the Portfolio for transactions in securities
of domestic issuers. When transactions are executed in the over-
the-counter market, each Portfolio will deal with the primary
market makers unless a more favorable price or execution
otherwise is obtainable.
For the period July 1, 1993 (commencement of
operations) through April 30, 1994, the Fund paid total brokerage
commissions of $26,354 with respect to Dreyfus Total Return
Portfolio, none of which was paid to the Distributor. The Fund
paid no gross spreads or concessions on principal transactions
for such period.
Portfolio turnover may vary from year to year, as well
as within a year. High turnover rates are likely to result in
comparatively greater brokerage expenses. The overall
reasonableness of brokerage commissions paid is evaluated by the
Manager based upon its knowledge of available information as to
the general level of commissions paid by other institutional
investors for comparable services.
PERFORMANCE INFORMATION
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE
READ IN CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS
ENTITLED "PERFORMANCE INFORMATION."
Dreyfus Total Return Portfolio's average annual total
return for the .80 year period ended April 30, 1994 was 0.99%.
Average annual total return is calculated by determining the
ending redeemable value of an investment purchased at net asset
value 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.
Dreyfus Total Return Portfolio's total return for the
period July 1, 1993 to April 30, 1994 was 1.19%. Total return is
calculated by subtracting the amount of each Portfolio's net
asset value per share at the beginning of a stated period from
the net asset value per share at the end of the period (after
giving effect to the reinvestment of dividends and distributions
during the period), and dividing the result by the net asset
value per share at the beginning of the period.
Comparative performance information may be used from
time to time in advertising the Fund's shares, including data
from Lipper Analytical Services, Inc., Morningstar, Inc.,
Standard & Poor's 500 Stock Index, the Dow Jones Industrial
Average, Money Magazine, Wilshire 4500 Index and other industry
publications. From time to time, the Fund may compare its
performance against inflation with the performance of other
instruments against inflation, such as short-term Treasury Bills
(which are direct obligations of the U.S. Government) and FDIC-
insured bank money market accounts. In addition, advertising for
the Fund may indicate that investors may consider diversifying
their investment portfolios in order to seek protection of the
value of their assets against inflation. From time to time,
advertising materials for the Fund may refer to or discuss then-
current or past economic or financial conditions, developments
and/or events.
From time to time, the Fund may compare its performance
with the performance of other instruments, such as certificates
of deposit and bank money market accounts which are FDIC-insured.
From time to time, advertising materials for the Fund may refer
to Morningstar ratings and related analyses supporting such
ratings.
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 Portfolio share has one vote and, when issued and
paid for in accordance with the terms of the offering, is fully
paid and non-assessable. Portfolio shares are of one class and
have equal rights as to dividends and in liquidation. Shares
have no preemptive, subscription or conversion rights and are
freely transferable.
The Fund will send annual and semi-annual financial
statements to all its shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York,
New York 10286, is the Fund's custodian. The Shareholder
Services Group, Inc., a subsidiary of First Data Corporation,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
transfer and dividend disbursing agent. Neither The Bank of New
York nor The Shareholder Services Group, Inc. 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, 7 Hanover Square, New York,
New York 10004-2696, as counsel for the Fund, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of common stock
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.
DREYFUS ASSET ALLOCATION FUND, INC.
STATEMENT OF INVESTMENTS
APRIL 30, 1994
COMMON STOCKS--59.9%
SHARES VALUE
------------- -------------
BASIC INDUSTRIES--4.9%
Chemicals--2.5% Dow Chemical 4,500 $ 282,375
dupont (EI) de Nemours. 16,400 936,850
Eastman Chemical. 1,200 53,400
1,272,625
Metals-.4% Alcan Aluminium 1,500 31,312
Aluminum Co. of America 2,900 197,200
228,512
Mining-1.1%
Minnesota Mining &
Manufacturing 9,600 469,200
Placer Dome 3,900 79,950
Paper & Forest Products-.5%
International Paper 1,600 104,400
Rayonier 450 12,713
Weyerhaeuser 3,300 140,663
257,776
Photography-.4% Eastman Kodak 4,800 199,200
TOTAL BASIC INDUSTRIES... 2,507,263
CAPITAL GOODS--1.5%
Environmental Control--.7%
WMX Technologies 14,100 368,363
Machinery & Industrial-.8%
Caterpillar 2,700 296,662
Cooper Industries. 2,800 106,750
Gardner Denver Machinery 112(a) 952
404,364
TOTAL CAPITAL GOODS. 772,727
CAPITAL GOODS/TECHNOLOGY--8.4%
Aerospace/Defense--.4%
Allied Signal 3,400 117,300
United Technologies 1,800 114,750
232,050
Electrical Equipment-3.3%
General Electric 16,700 1,588,587
Westinghouse Electric 6,800 79,050
1,667,637
Electronics-2.4%
Intel 10,200 622,200
Motorola 11,600 517,650
Texas Instruments 1,400 107,100
1,246,950
Information Processing-2.2%
Apple Computer 1,500 45,000
Automatic Data Processing 2,600 133,900
Hewlett-Packard 1,100 88,275
International Business
Machines 13,000 744,250
Pitney Bowes 2,900 110,925
1,122,350
Telecommunications-.1%
Airtouch Communications 1,600(a) 39,400
TOTAL CAPITAL GOODS/TECHNOLOGY. 4,308,387
DREYFUS ASSET ALLOCATION FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED)
APRIL 30, 1994
COMMON STOCKS (CONTINUED)
SHARES VALUE
CONGLOMERATES--.3%
ITT 1,800 $ 161,550
CONSUMER CYCLICAL--7.6%
Appliances--.2% Corning 2,700 85,050
Auto Related-3.1%
Ford Motor 11,500 671,313
General Motors 16,000 908,000
1,579,313
Merchandising-4.3%
Home Depot 9,800 411,600
K mart 4,800 79,200
May Department Stores 3,000 125,625
Penney (J.C.). 2,700 146,475
Sears, Roebuck 4,700 220,900
Wal-Mart Stores 48,100 1,214,525
2,198,325
TOTAL CONSUMER CYCLICAL. 3,862,688
CONSUMER GROWTH STAPLES--10.0%
Beverages--3.5%
Coca-Cola 26,800 1,115,550
PepsiCo 17,500 638,750
1,754,300
Drugs-3.1%
American Home Products 1,600 92,400
Bristol-Myers Squibb. 12,000 646,500
Merck & Co 25,000 740,625
Upjohn 3,900 104,325
1,583,850
Entertainment-.5%
Disney (Walt) 6,100 258,487
Hospital Supplies-1.5%
Abbott Laboratories 9,400 266,725
Baxter International 3,400 77,775
Johnson & Johnson 10,600 438,575
783,075
Printing & Publishing-.5%
Dun & Bradstreet 2,500 146,875
Gannett 2,200 115,500
262,375
Restaurants-.9%
McDonald's 7,800 468,000
TOTAL CONSUMER GROWTH STAPLES. 5,110,087
CONSUMER STAPLES--4.1%
Foods--.5%
Albertson's 3,800 108,775
General Mills 1,800 92,925
Sara Lee 3,500 72,625
274,325
Household Products-1.6%
Procter & Gamble 14,700 836,063
Tobacco-2.0%
Philip Morris Cos 18,500 1,008,250
TOTAL CONSUMER STAPLES 2,118,638
DREYFUS ASSET ALLOCATION FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED)
APRIL 30, 1994
COMMON STOCKS (CONTINUED)
SHARES VALUE
ENERGY--7.7%
Oil & Gas Production--7.7%
Amoco 3,300 $ 185,212
Atlantic Richfield 500 47,687
Chevron 2,900 258,100
Exxon 22,900 1,439,838
Mobil 8,200 641,650
Royal Dutch Petroleum 10,800 1,177,200
Texaco 2,600 167,375
TOTAL ENERGY 3,917,062
FINANCIAL--6.3%
Banking--3.4%
Banc One 7,287 240,471
BankAmerica 9,600 415,200
Bankers Trust New York 1,400 93,625
Chase Manhattan 6,000 204,000
Chemical Banking 2,600 90,350
Citicorp 5,300 196,100
Morgan (J.P.) 3,100 190,650
NationsBank 5,600 292,600
1,722,996
Finance-1.3%
American Express 7,800 231,075
Federal National
Mortgage Association 5,500 457,875
688,950
Insurance-1.6%
American General 2,700 68,850
American International
Group 7,300 622,325
General Re 1,000 111,500
802,675
TOTAL FINANCIAL 3,214,621
RAILROADS--1.2%
CSX 1,800 140,175
Norfolk Southern 2,200 140,525
Union Pacific 5,400 318,600
TOTAL RAILROADS 599,300
UTILITIES--7.9%
Communication--6.2%
American Telephone &
Telegraph 27,600 1,411,050
Ameritech 4,800 189,000
Bell Atlantic 1,700 87,975
BellSouth 7,200 438,300
GTE 17,500 553,438
NYNEX 4,400 160,050
Pacific Telesis 1,600 51,200
Southwestern Bell 5,100 211,650
U.S. West 2,000 81,500
DREYFUS ASSET ALLOCATION FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED)
APRIL 30, 1994
COMMON STOCKS (CONTINUED)
SHARES VALUE
UTILITIES (CONTINUED)
Electrical--1.7%
Duke Power 3,300 $ 120,862
Pacific Gas & Electric 10,100 267,650
Public Service Enterprise 400 11,550
SCEcorp 7,400 118,400
Southern Co 10,200 198,900
Texas Utilities 3,700 130,425
847,787
TOTAL UTILITIES 4,031,950
TOTAL COMMON STOCKS
(cost $31,231,292) $30,604,273
PRINCIPAL
U.S. TREASURY NOTES--14.6% AMOUNT
7.25%, 8/31/1996 $ 1,000,000 $ 1,027,656
8.50%, 11/15/2000 5,000,000 5,440,625
6.375%, 8/15/2002 1,000,000 960,625
TOTAL U.S. TREASURY NOTES
(cost $8,034,531) $ 7,428,906
SHORT-TERM INVESTMENTS--24.1%
U.S. Treasury Bills:
3.09%, 5/5/1994 $ 1,771,000 $ 1,770,379
3%, 5/19/1994 602,000 600,947
3.24%, 5/26/1994 5,167,000 5,154,521
3.44%, 6/2/1994 1,805,000 1,799,304
3.23%, 7/7/1994 2,018,000 2,004,742
3.125%, 7/21/1994 1,009,000 1,000,918
TOTAL SHORT-TERM INVESTMENTS
(cost $12,330,811) $12,330,811
TOTAL INVESTMENTS
(cost $51,596,634) 98.6% $50,363,990
CASH AND RECEIVABLES (NET) 1.4% $ 698,588
NET ASSETS 100.0% $51,062,578
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
ASSETS:
Investments in securities, at value
(cost $51,596,634)see statement $50,363,990
Cash 275,901
Dividends and interest receivable 284,519
Prepaid expenses Note 1(e) 113,558
Due from The Dreyfus Corporation 122,573
51,160,541
LIABILITIES;
Accrued expenses 97,963
NET ASSETS $51,062,578
REPRESENTED BY:
Paid-in capital $51,638,087
Accumulated undistributed investment
income-net 462,334
Accumulated undistributed net realized gain on
investments 194,801
Accumulated net unrealized
(depreciation) on investments-Note 4(b) (1,232,644)
NET ASSETS at value applicable to 4,089,084
shares outstanding (300 million
shares of $.001 par value Common Stock
authorized) $51,062,578
NET ASSET VALUE, offering and redemption
price per share ($51,062,578 divided by
4,089,084 shares) $12.49
See notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC.
STATEMENT OF OPERATIONS
FROM JULY 1, 1993 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1994
INVESTMENT INCOME:
INCOME:
Interest $501,958
Cash dividends
(net of $727 foreign taxes
withheld at source) 482,771
TOTAL INCOME $ 984,729
EXPENSES:
Management fee--Note 2(a) 232,788
Shareholder servicing
costs-Note 2(b,c) 275,297
Prospectus and shareholders'
reports-Note 2(b) 32,366
Registration fees 29,945
Auditing fees 27,107
Organization expenses-
Note1(e) 15,555
Directors fees and
expenses-Note 2(d) 14,365
Legal fees 12,156
Custodian fees 6,849
Miscellaneous 2,905
649,333
Less-expense reimbursement from
Manager due to undertakings-
Note 2(a) 588,150
TOTAL EXPENSES 61,183
INVESTMENT INCOME--NET 923,546
REALIZED AND UNREALIZED (LOSS)
ON INVESTMENTS:
Net realized (loss) on
investments (including option
transactions)-Note 3(a) $ (21,143)
Net realized gain on
financial futures-Note 3(a):
Long transactions 114,340
Short transactions 142,191
NET REALIZED GAIN 235,388
Net unrealized (depreciation) on
investments (1,232,644)
NET REALIZED AND UNREALIZED (LOSS) ON
INVESTMENTS (997,256)
NET (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ (73,710)
See notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FROM JULY 1, 1993 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1994
OPERATIONS:
Investment income--net $ 923,546
Net realized gain on investments 235,388
Net unrealized (depreciation) on
investments for the period (1,232,644)
NET (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS (73,710)
DIVIDENDS TO SHAREHOLDERS FROM:
Investment
income-net (461,212)
Net realized gain on investments (40,587)
TOTAL DIVIDENDS (501,799)
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold 69,747,836
Dividends reinvested 486,322
Cost of shares redeemed (18,696,071)
INCREASE IN NET ASSETS FROM CAPITAL STOCK
TRANSACTIONS 51,538,087
TOTAL INCREASE IN NET ASSETS 50,962,578
NET ASSETS:
Beginning of period--Note 1 100,000
End of period (including undistributed investment
income-net of $462,334) $51,062,578
CAPITAL SHARE TRANSACTIONS: SHARES
Shares sold 5,525,794
Shares issued for dividends reinvested 38,293
Shares redeemed (1,483,003)
NET INCREASE IN SHARES
OUTSTANDING 4,081,084
See notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a
share of Common Stock outstanding, total investment return,
ratios to average net
assets and other supplemental data for the period July 1, 1993
(commencement of operations) to April 30, 1994. This information
has been derived from information provided in the Fund's
financial statements.
PER SHARE DATA:
Net asset value, beginning of period $12.50
INVESTMENT OPERATIONS:
Investment income--net .24
Net realized and unrealized (loss) on
investments (.11)
TOTAL FROM INVESTMENT OPERATIONS .13
DISTRIBUTIONS:
Dividends from investment income-net (.13)
Dividends from net realized gain on
investments (.01)
TOTAL DISTRIBUTIONS (.14)
Net asset value, end of period $12.49
TOTAL INVESTMENT RETURN .99%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets .16%*
Ratio of net investment income to average net
assets 2.48%*
Decrease reflected in above expense ratio due to
undertakings by the Manager 1.58%*
Portfolio Turnover Rate --
Net Assets, end of period (000's
Omitted) $51,063
- ------------------
* Not annualized.
See notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Asset Allocation Fund, Inc. (the "Fund") was
incorporated on May 12, 1993 and had no operations until July 1,
1993 (commencement of
operations) other than matters relating to its organization and
registration as a non-diversified open-end management investment
company under the Investment Company Act of 1940 ("Act") and the
Securities Act of 1933 and the
sale and issuance of 8,000 shares of Common Stock ("Initial
Shares") to The Dreyfus Corporation ("Manager"). Dreyfus Service
Corporation ("Distributor")
acts as the distributor of the Fund's shares, which are sold to
the public without a sales load. The Distributor is a
wholly-owned subsidiary of the
Manager. As of April 30, 1994, the Manager held 412,386 shares.
(A) PORTFOLIO VALUATION: Investments in securities (including
options and financial futures) are valued at the last sales price
on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities
market. Securities not listed on an exchange
or the national securities market, or securities for which there
were no transactions, are valued at the average of the most
recent bid and asked prices, except for open short positions,
where the asked price is used for
valuation purposes. Bid price is used when no asked price is
available.
Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of the
Board of Directors.
Short-term investments are carried at amortized cost, which
approximates value. Investments traded in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange.
(B) 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.
(C) 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.
(D) 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 provisions available to certain investment
companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income
sufficient to relieve it from all, or substantially all, Federal
income taxes.
(E) OTHER: Organization expenses paid by the Fund are
included in prepaid expenses and are being amortized to
operations from July 1, 1993, the date
operations commenced, over the period during which it is expected
that a benefit will be realized, not to exceed five years. At
April 30, 1994, the
unamortized balance of such expenses amounted to $84,182. In the
event that any of the Initial Shares are redeemed during the
amortization period, the redemption proceeds will be reduced by
any unamortized organization expenses
in the same proportion as the number of such shares being
redeemed bears to the number of such shares outstanding at the
time of such redemption.
DREYFUS ASSET ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .75
of 1% of the average daily value of the Fund's net assets and is
payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the
Fund's aggregate expenses, exclusive of taxes, brokerage,
interest on borrowings and
extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund. The most stringent state
expense limitation applicable to the Fund presently requires
reimbursement of expenses in any
full fiscal year that such expenses (exclusive of distribution
expenses and certain expenses as described above) exceed 2 1/2%
of the first $30 million, 2% of the next $70 million and 1 1/2%
of the excess over $100 million of the
average value of the Fund's net assets in accordance with
California "blue sky" regulations. However, the Manager had
undertaken from July 1, 1993
through January 11, 1994 to reimburse all fees and expenses of
the Fund and thereafter had undertaken through April 30, 1994 to
reduce the management fee
paid by, and reimburse such excess expenses of the Fund, to the
extent that the Fund's aggregate expenses (excluding certain
expenses as described above)
exceeded specified annual percentages of the Fund's average daily
net assets.
The expense reimbursement, pursuant to the undertakings, amounted
to $588,150 for the period ended April 30, 1994.
The Manager may modify the expense limitation percentages
from time to time, provided that the resulting expense
reimbursement would not be less
than the amount required pursuant to the Agreement.
(B) Under the Distribution Plan (the "Plan") adopted pursuant
to Rule 12b-1 under the Act, the Fund pays the Distributor, at an
annual rate of .50 of 1% of the value of the Fund's average daily
net assets, for costs and expenses in connection with
advertising, marketing and distributing the Fund's shares and for
servicing shareholder accounts. The Distributor may
make payments to one or more Service Agents (a securities dealer,
financial institution, or other industry professional) based on
the value of the Fund's
shares owned by clients of the Service Agent. The Plan also
separately provides for the Fund to bear the costs of preparing,
printing and distributing certain of the Fund's prospectuses and
statements of additional
information and costs associated with implementing and operating
the Plan, not to exceed the greater of $100,000 or .005 of 1% of
the Fund's average daily net assets for any full fiscal year.
During the period ended April 30, 1994, the Fund was charged
$179,099 pursuant to the Plan.
(C) Pursuant to the Fund's Shareholder Services Plan, the
Fund pays the Distributor, at an annual rate of .25 of 1% of the
value of the Fund's
average daily net assets for servicing shareholder accounts. The
services provided may include personal services relating to
shareholder accounts, such
as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to
the maintenance of shareholder accounts. The Distributor may make
payments to Service Agents in respect of
these services. The Distributor determines the amounts to be paid
to Service Agents. During the period ended April 30, 1994, the
Fund was charged $77,596 pursuant to the Shareholder Services
Plan.
(D) Certain officers and directors of the Fund are
"affiliated persons," as defined in the Act, of the Manager
and/or the Distributor.
Each director who is not an "affiliated person" receives an
annual fee of $1,000 and an attendance fee of $250 per meeting.
(E) On December 5, 1993, the Manager entered into an
Agreement and Plan of Merger providing for the merger of the
Manager with a subsidiary of Mellon Bank Corporation ("Mellon").
DREYFUS ASSET ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Following the merger, it is planned that the Manager will be
a direct subsidiary of Mellon Bank, N.A. Closing of this merger
is subject to a number
of contingencies, including receipt of certain regulatory
approvals and approvals of stockholders of the Manager and of
Mellon. The merger is expected to occur in mid-1994, but could
occur later.
Because the merger will constitute an "assignment" of the
Fund's Management Agreement with the Manager under the Investment
Company Act of 1940, and thus a termination of such Agreement,
the Manager will seek prior approval from the Fund's Board and
shareholders.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases of investment
securities, excluding
short-term securities and options transactions, during the period
ended April 30, 1994 amounted to $39,265,842.
The Fund is engaged in trading financial futures contracts.
The Fund is exposed to market risk as a result of changes in the
value of the underlying
financial instruments. Investments in financial futures require
the Fund to "mark to market" on a daily basis, which reflects the
change in the market value of the contract at the close of each
day's trading.
Accordingly, variation margin payments are made or received to
reflect daily unrealized
gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require
initial margin deposits with
a custodian, which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these
deposits is determined by the
exchange or Board of Trade on which the contract is traded and is
subject to change. At April 30, 1994, there were no financial
futures contracts outstanding.
(B) At April 30, 1994, accumulated net unrealized
depreciation on
investments was $1,232,644, consisting of $1,111,802 gross
unrealized appreciation and $2,344,446 gross unrealized
depreciation.
At April 30, 1994, the cost of investments for Federal income
tax purposes was substantially the same as the cost for financial
reporting purposes (see the Statement of Investments).
DREYFUS ASSET ALLOCATION FUND, INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS ASSET ALLOCATION FUND, INC.
We have audited the accompanying statement of assets and
liabilities of
Dreyfus Asset Allocation Fund, Inc., including the statement of
investments, as of April 30, 1994, and the related statements of
operations and changes in
net assets and financial highlights for the period from July 1,
1993 (commencement of operations) to April 30, 1994. 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 audit.
We conducted our audit 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 April 30, 1994 by correspondence with the
custodian. 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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Dreyfus Asset Allocation
Fund, Inc. at April 30, 1994, and the
results of its operations, the changes in its net assets and the
financial highlights for the period from July 1, 1993 to April
30, 1994, in conformity
with generally accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
June 6, 1994
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal Tax purposes the Fund hereby designates $.0110
per share as a long-term capital gain distribution of the $.1360
per share paid on December 17, 1993.
DREYFUS ASSET ALLOCATION FUND, INC.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits. - List
(a) Financial Statements:
Included in Part A of the Registration Statement
Financial Highlights for the period from July 1,
1993 (commencement of operations) to April 30, 1994.
Included in Part B of the Registration Statement:
Statement of Investments -- April 30, 1994
Statement of Assets and Liabilities -- April 30, 1994
Statement of Operations -- for the period from
July 1, 1993 (commencement of operations) to
April 30, 1994
Statement of Changes in Net Assets -- for the
period from July 1, 1993 (commencement of
operations) to April 30, 1994
Notes to Financial Statements
Report of Ernst & Young LLP, Independent
Auditors, dated June 6, 1994.
Schedules No. I through VII and other financial statement
information, for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission,
are either omitted because they are not required under the
related instructions, they are inapplicable,
or the required information is presented in the financial
statements or notes thereto which are included in Part B of the
Registration Statement.
Item 24. Financial Statements and Exhibits. - List
(continued)
(b) Exhibits:
(1)(a) Registrant's Articles of Incorporation and Articles
of Amendment are incorporated by reference to Exhibit (1) of
Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on June 28, 1993.
(1)(b) Form of Amendment to the Registrant's Articles of
Incorporation.
(2) Registrant's By-Laws, as amended, are incorporated
by reference to Exhibit (2) of Pre-Effective Amendment No. 1
to the Registration Statement on Form N-1A, filed on June
28, 1993.
(4) Specimen certificate for the Registrant's
securities is incorporated by reference to Exhibit (4) of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on June 28, 1993.
(5)(a) Management Agreement is incorporated by reference
to Exhibit (5) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on June
28, 1993.
(5)(b) Form of Management Agreement, as revised.
(6)(a) Distribution Agreement is incorporated by reference
to Exhibit (6) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on June 28, 1993.
(6)(b) Forms of Service Agreement are incorporated by
reference to Exhibit 6(b) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on June 28, 1993.
(6)(c) Form of Distribution Agreement, as revised.
(8 Custody Agreement is incorporated by reference to Exhibit
(8) of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on June 28, 1993.
(9)(a) Shareholder Services Plan is incorporated by
reference to Exhibit (a) of the Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1A, filed on June 28, 1993.
(9)(b) Form of Shareholder Services Plan, as revised.
Item 24. Financial Statements and Exhibits. - List
(continued)
(10) Opinion and consent of Registrant's counsel is
incorporated by reference to Exhibit (10) of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on June 28, 1993.
(11) Consent of Independent Auditors.
(15)(a) Distribution Plan is incorporated by reference to
Exhibit (15) of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on June 28, 1993.
(15)(b) Form of Distribution Plan, as revised.
(16) Schedules of Computation of Performance Data are
incorporated by reference to Exhibit (16) of Post-
Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on February 1, 1994.
Other Exhibits
(a) Powers of Attorney of the Directors and officers
are incorporated by reference to Other Exhibits (a) of Pre-
Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on June 28, 1993. Additional
Powers of Attorney are filed herewith.
(b) Certificate of Secretary is incorporated by
reference to Other Exhibits (b) of Pre-Effective Amendment No. 1
to the Registration Statement on Form N-1A, filed on June 28,
1993.
Item 25. Persons Controlled by or under Common Control with
Registrant.
Not Applicable
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record Holders
Title of Class as of August 22, 1994
Shares of Common Stock,
par value $.01 per share
Dreyfus Total
Return Portfolio.. . . . . . . . . 3,578
Dreyfus Income Portfolio. . . . . . . .0
Dreyfus Growth Portfolio.. . . . . . . .0
Item 27. Indemnification
The Statement as to the general effect of any
contract, arrangements or statute under which a director,
officer, underwriter or affiliated person of the Registrant is
insured or indemnified in any manner against any liability
which may be incurred in such capacity, other than
insurance provided by any director, officer, affiliated
person or underwriter for their own protection, is
incorporated by reference to Item 4 of Part II of Pre-
Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on June 28, 1993.
Reference is also made to the Distribution Agreement
attached as Exhibit (6)(c) hereto.
Item 28. Business and Other Connections of Investment Adviser
The Dreyfus Corporation ("Dreyfus") is a wholly-owned
subsidiary of Mellon Bank, N.A. and an indirect subsidiary of
Mellon Bank Corporation ("Mellon"). Dreyfus and its subsidiary
companies comprise a financial service organization whose
business consists primarily of providing
investment management services as the investment adviser, manager
and distributor for sponsored investment companies registered
under the Investment Company Act of 1940 and as an investment
adviser to institutional and individual accounts. Dreyfus also
serves as sub-investment adviser to and/or administrator of other
investment companies.
Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as a broker-dealer of shares of
investment companies sponsored by
Dreyfus and of other investment companies for which Dreyfus acts
as investment adviser, sub-investment adviser or administrator.
Dreyfus Management, Inc., another wholly-owned subsidiary,
provides investment management services to various pension plans,
institutions and individuals.
Officers and Directors of Dreyfus
Name and Position with
Dreyfus Other Businesses
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway - Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation;
Member of the Board of Vintners International
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage
Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the Board Dreyfus Acquisition Corporation*;
and Chief Executive The Dreyfus Consumer Credit Corporation*;
Officer Dreyfus Land Development Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus Partnership Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
The Dreyfus Trust Company++;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Service Organization, Inc.*;
Director and Vice Chairman:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, Chief The Dreyfus Trust Company++;
Operating Officer Director and President:
and Director Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
Trustee:
Bucknell University
Lewisburg, Pennsylvania 17837;
Vice President and former Treasurer and
Director:
National Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
Director, President and Chief Operating
Officer:
Major Trading Corporation*
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant The Dreyfus Security Savings Bank,
F.S.B.+;
and Director Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ALAN M. EISNER Director and President:
Vice President and The Truepenny Corporation*;
Chief Financial Officer Vice President and Chief Financial
Officer:
Dreyfus Acquisition Corporation*;
Treasurer:
Dreyfus Realty Advisors, Inc.+++;
Director, Treasurer and Financial Officer:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
Dreyfus Thrift & Commerce****;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*
ELIE M. GENADRY President:
Vice President- Institutional Services Division of
Institutional Sales Dreyfus Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Vice President:
The Dreyfus Trust Company++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and Dreyfus Precious Metals, Inc.*;
General Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Seven Six Seven Agency, Inc.*
PETER A. SANTORIELLO Director and President:
Vice President Dreyfus Management, Inc.*;
Vice President:
Dreyfus Personal Management, Inc.*
KIRK V. STUMPP Senior Vice President and Director of
Vice President--New Marketing:
Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice
President:
Vice President and Dreyfus Thrift and Commerce****;
Director of Fixed- Director:
Income Research The Dreyfus Security Savings Bank, F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
Director and President:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York l008l
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Assistant Vice President- Department of Parks and Recreation
of the
Human Resources City of New York
830 Fifth Avenue
New York, New York l0022
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*;
Formerly, Vice President-Financial
Planning, Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Assistant Secretary:
Secretary and Deputy Dreyfus Service Organization, Inc.*;
General Counsel Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary The Truepenny Corporation*
* The address of the business so indicated is 200 Park
Avenue,
New York, New York 10166.
** The address of the business so indicated is 80 Cutter
Mill
Road, Great Neck, New York 11021.
*** The address of the business so indicated is Five Triad
Center,
Salt Lake City, Utah 84180.
+ The address of the business so indicated is Atrium
Building,
80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn
Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One
Rockefeller
Plaza, New York, New York 10020.
Item 29. Principal Underwriters
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal
underwriter or exclusive distributor:
1. Comstock Partners Strategy Fund, Inc.
2. Dreyfus A Bonds Plus, Inc.
3. Dreyfus Appreciation Fund, Inc.
4. Dreyfus Asset Allocation Fund, Inc.
Dreyfus Balanced Fund, Inc.
6. Dreyfus BASIC Money Market Fund, Inc.
7. Dreyfus BASIC Municipal Money Market Fund, Inc.
8. Dreyfus BASIC U.S. Government Money Market Fund
9. Dreyfus California Intermediate Municipal Bond Fund
10. Dreyfus California Tax Exempt Bond Fund, Inc.
11. Dreyfus California Tax Exempt Money Market Fund
12. Dreyfus Capital Value Fund, Inc.
13. Dreyfus Cash Management
14. Dreyfus Cash Management Plus, Inc.
15. Dreyfus Connecticut Intermediate Municipal Bond Fund
16. Dreyfus Connecticut Municipal Money Market Fund, Inc.
17. Dreyfus Edison Electric Index Fund, Inc.
18. Dreyfus Florida Intermediate Municipal Bond Fund
19. Dreyfus Florida Municipal Money Market Fund
20. Dreyfus Focus Funds, Inc.
21. The Dreyfus Fund Incorporated
22. Dreyfus Global Bond Fund, Inc.
23. Dreyfus Global Growth, L.P. (A Strategic Fund)
24. Dreyfus Global Investing, Inc.
25. Dreyfus GNMA Fund, Inc.
26. Dreyfus Government Cash Management
27. Dreyfus Growth Allocation Fund, Inc.
28. Dreyfus Growth and Income Fund, Inc.
29. Dreyfus Growth Opportunity Fund, Inc.
30. Dreyfus Institutional Money Market Fund
31. Dreyfus Institutional Short Term Treasury Fund
32. Dreyfus Insured Municipal Bond Fund, Inc.
33. Dreyfus Intermediate Municipal Bond Fund, Inc.
34. Dreyfus International Equity Fund, Inc.
35. Dreyfus International Recovery Fund, Inc.
36. Dreyfus Investors GNMA Fund
37. The Dreyfus Leverage Fund, Inc.
38. Dreyfus Life and Annuity Index Fund, Inc.
39. Dreyfus Liquid Assets, Inc.
40. Dreyfus Massachusetts Intermediate Municipal Bond Fund
41. Dreyfus Massachusetts Municipal Money Market Fund
42. Dreyfus Massachusetts Tax Exempt Bond Fund
43. Dreyfus Michigan Municipal Money Market Fund, Inc.
44. Dreyfus Money Market Instruments, Inc.
45. Dreyfus Municipal Bond Fund, Inc.
46. Dreyfus Municipal Cash Management Plus
47. Dreyfus Municipal Money Market Fund, Inc.
48. Dreyfus New Jersey Intermediate Municipal Bond Fund
49. Dreyfus New Jersey Municipal Bond Fund, Inc.
50. Dreyfus New Jersey Municipal Money Market Fund, Inc.
51. Dreyfus New Leaders Fund, Inc.
52. Dreyfus New York Insured Tax Exempt Bond Fund
53. Dreyfus New York Municipal Cash Management
54. Dreyfus New York Tax Exempt Bond Fund, Inc.
55. Dreyfus New York Tax Exempt Intermediate Bond Fund
56. Dreyfus New York Tax Exempt Money Market Fund
57. Dreyfus Ohio Municipal Money Market Fund, Inc.
58. Dreyfus 100% U.S. Treasury Intermediate Term Fund
59. Dreyfus 100% U.S. Treasury Long Term Fund
60. Dreyfus 100% U.S. Treasury Money Market Fund
61. Dreyfus 100% U.S. Treasury Short Term Fund
62. Dreyfus Pennsylvania Intermediate Municipal Bond Fund
63. Dreyfus Pennsylvania Municipal Money Market Fund
64. Dreyfus Short-Intermediate Government Fund
65. Dreyfus Short-Intermediate Municipal Bond Fund
66. Dreyfus Short-Term Income Fund, Inc.
67. The Dreyfus Socially Responsible Growth Fund, Inc.
68. Dreyfus Strategic Growth, L.P.
69. Dreyfus Strategic Income
70. Dreyfus Strategic Investing
71. Dreyfus Tax Exempt Cash Management
72. The Dreyfus Third Century Fund, Inc.
73. Dreyfus Treasury Cash Management
74. Dreyfus Treasury Prime Cash Management
75. Dreyfus Variable Investment Fund
76. Dreyfus-Wilshire Target Funds, Inc.
77. Dreyfus Worldwide Dollar Money Market Fund, Inc.
78. First Prairie Cash Management
79. First Prairie Diversified Asset Fund
80. First Prairie Money Market Fund
81. First Prairie Municipal Money Market Fund
82. First Prairie Tax Exempt Bond Fund, Inc.
83. First Prairie U.S. Government Income Fund
84. First Prairie U.S. Treasury Securities Cash Management
85. General California Municipal Bond Fund, Inc.
86. General California Municipal Money Market Fund
87. General Government Securities Money Market
Fund, Inc.
88. General Money Market Fund, Inc.
89. General Municipal Bond Fund, Inc.
90. General Municipal Money Market Fund, Inc.
91. General New York Municipal Bond Fund, Inc.
92. General New York Municipal Money Market Fund
93. Pacific American Fund
94. Peoples Index Fund, Inc.
95. Peoples S&P MidCap Index Fund, Inc.
96. Premier California Municipal Bond Fund
97. Premier GNMA Fund
98. Premier Growth Fund, Inc.
99. Premier Insured Municipal Bond Fund
100. Premier Municipal Bond Fund
101. Premier New York Municipal Bond Fund
102. Premier State Municipal Bond Fund
(b)
Positions and offices Positions and
Name and principal with Premier Mutual offices with
business address Fund Services, Inc. Registrant
Marie E. Connolly* President and Chief President and
Operating Officer Treasurer
Joseph F. Tower III* Treasurer and Chief Assistant
Financial Officer Treasurer
John E. Pelletier* Senior Vice President-- Secretary
General Counsel/Secretary
and Clerk
Jean M. O'Leary* Assistant Secretary and None
Clerk
_______________
* The address of the offices so indicated is One Exchange
Place, Boston, Massachusetts 02109.
Item 30. Location of Accounts and Records
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
Not Applicable
Item 32. Undertakings
Registrant hereby undertakes
(1) to file a post-effective amendment, using financial
statements which need not be certified, within four to six months
from the effective date of Registrant's 1933 Act Registration
Statement.
(2) to call a meeting of shareholders for the purpose
of voting upon the question of removal of a director or directors
when requested in writing to do so by the holders of at least 10%
of the Registrant's outstanding shares of common stock and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating
to shareholder communications.
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940, the Registrant
has duly caused this Amendment to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State
of New York, on the 25th day of August, 1994.
DREYFUS ASSET ALLOCATION FUND, INC.
(Registrant)
By:/s/ Marie E. Connolly
Marie E. Connolly, President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
/s/ Marie E. Connolly President August 25,
1994
Marie E. Connolly (Principal Executive
Officer) and Treasurer
/s/ Joseph F. Tower, III Assistant Treasurer August 25, 1994
Joseph F. Tower, III (Principal Financial
and Accounting Officer)
/s/ Lucy Wilson Benson* Director August 25, 1994
Lucy Wilson Benson
/s/ David W. Burke* Director August 25, 1994
David W. Burke
/s/ Martin D. Fife* Director August 25, 1994
Martin D. Fife
/s/ Whitney I. Gerard* Director August 25, 1994
Whitney I. Gerard
/s/ Robert R. Glauber* Director August 25, 1994
Robert R. Glauber
/s/ Arthur A. Hartman* Director August 25, 1994
Arthur A. Hartman
/s/ George L. Perry* Director August 25, 1994
George L. Perry
/s/ Paul Wolfowitz* Director August 25, 1994
Paul Wolfowitz
*BY: /s/ Steven F. Newman August 25, 1994
Steven F. Newman
Attorney-in-Fact
DREYFUS ASSET ALLOCATION FUND, INC.
Post-Effective Amendment No. 4 to
Registration Statement on Form N-1A under
the Securities Act of 1933 and
the Investment Company Act of 1940
____________________
EXHIBITS
____________________
INDEX TO EXHIBITS
Page
(1) (b) Articles Supplementary. . . . . . . . . . . . . .
(5) (b) Revised Management Agreement. . . . . . . . . . .
(6) (c) Revised Distribution Agreement. . . . . . . . . .
(9) (b) Revised Shareholder Services Plan . . . . . . . .
(11) Consent of Independent Auditors . . . . . . . . .
(15) (b) Revised Distribution Plan . . . . . . . . . . . .
Other Exhibits:
Powers of Attornery . . . . . . . . . . . . . . .
<PAGE>
EXHIBIT (1) (b)
ARTICLES SUPPLEMENTARY
DREYFUS ASSET ALLOCATION FUND, INC., a Maryland
corporation having its principal office in the State of Maryland
at 32 South Street, Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of
Assessments and Taxation that:
FIRST: The Board of Directors of the Corporation has
reclassified two hundred million (200,000,000) unissued shares
of Common Stock of the Corporation as follows: one hundred
million (100,000,000) unissued shares of Class D Common Stock
are reclassified as shares of Dreyfus Income Portfolio Common
Stock; fifty million (50,000,000) unissued shares of Class D
Common Stock and fifty million (50,000,000) unissued shares of
Class C Common Stock are reclassified as shares of Dreyfus
Growth Portfolio Common Stock; all shares of Common Stock
previously classified as Class D Common Stock having been
reclassified, the Class D Common Stock and the Class C Common
Stock of the Corporation shall no longer be subject to the
provisions of Article FIFTH (5)(d) of the Articles of
Incorporation.
SECOND: The Dreyfus Income Portfolio Common Stock and
Dreyfus Growth Portfolio Common Stock shares classified hereby
shall have, respectively, the preferences, conversion and other
rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption
as set forth in Article FIFTH, paragraph (5) of the Articles of
Incorporation and shall be subject to all of the provisions of
the Articles of Incorporation relating to shares of the
Corporation generally.
THIRD: The Board of Directors of the Corporation has
reclassified the aforesaid shares pursuant to authority provided
in the Corporation's Charter.
The undersigned President acknowledges these Articles
Supplementary to be the corporate act of the Corporation and
states that to the best of his knowledge, information and
belief, the matters and facts with respect to authorization and
approval set forth in these Articles are true in all material
respects and that this statement is made under penalties of
perjury.
IN WITNESS WHEREOF, DREYFUS ASSET ALLOCATION FUND, INC. has
caused these Articles Supplementary to be signed in its
name and on its behalf by its President and witnessed by its
Secretary on August 25, 1994.
DREYFUS ASSET ALLOCATION FUND, INC.
By:/s/ Marie E. Connolly
Marie E. Connolly, President
Witness:
/s/ John E. Pelletier
John E. Pelletier,
Secretary
<PAGE>
EXHIBIT (5) (b)
MANAGEMENT AGREEMENT
DREYFUS ASSET ALLOCATION FUND, INC.
August , 1994
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund")
consisting of the series named on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a "Series"),
herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing and
reinvesting the same in investments of the type and in accordance
with the limitations specified in its charter documents and in
its Prospectus and Statement of Additional Information as from
time to time in effect,
copies of which have been or will be submitted to you, and in
such manner and to such extent as from time to time may be
approved by the
Fund's Board. The Fund desires to employ you to act as its
investment adviser.
In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of
this Agreement. Such person or persons may be officers or
employees who are employed by both you and the Fund. The
compensation of such person
or persons shall be paid by you and no obligation may be incurred
on the Fund's behalf in any such respect.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of each Series'
portfolio in accordance with such Series' investment objectives
and policies as
stated in the Fund's Prospectus and Statement of Additional
Information as from time to time in effect. In connection
therewith, you will
obtain and provide investment research and will supervise each
Series' investments and conduct a continuous program of
investment, evaluation
and, if appropriate, sale and reinvestment of such Series'
assets. You will furnish to the Fund such statistical
information, with respect to
the investments which a Series may hold or contemplate
purchasing, as
the Fund may reasonably request. The Fund wishes to be informed
of important developments materially affecting any Series'
portfolio and
shall expect you, on your own initiative, to furnish to the Fund
from time to time such information as you may believe appropriate
for this purpose.
In addition, you will supply office facilities (which
may be in your own offices), data processing services, clerical,
accounting and
bookkeeping services, internal auditing and legal services,
internal executive and administrative services, and stationery
and office supplies; prepare reports to each Series'
stockholders, tax returns,
reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities; calculate the net
asset value of each
Series' shares; and generally assist in all aspects of the Fund's
operations. You shall have the right, at your expense, to engage
other entities to assist you in performing some or all of the
obligations set
forth in this paragraph, provided each such entity enters into an
agreement with you in form and substance reasonably satisfactory
to the Fund. You agree to be liable for the acts or omissions of
each such
entity to the same extent as if you had acted or failed to act
under the circumstances.
You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund agrees
as an inducement to your undertaking the same that you shall not
be liable hereunder for any error of judgment or mistake of law
or for any loss suffered by one or more Series, provided that
nothing herein shall be deemed to protect or purport to protect
you against any liability to the
Fund or a Series or to its security holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder,
or by reason of your reckless disregard of your obligations and
duties hereunder.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee at the rate set forth opposite each Series' name
on Schedule 1 hereto. Net asset value shall be computed on such
days and at such time
or times as described in the Fund's then-current Prospectus and
Statement of Additional Information. The fee for the period from
the date of the commencement of the public sale of a Series'
shares to the
end of the month during which such sale shall have been commenced
shall be pro-rated according to the proportion which such period
bears to the full monthly period, and upon any termination of
this Agreement before
the end of any month, the fee for such part of a month shall be
pro-rated according to the proportion which such period bears to
the full monthly period and shall be payable upon the date of
termination of this Agreement.
For the purpose of determining fees payable to you, the
value of each Series' net assets shall be computed in the manner
specified in the Fund's charter documents for the computation of
the value of each Series' net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by
you. The expenses to be borne by the Fund include, without
limitation, the following: organizational
costs, taxes, interest, loan commitment fees, interest and
distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Board members who are not your
officers, directors or employees
or holders of 5% or more of your outstanding voting securities,
Securities and Exchange Commission fees and state Blue Sky
qualification
fees, advisory fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining the Fund's
existence, costs attributable to investor services (including,
without limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing stockholders, costs of
stockholders' reports and meetings, and any extraordinary
expenses.
As to each Series, if in any fiscal year the aggregate
expenses of the Fund (including fees pursuant to this Agreement,
but excluding interest, taxes, brokerage and, with the prior
written consent of the necessary state securities commissions,
extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over the Series, the Fund may deduct
from the fees to be paid hereunder, or you
will bear, such excess expense to the extent required by state
law. Your obligation pursuant hereto will be limited to the
amount of your fees hereunder. Such deduction or payment, if
any, will be estimated
daily, and reconciled and effected or paid, as the case may be,
on a monthly basis.
The Fund understands that you now act, and that from
time to time hereafter you may act, as investment adviser to one
or more other investment companies and fiduciary or other managed
accounts, and the Fund has no objection to your so acting,
provided that when the purchase
or sale of securities of the same issuer is suitable for the
investment objectives of two or more companies or accounts
managed by you which have available funds for investment, the
available securities will be
allocated in a manner believed by you to be equitable to each
company or account. It is recognized that in some cases this
procedure may adversely affect the price paid or received by one
or more Series or the
size of the position obtainable for or disposed of by one or more
Series.
In addition, it is understood that the persons employed
by you to assist in the performance of your duties hereunder will
not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict your right or the
right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever
kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except for a
loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or from
reckless disregard by you of your
obligations and duties under this Agreement. Any person, even
though also your officer, director, partner, employee or agent,
who may be or become an officer, Board member, employee or agent
of the Fund, shall be deemed, when rendering services to the Fund
or acting on any business of
the Fund, to be rendering such services to or acting solely for
the Fund and not as your officer, director, partner, employee or
agent or one under your control or direction even though paid by
you.
As to each Series, this Agreement shall continue until
the date set forth opposite such Series' name on Schedule 1
hereto (the "Reapproval Date") and thereafter shall continue
automatically for successive annual periods ending on the day of
each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company
Act of 1940) of such Series' outstanding voting
securities, provided that in either event its continuance also is
approved by a majority of the Fund's Board members who are not
"interested persons" (as defined in said Act) of any party to
this Agreement, by vote cast in person at a meeting called for
the purpose of
voting on such approval. As to each Series, this Agreement is
terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of such Series' shares
or, upon not less than 90 days' notice, by you. This Agreement
also will terminate
automatically, as to the relevant Series, in the event of its
assignment (as defined in said Act).
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other corporations,
business trusts,
partnerships or other entities (including other investment
companies) and that such other entities may include the name
"Dreyfus" as part of their name, and that your corporation or its
affiliates may enter into
investment advisory or other agreements with such other entities.
If you cease to act as the Fund's investment adviser, the Fund
agrees that, at your request, the Fund will take all necessary
action to change the name of the Fund to a name not including
"Dreyfus" in any form or combination of words.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS ASSET ALLOCATION FUND, INC.
By:_____________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
SCHEDULE 1
Annual Fee as
a Percentage
of Average
Daily Net
Name of Series Assets Reapproval Date Reapproval Day
Dreyfus Growth
Portfolio .75 of 1% September 30, 1995 September 30th
Dreyfus Income
Portfolio .75 of 1% September 30, 1995 September 30th
Dreyfus Total
Return Portfolio .75 of 1% September 30, 1995 September 30th
<PAGE>
EXHIBIT (6) (c)
DISTRIBUTION AGREEMENT
DREYFUS ASSET ALLOCATION FUND, INC.
August , 1994
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the
agreements hereinafter contained, the above-named investment
company (the "Fund") has agreed that you shall be, for the period
of this agreement, the distributor
of (a) shares of each Series of the Fund set forth on Exhibit A
hereto, as such Exhibit may be revised from time to time (each, a
"Series") or (b) if no Series are set forth on such Exhibit,
shares of the Fund. For purposes of
this agreement the term "Shares" shall mean the authorized shares
of the relevant Series, if any, and otherwise shall mean the
Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of
Shares covered by, and in accordance with, the registration
statement and prospectus
then in effect under the Securities Act of 1933, as amended, and
will transmit promptly any orders received by you for purchase or
redemption of Shares to the Transfer and Dividend Disbursing
Agent for the Fund of which the Fund has notified you in writing.
1.2 You agree to use your best efforts to solicit orders for
the sale of Shares. It is contemplated that you will enter into
sales or
servicing agreements with securities dealers, financial
institutions and
other industry professionals, such as investment advisers,
accountants and
estate planning firms, and in so doing you will act only on your
own behalf as principal.
1.3 You shall act as distributor of Shares in compliance with
all applicable laws, rules and regulations, including, without
limitation, all rules and regulations made or adopted pursuant to
the Investment Company Act of 1940, as amended, by the Securities
and Exchange Commission or any
securities association registered under the Securities Exchange
Act of 1934, as amended.
1.4 Whenever in their judgment such action is warranted by
market, economic or political conditions, or by abnormal
circumstances of any
kind, the Fund's officers may decline to accept any orders for,
or make any sales of, any Shares until such time as they deem it
advisable to accept such
orders and to make such sales and the Fund shall advise you
promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in
connection with the registration of Shares under the Securities
Act of 1933, as amended, and all expenses in connection with
maintaining facilities for
the issue and transfer of Shares and for supplying information,
prices and other data to be furnished by the Fund hereunder, and
all expenses in connection with the preparation and printing of
the Fund's prospectuses and
statements of additional information for regulatory purposes and
for distribution to shareholders; provided, however, that nothing
contained herein shall be deemed to require the Fund to pay any
of the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all
documents and to furnish any and all information and otherwise to
take all actions which may be reasonably necessary in the
discretion of the Fund's officers in connection with the
qualification of Shares for sale in such states as you may
designate to the Fund and the Fund may approve, and the Fund
agrees to pay all expenses which may be incurred in connection
with such qualification.
You shall pay all expenses connected with your own qualification
as a dealer under state or Federal laws and, except as otherwise
specifically provided in this agreement, all other expenses
incurred by you in connection with the sale of Shares as
contemplated in this agreement.
1.7 The Fund shall furnish you from time to time, for use in
connection with the sale of Shares, such information with respect
to the Fund or any relevant Series and the Shares as you may
reasonably request, all of which shall be signed by one or more
of the Fund's duly authorized officers;
and the Fund warrants that the statements contained in any such
information, when so signed by the Fund's officers, shall be true
and correct. The Fund also shall furnish you upon request with:
(a) semi-annual reports and annual
audited reports of the Fund's books and accounts made by
independent public
accountants regularly retained by the Fund, (b) quarterly
earnings statements
prepared by the Fund, (c) a monthly itemized list of the
securities in the Fund's or, if applicable, each Series'
portfolio, (d) monthly balance sheets as soon as practicable
after the end of each month, and (e) from time to time
such additional information regarding the Fund's financial
condition as you may reasonably request.
1.8 The Fund represents to you that all registration state-
ments and prospectuses filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and under the Investment Company Act of 1940, as amended, with
respect to the Shares have
been carefully prepared in conformity with the requirements of
said Acts and rules and regulations of the Securities and
Exchange Commission thereunder.
As used in this agreement the terms "registration statement" and
"prospectus" shall mean any registration statement and
prospectus, including the statement
of additional information incorporated by reference therein,
filed with the Securities and Exchange Commission and any
amendments and supplements thereto
which at any time shall have been filed with said Commission.
The Fund represents and warrants to you that any registration
statement and prospectus, when such registration statement
becomes effective, will contain all
statements required to be stated therein in conformity with said
Acts and the rules and regulations of said Commission; that all
statements of fact contained in any such registration statement
and prospectus will be true and
correct when such registration statement becomes effective; and
that neither any registration statement nor any prospectus when
such registration
statement becomes effective will include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Fund may but
shall not be obligated to propose from time to time such
amendment or amendments to any registration statement and such
supplement or supplements to any
prospectus as, in the light of future developments, may, in the
opinion of the Fund's counsel, be necessary or advisable. If the
Fund shall not propose
such amendment or amendments and/or supplement or supplements
within fifteen days after receipt by the Fund of a written
request from you to do so, you
may, at your option, terminate this agreement or decline to make
offers of the Fund's securities until such amendments are made.
The Fund shall not
file any amendment to any registration statement or supplement to
any prospectus without giving you reasonable notice thereof in
advance; provided, however, that nothing contained in this
agreement shall in any way limit the
Fund's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus, of
whatever character, as the Fund
may deem advisable, such right being in all respects absolute and
unconditional.
1.9 The Fund authorizes you to use any prospectus in the form
furnished to you from time to time, in connection with the sale
of Shares.
The Fund agrees to indemnify, defend and hold you, your several
officers and directors, and any person who controls you within
the meaning of Section 15
of the Securities Act of 1933, as amended, free and harmless from
and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims,
demands or liabilities and any
counsel fees incurred in connection therewith) which you, your
officers and directors, or any such controlling person, may incur
under the Securities Act
of 1933, as amended, or under common law or otherwise, arising
out of or based upon any untrue statement, or alleged untrue
statement, of a material
fact contained in any registration statement or any prospectus or
arising out of or based upon any omission, or alleged omission,
to state a material fact
required to be stated in either any registration statement or any
prospectus or necessary to make the statements in either thereof
not misleading; provided, however, that the Fund's agreement to
indemnify you, your officers
or directors, and any such controlling person shall not be deemed
to cover any claims, demands, liabilities or expenses arising out
of any untrue statement or alleged untrue statement or omission
or alleged omission made in
any registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Fund by you
specifically for use in
the preparation thereof. The Fund's agreement to indemnify you,
your officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's being
notified of any action brought
against you, your officers or directors, or any such controlling
person, such notification to be given by letter or by telegram
addressed to the Fund at its address set forth above within ten
days after the summons or other first
legal process shall have been served. The failure so to notify
the Fund of any such action shall not relieve the Fund from any
liability which the Fund may have to the person against whom such
action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of the Fund's indemnity
agreement contained in this
paragraph 1.9. The Fund will be entitled to assume the defense
of any suit brought to enforce any such claim, demand or
liability, but, in such case,
such defense shall be conducted by counsel of good standing
chosen by the Fund and approved by you. In the event the Fund
elects to assume the defense
of any such suit and retain counsel of good standing approved by
you, the defendant or defendants in such suit shall bear the fees
and expenses of any
additional counsel retained by any of them; but in case the Fund
does not elect to assume the defense of any such suit, or in case
you do not approve
of counsel chosen by the Fund, the Fund will reimburse you, your
officers and directors, or the controlling person or persons
named as defendant or defendants in such suit, for the fees and
expenses of any counsel retained by you
or them. The Fund's indemnification agreement contained in this
paragraph 1.9 and the Fund's representations and warranties in
this agreement
shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of you, your officers and
directors, or any controlling person, and shall survive the
delivery of any Shares. This agreement of indemnity will inure
exclusively to your benefit, to the benefit
of your several officers and directors, and their respective
estates, and to
the benefit of any controlling persons and their successors. The
Fund agrees promptly to notify you of the commencement of any
litigation or proceedings against the Fund or any of its officers
or Board members in connection with the issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the
Fund, its several officers and Board members, and any person who
controls the Fund
within the meaning of Section 15 of the Securities Act of 1933,
as amended, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities
and any counsel fees incurred in connection therewith)
which the Fund, its officers or Board members, or any such
controlling person, may incur under the Securities Act of 1933,
as amended, or under common law or otherwise, but only to the
extent that such liability or
expense incurred by the Fund, its officers or Board members, or
such controlling person resulting from such claims or demands,
shall arise out of or be
based upon any untrue, or alleged untrue, statement of a material
fact contained in information furnished in writing by you to the
Fund specifically for use in the Fund's registration statement
and used in the answers to any of the items of the registration
statement or in the corresponding statements
made in the prospectus, or shall arise out of or be based upon
any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by you to
the Fund and required to be stated
in such answers or necessary to make such information not
misleading. Your agreement to indemnify the Fund, its officers
and Board members, and any such controlling person, as aforesaid,
is expressly conditioned upon your being
notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification
to be given by letter or telegram addressed to you at your
address set forth above within
ten days after the summons or other first legal process shall
have been served. You shall have the right to control the
defense of such action, with counsel of your own choosing,
satisfactory to the Fund, if such action is
based solely upon such alleged misstatement or omission on your
part, and in any other event the Fund, its officers or Board
members, or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any
such action. The failure so to notify you of any such
action shall not relieve you from any liability which you may
have to the Fund, its officers or Board members, or to such
controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged
omission, otherwise than on account of your indemnity agreement
contained in this paragraph 1.10. This agreement of indemnity
will inure exclusively to
the Fund's benefit, to the benefit of the Fund's officers and
Board members, and their respective estates, and to the benefit
of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any
litigation or proceedings against you or any of your officers or
directors in connection with the issue and sale of Shares.
1.11 No Shares shall be offered by either you or
the Fund under any of the provisions of this agreement and no
orders for the purchase or sale of such Shares hereunder shall be
accepted by the Fund if and so long as the effectiveness of the
registration statement then in effect or any
necessary amendments thereto shall be suspended under any of the
provisions of the Securities Act of 1933, as amended, or if and
so long as a current prospectus as required by Section 10 of said
Act, as amended, is not on file with the Securities and Exchange
Commission; provided, however, that nothing
contained in this paragraph 1.11 shall in any way restrict or
have an application to or bearing upon the Fund's obligation to
repurchase any Shares
from any shareholder in accordance with the provisions of the
Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and
Exchange Commission for amendments to the registration statement
or prospectus then in effect or for additional information;
(b) in the event of the issuance by the
Securities and Exchange Commission of any stop order suspending
the effectiveness of the registration statement or prospectus
then in effect or the initiation of any proceeding for that
purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made in the registration
statement or prospectus then in effect or which requires the
making of a change in such registration statement or prospectus
in order to make the statements therein not misleading; and
(d) of all actions of the Securities and
Exchange Commission with respect to any amendments to any
registration statement or prospectus which may from time to time
be filed with the Securities and Exchange Commission.
2. Offering Price
Shares of any class of the Fund offered for sale
by you shall be offered for sale at a price per share (the
"offering price") approximately equal to (a) their net asset
value (determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any and except to those
persons set forth in the then-current prospectus, which shall be
the percentage of the offering price of such Shares as set forth
in the Fund's then-current prospectus. The offering price, if
not an exact multiple of one cent, shall be adjusted to the
nearest cent. In addition, Shares of any
class of the Fund offered for sale by you may be subject to a
contingent deferred sales charge as set forth in the Fund's
then-current prospectus.
You shall be entitled to receive any sales charge or contingent
deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you and
such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the
"Reapproval Date") set forth on Exhibit A hereto (and, if the
Fund has Series, a separate
Reapproval Date shall be specified on Exhibit A for each Series),
and thereafter shall continue automatically for successive annual
periods ending on the day (the "Reapproval Day") of each year set
forth on Exhibit A hereto, provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment
Company Act of 1940) of the Shares of the Fund or the relevant
Series, as the case may be, provided that in either event its
continuance also is approved
by a majority of the Board members who are not "interested
persons" (as defined in said Act) of any party to this agreement,
by vote cast in person
at a meeting called for the purpose of voting on such approval.
This agreement is terminable without penalty, on 60 days' notice,
by vote of holders of a majority of the Fund's or, as to any
relevant Series, such Series' outstanding voting securities or by
the Fund's Board as to the Fund or the
relevant Series, as the case may be. This agreement is
terminable by you, upon 270 days' notice, effective on or after
the fifth anniversary of the date hereof. This agreement also
will terminate automatically, as to the
Fund or relevant Series, as the case may be, in the event of its
assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of Shares,
you shall not perform any services for any entity other than
investment companies advised or administered by The Dreyfus
Corporation. The Fund acknowledges that the
persons employed by you to assist in the performance of your
duties under this agreement may not devote their full time to
such service and nothing
contained in this agreement shall be deemed to limit or restrict
your or any of your affiliates right to engage in and devote time
and attention to other businesses or to render services of
whatever kind or nature.
Please confirm that the foregoing is in accordance with
your understanding and indicate your acceptance hereof by signing
below, whereupon it shall become a binding agreement between us.
Very truly yours,
DREYFUS ASSET ALLOCATION FUND, INC.
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
<PAGE>
EXHIBIT A
Name of Series Reapproval Date Reapproval
Day
Dreyfus Growth
Portfolio September 30, 1995 September 30th
Dreyfus Income
Portfolio September 30, 1995 September 30th
Dreyfus Total
Return Portfolio September 30, 1995 September 30th
<PAGE>
EXHIBIT (9) (b)
DREYFUS ASSET ALLOCATION FUND, INC.
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Shareholder
Services Plan under which the Fund would pay the Fund's
distributor (the "Distributor") for
providing services to (a) shareholders of each series of the Fund
or class of Fund shares set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time, or (b) if no series or
classes are set forth on such Exhibit, shareholders of the Fund.
The Distributor would be permitted to pay
certain financial institutions, securities dealers and other
industry professionals (collectively, "Service Agents") in
respect of these services. The Plan is not to be adopted
pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "Act"), and the fee under
the Plan is intended to be a "service fee" as defined in Article
III, Section 26, of the NASD Rules of Fair Practice.
The Fund's Board, in considering whether the
Fund should implement a written plan, has requested and evaluated
such information as it deemed necessary to an informed
determination as to whether a written plan
should be implemented and has considered such pertinent factors
as it deemed necessary to form the basis for a decision to use
Fund assets for such purposes.
In voting to approve the implementation of such a plan,
the Board has concluded, in the exercise of its reasonable
business judgment
and in light of applicable fiduciary duties, that there is a
reasonable likelihood that the plan set forth below will benefit
the Fund and its shareholders.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to the Distributor a fee at the
annual rate set forth on Exhibit A in respect of the provision of
personal services to shareholders and/or the maintenance of
shareholder accounts. The Distributor shall determine the
amounts to be paid to Service Agents and the basis on which such
payments will be made. Payments to a Service Agent are
subject to compliance by the Service Agent with the terms of any
related Plan agreement between the Service Agent and the
Distributor.
2. For the purpose of determining the fees payable
under this Plan, the value of the net assets of the Fund or the
net assets attributable to each series or class of Fund shares
identified on Exhibit A, as applicable, shall be computed in the
manner specified in the Fund's charter documents for the
computation of net asset value.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by a majority of the Board members, including a majority
of the Board members who are not "interested persons" (as defined
in the Act) of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreements
entered into in connection with this Plan,
pursuant to a vote cast in person at a meeting called for the
purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual
periods, provided such continuance is approved at least annually
in the manner provided in paragraph 4 hereof.
6. This Plan may be amended at any time by the Board,
provided that any material amendments of the terms of this Plan
shall become effective only upon approval as provided in
paragraph 4 hereof.
7. This Plan is terminable without penalty at any time
by vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and have
no direct or indirect financial
interest in the operation of this Plan or in any agreements
entered into in connection with this Plan.
Dated: August , 1994
EXHIBIT A
Name of Series Fee
Dreyfus Growth Portfolio .25 of 1%
Dreyfus Income Portfolio .25 of 1%
Dreyfus Total Return Portfolio .25 of 1%
<PAGE>
EXHIBIT (11)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Condensed Financial Information" and "Custodian, Transfer and
Dividend Disbursing Agent, Counsel and Independent Auditors" and
to the use of our report dated June 6, 1994, in this Registration
Statement (Form N-1A No. 33-62626) of Dreyfus Asset Allocation
Fund, Inc.
ERNST & YOUNG LLP
New York, New York
August 22, 1994
<PAGE>
EXHIBIT (15) (b)
DREYFUS ASSET ALLOCATION FUND, INC.
DISTRIBUTION PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Distribution
Plan (the "Plan") in accordance with Rule 12b-1 promulgated under
the Investment Company Act of 1940, as amended (the "Act"), with
respect to (a) each series of the Fund or class of Fund shares
set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time, or (b) if no series or
classes are set forth on such Exhibit, the Fund. Under the Plan,
the Fund would pay for
the costs and expenses of preparing, printing and distributing
its prospectuses and statements of additional information, and
would (a) reimburse the Fund's distributor (the "Distributor")
for payments to third
parties for distributing the Fund's shares (the payments in this
clause (a) being referred to as the "Distributor Payments") and
(b) pay The Dreyfus Corporation, Dreyfus Service Corporation and
any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing relating
to the Fund (the payments in this clause (b) being referred to as
"Dreyfus Payments").
If this proposal is to be implemented, the Act and said Rule
12b-1 require that a written plan describing all material aspects
of the proposed financing be adopted by the Fund.
The Fund's Board, in considering whether the
Fund should implement a written plan, has requested and evaluated
such information as it
deemed necessary to an informed determination as to whether a
written plan should be implemented and has considered such
pertinent factors as it deemed
necessary to form the basis for a decision to use assets of the
Fund for such purposes.
In voting to approve the implementation of such a plan,
the Board members have concluded, in the exercise of their
reasonable business judgment and in light of their respective
fiduciary duties, that
there is a reasonable likelihood that the plan set forth below
will benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay all costs of preparing
and printing prospectuses and statements of additional
information for regulatory
purposes and for distribution to existing shareholders. The Fund
also shall pay an amount of the costs and expenses in connection
with (a) preparing, printing and distributing the Fund's
prospectuses and statements of additional information used for
other purposes and (b) implementing and
operating this Plan, such aggregate amount not to exceed in any
fiscal year of the Fund the greater of $100,000 or .005 of 1% of
the average daily value
of the Fund's net assets for such fiscal year.
2. (a) The aggregate annual fee the Fund may pay under
this Plan for Distributor Payments and Dreyfus Payments is .50 of
1% of the value of the Fund's average daily net assets for such
year (the "Aggregate Amount").
(b) The Fund shall reimburse the Distributor in
respect of Distributor Payments an amount not to exceed an annual
rate of .50 of 1% of the value of the Fund's average daily net
assets for such year (the "Distributor Amount").
(c) The Fund shall pay Dreyfus in respect of Dreyfus
Payments an annual fee equal to the difference between the
Aggregate Amount and the Distributor Amount for such year.
(d) The Distributor may pay third parties in respect
of distribution services. The Distributor shall determine the
amounts to be paid to such persons under this Plan and the basis
on which such payments will be made. Such payments are subject
to compliance by such persons with the terms of any related Plan
agreement between such person and the Distributor.
3. For the purposes of determining the fees payable
under this Plan, the value of the Fund's net assets shall be
computed in the
manner specified in the Fund's charter documents as then in
effect for the computation of the value of the Fund's net assets.
4. The Fund's Board shall be provided, at least
quarterly, with a written report of all amounts expended pursuant
to this Plan. The report shall state the purpose for which the
amounts were
expended.
5. This Plan will become effective upon approval by (a)
holders of a majority of the Fund's outstanding shares, and (b) a
majority of the Board members, including a majority of the Board
members who are not "interested persons" (as defined in the Act)
of the Fund and have no direct
or indirect financial interest in the operation of this Plan or
in any agreements entered into in connection with this Plan,
pursuant to a vote cast in person at a meeting called for the
purpose of voting on the approval of
this Plan.
6. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual
periods, provided such continuance is approved at least annually
in the manner provided in paragraph 5(b) hereof.
7. This Plan may be amended at any time by the Fund's
Board, provided that (a) any amendment to increase materially the
costs which the Fund may bear pursuant to this Plan shall be
effective only upon approval
by a vote of the holders of a majority of the Fund's outstanding
shares, and (b) any material amendments of the terms of this Plan
shall become effective
only upon approval as provided in paragraph 5(b) hereof.
8. This Plan is terminable without penalty at any time
by (a) vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and have
no direct or indirect
financial interest in the operation of this Plan or in any
agreements entered
into in connection with this Plan or (b) vote of the holders of a
majority of the Fund's outstanding shares.
Dated: August , 1994
<PAGE>
EXHIBIT A
Name of Series
Dreyfus Growth Portfolio
Dreyfus Income Portfolio
Dreyfus Total Return Portfolio
<PAGE>
Other Exhibit
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints
Daniel C. Maclean, Mark N. Jacobs and Steven F. Newman, and each
of them, with full power to act without the other, his true and
lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities (until revoked
in writing) to sign any and all amendments to this Registration
Statement (including post-effective amendments and amendments
thereto), and to file the same, with
all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
____________________________
Director Date
________________________
David W. Burke,
Director
<PAGE>
Other Exhibit
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints
Daniel C. Maclean, Mark N. Jacobs and Steven F. Newman, and each
of them, with full power to act without the other, his true and
lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities (until revoked
in writing) to sign any and all amendments to this Registration
Statement (including post-effective amendments and amendments
thereto), and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and
every act and thing ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
____________________________
Director Date
________________________
Paul Wolfowitz,
Director
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints
Daniel C. Maclean, Mark N. Jacobs and Steven F. Newman, and each
of them, with full power to act without the other, his true and
lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities (until revoked
in writing) to sign any and all amendments to the Registration
Statement of Dreyfus Asset
Allocation Fund, Inc. (including post-effective amendments and
amendments thereto), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and
agents or any of
them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
____________________
Date
________________________
Marie E. Connolly,
President
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints
Daniel C. Maclean, Mark N. Jacobs and Steven F. Newman, and each
of them, with full power to act without the other, his true and
lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities (until revoked
in writing) to sign any and all amendments to the Registration
Statement of Dreyfus Asset
Allocation Fund, Inc. (including post-effective amendments and
amendments thereto), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing ratifying and confirming all that said
attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
____________________
Date
________________________
Joseph F. Tower, III
Assistant Treasurer
