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Dreyfus
Asset Allocation
Fund, Inc.
Dreyfus
Income Portfolio
Semi-Annual
Report
October 31, 1994
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DREYFUS ASSET ALLOCATION FUND INC., DREYFUS INCOME PORTFOLIO
STATEMENT OF INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)
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COMMON STOCKS--33.8% SHARES VALUE
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<S> <C> <C> <C>
CONSUMER DURABLES--1.4% Eastman Kodak............................. 32 $ 1,540
Echlin.................................... 62 1,906
Ford Motor................................ 151 4,454
General Motors............................ 105 4,147
Mattel.................................... 64 1,872
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13,919
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CONSUMER NON-DURABLES--3.3% Archer-Daniels-Midland.................... 65 1,861
Coca-Cola................................. 176 8,844
Gillette.................................. 25 1,859
PepsiCo................................... 115 4,025
Philip Morris Cos......................... 122 7,473
Procter & Gamble.......................... 97 6,063
Sara Lee.................................. 115 2,832
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32,957
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CONSUMER SERVICES--.7% Comcast, Cl. A............................ 104 1,703
Disney (Walt)............................. 40 1,575
Gannett................................... 14 672
McDonald's................................ 103 2,961
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6,911
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ENERGY--5.3% Amerada Hess.............................. 56 2,786
Amoco..................................... 37 2,345
Chevron................................... 59 2,655
Exxon..................................... 293 18,422
Mobil..................................... 98 8,428
Royal Dutch Petroleum..................... 96 11,184
Schlumberger.............................. 32 1,880
Texaco.................................... 82 5,361
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53,061
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FINANCE--3.0% American Express.......................... 51 1,568
American General.......................... 18 495
American International Group.............. 48 4,494
Banc One.................................. 48 1,386
Bank of Boston............................ 65 1,869
BankAmerica............................... 34 1,479
Chase Manhattan........................... 39 1,404
Chemical Banking.......................... 85 3,230
Citicorp.................................. 60 2,865
Dun & Bradstreet.......................... 16 938
Federal National Mortgage Association..... 36 2,736
General Re................................ 7 784
Household International................... 49 1,721
Morgan (J.P.)............................. 20 1,238
NationsBank............................... 37 1,832
Shawmut National.......................... 86 1,774
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29,813
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</TABLE>
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DREYFUS ASSET ALLOCATION FUND INC., DREYFUS INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
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COMMON STOCKS (CONTINUED) SHARES VALUE
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HEALTH CARE--4.0% Abbott Laboratories....................... 62 $ 1,922
American Home Products.................... 53 3,366
Baxter International...................... 22 572
Columbia/HCA Healthcare................... 106 4,412
Johnson & Johnson......................... 220 12,018
Lilly (Eli)............................... 53 3,286
Medtronic................................. 34 1,772
Merck & Co................................ 89 3,182
National Medical Enterprises.............. 118(a) 1,711
Schering-Plough........................... 59 4,204
U.S. HealthCare........................... 57 2,693
Upjohn.................................... 26 858
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39,996
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INDUSTRIAL SERVICES--.5% Fluor..................................... 38 1,881
WMX Technologies.......................... 93 2,732
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4,613
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NON-ENERGY MINERALS--1.0% Alcan Aluminium........................... 10 268
Aluminum Co. of America................... 83 7,076
Inco...................................... 59 1,777
Placer Dome............................... 26 562
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9,683
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PROCESS INDUSTRIES--2.8% Corning................................... 89 3,026
Dow Chemical.............................. 30 2,205
duPont(EI)de Nemours...................... 278 16,576
Eastman Chemical.......................... 8 432
Grace (W.R.).............................. 45 1,783
International Paper....................... 37 2,756
Weyerhaeuser.............................. 48 1,884
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28,662
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PRODUCER MANUFACTURING--2.3% Caterpillar............................... 36 2,151
Cooper Industries......................... 37 1,383
Deere & Co................................ 25 1,794
General Electric.......................... 220 10,752
Minnesota Mining & Manufacturing.......... 63 3,489
TRINOVA................................... 51 1,785
Tyco International........................ 38 1,833
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23,187
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RETAIL TRADE--2.2% Albertson's............................... 125 3,750
Home Depot................................ 64 2,912
K mart.................................... 32 524
Lowe's Cos................................ 47 1,868
May Department Stores..................... 99 3,725
Penney (J.C.)............................. 18 911
Sears, Roebuck............................ 31 1,534
Wal-Mart Stores........................... 316 7,426
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22,650
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</TABLE>
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DREYFUS ASSET ALLOCATION FUND INC., DREYFUS INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
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COMMON STOCKS (CONTINUED) SHARES VALUE
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TECHNOLOGY--5.3% Apple Computer............................ 49 $ 2,116
Automatic Data Processing................. 29 1,693
Boeing.................................... 161 7,064
Hewlett-Packard........................... 36 3,519
Intel..................................... 115 7,144
International Business Machines........... 82 6,109
Motorola.................................. 166 9,773
Tele-Communications, Cl. A................ 257(a) 5,815
Texas Instruments......................... 90 6,739
United Technologies....................... 59 3,717
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53,689
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TRANSPORTATION--.3% CSX....................................... 12 870
Norfolk Southern.......................... 14 882
Union Pacific............................. 36 1,759
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3,511
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UTILITIES--1.7% AT&T...................................... 181 9,955
AirTouch Communications................... 11(a) 329
Public Service Enterprise................. 13 341
Southern.................................. 335 6,616
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17,241
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TOTAL COMMON STOCKS
(cost $335,031)........................... $ 339,893
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U.S. TREASURY BONDS--17.8% AMOUNT
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<S> <C> <C> <C>
6.25%, 2/15/2023
(cost $178,126)......................... $ 200,000 $ 179,500
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SHORT-TERM INVESTMENTS--46.2%
<S> <C> <C> <C>
U.S. TREASURY BILL; 4.595%, 11/25/1994
(cost $465,609)......................... $ 467,000 $ 465,609
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TOTAL INVESTMENTS (cost $978,766)............................................. 97.8% $ 985,002
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CASH AND RECEIVABLES (NET).................................................... 2.2% $ 21,830
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NET ASSETS.................................................................... 100.0% $1,006,832
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NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
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DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
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STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1994 (UNAUDITED)
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ASSETS:
Investments in securities, at value
(cost $978,766)--see statement............................................... $ 985,002
Cash........................................................................... 4,999
Receivable for investment securities sold...................................... 15,006
Dividends and interest receivable.............................................. 3,244
Due from The Dreyfus Corporation............................................... 8,982
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1,017,233
LIABILITIES;
Accrued expenses and other liabilities......................................... 10,401
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NET ASSETS....................................................................... $1,006,832
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REPRESENTED BY:
Paid-in capital................................................................ $1,000,000
Accumulated undistributed investment income--net............................... 496
Accumulated undistributed net realized gain on investments..................... 100
Accumulated net unrealized appreciation on investments--Note 3(b).............. 6,236
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NET ASSETS at value applicable to 80,000 shares outstanding
(300 million shares of $.001 par value Common Stock authorized)................ $1,006,832
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NET ASSET VALUE, offering and redemption price per share
($1,006,832 / 80,000 shares)................................................... $12.59
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See notes to financial statements.
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DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
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STATEMENT OF OPERATIONS
FROM OCTOBER 18, 1994 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1994
(UNAUDITED)
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INVESTMENT INCOME:
INCOME:
Interest..................................................................... $1,691
Cash dividends............................................................... 223
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TOTAL INCOME............................................................ $1,914
EXPENSES:
Management fee--Note 2(a).................................................... 288
Auditing fees................................................................ 1,500
Custodian fees............................................................... 1,368
Registration fees............................................................ 345
Prospectus and shareholders' reports--Note 2(b).............................. 339
Shareholder servicing costs--Note 2(b,c)..................................... 299
Directors fees and expenses--Note 2(d)....................................... 41
Legal fees................................................................... 38
Miscellaneous................................................................ 471
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4,689
Less--expense reimbursement from Manager due to
undertaking--Note 2(a)..................................................... 3,271
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TOTAL EXPENSES.......................................................... 1,418
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INVESTMENT INCOME--NET.................................................. 496
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 3(a).................................... $ 100
Net unrealized appreciation on investments..................................... 6,236
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NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS......................... 6,336
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................. $6,832
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See notes to financial statements.
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DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
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STATEMENT OF CHANGES IN NET ASSETS
FROM OCTOBER 18, 1994 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1994
(UNAUDITED)
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OPERATIONS:
Investment income--net.......................................................... $ 496
Net realized gain on investments................................................ 100
Net unrealized appreciation on investments for the period....................... 6,236
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ 6,832
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CAPITAL STOCK TRANSACTIONS;
Net proceeds from shares sold................................................... 1,000,000
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TOTAL INCREASE IN NET ASSETS................................................ 1,006,832
NET ASSETS:
Beginning of period--Note 1..................................................... --
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End of period (including undistributed investment
income--net of $496).......................................................... $1,006,832
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SHARES
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CAPITAL SHARE TRANSACTIONS:
Shares sold..................................................................... 80,000
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See notes to financial statements.
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DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
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FINANCIAL HIGHLIGHTS (UNAUDITED)
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 October 18, 1994 (commencement of
operations) to October 31, 1994. This information has been derived from the
Portfolio's financial statements.
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PER SHARE DATA:
Net asset value, beginning of period................................................. $12.50
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INVESTMENT OPERATIONS:
Investment income--net............................................................... .01
Net realized and unrealized gain on investments...................................... .08
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TOTAL FROM INVESTMENT OPERATIONS................................................... .09
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Net asset value, end of period....................................................... $12.59
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TOTAL INVESTMENT RETURN .72%*
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RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............................................. .14%*
Ratio of net investment income to average net assets................................. .05%*
Decrease reflected in above expense ratio due to
undertakings by the Manager and expense limitation................................. .33%*
Portfolio Turnover Rate.............................................................. 5.78%*
Net Assets, end of period (000's Omitted)............................................ $1,007
<FN>
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*Not annualized.
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See notes to financial statements.
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DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Asset Allocation Fund, Inc. (the "Fund") began operating under such
name on July 1, 1993 and is currently offering three portfolios, including
Dreyfus Income Portfolio (the "Portfolio"), which was authorized by the Board of
Directors on August 25, 1994. The Portfolio had no operations until October 18,
1994 (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. Premier Mutual Fund Services, Inc. (the "Distributor")
acts as the distributor of the Portfolio's shares, which are sold to the public
without a sales load. The Distributor, located at One Exchange Place, Boston,
Massachusetts 02109, is a wholly-owned subsidiary of Institutional
Administration Services, Inc., a provider of mutual fund administration
services, the parent company of which is Boston Institutional Group, Inc. The
Dreyfus Corporation ("Manager") serves as the Portfolio's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A.
As of October 31, 1994, Major Trading Corporation, a subsidiary of Mellon
Bank Investments Corporation, held 80,000 shares of Common Stock of the
Portfolio. Mellon Bank Investments Corporation is a subsidiary of Mellon Bank.
The Fund accounts separately for the assets, liabilities and operations of
each portfolio. Expenses directly attributable to each portfolio are charged to
that portfolio's operations; expenses which are applicable to all portfolio are
allocated among them.
(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 denominated in foreign
currencies are translated to U.S. dollars at the prevailing rate 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 are declared and paid on a quarterly
basis. Dividends from net realized capital gain are normally declared and paid
annually, but the Portfolio 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.
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DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
(D) FEDERAL INCOME TAXES: It is the policy of the Portfolio to qualify as a
regulated investment company, if such qualification is in the best interests of
its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
NOTE 2--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 Portfolio's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Portfolio's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Portfolio. The most stringent state expense limitation
applicable to the Portfolio 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 Portfolio's net assets in accordance with California "blue
sky" regulations. However, the Manager had undertaken from October 18, 1994 to
October 31, 1994 to waive receipt of the management, service and distribution
fees. The expense reimbursement, pursuant to the undertakings and the expense
limitation, amounted to $3,271 for the period ended October 31, 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 Portfolio (a) reimburses the Distributor for payments to
certain Service Agents for distributing shares and (b) pays the Manager, Dreyfus
Service Corporation or any affiliate (collectively "Dreyfus") for advertising
and marketing relating to the Portfolio and servicing Shareholders accounts, at
an aggregate annual rate of .50 of 1% of the value of the Portfolio's average
daily net assets. Each of the Distributor and Dreyfus may pay Service Agents (a
securities dealer, financial institution or other industry professional) a fee
in respect of the Portfolio's shares owned by shareholders with whom the Service
Agent has a servicing relationship or for whom the Service Agent is the dealer
or holder of record. Each of the Distributor and Dreyfus determine the amounts
to be paid to Service Agents to which it will make payments and the basis on
which such payments are made. The Plan also separately provides for the
Portfolio to bear the costs of preparing, printing and distributing certain of
the Portfolio'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 Portfolio's average daily net assets for any
full fiscal year. For the period ended October 31, 1994, $192 was charged to the
Portfolio pursuant to the Distribution Plan.
(C) Pursuant to the Portfolio's Shareholder Services Plan, the Portfolio
pays the Distributor, at an annual rate of .25 of 1% of the value of the
Portfolio'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 Portfolio 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. For the period ended October 31, 1994, $96 was charged to the
Portfolio pursuant to the Shareholder Services Plan.
(D) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,000 and an attendance fee of $250 per
meeting.
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DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended October 31, 1994
amounted to $528,145 and $15,006, respectively.
(B) At October 31, 1994, accumulated net unrealized appreciation on
investments was $6,236, consisting of $8,231 gross unrealized appreciation and
$1,995 gross unrealized depreciation.
At October 31, 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).
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[Logo]
DREYFUS ASSET ALLOCATION FUND, INC.
DREYFUS INCOME PORTFOLIO
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. AAFSA9410
