LETTER TO SHAREHOLDERS
- ------------------------------------------------------------------------
Dear Shareholder:
We are pleased to submit this annual report for the Dreyfus Total
Return Portfolio of the Dreyfus Asset Allocation Fund, Inc. covering the
fiscal year that ended April 30, 1995.
The Portfolio provided a total return of 14.22% for the 12 months
ended April 30, 1995, a significant proportionate increase over the
return of 4.72% for the first six months of the fiscal period.* Much of
this improved performance is due to the strong bond market since the
first of the year which was reflected in the bond component of the
Portfolio. This compares with a total return for the same period of
12.00% for the Customized Blended Index, which, like the Portfolio, is
composed of a weighting of common stocks, Treasury obligations and
cash.** The Portfolio's benchmark index, the Standard & Poor's 500
Composite Stock Price Index, had a total return of 17.44% for the 12
months under review.*** Of course, the S & P 500, unlike the Portfolio,
is composed entirely of common stocks.
As the 12-month period ended, Dreyfus Total Return Portfolio was
allocated 27.1% to bonds (approximately double the figure of six months
ago), 69.3% to equities (compared to 61.4% last October 31) and 3.6% to
cash and cash equivalents, a fraction of the 25.1% held in cash six
months ago. These weightings are consistent with the Portfolio's asset
class strategy ranges described in the Prospectus.
We made these allocation changes because we believed that the stock
and bond markets would benefit from the Federal Reserve Board's anti-
inflation policies and from related economic trends that were getting
underway last Fall. Subsequent developments confirmed this analysis.
As we reported last Fall, the Portfolio established an important
position in 30-year Treasury bonds in October, when their yield was
above 8%. Currently, the yield has dropped below 7%, and the principal
value of these bonds, moving inversely to the course of interest rates,
appreciated during the period. The Fund still holds these long-term
bonds.
The equity portion of the Portfolio has also gained ground during
the past year.
This positive performance has been due to several factors. First,
the overweighting in energy and energy service stocks has been
beneficial. Major positions in this group have included Texaco, Royal
Dutch Petroleum and Schlumberger. Technology stocks were also
overweighted compared to the Standard & Poor's 500 Composite Stock Price
Index. Here our major holdings included Microsoft, Motorola and Texas
Instruments.
Health care stocks also contributed significantly to the Fund's
performance, including such issues as Merck & Co., Johnson & Johnson,
American Home Products, Baxter International and Abbott Laboratories.
In the consumer field, a mixture of stocks that included such names
as Coca-Cola, Sears Roebuck, Procter & Gamble, Philip Morris and Mattel
all played a part in the positive results.
In looking back over the year, the one theme that appears
outstanding in terms of contribution to the Fund's performance is broad
international exposure, particularly through American multinational
companies. With this in mind, we look for the world's economy to
continue expanding during 1995 and beyond.
Your participation in the Dreyfus Total Return Portfolio is very
much appreciated. Of course, portfolio composition and allocation
percentages are subject to change over time, and in this regard, we will
continue using our best efforts to provide you with a rewarding return
on your investment.
Sincerely,
Ernest G. Wiggins
Portfolio Manager
May 16, 1995
New York, N.Y.
*Total return represents the change during the period in a
hypothetical account with dividends reinvested.
**The Customized Blended Index has been prepared by the Fund and is
intended to be a more accurate comparison to the Portfolio's general
portfolio composition than the benchmark index, which is the Standard
& Poor's 500 Composite Stock Price Index, a leading indicator of
overall stock market performance. We have combined the performance of
unmanaged indices which reflect benchmark percentages with respect to
each asset class in which the Portfolio invests as described in the
Fund's Prospectus: 55% common stocks, 35% U.S. Treasury notes and
bonds, and 10% money market instruments. The Customized Blended Index
combines returns from the Standard & Poor's 500 Composite Stock Price
Index, the Shearson Lehman Intermediate Treasury Bond Index and the
Bank Rate Monitor Index of money market returns, and is weighted to
the benchmark percentages.
***SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment
of income dividends and, where applicable, capital gain distributions.
The Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE DREYFUS TOTAL
RETURN PORTFOLIO OF DREYFUS ASSET ALLOCATION FUND, INC. WITH THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX AND A CUSTOMIZED
BLENDED INDEX
In Dollars
$12,010
Standard &Poor's 500 Composite Stock Price Index*
$11,535
Dreyfus Total Return Portfolio
$11,356
Customized Blended Index**
(Exhibit A)
*Source: Lipper Analytical Services, Inc.
**Source: Lipper Analytical Services, Inc., Lehman Brothers and Bank Rate
Monitor
AVERAGE ANNUAL TOTAL RETURNS
- ----------------------------
ONE YEAR ENDED FROM INCEPTION (7/1/93)
APRIL 30, 1995 TO APRIL 30, 1995
-------------- -----------------------
14.22% 8.10%
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Dreyfus Total
Return Portfolio on 7/1/93 (Inception Date) to a $10,000 investment made
in the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500
Index") on that date as well as to a Customized Blended Index reflecting
the Portfolio's benchmark percentage allocations which is described
below. For comparative purposes, the value of each Index on 6/30/93 is
used as the beginning value on 7/1/93. All dividends and capital gain
distributions are reinvested.
The Dreyfus Total Return Portfolio allocates your money among stocks,
U.S. Treasury notes and bonds, and money market instruments. The
Portfolio's performance takes into account all applicable fees and
expenses. The S&P 500 Index is a widely accepted, unmanaged index of
overall stock market performance which does not take into account
charges, fees and other expenses. The S&P 500 Index was selected because
(1) common stocks represent the highest benchmark percentages and (2)
the common stock portion of the Portfolio is invested in stocks included
in the S&P 500 Index. The Customized Blended Index has been prepared by
the Fund for purposes of more accurate comparison to the Portfolio's
general portfolio composition. We have combined the performance of
unmanaged indices reflecting the benchmark percentages set forth in the
Prospectus: 55% common stocks, 35% U.S. Treasury notes and bonds, and
10% money market instruments. The benchmark percentages represent the
asset mix that The Dreyfus Corporation would expect to maintain where
its assessment of economic conditions and investment opportunities
indicate that the financial markets are fairly valued in relation to
each other. The Customized Blended Index combines returns from The S&P
500 Index, The Shearson Lehman Intermediate Treasury Bond Index and the
Bank Rate Monitor Index of money market returns, and is weighted to the
aforementioned benchmark percentages. Further information relating to
the Portfolio's performance, including expense reimbursements, if
applicable, is contained in the Condensed Financial Information section
of the Prospectus and elsewhere in this report.
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DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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STATEMENT OF INVESTMENTS APRIL 30, 1995
COMMON STOCKS--69.3% SHARES VALUE
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<S> <C> <C>
CONSUMER DURABLES--1.0% Mattel.............................. 23,345 $ 554,444
------- -----------
CONSUMER NON-DURABLES--5.5% Archer-Daniels-Midland.............. 8,590 156,768
CPC International................... 9,500 556,937
Coca-Cola........................... 15,587 905,994
Gillette............................ 3,170 259,940
Heinz (H.J.)........................ 13,000 546,000
PepsiCo............................. 10,179 423,701
Sara Lee............................ 10,178 283,712
-----------
3,133,052
-----------
CONSUMER SERVICES--2.5% Disney (Walt)....................... 3,548 196,471
McDonald's.......................... 9,073 317,555
Time Warner......................... 25,000 915,625
-----------
1,429,651
-----------
ENERGY--12.6% Amerada Hess........................ 26,966 1,365,154
Burlington Resources................ 8,250 322,781
Louisiana Land & Exploration........ 9,000 329,625
Royal Dutch Petroleum............... 10,000 1,240,000
Schlumberger........................ 30,000 1,886,250
Texaco.............................. 29,242 1,999,422
-----------
7,143,232
-----------
FINANCE--5.0% American International Group........ 12,000 1,281,000
Citicorp............................ 5,000 231,875
Household International............. 9,354 438,469
Providian........................... 15,000 511,875
Shawmut National.................... 14,613 387,244
-----------
2,850,463
-----------
HEALTH CARE--13.5% Abbott Laboratories................. 19,467 766,513
American Home Products.............. 10,653 821,613
Baxter International................ 20,000 695,000
Columbia/HCA Healthcare............. 22,251 934,542
Johnson & Johnson................... 14,431 938,015
Merck & Co.......................... 12,892 552,744
Pfizer.............................. 10,000 866,250
Schering-Plough..................... 5,000 376,875
SmithKline Beecham A.D.R............ 20,000 777,500
United Healthcare................... 25,000 906,250
-----------
7,635,302
-----------
INDUSTRIAL SERVICES--1.4% WMX Technologies.................... 28,201 768,477
-----------
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
- ------------------------------------------------------------------------------------ ------- -----------
PROCESS INDUSTRIES--7.2% duPont (EI) de Nemours.............. 20,300 $ 1,337,263
Grace ( W.R.)....................... 30,986 1,661,624
Monsanto............................ 13,000 1,082,250
-----------
4,081,137
-----------
PRODUCER MANUFACTURING--8.4% Cooper Industries................... 35,239 1,374,321
Deere & Co.......................... 19,877 1,629,914
TRINOVA............................. 49,541 1,721,550
-----------
4,725,785
-----------
RETAIL TRADE--3.3% Sears, Roebuck...................... 15,734 853,569
Wal-Mart Stores..................... 42,976 1,020,680
-----------
1,874,249
-----------
TECHNOLOGY--7.6% Boeing.............................. 14,271 784,905
cisco Systems....................... 13,000 (a) 518,375
DSC Communications.................. 10,000 (a) 370,000
Intel............................... 7,400 757,575
Microsoft........................... 9,000 (a) 735,750
Motorola............................ 11,000 625,625
Texas Instruments................... 5,000 530,000
-----------
4,322,230
-----------
TRANSPORTATION--1.3% Burlington Northern 12,200 725,900
-----------
TOTAL COMMON STOCKS
(cost $35,236,066) $39,243,922
===========
PRINCIPAL
U.S. TREASURY BONDS--27.1% AMOUNT
- ------------------------------------------------------------------------------------ -----------
7.125%, 2/15/2023
(cost $14,852,503)................ $15,900,000 $15,358,414
===========
SHORT-TERM INVESTMENTS--4.6%
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U.S. TREASURY BILLS: 5.72%, 5/18/1995.................... $ 853,000 $ 850,458
5.01%, 6/1/1995..................... 242,000 240,744
6.37%, 7/6/1995..................... 1,542,000 1,525,578
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TOTAL SHORT-TERM INVESTMENTS
(cost $2,617,871)................. $ 2,616,780
===========
TOTAL INVESTMENTS (cost $52,706,440)................................................ 101.0% $57,219,116
====== ===========
LIABILITIES, LESS CASH AND RECEIVABLES.............................................. (1.0%) $ (579,676)
====== ===========
NET ASSETS.......................................................................... 100.0% $56,639,440
====== ===========
NOTE TO STATEMENT OF INVESTMENTS;
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(a) Non-income producing.
See notes to financial statements.
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DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $52,706,440)--see statement............................................. $57,219,116
Cash............................................................................ 35,611
Receivable for investment securities sold....................................... 498,233
Dividends and interest receivable............................................... 267,759
Receivable for subscriptions to Common Stock.................................... 6,900
Prepaid expenses................................................................ 90,616
-----------
58,118,235
LIABILITIES:
Due to Distributor............................................................ $ 34,151
Payable for investment securities purchased..................................... 1,379,150
Accrued expenses................................................................ 65,494 1,478,795
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NET ASSETS ........................................................................ $56,639,440
===========
REPRESENTED BY:
Paid-in capital................................................................. $51,844,816
Accumulated undistributed investment income--net................................ 580,230
Accumulated net realized (loss) on investments.................................. (298,282)
Accumulated net unrealized appreciation on investments--Note 3(b)............... 4,512,676
-----------
NET ASSETS at value applicable to 4,100,964 shares outstanding
(100 million shares of $.001 par value Common Stock authorized)................. $56,639,440
===========
NET ASSET VALUE, offering and redemption price per share
($56,639,440 divide 4,100,964 shares)........................................... $13.81
======
See notes to financial statements.
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<TABLE>
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DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest...................................................................... $949,419
Cash dividends (net of $8,063 foreign taxes withheld at source)............... 925,484
--------
TOTAL INCOME.................................................................. $1,874,903
EXPENSES:
Management fee--Note 2(a)..................................................... 382,802
Shareholder servicing costs--Note 2(b,c)...................................... 448,904
Registration fees............................................................. 44,681
Legal fees.................................................................... 43,838
Organization expenses......................................................... 19,959
Directors' fees and expenses--Note 2(d)....................................... 14,967
Prospectus and shareholders' reports--Note 2(b)............................... 14,295
Custodian fees................................................................ 10,352
Auditing fees................................................................. 9,333
Miscellaneous................................................................. 1,425
--------
990,556
Less--expense reimbursement from Manager due to
undertakings--Note 2(a)....................................................... 647,771
--------
TOTAL EXPENSES.............................................................. 342,785
----------
INVESTMENT INCOME--NET...................................................... 1,532,118
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 3(a):
Long transactions............................................................. $211,829
Short sale transactions....................................................... (1,823)
Net realized (loss) on financial futures--Note 3(a);
Short transactions............................................................ (509,360)
--------
NET REALIZED (LOSS)........................................................... (299,354)
Net unrealized appreciation on investments...................................... 5,745,320
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS............................. 5,445,966
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................ $6,978,084
==========
See notes to financial statements.
</TABLE>
<TABLE>
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DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED APRIL 30,
---------------------------
1994* 1995
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment income--net.......................................................... $ 923,546 $ 1,532,118
Net realized gain (loss) on investments......................................... 235,388 (299,354)
Net unrealized appreciation (depreciation) on investments for the year.......... (1,232,644) 5,745,320
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............... (73,710) 6,978,084
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net........................................................... (461,212) (1,414,222)
Net realized gain on investments................................................ (40,587) (193,729)
----------- -----------
TOTAL DIVIDENDS............................................................... (501,799) (1,607,951)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold................................................... 69,747,836 19,578,479
Dividends reinvested............................................................ 486,322 1,551,632
Cost of shares redeemed......................................................... (18,696,071) (20,923,382)
----------- -----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS........................ 51,538,087 206,729
----------- -----------
TOTAL INCREASE IN NET ASSETS.................................................. 50,962,578 5,576,862
NET ASSETS:
Beginning of year............................................................... 100,000 51,062,578
----------- -----------
End of year (including undistributed investment
income--net of $462,334 and $580,230, respectively)........................... $51,062,578 $56,639,440
=========== ===========
SHARES SHARES
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Shares sold..................................................................... 5,525,794 1,522,416
Shares issued for dividends reinvested.......................................... 38,293 123,439
Shares redeemed................................................................. (1,483,003) (1,633,975)
----------- -----------
NET INCREASE IN SHARES OUTSTANDING............................................ 4,081,084 11,880
=========== ===========
- -------------------
*From July 1, 1993 (commencement of operations) to April 30, 1994.
See notes to financial statements.
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<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from information provided in the
Portfolio's financial statements.
YEAR ENDED APRIL 30,
---------------------------
PER SHARE DATA: 1994(1) 1995
----------- -----------
<S> <C> <C>
Net asset value, beginning of year.............................................. $12.50 $12.49
------ ------
INVESTMENT OPERATIONS:
Investment income--net.......................................................... .24 .39
Net realized and unrealized gain (loss) on investments.......................... (.11) 1.35
------ ------
TOTAL FROM INVESTMENT OPERATIONS.............................................. .13 1.74
------ ------
DISTRIBUTIONS:
Dividends from investment income-net............................................ (.13) (.37)
Dividends from net realized gain on investments.................................. (.01) (.05)
------ ------
TOTAL DISTRIBUTIONS........................................................... (.14) (.42)
------ ------
Net asset value, end of year.................................................... $12.49 $13.81
====== ======
TOTAL INVESTMENT RETURN .99%(2) 14.22%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......................................... .16%(2) .67%
Ratio of net investment income to average net assets............................ 2.48%(2) 3.00%
Decrease reflected in above expense ratios due to
undertakings by the Manager................................................... 1.58%(2) 1.27%
Portfolio Turnover Rate......................................................... -- 160.11%
Net Assets, end of year (000's Omitted)......................................... $51,063 $56,639
- ----------------------
(1) From July 1, 1993 (commencement of operations) to April 30, 1994.
(2) Not annualized.
See notes to financial statements.
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DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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NOTES TO FINANCIAL STATEMENTS
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 the Dreyfus Total Return Portfolio (the
"Portfolio") as the original Portfolio of the Fund became known on
August 25, 1994. The Portfolio is registered under the Investment
Company Act of 1940 ("Act") as a non-diversified open-end management
investment company. Dreyfus Service Corporation, until August 24, 1994,
acted as the distributor of the Portfolio's shares, which are sold to
the public without a sales load. Dreyfus Service Corporation is a
wholly-owned subsidiary of The Dreyfus Corporation ("Manager").
Effective August 24, 1994, the Manager became a direct subsidiary of
Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Portfolios' distributor. The
Distributor, located at One Exchange Place, Boston, Massachusetts 02109,
is a wholly-owned subsidiary of FDI Distribution Services, Inc., a
provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of
which is Boston Institutional Group, Inc.
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 portfolios 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. Investments denominated 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 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 Portfolio not to distribute
such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Portfolio to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by complying
with the applicable provisions of the Internal Revenue Code, and to make
distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately
$243,000 available for Federal income tax purposes to be applied against
future net securities profits, if any realized subsequent to April 30,
1995. If not applied, the carryover expire in fiscal 2003.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
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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 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 has undertaken
from May 1, 1994 to April 30, 1995 to reduce the management fee paid by,
and reimburse such excess expenses of the Portfolio, to the extent that
the Portfolio's aggregate expenses (excluding certain expenses as
described above) exceed specified annual percentages of the Portfolio's
average daily net assets. The expense reimbursement, pursuant to the
undertakings, amounted to $647,771 for the year ended April 30, 1995.
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) On August 4, 1994, Fund shareholders approved a revised
Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act.
Pursuant to the Plan, effective August 24, 1994, the Portfolio (a)
reimburses the Distributor for payments to certain Service Agents for
distributing the Portfolio's 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 Distribution 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.
Prior to August 24, 1994, the Distribution Plan ("prior Distribution
Plan") provided that the Portfolio pay Dreyfus Service Corporation at an
annual rate of .50 of 1% of the value of the Portfolio's average daily
net assets, for costs and expenses in connection with advertising,
marketing and distributing the Portfolio's shares. Dreyfus Service
Corporation made payments to one or more Service Agents based on the
value of the Portfolio's shares owned by clients of the Service Agent.
The prior distribution Plan also separately provided 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.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
- -------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
During the year ended April 30, 1995, $182,276 was charged to the
Portfolio pursuant to the Distribution Plan and $81,220 was charged to
the Portfolio pursuant to the prior 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. During the year ended April 30, 1995, the Portfolio was
charged $127,601 pursuant to the Shareholder Services Plan.
(D) Prior to August 24, 1994, certain officers and directors of the
Portfolio were "affiliated persons," as defined in the Act, of the
Manager and/or Dreyfus Service Corporation. Each director who is not an
"affiliated person" receives an annual fee from the Fund of $1,000 and
an attendance fee of $250 per meeting. The Chairman of the Board
receives an additional 25% of such compensation.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and
sales of investment securities and securities sold short, excluding
short-term securities, during the six months ended April 30, 1995:
PURCHASES SALES
----------- -----------
Long transactions.................... $75,372,558 $64,784,056
Short sale transactions.............. 692,000 690,177
----------- -----------
TOTAL.............................. $76,064,558 $65,474,233
=========== ===========
The Fund is engaged in short-selling which obligates the Portfolio
to replace the security borrowed by purchasing the security at current
market value. The Portfolio would incur a loss 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. The Portfolio would
realize a gain if the price of the security declines between those
dates. Until the Portfolio replaces the borrowed security, the Portfolio
will maintain daily, a segregated account with a broker and/or
custodian, of cash and/or U.S. Government securities sufficient to cover
its short position. At April 30, 1995, there were no securities sold
short outstanding.
The Portfolio is engaged in trading financial futures contracts. The
Portfolio is exposed to market risk as a result of changes in the value
of the underlying financial instruments. Investments in financial
futures require the Portfolio 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, 1995, there were no financial futures
contracts outstanding.
(B) At April 30, 1995, accumulated net unrealized appreciation on
investments was $4,512,676, consisting of $4,874,313 gross unrealized
appreciation and $361,637 gross unrealized depreciation.
At April 30, 1995, 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., Dreyfus Total Return Portfolio
- --------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS TOTAL RETURN PORTFOLIO
We have audited the accompanying statement of assets and
liabilities, including the statement of investments, of Dreyfus Asset
Allocation Fund, Inc., Dreyfus Total Return Portfolio (one of the Series
constituting the Dreyfus Asset Allocation Fund, Inc.) as of April 30,
1995, and the related statements of operations for the year then ended,
the statement changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the periods
indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of April 30, 1995 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Dreyfus Asset Allocation Fund, Inc., Dreyfus Total
Return Portfolio at April 30, 1995, and the results of its operations
for the year then ended, the changes in its net assets and the financial
highlights for each of the indicated periods, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
New York, New York
June 2, 1995
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Total Return Portfolio
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal Tax purposes the Fund hereby designates $.026 per share
as a long-term capital gain distribution of the $.415 per share paid on
December 27, 1994.
Asset Allocation
Fund, Inc.
Dreyfus Total
Return Portfolio
Annual Report
April 30, 1995
(Dreyfus Lion Logo)
DREYFUS ASSET ALLOCATION FUND, INC.
DREYFUS TOTAL RETURN PORTFOLIO
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
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. 550AR954
Printed in U.S.A. 550AR954
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN THE DREYFUS TOTAL RETURN PORTFOLIO OF
DREYFUS ASSET ALLOCATION FUND, INC. WITH THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX AND A CUSTOMIZED BLENDED INDEX
EXHIBIT A:
|-----------|--------------------------------|-----------|
| | | STANDARD | |
| | DREYFUS | & POOR'S 500 | |
| | TOTAL | COMPOSITE |CUSTOMIZED |
| PERIOD | RETURN | STOCK | BLENDED |
| | PORTFOLIO | PRICE INDEX *| INDEX ** |
|-----------|------------ | -------------|-----------|
| 7/1/93 | 10,000 | 10,000 | 10,000 |
| 7/31/93 | 9,976 | 9,960 | 9,987 |
| 10/31/93 | 10,200 | 10,470 | 10,349 |
| 1/31/94 | 10,519 | 10,852 | 10,598 |
| 4/30/94 | 10,099 | 10,228 | 10,135 |
| 7/31/94 | 10,301 | 10,474 | 10,325 |
| 10/31/94 | 10,576 | 10,875 | 10,533 |
| 1/31/95 | 10,524 | 10,910 | 10,612 |
| 4/30/95 | 11,535 | 12,010 | 11,356 |
|--------------------------------------------|-----------|
*Source: Lipper Analytical Services, Inc.
**Source: Lipper Analytical Services, Inc.,
Lehman Brothers and Bank Rate Monitor
