Registration No. 33-_____
========================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. __ [ ] Post-Effective Amendment No.__
(Check appropriate box or boxes)
DREYFUS LIFETIME PORTFOLIOS, INC.
(Exact Name of Registrant as Specified in Charter)
(212) 922-6000
(Area Code and Telephone Number)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices: Number,
Street, City, State, Zip Code)
(Name and Address of Agent for Service)
Mark N. Jacobs, Esq.
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement is declared effective.
It is proposed that this Registration Statement become effective on March
27, 1996 pursuant to Rule 488.
_____________________
Registrant has previously filed a declaration of indefinite
registration of its shares pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended; accordingly, no fee is payable herewith.
Registrant's Rule 24f-2 Notice for the fiscal year ended September 30, 1995
was filed on November 29, 1995.
DREYFUS LIFETIME PORTFOLIOS, INC.
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
Proxy Statement/
Form N-14 Item No. Prospectus Caption
Part A
Item 1. Beginning of Registration Cover Page
Statement and Outside Front
Cover Page of Prospectus
Item 2. Beginning and Outside Back Cover Page
Cover Page of Prospectus
Item 3. Synopsis Information and Risk Summary
Factors
Item 4. Information About the Letter to Shareholders;
Transaction Proposal No. 1; Comparison of
the Series and Portfolios
Item 5. Information About the Letter to Shareholders;
Registrant Comparison of the Series and
Portfolios
Item 6. Information About the Company Letter to Shareholders;
Being Acquired Comparison of the Series and
Portfolios
Item 7. Voting Information Letter to Shareholders;
Voting Information
Item 8. Interest of Certain Persons Not Applicable
and Experts
Item 9. Additional Information Not Applicable
Required for Reoffering by
Persons Deemed to be Under-
writers
Statement of Additional
Part B Information Caption
- ------ -----------------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Not Applicable
Item 12. Additional Information about Statement of Additional
the Registrant Information of Dreyfus
LifeTime
Portfolios, Inc. dated
January 15, 1996<F1>
Item 13. Additional Information about Statement of Additional
the Company being Acquired Information of Dreyfus Asset
Allocation Fund, Inc. dated
September 1, 1995<F2>
Item 14. Financial Statements Statement of Additional
Information of Dreyfus
LifeTime
Portfolios, Inc. dated
January 15, 1996<F1>;
Statement of Additional
Information of Dreyfus Asset
Allocation Fund, Inc. dated
September 1, 1995<F2>and Pro
Forma Financial Statements
Part C
- ------
Item 15. Indemnification
Item 16. Exhibits
Item 17. Undertakings
- ----------------
[FN]1 Incorporated herein by reference to the Registration Statement of the
Registrant on Form N-1A dated January 15, 1996 (File No. 33-66088).
[FN]2 Incorporated herein by reference to the Registration Statement of
Dreyfus Asset Allocation Fund, Inc. on Form N-1A dated September 1,
1995 (File No. 33-62626).
<PAGE>
Preliminary Copy
DREYFUS ASSET ALLOCATION FUND, INC.
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Shareholder:
As a shareholder of the Growth Series (the "Growth Series") or the
Income Series (the "Income Series" and, together with the Growth Series, the
"Series") of Dreyfus Asset Allocation Fund, Inc. ("DAAF"), you are entitled
to vote on the proposal described below and in the enclosed materials.
Because each Series has been unable to attract sufficient assets
under
management to operate efficiently as a separate series of DAAF without
significant expense subsidization, management of DAAF has determined that
certain operational efficiencies might be achievable if each of the Growth
Series and the Income Series were to exchange its assets (subject to
liabilities) for shares of funds in the Dreyfus Family that have the same
investment objective(s) and substantially similar policies; namely, the
Growth Portfolio (the "Growth Portfolio") and the Income Portfolio (the
"Income Portfolio" and, together with the Growth Portfolio, the
"Portfolios"), respectively, of Dreyfus LifeTime Portfolios, Inc. ("DLPI").
The proposal provides that each Series exchange (the
"Exchange") all of its assets, subject to liabilities, for Investor Class
shares (the "Portfolio Shares") of the corresponding Portfolio, namely the
Growth Portfolio, with respect to the Growth Series, and the Income
Portfolio, with respect to the Income Series. Promptly thereafter, each
Series will distribute pro rata the Portfolio Shares received in the
Exchange to its shareholders in complete liquidation of the Series. Thus,
each shareholder will receive for his or her Series shares a number of
Portfolio Shares equal to the value of such Series shares as of the date of
the Exchange. The Exchange will not result in the imposition of Federal
income tax on you.
The investment objective of each of the Series is the same as that of
its corresponding Portfolio. The Series and the Portfolios differ in
certain respects which are described in the enclosed Combined Proxy
Statement/Prospectus.
Further information about the transaction is contained in
the enclosed materials, which you should review carefully. You are entitled
to vote on the proposed transaction with respect to each Series in which you
are a Shareholder.
Please take the time to consider the enclosed materials and
then vote by completing, dating and signing the enclosed proxy card(s). A
self-addressed, postage-paid envelope has been enclosed for your
convenience.
An affiliate of The Dreyfus Corporation, each Series' and
Portfolio's
investment adviser, owns over 50% of each Series' outstanding shares and
intends to vote in favor of the proposed transactions.
DAAF'S BOARD MEMBERS RECOMMEND THAT EACH SERIES'
SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSED TRANSACTION WITH RESPECT TO THEIR
SERIES.
If you have any questions after considering the enclosed
materials, please feel free to call 1-800-645-6561 between the hours of 9:00
a.m. and 5:30 p.m. (New York time), Monday through Friday.
Sincerely,
Marie E. Connolly,
President
March __, 1996
<PAGE>
Preliminary Copy
DREYFUS ASSET ALLOCATION FUND, INC.
(GROWTH SERIES)
(INCOME SERIES)
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders:
A Special Meeting of Shareholders of each of the Growth
Series (the "Growth Series") and the Income Series (the "Income Series" and,
together with the Growth Series, the "Series") of Dreyfus Asset Allocation
Fund, Inc. ("DAAF") will be held at the offices of The Dreyfus Corporation,
200 Park Avenue, 7th Floor, New York, New York 10166, on Friday, April 26,
1996 at 10:00 a.m. for the following purposes:
1. To consider an Agreement and Plan of Reorganization
(each, a "Plan" and, collectively, the "Plans") for each Series
providing for the transfer of all or substantially all of its
assets, subject to liabilities, to the corresponding portfolio,
namely the Growth Portfolio, with respect to the Growth Series,
and the Income Portfolio, with respect to the Income Series
(each, a "Portfolio" and, collectively, the "Portfolios"), of
Dreyfus LifeTime Portfolios, Inc. ("DLPI"), in exchange (the
"Exchange") for the Portfolio's Investor Class shares and the
assumption by the Portfolio of stated liabilities. Portfolio
shares received in the Exchange will be distributed by each
Series to its shareholders in liquidation of the Series, after
which the Series will be terminated as a series of DAAF and its
shares cancelled; and
2. To transact such other business as may properly come
before the meeting, or any adjournment or adjournments thereof.
Shareholders of record at the close of business on March 26,
1996, will be entitled to receive notice of and to vote at the
meeting.
By Order of the Board of Directors
John E. Pelletier,
Secretary
New York, New York
March __, 1996
WE NEED YOUR PROXY VOTE IMMEDIATELY
A SHAREHOLDER MAY THINK HIS VOTE IS NOT IMPORTANT, BUT
IT IS VITAL. BY LAW, THE MEETING OF SHAREHOLDERS OF A
SERIES WILL HAVE TO BE ADJOURNED WITHOUT CONDUCTING
ANY BUSINESS IF LESS THAN A QUORUM OF ITS SHARES
ELIGIBLE TO VOTE IS REPRESENTED. IN THAT EVENT, SUCH
SERIES, AT ITS SHAREHOLDERS' EXPENSE, WOULD CONTINUE
TO SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM.
CLEARLY, YOUR VOTE COULD BE CRITICAL TO ENABLE YOUR
SERIES TO HOLD THE MEETING AS SCHEDULED, SO PLEASE
RETURN YOUR PROXY CARD IMMEDIATELY. YOU AND ALL OTHER
SHAREHOLDERS WILL BENEFIT FROM YOUR COOPERATION.
<PAGE>
Preliminary Copy
March __, 1996
DREYFUS ASSET ALLOCATION FUND, INC.
(GROWTH SERIES)
(INCOME SERIES)
COMBINED PROXY STATEMENT/PROSPECTUS
Special Meeting of Shareholders
to be held on April 26, 1996
This Combined Proxy Statement/Prospectus is furnished in
connection with a solicitation of proxies by the Board of Dreyfus Asset
Allocation Fund, Inc. ("DAAF"), on behalf of its Growth Series (the "Growth
Series") and Income Series (the "Income Series" and, together with the
Growth Series, the "Series"), to be used at the Special Meeting of
Shareholders (the "Meeting") of the Series to be held on Friday, April 26,
1996 at 10:00 a.m., at the offices of The Dreyfus Corporation, 200 Park
Avenue, 7th Floor, New York, New York 10166, for the purposes set forth in
the accompanying Notice of Special Meeting of Shareholders. Shareholders of
record at the close of business on March 26, 1996 (each, a "Shareholder"
and, collectively, the "Shareholders") are entitled to receive notice of and
to vote at the Meeting. Shareholders are entitled to one vote for each
share of common stock of a Series, par value $.001 per share ("Series
Share"), held and fractional votes for each fractional Series Share held.
Series Shares represented by executed and unrevoked proxies will be voted in
accordance with the specifications made thereon. If the enclosed form of
proxy is executed and returned, it nevertheless may be revoked by giving
another proxy or by letter or telegram directed to the relevant Series,
which must indicate the Shareholder's name and account number. To be
effective, such revocation must be received before the Meeting.
Authorizations to execute proxies may be obtained by telephonic or
electronically transmitted instructions. In addition, any Shareholder who
attends the Meeting in person may vote by ballot at the Meeting, thereby
canceling any proxy previously given. As of February 2, 1996, the following
numbers of Series Shares were issued and outstanding:
Name of Series Shares Outstanding
Growth Series 142,940.572
Income Series 156,728.215
Proxy materials will be mailed to shareholders of record on
or about March 30, 1996. DAAF's principal executive offices are located at
200 Park Avenue, New York, New York 10166.
This Combined Proxy Statement/Prospectus is being used in
order to reduce the preparation, printing, handling and postage expenses
that would result from the use of a separate proxy statement/prospectus for
each Series. Shareholders of each Series will vote separately on the
Proposal. Thus, if the Proposal is approved by one Series, and disapproved
by the other Series, the Proposal will be implemented only for the Series
that approved the Proposal. Therefore, it is essential that Shareholders
who own Series Shares in both Series complete, date, sign and return each
proxy card they receive.
It is proposed that each of the Growth Series and the Income
Series transfer all or substantially all of its respective assets, subject
to liabilities, to the Growth Portfolio (the "Growth Portfolio") and the
Income Portfolio (the "Income Portfolio" and, together with the Growth
Portfolio, the "Portfolios"), respectively, of Dreyfus LifeTime Portfolios,
Inc. ("DLPI") in exchange (the "Exchange") for Investor Class shares of the
corresponding Portfolio ("Portfolio Shares"), all as more fully described
herein. Upon consummation of the Exchange, Portfolio Shares received by a
Series will be distributed to its Shareholders, with each Shareholder
receiving a pro rata distribution of Portfolio Shares (or fractions thereof)
for Series Shares held prior to the Exchange. Thus, it is contemplated that
each Shareholder will receive for the Shareholder's Series Shares a number
of Portfolio Shares (or fractions thereof) equal in value to the aggregate
net asset value of such Series Shares as of the date of the Exchange.
DLPI is an open-end, management investment company comprised
of three diversified portfolios. Each Portfolio and its corresponding
Series has the same investment adviser, distributor and investment
objective, substantially similar management policies, and differs
substantively only to the extent set forth herein. Mellon Equity Associates
("Mellon Equity") serves as each Portfolio's sub-investment adviser as
described herein. The Portfolios and Series have different Portfolio
managers who are described herein.
This Combined Proxy Statement/Prospectus, which should be
retained for future reference, sets forth concisely the information about
the Portfolios that Shareholders should know before voting on the Proposal
or investing in the Portfolios. DLPI's prospectus dated January 15, 1996
(the "DLPI Prospectus"), DLPI's Annual Report for the fiscal year ended
September 30, 1995 and DAAF's prospectus dated September 1, 1995 (the "DAAF
Prospectus"), each accompany this Combined Proxy Statement/Prospectus and
are incorporated herein by reference.
Additional information, contained in a Statement of
Additional Information dated March __, 1996 forming a part of DLPI's
Registration Statement on Form N-14 (File No. 33-________), has been filed
with the Securities and Exchange Commission and is available without charge
by calling 1-800-645-6561 or writing to DLPI at its principal executive
offices located at 200 Park Avenue, New York, New York 10166. The Statement
of Additional Information is incorporated herein by reference in its
entirety.
________________________________________________________________
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 COMBINED PROXY STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
________________________________________________________________
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR BY ANY OTHER AGENCY.
ALL MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
TABLE OF CONTENTS
Page
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reasons for the Exchange . . . . . . . . . . . . . . . . . . . . .
Information about the Exchange . . . . . . . . . . . . . . . . . .
Additional Information about the Portfolios and Series . . . . . .
Voting Information . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Experts . . . . . . . . . . . . . . . . .
Other Matters. . . . . . . . . . . . . . . . . . . . . . . . . . .
Notice to Banks, Broker/Dealers and
Voting Trustees and Their Nominees . . . . . . . . . . . . . . .
<PAGE>
APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION
PROVIDING FOR THE TRANSFER OF ALL OR SUBSTANTIALLY ALL
OF THE ASSETS OF EACH SERIES TO THE CORRESPONDING
PORTFOLIO OF DREYFUS LIFETIME PORTFOLIOS, INC.
SUMMARY
This Summary is qualified by reference to the more complete
information contained elsewhere in this Combined Proxy Statement/Prospectus,
the DLPI Prospectus, the DAAF Prospectus and the form of Agreement and Plan
of Reorganization attached to this Combined Proxy Statement/Prospectus as
Exhibit A.
Proposed Transaction. DAAF's Board, including the Board
members who are not "interested persons" (as defined in the Investment
Company Act of 1940, as amended (the "1940 Act")), has unanimously approved
an Agreement and Plan of Reorganization (each a "Plan" and, collectively,
the "Plans"), with respect to each Series. The Plans are identical except
for the name of the parties. Each Plan provides that, subject to the
requisite approval of its Shareholders, on the date of the Exchange each
Series shall assign, transfer and convey to the corresponding Portfolio,
namely the Growth Portfolio, with respect to the Growth Series, and the
Income Portfolio, with respect to the Income Series, all of the assets
(subject to liabilities) of the Series, including all securities and cash,
in exchange for Portfolio Shares having an aggregate net asset value equal
to the value of the net assets of the Series' acquired. Each Series will
distribute all Portfolio Shares received by it among its Shareholders so
that each Shareholder will receive a pro rata distribution of Portfolio
Shares (or fractions thereof), having an aggregate net asset value equal to
the aggregate net asset value of the Shareholder's Series Shares as of the
date of the Exchange. Thereafter, the Series will be terminated as a series
of DAAF and its shares cancelled.
As a result of the Exchange, each Shareholder will cease to
be a shareholder of the relevant Series and will become a shareholder of the
corresponding Portfolio as of the close of business on the closing date of
the Exchange.
DAAF's Board has concluded unanimously that the Exchange
would be in the best interests of Shareholders of each Series and the
interests of existing Shareholders of each Series would not be diluted as a
result of the transactions contemplated thereby. See "Reasons for the
Exchange."
Tax Consequences. As a condition to the closing of the
Exchange, DAAF and DLPI will receive an opinion of counsel to the effect
that, for Federal income tax purposes, (a) no gain or loss will be
recognized by Series Shareholders for Federal income tax purposes as a
result of the Exchange, (b) the holding period and aggregate tax basis of
Portfolio Shares received by a Series Shareholder will be the same as the
holding period and aggregate tax basis of the Shareholder's Series Shares,
and (c) the holding period and tax basis of the Series' assets transferred
to the Portfolio as a result of the Exchange will be the same as the holding
period and tax basis of such assets held by the Series immediately prior to
the Exchange. See "Information about the Exchange--Federal Income Tax
Consequences."
Comparison of the Series and Portfolios. The following
discussion is a summary of certain parts of the DAAF Prospectus and the DLPI
Prospectus. Information contained herein is qualified by the more complete
information set forth in the DAAF Prospectus and the DLPI Prospectus, which
are incorporated herein by reference.
General. Each Series and Portfolio is an open-end,
management investment company advised by The Dreyfus Corporation
("Dreyfus"). Mellon Equity, an affiliate of Dreyfus, serves as each
Portfolio's sub-investment adviser. The investment objective of the Growth
Portfolio--capital appreciation--is identical to that of the Growth Series,
and the investment objectives of the Income Portfolio--to maximize current
income with a secondary objective of capital appreciation--are identical to
that of the Income Series.
The management policies of each Series and its corresponding
Portfolio are substantially similar. Each Series and Portfolio seeks to
achieve its investment objective by following an asset allocation strategy
that contemplates shifts among common stocks, fixed-income securities and,
except with respect to the Growth Portfolio, short-term money market
instruments. With respect to each of the Growth Series, the Income Series
and the Growth Portfolio, a target allocation percentage is set for each
permitted asset class and then adjusted within defined ranges based upon
Dreyfus' (in the case of the Growth Series and the Income Series) or Mellon
Equity's (in the case of the Growth Portfolio) assessment of the risk/return
characteristics of the particular class. With respect to the Income
Portfolio, Mellon Equity sets a target allocation percentage for the
Portfolio's investments, but does not actively manage the Portfolio's
assets.
The Growth Series may invest between 65% and 95% of its
assets (with a target allocation of 80%) in those common stocks included in
the Wilshire 5000 Index, which is composed of all publicly-traded common
stocks in the United States, and between 5% and 35% of its assets (with a
target allocation of 20%) in U.S. Treasury Notes and Bonds and short-term
money market instruments. The Growth Portfolio may invest between 65% and
100% of its assets (with a target allocation of 80%) in common stocks, and
up to 35% of its assets (with a target allocation of 20%) in fixed-income
securities. The Growth Portfolio, except for temporary defensive purposes,
may not invest in short-term money market instruments. The Growth
Portfolio's equity investments are further divided into 80% large
capitalization stocks (typically with market capitalizations of greater than
$1.4 billion) and 20% small capitalization stocks (typically with market
capitalizations of less than $1.4 billion). In addition, the Growth
Portfolio may invest up to 25% of its assets in foreign securities. The
Growth Series may not invest in foreign securities except to the extent the
common stocks of some foreign issuers are included in the Wilshire 5000
Index.
The Income Series may invest between 25% and 45% of its
assets (with a target allocation of 35%) in common stocks included in the
Standard & Poor's 500 Stock Index (the "S&P 500 Index"), which is composed
of 500 selected common stocks, most of which are listed on the New York
Stock Exchange, between 45% and 70% of its assets (with a target allocation
of 55%) in U.S. Treasury Notes and Bonds, and up to 15% of its assets (with
a target allocation of 10%) in short-term money market instruments. The
Income Portfolio may invest in domestic large capitalization common stocks
(with a target allocation of 25%), domestic fixed-income securities (with a
target allocation of 75%), and short-term money market instruments up to 10%
of its assets. The Income Portfolio may invest in foreign securities. The
Income Series may not invest in foreign securities except to the extent the
common stocks of some foreign issuers are included in the S&P 500 Index.
Each Portfolio and Series may engage in various investment
and hedging techniques, such as leveraging, options and futures transactions
and lending portfolios securities. In addition, each Series may engage--and
Portfolios may not engage--in short-selling. Each Portfolio may engage--and
the Series may not engage--in foreign currency transactions. In all other
material respects, the management policies of each Series and its
corresponding Portfolio are substantially the same. For a more complete
discussion of each Series' and Portfolio's management policies, see
"Description of the Fund" in the DAAF Prospectus and the DLPI Prospectus.
Both DAAF and DLPI are corporations organized under the laws
of the State of Maryland and have substantially identical charter documents.
Fundamental Policies. Each Portfolio is a diversified
investment company that may not invest more than 5% of the value of its
total assets in the obligations of a single issuer, except that up to 25% of
the value of the Portfolio's total assets may be invested, and securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities may be purchased, without regard to any such limitation.
Each Series is a non-diversified investment company, meaning that the
proportion of each Series' assets that may be invested in the securities of
a single issuer is not limited by the 1940 Act.
In all other respects, the fundamental policies and
investment restrictions of each Series and Portfolio are identical.
Fees and Expenses. The following information concerning
fees and expenses is derived from information set forth under the caption
"Annual Fund Operating Expenses" in each of the DLPI Prospectus and the DAAF
Prospectus.
ANNUAL FUND
OPERATING EXPENSES
(as a percentage
of average daily
net assets):
Pro Forma
After
Exchange
DLPI DLPI
INVESTOR Investor
CLASS DAAF Class
GROWTH Growth Growth
PORTFOLIO Series Portfolio
Management Fees
(after fee waiver) .33% .00% .33%
12b-1 Fees NONE None None
Other Expenses .67% 1.25% .67%
Total Fund
Operating Expenses
(after expense
reimbursement) 1.00% 1.25% 1.00%
Pro Forma
After
Exchange
DLPI DLPI
INVESTOR Investor
CLASS DAAF Class
INCOME Income Income
PORTFOLIO Series Portfolio
Management Fees
(after fee waiver) .27% .00% .27%
12b-1 Fees NONE None None
Other Expenses
(after expense
reimbursement) .58% 1.25% .58%
Total Fund
Operating Expenses
(after expense
reimbursement) .85% 1.25% .85%
Example
An investor 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:
Pro Forma
After
Exchange
DLPI DLPI
Investor Investor
Class DAAF Class
Growth Growth Growth
PORTFOLIO Series Portfolio
1 Year $ 10 $ 13 $ 10
3 Years $ 32 $ 40 $ 32
5 Years $ 55 $ 69 $ 55
10 Years $122 $151 $122
Pro Forma
After
Exchange
DLPI DLPI
INVESTOR Investor
CLASS DAAF Class
INCOME Income Income
PORTFOLIO Series Portfolio
1 Year $ 9 $ 13 $ 9
3 Years $ 27 $ 40 $ 27
5 Years $ 47 $ 69 $ 47
10 Years $105 $151 $105
Annual Fund Operating Expenses noted above have been restated to
reflect undertakings by Dreyfus with respect to the Investor Class of the
Growth Portfolio and Income Portfolio to limit the aggregate expenses of
each Portfolio (exclusive of the Shareholder Services Plan fee, taxes,
brokerage, interest on borrowings and extraordinary expenses) to an annual
rate of .75% and .60%, respectively, until the net assets of the applicable
Portfolio exceed $500,000,000 (irrespective of whether the net assets
remain at that level) or September 30, 1996, whichever occurs sooner. The
expenses noted above, without reimbursement, with respect to the Investor
Class of the Growth Portfolio would have been: Management Fees - .75% and
Total Fund Operating Expenses - 1.42%; and the amount of expenses that an
investor would pay, assuming redemption after one, three, five and ten
years, would be $14, $45, $78 and $170, respectively. The expenses noted
above, without reimbursement, with respect to the Investor Class of the
Income Portfolio would have been: Management Fees - .60% and Total Fund
Operating Expenses - 1.18%; and the amount of expenses that an
investor would pay, assuming redemption after one, three, five and ten
years, would be $12, $37, $65 and $143, respectively. Annual
Fund Operating Expenses noted above have been restated to reflect
undertakings by Dreyfus with respect to the Growth Series and
Income Series to limit the aggregate expenses of each Series (exclusive of
taxes, brokerage, interest on borrowings and extraordinary expenses) to an
annual rate of 1.25% until June 30, 1996. The expenses noted above, without
reimbursement, with respect to each of the Growth Series and Income Series
would have been: Management Fees - .75%, Other Expenses - 1.75% and Total
Fund Operating Expenses - 2.50% (Total Fund Operating Expenses are limited
to the expense limitation provisions of the Management Agreement); and the
amount of expenses that an investor would pay, assuming redemption after
one, three, five and ten years, would be $25, $78, $133 and $284,
respectively.
Assuming the approval of the Exchange, Dreyfus, based on
internally-developed estimates dated as of December 31, 1995,
believes that the Investor Class of the Growth Portfolio and Income
Portfolio initially will have annual Total Fund Operating
Expenses (after fee waivers and expense reimbursement arrangements) of
approximately 1.00% and .85%, respectively, of average net
assets.
Shareholder Services Plan. Portfolio Shares are subject to a
Shareholder Services Plan which is identical to that adopted
by DAAF for each Series' shares. See "Shareholder Services Plan" in the
relevant Prospectus for a complete discussion of the
Shareholder Services Plan.
Investment Adviser and Sub-Investment Adviser. Dreyfus serves as
each Series' and Portfolio's investment adviser.
Dreyfus has engaged Mellon Equity to serve as each Portfolio's
sub-investment adviser. Mellon Equity, a registered investment
adviser formed in 1987, is an indirect wholly-owned subsidiary of Mellon
Bank Corporation and, thus, an affiliate of Dreyfus. As of
September 30, 1995, Mellon Equity managed approximately $7.6 billion in
assets and serves as the investment adviser for 13 other
investment companies. Mellon Equity, subject to the supervision and
approval of Dreyfus, provides investment advisory assistance
and the day-to-day management of each Portfolio's investments, as well as
investment research and statistical information, under a
Sub-Investment Advisory Agreement (the "Sub-Advisory Agreement") with
Dreyfus. In providing its services, Mellon Equity may use
the services of one or more of its affiliates. Under the Sub-Advisory
Agreement, Dreyfus pays Mellon Equity an annual fee at the
following rate: .35% of each Portfolio's average daily net assets up to
$600 million in DLPI assets; .25% of the Portfolio's
average daily net assets when DLPI's assets are between $600 million and
$1.2 billion; .20% of the Portfolio's average daily net
assets when DLPI's assets are between $1.2 billion and $1.8 billion; and
.15% of the Portfolio's average daily net assets when DLPI's assets are over
$1.8 billion.
Each Portfolio's primary portfolio manager is Steven A. Falci. He
has held that position since the inception of DLPI and has been employed by
Mellon Equity since April 1994. For more than five years prior thereto, he
was a managing director for pension investments at NYNEX corporation. Each
Series' primary portfolio manager is Ernest G. Wiggins, Jr. He has held
that position since May 1994 and has been employed by Dreyfus since December
1993. From 1992 to December 1993, Mr. Wiggins was President of Gabelli
International and, prior thereto, he held various positions with Fidelity
Management and Research Company.
Capitalization. Each Portfolio has classified its shares into two
classes--Investor Class, which are referred to herein
as Portfolio Shares, and Class R. Each Series' shares are of one class.
The following table sets forth as of February 2, 1996 (1)
the capitalization of each Series, (2) the capitalization of each
Portfolio's Investor Class, and (3) the pro forma capitalization
of each Portfolio's Investor Class, as adjusted showing the effect of the
Exchange had it occurred on such date.
<TABLE>
<CAPTION>
Pro Forma
After
DLPI Exchange
Investor DLPI
Class DAAF Investor Class
Growth Growth Growth
Portfolio Series Portfolio
<S> <C> <C> <C>
Total net assets . . $13,126,634.77 $2,182,702.53 $15,309,337.30
Net asset value
per share . . . . . $ 15.09 $15.27 $15.09
Shares outstanding . 869,889.647 142,940.572 1,014,535.275
Pro Forma
After
DLPI Exchange
Investor DLPI
Class DAAF Investor Class
Income Income Income
Portfolio Series Portfolio
Total net assets . . $8,541,622.54 $2,123,667.31 $10,665,289.85
Net asset value
per share . . . . . $13.12 $13.55 $13.12
Shares outstanding . 651,038.303 156,728.215 812,903.190
</TABLE>
Purchase Procedures. The purchase procedures of the
Series and Portfolios (with respect to Investor Class shares)
are identical. See "How to Buy Fund Shares" in the relevant
Prospectus for a complete discussion of purchase procedures.
Redemption Procedures. The redemption procedures of
the Series and Portfolios (with respect to Investor Class
shares) are identical. See "How to Redeem Fund Shares" in the
relevant Prospectus for a complete discussion of redemption
procedures.
Distributions. The dividend and distributions
policies of the Growth Series and the Growth Portfolio are
identical. The Income Series declares and pays dividends
quarterly, while the Income Portfolio declares and pays
dividends annually. See "Dividends, Distributions and Taxes" in
the relevant Prospectus for a complete discussion of such
policies.
Shareholder Services. The shareholder services
offered by the Series and Portfolios (with respect to Investor
Class shares) are identical. See "Shareholder Services" in the
relevant Prospectus for a complete description of shareholder
services.
Risk Factors. The investment risks of each Series and
corresponding Portfolio are substantially similar, except as
described below.
The Growth Portfolio may invest in foreign securities.
Neither Series may invest in foreign securities except to the
extent the common stocks of some foreign issuers are included in
the S&P 500 Index and the Wilshire 5000 Index.
Securities of some foreign issuers are less liquid and
more volatile than securities of comparable U.S. issuers.
Similarly, volume and liquidity in most foreign securities
markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
The issuers of some of these securities, such as foreign bank
obligations, may be subject to less stringent or different
regulations than are U.S. issuers. In addition, there may be
less publicly available information about a non-U.S. issuer, and
non-U.S. issuers generally are not subject to uniform accounting
and financial reporting standards, practices and requirements
comparable to those applicable to U.S. issuers.
The Growth Portfolio also may engage in currency
exchange transactions and may purchase and sell currency futures
contracts and options thereon. Neither Series may engage in
currency exchange transactions or may purchase and sell currency
futures contracts and options thereon. Currency exchange rates
may fluctuate significantly over short periods of time, and can
be affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States
or abroad. The foreign currency market offers less protection
against defaults in the forward trading of currencies than is
available when trading in currencies occurs on an exchange.
See "Description of the Fund--Investment Considerations and
Risks" in the DLPI Prospectus for a more complete description of
these investment risks.
Each Series may engage in short-selling, where the
Series sells a security it does not own in anticipation of a
decline in the market value of that security. Neither Portfolio
may engage in short-selling. To complete a short-sale
transaction, the Series must borrow the security to make
delivery to the buyer. The Series 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
Series.
Each Series and Portfolio is permitted to borrow for
investment purposes up to 33-1/3% of the value of its total
assets. This borrowing, known as leveraging, generally will be
unsecured. Leveraging exaggerates the effect on net asset value
of any increase or decrease in the market value of the fund's
investment securities. Each Portfolio, however, currently
intends to limit its ability to borrow money and will do so only
for temporary or emergency (not leveraging) purposes, in an
amount up to 15% of the value of its total assets.
REASONS FOR THE EXCHANGE
The Board of Directors of DAAF and DLPI have concluded
that the Exchange is in the best interests of its respective
shareholders. Each Board believes that the Exchange will permit
shareholders to pursue substantially similar investment goals in
a larger fund without diluting shareholders' interests. Each
Series has been unable to attract sufficient assets to operate
efficiently without significant expense subsidization as
separate series of DAAF. As of February 2, 1996, the Growth
Series and Income Series had assets under management of just
$2,182,703 and $2,123,667, respectively. The expense ratio of
each Portfolio is lower than that of its corresponding Series.
Larger aggregate net assets should enable the combined Portfolio
to obtain the benefits of some economies of scale, which may
result in an even lower overall expense ratio for the combined
Portfolio (as compared to the expense ratios of each Series and
Portfolio alone) through the spreading of fixed costs of fund
operations over a somewhat larger asset base.
In determining whether to recommend approval of the
Exchange, each Board considered the following factors, among
others: (1) the compatibility of the Series' and corresponding
Portfolio's investment objective(s), management policies and
investment restrictions, as well as shareholder services offered
by the Series and Portfolios; (2) the terms and conditions of
the Exchange and whether the Exchange would result in dilution
of shareholder interests; (3) expense ratios and published
information regarding the fees and expenses of the Portfolios
and Series, as well as the expense ratios of similar funds and
the estimated expense ratio of the combined Portfolios; (4) the
tax consequences of the Exchange; and (5) the estimated costs
incurred by the Portfolios and the Series as a result of the
Exchange. In addition, DAAF's Board considered the Series'
inability to attract sufficient assets to operate efficiently
without sufficient expense subsidization.
INFORMATION ABOUT THE EXCHANGE
Plan of Exchange. The following summary of the Plan
is qualified in its entirety by reference to the Plan attached
hereto as Exhibit A. The Plan provides that each Portfolio will
acquire all or substantially all of the assets of its
corresponding Series, in exchange for Portfolio Shares, and
assume the Series' stated liabilities on April 30, 1996 or such
later date as may be agreed upon by the parties (the "Closing
Date"). The number of Portfolio Shares to be issued to the
Series will be determined on the basis of the relative net asset
values per share and aggregate net assets of the Portfolio and
the Series, generally computed as of the close of trading on the
floor of the New York Stock Exchange (currently at 4:00 p.m.,
New York time) (except for options and futures contracts, if
any, which will be valued 15 minutes after the close of trading)
on the Closing Date. Portfolio securities of each Series and
Portfolio will be valued in accordance with the valuation
practices of DLPI, which are described under the caption "How to
Buy Fund Shares" in the DLPI Prospectus and under the caption
"Determination of Net Asset Value" in DLPI's Statement of
Additional Information dated January 15, 1996.
Prior to the Closing Date, each Series will declare a
dividend or dividends which, together with all previous such
dividends, will have the effect of distributing to Series'
Shareholders all of such Series' investment company taxable
income, if any, for the taxable year ending on or prior to the
Closing Date (computed without regard to any deduction for
dividends paid) and all of its net capital gain realized in the
taxable year ending on or prior to the Closing Date (after
reduction for any capital loss carry forward).
As conveniently as practicable after the Closing Date,
each Series will liquidate and distribute pro rata to its
Shareholders of record as of the close of business on the
Closing Date the Portfolio Shares received by it in the
Exchange. Such liquidation and distribution will be
accomplished by establishing accounts on the share records of
the Portfolio in the name of each Series Shareholder, each
account representing the respective pro rata number of Portfolio
Shares due to the Shareholder. After such distribution and the
winding up of its affairs, each Series will be terminated as a
series of DAAF and its shares cancelled. After the Closing
Date, any outstanding certificates representing Series Shares
will represent the Portfolio Shares distributed to the record
holders of the Series. Upon presentation to the transfer agent
of DLPI, Series Share certificates will be exchanged for
Portfolio Share certificates, at the applicable exchange rate.
Certificates for Portfolio Shares will be issued only upon the
investor's written request.
The Plan may be amended at any time prior to the
Exchange. DAAF will provide Series Shareholders with
information describing any material amendment to the Plan prior
to Shareholder consideration. The Series' and Portfolios'
obligations under the Plan are subject to various conditions,
including approval by the requisite number of Series
Shareholders and the continuing accuracy of various
representations and warranties of the Series and the Portfolios
being confirmed by the respective parties.
The total expenses of the Exchange are expected to be
approximately $31,000 for each of the Growth Series and the
Income Series. Each Series will bear its own expenses, except
for the expenses of preparing, printing and mailing this
Combined Proxy Statement/Prospectus, the proxy cards and other
related materials, which will be borne by each Series ratably
according to their respective aggregate net assets on the date
of the Exchange.
If the Exchange is not approved by a Series'
Shareholders, DAAF's Board will consider other appropriate
courses of action, including liquidating the Series.
Federal Income Tax Consequences. The exchange of
Series assets for Portfolio Shares is intended to qualify for
Federal income tax purposes as a tax-free reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"). As a condition to the closing of the Exchange,
DLPI and DAAF will receive the opinion of Stroock & Stroock &
Lavan, counsel to the Portfolios and the Series, to the effect
that, on the basis of the existing provisions of the Code,
Treasury regulations issued thereunder, current administrative
regulations and pronouncements and court decisions, and certain
facts, assumptions and representations, for Federal income tax
purposes: (1) the transfer of all or substantially all of a
Series' assets in exchange for Portfolio Shares and the
assumption by the Portfolio of Series liabilities will
constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code; (2) no gain or loss will be recognized
by the Portfolio upon the receipt of Series assets solely in
exchange for Portfolio Shares and the assumption by the
Portfolio of liabilities of the Series; (3) no gain or loss will
be recognized by a Series upon the transfer of its assets to the
Portfolio in exchange for Portfolio Shares and the assumption by
the Portfolio of the Series' liabilities or upon the
distribution (whether actual or constructive) of Portfolio
Shares to Shareholders in exchange for their Series Shares; (4)
no gain or loss will be recognized by the Series Shareholders
upon the exchange of Series Shares for Portfolio Shares; (5) the
aggregate tax basis for Portfolio Shares received by each Series
Shareholder pursuant to the Exchange will be the same as the
aggregate tax basis for Series Shares held by such Shareholder
immediately prior to the Exchange, and the holding period of
Portfolio Shares to be received by each Series Shareholder will
include the period during which Series Shares surrendered in
exchange therefor were held by such Shareholder (provided Series
Shares were held as capital assets on the date of the Exchange);
and (6) the tax basis of Series assets acquired by the Portfolio
will be the same as the tax basis of such assets to the Series
immediately prior to the Exchange, and the holding period of
Series assets in the hands of the Portfolio will include the
period during which those assets were held by the Series.
NONE OF THE SERIES OR THE PORTFOLIOS HAS SOUGHT A TAX
RULING FROM THE INTERNAL REVENUE SERVICE ("IRS"). THE OPINION
OF COUNSEL IS NOT BINDING ON THE IRS NOR DOES IT PRECLUDE THE
IRS FROM ADOPTING A CONTRARY POSITION. Series Shareholders
should consult their tax advisers regarding the effect, if any,
of the proposed Exchange in light of their individual
circumstances. Because the foregoing discussion relates only to
the Federal income tax consequences of the Exchange, Series
Shareholders also should consult their tax advisers as to state
and local tax consequences, if any, of the Exchange.
REQUIRED VOTE AND BOARD'S RECOMMENDATION
DAAF's Board has approved the Plan and the Exchange
and has determined that (i) participation in the Exchange is in
the respective Series' best interests and (ii) the interests of
Shareholders of such Series will not be diluted as a result of
the Exchange. Pursuant to each Series' charter documents, an
affirmative vote of a majority of the Series' outstanding shares
is required to approve the Plan and the Exchange.
THE BOARD, INCLUDING THE "NON-INTERESTED" BOARD
MEMBERS, RECOMMENDS THAT EACH SERIES' SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE PLAN AND THE EXCHANGE.
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS AND SERIES
Information about the Portfolios is incorporated by
reference into this Combined Proxy Statement/Prospectus from the
DLPI Prospectus forming a part of the Registration Statement on
Form N-1A (File No. 33-66088). Information about the Series is
incorporated by reference into this Combined Proxy Statement/
Prospectus from the DAAF Prospectus forming a part of the
Registration Statement on Form N-1A (File No. 33-62626).
The Series and the Portfolios are subject to the
requirements of the 1940 Act, and file reports, proxy statements
and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and
other information filed by the Series or Portfolios may be
inspected and copied at the Public Reference Facilities of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 and at the Northeast regional office of the
Commission at 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can also be obtained from
the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission,
Washington, D.C. 20549, at prescribed rates.
VOTING INFORMATION
In addition to the use of the mails, proxies may be
solicited personally, by telephone or by telegraph, and each
Series may pay persons holding its Series Shares in their names
or those of their nominees for their expenses in sending
soliciting materials to their principals.
If a proxy is properly executed and returned
accompanied by instructions to withhold authority to vote,
represents a broker "non-vote" (that is, a proxy from a broker
or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled
to vote Series Shares on a particular matter with respect to
which the broker or nominee does not have discretionary power)
or is marked with an abstention (collectively, "abstentions"),
the Series Shares represented thereby will be considered to be
present at a Meeting for purposes of determining the existence
of a quorum for the transaction of business. Abstentions will
not constitute a vote "for" or "against" a matter and will be
disregarded in determining the "votes cast" on an issue. For
this reason, abstentions will have the effect of a "no" vote for
the purpose of obtaining requisite approval for the Proposal.
In the event that a quorum is not present at the
Meeting, or if a quorum is present but sufficient votes to
approve the Proposal are not received, the persons named as
proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. In determining whether
to adjourn the Meeting, the following factors may be considered:
the nature of the Proposal, the percentage of votes actually
cast, the percentage of negative votes actually cast, the nature
of any further solicitation and the information to be provided
to Shareholders with respect to the reasons for the
solicitation. Any adjournment will require the affirmative vote
of a majority of those shares affected by the adjournment that
are represented at the Meeting in person or by proxy. If a
quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote "FOR" the Proposal in
favor of such adjournments, and will vote those proxies required
to be voted "AGAINST" the Proposal against any adjournment. A
quorum is constituted with respect to a Series by the presence
in person or by proxy of the holders of more than one-third of
the outstanding Series Shares entitled to vote at the Meeting.
The votes of the Portfolios' shareholders are not
being solicited since their approval or consent is not necessary
for the Exchange.
As of February 5, 1996, the following were known by
DAAF to own of record 5% or more of the outstanding voting
securities of the indicated Series: Growth Series, Major
Trading Corporation, 200 Park Avenue, New York, New York 10166,
Attn: Maurice Bendrihem -- 59.01%; Income Series, Major Trading
Corporation, 200 Park Avenue, New York, New York 10166, Attn:
Maurice Bendrihem -- 65.12%. A Shareholder who beneficially
owns, directly or indirectly, more than 25% of a Series' voting
securities may be deemed a "control person" (as defined in the
1940 Act) of the Series.
As of February 5, 1996, the following were known by
DLPI to own of record 5% or more of the outstanding voting
securities of the indicated Portfolio and Class: Growth
Portfolio, Investor Class, Allomon Corporation, c/o Mellon Bank
Corporation, 1 Mellon Bank
Center 151-657, Pittsburgh, Pennsylvania 15258, Attn: John
Gaynord -- 855,094.870 shares (98.30%); Growth Portfolio, Class
R, Allomon Corporation, c/o Mellon Bank Corporation, 1 Mellon
Bank Center 151-657, Pittsburgh, Pennsylvania 15258, Attn: John
Gaynord -- 856,781.448 shares (95.43%); Income Portfolio,
Investor Class, Allomon Corporation, c/o
Mellon Bank Corporation, 1 Mellon Bank Center 151-657,
Pittsburgh, Pennsylvania 15258, Attn: John Gaynord --
648,205.928 shares (99.56%); Income Portfolio, Class R, Allomon
Corporation, c/o Mellon Bank Corporation, 1 Mellon Bank Center
151-657, Pittsburgh, Pennsylvania 15258, Attn: John Gaynord --
649,103.663 shares (94.68%).
As of February 5, 1996, Directors and officers of
DLPI, as a group, owned less than 1% of each Portfolio's
outstanding shares. As of February 5, 1996, Directors and
officers of DAAF, as a group, owned less than 1% of each Series'
outstanding shares.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the Series for the
fiscal year ended April 30, 1995, which are included in DAAF's
Statement of Additional Information, and the audited financial
statements of the Portfolios for the fiscal year ended September
30, 1995, which are included in DLPI's Statement of Additional
Information, have each been audited by Ernst & Young LLP,
independent auditors, whose respective reports thereon are
included therein. The financial statements of each Series
audited by Ernst & Young LLP have been incorporated herein by
reference in reliance upon their reports given on their
authority as experts in accounting and auditing.
OTHER MATTERS
DAAF's Board members are not aware of any other
matters which may come before the Meeting. However, should any
such matters properly come before the Meeting, it is the
intention of the persons named in the accompanying form of proxy
to vote the proxy in accordance with their judgment on such
matters.
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise DAAF, in care of Dreyfus Transfer, Inc.,
Attention: Dreyfus Asset Allocation Fund, Inc., P.O. Box 9671,
Providence, Rhode Island 02940-9671, whether other persons are
the beneficial owners of Series Shares for which proxies are
being solicited from you, and, if so, the number of copies of
the Combined Proxy Statement/Prospectus and other soliciting
material you wish to receive in order to supply copies to the
beneficial owners of Series Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
THEREFORE, SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND IN PERSON
ARE URGED TO COMPLETE, DATE, SIGN AND RETURN EACH PROXY CARD IN
THE ENCLOSED STAMPED ENVELOPE.
Dated: March __, 1996
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated
___________, 1996 (the "Agreement"), between DREYFUS ASSET
ALLOCATION FUND, INC., a Maryland corporation ("DAAF"), on
behalf of its [FN] (the "Series") and DREYFUS LIFETIME
PORTFOLIOS, INC., a Maryland corporation ("DLPI"), on behalf of
its [FN] (the "Portfolio").
This Agreement is intended to be and is adopted as a
plan of reorganization and liquidation within the meaning of
Section 368(a)(1)(C) of the United States Internal Revenue Code
of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of substantially
all of the assets of the Series in exchange solely for Investor
Class shares ("Portfolio Shares") of common stock, par value
$.001 per share, of the Portfolio and the assumption by the
Portfolio of certain liabilities of the Series and the
distribution, after the Closing Date hereinafter referred to, of
the Portfolio Shares to the shareholders of the Series in
liquidation of the Series as provided herein, all upon the terms
and conditions hereinafter set forth in this Agreement.
<F1> Insert GROWTH SERIES or INCOME SERIES, as appropriate.
<F2> Insert GROWTH PORTFOLIO or INCOME PORTFOLIO, as
appropriate.
<PAGE>
WHEREAS, the Series is a registered, non-diversified,
open-end management investment company and the Portfolio is a
registered, diversified, open-end management investment company,
and the Series owns securities which are assets of the character
in which the Portfolio is permitted to invest;
WHEREAS, both the Portfolio and the Series are
authorized to issue their shares of common stock;
WHEREAS, the Board of DLPI has determined that the
exchange of all or substantially all of the assets of the Series
and certain liabilities of the Series, for Portfolio Shares, and
the assumption of such liabilities is in the best interests of
the Portfolio's shareholders and that the interests of the
Portfolio's existing shareholders would not be diluted as a
result of this transaction; and
WHEREAS, the Board of DAAF has determined that the
exchange of all or substantially all of the assets and certain
of the liabilities of the Series, for Portfolio Shares, and the
assumption of such liabilities is in the best interests of the
Series' shareholders and that the interests of the Series'
existing shareholders would not be diluted as a result of this
transaction:
NOW THEREFORE, in consideration of the premises and of
the covenants and agreements hereinafter set forth, the parties
agree as follows:
1. TRANSFER OF ASSETS OF THE SERIES IN EXCHANGE FOR
PORTFOLIO SHARES AND ASSUMPTION OF SERIES LIABILITIES
AND LIQUIDATION OF THE SERIES.
1.1. Subject to the terms and conditions contained
herein, the Series agrees to assign, transfer and convey to the
Portfolio all of the assets of the Series, including all
securities and cash (subject to liabilities), and the Portfolio
agrees in exchange therefor (i) to deliver to the Series the
number of Portfolio Shares, including fractional Portfolio
Shares, determined as set forth in paragraph 2.3; and (ii) to
assume certain liabilities of the Series, as set forth in
paragraph 1.2. Such transactions shall take place at the
closing (the "Closing") on the closing date (the "Closing Date")
provided for in paragraph 3.1. In lieu of delivering
certificates for the Portfolio Shares, the Portfolio shall
credit the Portfolio Shares to the Series' account on the books
of the Portfolio and shall deliver a confirmation thereof to the
Series.
1.2. The Series will endeavor to discharge all of its
known liabilities and obligations prior to the Closing Date.
The Portfolio shall assume all liabilities, expenses, costs,
charges and reserves reflected on an unaudited statement of
assets and liabilities of the Series prepared by The Dreyfus
Corporation, as of the Valuation Date (as defined in paragraph
2.1), in accordance with generally accepted accounting
principles consistently applied from the prior audited period.
The Portfolio shall assume only those liabilities of the Series
reflected in that unaudited statement of assets and liabilities
and shall not assume any other liabilities, whether absolute or
contingent.
1.3. Delivery of the assets of the Series to be
transferred shall be made on the Closing Date and shall be
delivered to Mellon Bank, N.A., One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, DLPI's custodian (the
"Custodian"), for the account of the Portfolio, with all
securities not in bearer or book-entry form duly endorsed, or
accompanied by duly executed separate assignments or stock
powers, in proper form for transfer, with signatures guaranteed,
and with all necessary stock transfer stamps, sufficient to
transfer good and marketable title thereto (including all
accrued interest and dividends and rights pertaining thereto) to
the Custodian for the account of the Portfolio free and clear of
all liens, encumbrances, rights, restrictions and claims. All
cash delivered shall be in the form of immediately available
funds payable to the order of the Custodian for the account of
the Portfolio.
1.4. The Series will pay or cause to be paid to the
Portfolio any interest received on or after the Closing Date
with respect to assets transferred to the Portfolio hereunder.
The Series will transfer to the Portfolio any distributions,
rights or other assets received by the Series after the Closing
Date as distributions on or with respect to the securities
transferred. Such assets shall be deemed included in assets
transferred to the Portfolio on the Closing Date and shall not
be separately valued.
1.5. As soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), the Series
will liquidate and distribute pro rata to the Series'
shareholders of record, determined as of the close of business
on the Closing Date (the "Series Shareholders"), Portfolio
Shares received by the Series pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the
transfer of the applicable Portfolio Shares then credited to the
account of the Series on the books of the Portfolio to open
accounts on the share records of the Portfolio in the names of
the Series Shareholders and representing the respective pro rata
number of the applicable Portfolio Shares due such shareholders.
All issued and outstanding shares of the Series simultaneously
will be canceled on the books of the Series.
1.6. Ownership of Portfolio Shares will be shown on
the books of the Portfolio's transfer agent. Shares of the
Portfolio will be issued in the manner described in DLPI's
current prospectus and statement of additional information.
1.7. Any transfer taxes payable upon issuance of the
Portfolio Shares in a name other than the registered holder of
the Portfolio Shares on the books of the Series as of that time
shall, as a condition of such issuance and transfer, be paid by
the person to whom such Portfolio Shares are to be issued and
transferred.
1.8. Any reporting responsibility of the Series is
and shall remain the responsibility of the Series up to and
including the Closing Date and such later date on which the
Series' existence is terminated.
2. VALUATION.
2.1. The value of the Series' assets to be acquired
by the Portfolio hereunder shall be the value of such assets
computed as of the close of trading on the floor of the New York
Stock Exchange (currently, 4:00 p.m., New York time), except
that options and futures contracts will be valued 15 minutes
after the close of trading on the floor of the New York Stock
Exchange, on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation
procedures set forth in DLPI's Articles of Incorporation and
then-current prospectus or statement of additional information.
2.2. The net asset value of a Portfolio Share shall
be the net asset value per share computed as of the Valuation
Date, using the valuation procedures set forth in DLPI's
Articles of Incorporation and then-current prospectus or
statement of additional information.
2.3. The number of Portfolio Shares to be issued
(including fractional shares, if any) in exchange for the
Series' net assets shall be determined by dividing the value of
the net assets of the Series determined using the same valuation
procedures referred to in paragraph 2.1 by the net asset value
of one Portfolio Share, determined in accordance with
paragraph 2.2.
2.4. All computations of value shall be made in
accordance with the regular practices of the Portfolio.
3. CLOSING AND CLOSING DATE.
3.1. The Closing Date shall be April 30, 1996 or such
later date as the parties may mutually agree. All acts taking
place at the Closing shall be deemed to take place
simultaneously as of the close of business on the Closing Date
unless otherwise provided. The Closing shall be held at 4:00
p.m., New York time, at the offices of The Dreyfus Corporation,
200 Park Avenue, New York, New York, or such other time and/or
place as the parties may mutually agree.
3.2. The Custodian shall deliver at the Closing a
certificate of an authorized officer stating that the Series'
portfolio securities, cash and any other assets have been
delivered in proper form to the Portfolio within two business
days prior to or on the Closing Date.
3.3. If on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio
securities of the Portfolio or the Series shall be closed to
trading or trading thereon shall be restricted; or (b) trading
or the reporting of trading on said Exchange or elsewhere shall
be disrupted so that accurate appraisal of the value of the net
assets of the Portfolio or the Series is impracticable, the
Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and
reporting shall have been restored.
3.4. The transfer agent for the Series shall deliver
at the Closing a certificate of an authorized officer stating
that its records contain the names and addresses of the Series
Shareholders and the number and percentage ownership of
outstanding Series shares, owned by each such shareholder
immediately prior to the Closing. The Portfolio shall issue and
deliver a confirmation evidencing the Portfolio Shares to be
credited on the Closing Date to the Secretary of the Series, or
provide evidence satisfactory to the Series that such Portfolio
Shares have been credited to the Series' account on the books of
the Portfolio. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, receipts or other
documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES.
4.1. The Series represents and warrants to the
Portfolio as follows:
(a) The Series is a series of DAAF, a
corporation duly organized and validly existing and in good
standing under the laws of the State of Maryland and has power
to own all of its properties and assets and to carry out this
Agreement.
(b) The Series is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as
an open-end, non-diversified, management investment company, and
such registration has not been revoked or rescinded and is in
full force and effect.
(c) The Series is not, and the execution,
delivery and performance of this Agreement will not result, in
material violation of DAAF's Articles of Incorporation dated
May 11, 1993, as the same may have been amended (the "Charter"),
or its Bylaws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Series is a
party or by which it is bound.
(d) The Series has no material contracts or
other commitments outstanding (other than this Agreement) which
will be terminated with liability to it on or prior to the
Closing Date.
(e) No litigation or administrative proceeding
or investigation of or before any court or governmental body is
currently pending or to its knowledge threatened against the
Series or any of its properties or assets which, if adversely
determined, would materially and adversely affect its financial
condition or the conduct of its business. The Series knows of
no facts which might form the basis for the institution of such
proceedings, and is not a party to or subject to the provisions
of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its
ability to consummate the transactions herein contemplated.
(f) The Statement of Assets and Liabilities of
the Series for the fiscal year ended April 30, 1995 has been
audited by Ernst & Young LLP, independent auditors, and is in
accordance with generally accepted accounting principles,
consistently applied, and such statement (copies of which have
been furnished to the Portfolio) fairly reflect the financial
condition of the Series as of such date, and there are no known
contingent liabilities of the Series as of such date not
disclosed therein.
(g) Since April 30, 1995, there has not been any
material adverse change in the Series' financial condition,
assets, liabilities or business other than changes occurring in
the ordinary course of business, or any incurrence by the Series
of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as disclosed on the statement
of assets and liabilities referred to in paragraph 1.2 hereof.
(h) At the Closing Date, all Federal and other
tax returns and reports of the Series required by law to have
been filed by such dates shall have been filed, and all Federal
and other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and to the best of
the Series' knowledge no such return is currently under audit
and no assessment has been asserted with respect to such
returns.
(i) For each fiscal year of its operation, the
Series has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.
(j) All issued and outstanding shares of the
Series are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and non-assessable. All of
the issued and outstanding shares of the Series will, at the
time of Closing, be held by the persons and in the amounts set
forth in the records of the transfer agent as provided in
paragraph 3.4. The Series does not have outstanding any
options, warrants or other rights to subscribe for or purchase
any of the Series shares, nor is there outstanding any security
convertible into any of the Series shares.
(k) On the Closing Date, the Series will have
full right, power and authority to sell, assign, transfer and
deliver the assets to be transferred by it hereunder.
(l) The execution, delivery and performance of
this Agreement will have been duly authorized prior to the
Closing Date by all necessary action on the part of DAAF's Board
and, subject to the approval of the Series Shareholders, this
Agreement will constitute the valid and legally binding
obligation of the Series, enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and to
general principles of equity and the discretion of the court
(regardless of whether the enforceability is considered in a
proceeding in equity or at law).
(m) The proxy statement of DAAF, on behalf of
the Series (the "Proxy Statement"), included in the Registration
Statement referred to in paragraph 5.5 (other than information
therein that has been furnished by the Portfolio) will, on the
effective date of the Registration Statement and on the Closing
Date, not contain any 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, in light of the
circumstances under which such statements were made, not
materially misleading.
4.2. The Portfolio represents and warrants to the
Series as follows:
(a) The Portfolio is a series of DLPI, a
corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland and has power
to carry on its business as it is now being conducted and to
carry out this Agreement.
(b) The Portfolio is registered under the 1940
Act as an open-end, diversified, management investment company,
and such registration has not been revoked or rescinded and is
in full force and effect.
(c) The current prospectus and statement of
additional information of the DLPI conform in all material
respects to the applicable requirements of the Securities Act of
1933, as amended (the "1933 Act"), and the 1940 Act and the
rules and regulations of the Securities and Exchange Commission
thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not materially
misleading.
(d) The Portfolio is not, and the execution,
delivery and performance of this Agreement will not result, in
material violation of DLPI's Articles of Incorporation or Bylaws
or of any agreement, indenture, instrument, contract, lease or
other undertaking to which the Portfolio is a party or by which
it is bound.
(e) No litigation or administrative proceeding
or investigation of or before any court or governmental body is
currently pending or to its knowledge threatened against the
Portfolio or any of its properties or assets which, if adversely
determined, would materially and adversely affect its financial
condition or the conduct of its business. The Portfolio knows
of no facts which might form the basis for the institution of
such proceedings, and is not a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its
business or its ability to consummate the transactions
contemplated herein.
(f) The Statement of Assets and Liabilities of
the Portfolio for the fiscal year ended September 30, 1995, has
been audited by Ernst & Young LLP, independent auditors, and are
in accordance with generally accepted accounting principles,
consistently applied, and such statements (copies of which have
been furnished to the Series) fairly reflect the financial
condition of the Portfolio as of such dates.
(g) Since September 30, 1995 there has not been
any material adverse change in the Portfolio's financial
condition, assets, liabilities or business other than changes
occurring in the ordinary course of business, or any incurrence
by the Portfolio of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as
disclosed on the statement of assets and liabilities referred to
in paragraph 4.2(f) hereof.
(h) At the Closing Date, all Federal and other
tax returns and reports of the Portfolio required by law then to
be filed shall have been filed, and all Federal and other taxes
shown as due on said returns and reports shall have been paid or
provision shall have been made for the payment thereof.
(i) For each fiscal year of its operation, the
Portfolio has met the requirements of Subchapter M of the Code
for qualification and treatment as a regulated investment
company.
(j) All issued and outstanding shares of the
Portfolio are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and non-assessable. The
Portfolio does not have outstanding any options, warrants or
other rights to subscribe for or purchase any of the Portfolio
Shares, nor is there outstanding any security convertible into
any Portfolio Shares.
(k) The execution, delivery and performance of
this Agreement will have been duly authorized prior to the
Closing Date by all necessary action, if any, on the part of
DLPI's Directors and shareholders, and this Agreement will
constitute the valid and legally binding obligation of the
Portfolio enforceable in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto, and to general principles of
equity and the discretion of the court (regardless of whether
the enforceability is considered in a proceeding in equity or at
law).
(l) The Proxy Statement included in the
Registration Statement (only insofar as it relates to the
Portfolio and is based on information furnished by the
Portfolio) will, on the effective date of the Registration
Statement and on the Closing Date, not contain any 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, in light of the circumstances under which
such statements were made, not materially misleading.
5. COVENANTS OF THE PORTFOLIO AND THE SERIES.
5.1. The Portfolio and the Series each will operate
its business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary course
of business will include payment of customary dividends and
distributions.
5.2. The Series will call a meeting of the Series
Shareholders to consider and act upon this Agreement and to take
all other action necessary to obtain approval of the
transactions contemplated herein.
5.3. Subject to the provisions of this Agreement, the
Portfolio and the Series will each take, or cause to be taken,
all action, and do or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement.
5.4. As promptly as practicable, but in any case
within sixty days after the Closing Date, the Series shall
furnish the Portfolio, in such form as is reasonably
satisfactory to the Portfolio, a statement of the earnings and
profits of the Series for Federal income tax purposes which will
be carried over to the Portfolio as a result of Section 381 of
the Code and which will be certified by DAAF's President or its
Vice President and Treasurer.
5.5. The Series will provide the Portfolio with
information reasonably necessary for the preparation of a
prospectus (the "Prospectus") which will include the Proxy
Statement, referred to in paragraph 4.1(m), all to be included
in a Registration Statement on Form N-14 of DLPI (the
"Registration Statement"), in compliance with the 1933 Act, the
Securities Exchange Act of 1934, as amended, and the 1940 Act in
connection with the meeting of the Series Shareholders to
consider approval of this Agreement and the transactions
contemplated herein.
5.6. The Portfolio agrees to use all reasonable
efforts to obtain the approvals and authorizations required by
the 1933 Act, the 1940 Act and such of the state Blue Sky or
securities laws as it may deem appropriate in order to continue
its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
PORTFOLIO.
The obligations of the Portfolio to complete the
transactions provided for herein shall be subject, at its
election, to the performance by the Series of all the
obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
6.1. All representations and warranties of the Series
contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement,
as of the Closing Date with the same force and effect as if made
on and as of the Closing Date.
6.2. The Series shall have delivered to the Portfolio
a statement of the Series' assets and liabilities, together with
a list of the Series' portfolio securities showing the tax basis
of such securities by lot and the holding periods of such
securities, as of the Closing Date, certified by the Treasurer
of DAAF.
6.3. The Series shall have delivered to the Portfolio
on the Closing Date a certificate executed in its name by DAAF's
President or Vice President and its Treasurer, in form and
substance satisfactory to the Portfolio, to the effect that the
representations and warranties of the Series made in this
Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as the Portfolio
shall reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SERIES.
The obligations of the Series to consummate the
transactions provided for herein shall be subject, at its
election, to the performance by the Portfolio of all the
obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
7.1. All representations and warranties of the
Portfolio contained in this Agreement shall be true and correct
in all material respects as of the date hereof and, except as
they may be affected by the transactions contemplated by this
Agreement, as of the Closing Date with the same force and effect
as if made on and as of the Closing Date.
7.2. The Portfolio shall have delivered to the Series
on the Closing Date a certificate executed in its name by DLPI's
President or Vice President and its Treasurer, in form and
substance reasonably satisfactory to the Series, to the effect
that the representations and warranties of the Portfolio made in
this Agreement are true and correct at and as of the Closing
Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as
the Series shall reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
PORTFOLIO AND THE SERIES.
If any of the conditions set forth below do not exist
on or before the Closing Date with respect to the Series or the
Portfolio, the other party to this Agreement shall, at its
option, not be required to consummate the transactions
contemplated by this Agreement.
8.1. This Agreement and the transactions contemplated
herein shall have been approved by the requisite vote of the
holders of the outstanding shares of the Series in accordance
with the provisions of DAAF's Charter.
8.2. On the Closing Date, no action, suit or other
proceeding shall be pending before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or
the transactions contemplated herein.
8.3. All consents of other parties and all other
consents, orders and permits of Federal, state and local
regulatory authorities (including those of the Securities and
Exchange Commission and of state Blue Sky and securities
authorities) deemed necessary by the Portfolio or the Series to
permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit
would not involve a risk of a material adverse effect on the
assets or properties of the Portfolio or the Series, provided
that either party hereto may for itself waive any of such
conditions.
8.4. The Registration Statement shall have become
effective under the 1933 Act and no stop orders suspending the
effectiveness thereof shall have been issued and, to the best
knowledge of the parties hereto, no investigation or proceeding
for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act.
8.5. The Series shall have declared a dividend or
dividends which, together with all previous such dividends,
shall have the effect of distributing to the Series Shareholders
all of the Series' investment company taxable income for all
taxable years ending on or prior to the Closing Date (computed
without regard to any deduction for dividends paid) and all of
its net capital gain realized in all taxable years ending on or
prior to the Closing Date (after reduction for any capital loss
carry forward).
8.6. The parties shall have received an opinion of
Stroock & Stroock & Lavan substantially to the effect that for
Federal income tax purposes:
(a) The transfer of all or substantially all of
the Series' assets in exchange for the Portfolio Shares and the
assumption by the Portfolio of certain identified liabilities of
the Series will constitute a "reorganization" within the meaning
of Section 368(a)(1)(C) of the Code; (b) No gain or loss will be
recognized by the Portfolio upon the receipt of the assets of
the Series solely in exchange for the Portfolio Shares and the
assumption by the Portfolio of certain identified liabilities of
the Series; (c) No gain or loss will be recognized by the Series
upon the transfer of the Series' assets to the Portfolio in
exchange for the Portfolio Shares and the assumption by the
Portfolio of certain identified liabilities of the Series or
upon the distribution (whether actual or constructive) of the
Portfolio Shares to Series Shareholders in exchange for their
shares of the Series; (d) No gain or loss will be recognized by
the Series Shareholders upon the exchange of their Series shares
for the Portfolio Shares; (e) The aggregate tax basis for the
Portfolio Shares received by each of the Series Shareholders
pursuant to the Reorganization will be the same as the aggregate
tax basis of the Series shares held by such shareholder
immediately prior to the Reorganization, and the holding period
of the Portfolio Shares to be received by each Series
Shareholder will include the period during which the Series
shares exchanged therefor were held by such shareholder
(provided the Series shares were held as capital assets on the
date of the Reorganization); and (f) The tax basis of the Series
assets acquired by the Portfolio will be the same as the tax
basis of such assets to the Series immediately prior to the
Reorganization, and the holding period of the assets of the
Series in the hands of the Portfolio will include the period
during which those assets were held by the Series.
9. TERMINATION OF AGREEMENT.
9.1. This Agreement and the transaction contemplated
hereby may be terminated and abandoned by resolution of the
Board of DAAF or of DLPI, as the case may be, at any time prior
to the Closing Date (and notwithstanding any vote of the Series
Shareholders) if circumstances should develop that, in the
opinion of either of the parties' Board, make proceeding with
the Agreement inadvisable.
9.2. If this Agreement is terminated and the
transaction contemplated hereby is abandoned pursuant to the
provisions of this Section 9, this Agreement shall become void
and have no effect, without any liability on the part of any
party hereto or the directors, officers or shareholders of DLPI
or of DAAF, as the case may be, in respect of this Agreement,
except that the parties shall bear the aggregate expenses of the
transaction contemplated hereby in proportion to their
respective net assets as of the date this Agreement is
terminated or the exchange contemplated hereby is abandoned.
10. WAIVER.
At any time prior to the Closing Date, any of the
foregoing conditions may be waived by the Board of DLPI or of
DAAF if, in the judgment of either, such waiver will not have a
material adverse effect on the benefits intended under this
Agreement to the shareholders of the Portfolio or of the Series,
as the case may be.
11. MISCELLANEOUS.
11.1. None of the representations and warranties
included or provided for herein shall survive consummation of
the transactions contemplated hereby.
11.2. This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the
subject matter hereof, and merges and supersedes all prior
discussions, agreements and understandings of every kind and
nature between them relating to the subject matter hereof.
Neither party shall be bound by any condition, definition,
warranty or representation, other than as set forth or provided
in this Agreement or as may be, on or subsequent to the date
hereof, set forth in a writing signed by the party to be bound
thereby.
11.3. This Agreement shall be governed and construed
in accordance with the internal laws of the State of New York,
without giving effect to principles of conflict of laws;
provided, however, that the due authorization, execution and
delivery of this Agreement by the Portfolio and the Series shall
be governed and construed in accordance with the internal laws
of the State of Maryland without giving effect to principles of
conflict of laws.
11.4. This Agreement may be executed in counterparts,
each of which, when executed and delivered, shall be deemed to
be an original.
11.5. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors
and assigns, but no assignment or transfer hereof or of any
rights or obligations hereunder shall be made by any party
without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, other than the
parties hereto and their respective successors and assigns, any
rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the Portfolio and the Series have
caused this Agreement and Plan of Reorganization to be executed
and attested on its behalf by its duly authorized
representatives as of the date first above written.
DREYFUS LIFETIME PORTFOLIOS, INC.,
on behalf of its [FN]
PORTFOLIO
By:
Marie E. Connolly,
President
ATTEST:
John E. Pelletier,
Secretary
DREYFUS ASSET ALLOCATION FUND, INC.,
on behalf of its [FN] SERIES
By:
Marie E. Connolly,
President
ATTEST:
John E. Pelletier,
Secretary
<F1> Insert GROWTH or INCOME, as appropriate.
<PAGE>
Preliminary Copy
DREYFUS ASSET ALLOCATION FUND, INC.
(GROWTH SERIES)
The undersigned shareholder of the Growth Series (the
"Series") of Dreyfus Asset Allocation Fund, Inc. ("DAAF") hereby
appoints Mark N. Jacobs and Michael A. Rosenberg, and each of
them, the attorneys and proxies of the undersigned, with full
power of substitution, to vote, as indicated herein, all of the
shares of common stock of the Series standing in the name of the
undersigned at the close of business on March 26, 1996, at a
Special Meeting of Shareholders to be held at the offices of The
Dreyfus Corporation, 200 Park Avenue, 7th Floor, New York, New
York 10166, at 10:00 a.m. on Friday, April 26, 1996, and at any
and all adjournments thereof,
with all of the powers the undersigned would possess if then and
there personally present and especially (but without limiting
the general authorization and power hereby given) to vote as
indicated on the proposal, as more fully described in the
Combined Proxy Statement/Prospectus for the meeting.
Please mark boxes in blue or black ink.
1. To approve an Agreement and Plan of Reorganization
between the Series and Dreyfus LifeTime Portfolios, Inc., on
behalf of its Growth Portfolio, providing for the transfer of
substantially all of the assets of the Series, subject to its
liabilities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the
meeting, or any adjournment(s) thereof.
THIS PROXY IS SOLICITED BY DAAF'S BOARD OF DIRECTORS AND WILL BE
VOTED FOR THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.
Signature(s) should be exactly as name or names
appearing on this proxy. If shares are held
jointly, each holder should sign. If signing is
by attorney, executor, administrator, trustee or
guardian, please give full title.
Dated: __________, 1996
____________________________
Signature(s)
____________________________
Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
<PAGE>
Preliminary Copy
DREYFUS ASSET ALLOCATION FUND, INC.
(INCOME SERIES)
The undersigned shareholder of the Income Series (the
"Series") of Dreyfus Asset Allocation Fund, Inc. ("DAAF") hereby
appoints Mark N. Jacobs and Michael A. Rosenberg, and each of
them, the attorneys and proxies of the undersigned, with full
power of substitution, to vote, as indicated herein, all of the
shares of beneficial interest of the Series standing in the name
of the undersigned at the close of business on March 26, 1996,
at a Special Meeting of Shareholders to be held at the offices
of The Dreyfus Corporation, 200 Park Avenue, 7th Floor, New
York, New York 10166, at 10:00 a.m. on Friday, April 26, 1996,
and at any and all adjournments thereof, with all of the powers
the undersigned would possess if then
and there personally present and especially (but without
limiting the general authorization and power hereby given) to
vote as indicated on the proposal, as more fully described in
the Combined Proxy Statement/Prospectus for the meeting.
Please mark boxes in blue or black ink.
1. To approve an Agreement and Plan of Reorganization
between the Series and Dreyfus LifeTime Portfolios, Inc., on
behalf of its Income Portfolio, providing for the transfer of
substantially
all of the assets of the Series, subject to its liabilities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the
meeting, or any adjournment(s) thereof.
THIS PROXY IS SOLICITED BY DAAF'S BOARD OF DIRECTORS AND WILL BE
VOTED FOR THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.
Signature(s) should be exactly as name or names
appearing on this proxy. If shares are held
jointly, each holder should sign. If signing is
by attorney, executor, administrator, trustee or
guardian, please give full title.
Dated: _______________, 1996
____________________________
Signature(s)
____________________________
Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
<PAGE>
PROSPECTUS JANUARY 15, 1996
DREYFUS LIFETIME PORTFOLIOS, INC.
DREYFUS LIFETIME PORTFOLIOS, INC. (THE "FUND") IS AN
OPEN-END, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL FUND.
THE FUND PERMITS YOU TO INVEST IN THREE SEPARATE DIVERSIFIED
PORTFOLIOS (EACH, A "PORTFOLIO"):
INCOME PORTFOLIO, THE PRIMARY GOAL OF WHICH IS TO MAXIMIZE
CURRENT INCOME, ITS SECONDARY GOAL IS CAPITAL APPRECIATION;
GROWTH AND INCOME PORTFOLIO, THE GOAL OF WHICH IS TO MAXIMIZE
TOTAL RETURN, CONSISTING OF CAPITAL APPRECIATION AND CURRENT
INCOME; AND GROWTH PORTFOLIO, THE GOAL OF WHICH IS
CAPITAL APPRECIATION. EACH PORTFOLIO WILL FOLLOW AN INVESTMENT
STRATEGY THAT ALLOCATES THE PORTFOLIO'S ASSETS AMONG COMMON
STOCKS, FIXED-INCOME SECURITIES AND, IN THE CASE OF THE INCOME
PORTFOLIO, SHORT-TERM MONEY MARKET INSTRUMENTS.
BY THIS PROSPECTUS, EACH PORTFOLIO IS OFFERING INVESTOR
CLASS SHARES AND CLASS R SHARES. INVESTOR CLASS SHARES AND CLASS
R SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES OFFERED TO AND
THE EXPENSES BORNE BY EACH CLASS.
INVESTOR CLASS SHARES ARE OFFERED TO ANY INVESTOR. CLASS R
SHARES ARE OFFERED ONLY TO INSTITUTIONAL INVESTORS ACTING FOR
THEMSELVES OR IN A FIDUCIARY, ADVISORY, AGENCY, CUSTODIAL OR
SIMILAR CAPACITY, FOR QUALIFIED OR NON-QUALIFIED EMPLOYEE
BENEFIT PLANS, INCLUDING PENSION, PROFIT-SHARING
SEP-IRA AND OTHER DEFERRED COMPENSATION PLANS, WHETHER
ESTABLISHED BY
CORPORATIONS, PARTNERSHIPS, NON-PROFIT ENTITIES OR STATE AND
LOCAL GOVERNMENTS, BUT NOT INCLUDING IRA'S OR IRA "ROLLOVER
ACCOUNTS".
INVESTORS CAN INVEST, REINVEST OR REDEEM SHARES AT ANY
TIME WITHOUT CHARGE OR PENALTY.
THE DREYFUS CORPORATION SERVES AS EACH PORTFOLIO'S
INVESTMENT ADVISER. THE DREYFUS CORPORATION HAS ENGAGED MELLON
EQUITY ASSOCIATES ("MELLON EQUITY") TO SERVE AS EACH PORTFOLIO'S
SUB-INVESTMENT ADVISER AND
PROVIDE DAY-TO-DAY MANAGEMENT OF EACH PORTFOLIO'S INVESTMENTS.
THE DREYFUS CORPORATION AND MELLON EQUITY ARE REFERRED TO
COLLECTIVELY AS THE "ADVISERS."
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT
THE FUND THAT AN INVESTOR SHOULD KNOW BEFORE INVESTING. IT
SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED JANUARY
15, 1996, 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 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. THE NET ASSET VALUE
OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
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.
{This Page Intentionally Left Blank]
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses.......... 4
Condensed Financial Information........ 5
Description of the Fund..................7
Management of the Fund...................11
How to Buy Fund Shares...................13
Shareholder Services.....................16
How to Redeem Fund Shares............... 19
Shareholder Services Plan............... 21
Dividends, Distributions and Taxes.......22
Performance Information..................23
General Information..................... 24
Appendix.................................26
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
INCOME GROWTH AND INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------- -------------------------- --------------------------
Investor Investor Investor
Class R Class Class R Class Class R Class
------------ -------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Management Fees.................. .60% .60% .75% .75% .75% .75%
Other Expenses................... .51% .77% .66% .92% .52% .78%
Total Portfolio Operating
Expenses......................... 1.11% 1.37% 1.41% 1.67% 1.27% 1.53%
EXAMPLE:
An investor 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 ............. $11 $14 $14 $17 $13 $16
3 Years ............ $35 $43 $45 $53 $40 $48
</TABLE>
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
investors in understanding the costs and expenses borne by the
Fund, the payment of which will reduce investors' annual return.
Other Expenses and Total Portfolio Operating Expenses are based
on estimated amounts for the current fiscal year. The
information in the foregoing table has been restated to reflect
the Fund's termination of its Rule 12b-1 Plan, but 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 Fund shares; such fees are not reflected in the foregoing
table. 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 "Shareholder Services
Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited
by Ernst & Young LLP, the Fund's independent auditors, whose
report thereon appears in the Statement of Additional
Information. Further financial data and related notes are
included in the Statement of Additional Information, available
upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data
for a share of Common Stock outstanding, total investment
return, ratios to average net assets and other supplemental data
for each Portfolio for the period March 31, 1995 (commencement
of operations) through September 30, 1995. This information has
been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
-----------------------------------------------
PER SHARE DATA: Class R Shares Investor Class Shares
------------------- -----------------------
<S> <C> <C>
Net asset value, beginning of period................................ $12.50 $12.50
-------- --------
INVESTMENT OPERATIONS:
Investment income--net ............................................. .21 .19
Net realized and unrealized gain on investments..................... 2.13 2.13
-------- --------
TOTAL FROM INVESTMENT OPERATIONS.................................... 2.34 2.32
-------- --------
Net asset value, end of period...................................... $14.84 $14.82
======== ========
TOTAL INVESTMENT RETURN(1)............................................ 18.72% 18.56%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets(1)................ .38% .51%
Ratio of net investment income to average net assets(1)............. 1.51% 1.39%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation(1).......................... .26% .26%
Portfolio Turnover Rate(1).......................................... 52.86% 52.86%
Net Assets, end of period (000's omitted)........................... $11,898 $11,939
(1)Not annualized.
GROWTH AND INCOME PORTFOLIO
---------------------------------------------------
PER SHARE DATA: Class R Shares Investor Class Shares
----------------------- ------------------------
Net asset value, beginning of period................................ $12.50 $12.50
---------- -----------
INVESTMENT OPERATIONS:
Investment income--net ............................................. .27 .27
Net realized and unrealized gain on investments..................... 1.54 1.52
---------- -----------
TOTAL FROM INVESTMENT OPERATIONS.................................... 1.81 1.79
---------- -----------
Net asset value, end of year........................................ $14.31 $14.29
========== ===========
TOTAL INVESTMENT RETURN(1)............................................ 14.48% 14.32%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets(1)................ .38% .51%
Ratio of net investment income to average net assets(1)............. 2.10% 1.98%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation(1).......................... .33% .33%
Portfolio Turnover Rate(1).......................................... 33.55% 33.55%
Net Assets, end of period (000's omitted)........................... $9,248 $8,602
(1)Not annualized.
INCOME PORTFOLIO
---------------------------------------------------
PER SHARE DATA: Class R Shares Investor Class Shares
----------------- ---------------------------
Net asset value, beginning of period................................ $12.50 $12.50
---------- -----------
INVESTMENT OPERATIONS:
Investment income--net ............................................. .40 .39
Net realized and unrealized gain on investments..................... .62 .62
---------- -----------
TOTAL FROM INVESTMENT OPERATIONS.................................... 1.02 1.01
---------- -----------
Net asset value, end of year........................................ $13.52 $13.51
========== ===========
TOTAL INVESTMENT RETURN1)............................................. 8.16% 8.08%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(1).......................... .30% .43%
Ratio of net investment income to average net assets(1)............. 3.08% 2.95%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation(1).......................... .26% .26%
Portfolio Turnover Rate(1).......................................... 5.66% 5.66%
Net Assets, end of period (000's omitted)........................... $8,141 $8,122
</TABLE>
(1)Not annualized.
DESCRIPTION OF THE FUND
GENERAL
By this Prospectus, two classes of shares of each
Portfolio are being offered--Investor Class shares and Class R
shares (each such class being referred to as a "Class"). The
Classes are identical, except that Investor Class shares are
subject to fees for certain services which are described under
"Shareholder Services Plan." The shareholder services fees paid
by the Investor Class will cause such Class to have a higher
expense ratio and to pay lower dividends than Class R.
Class R shares may not be purchased directly by
individuals, although institutions may purchase Class R shares
for accounts maintained by individuals. Such institutions have
agreed to transmit copies of this Prospectus and all relevant
Fund materials, including proxy materials, to each individual or
entity for whose account the institution purchases Class R
shares, to the extent required by law. The Fund treats the
institution investing in Class R shares as the Fund shareholder
entitled to the rights and privileges described herein.
INVESTMENT OBJECTIVES
The INCOME PORTFOLIO'S primary investment objective is
to maximize current income. Capital appreciation is a secondary
objective.
The GROWTH AND INCOME PORTFOLIO'S investment objective
is to maximize total return, consisting of capital appreciation
and current income.
The GROWTH PORTFOLIO'S investment objective is 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, as amended (the "1940 Act")) of
such Portfolio's outstanding voting shares. There can be no
assurance that a Portfolio's investment objective will be
achieved.
MANAGEMENT POLICIES
INVESTMENT APPROACH -- The Growth and Income Portfolio and the
Growth Portfolio seek to achieve their investment objective by
following an asset allocation strategy that contemplates shifts
among common stock and fixed-income securities. The Income
Portfolio will allocate its assets among common stock,
fixed-income securities and short-term money market
instruments. In selecting investments for a Portfolio, Mellon
Equity will employ a multi-step process that, first, establishes
an asset allocation baseline, or weighting of a Portfolio's
assets towards a particular asset class, second, establishes
ranges within which to allocate a Portfolio's assets among the
asset classes, third, uses proprietary asset allocation
models to recommend an allocation among asset classes and,
fourth, selects the securities within the asset classes.
The Portfolios employ a strategic asset allocation
investment technique that involves an ongoing comparison of the
relative value of stocks and bonds across different markets.
Each Portfolio diversifies among stocks, bonds and, in the case
of the Income Portfolio, money market instruments, based on
Mellon Equity's assessment of current economic conditions and
investment opportunities both domestically and internationally.
For the Growth Portfolio and the Growth and Income Portfolio, a
target allocation is set and then adjusted within defined ranges
based upon Mellon Equity's assessment of return and risk
characteristics of each. For the Income Portfolio, Mellon Equity
sets a target allocation for the Portfolio's investments, but
does not actively manage the Portfolio's assets.
The Income Portfolio invests exclusively in domestic
securities and may invest up to 10% of its assets in money
market instruments. The target allocation is 25% equity
securities and 75% fixed-income securities. All equity
investments will consist of large capitalization stocks
(typically with market capitalizations of greater than $1.4
billion).
The Growth and Income Portfolio divides its investments
between equity securities and fixed-income securities and may
invest up to 15% of its assets in international securities.
Equity and fixed-income investments may range from 35% to 65% of
the Portfolio with a target allocation of 50% in each asset
class. The equity portion is divided into 80% large
capitalization stocks and 20% small capitalization stocks
(typically with market capitalizations of less than $1.4
billion).
The Growth Portfolio divides its investments between
equity securities and fixed-income securities and may invest up
to 25% of its assets in international securities. Equity
investments may range from 65% to 100% of the portfolio with a
target allocation of 80%. The equity portion is divided
into 80% large capitalization stocks and 20% small
capitalization stocks. Fixed-income investments may range from
0% to 35% of the portfolio with a target allocation of 20%.
Mellon Equity will attempt, in selecting securities for
each Portfolio, to approximate the investment characteristics of
designated benchmark indices but with expected returns that
exceed the benchmark. The designated benchmark indices, which
are described in detail below, are listed in the following
table:
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET CLASS PORTFOLIOS BENCHMARK INDEX
------------ ------------- ---------------------------
Domestic Large Cap Equity Income, Growth and Income Standard & Poor's 500
and Growth Index ("S&P 500 Index")*
Domestic Small Cap Equity Growth and Income and Growth Russell 2000 Index
International Equity Growth and Income Morgan Stanley Capital
and Growth International Europe, Australia,
Far East (Free) Index ("EAFE Index")Registration Mark**
Domestic Fixed-Income Income, Growth and Lehman Brothers Government/Corporate
Income and Growth Intermediate Bond Index ("Lehman
Government/Corporate Index")
International Fixed-Income Growth and Income and Growth J.P. Morgan Non-US Government Bond
Index-Hedged ("J.P. Morgan Global Index")
* "Standard & Poor's," "S&P" and "S&P 500Registration Mark" are trademarks
of Standard & Poor's, a division of The McGraw Hill Companies, Inc.
** In U.S. Dollars.
</TABLE>
Mellon Equity may manage asset classes either actively
or on an indexed basis consistent with the Portfolio's
investment objective. For asset classes managed on an indexed
basis, where possible, full index replication will be used,
otherwise a statistically based "sampling" technique will be
used to construct portfolios. This process will be used with
respect to the equity asset class, for example, to select stocks
so that the market capitalizations, industry weightings,
dividend yields, beta and, with respect to the international
equity asset class, country weightings closely approximate those
of the designated index. The sampling technique is expected
to be an effective means of substantially duplicating the
investment performance of the benchmark index. It may, however,
provide investment performance relative to the benchmark index
with the same degree of accuracy that complete or full
replication would provide. In its active investment process,
Mellon Equity concentrates on fundamental factors such as
relative price/earnings ratios, relative book to price ratios,
earnings growth rates and momentum, and consensus earnings
expectations and changes in that consensus to value and rank
stocks based on expected relative performance to the asset class
benchmark index.
A further explanation of the Fund's allocation process
is provided in the Statement of Additional Information.
COMMON STOCKS. The S&P 500 Index is composed of 500
common stocks, most of which are listed on the New York Stock
Exchange. The weightings of stocks in the S&P500 Index are based
on each stock's relative total market capitalization; that is,
its market price per share times the number of shares
outstanding. Because of this weighting, as of November 30, 1995,
approximately 46.3% of the S&P 500 Index was composed of the 50
largest companies.
The Russell 2000 Index is composed of 2,000 common
stocks of U.S. companies with market capitalizations ranging
between $23 million and $2.23 billion as of November 30, 1995.
The EAFE Index is a broadly diversified international
index composed of the equity securities of approximately 1,000
companies located outside the United States. The weightings of
stocks in the EAFE Index are based on each stock's market
capitalization relative to the total market capitalization of
all stocks in the Index. Because of this weighting, as of
November 30, 1995, approximately 40.7% of the EAFE Index was
composed of equity securities of Japanese issuers.
FIXED-INCOME SECURITIES. The Lehman Government/Corporate
Index is composed of approximately 5,000 fixed-income
securities, including U.S. Government securities and investment
grade corporate bonds, each with an outstanding market value of
at least $25 million and maturities of less than ten years and
greater than one year. As of November 30, 1995, U.S. Government
securities and corporate debt securities represented 78% and
22%, respectively, of the Lehman Brothers Government/Corporate
Intermediate Bond Index, and the average maturity of such
securities was 4.27 years.
The J.P. Morgan Global Government Index is composed of
traded, fixed-rate government bonds from twelve countries with
maturities of greater than one year. The twelve countries are
Australia, Belgium, Canada, Denmark, France, Germany, Italy,
Japan, the Netherlands, Spain, Sweden and the United
Kingdom.
MONEY MARKET INSTRUMENTS. The short-term money market
instruments in which the Income Portfolio only 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
"Appendix -- Certain Portfolio Securities." The Income Portfolio
will purchase only money market instruments having remaining
maturities of 13 months or less. When the Advisers determine
that market conditions warrant, a Portfolio may adopt a
temporary defensive posture and invest without limitation in
money market instruments.
INVESTMENT TECHNIQUES
The annual portfolio turnover rate of each Portfolio is
not expected to exceed 100%. Each Portfolio also may engage in
various investment and hedging techniques such as options and
futures transactions, lending portfolio securities and, with
respect to the Growth and Income Portfolio and Growth Portfolio,
foreign currency transactions. See also "Investment
Considerations and Risks" and "Appendix -- Investment
Techniques" below and "Investment Objectives and Management
Policies -- Management Policies" in the Statement of Additional
Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- Since each Portfolio will have any given time a
different asset mix to achieve its investment objective, the
risks of investing will vary depending on the Portfolio selected
for investment. Before selecting a Portfolio in which to invest,
the investor should assess the risks associated with the types
of investments made by the Portfolio. The net asset value per
share of each Portfolio should be expected to fluctuate.
Investors should consider each Portfolio as a supplement to an
overall investment program and should invest only if they are
willing to undertake the risks involved. See "Investment
Objectives and Management Policies -- Management Policies" in
the Statement of Additional Information for a further discussion
of certain risks.
EQUITY SECURITIES -- Equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the
securities, and such fluctuations can be pronounced. Changes in
value of a Portfolio's investments will result in changes in the
value of its shares and thus the Portfolio's total return to
investors.
The securities of the smaller companies in which the
Growth and Income and Growth Portfolio's may invest may be
subject to more abrupt or erratic market movements than larger,
more-established companies, because these securities typically
are traded in lower volume and the issuers typically are subject
to a greater degree to changes in earnings and prospects.
FIXED-INCOME SECURITIES -- For the portion of a Portfolio's
assets invested in 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 generally are inversely affected by
changes in interest rates and, therefore, are subject to the
risk of market price fluctuations. The values of fixed-income
securities also may be affected by changes in the credit rating
or financial condition of the issuing entities. Certain
securities that may be purchased by the Portfolios,
such as those rated Baa by Moody's Investors Service, Inc.
("Moody's") and BBB by Standard & Poor's Ratings Group, a
division of The McGraw Hill Companies, Inc. ("S&P"), Fitch
Investors Service, L.P. ("Fitch") and Duff & Phelps Credit
Rating Co. ("Duff"), may be subject to such risk with respect
to the issuing entity and to greater market fluctuations than
certain lower yielding, higher rated fixed-income securities.
Once the rating of a security held by a Portfolio has been
changed, the Advisers will consider all circumstances deemed
relevant in determining whether such Portfolio should
continue to hold the security. See "Appendix" in the Statement
of Additional Information.
FOREIGN SECURITIES -- Foreign securities markets generally are
not as developed or efficient as those in the United States.
Securities of some foreign issuers are less liquid and more
volatile than securities of comparable U.S. issuers. Similarly,
volume and liquidity in most foreign securities markets are less
than in the United States and, at times, volatility of price can
be greater than in the United States.
Because stock certificates and other evidences of
ownership of such securities usually are held outside the United
States, the Growth and Income Portfolio and Growth Portfolio
will be subject to additional risks, which include possible
adverse political and economic developments, possible
seizure or nationalization of foreign deposits and possible
adoption of governmental restrictions that might adversely
affect the payment of principal, interest and dividends on the
foreign securities or might restrict the payment of principal,
interest and dividends to investors located outside the country
of the issuers, whether from currency blockage or otherwise.
Since foreign securities often are purchased with and
payable in currencies of foreign countries, the value of these
assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and exchange control
regulations.
FOREIGN CURRENCY TRANSACTIONS _ Currency exchange rates may
fluctuate significantly over short periods of time. They
generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of
investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen
from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States
or abroad. See "Appendix -- Investment Techniques -- Foreign
Currency Transactions."
USE OF DERIVATIVES -- Each Portfolio may invest, to a limited
extent, in derivatives ("Derivatives"). These are financial
instruments which derive their performance, at least in part,
from the performance of an underlying asset, index or interest
rate. The Derivatives a Portfolio may use include options and
futures. While Derivatives can be used effectively in
furtherance of the Portfolio's investment objective, under
certain market conditions, they can increase the volatility of
the Portfolio's net asset value, can decrease the liquidity of
the Portfolio's investments and make more difficult the accurate
pricing of the Portfolio's investments. See "Appendix --
Investment Techniques -- Use of Derivatives" below and
"Investment Objectives and Management Policies -- Management
Policies -- Derivatives"in the Statement of Additional
Information.
ZERO COUPON SECURITIES -- 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.
NON-DIVERSIFIED STATUS -- Each Portfolio'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 1940 Act. A
"diversified" investment company is required by the 1940 Act
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. Since a relatively high percentage of each Portfolio's
assets may be invested in the securities of a limited number of
issuers, some of which may be within the same industry, each
Portfolio's portfolio securities may be more sensitive to
changes in the market value of a single issuer. However, to
meet Federal tax requirements, at the close of each quarter no
Portfolio may have more than 25% of its total assets invested in
any one issuer and, with respect to 50% of its total assets,
more than 5% of its total assets invested in any one issuer. No
Portfolio may invest more than 25% of its assets in any
one industry. These limitations do not apply to U.S. Government
securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for each
Portfolio are made independently from those of other investment
companies or accounts advised by the Advisers. 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, 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
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200
Park Avenue, New York, New York 10166, was formed in 1947 and
serves as each Portfolio'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 September 30, 1995, The Dreyfus Corporation
managed or administered approximately $80 billion in assets for
more than 1.8 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 in accordance with Maryland law.
The Dreyfus Corporation has engaged Mellon Equity,
located at 500 Grant Street, Pittsburgh, Pennsylvania 15258, to
serve as each Portfolio's sub-investment adviser. Mellon Equity,
a registered investment adviser formed in 1987, is an indirect
wholly-owned subsidiary of Mellon. As of September 30, 1995,
Mellon Equity managed approximately $7.6 billion in assets and
serves as the investment adviser for 13 other investment
companies.
Mellon Equity, subject to the supervision and approval
of The Dreyfus Corporation, provides investment advisory
assistance and the day-to-day management of each Portfolio's
investments, as well as investment research and statistical
information, under a Sub-Investment Advisory Agreement with
The Dreyfus Corporation, subject to the overall authority of the
Fund's Board in accordance with Maryland law. In providing its
services, Mellon Equity may use the services of one or more of
its affiliates. Each Portfolio's primary portfolio manager is
Steven A. Falci. He has held that position since the
inception of the Fund and has been employed by Mellon Equity
since April 1994. For more than five years prior thereto, he was
a managing director for pension investments at NYNEX
Corporation.
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, including The Dreyfus Corporation, Mellon managed
more than $203 billion in assets as of September 30, 1995,
including approximately $80 billion in mutual fund assets. As of
September 30, 1995, Mellon, through various subsidiaries,
provided non-investment services, such as custodial or
administration services, for more than $717 billion in assets,
including $55 billion in mutual fund assets.
Under the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of
.60 of 1% of the value of the Income Portfolio's average daily
net assets and .75 of 1% of the value of each of the Growth and
Income Portfolio's and Growth Portfolio's average daily net
assets. The management fee payable for the Growth and Income
Portfolio and Growth Portfolio is higher than that paid by most
other investment companies.
Under the Sub-Investment Advisory Agreement, The Dreyfus
Corporation has agreed to pay Mellon Equity an annual fee
payable monthly, at the following rate: .35% of each Portfolio's
average daily net assets up to $600 million in Fund assets; .25%
of the Portfolio's average daily net assets when the Fund's
assets are between $600 million and $1.2 billion; .20% of the
Portfolio's average daily net assets when the Fund's assets are
between $1.2 billion and $1.8 billion; and .15% of the
Portfolio's average daily net assets when the Fund's assets are
over $1.8 billion.
EXPENSES -- All expenses incurred in the operation of the Fund
are borne by the Fund, except to the extent specifically assumed
by The Dreyfus Corporation. The expenses borne by the Fund
include: organizational costs, taxes, interest, loan commitment
fees, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or
holders of 5% or more of the outstanding voting securities of
The Dreyfus Corporation, Mellon Equity or any of their
affiliates, Securities and Exchange Commission fees, state Blue
Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of independent pricing services, costs of
maintaining 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 shareholders, costs of
shareholders' reports and meetings, 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 among 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.
From time to time, The Dreyfus Corporation may waive
receipt of its fee and/or voluntarily assume certain expenses of
a Portfolio, which would have the effect of lowering the overall
expense ratio of that Portfolio and increasing yield to its
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.
The Dreyfus Corporation may pay the Fund's distributor
for shareholder services from The Dreyfus Corporation's own
assets, including past profits but not including the management
fee paid by the Fund. The Fund's distributor may use part or all
of such payments to pay Service Agents (as defined below) in
respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One Exchange
Place, Boston, Massachusetts 02109. The Distributor's ultimate
parent company is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus
Corporation, is located at One American Express Plaza,
Providence, Rhode Island 02903, and serves as the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer
Agent"). The Bank of New York, 90 Washington Street, New York,
New York 10286, is the Fund's Custodian.
HOW TO BUY FUND SHARES
Shares of each Class are sold without a sales charge.
Certain financial institutions (which may include banks),
securities dealers and other industry professionals
(collectively, "Service Agents") effecting transactions in
Investor class shares and institutions effecting transactions
in Class R shares for the accounts of their clients may charge
their clients direct fees in connection with such transactions.
Investor Class shares are offered to any investor. Class
R shares are offered only to institutional investors acting for
themselves or in a fiduciary, advisory, agency, custodial or
similar capacity, for qualified or non-qualified employee
benefit plans SEP-IRA's or other programs, including
pension, profit-sharing and other deferred compensation plans,
whether established by corporations, partnerships, non-profit
entities or state and local governments ("Retirement Plans").
The term "Retirement Plans" does not include IRA's or IRA
"Rollover Accounts." Class R shares may be purchased for
a Retirement Plan only by a custodian, trustee, investment
manager or other entity authorized to act on behalf of such
Plan.
Stock certificates are issued only upon an investor's
written request. No certificates are issued for fractional
shares. The Fund reserves the right to reject any purchase
order.
The minimum initial investment for each Class is $2,500,
or $1,000 if the investor is 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.
However, the minimum initial investment for Dreyfus-sponsored
Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only
one participant is $750, with no minimum on subsequent
purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum initial investment of
$250. Subsequent investments in a spousal IRA must be
at least $250. The initial investment must be accompanied by the
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 Fund 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.
Investor Class shares also are offered without regard to the
minimum initial investment requirements through
Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings
Plan pursuant to the Dreyfus Step Program described under
"Shareholder Services." These services enable an investor to
make regularly scheduled investments and may provide investors
with a convenient way to invest for long-term financial
goals. Investors should be aware, however, that periodic
investment plans do not guarantee a profit and will not protect
an investor against loss in a declining market.
The Internal Revenue Code of 1986, as amended (the
"Code"), imposes various limitations on the amount that may be
contributed to certain Retirement Plans. These limitations apply
with respect to participants at the plan level and, therefore,
do not directly affect the amount that may be invested in the
Fund by a Retirement Plan. Participants and plan sponsors
should consult their tax advisers for details.
Investors may purchase Fund shares by check or wire, or,
with respect to Investor Class shares only, 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 the
investor's Account Application indicating which Portfolio and
Class of shares is being purchased. For subsequent investments,
the investor's 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 the investor's bank account
is in a commercial bank that is a member of the Federal Reserve
System or any other bank having a correspondent bank in New York
City. Immediately available funds may be transmitted by wire to
The Bank of New York, together with the relevant Portfolio's DDA
# as shown below, for purchase of shares in the investor's name:
DDA #8900251785 Dreyfus LifeTime Portfolios, Inc./Income
Portfolio_Class R; or DDA #8900104511 Dreyfus LifeTime
Portfolios, Inc./Income Portfolio_Investor Class; or
DDA #8900251778 Dreyfus LifeTime Portfolios, Inc./Growth and
Income Portfolio_Class R; or DDA #8900118253 Dreyfus LifeTime
Portfolios, Inc./Growth and Income Portfolio_Investor Class; or
DDA #8900251794 Dreyfus LifeTime Portfolios, Inc./Growth
Portfolio_Class R; or DDA #8900227745 Dreyfus LifeTime
Portfolios, Inc./Growth Portfolio_Investor Class.
The wire must include the investor's Fund account number (for
new accounts, the investor's Taxpayer Identification Number
("TIN") should be included instead), account registration and
dealer number, if applicable. If an investor's initial purchase
of Portfolio shares is by wire, the investor should call
1-800-645-6561 after the investor has completed the wire payment
in order to obtain his or her Fund account number. The investor
should include his or her 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. Investors may obtain further
information about remitting funds in this manner from their
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 an
investor's 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. The investor must direct the institution to
transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to
credit the investor's Fund account. The instructions must
specify the investor's Fund account registration and Fund
account number PRECEDED BY THE DIGITS "1111."
The Distributor may pay dealers a fee of up to .5% of
the amount invested through such dealers in Fund shares by
employees participating in qualified or non-qualified employee
benefit plans or other programs where (i) the employers or
affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such
plans or programs or (ii) such plan's or program's aggregate
investment in the Dreyfus Family of Funds or certain other
products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans").
Shares of funds in the Dreyfus Family of Funds then held by
Eligible Benefit Plans will be aggregated to determine the fee
payable. The Distributor reserves the right to cease paying
these fees at any time. The Distributor will pay such fees from
its own funds, other than amounts received from the Fund,
including past profits or any other source available to it.
Shares are sold on a continuous basis at the 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,
option 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 of each Class is computed by dividing
the value of the Portfolio's net assets represented by such
Class (i.e., the value of its assets less liabilities) by the
total number of shares of such Class outstanding. Each
Portfolio's investments are valued based on market value or,
where market quotations are not readily available, based on fair
value as determined in good faith by the Board of
Directors. For further information regarding the methods
employed in valuing the Portfolio's investments, see
"Determination of Net Asset Value" in the Statement of
Additional Information.
For certain institutions that have entered into
agreements with the Distributor, payment for the purchase of
Portfolio shares may be transmitted, and must be received by the
Transfer Agent, within three business days after the order is
placed. If such payment is not received within three business
days after the order is placed, the order may be canceled and
the institution could be held liable for resulting fees and/or
losses.
Federal regulations require that investors 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 the investor to a $50 penalty imposed by the Internal
Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE -- INVESTOR CLASS
An investor may purchase Investor Class shares (minimum
$500, maximum $150,000 per day) by telephone if he has checked
the appropriate box and supplied the necessary information on
the Fund's Account Application or has 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 the investor's 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 an investor has selected the Dreyfus TELETRANSFER
Privilege, he may request a Dreyfus TELETRANSFER purchase of
Investor Class shares by telephoning 1-800-645-6561 or, if
calling from overseas, 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES
An investor may purchase, in exchange for Investor Class
shares or Class R shares of a Portfolio, shares of the same
class of another Portfolio or shares of certain other funds
managed or administered by The Dreyfus Corporation, to the
extent such shares are offered for sale in the investor's
state of residence. These funds have different investment
objectives which may be of interest to investors. To use this
service, investors should consult their Service Agent or call
1-800-645-6561 to determine if it is available and whether any
conditions are imposed on its use. WITH RESPECT TO
CLASS R SHARES HELD BY RETIREMENT PLANS, EXCHANGES MAY BE MADE
ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND
AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
To request an exchange, an investor must give exchange
instructions to the Transfer Agent in writing or by telephone.
Before any exchange, the investor must obtain and should review
a copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained
by calling 1-800-645-6561. Except in the case of personal
retirement plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new
account by exchange, the shares being exchanged must have a
value of at least the minimum initial investment required for
the fund into which the exchange is being made. The ability to
issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless the investor checks the
applicable "No" box on the Account Application, indicating that
the investor specifically refuses this Privilege. The Telephone
Exchange Privilege may be established for an existing account by
written request, signed by all shareholders on the account, or
by a separate signed Shareholder Services Form, also available
by calling 1-800-645-6561. If an investor has established the
Telephone Exchange Privilege, the investor may telephone
exchange instructions by calling 1-800-645-6561 or, if calling
from overseas, 516-794-5452. See "How to Redeem Fund Shares_
Procedures." Upon an exchange, the following shareholder
services and privileges, as applicable and where available, will
be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER
Privilege and the dividends and distributions payment 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 an investor
is exchanging into a fund that charges a sales load, the
investor 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 the investor is exchanging were:
(a) purchased with a sales load, (b) acquired by a previous
exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions paid
with respect to the foregoing categories of shares. To qualify,
at the time of the exchange the investor must notify the
Transfer Agent or the investor's Service Agent must notify the
Distributor. Any such qualification is subject to confirmation
of the investor's 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 availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders.
See "Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables a shareholder to
invest regularly (on a semi-monthly, monthly, quarterly or
annual basis), in exchange for shares of a Portfolio, in shares
of the same class of another Portfolio or shares of other funds
in the Dreyfus Family of Funds of which such shareholder is
currently an investor. WITH RESPECT TO CLASS R SHARES HELD BY
RETIREMENT PLANS, EXCHANGES PURSUANT TO THE DREYFUS
AUTO-EXCHANGE PRIVILEGE MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S
RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S
RETIREMENT PLAN ACCOUNT IN ANOTHER FUND. The amount
the investor designates, 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 the investor has 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. An investor may modify or
cancel the investor's 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. See "Dividends, Distributions and
Taxes.". 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 BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits a shareholder to
purchase Portfolio shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by the
shareholder. Portfolio shares are purchased by transferring
funds from the bank account designated by the shareholder. At
the shareholder's option, the bank account designated by the
shareholder 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, the
shareholder must file an authorization form with the Transfer
Agent. Shareholders may obtain the necessary authorization form
by calling 1-800-645-6561. A shareholder may cancel his
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. See
"Dividends, Distributions and Taxes."
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables a
shareholder 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 such shareholder's Fund account. A shareholder may deposit
as much of such payments as such shareholder elects. To enroll
in Dreyfus Government Direct Deposit, the shareholder must file
with the Transfer Agent a completed Direct Deposit Sign-Up Form
for each type of payment that the shareholder desires to include
in this Privilege. The appropriate form may be obtained by
calling 1-800-645-6561. Death or legal incapacity will terminate
a shareholder's participation in this Privilege. A shareholder
may elect at any time to terminate his participation by
notifying in writing the appropriate Federal agency. Further,
the Fund may terminate a shareholder's participation upon 30
days' notice to such shareholder.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits a shareholder to
purchase Portfolio shares (minimum of $100 per transaction)
automatically on a regular basis. Depending upon the direct
deposit program of the shareholder's employer, a shareholder may
have part or all of his paycheck transferred to his existing
Dreyfus account electronically through the Automated Clearing
House system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, the shareholder must file an authorization
form with his employer's payroll department. The shareholder's
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. A shareholder may obtain the necessary
authorization form by calling 1-800-645-6561. A shareholder may
change the amount of purchase or cancel the authorization only
by written notification to the shareholder's employer. It is the
sole responsibility of the shareholder's employer, not the
Distributor, 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. Shares held under Keogh Plans, IRAs
or other retirement plans are not eligible for this Privilege.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables a shareholder to purchase
Investor Class shares without regard to the Fund's minimum
initial investment requirements through Dreyfus-AUTOMATIC Asset
Builder, Dreyfus Government Direct Deposit Privilege or Dreyfus
Payroll Savings Plan. To establish a Dreyfus Step Program
account, a shareholder must supply the necessary information on
the Fund's Account Application and file the required
authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary
authorization form(s), please call toll free 1-800-782-6620. A
shareholder may terminate participation in this Program at
any time by discontinuing participation in Dreyfus-AUTOMATIC
Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan, as the case may be, as provided
under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to
purchase Fund shares through the Dreyfus Step Program in
conjunction with a Dreyfus-sponsored retirement plan may do so
only for IRAs, SEP-IRAs and IRA "Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables a shareholder to invest
automatically dividends or dividends and capital gain
distributions, if any, paid by a Portfolio in shares of the same
class of another Portfolio or other funds in the Dreyfus Family
of Funds of which the shareholder is an investor. 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
the shareholder is investing in a fund that charges a sales
load, such shareholder may qualify for share prices which do
not include the sales load or which reflect a reduced sales
load. See "Shareholder Services" in the Statement of Additional
Information. Dreyfus Dividend ACH permits a shareholder to
transfer electronically dividends or dividends and capital gain
distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be
so designated. Banks may charge a fee for this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call toll free
1-800-645-6561. 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.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits a shareholder to
request withdrawal of a specified dollar amount (minimum of $50)
on either a monthly or quarterly basis if such shareholder has a
$5,000 minimum account. Particular Retirement Plans, including
Dreyfus sponsored retirement plans, may permit certain
participants to establish an automatic withdrawal plan from such
Retirement Plans. Participants should consult their Retirement
Plan sponsor and tax adviser for details. Such a withdrawal plan
is different than the Automatic Withdrawal Plan. An application
for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. There is a service charge of 50cents for each
withdrawal check. The Automatic Withdrawal Plan may be ended
at any time by the shareholder, 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. An investor 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;
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
Shareholders may request redemption of their 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 Portfolio will redeem the shares at the next
determined net asset value.
The Fund imposes no charges when shares are redeemed.
Service Agents or other institutions may charge their clients 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.
Distributions from qualified Retirement Plans and
certain non-qualified deferred compensation plans, except
distributions representing returns of non-deductible
contributions to the Retirement Plan, generally are taxable
income to the participant. Distributions from such a Retirement
Plan to a participant prior to the time the participant reaches
age 59-1/2 or becomes permanently disabled may subject the
participant to an additional 10% penalty tax imposed by the IRS.
Participants should consult their tax advisers concerning the
timing and consequences of distributions from a Retirement Plan.
Participants in qualified Retirement Plans will receive a
disclosure statement describing the consequences of a
distribution from such a Plan from the administrator, trustee or
custodian of the Plan, before receiving the distribution. The
Fund will not report to the IRS redemptions of Portfolio shares
by qualified Retirement Plans or certain non-qualified
deferred compensation plans. The administrator, trustee or
custodian of such Retirement Plans will be responsible for
reporting distributions from such Plans to the IRS.
The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent
of a redemption request in proper form, except as provided by
the rules of the Securities and Exchange Commission. HOWEVER, IF
AN INVESTOR HAS PURCHASED PORTFOLIO SHARES BY CHECK,
BY DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC
ASSET BUILDER AND SUBSEQUENTLY SUBMITS A WRITTEN REDEMPTION
REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO THE INVESTOR PROMPTLY UPON BANK CLEARANCE OF
THE INVESTOR'S PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR
DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO
EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT
REQUESTS TO REDEEM SHARES 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 THE
INVESTOR'S SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF THE
INVESTOR OTHERWISE HAS A SUFFICIENT COLLECTED BALANCE IN
THE INVESTOR'S ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO
THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES
WILL ACCRUE AND BE PAYABLE, AND THE INVESTOR WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Portfolio
shares will not be redeemed until the Transfer Agent has
received the investor's Account Application.
The Fund reserves the right to redeem an investor's
account at its option upon not less than 45 days' written notice
if the net asset value of the investor's account is $500 or less
and remains so during the notice period.
PROCEDURES
Investors may redeem shares by using the regular
redemption procedure through the Transfer Agent, or, if the
investor has checked the appropriate box and supplied the
necessary information on the Account Application or has
filed a Shareholder Services Form with the Transfer Agent,
through the Wire Redemption Privilege, the Telephone Redemption
Privilege, or, for Investor Class shares only, the Dreyfus
TELETRANSFER Privilege. Other redemption procedures may be in
effect for clients of certain Service Agents and
institutions. The Fund makes available to certain large
institutions the ability to issue redemption instructions
through compatible computer facilities. The Fund reserves the
right to refuse any request made by wire or telephone, including
requests made shortly after a change of address, and may
limit the amount involved or the number of such requests. The
Fund may modify or terminate any redemption Privilege at any
time or charge a service fee upon notice to shareholders. No
such fee is currently contemplated.
Investors may redeem Portfolio shares by telephone if
they have checked the appropriate box on the Fund's Account
Application or have filed a Shareholder Services Form with the
Transfer Agent. If an investor selects the telephone redemption
privilege or telephone exchange privilege (which is granted
automatically unless the investor refuses it), such investor
authorizes the Transfer Agent to act on telephone instructions
from any person representing himself or herself to be the
investor, 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,
investors may experience difficulty in contacting the Transfer
Agent by telephone to request a redemption or exchange of
Portfolio shares. In such cases, investors should consider using
the other redemption procedures described herein. Use of these
other redemption procedures may result in an investor's
redemption request being processed at a later time than it would
have been if telephone redemption had been used. During the
delay, the Portfolio's net asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, an
investor may redeem his shares by written request mailed 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. 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 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. For more information 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 -- An investor may request by wire or
telephone that redemption proceeds (minimum $1,000) be wired to
the investor's account at a bank which is a member of the
Federal Reserve System, or a correspondent bank if the
investor's bank is not a member. An investor also may direct
that redemption proceeds be paid by check (maximum $150,000 per
day) made out to the owners of record and mailed to the
investor's 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 not
more than $250,000 wired within any 30-day period. An investor
may telephone redemption requests by calling 1-800-645-6561 or,
if calling from overseas, 516-794-5452. The 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 -- An investor may request by
telephone that redemption proceeds (maximum $150,000 per day) be
paid by check and mailed to the investor's address. An investor
may telephone redemption instructions by calling 1-800-645-6561
or, if calling from overseas, 516-794-5452. 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 -- INVESTOR CLASS -- An investor
may request by telephone that redemption proceeds (minimum $500
per day) be transferred between the investor's Fund account and
the investor's bank account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing
House member may be designated. Redemption proceeds will be on
deposit in the investor's account at an Automated Clearing House
member bank ordinarily two days after receipt of the redemption
request or, at the investor's request, paid by check (maximum
$150,000 per day) and mailed to the investor's address. Holders
of jointly registered Fund or bank accounts may redeem through
the Dreyfus TELETRANSFER Privilege for transfer to their
bank account not more than $250,000 within any 30-day period.
If an investor has selected the Dreyfus TELETRANSFER
Privilege, the investor may request a Dreyfus TELETRANSFER
redemption of shares by telephoning 1-800-645-6561 or, if
calling from overseas, 516-794-5452. Shares held under Keogh
Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.
SHAREHOLDER SERVICES PLAN
(INVESTOR CLASS ONLY)
The Fund has adopted a Shareholder Services Plan,
pursuant to which it pays the Distributor for the provision of
certain services to each Portfolio's Investor Class shareholders
a fee at an annual rate of .25 of 1% of the value of the average
daily net assets of the Portfolio's Investor Class Shares. 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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Code, each Portfolio 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 1940 Act. No Portfolio
will make distributions from net realized securities gains
unless capital loss carryovers, if any, have been
utilized or have expired. Investors may choose whether to
receive dividends and distributions in cash or to reinvest in
additional Portfolio shares. Dividends and distributions paid in
cash to Retirement Plans, however, may be subject to additional
tax as described below. All expenses are accrued daily
and deducted before declaration of dividends to investors.
Dividends paid by each Class will be calculated at the same time
and in the same manner and will be of the same amount, except
that the expenses attributable solely to the Investor Class or
Class R will be borne exclusively by such Class. Investor Class
shares will receive lower per share dividends than Class R
shares because of the higher expenses borne by the Investor
Class. See "Annual Fund Operating Expenses."
Dividends paid by a Portfolio to qualified Retirement
Plans or certain non-qualified deferred compensation plans
ordinarily will not be subject to taxation until the proceeds
are distributed from the Retirement Plan. The Fund will not
report dividends paid to such Plans to the IRS. Generally,
distributions from such Retirement Plans, except those
representing returns of non-deductible contributions thereto,
will be taxable as ordinary income and, if made prior to the
time the participant reaches age 59-1/2, generally will be
subject to an additional tax equal to 10% of the taxable portion
of the distribution. If the distribution from such a
Retirement Plan (other than certain governmental or church
plans) for any taxable year following the year in which the
participant reaches age 70-1/2 is less than the "minimum
required distribution" for that taxable year, an excise tax
equal to 50% of the deficiency may be imposed by the IRS. The
administrator, trustee or custodian of such a Retirement Plan
will be responsible for reporting distributions from such Plans
to the IRS. Participants in qualified Retirement Plans will
receive a disclosure statement describing the consequences of a
distribution from such a Plan from the administrator, trustee or
custodian of the Plan prior to receiving the distribution.
Moreover, certain contributions to a qualified Retirement Plan
in excess of the amounts permitted by law may be subject to an
excise tax.
Dividends derived from net investment income, together
with distributions from net realized short-term securities gains
and all or a portion of any gains realized from the sale or
other disposition of certain market discount bonds, paid by a
Portfolio will be taxable to U.S. shareholders and to certain
non-qualified Retirement Plans as ordinary income whether
received in cash or reinvested in Portfolio shares.
Distributions from net realized long-term securities gains of a
Portfolio will be taxable to U.S. shareholders and to certain
non-qualified Retirement Plans 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 Portfolio
shares. The Code provides that the net capital gain of an
individual generally will not be subject to Federal income tax
at a rate in excess of 28%. Dividends and distributions may be
subject to state and local taxes.
Dividends derived from net investment income, together
with distributions from net realized short-term securities gains
and all or a portion of any gains realized from the sale or
other disposition of certain market discount bonds, paid by a
Portfolio to a foreign investor generally are subject to U.S.
non-resident 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 a Portfolio 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.
The exchange of shares of one fund or portfolio for
shares of another is treated for Federal income tax purposes as
a sale of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize, or an exchange
on behalf of a Retirement Plan which is not tax exempt may
result in, a taxable gain or loss.
Notice as to the tax status of dividends and
distributions will be mailed to investors annually. Investors
also will receive periodic summaries of their account which will
include information as to dividends and distributions from
securities gains, if any, paid during the year. Participants in
a Retirement Plan should receive periodic statements from the
trustee, custodian or administrator of their Plan.
With respect to individual investors and certain
non-qualified Retirement Plans, Federal regulations generally
require the Fund to withhold ("backup withholding") and remit to
the U.S. Treasury 31% of dividends, distributions from net
realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized,
paid to a shareholder if such shareholder fails to certify
either that the TIN furnished in connection with opening an
account is correct or that such shareholder has not received
notice from the IRS of being subject to backup withholding as a
result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the
IRS may notify a Portfolio to institute backup withholding if
the IRS determines a shareholder's TIN is incorrect or if a
shareholder has failed to properly report taxable dividend and
interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any
tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the
account, and may be claimed as a credit on the record owner's
Federal income tax return.
Management of the Fund believes that each Portfolio has
qualified for the fiscal year ended September 30, 1995 as a
"regulated investment company" under the Code. Each Portfolio
intends to continue to so qualify if such qualification is in
the best interests of its shareholders. Such qualification
relieves the 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.
Investors should consult their tax advisers regarding
specific questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class
may be calculated on the basis of average annual total return
and/or total return. These total return figures reflect changes
in the price of the shares and assume that any income dividends
and/or capital gains distributions made by the Portfolio during
the measuring period were reinvested in shares of the same
Class. These figures also take into account any applicable
shareholder services fees. As a result, at any given time, the
performance of the Investor Class should be expected to be lower
than that of Class R. Performance for each Class will be
calculated separately.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the
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 the
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.
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. Investors
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., Russell 2000 Index, Standard & Poor's 500
Stock Index, the Dow Jones Industrial Average and other industry
publications.
GENERAL INFORMATION
The Fund was organized as a corporation under the laws
of Maryland on July 15, 1993, and commenced operations on March
31, 1995. The Fund is authorized to issue 300 million shares of
Common Stock (with 100 million shares allocated to each
Portfolio), par value $.001 per share. Each Portfolio's shares
are classified into two classes_Investor Class and Class R. Each
share has one vote and shareholders will vote in the aggregate
and not by class except as otherwise required by law. However,
only holders of Investor Class shares will be entitled to vote
on matters submitted to shareholders pertaining to the
Shareholder Services Plan.
Unless otherwise required by the 1940 Act, ordinarily it
will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider
each year the election of 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 and 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.
The Fund is a "series fund," which is a mutual fund
divided into separate portfolios, each of which is treated as a
separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one Portfolio is not deemed to
be a shareholder of any other Portfolio. For certain matters
Fund shareholders vote together as a group; as to others they
vote separately by Portfolio.
To date, the Fund's Board 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 assets attributable to,
and the expenses of, one Portfolio (and as to classes within a
Portfolio) are treated separately from those of the other
Portfolios (and classes). The Fund has the ability to create
from time to time,
new portfolios of shares without shareholder approval.
The Transfer Agent maintains a record of your ownership
and will send you confirmations and statements of account.
Shareholder inquiries may be made 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; outside the U.S. and Canada, call 516-794-5452.
APPENDIX
INVESTMENT TECHNIQUES FOREIGN CURRENCY TRANSACTIONS (GROWTH AND
INCOME AND GROWTH PORTFOLIOS ONLY) -- Foreign currency
transactions may be entered into for a variety of purposes,
including: to fix in U.S. dollars, between trade and settlement
date, the value of a security the Portfolio has agreed to buy or
sell; or to hedge the U.S. dollar value of securities the
Portfolio already owns, particularly if it expects a decrease in
the value of the currency in which the foreign security is
denominated; or to gain exposure to the foreign currency in an
attempt to realize gains.
Foreign currency transactions may involve, for example,
the Portfolio's purchase of foreign currencies for U.S. dollars
or the maintenance of short positions in foreign currencies,
which would involve the Portfolio agreeing to exchange an amount
of a currency it did not currently own for another currency at a
future date in anticipation of a decline in the value of the
currency sold relative to the currency the Portfolio contracted
to receive in the exchange. The Portfolio's success in these
transactions will depend principally on the Advisers' ability to
predict accurately the future exchange rates between foreign
currencies and the U.S. dollar.
BORROWING MONEY -- Each Portfolio is permitted to borrow to the
extent permitted under the 1940 Act, which permits an investment
company to borrow in an amount up to 331/3% of the value of such
company's total assets. Each Portfolio currently intends to
borrow money only for temporary or emergency (not leveraging)
purposes, in an amount up to 15% of the value of its total
assets (including the amount borrowed) valued at the lesser of
cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings
exceed 5% of the Portfolio's total assets, the Portfolio will
not make any additional investments.
USE OF DERIVATIVES -- Although neither the Fund nor a Portfolio
will be a commodity pool, Derivatives subject the Portfolio to
the rules of the Commodity Futures Trading Commission which
limit the extent to which the Portfolio can invest in certain
Derivatives. Each Portfolio may invest in futures contracts and
options with respect thereto for hedging purposes without limit.
However, none of the Portfolios may invest in such contracts and
options for other purposes if the sum of the amount of initial
margin deposits and premiums paid for unexpired options with
respect to such contracts, other than bona fide hedging
purposes, exceed 5% of the liquidation value of the Portfolio's
assets, after taking into account unrealized losses on such
contracts and options; 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%
limitation.
Each Portfolio may invest up to 5% of its asset,
represented by the premium paid, in the purchase of call and put
options. Each Portfolio may write (i.e., sell) 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. When
required by the Securities and Exchange Commission, the
Portfolio will set aside permissible liquid assets in a
segregated account to cover its obligations relating to its
purchase of Derivatives. To maintain this required cover, a
Portfolio may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to
liquidate a Derivative position at a reasonable price.
Derivatives may entail investment exposures that are
greater than their cost would suggest, meaning that a small
investment in Derivatives could have a large potential impact on
the Portfolio's performance.
If a Portfolio invests in Derivatives at inappropriate
times or judges market conditions incorrectly, such investments
may lower the Portfolio's return or result in a loss. The
Portfolio also could experience losses it its Derivatives were
poorly correlated with its other investments, or if the
Portfolio were unable to liquidate its position because of an
illiquid secondary market. The market for many
Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid an unpredictable
changes in their prices for Derivatives.
LENDING PORTFOLIO SECURITIES -- Each Portfolio may lend
securities from its portfolio to brokers, dealers and other
financial institutions needing to borrow securities to complete
certain transactions. In connection with such loans, the
Portfolio continues to be entitled to payments in amounts equal
to the interest or other distributions payable on the loaned
securities. Loans of portfolio securities afford the Portfolio
an opportunity to earn interest on the amount of the loan and at
the same time to earn income on the loaned securities'
collateral. Loans of portfolio securities may not exceed 331/3%
of the value of the 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. Such loans are terminable by the Portfolio at any
time upon specified notice. The 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 securities on
a forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date
of the commitment to purchase. The payment obligation and the
interest rate that will be received on a forward commitment or
when-issued security are fixed at the time the Portfolio enters
into the commitment. However, the Portfolio does not make a
payment until it receives delivery from the other party to the
transaction. The Portfolio will make commitments to purchase
such securities only with the intention of actually acquiring
the securities, but a Portfolio may sell these securities before
the settlement date if it is deemed advisable. A segregated
account of the Portfolio 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
commitments will be established and maintained at the Fund's
custodian bank.
CERTAIN PORTFOLIO SECURITIES MONEY MARKET INSTRUMENTS -- Each
Portfolio may invest, in the circumstances described under
"Description of the Fund -- Management Policies," in the
following types of money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities include U.S. Treasury securities that differ
in the interest rates, maturities and time of issuance. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, are supported by the full faith and credit of
the U.S. Treasury; others, by the right of the issuer to borrow
from the U.S. Treasury; others, by discretionary authority of
the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, only by the credit of the
agency or instrumentality. These securities bear fixed, floating
or variable rates of interest. While the U.S. Government
provides financial support to such U.S. Government-sponsored
agencies 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.
REPURCHASE AGREEMENTS. In a repurchase agreement a
Portfolio buys and the seller agrees to repurchase, security at
a mutually agreed upon time and price (usually seven days). The
repurchase agreement thereby determines the yield during the
purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security.
Repurchase agreements could involve risks in the event of a
default or insolvency of the other party to the agreement,
including possible delays or restrictions upon the Portfolio's
ability to dispose of the underlying securities. Each Portfolio
may enter into repurchase agreements with certain banks or
non-bank dealers.
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
Portfolio
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.
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.
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. 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, A-1
by S&P, F-1 by Fitch or Duff-1 by Duff, (b) issued by companies
having an outstanding unsecured debt issue currently rated not
lower than Aa3 by Moody's or AA- by S&P, Fitch or Duff, or (c)
if unrated, determined by the Advisers to be of comparable
quality to those rated obligations which may be purchased by the
Portfolio.
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.
FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL
ENTITIES -- Each of the Growth and Income Portfolio and Growth
Portfolio may invest in obligations issued or guaranteed by one
or more foreign governments or any of their political
subdivisions, agencies or instrumentalities that are determined
by the Advisers to be of comparable quality to the other
obligations in which the Portfolio may invest. Such securities
also include debt obligations of supranational entities.
Supranational entities include international organizations
designated or supported by governmental entities to promote
economic reconstruction or development and international banking
institutions and related government agencies.
AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS -- Each
of the Growth and Income Portfolio and Growth Portfolio may
invest in the securities of foreign issuers in the form of
American Depositary Receipts ("ADRs") and European Depositary
Receipts ("EDRs"). These securities may not necessarily be
denominated in the same currency as the securities into which
they may be converted. ADRs are receipts typically issued by a
United States bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation. EDRs,
which are sometimes referred to as Continental Depositary
Receipts ("CDRs"), are receipts issued in Europe typically by
non-United States banks and trust companies that evidence
ownership of either foreign or domestic securities. Generally,
ADRs in registered form are designed for use in the United
States securities markets and EDRs and CDRs in bearer form are
designed for use in Europe.
INVESTMENT COMPANIES -- Each Portfolio may invest in securities
issued by other investment companies to the extent consistent
with its investment objective. Under the 1940 Act, the
Portfolio's investment in such securities, subject to certain
exceptions, currently is 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.
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,
certain privately negotiated non-exchange traded options 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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE
MADE.
December 1, 1995
DREYFUS ASSET ALLOCATION
FUND, INC.
SUPPLEMENT TO PROSPECTUS
DATED SEPTEMBER 1, 1995
THE FOLLOWING INFORMATION SUPPLEMENTS OR REPLACES THE
INFORMATION CONTAINED IN THE SECTIONS OF THE FUND'S PROSPECTUS
ENTITLED "MANAGEMENT OF THE FUND," "HOW TO BUY FUND SHARES,"
"SHAREHOLDER SERVICES," AND "HOW TO REDEEM FUND SHARES":
Dreyfus Transfer, Inc., a wholly-owned subsidiary of The
Dreyfus Corporation, is located at One American Express Plaza,
Providence, Rhode Island 02903, and serves as the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer Agent").
Effective January 1, 1996, the telephone number for the
following transactions is 1-800-645-6561 or, if you are calling
from overseas, 516-794-5452:
* Dreyfus TELETRANSFER Privilege
* Telephone Exchange Privilege
* Wire Redemption Privilege
* Telephone Redemption Privilege
<PAGE>
PROSPECTUS SEPTEMBER 1, 1995
DREYFUS ASSET ALLOCATION FUND, INC.
________________________________________________________________
DREYFUS ASSET ALLOCATION FUND, INC. (THE "FUND") IS AN
OPEN-END, NON-DIVERSIFIED 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. YOU CAN PURCHASE OR REDEEM SHARES BY
TELEPHONE USING DREYFUS TELE-TRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES EACH
PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT
THE FUND THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE
READ AND RETAINED FOR FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED SEPTEMBER
1, 1995, 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 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM
TIME TO TIME.
________________________________________________________________
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses............ 3
Condensed Financial Information........... 4
Description of the Fund................... 4
Management of the Fund.................... 14
How to Buy Fund Shares.................... 16
Shareholder Services...................... 18
How to Redeem Fund Shares ................ 21
Shareholder Services Plan................. 23
Dividends, Distributions and Taxes........ 24
Performance Information................... 25
General Information....................... 25
________________________________________________________________
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.
________________________________________________________________
[This Page Intentionally Left Blank]
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Dreyfus Dreyfus Dreyfus
Total Return Income Growth
Portfolio Portfolio Portfolio
______________ ____________ _________
<S> <C> <C> <C>
Management Fees........................................................ .75% .75% .75%
Other Expenses......................................................... .69% 1.75% 1.75%
Total Operating Expenses............................................... 1.44% 2.50% 2.50%
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................................................................. $ 15 $ 25 $ 25
3 YEARS................................................................ $ 46 $ 78 $ 78
5 YEARS................................................................ $ 79 $ 133 $ 133
10 YEARS............................................................... $ 172 $ 284 $ 284
- ------------------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS REPRESEN-TATIVE 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%.
- --------------------------------------------------------------------------------------------
</TABLE>
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 Operating Expenses for
the Dreyfus Income Portfolio and Dreyfus Growth Portfolio are
based on estimated amounts for the
current fiscal year. The information in the foregoing table has
been restated to reflect the Fund's termination of its Rule
12b-1 Plan, but does not reflect any fee waivers or expense
reimbursement arrangements that may be in effect. You can
purchase Portfolio shares without charge directly from the
Fund's distributor; you may be charged a nominal fee if you
effect transactions in Fund shares through a securities dealer,
bank or other financial institution. See "Management of the
Fund," "How to Buy Fund Shares" 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 for each
Portfolio are included in the Statement of Additional
Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data
for a share of Common Stock outstanding, total investment
return, ratios to average net
assets and other supplemental data for each Portfolio for the
periods indicated. This information has been derived from the
Fund's financial statements.
<TABLE>
<CAPTION>
DREYFUS DREYFUS DREYFUS
TOTAL RETURN INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
___________________________________ ___________________________ __________________
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 1994(1) APRIL 30, 1995 APRIL 30, 1995(2) APRIL 30, 1995(2)
__________________ _______________ ___________________________ __________________
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period...... $12.50 $12.49 $12.50 $12.50
___________ ____________ _____________ _____________
INVESTMENT OPERATIONS:
Investment income-net .................... .24 .39 .20 .45
Net realized and unrealized gain (loss)
on investments (.11) 1.35 1.18 .24
___________ ____________ _____________ _____________
TOTAL FROM INVESTMENT OPERATIONS............ .13 1.74 1.38 .69
___________ ____________ _____________ _____________
DISTRIBUTIONS:
Dividends from investment income-net........ (.13) (.37) (.17) (.03)
Dividends from net realized gain
on investments (.01) (.05) -- --
___________ ____________ _____________ _____________
TOTAL DISTRIBUTIONS....................... (.14) (.42) (.17) (.03)
___________ ____________ _____________ _____________
Net asset value, end of period.............. $12.49 $13.81 $13.71 $13.16
___________ ____________ _____________ _____________
TOTAL INVESTMENT RETURN..................... .99%(3) 14.22% 11.14%(3) 5.53%(3)
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... .16%(3) .67% 1.40%(3) 1.40%(3)
Ratio of net investment income to
average net assets 2.48%(3) 3.00% 1.60%(3) 3.91%(3)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus
Corporation... 1.58%(3) 1.27% 1.60%(3) 4.63%(3)
Portfolio Turnover Rate................... - 160.11% 94.33%(3) 497.41%(3)
Net Assets, end of period (000's omitted). $51,063 $56,639 $1,386 $1,368
</TABLE>
(1). From July 1, 1993 (commencement of operations) through
April 30, 1994.
(2). From October 18, 1994 (commencement of operations) through
April 30, 1995.
(3) Not annualized.
Further information about the performance of each
Portfolio is contained in the Fund's annual report which may be
obtained without charge by writing to the address or calling the
number set forth on the cover page of this Prospectus.
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 Portfolios differ only with
respect to their asset class weightings and, in the case of the
Dreyfus Growth Portfolio, the types of common stocks in which it
may invest.
The following table sets forth for each Portfolio the
asset classes, benchmark percentages and asset class strategy
ranges within which The Dreyfus Corporation intends to manage
the Portfolio's assets:
<TABLE>
<CAPTION>
DREYFUS TOTAL DREYFUS INCOME DREYFUS GROWTH
RETURN PORTFOLIO PORTFOLIO PORTFOLIO
__________________________ ___________________________ ___________________________
ASSET BENCHMARK STRATEGY BENCHMARK STRATEGY BENCHMARK STRATEGY
CLASS PERCENTAGE RANGE PERCENTAGE RANGE PERCENTAGE RANGE
______ ___________ ___________ ___________ _________ ___________ __________
<S> <C> <C> <C> <C> <C> <C>
Common Stocks 55% 40-70% 35% 25-45% 80% 65-95%
U.S. Treasury Notes and
Bonds 35% 25-50% 55% 45-70% - -
Short-Term Money Market
Instruments 10% 0-15% 10% 0-15% - -
Debt Instruments (consisting - - - - 20% 5-35%
of U.S. Treasury Notes and
Bonds and Short-Term Money
Market Instruments)
</TABLE>
The Dreyfus Corporation has broad latitude in selecting
the class of investments and market sectors in which each
Portfolio will invest. Under normal market conditions, The
Dreyfus Corporation expects to adhere to the asset class
strategy ranges set forth above; however, it reserves the right
to vary the asset class mix and the percentage of securities
invested in any asset class or market from the benchmark
percentages and asset class strategy
ranges set forth above as the risk/return characteristics of
either markets or asset classes, as assessed by The Dreyfus
Corporation, vary over time.
None of the Portfolios will be managed as a balanced portfolio.
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
Portfolio 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 consist
of those included in the Standard & Poor's 500 Stock Index (the
"S&P 500 Index").[FN] The S&P 500 Index is composed of 500
selected common stocks, most of which are listed
- --------------------
[FN] "Standard & Poor's," "S&PRegistration Mark" and "S&P
500Registration Mark" are trademarks of Standard & Poor's
Corporation.
on the New York Stock Exchange. The composition of the S&P
500 Index is determined by Standard & Poor's Corporation based
on such factors as the market capitalization and trading
activity of each stock and its adequacy as
a representative of stocks in a particular industry group, and
may be changed from time to time. The common stocks in which the
Dreyfus Growth Portfolio invests consist of those included in
the Wilshire 5000 Index. The Wilshire
5000 Index is composed of all publicly-traded common stocks in
the United States. The Fund is not sponsored, endorsed, sold or
promoted by Standard & Poor's Corporation or Wilshire
Associates.
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. For
temporary defensive purposes, 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 up to 331/3% of the value of its total
assets. This borrowing, which is known as leveraging, generally
will be unsecured, except to the extent a Portfolio enters into
reverse repurchase agreements described below.
Leveraging will 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.
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.
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. 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.
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.
No securities will be sold short by a Portfolio if,
after effect is given to any such short sale, the total market
value of all securities sold
short by the Portfolio would exceed 25% of the value of its net
assets. No Portfolio may sell short the securities of any single
issuer on a national securities exchange to the extent of more
than 5% of the value of its net assets. No Portfolio may sell
short the securities of any class of an issuer
to the extent, at the time of the transaction, of more than 5%
of the outstanding securities of that class.
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 Portfolio owns. At no time
will a Portfolio have more than 15% of the value of its 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
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 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, 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 to possible continued holding of a
security which might otherwise have been
sold to protect against depreciation in its market price. 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.
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. Similarly, the principal reason for
writing covered put options is to realize income in the form of
premiums. 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" by
purchasing an option on the same security 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 such Portfolio are qualified for offer
and sale.
STOCK INDEX OPTIONS _ Each Portfolio may purchase and write put
and call options on stock indices 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 indices, 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 indices 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 the Fund's
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 or 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.
To the extent a Portfolio is engaging in a futures
transaction as a hedging device, because of the risk of an
imperfect correlation between securities owned by the 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 if, for example,
losses on the portfolio securities exceed gains on the futures
contract or losses on the
futures contract exceed gains on the portfolio securities. For
futures contracts based on indices, the risk of imperfect
correlation increases as the
composition of the 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 the market does not move 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. Furthermore, if in such circumstances the
Portfolio has insufficient cash, it may have to sell securities
to meet daily variation margin requirements.The Portfolio may
have to sell such 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 as a substitute for
a comparable market position in the underlying securities or for
hedging purposes.
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 indices 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 or 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 or statement of additional information.
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 331/3%
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. The 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
Portfolios 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 each Portfolio 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. 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. 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.
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. No Portfolio will
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 Standard & Poor's Corporation ("S&P"),
F-1 by Fitch Investors Service, Inc. ("Fitch") or Duff-1 by Duff
& Phelps Credit Rating Co. ("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.
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 privately
negotiated non-exchange traded options and securities used to
cover such options. As to these securities, a Portfolio is
subject to a risk that should the Portfolio 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.
CERTAIN FUNDAMENTAL POLICIES
Each Portfolio may (i) borrow money to the extent
permitted under the Investment Company Act of 1940, which
currently limits borrowing to no more than 331/3% of the value
of the Portfolio's total assets; 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
such Portfolio's outstanding voting shares. 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.
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.
Each Portfolio's ability to engage in certain short-term
transactions may be limited by the requirement that, to qualify
as a regulated investment company, the 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.
FOREIGN SECURITIES _ Since the stocks of some foreign issuers
are included in the S&P 500 Index and the Wilshire 5000 Index, a
Portfolio's investments may contain securities of such foreign
issuers which may subject the Portfolio to additional investment
risks with respect to those securities that are different in
some respects from those incurred by a fund that 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 that
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.
Each Portfolio's classification as a "non-diversified"
investment company means that the proportion of the 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 the 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 the
Portfolio's total assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more
than 25% of the value of the 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). Because a relatively high
percentage of each Portfolio'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 Portfolio'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 advised
by The Dreyfus Corporation.
However, if such other investment companies 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 investment company. 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 May 31, 1995, The Dreyfus Corporation managed
or administered approximately $76 billion in assets for more
than 1.8 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 portfolio manager of each Portfolio
is Ernest G. Wiggins, Jr. He has held that position since May
12, 1994 and has been an employee of The Dreyfus Corporation
since December 1993. From
1992 to December 1993, Mr. Wiggins was President of Gabelli
International and, prior thereto, he held various positions
with Fidelity Management and
Research Company. The Fund's other portfolio managers are
identified 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 securities 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, including The
Dreyfus Corporation, Mellon managed more than
$203 billion in assets as of June 30, 1995, including
approximately $73 billion in proprietary mutual fund assets. As
of March 31, 1995, Mellon,
through various subsidiaries, provided non-investment services,
such as custodial or administration services, for approximately
$707 billion in assets, including approximately $71 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 fiscal year ended April 30, 1995, no
management fee was paid by the Fund with respect to any
Portfolio pursuant to an undertaking by The Dreyfus Corporation.
All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by
The Dreyfus Corporation. The expenses 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 prospectuses and statements of additional information,
for regulatory purposes and for distribution to
existing shareholders, 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.
The Dreyfus Corporation may pay the Fund's distributor
for shareholder services from The Dreyfus Corporation's own
assets, including past profits but not including the management
fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay
Service Agents (as defined below) in respect of these services.
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 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 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, 90 Washington
Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY FUND SHARES
Portfolio shares are sold without a sales charge. You
may be charged a nominal fee if you effect transactions in
Portfolio shares through the Distributor or certain financial
institutions, securities dealers and other industry
professionals (collectively, "Service Agents"). 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.
Portfolio shares also are offered without regard to the minimum
initial investment requirements through
Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to
the Dreyfus Step Program
described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may provide you
with a convenient way to invest for long-term financial goals.
You should be aware, however, that periodic investment plans do
not guarantee a profit and will not protect an investor against
loss in a declining market.
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 subse-
quent 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 bank account is in a
commercial bank that is a member of the Federal Reserve System
or any other bank having a correspondent bank in New York City.
Immediately available funds may be transmitted by wire to The
Bank of New York, 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# 8900104481/Dreyfus Asset Allocation Fund,
Inc./Dreyfus Income Portfolio
DDA# 8900104503/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 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."
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"). 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 the 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.
For certain institutions that have entered into
agreements with the Distributor, payment for the purchase of
Portfolio shares may be transmitted, and must be received by the
Transfer Agent, within three business days after the order is
placed. If such payment is not received within three business
days after the order is placed, the order may be canceled and
the institution could be held liable for resulting fees and/or
losses.
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 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 shares by
telephoning 1-800-221-4060 or, if you are calling from overseas,
call 1-401-455-3306.
SHAREHOLDER SERVICES
FUND EXCHANGES
You may 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. If you desire to use
this service, you should consult your Service Agent or call
1-800-645-6561 to determine if it is available and whether any
conditions are imposed on its use.
To request an exchange, you must give exchange
instructions to the Transfer Agent in writing or by telephone.
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 by calling
1-800-645-6561. Except in the case of personal retirement plans,
the shares being exchanged must have a current value of at least
$500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at
least the minimum initial investment required for the fund into
which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders
automatically, unless you check the applicable "No"
box on the Account Application, indicating that you specifically
refuse this privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed
by all shareholders on the account, or by a separate signed
Shareholder Services Form, also available by
calling 1-800-645-6561. If you 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." Upon an exchange into a new account,
the following shareholder services and privileges, as applicable
and where available, will be automatically carried over to the
fund into which the exchange is made:
Telephone Exchange Privilege, Wire Redemption Privilege,
Telephone Redemption
Privilege, 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
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 availability of Fund Exchanges 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 cancelled 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 BUILDERRegistration Mark
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
by calling 1-800-645-6561. You may cancel your participation in
this Privilege or changethe 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 notifica-
tion 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
by calling 1-800-645-6561. 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 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 by
calling 1-800-645-6561. 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 the Distributor, 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.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Portfolio
shares without regard to the Fund's minimum initial investment
requirements through Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings
Plan. To establish a Dreyfus Step Program account,
you must supply the necessary information on the Fund's Account
Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or
to request the necessary authorization form(s), please call toll
free 1-800-782-6620. You may terminate your participation in
this Program at any time by discontinuing
your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings
Plan, as the case may be, as provided under the terms of such
Privilege(s). The Fund may modify or terminate this Program at
any time. Investors who wish to purchase Fund
shares through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs,
SEP-IRAs and IRA "Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep 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. See "Shareholder Services" in the
Statement of Additional Information. Dreyfus Dividend ACH
permits you to transfer electronically on the payment date
dividends or dividends and capital gain distributions, if any,
from the Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is
an Automated Clearing House member may be so designated. Banks
may charge a fee for this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call toll free
1-800-645-6561. 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, IRAs or other retirement plans
are not eligible for these privileges.
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 by calling 1-800-645-6561. There
is a service charge of 50cents 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.
Service Agents may charge their clients 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 SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO
THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED
TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM
SHARES 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, the Wire Redemption
Privilege, the Telephone Redemption Privilege or 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 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 privilege or telephone
exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act
on telephone instructions from any person representing himself
or herself to be you, 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, the 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 guaranteed. The Transfer Agent has
adopted standards and procedures pursuant to which
signature-guarantees in proper
form generally will be accepted from domestic banks, brokers,
dealers, credit unions, national securities exchanges,
registered securities associations,
clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion
Program. If you have any questions with respect to
signature-guarantees,
please 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 not more than $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 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 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 not more than $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 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.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan,
pursuant to which it 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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DREYFUS TOTAL RETURN PORTFOLIO AND DREYFUS GROWTH PORTFOLIO _
Declare and pay dividends from net investment income annually.
DREYFUS INCOME PORTFOLIO _ Declares and pays dividends from net
investment income quarterly.
APPLICABLE TO ALL PORTFOLIOS _ 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 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. No Portfolio will 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 all or a portion of any gain realized 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 Portfolio 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 all or a portion of any gain realized 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 constitute an additional tax imposed
on the record owner of the account, and may be claimed as a
credit on the record owner's Federal income tax return.
Management of the Fund believes that each Portfolio has
qualified for the fiscal year ended April 30, 1995 as a
"regulated investment company"
under the Code. Each Portfolio intends to continue to so qualify
if such qualification is in the best interests of its
shareholders. Qualification as
a "regulated investment company" relieves a Portfolio of any
liability for Federal income taxes to the extent its earnings
are distributed in accordance
with applicable provisions of the Code. 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.
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 Portfolios' shares,
including data from Lipper Analytical Services, Inc.,
Morningstar, Inc., Standard & Poor's 500 Stock Index, the Dow
Jones Industrial Average, Moody's Bond Survey Bond Index, Bond
Buyer's 20-Bond Index, Wilshire 5000 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 August 26,
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; outside the U.S. and Canada, call 516-794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE
MADE.
<PAGE>
DREYFUS LIFETIME PORTFOLIOS, INC.
PART B
STATEMENT OF ADDITIONAL INFORMATION
March __, 1996
Acquisition of the Assets of
DREYFUS ASSET ALLOCATION FUND, INC.
GROWTH SERIES
INCOME SERIES
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
1-800-554-4611
By and in Exchange for Investor Class Shares of
DREYFUS LIFETIME PORTFOLIOS, INC.
GROWTH PORTFOLIO
INCOME PORTFOLIO
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
1-800-554-4611
This Statement of Additional Information, which is not
a prospectus, supplements and should be read in conjunction with
the Combined Proxy Statement/Prospectus dated March __, 1996,
relating specifically to the proposed transfer of all or
substantially all of the assets and liabilities of the Growth
Series and the Income Series of Dreyfus Asset Allocation Fund,
Inc. in exchange for Investor Class shares of the Growth
Portfolio and the Income Portfolio, respectively, of Dreyfus
LifeTime Portfolios, Inc. Each such transfer is to occur
pursuant to an Agreement and Plan of Reorganization. This
Statement of Additional Information consists of this cover page
and the following described documents, each of which is attached
hereto and incorporated herein by reference:
1. The Statement of Additional Information of Dreyfus
LifeTime Portfolios, Inc. dated January 15, 1996.
2. Annual Report of Dreyfus LifeTime Portfolios, Inc.
for the fiscal year ended September 30, 1995.
3. Annual Report of Dreyfus Asset Allocation Fund,
Inc. for the fiscal year ended April 30, 1995.
4. Semi-Annual Report of Dreyfus Asset Allocation
Fund, Inc. for the six-month period ended October 31, 1995.
5. Pro Forma Financial Statements.
The Combined Proxy Statement/Prospectus dated March __,
1996 may be obtained by writing to Dreyfus LifeTime Portfolios,
Inc., c/o The Dreyfus Corporation, 200 Park Avenue, New York,
New York 10166.
<PAGE>
DREYFUS LIFETIME PORTFOLIOS, INC.
INCOME PORTFOLIO
GROWTH AND INCOME PORTFOLIO
GROWTH PORTFOLIO
INVESTOR CLASS AND CLASS R
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 15, 1996
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of Dreyfus LifeTime Portfolios, Inc. (the
"Fund"), dated January 15, 1996, 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
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation ("Dreyfus") serves as each
Portfolio's investment adviser. Dreyfus has engaged Mellon
Equity Associates ("Mellon Equity") to serve as each Portfolio's
sub-investment adviser and to provide day-to-day management of
each Portfolio's investments, subject to the supervision of
Dreyfus. Dreyfus and Mellon Equity are referred to collectively
as the "Advisers."
Premier Mutual Fund Services, Inc. (the "Distributor") is
the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies. . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . B-12
Management Arrangements. . . . . . . . . . . . . . . . . . B-17
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . B-19
Shareholder Services Plan. . . . . . . . . . . . . . . . . B-20
Redemption of Fund Shares. . . . . . . . . . . . . . . . . B-21
Shareholder Services . . . . . . . . . . . . . . . . . . . B-23
Determination of Net Asset Value . . . . . . . . . . . . . B-26
Dividends, Distributions and Taxes . . . . . . . . . . . . B-27
Portfolio Transactions . . . . . . . . . . . . . . . . . . B-28
Performance Information. . . . . . . . . . . . . . . . . . B-29
Information About the Fund . . . . . . . . . . . . . . . . B-30
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors . . . . . . . . . . . . B-31
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . B-32
Financial Statements . . . . . . . . . . . . . . . . . . . B-37
Report of Independent Auditors . . . . . . . . . . . . . . B-59
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the sections in the Fund's Prospectus entitled
"Description of the Fund" and "Appendix."
Investment Approach
I. Asset Allocation Baseline. For each Portfolio, Mellon
Equity will establish an asset allocation baseline (the
"Portfolio Baseline"). The Portfolio Baseline describes target
levels or relative weights for the Portfolio's asset classes:
Level One describes the relative weighing of total assets
between international assets, domestic assets, and money market
instruments; Level Two describes the relative weighing of
international and domestic assets between common stock and
fixed-income assets; and Level Three describes the relative
weighing of domestic common stock assets between large and small
capitalization stocks. The following table illustrates this
hierarchy:
<TABLE>
<CAPTION>
Level One Level Two Level Three
International
Total Assets Assets Domestic Assets Domestic Equity
------------ ------------- --------------- ---------------
Money
Market Fixed Fixed
Portfolio Int'l Domestic Instruments Equity Income Equity Income Large Cap Small Cap
- --------- ----- -------- ----------- ------ ------ ------ ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME N/A 90% 10% N/A N/A 25% 75% 100% N/A
GROWTH
AND
INCOME 10% 90% * 50% 50% 50% 50% 80% 20%
GROWTH 15% 85% * 80% 20% 80% 20% 80% 20%
__________
* Not held as an asset class. Money market instruments held for
transactional and liquidity purposes only.
</TABLE>
Mellon Equity will attempt to maintain relative asset class
weights consistent with the Portfolio Baseline as adjusted by
the Active Allocation Overlay described below. At any given
time, however, actual weights will not equal the Portfolio
Baseline because of fluctuations in market values, money market
instruments held for transactional and liquidity purposes, and
Mellon Equity's active allocation overlay
decisions as described below.
II. Active Allocation Overlay. For each of the Growth
Portfolio and the Growth and Income Portfolio, Mellon Equity
will establish two active allocation ranges ("Portfolio Overlay
One" and "Portfolio Overlay Two"). Portfolio Overlay One
describes the amount of over/under weighing to the Portfolio
Baseline for the relative weighing between international and
domestic assets. Portfolio Overlay Two describes the amount of
over/under weighing to the Portfolio Baseline for the relative
weighing of domestic assets between common stock and
fixed-income assets. The following table illustrates these
ranges:
<TABLE>
<CAPTION>
<S> <C> <C>
Portfolio Portfolio Overlay One Portfolio Overlay Two
- --------- --------------------- ---------------------
Range for Relative Weighing of Range for Relative Weighing of
International and Domestic Assets Domestic Assets Between Equity
Assets and Fixed-Income Assets
GROWTH AND INCOME +/- 5% of Portfolio Baseline +/- 15% of Portfolio Baseline
GROWTH +/- 10% of Portfolio Baseline +20%/-15% of Portfolio Baseline
</TABLE>
The following examples illustrate Mellon Equity's
allocation overlay process:
Example 1: Given the Level One Portfolio Baseline for the
Growth and Income Portfolio of 10% of total assets in
international securities and 90% of total assets in domestic
securities, under Portfolio Overlay One, Mellon Equity could
invest as much as 15% of the Growth and Income Portfolio's total
assets in international securities and 85% of its total assets
in domestic securities or as little as 5% of its total assets in
international securities and 95% of its total assets in domestic
securities.
Example 2: Given the Level Two Portfolio Baseline for the
Growth and Income Portfolio of 50% of domestic assets in equity
securities and 50% of domestic assets in fixed-income
securities, under Portfolio Overlay Two, Mellon Equity could
invest as much as 65% of the Growth and Income Portfolio's
assets invested in domestic assets in equity securities and 35%
of such domestic assets in fixed-income securities or as little
as 35% of the Portfolio's assets invested in domestic assets in
equity securities and 65% of such domestic assets in
fixed-income securities.
Under normal circumstances, Mellon Equity expects to
maintain relative asset class weights consistent with the
Portfolio Baseline adjusted by Portfolio Overlay One and
Portfolio Overlay Two as described above. At any given time,
however, actual weights may not fall within the ranges suggested
by the Portfolio Baseline adjusted by Portfolio Overlay One and
Portfolio Overlay Two because of fluctuations in market values,
cash and cash-equivalents held for transactional and liquidity
purposes, and Portfolio rebalancing.
Mellon Equity reserves the right to vary the relative
asset class weights and the percentage of assets invested in any
asset class from the Portfolio Baseline adjusted by Portfolio
Overlay One and Portfolio Overlay Two described above as the
risk and return characteristics of either asset classes or
markets, as assessed by Mellon Equity, vary over time. None of
the Portfolios will be managed as a balanced portfolio, which
would require that at least 25% of the Portfolio's total assets
be invested in fixed-income securities.
III. Implementing the Active Allocation Overlay. To
implement Portfolio Overlay One, Mellon Equity will employ a
proprietary country asset allocation model (the "Country
Model"). The Country Model evaluates the return and risk
characteristics of individual capital markets and their
correlation across countries, incorporates expected movements in
currency markets to determine expected U.S. dollar returns, and
then employs an international correlation model to recommend
appropriate relative weightings.
To implement Portfolio Overlay Two, Mellon Equity will
employ a proprietary domestic asset allocation model (the
"Domestic Model"). The Domestic Model evaluates the return and
risk characteristics of the domestic equity and fixed-income
markets by comparing the valuation of equity and fixed-income
assets relative to their current market prices and long-term
values in the context of the current economic environment. Once
this analysis is completed, the Domestic Model recommends
appropriate relative weightings.
With respect to the Growth Portfolio and the Growth and
Income Portfolio, Mellon Equity will compare each such
Portfolio's relative asset class weights from time to time to
that suggested by the Country Model and the Domestic Model.
Recommended changes will be implemented subject to Mellon
Equity's assessment of current economic conditions and
investment opportunities. From time to time, Mellon Equity may
change the criteria and methods used to implement the
recommendations of the asset allocation models.
IV. Asset Class Benchmarks. For each asset class, other
than money market instruments, a market-based index is
designated as a benchmark or reference for the respective asset
class (the "Asset Class Benchmark"). The Asset Class Benchmarks
are used in the investment management process as described in
the following section. The Asset Class Benchmarks are listed in
the following table:
<TABLE>
<CAPTION>
<S> <C> <C>
Asset Class Portfolios Asset Class Benchmark
- ----------- ---------- ---------------------
Domestic Large Cap Equity Income, Growth and Income and Growth Standard & Poor's 500 Index
Domestic Small Cap Equity Growth and Income and Growth Russell 2000 Index
International Equity Growth and Income and Growth Morgan Stanley Capital International Europe,
Australia, Far East (Free) Index*
Domestic Fixed-Income Income, Growth and Income and Growth Lehman Brothers Government/Corporate
Intermediate Bond Index
International Fixed-Income Growth and Income and Growth J.P. Morgan Non-US Government Bond Index -
Hedged
____________________________
* In U.S. dollars
</TABLE>
Under normal circumstances, Mellon Equity expects to use
the Asset Class Benchmarks as described below. Mellon Equity,
however, reserves the right to substitute another suitable Asset
Class Benchmark if the then-existing Asset Class Benchmark is no
longer calculated, suffers a material change in formula or
content, fails to adequately reflect the return
characteristics of the asset class, or for any other reason, in
the judgment of Mellon Equity, is inappropriate.
V. Asset Class Investment Management. When constructing
portfolios for each asset class, Mellon Equity seeks to select
securities which, in the aggregate, have approximately the same
investment characteristics as those of the Asset Class Benchmark
with expected returns equal to or better than that of the Asset
Class Benchmark. Some of the asset classes will be managed on
an indexed basis and Mellon Equity reserves the right, in its
judgment, to manage asset classes either actively or on an
indexed basis consistent with the Portfolio's investment
objective.
For asset classes managed on an indexed basis, a
statistically based "sampling" technique will be used to
construct portfolios. The sampling technique is expected to
be an effective means of
substantially duplicating the investment performance of the
Asset Class Benchmark. It will not,
however, provide investment performance relative to the Asset
Class Benchmark with the same degree of accuracy that complete
or full replication would provide.
If possible, Mellon Equity will seek to fully replicate
the holdings of an Asset Class Benchmark when managing an
indexed portfolio. Such a strategy is limited by the number of
securities in the Asset Class Benchmark and will not provide
investment performance equal to that of the Asset Class
Benchmark owing to certain factors, including Asset Class
Benchmark changes, calculation rules which assume dividends are
reinvested into the Asset Class Benchmark on ex-dividend dates
and transaction costs of rebalancing.
For asset classes that are actively managed, Mellon Equity
will employ proprietary valuation models to assist in the
selection of stocks and in the construction of portfolios that
maintain the investment characteristics of
the Asset Class Benchmark consistent with the Portfolio's
investment objective. In its active investment process, Mellon
Equity concentrates on fundamental factors such as relative
price/earnings ratios, relative book to
price ratios, earnings growth rates and momentum, and consensus
earnings expectations and changes in that consensus to value and
rank stocks based on expected relative performance to the Asset
Class Benchmark.
Mellon Equity will seek to manage each asset class
consistent with the
descriptions above and with each Portfolio's investment
objective. Across the Portfolios, it is not anticipated that
each asset class will be managed identically with respect to
being an indexed portfolio or actively managed.
For example, the domestic equity, large cap asset class could be
managed as an index portfolio in the Income Portfolio while eing
actively managed in the other Portfolios.
Mellon Equity may choose to combine Asset Class Benchmarks
proportionately if the amount of investable assets in a
Portfolio is deemed
low in the judgment of Mellon Equity. For example, the domestic
equity large cap and small cap Asset Class Benchmarks could be
combined proportionately according to the Portfolio Baseline in
order to create more efficient portfolio management as deemed
appropriate by Mellon Equity.
Mellon Equity would continue to provide investment management
services as described above, but would manage to the combined
Asset Class Benchmark.
Portfolio Securities
Repurchase Agreements. The Fund's custodian or
sub-custodian 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 that enters
into them. In an attempt to reduce the
risk of incurring a loss on a repurchase agreement, each
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 the
resale price.
Commercial Paper and Other Short-Term Corporate
Obligations. These instruments include variable amount master
demand notes, which are obligations that permit the Portfolio to
invest fluctuating amounts at varying rates of interest pursuant
to direct arrangements between the
Portfolio, as lender, and the borrower. These notes permit
daily changes in the amounts borrowed. Because these
obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that
such instruments generally will be traded, and there generally
is no established secondary market for these obligations,
although they are redeemable at face value, plus accrued
interest, at any time. Accordingly,
where these obligations are not secured by letters of credit or
other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and
interest on demand. Such obligations
frequently are not rated by credit rating agencies, and the
Portfolio may invest in them only if at the time of an
investment the borrower meets the criteria set forth in the
Fund's Prospectus for other commercial paper
issuers.
American, European and Continental Depositary Receipts.
(Growth and Income and Growth Portfolio only) Each of the
Growth and Income Portfolio and Growth Portfolio may invest in
the securities of foreign issuers in the
form of American Depositary Receipts, European Depositary
Receipts and Continental Depositary Receipts through "sponsored"
or "unsponsored" facilities. A sponsored facility is
established jointly by the issuer of the underlying security and
a depositary, whereas a depositary may establish
an unsponsored facility without participation by the issuer of
the deposited security. Holders of unsponsored depositary
receipts generally bear all the
costs of such facilities and the depositary of an unsponsored
facility frequently is under no obligation to distribute
shareholder communications
received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect
of the deposited securities.
Illiquid Securities. 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,
where a substantial market of qualified institutional buyers has
developed for certain unregistered securities purchased by a
Portfolio pursuant to Rule
144A under the Securities Act of 1933, as amended, the Fund
intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board.
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 has directed the Advisers 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 restricted
securities pursuant to Rule 144A, a Portfolio's investing in
such securities may have the effect of
increasing the level of illiquidity in its investment portfolio
during such period.
Management Policies
Derivatives. Each Portfolio may invest in Derivatives (as
defined in the Fund's Prospectus) for a variety of reasons,
including to hedge certain market risks, to provide a substitute
for purchasing or selling particular
securities or to increase potential income gain. Derivatives
may provide a cheaper, quicker or more specifically focused way
for the Portfolio to invest than "traditional" securities would.
Derivatives can be volatile and involve various types and
degrees of risk, depending upon the characteristics of the
particular Derivative and the portfolio as a whole. Derivatives
permit the Portfolio to increase,
decrease or change the level of risk to which its portfolio is
exposed in much the same way as the Portfolio can increase,
decrease or change the risk of its portfolio by making
investments in specific securities.
Derivatives may be purchased on established exchanges or
through privately negotiated transactions referred to as
over-the-counter Derivatives. Exchange-traded Derivatives
generally are guaranteed by the clearing agency which is the
issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system
(i.e., margin requirements) operated by the clearing agency in
order to reduce overall
credit risk. As a result, unless the clearing agency defaults,
there is relatively little counterparty credit risk associated
with Derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter Derivatives.
Therefore, each party to an over-the-counter
Derivative bears the risk that the counterparty will default.
Accordingly, the Advisers will consider the creditworthiness of
counterparties to over-the-counter Derivatives in the same
manner as it would review the
credit quality of a security to be purchased by a Portfolio.
Over-the-counter Derivatives are less liquid than exchange-
traded Derivatives since the other party to the transaction may
be the only investor with sufficient understanding of the
Derivative to be interested in bidding for it.
Futures Transactions--In General. A Portfolio may enter
into futures contracts in U.S. domestic markets, such as the
Chicago Board of Trade and the International Monetary Market of
the Chicago Mercantile Exchange, or, in the case of Growth and
Income and Growth Portfolio, on exchanges located
outside the United States, such as the London International
Financial Futures Exchange and the Sydney Futures Exchange
Limited. Foreign markets may offer advantages such as trading
opportunities or arbitrage possibilities not available in the
United States. Foreign markets, however, may have greater risk
potential than domestic markets. For example, some
foreign exchanges are principal markets so that no common
clearing facility exists and an investor may look only to the
broker for performance of the contract. In addition, any
profits that a Portfolio might realize in
trading could be eliminated by adverse changes in the exchange
rate, or the Portfolio could incur losses as a result of those
changes. Transactions on foreign exchanges may include both
commodities which are traded on domestic
exchanges and those which are not. Unlike trading on domestic
commodity exchanges, trading on foreign commodity exchanges is
not regulated by the Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to a
Portfolio which could adversely affect the value of the
Portfolio's net assets.
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 the Portfolio to substantial losses.
Successful use of futures by a Portfolio also is subject to
the ability of the Advisers to predict correctly movements in
the direction of the relevant market and, to the extent the
transaction is entered into for
hedging purposes, to ascertain the appropriate correlation
between the transaction being hedged and the price movements of
the futures contract. For example, if a Portfolio uses futures
to hedge against the possibility of
a decline in the market value of securities held in its
portfolio and the prices of such securities instead increase,
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.
Furthermore, if in such circumstances the Portfolio has
insufficient cash, it may have to sell securities to meet daily
variation margin requirements.
A Portfolio may have to sell such securities at a time when it
may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the
Securities and Exchange Commission, a 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. The segregation of such assets will have
the effect of limiting a Portfolio's ability otherwise to invest
those assets.
Specific Futures Transactions. A Portfolio may purchase
and sell stock index futures contracts. A stock index future
obligates a Portfolio to pay or receive an amount of cash equal
to a fixed dollar amount specified in the futures contract
multiplied by the difference between the
settlement price of the contract on the contract's last trading
day and the value of the index based on the stock prices of the
securities that comprise it at the opening of trading in such
securities on the next business day.
A Portfolio may purchase and sell interest rate futures
contracts. An interest rate future obligates the Portfolio to
purchase or sell an amount of a specific debt security at a
future date at a specific price.
Growth and Income and Growth Portfolios may purchase and
sell currency futures. A foreign currency future obligates the
Portfolio to purchase or sell an amount of a specific currency
at a future date at a specific price.
Options--In General. A Portfolio may purchase and write
(i.e., sell) call or put options with respect to specific
securities. 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, or at a
specific date. 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 written by a Portfolio is a call
option with respect to which the Portfolio owns the underlying
security or otherwise covers the transaction by segregating cash
or other securities. A put option written by a Portfolio is
covered when, among other things, cash or
liquid securities having a value equal to or greater than the
exercise price of the option are placed in a segregated account
with the Fund's custodian to fulfill the obligation undertaken.
The principal reason for writing covered call and put options is
to realize, through the receipt of
premi[Bums, a greater return than would be realized on the
underlying securities alone. A Portfolio receives a premium
from writing covered call or put options which it retains
whether or not the option is exercised.
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 of
the 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 may
otherwise 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, the
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.
Specific Options Transactions. A Portfolio may purchase
and sell call and put options in respect of specific securities
(or groups or "baskets" of specific securities) or stock indices
listed on national securities exchanges or traded in the
over-the-counter market. An option
on a stock index is similar to an option in respect of specific
securities, except that settlement does not occur by delivery of
the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock
index upon which the
option is based is greater than, in the case of a call, or less
than, in the case of a put, the exercise price of the option.
Thus, the effectiveness of purchasing or writing stock index
options will depend upon price movements in the level of the
index rather than the price of a particular stock.
Growth and income and Growth Portfolios may purchase and
sell call and put options on foreign currency. These options
convey the right to buy or sell the underlying currency at a
price which is expected to be lower or higher than the spot
price of the currency at the time the option is exercised or
expires.
Successful use by a Portfolio of options will be subject to
the ability of the Advisers to predict correctly movements in
the prices of individual stocks or the stock market generally.
To the extent such predictions are incorrect, a Portfolio may
incur losses.
Future Developments. A Portfolio may take advantage of
opportunities in the area of options and futures contracts and
options on futures contracts and any other Derivatives which are
not presently contemplated for use by the Portfolio 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, the Fund will provide appropriate disclosure in its
Prospectus or Statement of Additional Information.
Lending Portfolio Securities. In connection with its
securities lending transactions, a Portfolio 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 must terminate the loan and regain the right to
vote the securities if a material event adversely affecting the
investment occurs.
Forward Commitments. Securities purchased on a forward
commitment or when-issued basis are subject to changes in value
(generally changing in the same way, i.e., appreciating when
interest rates decline and depreciating when interest rates
rise) based upon the public's perception
of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Securities
purchased on a forward commitment
or when-issued basis may expose a Portfolio to risks because
they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can
involve the additional risk that the yield available in the
market when the delivery takes place actually may
be higher than that obtained in the transaction itself.
Purchasing securities on a forward commitment or when-issued
basis when 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.
Investment Restrictions
Each Portfolio has adopted investment restrictions numbered
1 through 10 as fundamental policies, which cannot be changed,
as to a Portfolio, without approval by the holders of a majority
(as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of such
Portfolio's outstanding voting shares. Investment restrictions
numbered 11 through 16 are not fundamental policies and may be
changed by vote of a majority of the Fund's Board members at any
time. No Portfolio may:
1. Invest more than 5% of its assets in the obligations
of any single issuer, except that up to 25% of the value of the
Portfolio's total assets may be invested, and securities issued
or guaranteed by the U.S. Government, or its agencies or
instrumentalities may be purchased, without
regard to any such limitation.
2. Hold more than 10% of the outstanding voting
securities of any single issuer. This Investment Restriction
applies only with respect to 75% of the Portfolio's total
assets.
3. Invest in commodities, except that the Portfolio may
purchase and sell options, forward contracts, futures contracts,
including those relating to indices, and options on futures
contracts or indices.
4. 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.
5. Borrow money, except to the extent permitted under the
1940 Act (which currently limits borrowing to no more than
33-1/3% of the Portfolio's total assets). For purposes of this
investment restriction, the entry into options, forward
contracts, futures contracts, including
those relating to indices, and options on futures contracts or
indices shall not constitute borrowing.
6. 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.
7. 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.
8. 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.
9. Issue any senior security (as such term is defined in
Section 18(f) of the 1940 Act), except to the extent the
activities permitted in Investment Restriction Nos. 3, 5, 12
and 13 may be deemed to give rise to a senior security.
10. 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 indices, and options on futures contracts or indices.
11. 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.
12. 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 indices, and options on
futures contracts or indices.
13. 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.
14. 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.
15. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
15% of the value of the Portfolio's net assets would be so
invested.
16. Purchase securities of other investment companies,
except to the extent permitted under the 1940 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 1940 Act, is
indicated by an asterisk.
Directors 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 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. From 1980 to 1994, Mrs. Benson was a
director of the Grumman Corporation. 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. Mrs. Benson is 68 years old and her address is
46 Sunset Avenue, Amherst, Massachusetts 01002.
*DAVID W. BURKE, Director. Chairman of the Broadcasting Board
of Governors, an independent board within the United States
Information Agency, since August 1995. From August 1994 to
February 1995, Mr. Burke was Consultant to the Manager, and from
October 1990 to August 1994, he was Vice President and Chief
Administrative Officer of 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. He
is 59 years old and his address is 200 Park Avenue, New York
10166.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January
1995, Chairman of the Board of various funds in the Dreyfus
Family of Funds. For more than five years prior thereto, he was
President, a director and, until August 1994, Chief Operating
Officer of Dreyfus and Executive Vice President and a director
of Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus and, until August 24, 1994, the Fund's distributor.
From August 1994 to December 31, 1994, he was a director of
Mellon Bank Corporation. He is Chairman of the Board of
the Noel Group, Inc., a venture capital company; a trustee of
Bucknell University; and a director of the Muscular Dystrophy
Association, HealthPlan Services Corporation, Belding Heminway,
Inc., a manufacturer and marketer of industrial threads,
specialty yarns, home furnishings and fabrics, Curtis
Industries, a national distributor of security products,
chemicals and automotive and other hardware, and Staffing
Resources, Inc. He is 52 years old and his address is 200 Park
Avenue, New York, New York 10166.
MARTIN D. FIFE, Director. Chairman of the Board of Magar Inc.,
a company specializing in financial products and developing
early stage companies, since November 1987. From 1960 to 1994,
Mr. Fife was President of Fife Associates, Inc. and other
companies engaged in the chemical and plastics industries. In
addition, Mr. Fife is Chairman of the Board and Chief Executive
Officer of Skysat Communications Network Corporation, a company
developing telecommunications systems. Mr. Fife also serves on
the boards of various other companies. He is 68 years old and
his address is The Chrysler Building, 405 Lexington Avenue, New
York, New York 10174.
WHITNEY I. GERARD, Director. Partner of the New York City law
firm of Chadbourne & Parke. Mr. Gerard is 61 years old and 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. He is also a director of Mid Ocean
Reinsurance Co. Ltd and Cooke and Bieler, Inc., investment
counselors. Mr. Glauber is 56 years old and 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
ITT Hartford Insurance Group, Ford Meter Box Corporation, Lawter
International and a member of the advisory councils of several
other companies, research institutes and foundations.
Ambassador Hartman is Chairman of First NIS Regional
Fund (ING/Barings Management). He is a former President of the
Harvard Board of Overseers. Mr. Hartman is 69 years old and 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, State Farm Life Insurance Company
and Federal Realty Investment Trust. Mr. Perry is 61 years old
and his address is 1775 Massachusetts Avenue, N.W., Washington,
D.C. 20015.
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. From 1982 to 1986, he was Assistant Secretary of
State for East Asian and Pacific Affairs, Department of State.
He is a director of Hasbro, Inc. Mr. Wolfowitz is 50 years old
and his address is 1740 Massachusetts Avenue, N.W., Washington,
D.C. 20036.
For so long as the Fund's plan described in the section
captioned "Shareholder Services Plan" remains in effect, the
Board members of the Fund who are not "interested persons" of
the Fund, as defined in the 1940 Act, will be selected and
nominated by the Board members who are not "interested persons"
of the Fund.
The Fund typically pays its Board members an annual
retainer and a per meeting fee and reimburses them for their
expenses. The Chairman of the Board receives an additional 25%
of such compensation. Emeritus Board members are entitled to
receive an annual retainer and a per meeting fee
of one-half the amount paid to them as Board members. The
estimated amount of compensation payable by the Fund to each
Board member for the fiscal year ending September 30, 1996, and
the aggregate amount of compensation paid to each Board member
by all other funds in the Dreyfus Family of Funds for which such
person is a Board member (the number of which is set forth in
parenthesis next to each Board member's total
compensation) for the year ended December 31, 1994, is as
follows:
<TABLE>
<CAPTION>
(3) (5)
(2) Pension or (4) Total Compensation
(1) Aggregate Retirement Benefits Estimated Annual from Fund and
Name of Board Compensation from Accrued as Part of Benefits Upon Fund Complex Paid
Member Fund* Fund's Expenses Retirement to Board Member
- -------------- ----------------- -------------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Lucy Wilson Benson $2,000 none none $ 64,459 (13)
David W. Burke $2,000 none none $ 27,878 (51)
Joseph S. DiMartino $1,763 none none $445,000** (93)
Martin D. Fife $2,000 none none $ 51,750 (11)
Whitney I. Gerard $2,000 none none $ 52,000 (11)
Robert R. Glauber $2,000 none none $ 79,696 (20)
Arthur A. Hartman $2,000 none none $ 52,000 (11)
George L. Perry $2,000 none none $ 52,000 (11)
Paul Wolfowitz $2,000 none none $ 32,631 (10)
______________________________
* Amount does not include reimbursed expenses for attending Board meetings, which are estimated to be approximately $414 for
all Directors as a group.
** Estimated amount for the year ended December 31, 1995.
</TABLE>
Officers of the Fund
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 Dreyfus. From
December 1991 to July 1994, she was President and Chief
Compliance Officer of Funds Distributor, Inc., the ultimate
parent of which is Boston Institutional Group, Inc. Prior to
December 1991, she served as Vice President and Controller, and
later as Senior Vice President, of The Boston Company Advisors,
Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice
President and General Counsel of the Distributor and an officer
of other investment companies advised or administered by
Dreyfus. From February 1992 to July 1994, he served as Counsel
for The Boston Company Advisors, Inc. From August 1990 to
February 1992, he was employed as an Associate at Ropes & Gray.
He is 31 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary.
Associate General Counsel of the Distributor and an officer of
other investment companies advised or administered by Dreyfus.
From September 1992 to August 1994, he was an attorney with the
Board of Governors of the Federal Reserve System. He is 30
years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer.
Senior Vice President of the Distributor and an officer of other
investment companies advised or administered by Dreyfus. From
1988 to August 1994, he was manager of the High Performance
Fabric Division of Springs Industries Inc. He is 33 years old.
JOSEPH S. 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 Dreyfus. From July 1988 to August 1994, he
was employed by The Boston Company, Inc. where he held various
management positions in the Corporate Finance and Treasury
areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies
advised or administered by Dreyfus. From 1984 to July 1994, he
was Assistant Vice President in the Mutual Fund Accounting
Department of Dreyfus. He is 59 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary.
Staff attorney of the Distributor and an officer of other
Investment Companies advised or administered by the Manager.
She is 26 years old.
MARGARET PARDO, Assistant Secretary. Legal Assistant with the
Distributor and an officer of other investment companies advised
or administered by Dreyfus. From June 1992 to April 1995, she
was a Medical Coordinator Officer at ORBIS International. Prior
to June 1992, she worked as Program Coordinator at Physicians
World Communications Group. She is 27 years old.
The address of each officer of the Fund is 200 Park Avenue,
New York, New York 10166.
Directors and officers, as a group, owned less than 1% of
the shares of Common Stock of each Portfolio outstanding on
November 2, 1995.
The following persons are known by the Fund to own,
beneficially and of record, except where indicated, 5% or more
of the outstanding voting securities of the indicated Portfolio
on November 2, 1995: Growth and Income Portfolio, Investor
Class -- Allomon Corporation, C/O Mellon Bank,
ATTN: John Gaylord, 1 Mellon Bank Center 151-657, Pittsburgh,
Pennsylvania 15258 - 99.6186%; Growth and Income Portfolio,
Class R -- Allomon Corporation, C/O Mellon Bank, ATTN: John
Gaylord, 1 Mellon Bank Center
151-657, Pittsburgh, Pennsylvania 15258 - 92.6924%; Mac & Co.
A/C 195-851 (record owner), FBO Office Max, Mellon Bank, N.A.,
Mutual Funds, P.O. Box 320, Pittsburgh, Pennsylvania 15230-0320
(beneficial owner), -7.0975%;
Income Portfolio, Investor Class -- Allomon Corporation, C/O
Mellon Bank, ATTN: John Gaylord, 1 Mellon Bank Center 151-657,
Pittsburgh, Pennsylvania 15258 - 99.7805%; Income Portfolio,
Class R - Allomon Corporation, C/O
Mellon Bank, ATTN: John Gaylord, 1 Mellon Bank Center 151-657,
Pittsburgh, Pennsylvania 15258 - 92.6486%; Growth Portfolio,
Investor Class -- Allomon Corporation, C/O Mellon Bank, ATTN:
John Gaylord, 1 Mellon Bank Center
151-657, Pittsburgh, Pennsylvania 15258 - 99.1137%; Growth and
Income Portfolio, Class R -- Allomon Corporation, C/O Mellon
Bank, ATTN: John Gaylord, 1 Mellon Bank Center 151-657,
Pittsburgh, Pennsylvania 15258 - 99.7303%.
A shareholder who beneficially owns, directly or
indirectly, more than 25% of the Fund's voting securities may be
deemed a "control person" (as defined in the 1940 Act) of the
Fund.
MANAGEMENT ARRANGEMENTS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Management of the Fund."
Management Agreement. Dreyfus supervises investment
management of each Portfolio pursuant to the Management
Agreement (the "Management Agreement") dated August 24, 1994, as
amended February 2, 1995, between Dreyfus and the Fund. As to
each Portfolio, the Management Agreement is
subject to annual approval by (i) the Fund's Board or (ii) vote
of a majority (as defined in the 1940 Act) of the outstanding
voting securities of the Portfolio, provided that in either
event the continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or
Dreyfus, by vote cast in person at a meeting called for the
purpose of voting on such approval.
As to each Portfolio, the Management Agreement is terminable
without penalty, on 60 days' notice, by the Fund's Board or by
vote of the holders of a majority of such Portfolio's shares,
or, upon not less than 90 days'
notice, by Dreyfus. The Management Agreement will terminate
automatically, as to the relevant Portfolio, in the event of its
assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive
Officer; W. Keith Smith, Vice Chairman of the Board; Christopher
M. Condron, President, Chief Operating Officer and a director;
Stephen E. Canter, Vice Chairman, Chief Investment Officer and a
director; Lawrence S. Kash, Vice Chairman-Distribution and a
director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director;
Barbara E. Casey, Vice President-Dreyfus
Retirement Services; Diane M. Coffey, Vice President-Corporate
Communications; Elie M. Genadry, Vice President-Institutional
Sales; William F. Glavin, Jr., Vice President-Corporate
Development; Henry D. Gottmann, Vice President-Retail Sales and
Service; Mark N. Jacobs, Vice President-Legal and Secretary;
Daniel C. Maclean, Vice President and
General Counsel; Jeffrey N. Nachman, Vice President-Mutual Fund
Accounting; Andrew S. Wasser, Vice President-Information
Services; Katherine C. Wickham, Vice President-Human Resources;
Maurice Bendrihem, Controller; Elvira Oslapas, Assistant
Secretary; and Mandell L. Berman,
Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene and
Julian M. Smerling, directors.
Dreyfus maintains office facilities on behalf of the Fund,
and furnishes statistical and research data, clerical help,
accounting, data processing, bookkeeping and internal auditing
and certain other required services to the Fund. Dreyfus also
may make such advertising and promotional expenditures using its
own resources, as it from time to time deems appropriate.
Sub-Investment Advisory Agreement. Mellon Equity provides
investment advisory assistance and day-to-day management of each
Portfolio's investments pursuant to the Sub-Investment Advisory
Agreement (the "Sub-Advisory Agreement") dated February 2, 1995
between Mellon Equity and Dreyfus. As to each Portfolio, the
Sub-Advisory Agreement is subject to
annual approval by (i) the Fund's Board or (ii) vote of a
majority (as defined in the 1940 Act) of such Portfolio's
outstanding voting securities, provided that in either event the
continuance also is approved
by a majority of the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Fund or the
Advisers, by vote cast in person at a meeting called for the
purpose of voting on such approval. As
to each Portfolio, the Sub-Advisory Agreement is terminable
without penalty, (i) by Dreyfus on 60 days' notice, (ii) by the
Fund's Board or by vote of the holders of a majority of such
Portfolio's outstanding voting
securities on 60 days' notice, or (iii) upon not less than 90
days' notice, by Mellon Equity. The Sub-Advisory Agreement will
terminate automatically, as to the relevant Portfolio, in the
event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of
Mellon Equity: Phillip R. Roberts, Chairman of the Board; and
William P. Rydell, President and Chief Executive Officer.
Mellon Equity provides day-to-day management of each
Portfolio's investments, subject to the supervision of Dreyfus
and the approval of the Fund's Board. The Advisers provide the
Fund with portfolio managers who
are authorized by the Fund's Board to execute purchases and
sales of securities for each Portfolio. The Fund's portfolio
manager is Steven A. Falci. The Advisers maintain research
departments with professional
portfolio managers and securities analysts who provide research
services for the Fund as well as for other funds advised by
Dreyfus and Mellon Equity.
Expenses. All expenses incurred in the operation of the
Fund are borne by the Fund, except to the extent specifically
assumed by Dreyfus. The expenses 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
Board members who are not officers, directors, employees or
holders of 5% or more of the outstanding voting securities of
the Advisers or their affiliates, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory
fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses,
costs of maintaining the Fund's existence, costs of independent
pricing services, 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
shareholders, costs of shareholders' reports and meetings, and
any extraordinary expenses. In
addition, the Investor Class shares are subject to an annual
service fee for ongoing personal services relating to
shareholder accounts and
services related to the maintenance of shareholder accounts.
See "Shareholder Services Plan." Expenses attributable to a
particular Portfolio are charged against the assets of that
Portfolio; other expenses
of the Fund are allocated among the Portfolios on the basis
determined by the Fund's Board, including, but not limited to,
proportionately in relation to the net assets of the Portfolios.
As compensation for its services, the Fund has agreed to
pay Dreyfus a monthly management fee at the annual rate of .60
of 1% of the value of the Income Portfolio's average daily net
asset and at the annual rate of .75 of 1% of the value of each
of the Growth Portfolio's and the Growth
and Income Portfolio's average daily net assets. For the period
March 31, 1995 (commencement of operations) through September
30, 1995, the
management fees payable with respect to the Income Portfolio,
Growth Portfolio, and Growth and Income Portfolio amounted to
$47,599, $82,882 and $61,635, respectively. These fees were
reduced pursuant to an undertaking by Dreyfus by $41,157,
$56,446 and $53,875, respectively, resulting in a net fee being
paid of $6,442 by the Income Portfolio,
$20,436 by the Growth Portfolio and $7,760 by the Growth and
Income Portfolio.
As compensation for Mellon Equity's services, Dreyfus has
agreed to pay Mellon Equity a monthly fee at the annual rate
described in the Fund's Prospectus. For the period from March
31, 1995 (commencement of
operations) through September 30, 1995, the sub-investment
advisory fee payable by Dreyfus amounted to $27,765.90 with
respect to the Income
Portfolio, $38,678.43 with respect to the Growth Portfolio and
$28,762.87 with respect to the Growth and Income Portfolio. All
of such fees were absorbed by Dreyfus resulting in the
Portfolios paying no fee to Mellon Equity.
Dreyfus has agreed that if in any fiscal year the aggregate
expenses of a 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 that Portfolio, the Fund may deduct from the payment to be
made to Dreyfus under the Management Agreement, or Dreyfus will
bear, such excess expense to the extent required by state law.
Such deduction or payment, if any,
will be estimated daily, and reconciled and effected or paid, as
the case may be, on a monthly basis.
The aggregate of the fees payable to Dreyfus is not subject
to reduction as the value of the Portfolios' 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 on a best efforts basis 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. In some states, banks or other financial
institutions effecting transactions in Portfolio shares may be
required to register as dealers pursuant to state law.
Dreyfus TeleTransfer Privilege--Investor Class. Dreyfus
TeleTransfer purchase orders may be made at any time. Purchase
orders received by 4:00 P.M., New York time, on any business day
that Dreyfus Transfer, Inc., the Fund's transfer and dividend
disbursing agent (the "Transfer Agent"), and the New York Stock
Exchange are open for business
will be credited to the shareholder's Fund account on the next
bank business day following such purchase order. Purchase
orders made after 4:00 P.M., New York time, on any business day
the Transfer Agent and the New York Stock Exchange are open for
business, or orders made on Saturday,
Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the
shareholder's Fund account on the second bank business day
following such purchase order. To qualify to
use the Dreyfus TeleTransfer Privilege, the initial payment for
purchase of Investor Class 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--Investor Class."
Reopening an Account. An investor may reopen an account
with a minimum investment of $100 without filing a new Account
Application during the calendar year the account is closed or
during the following calendar year, provided the information on
the old Account Application is still applicable.
SHAREHOLDER SERVICES PLAN
(INVESTOR CLASS ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"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. 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. Under the Shareholder Services Plan, the
Distributor may make payments to
certain financial institutions, securities dealers and other
financial industry professionals (collectively, "Service
Agents") in respect to these services.
A quarterly report of the amounts expended under the
Shareholder Services Plan, and the purposes for which such
expenditures were incurred, must be made to the Fund's Board for
its review. In addition, the
Shareholder Services Plan provides that it may not be amended
without approval of the Board, and by the Board members who are
not "interested persons" (as defined in the 1940 Act) of the
Fund and have no direct or
indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection
with the Shareholder Services Plan, by vote cast in person at a
meeting called for the purpose
of considering such amendments. The Shareholder Services Plan
is subject to annual approval by such vote of the Board members
cast in person at a meeting called for the purpose of voting on
the Shareholder Services Plan.
The Shareholder Services Plan was so approved at a meeting held
on August 24, 1995. The Shareholder Services Plan is terminable
at any time with respect to each Portfolio by vote of a majority
of the Board members who are not "interested persons" and have
no direct or indirect financial interest in the operation of the
Shareholder Services Plan or in any agreements entered into in
connection with the Shareholder Services Plan.
Prior Service Plan. As of October 1, 1995, the Fund
terminated its then-existing Service Plan, adopted pursuant to
Rule 12b-1 under the 1940 Act, which provided that the Fund (a)
reimburse the Distributor for payments to certain Service Agents
for distributing each Portfolio's
Investor Class shares and servicing Investor Class shareholder
accounts and (b) pay Dreyfus, Dreyfus Service Corporation and
any affiliate of either of them for advertising and marketing
relating to each Portfolio's
Investor Class and servicing Investor Class shareholder accounts
at an aggregate annual rate of .25 of 1% of the value of each
Portfolio's average daily net assets. For the period March 31,
1995 (commencement of
operations) through September 30, 1995, the Fund was charged
$9,913, $10,185 and $13,813 with respect to the Income
Portfolio, Growth and Income Portfolio and Growth Portfolio,
respectively, for advertising,
marketing and distributing shares of the Portfolio's Investor
Class Shares. The Fund was not charged for printing
prospectuses and statements of additional information.
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 ($1,000 minimum)
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, or to a correspondent
bank if the investor's
bank is not a member of the Federal Reserve System. 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."
Stock Certificates; Signatures. Any certificates
representing Portfolio 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.
Dreyfus TeleTransfer Privilege--Investor Class. 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--Investor Class."
Redemption Commitment. The Fund has committed itself to
pay in cash all redemption requests by any shareholder of record
of the Portfolio, limited in amount during any 90-day period to
the lesser of $250,000 or 1% of the value of the 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 Fund's Board 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 investments 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 Portfolio 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 Portfolio's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Fund Exchanges. Shares 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 request an exchange, an investor must give exchange
instructions to the Transfer Agent in writing or by telephone.
The ability to issue exchange instructions by telephone is given
to all Fund shareholders automatically, unless the investor
checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses
this Privilege. By using the Telephone Exchange Privilege, the
investor authorizes the Transfer Agent to act on telephonic
instructions from any person representing himself or herself to
be the investor, and reasonably
believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount
involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone
exchange.
Exchanges of Class R shares held by a Retirement Plan may
be made only between the investor's Retirement Plan account in
one fund and such investor's Retirement Plan account in another
fund.
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
SEP-IRAs with only one participant, the
minimum initial investment is $750. To exchange shares held in
corporate plans, 403(b)(7) Plans and IRAs set up under a
Simplified Employee Pension Plan ("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
Privilege permits an investor to purchase, in exchange for
shares of a Portfolio, shares of the same Class of another
Portfolio or shares of another fund in
the Dreyfus Family of Funds. This Privilege is available only
for existing accounts. With respect to Class R shares held by a
Retirement Plan, exchanges may be made only between the
investor's Retirement Plan
account in one fund and such investor's Retirement Plan account
in another fund. Shares will be exchanged on the basis of
relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification
or cancellation of this Privilege is effective three business
days following notification by the investor. An investor will
be notified if the investor's account falls below the amount
designated to be exchanged
under this Privilege. In this case, an investor's account will
fall to zero unless additional investments are made in excess of
the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA
and other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and
from regular accounts to IRA accounts, but not from IRA accounts
to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and the 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 by calling 1-800-645-6561. The Fund
reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges
service or the Dreyfus Auto-Exchange Privilege may be modified
or terminated at any time upon notice to shareholders.
Automatic Withdrawal. 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
Portfolio shares, not the yield on the shares. If withdrawal
payments exceed reinvested dividends and distributions, the
investor's shares will be
reduced and eventually may be depleted. There is a service
charge of $.50 for each withdrawal 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 the same class of another Portfolio or
shares of another fund in the Dreyfus Family of Funds
of which the investor is a shareholder. Shares of the same
class of other funds purchased pursuant to this privilege will
be purchased on the basis of relative net asset value per share
as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of other
funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other funds
sold with a sales load (referred to herein as "Offered Shares"),
provided that, if the sales load applicable to the Offered
Shares exceeds the maximum sales load charged by the fund from
which dividends or distributions are being swept, without giving
effect to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a contingent
deferred sales charge ("CDSC") and the applicable CDSC, 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.
Investors who wish to purchase Portfolio 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 the
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. Bid price is used when no
asked price is available. Any assets or liabilities initially
expressed in terms of
foreign currency will be translated into dollars at the midpoint
of the New York interbank market spot exchange rate as quoted on
the day of such translation by the Federal Reserve Bank of New
York or if no such rate is
quoted on such date, at the exchange rate previously quoted by
the Federal
Reserve Bank of New York or at such other quoted market exchange
rate as may be determined to be appropriate by the Advisers.
Forward currency contracts will be valued at the current cost of
offsetting the contract.
Because of the need to obtain prices as of the close of trading
on various exchanges throughout the world, the calculation of
net asset value for the Growth and Income and Growth Portfolios
does not take place
contemporaneously with the determination of prices of certain
portfolio securities. Expenses and fees of each Portfolio,
including the management fee paid by the Portfolio and, with
respect to an Investor Class, fees
pursuant to the Fund's Shareholder Services Plan, are accrued
daily and taken into account for the purpose of determining the
net asset value of Portfolio 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 Fund's
Board, are valued at fair value as
determined in good faith by the Board. The Fund's Board will
review the method of valuation on a current basis. In making
their good faith valuation of restricted securities, the Board
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 Fund's Board if it believes 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 Fund's Board.
New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Dividends, Distributions and Taxes."
Management of the Fund believes that each Portfolio
qualified for the fiscal year ended September 30, 1995 as a
"regulated investment company"
under the Internal Revenue Code of 1986, as amended (the
"Code"). Each Portfolio intends to continue to so qualify if
such qualification is in the best interests of its shareholders.
Qualification as a regulated
investment company relieves the Portfolio from any liability for
Federal income taxes to the extent its earnings are distributed
in accordance with the 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 any gain realized from the sale or
other disposition of certain market
discount bonds will be treated as ordinary income under Section
1276 of the Code. Finally, all or a portion of the gain
realized from engaging in
"conversion transactions" may be treated as ordinary income
under Section 1258 of the Code. "Conversion transactions" are
defined to include certain forward, futures, option and straddle
transactions, transactions
marketed or sold to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, any gain or loss realized
by the 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 the Portfolio characterized in the manner
described above.
Offsetting positions held by the 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 of the Code. As
such, all or a portion of any
short-term or long-term capital gain from certain "straddle"
transactions may be recharacterized to ordinary income. If the
Portfolio were treated as entering into "straddles" by reason of
its engaging in certain forward
contracts or options transactions, such "straddles" would be
characterized as "mixed straddles" if the forward contracts or
options transactions comprising a part of such "straddles" were
governed by Section 1256 of the
Code. The 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" and conversion transactions 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"
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 the 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 the Portfolio to recognize income prior
to the receipt of cash payments. For example, the 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,
the 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.
If the Growth and Income Portfolio or Growth Portfolio
invests in an entity that is classified as a "passive foreign
investment company" ("PFIC") for Federal Income Tax purposes,
the operation of certain
provisions of the Code applying to PFICs could result in the
imposition of certain Federal income taxes on the Portfolio. In
addition, gain realized
from the sale or other disposition of PFIC securities may be
treated as ordinary income under Section 1291 of the Code.
PORTFOLIO TRANSACTIONS
The Advisers assume general supervision over placing orders
on behalf of the Portfolio for the purchase or sale of
investment securities.
Allocation of brokerage transactions, including their frequency,
is made in the Advisers' best judgment and in a manner deemed
fair and reasonable to shareholders. The primary consideration
is prompt execution of orders at the most favorable net price.
Subject to this consideration, the brokers selected will include
those that supplement the Advisers' research facilities with
statistical data, investment information, economic facts
and opinions. Information so received is in addition to and not
in lieu of services required to be performed by the Advisers and
the Advisers' fees are not reduced as a consequence of the
receipt of such supplemental information.
Such information may be useful to Dreyfus in serving both
the Fund and other funds which it advises and to Mellon Equity
in serving both the Fund and the other funds or accounts it
advises, and, conversely, supplemental information obtained by
the placement of business of other
clients may be useful to the Advisers in carrying out their
obligations to the Fund. Sales of Fund shares by a broker may
be taken into consideration, and brokers also will be selected
because of their ability to handle special executions such as
are involved in large block trades or broad distributions,
provided the primary consideration is met. Large
block trades may, in certain cases, result from two or more
funds advised or administered by Dreyfus being engaged
simultaneously in the purchase or
sale of the same security. Certain of the Fund's transactions
in securities of foreign issuers may not benefit from the
negotiated commission rates available to the Fund for
transactions in securities of
domestic issuers. When transactions are executed in the
over-the-counter market, the Fund will deal with the primary
market makers unless a more favorable price or execution
otherwise is obtainable. Foreign exchange transactions are
made with banks or institutions in the interbank market
at prices reflecting a mark-up or mark-down and/or commission.
Portfolio turnover may vary from year to year as well as
within a year. In periods in which extraordinary market
conditions prevail, the Advisers will not be deterred from
changing investment strategy as rapidly
as needed, in which case higher turnover rates can be
anticipated which would result in greater brokerage expenses.
The overall reasonableness of brokerage commissions paid is
evaluated by Dreyfus based upon its
knowledge of available information as to the general level of
commissions paid by other institutional investors for comparable
services.
For the fiscal year ended September 30, 1995, the Fund paid
total brokerage commissions of $410, $16,001 and $32,428 with
respect to the Income Portfolio, Growth and Income Portfolio and
Growth Portfolio, respectively, none of which was paid to the
Distributor. The Fund paid no concessions or gross spreads on
principal transactions during such periods.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
The Growth and Income Portfolio's total return for the .504
year period from March 31, 1995 (commencement of operations)
through September 30, 1995 was 14.32% and 14.48% for its
Investor Class shares and Class R
shares, respectively. The Growth Portfolio's total return for
the .504 year period from March 31, 1995 (commencement of
operations) through September 30, 1995 was 18.56% and 18.72% for
its Investor Class shares and
Class R shares, respectively. The Income Portfolio's total
return for the .504 year period from March 31, 1995
(commencement of operations) through September 30, 1995 was
8.08% and 8.24% for its Investor Class shares and
Class R shares, respectively. 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.
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.
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 5000
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 have no preemptive,
subscription or conversion rights and are freely transferable.
Rule 18f-2 under the 1940 Act provides that any matter
required to be submitted under the provisions of the 1940 Act 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, that Rule
exempts the selection of independent
accountants and the election of Directors from the separate
voting requirements of the rule.
The Fund will send annual and semi-annual financial
statements to all its shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly owned subsidiary of
Dreyfus, is located at One American Express Plaza, Providence,
Rhode Island 02903, and serves as the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement
with the Fund, the Transfer Agent arranges for the maintenance
of shareholder account records for the Fund, the handling of
certain communications between shareholders and the Fund and the
payment of dividends and distributions payable by the Fund. For
these services, the Transfer Agent receives a monthly fee
computed on the basis of the number of shareholder accounts
during the month, and is reimbursed for certain out-of-pocket
expenses. The Bank of New York, 90 Washington Street, New York,
New York 10286, is the Fund's custodian. Neither the Transfer
Agent nor The Bank of New York has any part in determining the
investment policies of the Fund or which securities are to be
purchased or sold by the Fund.
Stroock & Stroock & Lavan, 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.
APPENDIX
Description of certain ratings assigned by Standard &
Poor's Ratings Group, a division of The McGraw Hill Companies,
Inc. ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch
Investors Service, L.P. ("Fitch") and Duff & Phelps Credit
Rating Co. ("Duff"):
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA
Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the highest rated issues
only in small degree.
A
Bonds rated A have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity
to pay interest and repay principal. Whereas they normally
exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated
categories.
S&P's letter ratings may be modified by the addition of a
plus (+) or minus (-) sign designation, which is used to show
relative standing within the major rating categories, except in
the AAA (Prime Grade) category.
Commercial Paper Rating
The designation A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise
what generally are known as high grade bonds. They are rated
lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there
may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa
Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing within the major rating categories, except in
the Aaa category. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2
indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of a rating
category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper
rating assigned by Moody's. Issuers of P-1 paper must have a
superior capacity for repayment of short-term promissory
obligations, and ordinarily will be evidenced by leading market
positions in well established industries, high
rates of return on funds employed, conservative capitalization
structures with moderate reliance on debt and ample asset
protection, broad margins in earnings coverage of fixed
financial charges and high internal cash
generation, and well established access to a range of financial
markets and assured sources of alternate liquidity.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or
class of debt. The ratings take into consideration special
features of the issue, its relationship to other obligations of
the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect
the issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and
of the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not quite as strong
as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these
issuers is generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and
of satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment.
The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating
category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three
years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to
meet the issuer's obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The
risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.
A
Bonds rated A have protection factors which are average but
adequate. However, risk factors are more variable and greater
in periods of economic stress.
BBB
Bonds rated BBB are considered to have below average
protection factors but still considered sufficient for prudent
investment. Considerable variability in risk during economic
cycles.
Plus (+) and minus (-) signs are used with a rating symbol
(except AAA) to indicate the relative position of a credit
within the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating
assigned by Duff. Paper rated Duff-1 is regarded as having very
high certainty of timely payment with excellent liquidity
factors which are supported by ample asset protection. Risk
factors are minor.
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Income Portfolio
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1995
PRINCIPAL
BONDS AND NOTES--66.5% AMOUNT VALUE
--------- -----
<S> <C> <C>
U.S. GOVERNMENT SECURITIES: U.S. Treasury Bonds:
11 5/8%, 11/15/2004................... $ 600,000 $ 820,969
U.S. Treasury Notes:
7 1/2%, 1/31/1997..................... 2,945,000 3,008,041
5 5/8%, 1/31/1998..................... 3,000,000 2,982,189
5 1/8%, 11/30/1998.................... 250,000 244,141
7 1/8%, 9/30/1999..................... 1,000,000 1,039,375
8 3/4%, 8/15/2000..................... 700,000 779,078
8%, 5/15/2001......................... 1,000,000 1,090,781
7 1/2%, 11/15/2001.................... 180,000 192,740
7 1/2%, 2/15/2005..................... 600,000 653,156
-----------
9,989,501
===========
TOTAL BONDS AND NOTES
(cost $10,577,780).................... $10,810,470
===========
SHORT-TERM INVESTMENTS--31.9%
U.S. TREASURY BILLS: 5.38%, 10/5/1995...................... 41,000 $ 40,971
5.33%, 10/12/1995..................... 40,000 39,931
5.34%, 10/19/1995..................... 161,000 160,554
5.40%, 11/2/1995...................... 75,000 74,636
5.41%, 11/16/1995..................(a) 2,448,000 2,431,035
5.27%, 11/30/1995..................... 50,000 49,554
5.30%, 12/7/1995...................... 2,415,000 2,390,705
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $5,187,909)......................................................... $ 5,187,386
===========
TOTAL INVESTMENTS
(cost $15,765,689)........................................................ 98.4% $15,997,856
====== ===========
CASH AND RECEIVABLES (NET).................................................... 1.6% $ 264,679
====== ===========
NET ASSETS.................................................................... 100.0% $16,262,535
====== ===========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Partially held by the custodian in a segregated account as collateral for open futures positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1995
Financial Futures Purchased; MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/95
--------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Standard & Poor's 500................ 13 $3,823,300 December '95 $160,420
========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth and Income Portfolio
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1995
COMMON STOCKS--46.0% SHARES VALUE
------ -----
<S> <C> <C>
BASIC INDUSTRIES--2.5% Cabot..................................... 200 $ 10,625
Champion International.................... 1,400 75,425
Dow Chemical.............................. 700 52,150
duPont (E.I.) de Nemours.................. 300 20,625
Eastman Chemical.......................... 1,200 76,800
Federal Paper Board....................... 400 15,350
International Paper....................... 1,200 50,400
Lyondell Petrochemical.................... 1,000 25,875
PPG Industries............................ 500 23,250
Temple-Inland............................. 300 15,975
Union Carbide............................. 1,100 43,725
Wellman................................... 700 17,150
Weyerhaeuser.............................. 600 27,375
------------
454,725
------------
CAPITAL SPENDING--10.1% Advanced Micro Devices.................(a) 800 23,300
Applied Materials......................(a) 300 30,675
Arrow Electronics......................(a) 400 21,750
Avnet..................................... 700 36,138
Cabletron Systems......................(a) 800 52,700
Case...................................... 800 29,400
Caterpillar............................... 500 28,438
Ceridian...............................(a) 1,300 57,688
cisco Systems..........................(a) 900 62,100
Computer Associates International......... 1,350 57,038
Cummins Engine............................ 700 26,950
Deere & Co................................ 200 16,275
Eaton..................................... 1,600 84,800
General Electric.......................... 2,400 153,000
HBO & Co.................................. 800 50,000
Harnischfeger Industries.................. 300 10,012
HealthCare COMPARE.....................(a) 1,300 50,375
Hewlett-Packard........................... 600 50,025
Illinois Tool Works....................... 600 35,325
Intel..................................... 1,300 78,162
International Business Machines........... 1,500 141,563
Lockheed Martin........................... 1,200 80,550
Manpower.................................. 400 11,600
McDonnell Douglas......................... 400 33,100
Microsoft..............................(a) 700 63,350
Omnicom Group............................. 300 19,537
Oracle.................................(a) 1,100 42,212
Raytheon.................................. 1,200 102,000
Rockwell International.................... 1,100 51,975
Sun Microsystems.......................(a) 800 50,400
TRW....................................... 1,100 81,812
Teradyne...............................(a) 400 14,400
Texas Instruments......................... 1,500 119,812
3Com...................................(a) 600 27,300
------------
1,793,762
------------
CONSUMER CYCLICAL--5.9% American Greetings, Cl. A................. 900 $ 27,450
Capital Cities/ABC........................ 500 58,813
Chrysler.................................. 1,300 68,900
Circuit City Stores....................... 2,300 72,738
Eckerd.................................(a) 500 20,000
Ford Motor................................ 2,200 68,475
General Motors............................ 400 18,750
Goodyear Tire & Rubber.................... 600 23,625
Harley-Davidson........................... 500 12,188
King World Productions.................(a) 900 32,962
Magna International, Cl. A................ 400 18,050
Mattel.................................... 800 23,500
McDonald's................................ 1,600 61,200
Mirage Resorts.........................(a) 1,200 39,450
NIKE, Cl. B............................... 400 44,450
New York Times, Cl. A..................... 800 21,900
Philips Electronics, N.V.................. 1,200 58,500
Reynolds & Reynolds, Cl. A................ 900 30,937
Rite Aid.................................. 1,600 44,800
Safeway................................(a) 1,600 66,800
Sears, Roebuck & Co....................... 2,200 81,125
Tandy..................................... 1,400 85,050
V.F....................................... 600 30,600
Walgreen.................................. 1,700 47,600
------------
1,057,863
------------
CONSUMER STAPLES--6.0% Archer Daniels Midland.................... 2,310 35,516
CPC International......................... 900 59,400
Coca-Cola................................. 2,700 186,300
ConAgra................................... 1,500 59,438
Eastman Kodak............................. 700 41,475
Gillette.................................. 1,700 80,963
Heinz (H.J.).............................. 600 27,450
IBP....................................... 700 37,363
Johnson & Johnson......................... 2,300 170,487
Newell.................................... 900 22,275
PepsiCo................................... 1,400 71,400
Philip Morris Cos......................... 1,600 133,600
Procter & Gamble.......................... 600 46,200
Sara Lee.................................. 1,000 29,750
Unilever, N.V. (New York Shares).......... 400 52,000
Whitman................................... 1,200 24,750
------------
1,078,367
------------
ENERGY--4.4% Amoco..................................... 1,300 83,363
Atlantic Richfield........................ 400 42,950
Coastal................................... 500 16,812
Exxon..................................... 2,700 195,075
Mobil..................................... 1,200 119,550
Panhandle Eastern......................... 1,500 40,875
Phillips Petroleum........................ 800 26,000
Royal Dutch Petroleum (New York Shares)... 1,300 159,575
Smith International....................(a) 1,000 17,375
Tidewater................................. 1,000 28,125
Williams Cos.............................. 1,500 58,500
------------
788,200
------------
HEALTH CARE--4.2% Abbott Laboratories....................... 1,400 59,675
Amgen..................................(a) 1,200 59,850
Baxter International...................... 1,700 69,913
Becton, Dickinson & Co.................... 1,000 62,875
Boston Scientific......................(a) 500 21,312
Bristol-Myers Squibb...................... 600 43,725
Columbia/HCA Healthcare................... 1,200 58,350
Merck & Co................................ 2,700 151,200
Pfizer.................................... 1,500 80,062
Schering-Plough........................... 2,600 133,900
------------
740,862
------------
INTEREST SENSITIVE--6.0% Allstate.................................. 2,839 100,430
American National Insurance............... 300 17,475
Bank of New York.......................... 500 23,250
BankAmerica............................... 1,400 83,825
Bear Stearns Cos.......................... 1,700 36,550
CIGNA..................................... 900 93,712
Chemical Banking.......................... 1,500 91,313
Citicorp.................................. 1,700 120,275
Dean Witter, Discover & Co................ 1,300 73,125
EXEL Limited.............................. 1,100 63,938
First Chicago............................. 900 61,762
First USA................................. 1,100 59,675
Loews..................................... 200 29,100
NationsBank............................... 1,800 121,050
Providian................................. 100 4,150
Signet Banking............................ 900 23,625
Standard Federal Bancorporation........... 400 15,600
Travelers Group........................... 600 31,875
USLIFE.................................... 600 17,550
------------
1,068,280
------------
MINING AND METALS--.7% ASARCO.................................... 1,100 34,650
Alcan Aluminium........................... 700 22,663
Inland Steel Industries................... 1,000 22,750
Phelps Dodge.............................. 500 31,312
Reynolds Metals........................... 300 17,325
------------
128,700
------------
TRANSPORTATION--.7% AMR....................................(a) 200 14,425
CSX....................................... 400 33,650
Conrail................................... 500 34,375
Delta Air Lines........................... 300 20,775
Illinois Central, Ser. A.................. 700 27,387
------------
130,612
------------
UTILITIES--5.5% ALLTEL.................................... 700 20,913
Ameritech................................. 3,100 161,588
BellSouth................................. 2,100 153,563
Consolidated Edison....................... 2,200 66,825
DQE....................................... 1,150 30,475
Entergy................................... 2,900 75,762
General Public Utilities.................. 2,000 62,250
MCI Communications........................ 4,100 106,856
NYNEX..................................... 1,300 62,075
PECO Energy............................... 2,100 60,112
SBC Communications........................ 1,500 82,500
Sprint.................................... 2,400 84,000
WorldCom...............................(a) 300 9,637
------------
976,556
------------
TOTAL COMMON STOCKS
(cost $7,071,303) $ 8,217,927
============
PRINCIPAL
BONDS AND NOTES--32.1% AMOUNT
---------
U.S. GOVERNMENT SECURITIES: U.S. Treasury Bonds;
11.63%, 11/15/2004.................... $ 500,000 $ 684,141
------------
U.S. Treasury Notes:
7.50%, 1/31/1997...................... 1,715,000 1,751,711
5.63%, 1/31/1998...................... 1,350,000 1,341,985
5.13%, 11/30/1998..................... 350,000 341,797
7.13%, 9/30/1999...................... 500,000 519,688
8.75%, 8/15/2000...................... 300,000 333,891
8%, 5/15/2001......................... 300,000 327,234
7.50%, 11/15/2001..................... 100,000 107,078
5.75%, 8/15/2003...................... 325,000 316,062
------------
5,039,446
============
TOTAL BONDS AND NOTES
(cost $5,598,232)..................... $ 5,723,587
============
PRINCIPAL
SHORT-TERM INVESTMENTS--20.8% AMOUNT VALUE
--------- -----
U.S. TREASURY BILLS: 5.34%, 10/5/1995.......................(b) $ 71,000 $ 70,950
5.33%, 10/12/1995......................(b) 209,000 208,638
5.37%, 11/2/1995.......................(b) 180,000 179,127
5.41%, 11/16/1995......................(b) 709,000 704,087
5.25%, 12/7/1995.......................(b) 2,584,000 2,558,005
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,721,591) $ 3,720,807
============
TOTAL INVESTMENTS (cost $16,391,126) 98.9% $ 17,662,321
====== ============
CASH AND RECEIVABLES (NET) 1.1% $ 188,069
====== ============
NET ASSETS 100.0% $ 17,850,390
====== ============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Partially held by the custodian in a segregated account as
collateral for open futures positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1995
UNREALIZED
MARKET VALUE APPRECIATION/
NUMBER OF COVERED (DEPRECIATION)
FINANCIAL FUTURES PURCHASED: CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/95
--------- ------------ ---------- --------------
<S> <C> <C> <C> <C>
Deutsche Aktienindex...................... 1 $ 150,112 December '95 $ (3,039)
Financial Times 100....................... 2 272,618 December '95 (471)
Hang Seng................................. 1 62,572 December '95 (1,054)
Nikkei 300................................ 13 355,610 December '95 799
Russell 2000.............................. 13 2,025,400 December '95 22,070
Standard & Poor's 500..................... 2 588,200 December '95 16,355
----------
$ 34,660
==========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1995
COMMON STOCKS--71.6% SHARES VALUE
------ -----
<S> <C> <C>
BASIC INDUSTRIES--4.1% Cabot..................................... 400 $ 21,250
Champion International.................... 2,600 140,075
Dow Chemical.............................. 1,400 104,300
duPont (E.I.) de Nemours.................. 2,000 137,500
Eastman Chemical.......................... 2,500 160,000
Federal Paper Board....................... 800 30,700
International Paper....................... 2,600 109,200
Lyondell Petrochemical.................... 2,000 51,750
PPG Industries............................ 1,000 46,500
Temple-Inland............................. 600 31,950
Union Carbide............................. 1,600 63,600
Wellman................................... 1,100 26,950
Weyerhaeuser.............................. 1,200 54,750
------------
978,525
------------
CAPITAL SPENDING--15.5% Advanced Micro Devices.................(a) 1,700 49,513
Applied Materials......................(a) 600 61,350
Arrow Electronics......................(a) 800 43,500
Avnet..................................... 1,400 72,275
Cabletron Systems......................(a) 1,700 111,988
Case...................................... 1,600 58,800
Caterpillar............................... 1,100 62,563
Ceridian...............................(a) 2,700 119,813
cisco Systems..........................(a) 1,800 124,200
Computer Associates International......... 2,850 120,412
Cummins Engine............................ 1,300 50,050
Deere & Co................................ 500 40,687
Eaton..................................... 3,300 174,900
General Electric.......................... 4,600 293,250
HBO & Co.................................. 1,700 106,250
Harnischfeger Industries.................. 800 26,700
HealthCare COMPARE.....................(a) 2,700 104,625
Hewlett-Packard........................... 1,200 100,050
Illinois Tool Works....................... 1,200 70,650
Intel..................................... 2,700 162,337
International Business Machines........... 3,200 302,000
Lockheed Martin........................... 2,600 174,525
Manpower.................................. 900 26,100
McDonnell Douglas......................... 900 74,475
Microsoft..............................(a) 1,300 117,650
Omnicom Group............................. 600 39,075
Oracle.................................(a) 2,300 88,262
Raytheon.................................. 2,400 204,000
Rockwell International.................... 2,300 108,675
Sun Microsystems.......................(a) 1,800 113,400
TRW....................................... 2,200 163,625
Teradyne...............................(a) 1,000 36,000
Texas Instruments......................... 3,000 239,625
3Com...................................(a) 1,400 63,700
------------
3,705,025
------------
CONSUMER CYCLICAL--9.3% American Greetings, Cl. A................. 1,900 $ 57,950
Capital Cities/ABC........................ 1,200 141,150
Chrysler.................................. 2,500 132,500
Circuit City Stores....................... 4,800 151,800
Eckerd.................................(a) 900 36,000
Ford Motor................................ 4,500 140,063
General Motors............................ 800 37,500
Goodyear Tire & Rubber.................... 1,300 51,188
Harley-Davidson........................... 1,700 41,438
King World Productions.................(a) 1,900 69,588
Magna International, Cl. A................ 900 40,612
Mattel.................................... 1,700 49,937
McDonald's................................ 3,400 130,050
Mirage Resorts.........................(a) 2,400 78,900
NIKE, Cl. B............................... 800 88,900
New York Times, Cl. A..................... 1,700 46,537
Philips Electronics, N.V.................. 2,200 107,250
Reynolds & Reynolds, Cl. A................ 1,900 65,312
Rite Aid.................................. 3,200 89,600
Safeway................................(a) 3,300 137,775
Sears, Roebuck & Co....................... 4,600 169,625
Tandy..................................... 3,000 182,250
V.F....................................... 1,300 66,300
Walgreen.................................. 3,600 100,800
------------
2,213,025
------------
CONSUMER STAPLES--9.4% Archer Daniels Midland.................... 4,900 75,338
CPC International......................... 1,900 125,400
Coca-Cola................................. 5,600 386,400
ConAgra................................... 3,000 118,875
Eastman Kodak............................. 1,400 82,950
Gillette.................................. 3,600 171,450
Heinz (H.J.).............................. 1,300 59,475
IBP....................................... 1,500 80,062
Johnson & Johnson......................... 4,800 355,800
Newell.................................... 2,000 49,500
PepsiCo................................... 2,700 137,700
Philip Morris Cos......................... 3,400 283,900
Procter & Gamble.......................... 1,200 92,400
Sara Lee.................................. 2,100 62,475
Unilever, N.V. (New York Shares).......... 800 104,000
Whitman................................... 2,400 49,500
------------
2,235,225
------------
ENERGY--7.0% Amoco..................................... 2,800 179,550
Atlantic Richfield........................ 900 96,638
Coastal................................... 800 26,900
Exxon..................................... 5,700 411,825
Mobil..................................... 2,600 259,025
Panhandle Eastern......................... 3,100 84,475
Phillips Petroleum........................ 1,700 55,250
Royal Dutch Petroleum (New York Shares)... 2,700 331,425
Smith International....................(a) 2,100 36,487
Tidewater................................. 2,100 59,062
Williams Cos.............................. 3,000 117,000
------------
1,657,637
------------
HEALTH CARE--6.3% Abbott Laboratories....................... 3,600 153,450
Amgen..................................(a) 2,600 129,675
Baxter International...................... 3,400 139,825
Becton, Dickinson & Co.................... 1,800 113,175
Boston Scientific......................(a) 1,100 46,888
Bristol-Myers Squibb...................... 1,200 87,450
Columbia/HCA Healthcare................... 2,400 116,700
Merck & Co................................ 5,600 313,600
Pfizer.................................... 3,100 165,462
Schering-Plough........................... 4,700 242,050
------------
1,508,275
------------
INTEREST SENSITIVE--9.3% Allstate.................................. 5,964 210,976
American National Insurance............... 700 40,775
Bank of New York.......................... 1,000 46,500
BankAmerica............................... 2,900 173,638
Bear Stearns Cos.......................... 3,500 75,250
CIGNA..................................... 1,800 187,425
Chemical Banking.......................... 3,200 194,800
Citicorp.................................. 3,500 247,625
Dean Witter, Discover & Co................ 2,400 135,000
EXEL Limited.............................. 2,300 133,688
First Chicago............................. 1,900 130,388
First USA................................. 2,300 124,775
Loews..................................... 300 43,650
NationsBank............................... 3,800 255,550
Providian................................. 300 12,450
Signet Banking............................ 1,800 47,250
Standard Federal Bancorporation........... 900 35,100
Travelers Group........................... 1,300 69,062
USLIFE.................................... 1,500 43,875
------------
2,207,777
------------
MINING & METALS--1.1% ASARCO.................................... 2,300 72,450
Alcan Aluminium........................... 1,400 45,325
Inland Steel Industries................... 2,200 50,050
Phelps Dodge.............................. 1,000 62,625
Reynolds Metals........................... 600 34,650
------------
265,100
------------
TRANSPORTATION--1.1% AMR....................................(a) 400 $ 28,850
CSX....................................... 900 75,712
Conrail................................... 1,000 68,750
Delta Air Lines........................... 600 41,550
Illinois Central, Ser. A.................. 1,400 54,775
------------
269,637
------------
UTILITIES--8.5% ALLTEL.................................... 1,400 41,825
Ameritech................................. 6,500 338,813
BellSouth................................. 4,400 321,750
Consolidated Edison....................... 4,600 139,725
DQE....................................... 2,350 62,275
Entergy................................... 6,100 159,363
General Public Utilities.................. 4,100 127,613
MCI Communications........................ 8,700 226,743
NYNEX..................................... 2,400 114,600
PECO Energy............................... 4,400 125,950
SBC Communications........................ 3,200 176,000
Sprint.................................... 5,000 175,000
WorldCom...............................(a) 700 22,487
------------
2,032,144
------------
TOTAL COMMON STOCKS
(cost $14,751,836).................... $ 17,072,370
============
PRINCIPAL
SHORT-TERM INVESTMENTS--28.2% AMOUNT VALUE
--------- -----
U.S. TREASURY BILLS: 5.34%, 10/5/1995.......................(b) $ 191,000 $ 190,864
5.36%, 10/19/1995......................(b) 114,000 113,684
5.40%, 10/26/1995......................(b) 105,000 104,613
5.37%, 11/2/1995.......................(b) 1,803,000 1,794,255
5.16%, 11/9/1995.......................(b) 121,000 120,289
5.32%, 11/16/1995......................(b) 1,196,000 1,187,712
5.28%, 12/7/1995.......................(b) 3,237,000 3,204,436
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $6,716,972)..................... $ 6,715,853
===========
TOTAL INVESTMENTS (cost $21,468,808).......................................... 99.8% $23,788,223
====== ===========
CASH AND RECEIVABLES (NET).................................................... .2% $ 48,781
====== ===========
NET ASSETS.................................................................... 100.0% $23,837,004
====== ===========
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Partially held by the custodian in a segregated account as
collateral for open futures positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1995
UNREALIZED
MARKET VALUE APPRECIATION/
NUMBER OF COVERED (DEPRECIATION)
FINANCIAL FUTURES PURCHASED: CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/95
--------- ------------ ---------- --------------
<S> <C> <C> <C> <C>
CAC 40 Index.............................. 2 $ 141,110 December '95 $(9,396)
Deutsche Aktienindex...................... 2 300,223 December '95 (6,078)
Financial Times 100....................... 4 545,790 December '95 360
Hang Seng................................. 3 187,716 December '95 (3,208)
Nikkei 300................................ 38 1,034,983 December '95 (2,533)
Russell 2000.............................. 27 4,206,600 December '95 42,830
-------
$21,975
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1995
INCOME GROWTH AND INCOME GR0WTH
PORTFOLIO PORTFOLIO PORTFOLIO
--------- ----------------- ---------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value
[cost--Note 4(b)]--see statement.............. $15,997,856 $17,662,321 $23,788,223
Cash.............................................. 82,413 8,380 30,078
Dividends and interest receivable................. 181,653 114,194 33,066
Receivable for futures variation margin........... -- 6,508 19,590
Prepaid expenses--Note 2(g)....................... 57,859 95,341 59,599
----------- ----------- -----------
16,319,781 17,886,744 23,930,556
----------- ----------- -----------
LIABILITIES:
Due to The Dreyfus Corporation.................... 10,683 6,439 11,489
Due to Distributor................................ 1,662 1,757 2,429
Payable for investment securities purchased....... -- 9,612 19,748
Payable for futures variation margin.............. 6,500 -- --
Accrued expenses and other liabilities............ 38,401 18,546 59,886
----------- ----------- -----------
57,246 36,354 93,552
----------- ----------- -----------
NET ASSETS............................................ $16,262,535 $17,850,390 $23,837,004
=========== =========== ===========
REPRESENTED BY:
Paid-in capital................................... $15,041,856 $15,666,553 $20,103,205
Accumulated undistributed investment income-net... 474,272 332,653 318,027
Accumulated undistributed net realized gain
on investments................................ 353,820 545,329 1,074,382
Accumulated net unrealized appreciation on
investments and foreign currency
transactions [including $160,420, $34,660
and $21,975 net unrealized appreciation on
financial futures for the Income Portfolio,
Growth and Income Portfolio and Growth
Portfolio, respectively]--Note 4(b)........... 392,587 1,305,855 2,341,390
----------- ----------- -----------
NET ASSETS at value................................... $16,262,535 $17,850,390 $23,837,004
=========== =========== ===========
Shares of Common Stock outstanding:
Class R Shares
(50 million shares of $.001 par value
shares authorized)............................ 601,975 646,297 801,860
=========== =========== ===========
Investor Class Shares
(50 million shares of $.001 par value
shares authorized)............................ 601,320 601,948 805,586
=========== =========== ===========
NET ASSET VALUE per share:
Class R Shares
($8,140,844 / 601,975 shares)................. $13.52
======
($9,247,876 / 646,297 shares)................. $14.31
======
($11,898,401 / 801,860 shares)................ $14.84
======
Investor Class Shares
($8,121,691 / 601,320 shares)................. $13.51
======
($8,602,514 / 601,948 shares)................. $14.29
======
($11,938,603 / 805,586 shares)................ $14.82
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF OPERATIONS
FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995
INCOME GROWTH AND INCOME GR0WTH
PORTFOLIO PORTFOLIO PORTFOLIO
--------- ----------------- ---------
<S> <C> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest...................................... $ 531,783 $ 314,676 $ 231,188
Cash dividends (net of $1,565 and $2,987
foreign taxes withheld at source for
the Growth and Income Portfolio and
the Growth Portfolio, respectively)....... -- 90,530 184,266
----------- ----------- -----------
TOTAL INCOME ......................... 531,783 405,206 415,454
----------- ----------- -----------
EXPENSES--Note 2(d):
Management fee--Note 3(a)..................... $ 47,599 $ 61,635 $ 82,882
Legal fees.................................... 12,908 13,195 16,735
Distribution fees
(Investor Class shares)--Note 3(b)........ 9,913 10,185 13,812
Organization expenses--Note 2(g).............. 7,641 8,968 7,642
Registration fees............................. 5,187 8,545 7,306
Auditing fees................................. 4,083 4,083 4,333
Director's fees and expenses--Note 3(c)....... 3,400 3,252 4,022
Shareholder servicing costs................... 3,049 4,804 4,056
Shareholders' reports......................... 2,667 2,871 2,871
Custodian fees................................ 1,405 8,061 9,385
Miscellaneous................................. 816 829 829
----------- ----------- -----------
98,668 126,428 153,873
Less--reduction in management fee due to
undertakings--Note 3(a)................... 41,157 53,875 56,446
----------- ----------- -----------
TOTAL EXPENSES........................ 57,511 72,553 97,427
----------- ----------- -----------
INVESTMENT INCOME--NET................ 474,272 332,653 318,027
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 4(a)....... $ 5,000 $ 197,726 $ 396,526
Net realized gain on financial futures
(including foreign currency
transactions)--Note 4(a);
Long Transactions................................. 348,820 347,603 677,856
----------- ----------- -----------
NET REALIZED GAIN................................. 353,820 545,329 1,074,382
----------- ----------- -----------
Net unrealized appreciation on investments
(including foreign currency transactions)
(including $160,420, $34,660 and $21,975
net unrealized appreciation on financial
futures for the Income Portfolio, the Growth
and Income Portfolio and the Growth
Portfolio, respectively)...................... 392,587 1,305,855 2,341,390
----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS................... 746,407 1,851,184 3,415,772
----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $ 1,220,679 $ 2,183,837 $ 3,733,799
=========== =========== ===========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF CHANGES IN NET ASSETS
FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995
INCOME
PORTFOLIO
---------
<S> <C>
OPERATIONS:
Investment income--net.............................................. $ 474,272
Net realized gain on investments.................................... 353,820
Net unrealized appreciation on investments for the period........... 392,587
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... 1,220,679
-----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class R shares.................................................. 7,508,845
Investor Class shares........................................... 7,504,669
Cost of shares redeemed;
Investor Class shares........................................... (4,658)
-----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS...... 15,008,856
-----------
TOTAL INCREASE IN NET ASSETS............................ 16,229,535
===========
NET ASSETS:
Beginning of period--Note 1......................................... 33,000
-----------
End of period (including undistributed investment income-net of
$474,272 on September 30, 1995)................................. $16,262,535
===========
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------
CLASS R INVESTOR CLASS
------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 600,655 600,353
Shares redeemed..................................................... -- (353)
------- -------
NET INCREASE IN SHARES OUTSTANDING.............................. 600,655 600,000
======= =======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995
GROWTH AND INCOME
PORTFOLIO
-----------------
<S> <C>
OPERATIONS:
Investment income--net.............................................. $ 332,653
Net realized gain on investments.................................... 545,329
Net unrealized appreciation on investments for the period........... 1,305,855
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 2,183,837
-----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class R shares.................................................. 8,144,735
Investor Class shares........................................... 7,509,353
Cost of shares redeemed:
Class R shares.................................................. (20,620)
Investor Class shares........................................... (915)
-----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS...... 15,632,553
-----------
TOTAL INCREASE IN NET ASSETS............................ 17,816,390
NET ASSETS:
Beginning of period--Note 1......................................... 34,000
-----------
End of period (including undistributed investment income-net of
$332,653 on September 30, 1995)..................................... $17,850,390
===========
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------
CLASS R INVESTOR CLASS
------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 646,375 600,654
Shares redeemed..................................................... (1,438) (66)
------- -------
NET INCREASE IN SHARES OUTSTANDING.............................. 644,937 600,588
======= =======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995
GROWTH
PORTFOLIO
---------
<S> <C>
OPERATIONS:
Investment income--net.............................................. $ 318,027
Net realized gain on investments.................................... 1,074,382
Net unrealized appreciation on investments for the period........... 2,341,390
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 3,733,799
-----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class R shares.................................................. 10,007,843
Investor Class shares........................................... 10,067,618
Cost of shares redeemed;
Investor Class shares........................................... (5,256)
-----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS...... 20,070,205
-----------
TOTAL INCREASE IN NET ASSETS............................ 23,804,004
NET ASSETS:
Beginning of period--Note 1......................................... 33,000
-----------
End of period (including undistributed investment income-net of
$318,027 on September 30, 1995)................................. $23,837,004
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------
CLASS R INVESTOR CLASS
------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 800,540 804,636
Shares redeemed..................................................... -- (370)
------- -------
NET INCREASE IN SHARES OUTSTANDING.............................. 800,540 804,266
======= =======
See notes to financial statements.
</TABLE>
DREYFUS LIFETIME PORTFOLIOS, INC.
FINANCIAL HIGHLIGHTS
Reference is made to pages 5 through 7 of the Fund's
Prospectus dated January 15, 1996.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL:
Dreyfus LifeTime Portfolios, Inc. (the "Fund"), formerly
Dreyfus Retirement Portfolios, Inc., was incorporated on July
15, 1993 and operates as a series company currently offering
three portfolios: the Income Portfolio, the Growth and Income
Portfolio and the Growth Portfolio. The Fund accounts separately
for the assets, liabilities and
operations of each Portfolio. The Fund had no operations until
March 31, 1995 (when operations commenced for all Portfolios)
other than matters relating to its organization and registration
as a 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 2,640 shares of Common Stock ("Initial Shares") of
the Income Portfolio
and the Growth Portfolio, and 2,720 shares of Common Stock of
the Growth and Income Portfolio to MBC Investments Corporation.
The Dreyfus Corporation ("Manager") serves as each Portfolio's
investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. Mellon
Equity Associates ("Mellon Equity") serves as each Portfolios'
sub-investment
adviser. Premier Mutual Fund Services, Inc. (the "Distributor")
acts as the distributor of the Fund's shares. 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.
As of September 30, 1995, Allomon Corporation, a subsidiary
of Mellon Bank Investments Corporation, which in turn is a
subsidiary of Mellon Bank, held the following shares:
Income Portfolio 1,200,000 Growth Portfolio 1,600,000
Growth and Income Portfolio 1,200,000
Each Portfolio offers both Investor Class shares and Class R
shares.
Investor Class shares are offered to any investor and Class R
shares are offered only to institutional investors. Other
differences between the two classes include the services offered
to and the expenses borne by each class.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Each Portfolios' investments in
securities (including options and financial futures) are valued
at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on
the national securities market.
Securities not listed on an exchange or the national securities
market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices.
Bid price is used when no asked price is available. Investments
denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
Most debt securities (excluding short-term investments) are
valued each business day by an independent pricing service
("Service") approved by the Board of Directors. Debt securities
for which quoted bid prices are readily available and are
representative of the bid side of the
market in the judgment of the Service are valued at the mean
between the quoted bid prices (as obtained by the Service from
dealers in such securities) and asked prices (as calculated by
the Service based upon
its evaluation of the market for such securities). Other debt
securities are carried at fair value as determined by the
Service, based on methods which include consideration of: yields
or prices of securities of
comparable quality, coupon, maturity and type; indications as to
values from dealers; and general market conditions.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
(continued)
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate
that portion of the results of operations resulting from changes
in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such
fluctuations are included with
the net realized and unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from
sales and maturities of short-term securities, sales of foreign
currencies, and currency gains and losses realized on securities
transactions. the difference between the amounts of dividends,
interest and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes
in the value of assets and liabilities other than investments in
securities at fiscal
year end, resulting from changes in exchange rates. Such gains
and losses are included with net realized and unrealized gain
and loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss
from securities transactions are recorded on the identified cost
basis. Dividend income is recognized on the ex-dividend date
and interest income, including, where applicable, amortization
of discount on investments, is recognized on the accrual basis.
(D) EXPENSES: Expenses directly attributable to each
Portfolio are charged to that Portfolio's operations; expenses
which are applicable to all series are allocated among them on a
pro rata basis.
(E) DIVIDENDS TO SHAREHOLDERS: Dividends payable to
shareholders are recorded by each Portfolio on the ex-dividend
date. Dividends from investment income-net and dividends from
net realized capital gain, with
respect to each Portfolio, are normally declared and paid
annually, but each Portfolio may make distributions on a more
frequent basis to comply with the distribution requirements of
the Internal Revenue Code. To the
extent that a net realized capital gain of a Portfolio can be
offset by a capital loss carryover, if any, of that Portfolio,
such gain will not be distributed.
(F) FEDERAL INCOME TAXES: It is the policy of the Fund 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. For Federal income tax purposes, each
Portfolio is treated as a single entity for the purpose of
determining such qualification.
(G) OTHER: Organization expenses paid by the Portfolio are
included in prepaid expenses and are being amortized to
operations from the date operations commenced over the period
during which it is expected that a
benefit will be realized, not to exceed five years. At September
30, 1995, the unamortized balance of such expenses of each of
the respective Portfolio's amounted to the following:
Income Portfolio $57,858 Growth Portfolio $57,858
Growth and Income Portfolio 67,900
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 3--MANAGEMENT FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with
the Manager, the management fee is computed on the average daily
value of each Portfolio's net assets and is payable monthly at
the following annual rates: 60 of 1% of the Income Portfolio,
and 75 of 1% of the Growth and Income Portfolio and the Growth
Portfolio. The Agreement provides that if in any full fiscal
year the aggregate expenses of any
Portfolio, exclusive of taxes, brokerage, interest on borrowings
(which, in the view of Stroock & Stroock & Lavan, counsel to the
Fund, also contemplates dividends accrued on securities sold
short) and extraordinary expenses, exceed the expense limitation
of any state having jurisdiction over the Fund, that Portfolio
may deduct from
payments to be made to the Manager, or the Manager will bear the
amount of such excess to the extent required by state law. The
most stringent state expense limitation applicable to each
Portfolio presently requires reimbursement of expenses in any
full fiscal year that such expenses
(excluding 12b-1 Service Plan 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 that Portfolio's net assets in accordance with
California "blue sky"
regulations. The Manager has undertaken with respect to the
Income Portfolio from March 31, 1995 through December 31, 1995,
or until such time as the net assets of the Portfolio exceed
$500 million, regardless
of whether they remain at that level, to reduce to the
management fee paid by, or reimburse such excess expenses of the
Portfolio, to the extent that the Portfolios' aggregate annual
expenses (excluding 12b-1 Service Plan and certain expenses as
described above) exceed an annual rate of 60 of 1% of the
average daily value of the Portfolios' net assets. With respect
to the Growth and Income Portfolio and the Growth
Portfolio, the Manager has undertaken from March 31, 1995
through December 31, 1995, or until such time as the net assets
of the Portfolios' exceed $500 million, regardless of whether
they remain at that level, to reduce the management fee paid by,
or reimburse such excess expenses of the Portfolio, to the
extent that the Portfolio's
aggregate annual expenses (excluding 12b-1 Service Plan and
certain expenses as described above) exceed an annual rate of 75
of 1% of the average daily value of the Portfolio's net assets.
The expense reimbursements, pursuant to the undertakings
amounted to the following for the period ended September 30,
1995:
Income Portfolio $41,157 Growth Portfolio $56,446
Growth and Income Portfolio 53,875
The undertakings may be modified by the Manager from time to
time, provided that the resulting expense reimbursement would
not be less than the amount required pursuant to the agreement.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
(continued)
Pursuant to a Sub-Investment Advisory Agreement between the
Manager and Mellon Equity, the Manager has agreed to pay Mellon
Equity a monthly sub-advisory fee for each Portfolio, computed
at the following annual
rates:
Annual Fee as a Percentage of
Total Fund Net Assets Average Daily Net Assets of each
Portfolio
0 to $600 million. .35 of 1%
$600 up to $1.2 billion .25 of 1%
$1.2 up to $1.8 billion .20 of 1%
In excess of $1.8 billion .15 of 1%
(B) Under the Service Plan (the "Plan") with respect to the
Investor Class shares only, adopted pursuant to Rule 12b-1 under
the Act, the Fund (a) reimburses the Distributor for payments to
certain Service Agents for distributing each Portfolio's
Investor Class shares and
servicing Investor Class shareholder accounts ("Servicing") and
(b) pays the Manager, Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager, and any affiliate of
either of them (collectively, "Dreyfus") for advertising and
marketing relating to each Portfolio's
Investor Class shares and for Servicing, at an aggregate annual
rate of .25 of 1% of the value of each Portfolio's average daily
net assets of Investor Class shares. Each of the Distributor and
Dreyfus may pay one or more Service Agents a fee in respect of
Investor Class 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 determines
the amounts, if any, to be paid
to Service Agents under the Plan and the basis on which such
payments are made. The fees payable under the Plan are payable
without regard to actual expenses incurred. The Plan also
separately provides for each
Portfolio 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
each Portfolio's average daily net assets of Investor Class
shares for any full fiscal year.
During the period ended September 30, 1995, the following
was charged to each Portfolio pursuant to the Plan:
Income Portfolio $ 9,913 Growth Portfolio $13,812
Growth and Income Portfolio 10,185
Effective October 1, 1995, the Plan has been terminated.
Effective October 2, 1995, the Fund has adopted a
Shareholder Services Plan. Under the Shareholder Services Plan,
the Fund pays the Distributor, at an annual rate of .25 of 1% of
the value of the average daily net assets of the Portfolio's
Investor Class shares only for the
provision of certain services. The services provided may include
personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing
reports and other information, and services related to the
maintenance of shareholder
accounts. The Distributor may make payments to Service Agents in
respect of these services. The Distributor determines the
amounts to be paid to Service Agents.
(C) 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. The Chairman
of the Board receives an additional 25% of such compensation.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 4--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of
purchases and sales of investment securities, excluding
short-term securities, for the period ended September 30, 1995:
PURCHASES SALES
----------- ----------
Income Portfolio............. $11,067,283 $ 511,484
Growth and Income Portfolio. 16,235,527 3,771,966
Growth Portfolio............. 21,542,148 7,187,600
The Fund may invest in financial futures contracts in order
to gain exposure to or protect against changes in the market.
The Fund is exposed to market risk as a result of changes in the
value of the underlying financial instruments (see the
Statements of Financial Futures). 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. Typically,
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. Contracts open at September 30,
1995 and their related unrealized market appreciation
(depreciation) are set forth in the Statements of Financial
Futures.
(B) The following summarizes accumulated net unrealized
appreciation on investments for each Portfolio at September 30,
1995:
<TABLE>
<CAPTION>
Gross Gross
Appreciation (Depreciation) Net ------------ -------------- ----------
<S> <C> <C> <C>
Income Portfolio..... $ 393,804 $ (1,217) $ 392,587
Growth and Income Portfolio.. 1,367,745 (61,890) 1,305,855
Growth Portfolio........ 2,495,195 (153,805) 2,341,390
</TABLE>
At September 30, 1995, the cost of investments of each
Portfolio for Federal income tax purposes was substantially the
same as the cost for financial reporting purposes. The cost of
investments for Portfolio
series for financial reporting purposes as of September 30, 1995
was as follows:
Income Portfolio $15,765,689 Growth Portfolio $21,468,808
Growth and Income Portfolio 16,391,126
Dreyfus LifeTime Portfolios, Inc.
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus LifeTime Portfolios, Inc.
We have audited the accompanying statement of assets and
liabilities, including the statements of investments and
financial futures, of Dreyfus LifeTime Portfolios, Inc.,
(comprised of the Income Portfolio, the Growth and Income
Portfolio and the Growth Portfolio) as of September 30, 1995,
and the related statements of operations
and changes in net assets and financial highlights for the
period from March 31, 1995 (commencement of operations) to
September 30, 1995. 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 September 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 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 each of the respective
Portfolios constituting the
Dreyfus LifeTime Portfolios, Inc. at September 30, 1995, and the
results of their operations, the changes in their net assets and
the financial highlights for the period from March 31, 1995 to
September 30, 1995, in conformity with generally accepted
accounting principles.
[Ernst & Young LLP signature logo]
New York, New York
November 8, 1995
<PAGE>
Dear Shareholder:
The letter that follows is the first annual report of
Dreyfus LifeTime Portfolios, Inc., a mutual fund that began
operations in March of this year. It is a pleasure to introduce
the Portfolios' manager, Steven A. Falci, to those who have
invested in this mutual fund.
Steve Falci is a portfolio manager for our corporate
affiliate, Mellon Equity Associates, which is the Portfolios'
sub-investment adviser. He has broad experience in portfolio
management, asset allocation and the application of quantitative
techniques to create investment solutions.
Prior to joining Mellon Equity Associates in April 1994,
Steve was the Managing Director--Pension Investments at NYNEX
Corporation where he oversaw the internally managed assets of
the NYNEX Pension Fund and NYNEX Foundation. He was responsible
for equity and fixed income portfolio management and trading,
investment strategy and the generation of new portfolio
applications.
Steve is a chartered financial analyst and is a member of
the Association for Investment Management and Research. He
received an MBA in finance and a B.S. in economics, both from
New York University.
Sincerely,
[Stephen E. Canter signature logo]
Stephen E. Canter
Chief Investment Officer
The Dreyfus Corporation
October 18, 1995
New York, N.Y.
LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus LifeTime Portfolios, Inc. commenced operations on
March 31 of this year. The Fund is composed of three separate
portfolios, each specifically designed for investors at
particular points in the savings cycle. Each portfolio follows
an asset allocation strategy that involves an ongoing comparison
of the relative value of stocks and bonds across different
markets.
ECONOMIC ENVIRONMENT
For most of the past twelve months, the U.S. economy
expanded in spite of a restrictive monetary policy pursued by
the Federal Reserve Board until early last summer. In July of
this year the Fed switched gears and lowered its short-term
interest rates by a minimal amount. This action was taken
because the American economy had started to slow down and the
central bank wanted to make sure that the slowdown would
not turn into a full-fledged recession.
The most recent economic statistics do indeed indicate that
the Fed has successfully reduced the rate of economic expansion,
which in turn has warded off threats of a recurrence of price or
wage inflation.
Thanks to low interest rates, the construction industry
continues to look vigorous. However, retail sales and
industrial production have cooled off. Gross Domestic Product
continues to grow, but at a reduced rate. Unemployment remains
steady at somewhat below six percent. However, job growth
according to the latest statistics has diminished its pace.
Many economists now are wondering whether this pause in
economic growth is a prelude to something more serious, or is
simply a pause before faster growth is resumed.
On the global scene, economic growth is slowing due to the
long lagged effects of the dynamic interest rate rise in 1994.
Our analysis is that, while short bursts of faster growth may
temporarily occur, current monetary and fiscal trends portend
more below-average growth in 1996, with 1997 likely to see a
more sustained economic and earnings growth phase if the
liquidity background improves further. European economic
activity is slowing and Japan remains in need of a major
stimulus program to accelerate growth in 1996.
MARKET ENVIRONMENT
As we see it, the financial markets have a continued
positive background as increased monetary liquidity and lower
interest rates should occur in the current slow-growth,
low-inflation environment. The corollary of this for equity
investments is that the risk of some 1996 earnings
disappointments has increased. Therefore, stock selection and
company focus must be made very carefully.
A case in point is the sell-off in late September and early
October of high technology stocks, after they had reached
unprecedented high prices and record price/earnings ratios. To
be sure, this has uncovered a number of situations where these
stocks are now much more attractively priced. However, the
lesson has been underscored that earnings and prospects for
future earnings are decisive in stock price fluctuations.
PORTFOLIO OVERVIEW
The Income Portfolio is designed for the investor with a
short investment horizon. It is designed to be the least risky
of the three Portfolios. The majority of assets are allocated
to bonds and cash with a stock component of about 25% of
Portfolio assets included to combat inflation. We maintain
constant allocations to each asset class in this Portfolio and
manage each asset class passively, using an index-based
approach.
The Growth and Income Portfolio is designed for the investor
with an intermediate investment horizon and is the most moderate
of the Portfolios. A modest portion of assets are allocated to
international investments, with stocks and bonds equally
weighted both domestically and internationally. We can move
somewhat from baseline weights for the mix of international
versus domestic assets and for the mix of domestic stocks versus
domestic bonds. To make these decisions, we use proprietary
asset allocation models developed by the Portfolios' sub-
investment advisor, Mellon Equity Associates. Except for
domestic stocks, all asset classes are passively managed.
The Growth Portfolio is designed for the investor with a
longer investment horizon and has the highest risk of the three
portfolios. A larger portion of assets, as compared to the
Growth and Income Portfolio, are allocated to international
investments with stocks dominating the allocation for both
international and domestic assets. The allocation can vary
significantly from baseline weights and the asset allocation
decisions are also implemented using Mellon Equity's
disciplined asset allocation process. Like the Growth and
Income Portfolio, all asset classes are passively managed with
the exception of domestic stocks.
For each Portfolio, Mellon Equity establishes an asset
allocation baseline that describes target levels or relative
weights for the Portfolio's asset classes. For each Portfolio,
Mellon Equity then establishes active allocation ranges. One
deals with relative weighting (compared to the Portfolio
baseline) as between international and domestic assets; the
other involves weightings for domestic assets as between common
stock and fixed-income assets.
To implement the first stage of allocation in the Growth
Portfolio and the Growth and Income Portfolio, we evaluate risk
and return characteristics of capital markets around the world
and their correlation across countries, including expected
movements in currency markets.
In the second stage of allocation in domestic markets, we
evaluate risk and return characteristics of the domestic equity
and fixed-income markets. We do this by comparing the valuation
of equity and fixed-income assets relative to their current
market prices and long-term values in the context of the current
economic environment. Using this analysis, we arrive at
appropriate relative weightings among domestic securities.
Mellon Equity maintains a continuous watch on these relative
asset class weights, making changes when required, subject to
our assessment of current economic conditions and investment
opportunities.
In selecting securities for each Portfolio, we attempt to
approximate the investment characteristics of designated
benchmark indices, while seeking to exceed the returns of the
benchmark.
In its active investment process, Mellon Equity concentrates
on fundamental factors such as relative price/earnings ratios,
relative book-to-price ratios, earnings growth rates and
momentum, and consensus earnings expectations and changes in
that consensus. Using this information, we value and rank
stocks based on our belief of expected performance relative to
the asset class benchmark.
PORTFOLIO RETURNS
As previously noted, Dreyfus LifeTime Portfolios began
operations March 31, 1995. The fiscal year ended September 30,
1995. We are pleased to report the following results for that
period of six calendar months.
The Income Portfolio provided total returns in line with its
benchmark. (See graph on a later page.) Investor Class shares
of the Income Portfolio returned 8.08% for the reporting period,
and Class R shares 8.24%.*
The Growth and Income Portfolio and the Growth Portfolio
both achieved strong total returns.
The Growth and Income Portfolio's Investor Class and Class R
shares achieved total returns of 14.32% and 14.48%,
respectively; the Growth Portfolio's Investor Class and Class R
shares achieved total returns of 18.56% and 18.72%,
respectively.*
The strong performance by these latter two Portfolios was
generated by our asset allocation decisions and successful stock
selection in the domestic equity component. Both Portfolios
assumed their maximum stock positions in early May as long
maturity bond rates fell below 7%. This decision enhanced
returns, because stocks outperformed bonds over the subsequent
months. The performance in domestic stocks was attributable
to stock selection across the broad market sectors, rather than
to superior performance of any particular sector of the
portfolio such as technology.
At present, the Growth and Income Portfolio and the Growth
Portfolio remain at their maximum stock weights reflecting the
relative attractiveness of stocks to bonds as indicated by our
proprietary evaluation techniques.
It is a pleasure to count you among the investors in Dreyfus
LifeTime Portfolios. We look forward to a continuing and
rewarding relationship.
Sincerely,
[Steven A. Falci signature logo]
Steven A. Falci
Portfolio Manager
October 18, 1995
New York, N.Y.
*Total return includes reinvestment of dividends and any capital
gains paid.
DREYFUS LIFETIME PORTFOLIOS, INC., Income Portfolio SEPTEMBER
30, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
INVESTOR CLASS SHARES AND CLASS R SHARES OF DREYFUS LIFETIME
PORTFOLIOS, INC.-- INCOME PORTFOLIO WITH THE LEHMAN BROTHERS
INTERMEDIATE GOVERNMENT / CORPORATE BOND INDEX AND A CUSTOMIZED
BLENDED INDEX
[SEE EXHIBIT A]
*Source: Lehman Brothers
**Source: Lehman Brothers, Lipper Analytical Services, Inc.,
and The Wall Street Journal
<TABLE>
<CAPTION>
ACTUAL AGGREGATE TOTAL RETURNS
INVESTOR CLASS SHARES CLASS R SHARES
- ------------------------------------------------------- -------------------------------------------------------
<S> <C> <S> <C>
From Inception (3/31/95) to September 30, 1995 8.08% From Inception (3/31/95) to September 30, 1995 8.24%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of
the Investor Class shares and Class R shares of the Income
Portfolio on 3/31/95 (Inception Date) to a $10,000 investment
made in the Lehman Brothers Intermediate Government/Corporate
Bond Index on that date as well as to a Customized Blended Index
reflecting the Portfolio's asset allocation baseline percentages
("Baseline") which are described below and in the Fund's
prospectus. All dividends and capital gain distributions are
reinvested.
The Income Portfolio allocates your money among domestic bonds
and stocks and money market instruments. The Portfolio's
performance shown in the line graph takes into account all
applicable fees and expenses. The Lehman Brothers Intermediate
Government/Corporate Bond Index is a widely accepted index of
bond market performance which does not take into account
charges, fees and other expenses. The Lehman Brothers
Intermediate Government/Corporate Bond Index ("Lehman Index")
was selected because (1) government and corporate bonds
represent the highest Baseline percentage of the Portfolio and
(2) the fixed-income portion of the Portfolio is invested to
represent the Lehman Index. The Customized Blended Index has
been prepared by the Fund for purposes of more accurate
comparison to the Portfolio's overall portfolio composition. We
have combined the performance of unmanaged indices
reflecting the Baseline percentages set forth in the Prospectus,
but in greater detail than the broader prospectus Baseline
percentages: Bonds--67.5%; Stocks--22.5%; and Treasury
Bills--10%. The Customized Blended Index combines returns from
the Lehman Index, the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500 Index") and the 90-day Treasury
Bill rate, as it changes from time to time, and is weighted to
the aforementioned Baseline percentages. The Lehman Index is a
widely accepted, unmanaged index of Government and Corporate
bond market performance composed of U.S. Government, Treasury
and agency securities, fixed-income securities and
nonconvertible investment grade corporate debt, with an average
maturity of 1-10 years. The S&P 500 Index is a widely accepted,
unmanaged index of overall stock market performance. None of the
foregoing indices reflect account charges, fees or other
expenses. 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.
DREYFUS LIFETIME PORTFOLIOS, INC., Growth and Income Portfolio
SEPTEMBER 30, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
INVESTOR CLASS SHARES AND CLASS R SHARES OF DREYFUS LIFETIME
PORTFOLIOS, INC.-- GROWTH AND INCOME PORTFOLIO WITH THE STANDARD
& POOR'S 500 COMPOSITE STOCK PRICE INDEX AND A CUSTOMIZED
BLENDED INDEX
[SEE EXHIBIT B]
*Source: Lipper Analytical Services, Inc.
**Source: Lipper Analytical Services, Inc., Lehman Brothers,
Morgan Stanley & Co. Incorporated and J.P. Morgan & Co.
Incorporated
<TABLE>
<CAPTION>
ACTUAL AGGREGATE TOTAL RETURNS
INVESTOR CLASS SHARES CLASS R SHARES
- --------------------------------------------------------- --------------------------------------------------------
<S> <C> <S> <C>
From Inception (3/31/95) to September 30, 1995 14.32% From Inception (3/31/95) to September 30, 1995 14.48%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of
the Investor Class shares and Class R shares of the Growth and
Income Portfolio on 3/31/95 (Inception Date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500 Index") on that date as well as to a
Customized Blended Index reflecting the Portfolio's asset
allocation baseline percentages ("Baseline") which are
described below and in the Fund's prospectus. All dividends and
capital gain distributions are reinvested.
The Growth and Income Portfolio allocates your money among
domestic and foreign stocks and bonds. The Portfolio's
performance shown in the line graph 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)
domestic common stocks represent a significant portion of the
Baseline and (2) the majority of the stock portion of the
Portfolio is invested in stocks included in the S&P 500 Index.
Because the Portfolio has significant fixed-income holdings,
though, it can underperform an equity-only index. The Customized
Blended Index has been prepared by the Fund for purposes
of more accurate comparison to the Portfolio's overall portfolio
composition. We have combined the performance of unmanaged
indices reflecting the Baseline percentages set forth in the
Prospectus, but in greater detail than the broader prospectus
Baseline percentages: Domestic Large Company Stocks-36%;
Domestic Small Company Stocks-9%; Foreign Stocks-5%; Domestic
Bonds-45%; Foreign Bonds-5%. The Customized Blended Index
combines returns from the S&P 500 Index, the Russell 2000
Index, the Morgan Stanley Capital International Europe,
Australasia, Far East (Free) Index-Hedged, $U.S. ("EAFE Index"),
the Lehman Brothers Intermediate Government/Corporate Bond Index
("Lehman Index") and the J.P. Morgan Non-U.S. Government Bond
Index-Hedged ("J.P. Morgan Global Index"), and is weighted to
the aforementioned Baseline percentages. The Russell 2000 Index
is an unmanaged index and is composed of the 2,000 smallest
companies in the Russell 3000 Index. The Russell 3000
Index is composed of the largest U.S. companies by market
capitalization. The EAFE Index, which is the property of Morgan
Stanley & Co. Incorporated, is an unmanaged index composed of a
sample of companies representative of the market structure of 16
European and Pacific Basin countries and includes net dividends
reinvested. The Lehman Index is a widely accepted, unmanaged
index of Government and Corporate bond market performance
composed of U.S. Government, Treasury and agency securities,
fixed-income securities and nonconvertible investment grade
corporate debt, with an average maturity of 1-10 years.
The J.P. Morgan Global Index is an index Portfolio that measures
returns on bonds from 12 world markets, hedged into U.S.
dollars. This index does not include a U.S. bonds component.
None of the foregoing indices reflect account charges, fees or
other expenses. 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.
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio SEPTEMBER
30, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
INVESTOR CLASS SHARES AND CLASS R SHARES OF DREYFUS LIFETIME
PORTFOLIOS, INC.-- GROWTH PORTFOLIO WITH THE STANDARD & POOR'S
500 COMPOSITE STOCK PRICE INDEX AND A CUSTOMIZED BLENDED INDEX
[SEE EXHIBIT C]
*Source: Lipper Analytical Services, Inc.
**Source: Lipper Analytical Services, Inc., Lehman Brothers,
Morgan Stanley & Co. Incorporated and J.P. Morgan & Co.
Incorporated
<TABLE>
<CAPTION>
ACTUAL AGGREGATE TOTAL RETURNS
INVESTOR CLASS SHARES CLASS R SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C> <S> <C>
From Inception (3/31/95) to September 30, 1995 18.56% From Inception (3/31/95) to September 30, 1995 18.72%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of
the Investor Class shares and Class R shares of the Growth
Portfolio on 3/31/95 (Inception Date) to a $10,000 investment
made in the Standard & Poor's 500 Composite Stock Price Index
("S&P 500 Index") on that date as well as to a Customized
Blended Index reflecting the Portfolio's asset allocation
baseline percentages ("Baseline") which are described below
and in the Fund's prospectus. All dividends and capital gain
distributions are reinvested.
The Growth Portfolio allocates your money among domestic and
foreign stocks and bonds. The Portfolio's performance shown in
the line graph takes into account all applicable fees and
expenses. The S&P 500 Index is a widely accepted, unmanaged
index of overall stock market performance which does not take
into account charges, fees and other expenses. The S&P 500
Index was selected because (1) domestic common stocks represent
the highest Baseline percentage of the Portfolio's assets and
(2) the majority of the stock portion of the Portfolio is
invested in stocks included in the S&P 500 Index. The
Customized Blended Index has been prepared by the Fund for
purposes of more accurate comparison to the Portfolio's overall
portfolio composition. We have combined the performance of
unmanaged indices reflecting the Baseline percentages set forth
in the Prospectus, but in greater detail than the broader
prospectus Baseline percentages: Domestic Large Company
Stocks-54.4%; Domestic Small Company Stocks-13.6%; Foreign
Stocks-12.0%; Domestic Bonds-17.0%; and Foreign Bonds-3.0%. The
Customized Blended Index combines returns from the S&P 500
Index, the Russell 2000 Index, the Morgan Stanley Capital
International Europe, Australasia, Far East (Free)
Index-Hedged,$U.S. ("EAFE Index"), the Lehman Brothers
Intermediate Government/Corporate Bond Index ("Lehman
Index") and the J.P. Morgan Non-U.S. Government Bond
Index-Hedged ("J.P. Morgan Global Index") and is weighted to the
aforementioned Baseline percentages. The Russell 2000 Index is
an unmanaged index and is composed of the 2,000 smallest
companies in the Russell 3000 Index. The Russell 3000 Index is
composed of the largest U.S. companies by market capitalization.
The EAFE Index, which is the property of Morgan Stanley
& Co. Incorporated, is an unmanaged index composed of a sample
of companies representative of the market structure of 16
European and Pacific Basin countries and includes net dividends
reinvested. The Lehman Index is a widely accepted, unmanaged
index of Government and Corporate bond market performance
composed of U.S. Government, Treasury and agency securities,
fixed-income securities and nonconvertible investment grade
corporate debt, with an average maturity of 1-10 years.
The J.P. Morgan Global Index is an index Portfolio that measures
returns on bonds from 12 world markets, hedged into U.S.
dollars. This index does not include a U.S. bonds component.
None of the foregoing indices reflect account charges, fees or
other expenses. 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.
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Income Portfolio
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1995
PRINCIPAL
BONDS AND NOTES--66.5% AMOUNT VALUE
--------- -----
<S> <C> <C>
U.S. GOVERNMENT SECURITIES: U.S. Treasury Bonds:
11 5/8%, 11/15/2004................... $ 600,000 $ 820,969
U.S. Treasury Notes:
7 1/2%, 1/31/1997..................... 2,945,000 3,008,041
5 5/8%, 1/31/1998..................... 3,000,000 2,982,189
5 1/8%, 11/30/1998.................... 250,000 244,141
7 1/8%, 9/30/1999..................... 1,000,000 1,039,375
8 3/4%, 8/15/2000..................... 700,000 779,078
8%, 5/15/2001......................... 1,000,000 1,090,781
7 1/2%, 11/15/2001.................... 180,000 192,740
7 1/2%, 2/15/2005..................... 600,000 653,156
-----------
9,989,501
===========
TOTAL BONDS AND NOTES
(cost $10,577,780).................... $10,810,470
===========
SHORT-TERM INVESTMENTS--31.9%
U.S. TREASURY BILLS: 5.38%, 10/5/1995...................... 41,000 $ 40,971
5.33%, 10/12/1995..................... 40,000 39,931
5.34%, 10/19/1995..................... 161,000 160,554
5.40%, 11/2/1995...................... 75,000 74,636
5.41%, 11/16/1995..................(a) 2,448,000 2,431,035
5.27%, 11/30/1995..................... 50,000 49,554
5.30%, 12/7/1995...................... 2,415,000 2,390,705
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $5,187,909)......................................................... $ 5,187,386
===========
TOTAL INVESTMENTS
(cost $15,765,689)........................................................ 98.4% $15,997,856
====== ===========
CASH AND RECEIVABLES (NET).................................................... 1.6% $ 264,679
====== ===========
NET ASSETS.................................................................... 100.0% $16,262,535
====== ===========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Partially held by the custodian in a segregated account as collateral for open futures positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1995
Financial Futures Purchased; MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/95
--------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Standard & Poor's 500................ 13 $3,823,300 December '95 $160,420
========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth and Income Portfolio
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1995
COMMON STOCKS--46.0% SHARES VALUE
------ -----
<S> <C> <C>
BASIC INDUSTRIES--2.5% Cabot..................................... 200 $ 10,625
Champion International.................... 1,400 75,425
Dow Chemical.............................. 700 52,150
duPont (E.I.) de Nemours.................. 300 20,625
Eastman Chemical.......................... 1,200 76,800
Federal Paper Board....................... 400 15,350
International Paper....................... 1,200 50,400
Lyondell Petrochemical.................... 1,000 25,875
PPG Industries............................ 500 23,250
Temple-Inland............................. 300 15,975
Union Carbide............................. 1,100 43,725
Wellman................................... 700 17,150
Weyerhaeuser.............................. 600 27,375
------------
454,725
------------
CAPITAL SPENDING--10.1% Advanced Micro Devices.................(a) 800 23,300
Applied Materials......................(a) 300 30,675
Arrow Electronics......................(a) 400 21,750
Avnet..................................... 700 36,138
Cabletron Systems......................(a) 800 52,700
Case...................................... 800 29,400
Caterpillar............................... 500 28,438
Ceridian...............................(a) 1,300 57,688
cisco Systems..........................(a) 900 62,100
Computer Associates International......... 1,350 57,038
Cummins Engine............................ 700 26,950
Deere & Co................................ 200 16,275
Eaton..................................... 1,600 84,800
General Electric.......................... 2,400 153,000
HBO & Co.................................. 800 50,000
Harnischfeger Industries.................. 300 10,012
HealthCare COMPARE.....................(a) 1,300 50,375
Hewlett-Packard........................... 600 50,025
Illinois Tool Works....................... 600 35,325
Intel..................................... 1,300 78,162
International Business Machines........... 1,500 141,563
Lockheed Martin........................... 1,200 80,550
Manpower.................................. 400 11,600
McDonnell Douglas......................... 400 33,100
Microsoft..............................(a) 700 63,350
Omnicom Group............................. 300 19,537
Oracle.................................(a) 1,100 42,212
Raytheon.................................. 1,200 102,000
Rockwell International.................... 1,100 51,975
Sun Microsystems.......................(a) 800 50,400
TRW....................................... 1,100 81,812
Teradyne...............................(a) 400 14,400
Texas Instruments......................... 1,500 119,812
3Com...................................(a) 600 27,300
------------
1,793,762
------------
CONSUMER CYCLICAL--5.9% American Greetings, Cl. A................. 900 $ 27,450
Capital Cities/ABC........................ 500 58,813
Chrysler.................................. 1,300 68,900
Circuit City Stores....................... 2,300 72,738
Eckerd.................................(a) 500 20,000
Ford Motor................................ 2,200 68,475
General Motors............................ 400 18,750
Goodyear Tire & Rubber.................... 600 23,625
Harley-Davidson........................... 500 12,188
King World Productions.................(a) 900 32,962
Magna International, Cl. A................ 400 18,050
Mattel.................................... 800 23,500
McDonald's................................ 1,600 61,200
Mirage Resorts.........................(a) 1,200 39,450
NIKE, Cl. B............................... 400 44,450
New York Times, Cl. A..................... 800 21,900
Philips Electronics, N.V.................. 1,200 58,500
Reynolds & Reynolds, Cl. A................ 900 30,937
Rite Aid.................................. 1,600 44,800
Safeway................................(a) 1,600 66,800
Sears, Roebuck & Co....................... 2,200 81,125
Tandy..................................... 1,400 85,050
V.F....................................... 600 30,600
Walgreen.................................. 1,700 47,600
------------
1,057,863
------------
CONSUMER STAPLES--6.0% Archer Daniels Midland.................... 2,310 35,516
CPC International......................... 900 59,400
Coca-Cola................................. 2,700 186,300
ConAgra................................... 1,500 59,438
Eastman Kodak............................. 700 41,475
Gillette.................................. 1,700 80,963
Heinz (H.J.).............................. 600 27,450
IBP....................................... 700 37,363
Johnson & Johnson......................... 2,300 170,487
Newell.................................... 900 22,275
PepsiCo................................... 1,400 71,400
Philip Morris Cos......................... 1,600 133,600
Procter & Gamble.......................... 600 46,200
Sara Lee.................................. 1,000 29,750
Unilever, N.V. (New York Shares).......... 400 52,000
Whitman................................... 1,200 24,750
------------
1,078,367
------------
ENERGY--4.4% Amoco..................................... 1,300 83,363
Atlantic Richfield........................ 400 42,950
Coastal................................... 500 16,812
Exxon..................................... 2,700 195,075
Mobil..................................... 1,200 119,550
Panhandle Eastern......................... 1,500 40,875
Phillips Petroleum........................ 800 26,000
Royal Dutch Petroleum (New York Shares)... 1,300 159,575
Smith International....................(a) 1,000 17,375
Tidewater................................. 1,000 28,125
Williams Cos.............................. 1,500 58,500
------------
788,200
------------
HEALTH CARE--4.2% Abbott Laboratories....................... 1,400 59,675
Amgen..................................(a) 1,200 59,850
Baxter International...................... 1,700 69,913
Becton, Dickinson & Co.................... 1,000 62,875
Boston Scientific......................(a) 500 21,312
Bristol-Myers Squibb...................... 600 43,725
Columbia/HCA Healthcare................... 1,200 58,350
Merck & Co................................ 2,700 151,200
Pfizer.................................... 1,500 80,062
Schering-Plough........................... 2,600 133,900
------------
740,862
------------
INTEREST SENSITIVE--6.0% Allstate.................................. 2,839 100,430
American National Insurance............... 300 17,475
Bank of New York.......................... 500 23,250
BankAmerica............................... 1,400 83,825
Bear Stearns Cos.......................... 1,700 36,550
CIGNA..................................... 900 93,712
Chemical Banking.......................... 1,500 91,313
Citicorp.................................. 1,700 120,275
Dean Witter, Discover & Co................ 1,300 73,125
EXEL Limited.............................. 1,100 63,938
First Chicago............................. 900 61,762
First USA................................. 1,100 59,675
Loews..................................... 200 29,100
NationsBank............................... 1,800 121,050
Providian................................. 100 4,150
Signet Banking............................ 900 23,625
Standard Federal Bancorporation........... 400 15,600
Travelers Group........................... 600 31,875
USLIFE.................................... 600 17,550
------------
1,068,280
------------
MINING AND METALS--.7% ASARCO.................................... 1,100 34,650
Alcan Aluminium........................... 700 22,663
Inland Steel Industries................... 1,000 22,750
Phelps Dodge.............................. 500 31,312
Reynolds Metals........................... 300 17,325
------------
128,700
------------
TRANSPORTATION--.7% AMR....................................(a) 200 14,425
CSX....................................... 400 33,650
Conrail................................... 500 34,375
Delta Air Lines........................... 300 20,775
Illinois Central, Ser. A.................. 700 27,387
------------
130,612
------------
UTILITIES--5.5% ALLTEL.................................... 700 20,913
Ameritech................................. 3,100 161,588
BellSouth................................. 2,100 153,563
Consolidated Edison....................... 2,200 66,825
DQE....................................... 1,150 30,475
Entergy................................... 2,900 75,762
General Public Utilities.................. 2,000 62,250
MCI Communications........................ 4,100 106,856
NYNEX..................................... 1,300 62,075
PECO Energy............................... 2,100 60,112
SBC Communications........................ 1,500 82,500
Sprint.................................... 2,400 84,000
WorldCom...............................(a) 300 9,637
------------
976,556
------------
TOTAL COMMON STOCKS
(cost $7,071,303) $ 8,217,927
============
PRINCIPAL
BONDS AND NOTES--32.1% AMOUNT
---------
U.S. GOVERNMENT SECURITIES: U.S. Treasury Bonds;
11.63%, 11/15/2004.................... $ 500,000 $ 684,141
------------
U.S. Treasury Notes:
7.50%, 1/31/1997...................... 1,715,000 1,751,711
5.63%, 1/31/1998...................... 1,350,000 1,341,985
5.13%, 11/30/1998..................... 350,000 341,797
7.13%, 9/30/1999...................... 500,000 519,688
8.75%, 8/15/2000...................... 300,000 333,891
8%, 5/15/2001......................... 300,000 327,234
7.50%, 11/15/2001..................... 100,000 107,078
5.75%, 8/15/2003...................... 325,000 316,062
------------
5,039,446
============
TOTAL BONDS AND NOTES
(cost $5,598,232)..................... $ 5,723,587
============
PRINCIPAL
SHORT-TERM INVESTMENTS--20.8% AMOUNT VALUE
--------- -----
U.S. TREASURY BILLS: 5.34%, 10/5/1995.......................(b) $ 71,000 $ 70,950
5.33%, 10/12/1995......................(b) 209,000 208,638
5.37%, 11/2/1995.......................(b) 180,000 179,127
5.41%, 11/16/1995......................(b) 709,000 704,087
5.25%, 12/7/1995.......................(b) 2,584,000 2,558,005
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,721,591) $ 3,720,807
============
TOTAL INVESTMENTS (cost $16,391,126) 98.9% $ 17,662,321
====== ============
CASH AND RECEIVABLES (NET) 1.1% $ 188,069
====== ============
NET ASSETS 100.0% $ 17,850,390
====== ============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Partially held by the custodian in a segregated account as
collateral for open futures positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1995
UNREALIZED
MARKET VALUE APPRECIATION/
NUMBER OF COVERED (DEPRECIATION)
FINANCIAL FUTURES PURCHASED: CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/95
--------- ------------ ---------- --------------
<S> <C> <C> <C> <C>
Deutsche Aktienindex...................... 1 $ 150,112 December '95 $ (3,039)
Financial Times 100....................... 2 272,618 December '95 (471)
Hang Seng................................. 1 62,572 December '95 (1,054)
Nikkei 300................................ 13 355,610 December '95 799
Russell 2000.............................. 13 2,025,400 December '95 22,070
Standard & Poor's 500..................... 2 588,200 December '95 16,355
----------
$ 34,660
==========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1995
COMMON STOCKS--71.6% SHARES VALUE
------ -----
<S> <C> <C>
BASIC INDUSTRIES--4.1% Cabot..................................... 400 $ 21,250
Champion International.................... 2,600 140,075
Dow Chemical.............................. 1,400 104,300
duPont (E.I.) de Nemours.................. 2,000 137,500
Eastman Chemical.......................... 2,500 160,000
Federal Paper Board....................... 800 30,700
International Paper....................... 2,600 109,200
Lyondell Petrochemical.................... 2,000 51,750
PPG Industries............................ 1,000 46,500
Temple-Inland............................. 600 31,950
Union Carbide............................. 1,600 63,600
Wellman................................... 1,100 26,950
Weyerhaeuser.............................. 1,200 54,750
------------
978,525
------------
CAPITAL SPENDING--15.5% Advanced Micro Devices.................(a) 1,700 49,513
Applied Materials......................(a) 600 61,350
Arrow Electronics......................(a) 800 43,500
Avnet..................................... 1,400 72,275
Cabletron Systems......................(a) 1,700 111,988
Case...................................... 1,600 58,800
Caterpillar............................... 1,100 62,563
Ceridian...............................(a) 2,700 119,813
cisco Systems..........................(a) 1,800 124,200
Computer Associates International......... 2,850 120,412
Cummins Engine............................ 1,300 50,050
Deere & Co................................ 500 40,687
Eaton..................................... 3,300 174,900
General Electric.......................... 4,600 293,250
HBO & Co.................................. 1,700 106,250
Harnischfeger Industries.................. 800 26,700
HealthCare COMPARE.....................(a) 2,700 104,625
Hewlett-Packard........................... 1,200 100,050
Illinois Tool Works....................... 1,200 70,650
Intel..................................... 2,700 162,337
International Business Machines........... 3,200 302,000
Lockheed Martin........................... 2,600 174,525
Manpower.................................. 900 26,100
McDonnell Douglas......................... 900 74,475
Microsoft..............................(a) 1,300 117,650
Omnicom Group............................. 600 39,075
Oracle.................................(a) 2,300 88,262
Raytheon.................................. 2,400 204,000
Rockwell International.................... 2,300 108,675
Sun Microsystems.......................(a) 1,800 113,400
TRW....................................... 2,200 163,625
Teradyne...............................(a) 1,000 36,000
Texas Instruments......................... 3,000 239,625
3Com...................................(a) 1,400 63,700
------------
3,705,025
------------
CONSUMER CYCLICAL--9.3% American Greetings, Cl. A................. 1,900 $ 57,950
Capital Cities/ABC........................ 1,200 141,150
Chrysler.................................. 2,500 132,500
Circuit City Stores....................... 4,800 151,800
Eckerd.................................(a) 900 36,000
Ford Motor................................ 4,500 140,063
General Motors............................ 800 37,500
Goodyear Tire & Rubber.................... 1,300 51,188
Harley-Davidson........................... 1,700 41,438
King World Productions.................(a) 1,900 69,588
Magna International, Cl. A................ 900 40,612
Mattel.................................... 1,700 49,937
McDonald's................................ 3,400 130,050
Mirage Resorts.........................(a) 2,400 78,900
NIKE, Cl. B............................... 800 88,900
New York Times, Cl. A..................... 1,700 46,537
Philips Electronics, N.V.................. 2,200 107,250
Reynolds & Reynolds, Cl. A................ 1,900 65,312
Rite Aid.................................. 3,200 89,600
Safeway................................(a) 3,300 137,775
Sears, Roebuck & Co....................... 4,600 169,625
Tandy..................................... 3,000 182,250
V.F....................................... 1,300 66,300
Walgreen.................................. 3,600 100,800
------------
2,213,025
------------
CONSUMER STAPLES--9.4% Archer Daniels Midland.................... 4,900 75,338
CPC International......................... 1,900 125,400
Coca-Cola................................. 5,600 386,400
ConAgra................................... 3,000 118,875
Eastman Kodak............................. 1,400 82,950
Gillette.................................. 3,600 171,450
Heinz (H.J.).............................. 1,300 59,475
IBP....................................... 1,500 80,062
Johnson & Johnson......................... 4,800 355,800
Newell.................................... 2,000 49,500
PepsiCo................................... 2,700 137,700
Philip Morris Cos......................... 3,400 283,900
Procter & Gamble.......................... 1,200 92,400
Sara Lee.................................. 2,100 62,475
Unilever, N.V. (New York Shares).......... 800 104,000
Whitman................................... 2,400 49,500
------------
2,235,225
------------
ENERGY--7.0% Amoco..................................... 2,800 179,550
Atlantic Richfield........................ 900 96,638
Coastal................................... 800 26,900
Exxon..................................... 5,700 411,825
Mobil..................................... 2,600 259,025
Panhandle Eastern......................... 3,100 84,475
Phillips Petroleum........................ 1,700 55,250
Royal Dutch Petroleum (New York Shares)... 2,700 331,425
Smith International....................(a) 2,100 36,487
Tidewater................................. 2,100 59,062
Williams Cos.............................. 3,000 117,000
------------
1,657,637
------------
HEALTH CARE--6.3% Abbott Laboratories....................... 3,600 153,450
Amgen..................................(a) 2,600 129,675
Baxter International...................... 3,400 139,825
Becton, Dickinson & Co.................... 1,800 113,175
Boston Scientific......................(a) 1,100 46,888
Bristol-Myers Squibb...................... 1,200 87,450
Columbia/HCA Healthcare................... 2,400 116,700
Merck & Co................................ 5,600 313,600
Pfizer.................................... 3,100 165,462
Schering-Plough........................... 4,700 242,050
------------
1,508,275
------------
INTEREST SENSITIVE--9.3% Allstate.................................. 5,964 210,976
American National Insurance............... 700 40,775
Bank of New York.......................... 1,000 46,500
BankAmerica............................... 2,900 173,638
Bear Stearns Cos.......................... 3,500 75,250
CIGNA..................................... 1,800 187,425
Chemical Banking.......................... 3,200 194,800
Citicorp.................................. 3,500 247,625
Dean Witter, Discover & Co................ 2,400 135,000
EXEL Limited.............................. 2,300 133,688
First Chicago............................. 1,900 130,388
First USA................................. 2,300 124,775
Loews..................................... 300 43,650
NationsBank............................... 3,800 255,550
Providian................................. 300 12,450
Signet Banking............................ 1,800 47,250
Standard Federal Bancorporation........... 900 35,100
Travelers Group........................... 1,300 69,062
USLIFE.................................... 1,500 43,875
------------
2,207,777
------------
MINING & METALS--1.1% ASARCO.................................... 2,300 72,450
Alcan Aluminium........................... 1,400 45,325
Inland Steel Industries................... 2,200 50,050
Phelps Dodge.............................. 1,000 62,625
Reynolds Metals........................... 600 34,650
------------
265,100
------------
TRANSPORTATION--1.1% AMR....................................(a) 400 $ 28,850
CSX....................................... 900 75,712
Conrail................................... 1,000 68,750
Delta Air Lines........................... 600 41,550
Illinois Central, Ser. A.................. 1,400 54,775
------------
269,637
------------
UTILITIES--8.5% ALLTEL.................................... 1,400 41,825
Ameritech................................. 6,500 338,813
BellSouth................................. 4,400 321,750
Consolidated Edison....................... 4,600 139,725
DQE....................................... 2,350 62,275
Entergy................................... 6,100 159,363
General Public Utilities.................. 4,100 127,613
MCI Communications........................ 8,700 226,743
NYNEX..................................... 2,400 114,600
PECO Energy............................... 4,400 125,950
SBC Communications........................ 3,200 176,000
Sprint.................................... 5,000 175,000
WorldCom...............................(a) 700 22,487
------------
2,032,144
------------
TOTAL COMMON STOCKS
(cost $14,751,836).................... $ 17,072,370
============
PRINCIPAL
SHORT-TERM INVESTMENTS--28.2% AMOUNT VALUE
--------- -----
U.S. TREASURY BILLS: 5.34%, 10/5/1995.......................(b) $ 191,000 $ 190,864
5.36%, 10/19/1995......................(b) 114,000 113,684
5.40%, 10/26/1995......................(b) 105,000 104,613
5.37%, 11/2/1995.......................(b) 1,803,000 1,794,255
5.16%, 11/9/1995.......................(b) 121,000 120,289
5.32%, 11/16/1995......................(b) 1,196,000 1,187,712
5.28%, 12/7/1995.......................(b) 3,237,000 3,204,436
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $6,716,972)..................... $ 6,715,853
===========
TOTAL INVESTMENTS (cost $21,468,808).......................................... 99.8% $23,788,223
====== ===========
CASH AND RECEIVABLES (NET).................................................... .2% $ 48,781
====== ===========
NET ASSETS.................................................................... 100.0% $23,837,004
====== ===========
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Partially held by the custodian in a segregated account as
collateral for open futures positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1995
UNREALIZED
MARKET VALUE APPRECIATION/
NUMBER OF COVERED (DEPRECIATION)
FINANCIAL FUTURES PURCHASED: CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/95
--------- ------------ ---------- --------------
<S> <C> <C> <C> <C>
CAC 40 Index.............................. 2 $ 141,110 December '95 $(9,396)
Deutsche Aktienindex...................... 2 300,223 December '95 (6,078)
Financial Times 100....................... 4 545,790 December '95 360
Hang Seng................................. 3 187,716 December '95 (3,208)
Nikkei 300................................ 38 1,034,983 December '95 (2,533)
Russell 2000.............................. 27 4,206,600 December '95 42,830
-------
$21,975
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1995
INCOME GROWTH AND INCOME GR0WTH
PORTFOLIO PORTFOLIO PORTFOLIO
--------- ----------------- ---------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value
[cost--Note 4(b)]--see statement.............. $15,997,856 $17,662,321 $23,788,223
Cash.............................................. 82,413 8,380 30,078
Dividends and interest receivable................. 181,653 114,194 33,066
Receivable for futures variation margin........... -- 6,508 19,590
Prepaid expenses--Note 2(g)....................... 57,859 95,341 59,599
----------- ----------- -----------
16,319,781 17,886,744 23,930,556
----------- ----------- -----------
LIABILITIES:
Due to The Dreyfus Corporation.................... 10,683 6,439 11,489
Due to Distributor................................ 1,662 1,757 2,429
Payable for investment securities purchased....... -- 9,612 19,748
Payable for futures variation margin.............. 6,500 -- --
Accrued expenses and other liabilities............ 38,401 18,546 59,886
----------- ----------- -----------
57,246 36,354 93,552
----------- ----------- -----------
NET ASSETS............................................ $16,262,535 $17,850,390 $23,837,004
=========== =========== ===========
REPRESENTED BY:
Paid-in capital................................... $15,041,856 $15,666,553 $20,103,205
Accumulated undistributed investment income-net... 474,272 332,653 318,027
Accumulated undistributed net realized gain
on investments................................ 353,820 545,329 1,074,382
Accumulated net unrealized appreciation on
investments and foreign currency
transactions [including $160,420, $34,660
and $21,975 net unrealized appreciation on
financial futures for the Income Portfolio,
Growth and Income Portfolio and Growth
Portfolio, respectively]--Note 4(b)........... 392,587 1,305,855 2,341,390
----------- ----------- -----------
NET ASSETS at value................................... $16,262,535 $17,850,390 $23,837,004
=========== =========== ===========
Shares of Common Stock outstanding:
Class R Shares
(50 million shares of $.001 par value
shares authorized)............................ 601,975 646,297 801,860
=========== =========== ===========
Investor Class Shares
(50 million shares of $.001 par value
shares authorized)............................ 601,320 601,948 805,586
=========== =========== ===========
NET ASSET VALUE per share:
Class R Shares
($8,140,844 / 601,975 shares)................. $13.52
======
($9,247,876 / 646,297 shares)................. $14.31
======
($11,898,401 / 801,860 shares)................ $14.84
======
Investor Class Shares
($8,121,691 / 601,320 shares)................. $13.51
======
($8,602,514 / 601,948 shares)................. $14.29
======
($11,938,603 / 805,586 shares)................ $14.82
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF OPERATIONS
FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995
INCOME GROWTH AND INCOME GR0WTH
PORTFOLIO PORTFOLIO PORTFOLIO
--------- ----------------- ---------
<S> <C> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest...................................... $ 531,783 $ 314,676 $ 231,188
Cash dividends (net of $1,565 and $2,987
foreign taxes withheld at source for
the Growth and Income Portfolio and
the Growth Portfolio, respectively)....... -- 90,530 184,266
----------- ----------- -----------
TOTAL INCOME ......................... 531,783 405,206 415,454
----------- ----------- -----------
EXPENSES--Note 2(d):
Management fee--Note 3(a)..................... $ 47,599 $ 61,635 $ 82,882
Legal fees.................................... 12,908 13,195 16,735
Distribution fees
(Investor Class shares)--Note 3(b)........ 9,913 10,185 13,812
Organization expenses--Note 2(g).............. 7,641 8,968 7,642
Registration fees............................. 5,187 8,545 7,306
Auditing fees................................. 4,083 4,083 4,333
Director's fees and expenses--Note 3(c)....... 3,400 3,252 4,022
Shareholder servicing costs................... 3,049 4,804 4,056
Shareholders' reports......................... 2,667 2,871 2,871
Custodian fees................................ 1,405 8,061 9,385
Miscellaneous................................. 816 829 829
----------- ----------- -----------
98,668 126,428 153,873
Less--reduction in management fee due to
undertakings--Note 3(a)................... 41,157 53,875 56,446
----------- ----------- -----------
TOTAL EXPENSES........................ 57,511 72,553 97,427
----------- ----------- -----------
INVESTMENT INCOME--NET................ 474,272 332,653 318,027
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 4(a)....... $ 5,000 $ 197,726 $ 396,526
Net realized gain on financial futures
(including foreign currency
transactions)--Note 4(a);
Long Transactions................................. 348,820 347,603 677,856
----------- ----------- -----------
NET REALIZED GAIN................................. 353,820 545,329 1,074,382
----------- ----------- -----------
Net unrealized appreciation on investments
(including foreign currency transactions)
(including $160,420, $34,660 and $21,975
net unrealized appreciation on financial
futures for the Income Portfolio, the Growth
and Income Portfolio and the Growth
Portfolio, respectively)...................... 392,587 1,305,855 2,341,390
----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS................... 746,407 1,851,184 3,415,772
----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $ 1,220,679 $ 2,183,837 $ 3,733,799
=========== =========== ===========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF CHANGES IN NET ASSETS
FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995
INCOME
PORTFOLIO
---------
<S> <C>
OPERATIONS:
Investment income--net.............................................. $ 474,272
Net realized gain on investments.................................... 353,820
Net unrealized appreciation on investments for the period........... 392,587
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... 1,220,679
-----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class R shares.................................................. 7,508,845
Investor Class shares........................................... 7,504,669
Cost of shares redeemed;
Investor Class shares........................................... (4,658)
-----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS...... 15,008,856
-----------
TOTAL INCREASE IN NET ASSETS............................ 16,229,535
===========
NET ASSETS:
Beginning of period--Note 1......................................... 33,000
-----------
End of period (including undistributed investment income-net of
$474,272 on September 30, 1995)................................. $16,262,535
===========
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------
CLASS R INVESTOR CLASS
------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 600,655 600,353
Shares redeemed..................................................... -- (353)
------- -------
NET INCREASE IN SHARES OUTSTANDING.............................. 600,655 600,000
======= =======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995
GROWTH AND INCOME
PORTFOLIO
-----------------
<S> <C>
OPERATIONS:
Investment income--net.............................................. $ 332,653
Net realized gain on investments.................................... 545,329
Net unrealized appreciation on investments for the period........... 1,305,855
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 2,183,837
-----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class R shares.................................................. 8,144,735
Investor Class shares........................................... 7,509,353
Cost of shares redeemed:
Class R shares.................................................. (20,620)
Investor Class shares........................................... (915)
-----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS...... 15,632,553
-----------
TOTAL INCREASE IN NET ASSETS............................ 17,816,390
NET ASSETS:
Beginning of period--Note 1......................................... 34,000
-----------
End of period (including undistributed investment income-net of
$332,653 on September 30, 1995)..................................... $17,850,390
===========
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------
CLASS R INVESTOR CLASS
------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 646,375 600,654
Shares redeemed..................................................... (1,438) (66)
------- -------
NET INCREASE IN SHARES OUTSTANDING.............................. 644,937 600,588
======= =======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995
GROWTH
PORTFOLIO
---------
<S> <C>
OPERATIONS:
Investment income--net.............................................. $ 318,027
Net realized gain on investments.................................... 1,074,382
Net unrealized appreciation on investments for the period........... 2,341,390
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 3,733,799
-----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class R shares.................................................. 10,007,843
Investor Class shares........................................... 10,067,618
Cost of shares redeemed;
Investor Class shares........................................... (5,256)
-----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS...... 20,070,205
-----------
TOTAL INCREASE IN NET ASSETS............................ 23,804,004
NET ASSETS:
Beginning of period--Note 1......................................... 33,000
-----------
End of period (including undistributed investment income-net of
$318,027 on September 30, 1995)................................. $23,837,004
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------
CLASS R INVESTOR CLASS
------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 800,540 804,636
Shares redeemed..................................................... -- (370)
------- -------
NET INCREASE IN SHARES OUTSTANDING.............................. 800,540 804,266
======= =======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each series for the period March 31,
1995 (commencement of operations) to September 30, 1995. This information has
been derived from the Portfolios' financial statements.
INCOME PORTFOLIO
---------------------------------------
CLASS R SHARES INVESTOR CLASS SHARES
-------------- ---------------------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................ $12.50 $12.50
------ ------
INVESTMENT OPERATIONS:
Investment income--net.............................................. .40 .39
Net realized and unrealized gain on investments..................... .62 .62
------ ------
TOTAL FROM INVESTMENT OPERATIONS................................ 1.02 1.01
------ ------
Net asset value, end of period...................................... $13.52 $13.51
====== ======
TOTAL INVESTMENT RETURN*................................................ 8.24% 8.08%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets*.................. .30% .43%
Ratio of net investment income to average net assets*............... 3.08% 2.95%
Decrease reflected in above expense ratios due to undertaking
by the Manager*................................................. .26% .26%
Portfolio Turnover Rate*............................................ 5.66% 5.66%
Net Assets, end of period (000's Omitted)........................... $8,141 $8,122
- -----------------
* Not annualized.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each series for the period March 31,
1995 (commencement of operations) to September 30, 1995. This information has
been derived from the Portfolios' financial statements.
GROWTH AND INCOME PORTFOLIO
---------------------------------------
CLASS R SHARES INVESTOR CLASS SHARES
-------------- ---------------------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................ $12.50 $12.50
------ ------
INVESTMENT OPERATIONS:
Investment income--net.............................................. .27 .27
Net realized and unrealized gain on investments..................... 1.54 1.52
------ ------
TOTAL FROM INVESTMENT OPERATIONS................................ 1.81 1.79
------ ------
Net asset value, end of period...................................... $14.31 $14.29
====== ======
TOTAL INVESTMENT RETURN*................................................ 14.48% 14.32%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets*.................. .38% .51%
Ratio of net investment income to average net assets*............... 2.10% 1.98%
Decrease reflected in above expense ratios due to undertaking
by the Manager*................................................. .33% .33%
Portfolio Turnover Rate*............................................ 33.55% 33.55%
Net Assets, end of period (000's Omitted)........................... $9,248 $8,602
- -----------------
* Not annualized.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each series for the period March 31,
1995 (commencement of operations) to September 30, 1995. This information has
been derived from the Portfolios' financial statements.
GROWTH PORTFOLIO
---------------------------------------
CLASS R SHARES INVESTOR CLASS SHARES
-------------- ---------------------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................ $12.50 $12.50
------ ------
INVESTMENT OPERATIONS:
Investment income--net.............................................. .21 .19
Net realized and unrealized gain on investments..................... 2.13 2.13
------ ------
TOTAL FROM INVESTMENT OPERATIONS................................ 2.34 2.32
------ ------
Net asset value, end of period...................................... $14.84 $14.82
====== ------
TOTAL INVESTMENT RETURN*................................................ 18.72% 18.56%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets*.................. .38% .51%
Ratio of net investment income to average net assets*............... 1.51% 1.39%
Decrease reflected in above expense ratios due to undertaking
by the Manager*................................................. .26% .26%
Portfolio Turnover Rate*............................................ 52.86% 52.86%
Net Assets, end of period (000's Omitted)........................... $11,898 $11,939
- ---------------
* Not annualized.
See notes to financial statements.
</TABLE>
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL:
Dreyfus LifeTime Portfolios, Inc. (the "Fund"), formerly
Dreyfus Retirement Portfolios, Inc., was incorporated on July
15, 1993 and operates as a series company currently offering
three portfolios: the Income Portfolio, the Growth and Income
Portfolio and the Growth Portfolio. The Fund accounts separately
for the assets, liabilities and operations of each Portfolio.
The Fund had no operations until March 31, 1995 (when operations
commenced for all Portfolios) other than matters relating to its
organization and registration as a 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 2,640 shares of Common Stock ("Initial Shares") of
the Income Portfolio and the Growth Portfolio, and 2,720 shares
of Common Stock of the Growth and Income Portfolio to MBC
Investments Corporation. The Dreyfus Corporation ("Manager")
serves as each Portfolio's investment adviser. The Manager is a
direct subsidiary of Mellon Bank, N.A. Mellon Equity Associates
("Mellon Equity") serves as each Portfolios' sub-investment
adviser. Premier Mutual Fund Services, Inc. (the "Distributor")
acts as the distributor of the Fund's shares. 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.
As of September 30, 1995, Allomon Corporation, a subsidiary
of Mellon Bank Investments Corporation, which in turn is a
subsidiary of Mellon Bank, held the following shares:
Income Portfolio 1,200,000 Growth Portfolio 1,600,000
Growth and Income Portfolio 1,200,000
Each Portfolio offers both Investor Class shares and Class R
shares. Investor Class shares are offered to any investor and
Class R shares are offered only to institutional investors.
Other differences between the two classes include the services
offered to and the expenses borne by each class.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Each Portfolios' investments in
securities (including options and financial futures) are valued
at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on
the national securities market. Securities not listed on an
exchange or the national securities market, or securities for
which there were no transactions, are valued at the average of
the most recent bid and asked prices. Bid price is used when
no asked price is available. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing
rates of exchange.
Most debt securities (excluding short-term investments) are
valued each business day by an independent pricing service
("Service") approved by the Board of Directors. Debt securities
for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of
the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and
asked prices (as calculated by the Service based upon
its evaluation of the market for such securities). Other debt
securities are carried at fair value as determined by the
Service, based on methods which include consideration of: yields
or prices of securities of comparable quality, coupon, maturity
and type; indications as to values from dealers; and general
market conditions.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
(continued)
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate
that portion of the results of operations resulting from changes
in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized
gain or loss from investments.
Net realized foreign exchange gains or losses arise from
sales and maturities of short-term securities, sales of foreign
currencies, and currency gains and losses realized on securities
transactions. the difference between the amounts of dividends,
interest and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities
other than investments in securities at fiscal year end,
resulting from changes in exchange rates. Such gains and
losses are included with net realized and unrealized gain and
loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are recorded
on the identified cost basis. Dividend income is recognized on
the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is
recognized on the accrual basis.
(D) EXPENSES: Expenses directly attributable to each
Portfolio are charged to that Portfolio's operations; expenses
which are applicable to all series are allocated among them on a
pro rata basis.
(E) DIVIDENDS TO SHAREHOLDERS: Dividends payable to
shareholders are recorded by each Portfolio on the ex-dividend
date. Dividends from investment income-net and dividends from
net realized capital gain, with respect to each Portfolio, are
normally declared and paid annually, but each Portfolio may make
distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. To the
extent that a net realized capital gain of a Portfolio can be
offset by a capital loss carryover, if any, of that Portfolio,
such gain will not be distributed.
(F) FEDERAL INCOME TAXES: It is the policy of the Fund 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. For
Federal income tax purposes, each Portfolio is treated as a
single entity for the purpose of determining such qualification.
(G) OTHER: Organization expenses paid by the Portfolio are
included in prepaid expenses and are being amortized to
operations from the date operations commenced over the period
during which it is expected that a benefit will be realized, not
to exceed five years. At September 30, 1995, the unamortized
balance of such expenses of each of the respective Portfolio's
amounted to the following:
Income Portfolio $57,858 Growth Portfolio $57,858
Growth and Income Portfolio 67,900
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 3--MANAGEMENT FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with
the Manager, the management fee is computed on the average daily
value of each Portfolio's net assets and is payable monthly at
the following annual rates: 60 of 1% of the Income Portfolio,
and 75 of 1% of the Growth and Income Portfolio and the Growth
Portfolio. The Agreement provides that if in any full fiscal
year the aggregate expenses of any Portfolio, exclusive of
taxes, brokerage, interest on borrowings (which, in the view of
Stroock & Stroock & Lavan, counsel to the Fund, also
contemplates dividends accrued on securities sold short) and
extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund, that Portfolio may
deduct from payments to be made to the Manager, or the Manager
will bear the amount of such excess to the extent required by
state law. The most stringent state expense limitation
applicable to each Portfolio presently requires reimbursement of
expenses in any full fiscal year that such expenses (excluding
12b-1 Service Plan 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 that Portfolio's net assets in accordance with
California "blue sky" regulations. The Manager has undertaken
with respect to the Income Portfolio from March 31, 1995 through
December 31, 1995, or until such time as the net assets of the
Portfolio exceed $500 million, regardless of whether they remain
at that level, to reduce to the management fee paid by, or
reimburse such excess expenses of the Portfolio, to the
extent that the Portfolios' aggregate annual expenses (excluding
12b-1 Service Plan and certain expenses as described above)
exceed an annual rate of 60 of 1% of the average daily value of
the Portfolios' net assets. With respect to the Growth and
Income Portfolio and the Growth Portfolio, the Manager has
undertaken from March 31, 1995 through December 31, 1995, or
until such time as the net assets of the Portfolios' exceed $500
million, regardless of whether they remain at that level, to
reduce the management fee paid by, or reimburse such
excess expenses of the Portfolio, to the extent that the
Portfolio's aggregate annual expenses (excluding 12b-1 Service
Plan and certain expenses as described above) exceed an annual
rate of 75 of 1% of the average daily value of the Portfolio's
net assets.
The expense reimbursements, pursuant to the undertakings
amounted to the following for the period ended September 30,
1995:
Income Portfolio $41,157 Growth Portfolio $56,446
Growth and Income Portfolio 53,875
The undertakings may be modified by the Manager from time to
time, provided that the resulting expense reimbursement would
not be less than the amount required pursuant to the agreement.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
(continued)
Pursuant to a Sub-Investment Advisory Agreement between the
Manager and Mellon Equity, the Manager has agreed to pay Mellon
Equity a monthly sub-advisory fee for each Portfolio, computed
at the following annual rates:
Annual Fee as a Percentage of
Total Fund Net Assets Average Daily Net Assets of each
Portfolio
- --------------------- ----------------------------
0 to $600 million. .35 of 1%
$600 up to $1.2 billion .25 of 1%
$1.2 up to $1.8 billion .20 of 1%
In excess of $1.8 billion .15 of 1%
(B) Under the Service Plan (the "Plan") with respect to the
Investor Class shares only, adopted pursuant to Rule 12b-1 under
the Act, the Fund (a) reimburses the Distributor for payments to
certain Service Agents for distributing each Portfolio's
Investor Class shares and servicing Investor Class shareholder
accounts ("Servicing") and (b) pays the Manager, Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and any
affiliate of either of them (collectively, "Dreyfus") for
advertising and marketing relating to each Portfolio's
Investor Class shares and for Servicing, at an aggregate annual
rate of .25 of 1% of the value of each Portfolio's average daily
net assets of Investor Class shares. Each of the Distributor and
Dreyfus may pay one or more Service Agents a fee in respect of
Investor Class 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 determines the amounts, if any, to
be paid to Service Agents under the Plan and the basis on which
such payments are made. The fees payable under the Plan are
payable without regard to actual expenses incurred. The Plan
also separately provides for each Portfolio 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 each
Portfolio's average daily net assets of Investor Class shares
for any full fiscal year.
During the period ended September 30, 1995, the following
was charged to each Portfolio pursuant to the Plan:
Income Portfolio $ 9,913 Growth Portfolio $13,812
Growth and Income Portfolio 10,185
Effective October 1, 1995, the Plan has been terminated.
Effective October 2, 1995, the Fund has adopted a
Shareholder Services Plan. Under the Shareholder Services Plan,
the Fund pays the Distributor, at an annual rate of .25 of 1% of
the value of the average daily net assets of the Portfolio's
Investor Class shares only for the provision of certain
services. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of
shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor
determines the amounts to be paid to Service Agents.
(C) 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. The Chairman
of the Board receives an additional 25% of such compensation.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 4--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of
purchases and sales of investment securities, excluding
short-term securities, for the period ended September 30, 1995:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- ----------
<S> <C> <C>
Income Portfolio................. $11,067,283 $ 511,484
Growth and Income Portfolio...... 16,235,527 3,771,966
Growth Portfolio................. 21,542,148 7,187,600
</TABLE>
The Fund may invest in financial futures contracts in order
to gain exposure to or protect against changes in the market.
The Fund is exposed to market risk as a result of changes in the
value of the underlying financial instruments (see the
Statements of Financial Futures). 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. Typically, 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. Contracts open at September 30, 1995 and their related
unrealized market appreciation (depreciation) are set forth in
the Statements of Financial Futures.
(B) The following summarizes accumulated net unrealized
appreciation on investments for each Portfolio at September 30,
1995:
<TABLE>
<CAPTION>
Gross Gross
Appreciation (Depreciation) Net
------------ -------------- ----------
<S> <C> <C> <C>
Income Portfolio............. $ 393,804 $ (1,217) $ 392,587
Growth and Income Portfolio.. 1,367,745 (61,890) 1,305,855
Growth Portfolio............. 2,495,195 (153,805) 2,341,390
</TABLE>
At September 30, 1995, the cost of investments of each
Portfolio for Federal income tax purposes was substantially the
same as the cost for financial reporting purposes. The cost of
investments for Portfolio series for financial reporting
purposes as of September 30, 1995 was as follows:
Income Portfolio $15,765,689 Growth Portfolio
$21,468,808
Growth and Income Portfolio 16,391,126
Dreyfus LifeTime Portfolios, Inc.
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus LifeTime Portfolios, Inc.
We have audited the accompanying statement of assets and
liabilities, including the statements of investments and
financial futures, of Dreyfus LifeTime Portfolios, Inc.,
(comprised of the Income Portfolio, the Growth and Income
Portfolio and the Growth Portfolio) as of September 30, 1995,
and the related statements of operations and changes in net
assets and financial highlights for the period from March
31, 1995 (commencement of operations) to September 30, 1995.
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 September 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 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 each of the respective
Portfolios constituting the Dreyfus LifeTime Portfolios, Inc. at
September 30, 1995, and the results of their operations, the
changes in their net assets and the financial highlights for the
period from March 31, 1995 to September 30, 1995, in
conformity with generally accepted accounting principles.
[Ernst & Young LLP signature logo]
New York, New York
November 8, 1995
Dreyfus LifeTime
Portfolios, Inc.
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.
LifeTime
Portfolios, Inc.
Annual Report
September 30, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
GROWTH AND INCOME PORTFOLIO INVESTOR CLASS AND CLASS R OF
DREYFUS LIFETIME PORTFOLIOS, INC. WITH THE STANDARD & POOR'S
500 COMPOSITE STOCK INDEX AND A CUSTOMIZED BLENDED INDEX
EXHIBIT A:
<TABLE>
<CAPTION>
LIFETIME
GROWTH AND LIFETIME STANDARD
INCOME GROWTH AND & POOR'S 500
PORTFOLIO INCOME COMPOSITE CUSTOMIZED
INVESTOR PORTFOLIO STOCK BLENDED
PERIOD CLASS CLASS R PRICE INDEX * INDEX **
<S> <C> <C> <C> <C>
3/31/95 10,000 10,000 10,000 10,000
4/30/95 10,208 10,208 10,294 10,204
5/31/95 10,536 10,536 10,705 10,522
6/30/95 10,728 10,736 10,953 10,678
7/31/95 11,072 11,080 11,316 10,909
8/31/95 11,160 11,176 11,345 11,003
9/30/95 11,432 11,448 11,823 11,239
</TABLE>
*Source: Lipper Analytical Services, Inc.
**Source: Lipper Analytical Services, Inc., Lehman
Brothers, Morgan Stanley & Co. Incorporated and J.P. Morgan &
Co. Incorporated
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
INCOME PORTFOLIO INVESTOR CLASS AND CLASS R OF DREYFUS
LIFETIME PORTFOLIOS, INC. WITH THE LEHMAN BROTHERS
GOVERNMENT / CORPORATE INTERMEDIATE
BOND INDEX AND A CUSTOMIZED BLENDED INDEX
EXHIBIT A:
<TABLE>
<CAPTION>
LEHMAN BROTHERS
LIFETIME LIFETIME GOVERNMENT/
INCOME INCOME CORPORATE CUSTOMIZED
PERIOD PORTFOLIO PORTFOLIO INTERMEDIATE BLENDED
INVESTOR CLASS CLASS R BOND INDEX * INDEX **
<S> <C> <C> <C> <C>
3/31/95 10,000 10,000 10,000 10,000
4/30/95 10,128 10,136 10,123 10,154
5/31/95 10,416 10,424 10,430 10,458
6/30/95 10,512 10,520 10,499 10,566
7/31/95 10,600 10,608 10,501 10,653
8/31/95 10,664 10,672 10,596 10,729
9/30/95 10,808 10,824 10,673 10,893
</TABLE>
*Source: Lehman Brothers
**Source: Lehman Brothers, Lipper Analytical Services,
Inc., and The Wall Street Journal
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
GROWTH PORTFOLIO INVESTOR CLASS AND CLASS R OF DREYFUS
LIFETIME PORTFOLIOS, INC. WITH THE STANDARD & POOR'S 500
COMPOSITE STOCK PRICE INDEX AND A CUSTOMIZED BLENDED INDEX
EXHIBIT A:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
LIFETIME LIFETIME STANDARD
GROWTH GROWTH & POOR'S 500 CUSTOMIZED
PERIOD PORTFOLIO PORTFOLIO COMPOSITE STOCK BLENDED
INVESTOR CLASS CLASS R PRICE INDEX * INDEX **
<S> <C> <C> <C> <C>
3/31/95 10,000 10,000 10,000 10,000
4/30/95 10,256 10,256 10,294 10,251
5/31/95 10,600 10,600 10,705 10,559
6/30/95 10,864 10,872 10,953 10,751
7/31/95 11,384 11,392 11,316 11,126
8/31/95 11,480 11,488 11,345 11,228
9/30/95 11,856 11,872 11,823 11,541
</TABLE>
*Source: Lipper Analytical Services, Inc.
**Source: Lipper Analytical Services, Inc., Lehman
Brothers, Morgan Stanley & Co. Incorporated and J.P. Morgan &
Co. Incorporated
<PAGE>
Dear Shareholder:
It is a pleasure to send you this first annual report of the
Dreyfus Growth Portfolio of the Dreyfus Asset Allocation Fund,
Inc. It covers the period from inception of the Portfolio on
October 18, 1994 through April 30, 1995, the Fund's fiscal
year-end.
Dreyfus Growth Portfolio provided a total return of 5.53%
for the period since inception.* This compares with a total
return of 9.10% for the Wilshire 5000 Index, which is the
benchmark index used for the Portfolio for evaluating
performance.**
While the Portfolio can invest in any of the 5000 stocks
composing the Wilshire 5000 Index, during the period we chose to
concentrate investments primarily in technology, health care,
selected chemicals, energy and producer manufacturing. In
addition, the Portfolio had some exposure to consumer stocks
which dampened overall performance.
Among the major holdings in the technology field were
Microsoft, Motorola and Texas Instruments, which have worked out
well to date.
In health care, our principal investments were such names as
Merck & Co., Johnson & Johnson, American Home Products, Baxter
International and Abbott Laboratories. This group began to show
strength when the Clinton health reform plan foundered in
Congress.
In the energy group, we favored Texaco and Royal Dutch
Petroleum, and in energy services, Schlumberger.
The chemicals group benefited from restructuring in duPont
(EI) deNemours and Grace (W.R.). Among producer goods, holdings
such as TRINOVA, Deere & Co., and Boeing proved rewarding.
The Portfolio also has holdings in American multinational
companies that derive a considerable share of their business
from overseas sales.
The low price of the dollar on foreign exchange markets boosted
profits for these companies and strengthened their stocks. We
look for this favorable trend to most likely continue for the
balance of this calendar year and into 1996, as we maintain
prudence in an investment field
involving certain special risk considerations.
We appreciate your investment in the Portfolio and will
continue to exert our best effort to provide capital
appreciation on your holdings.
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.
**SOURCE: WILSHIRE ASSOCIATES, INCORPORATED. - Reflects the
reinvestment of income dividends and, where applicable, capital
gain distributions. The Wilshire 5000 Index consists of all
publicly traded stocks in the United States, and is a widely
accepted unmanaged index of overall stock market performance.
The Wilshire 5000 Index total return is from
10/31/94-4/30/95 (not from inception, 10/18/94).
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
DREYFUS GROWTH PORTFOLIO OF DREYFUS ASSET ALLOCATION FUND, INC.
WITH THE WILSHIRE 5000 INDEX
(Exhibit A)
$10,910 Wilshire 5000 Index*
$10,553 Dreyfus
Growth Portfolio In Dollars
*Source: Wilshire Associates, Incorporated
ACTUAL AGGREGATE TOTAL RETURN
- ----------------------------------------------------------------
From Inception (10/18/94) to April 30,
1995...................... 5.53%
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the
Dreyfus Growth
Portfolio on 10/18/94 (Inception Date) to a $10,000 investment
made in the Wilshire 5000 Index on that date. For comparative
purposes, the value of the Index on 10/31/94 is used as the
beginning value on 10/18/94. All dividends and capital gain
distributions are reinvested.
The Portfolio's performance takes into account all applicable
fees and expenses. The Wilshire 5000 Index consists of all
publicly traded stocks in the United States, and is a widely
accepted, unmanaged index
of overall stock market performance which does not take into
account charges, fees and other expenses. Further information
relating to 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.
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC. GROWTH PORTFOLIO
ACTUAL AGGREGATE TOTAL RETURN
FROM INCEPTION (10/18/94) TO APRIL 30, 1995
5.53%
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
- ---------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS APRIL 30, 1995
COMMON STOCKS--95.4% SHARES VALUE
- -------------------------------------------------------------------------------------- ---------- ----------
<S> <C> <C>
CONSUMER DURABLES--1.3% Mattel................................. 737 $ 17,504
----------
CONSUMER NON-DURABLES--5.7% CPC International...................... 500 29,313
Dean Foods............................. 245 6,982
General Mills.......................... 200 12,200
Heinz (H.J.)........................... 500 21,000
PepsiCo................................ 190 7,909
----------
77,404
----------
CONSUMER SERVICES--4.7% Gaylord Entertainment, Cl. A........... 500 11,812
Mirage Resorts......................... 500 (a) 15,000
Time Warner............................ 1,000 36,625
----------
63,437
----------
ENERGY--13.0% Amerada Hess........................... 640 32,400
Anadarko Petroleum..................... 400 16,450
Arethusa (OFF-Shore)................... 500 (a) 7,125
Burlington Resources................... 500 19,563
Energy Service......................... 675 (a) 11,306
Louisiana Land & Exploration........... 350 12,819
Schlumberger........................... 700 44,013
Texaco................................. 505 34,529
----------
178,205
----------
FINANCE--9.9% American International Group........... 300 32,025
EXEL................................... 775 35,262
Executive Risk......................... 1,025 (a) 18,066
First Interstate Bancorp............... 250 19,219
Transatlantic Holdings................. 480 30,480
----------
135,052
----------
HEALTH CARE--11.4% Abbott Laboratories.................... 200 7,875
American Home Products................. 200 15,425
Baxter International................... 300 10,425
Columbia/HCA Healthcare................ 575 24,150
Lilly (Eli)............................ 425 31,769
Scherer (R.P.)......................... 350 (a) 16,712
Schering-Plough........................ 95 7,161
SmithKline Beecham A.D.R............... 400 15,550
United Healthcare...................... 300 10,875
Watson Pharmaceuticals................. 525 (a) 16,341
----------
156,283
----------
INDUSTRIAL SERVICES--2.5% WMX Technologies....................... 500 13,625
Western Atlas.......................... 300 (a) 13,500
Wheelabrator Technology................ 500 7,250
----------
34,375
----------
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
- ---------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------------- ---------- ----------
PROCESS INDUSTRIES--9.3% AlliedSignal........................... 200 $ 7,925
duPont (EI) deNemours.................. 500 32,937
Grace (W.R.)........................... 800 42,900
Lubrizol............................... 210 7,324
Monsanto............................... 300 24,975
Witco.................................. 380 10,877
----------
126,938
----------
PRODUCER MANUFACTURING--13.2% Authentic Fitness...................... 955 (a) 15,757
CBI Industries......................... 1,100 27,225
Cooper Industries...................... 790 30,810
Deere & Co............................. 300 24,600
Minnesota Mining & Manufacturing....... 265 15,801
Norton McNaughton...................... 435 (a) 7,504
Roper Industries....................... 600 16,200
TRINOVA................................ 1,225 42,569
----------
180,466
----------
RETAIL TRADE--7.6% Consolidated Stores.................... 685 (a) 11,731
Federated Department Stores............ 800 (a) 16,900
Home Shopping Network.................. 1,500 (a) 10,312
May Department Stores.................. 400 14,500
Sears, Roebuck......................... 500 27,125
Talbots................................ 310 9,416
Wal-Mart Stores........................ 600 14,250
----------
104,234
----------
TECHNOLOGY--12.9% Bay Networks........................... 200 (a) 7,275
cisco Systems.......................... 300 (a) 11,963
DSC Communications..................... 410 (a) 15,170
Electronic Arts........................ 650 (a) 14,950
General Instrument..................... 450 (a) 15,356
Intel.................................. 215 22,011
Microsoft.............................. 225 (a) 18,394
Motorola............................... 300 17,062
Novell................................. 700 (a) 15,225
Sierra On-Line......................... 625 (a) 11,797
Texas Instruments...................... 190 20,140
Thermo Electron........................ 140 (a) 7,542
----------
176,885
----------
TRANSPORTATION--3.9% Burlington Northern.................... 500 29,750
OMI.................................... 2,050 (a) 11,787
Overseas Shipholding................... 615 12,300
----------
53,837
----------
TOTAL COMMON STOCKS
(cost $1,197,213).................... $1,304,620
==========
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995
PRINCIPAL
SHORT-TERM INVESTMENTS-8.8% AMOUNT VALUE
- ------------------------------------------------------------------------------------------ ---------- ----------
U.S. TREASURY BILL; 6.37%, 7/6/1995
(cost $120,734)..................................... $122,000 $ 120,701
==========
TOTAL INVESTMENTS (cost $1,317,947).................................................... 104.2% $1,425,321
========== ==========
LIABILITIES, LESS CASH AND RECEIVABLES................................................. (4.2%) $ (56,997)
========== ==========
NET ASSETS ............................................................................ 100.0% $1,368,324
=========== ==========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $1,317,947)-see statement.................................................. $1,425,321
Cash............................................................................... 17,529
Receivable for investment securities sold.......................................... 19,522
Dividends receivable............................................................... 4,294
Prepaid expenses................................................................... 15,469
Due from The Dreyfus Corporation................................................... 3,659
----------
1,485,794
LIABILITIES:
Due to Distributor................................................................. $ 830
Payable for investment securities purchased........................................ 92,270
Accrued expenses................................................................... 24,370 117,470
--------
NET ASSETS............................................................................. $1,368,324
==========
REPRESENTED BY:
Paid-in capital.................................................................... $1,297,177
Accumulated undistributed investment income-net.................................... 44,262
Accumulated net realized (loss) on investments..................................... (80,489)
Accumulated net unrealized appreciation on investments-Note 3...................... 107,374
----------
NET ASSETS at value applicable to 104,004 shares outstanding
(100 million shares of $.001 par value Common Stock authorized).................... $1,368,324
==========
NET ASSET VALUE, offering and redemption price per share
($1,368,324 / 104,004 shares)...................................................... $13.16
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
STATEMENT OF OPERATIONS
FROM OCTOBER 18, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends................................................................... $ 55,629
Interest......................................................................... 7,917
--------
TOTAL INCOME................................................................... $ 63,546
EXPENSES:
Management fee-Note 2(a)......................................................... 4,800
Legal fees....................................................................... 26,395
Auditing fees.................................................................... 15,000
Registration fees................................................................ 8,557
Shareholder servicing costs-Note 2(b,c).......................................... 7,391
Custodian fees................................................................... 4,637
Prospectus and shareholders' reports-Note 2(b)................................... 3,733
Directors' fees and expenses-Note 2(d)........................................... 256
Miscellaneous.................................................................... 1,424
--------
72,193
Less-expense reimbursement from Manager due to
undertaking and expense limitation-Note 2(a)................................... 55,445
----------
TOTAL EXPENSES............................................................... 16,748
----------
INVESTMENT INCOME-NET........................................................ 46,798
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3(a)....................................... $ (80,489)
Net unrealized appreciation on investments......................................... 107,374
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS.............................. 26,885
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................... $ 73,683
==========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
STATEMENT OF CHANGES IN NET ASSETS
FROM OCTOBER 18, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1995
<S> <C>
OPERATIONS:
Investment income-net.............................................................. $ 46,798
Net realized (loss) on investments................................................. (80,489)
Net unrealized appreciation on investments for the period ......................... 107,374
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................. 73,683
----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net.............................................................. (2,536)
----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold...................................................... 1,789,201
Dividends reinvested............................................................... 2,536
Cost of shares redeemed............................................................ (494,560)
----------
Increase In Net Assets From Capital Stock Transactions.......................... 1,297,177
----------
TOTAL INCREASE IN NET ASSETS.................................................. 1,368,324
NET ASSETS:
Beginning of period-Note 1........................................................ --
----------
End of period (including undistributed investment
income-net of $44,262)......................................................... $ 1,368,324
==========
CAPITAL SHARE TRANSACTIONS: SHARES
----------
Shares sold....................................................................... 143,001
Shares issued for dividends reinvested............................................ 207
Shares redeemed................................................................... (39,204)
----------
NET INCREASE IN SHARES OUTSTANDING.............................................. 104,004
----------
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
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 October 18, 1994
(commencement of operations) to April 30, 1995. This information has
been derived from the Portfolio's financial statements.
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.............................................. $12.50
------
INVESTMENT OPERATIONS:
Investment income-net............................................................. .45
Net realized and unrealized gain on investments................................... .24
------
TOTAL FROM INVESTMENT OPERATIONS................................................ .69
DISTRIBUTIONS;
Dividends from investment income-net.............................................. (.03)
------
Net asset value, end of period.................................................... $13.16
======
TOTAL INVESTMENT RETURN............................................................... 5.53%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........................................... 1.40%*
Ratio of net investment income to average net assets.............................. 3.91%*
Decrease reflected in above expense ratio due to
undertaking by the Manager and expense limitation............................... 4.63%*
Portfolio Turnover Rate........................................................... 497.41%*
Net Assets, end of period (000's Omitted)......................................... $1,368
- --------
*Not annualized.
See notes to financial statements.
</TABLE>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
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 Growth
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 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 Dreyfus Corporation ("Manager") serves as the
Portfolio's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A.
As of April 30, 1995, Major Trading Corporation, a
subsidiary of Mellon Bank Investments Corporation, held 80,189
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 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, if any, 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.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
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 had undertaken
from October 18, 1994 to April 30, 1995 to waive receipt of the
management, service and distribution fees. The expense
reimbursement, pursuant to the undertaking and expenses
limitation, amounted to $55,445 for the period 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) 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
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 April 30,
1995, $4,829 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 April 30, 1995, $1,600 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. The Chairman
of the Board receives an additional 25% of such compensation.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of
investment securities, excluding short-term securities during
the period ended April 30, 1995 amounted to $5,437,450 and
$4,160,961, respectively.
In addition, the following table summarizes the Fund's
option transactions for the period ended April 30, 1995:
<TABLE>
<CAPTION>
OPTIONS TERMINATED
-------------------------
NET
NUMBER OF PREMIUMS REALIZED
CONTRACTS RECEIVED COST (LOSS)
----------- -------- -------- --------
<S> <C> <C> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding October 18, 1994............... -- $ --
Contracts written.................................... 5 8,548
----------- --------
5 8,548
----------- --------
Contracts Terminated;
Closed............................................. 5 8,548 $ 8,753 $ (205)
----------- -------- ======== ========
Contracts outstanding April 30, 1995................. -- $ --
=========== ========
</TABLE>
As a writer of call options, the Fund receives a premium at
the outset and then bears the market risk of unfavorable changes
in the price of the financial instrument underlying the option.
Generally, the Fund would incur a gain, to the extent of the
premiums, if the price of the underlying financial instrument
decreases between the date the option is written and the date on
which the option is terminated.
Generally, the Fund would realize a loss, if the price of the
financial instrument increases between those dates. At April 30,
1995, there were no written call options outstanding.
(B) At April 30, 1995, accumulated net unrealized
appreciation on investments was $107,374, consisting of $123,162
gross unrealized appreciation and $15,788 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 Growth Portfolio
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS GROWTH PORTFOLIO
We have audited the accompanying statement of assets and
liabilities, including the statement of investments, of Dreyfus
Asset Allocation Fund, Inc., Dreyfus Growth Portfolio (one of
the Series constituting the Dreyfus Asset Allocation Fund, Inc.)
as of April 30, 1995, and the related statements of operations
and changes in net assets
and financial highlights for the period from October 18, 1994
(commencement of operations) to April 30, 1995. 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, 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 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., Dreyfus Growth Portfolio at April 30, 1995, and the
results of its operations, the changes in its net assets and the
financial highlights for the period from October 18, 1994 to
April 30, 1995, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
New York, New York
June 2, 1995
Asset Allocation
Fund, Inc.
Dreyfus
Growth Portfolio
Annual Report
April 30, 1995
DREYFUS ASSET ALLOCATION FUND, INC.
DREYFUS GROWTH 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.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
DREYFUS GROWTH PORTFOLIO OF DREYFUS ASSET ALLOCATION
FUND, INC. WITH THE WILSHIRE 5000 INDEX
EXHIBIT A:
DREYFUS
PERIOD GROWTH
PORTFOLIO WILSHIRE 5000 INDEX*
10/18/94 10,000 10,000
10/31/94 10,128 10,000
1/31/95 9,607 9,975
4/30/95 10,553 10,910
---------------------------------------------------
*Source: Wilshire Associates, Incorporated
<PAGE>
Dear Shareholder:
It is a pleasure to send you this first annual report of the
Dreyfus Income Portfolio of the Dreyfus Asset Allocation Fund,
Inc. The Portfolio commenced operations October 18, 1994. This
report covers developments from that date through April 30,
1995, the Fund's fiscal year-end.
Dreyfus Income Portfolio, in its six-and-a-half months of
existence, benefited in no small measure from a large position
in 30-year Treasury bonds that was established at the onset of
operations of this Portfolio, and
that has been retained to date. The move in interest rates that
has taken place since October from above 8% (based on the
30-year Treasury benchmark) to present levels below 7% has been
a major factor in the Income Portfolio's
performance. From the Portfolio's inception date through April
30, it has provided a total return of 11.14%.* This compares
with a total return of 6.65% for the Customized Blended Index,
which, like the Portfolio, is composed of a
defined weighting of Treasury obligations, common stocks and
cash equivalents that is more fully described below.** The
Shearson Lehman Intermediate Treasury Bond Index, which the
Portfolio has selected as a benchmark, posted a total return of
5.19% from October 31, 1994 through April 30, 1995.***
The equity portion of the Portfolio benefited from a number
of selections of industry sectors, with technology, health care,
certain process industries, energy, and producer manufacturing
contributing the most to performance.
Technology almost across the board has been strong, starting
with semiconductors such as Intel and Texas Instruments,
communications with Motorola and DSC Communications, and of
course software via Microsoft.
In health care, gains came largely from drugs, where the
Portfolio benefited from significant positions in American Home
Products, Schering-Plough and Merck & Co., as well as from more
diverse health care companies such as Johnson & Johnson, Abbott
Laboratories, and Baxter International.
In process industries, there has been a lot of corporate
restructuring. Holdings that were of particular benefit to the
Portfolio in this sector included duPont (EI) deNemours and
Grace (W.R.).
The Portfolio's significant contrarian position in energy
stocks finally began to pay off in 1995 when this group began to
recover from a previous slump. Holdings in Texaco, Schlumberger
and Royal Dutch Petroleum helped considerably.
Lastly, select positions in producer manufacturing such as
TRINOVA, Deere & Co. and Boeing turned in strong showings for
the year.
<PAGE>
Your investment in the Portfolio is very much appreciated.
Of course, Portfolio composition and allocation percentages are
subject to change over time. In this regard, we will continue to
exert our best efforts to achieve the Portfolio's objective of
maximizing current income, with a secondary
goal of capital appreciation.
Sincerely,
(Ernest G. Wiggins Signature
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 Shearson Lehman Intermediate Treasury Bond
Index, an unmanaged index viewed as being a leading indicator of
overall performance of U.S. Treasury notes and bonds.
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% U.S. Treasury notes and bonds, 35% common
stocks, and 10% cash equivalents.
The Customized Blended Index combines returns from the
Shearson Lehman Intermediate Treasury Bond Index, the Standard &
Poor's 500 Composite Stock Price Index and the Bank Rate Monitor
Index of money market returns, and is weighted to the benchmark
percentages. The Customized Blended Index covers
the period from 10/31/94 through 4/30/95 (not from inception,
10/18/94).
*** SOURCE: LEHMAN BROTHERS - Reflects the reinvestment of
income dividends and, where applicable, capital gain
distributions. The Shearson Lehman Brothers Intermediate
Treasury Bond Index is a widely accepted index of U.S. Treasury
notes and bonds.
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
DREYFUS INCOME PORTFOLIO OF DREYFUS ASSET ALLOCATION FUND, INC.
WITH THE SHEARSON LEHMAN INTERMEDIATE TREASURY INDEX AND A
CUSTOMIZED BLENDED INDEX
(Exhibit A)
In Dollars
Dreyfus Income Portfolio
$11,114
Customized Blended Index**
$10,665
Shearson Lehman Intermediate Treasury Bond Index*
$10,519
*Source: Lehman Brothers
**Source: Lipper Analytical Services, Inc., Lehman Brothers and
Bank Rate Monitor
ACTUAL AGGREGATE TOTAL RETURN
From Inception (10/18/94) to April 30,
1995......................... 11.14%
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the
Dreyfus Income Portfolio on 10/18/94 (Inception Date) to a
$10,000 investment made in the Shearson Lehman Intermediate
Treasury Bond Index on that date as well as to a Customized
Blended Index reflecting the Portfolio's benchmark percentage
allocations which are described below. For comparative
purposes, the value of each index on 10/31/94 is used as the
beginning value on 10/18/94. All dividends and capital gain
distributions are reinvested.
The Dreyfus Income Portfolio allocates your money among U.S.
Treasury notes and bonds, stocks and money market instruments.
The Portfolio's performance takes into account all applicable
fees and expenses. The Shearson Lehman Intermediate Treasury
Bond Index is a widely accepted index of U.S. Treasury
notes and bonds which does not take into account charges, fees
and other expenses. The Shearson Lehman Intermediate Treasury
Bond Index was selected because (1) Treasuries represent the
highest benchmark percentage and (2) the weighted average
maturity of the Treasuries portion of the Portfolio
ranges between 3 and 10 years. 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% U.S. Treasury notes and bonds, 35% common stocks, 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 Shearson Lehman Intermediate Treasury Bond Index, The
Standard & Poor's 500 Composite Stock Price 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.
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
STATEMENT OF INVESTMENTS APRIL 30, 1995
<TABLE>
<CAPTION>
COMMON STOCKS--45.2% SHARES VALUE
- ----------------------------------------------------------------------------- ------ ----------
<S> <C> <C> <C>
CONSUMER DURABLES--.7% Mattel ................................... 430 $ 10,212
----------
CONSUMER NON-DURABLES--4.9% CPC International ........................ 300 17,587
Coca-Cola ................................ 150 8,719
General Mills ............................ 200 12,200
Heinz (H.J.) ............................. 600 25,200
PepsiCo .................................. 98 4,079
----------
67,785
----------
DRUGS--.6% SmithKline Beecham ADS ................... 200 7,775
----------
ENERGY--6.5% Amerada Hess ............................. 356 18,022
Occidental Petroleum ..................... 300 6,900
Royal Dutch Petroleum .................... 81 10,044
Schlumberger ............................. 396 24,898
Texaco ................................... 447 30,564
----------
90,428
----------
FINANCE--1.5% American International Group ............. 200 21,350
----------
HEALTH CARE--6.8% Abbott Laboratories ...................... 200 7,875
American Home Products ................... 203 15,656
Baxter International ..................... 200 6,950
Columbia/HCA Healthcare .................. 485 20,370
Johnson & Johnson ........................ 139 9,035
Lilly (Eli) .............................. 100 7,475
Merck & Co. .............................. 89 3,816
Pfizer ................................... 100 8,662
Schering-Plough .......................... 100 7,538
United Healthcare ........................ 200 7,250
----------
94,627
----------
INDUSTRIAL SERVICES--2.0% CBI Industries ........................... 300 7,425
WMX Technologies ......................... 717 19,538
----------
26,963
----------
PROCESS INDUSTRIES--6.8% Corning .................................. 204 6,809
duPont(EI)deNemours ...................... 500 32,938
Grace (W.R.) ............................. 545 29,226
Monsanto ................................. 300 24,975
----------
93,948
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
- ----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995
COMMON STOCKS (continued) SHARES VALUE
- ----------------------------------------------------------------------------- ------ ----------
<S> <C> <C> <C>
PRODUCER MANUFACTURING--5.8% Cooper Industries ........................ 447 $ 17,433
Deere & Co. .............................. 321 26,322
Minnesota Mining & Manufacturing ......... 121 7,215
TRINOVA .................................. 840 29,190
----------
80,160
----------
RETAIL TRADE--2.0% May Department Stores .................... 400 14,500
Wal-Mart Stores .......................... 569 13,514
----------
28,014
----------
TECHNOLOGY--6.6% Boeing ................................... 137 7,535
cisco Systems ............................ 200(a) 7,975
DSC Communications ....................... 100(a) 3,700
Intel .................................... 237 24,263
Microsoft ................................ 200(a) 16,350
Motorola ................................. 209 11,887
Texas Instruments ........................ 190 20,140
----------
91,850
----------
TRANSPORTATION--1.0% Burlington Northern ...................... 240 14,280
----------
TOTAL COMMON STOCKS
(cost $570,233) ........................ $ 627,392
==========
<CAPTION>
PRINCIPAL
U.S. TREASURY BONDS--52.3% AMOUNT
- ----------------------------------------------------------------------------- ---------
<S> <C> <C> <C>
7.125%, 2/15/2023
(cost $693,616) ........................ $750,000 $ 724,453
==========
SHORT-TERM INVESTMENTS--7.5%
- -----------------------------------------------------------------------------
U.S. TREASURY BILL; 6.37%, 7/6/1995
(cost $103,927) ........................ $105,000 $ 103,882
==========
TOTAL INVESTMENTS (cost $1,367,776) ......................................... 105.0% $1,455,727
====== ==========
LIABILITIES, LESS CASH AND RECEIVABLES ...................................... (5.0%) $ (69,764)
====== ==========
NET ASSETS .................................................................. 100.0% $1,385,963
====== ==========
</TABLE>
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
- ----------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $1,367,776)--see statement .............................. $1,455,727
Cash .............................................................. 4,701
Receivable for investment securities sold ......................... 16,627
Dividends and interest receivable ................................. 11,595
Prepaid expenses .................................................. 11,584
Due from The Dreyfus Corporation .................................. 5,613
----------
1,505,847
LIABILITIES:
Due to Distributor ................................................ $ 825
Payable for investment securities purchased ....................... 96,855
Accrued expenses .................................................. 22,204 119,884
------- ----------
NET ASSETS $1,385,963
==========
REPRESENTED BY:
Paid-in capital ................................................... $1,273,465
Accumulated undistributed investment income--net .................. 2,667
Accumulated undistributed net realized gain on investments ........ 21,880
Accumulated net unrealized appreciation on investments--Note 3 .... 87,951
----------
NET ASSETS at value applicable to 101,059 shares outstanding
(100 million shares of $.001 par value Common Stock authorized) ... $1,385,963
==========
NET ASSET VALUE, offering and redemption price per share
($1,385,963 / 101,059 shares) ..................................... $13.71
======
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
- ----------------------------------------------------------------
STATEMENT OF OPERATIONS
FROM OCTOBER 18, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995
<TABLE>
<CAPTION>
<S> <C> <C>
INCOME:
INCOME:
Interest ..................................................... $29,714
Cash dividends ............................................... 5,175
-------
TOTAL INCOME ......................................... $ 34,889
EXPENSES:
Management fee--Note 2(a) .................................... 4,661
Legal fees ................................................... 17,649
Auditing fees ................................................ 15,000
Registration fees ............................................ 12,301
Shareholder servicing costs--Note 2(b,c) ..................... 6,778
Prospectus and shareholders' reports--Note 2(b) .............. 5,175
Custodian fees ............................................... 2,872
Directors' fees and expenses--Note 2(d) ...................... 198
Miscellaneous ................................................ 1,399
-------
66,033
Less--expense reimbursement from Manager due to
undertaking and expense limitation--Note 2(a) ............ 49,748
-------
TOTAL EXPENSES ....................................... 16,285
--------
INVESTMENT INCOME--NET ............................... 18,604
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 3 ......................... $21,880
Net unrealized appreciation on investments ....................... 87,951
-------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ...... 109,831
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. $128,435
========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
- ----------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FROM OCTOBER 18, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995
<TABLE>
<CAPTION>
<S> <C>
OPERATIONS:
Investment income--net ....................................................... $ 18,604
Net realized gain on investments ............................................. 21,880
Net unrealized appreciation on investments for the period .................... 87,951
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................... 128,435
----------
DIVIDEND TO SHAREHOLDERS FROM;
Investment income-net ........................................................ (15,937)
----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold ................................................ 1,330,845
Dividends reinvested ......................................................... 15,022
Cost of shares redeemed ...................................................... (72,402)
----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS ................... 1,273,465
----------
TOTAL INCREASE IN NET ASSETS ......................................... 1,385,963
NET ASSETS:
Beginning of period--Note 1 .................................................. --
----------
End of period (including undistributed investment
income--net of $2,667) ................................................... $1,385,963
==========
<CAPTION>
SHARES
----------
<S> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold .................................................................. 105,429
Shares issued for dividends reinvested ....................................... 1,145
Shares redeemed .............................................................. (5,515)
----------
NET INCREASE IN SHARES OUTSTANDING ....................................... 101,059
==========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
- -------------------------------------------------------------
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 October 18, 1994 (commencement of
operations) to April 30, 1995. This information has been
derived from the Portfolio's financial statements.
<TABLE>
<CAPTION>
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period .......................................... $12.50
------
INVESTMENT OPERATIONS:
Investment income--net ........................................................ .20
Net realized and unrealized gain on investments ............................... 1.18
------
TOTAL FROM INVESTMENT OPERATIONS .......................................... 1.38
------
Distributions;
Dividends from investment income-net .......................................... (.17)
------
Net asset value, end of period ................................................ $13.71
======
TOTAL INVESTMENT RETURN 11.14%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets ....................................... 1.40%*
Ratio of net investment income to average net assets .......................... 1.60%*
Decrease reflected in above expense ratio due to
undertaking by the Manager and expense limitation ......................... 4.28%*
Portfolio Turnover Rate ....................................................... 94.33%*
Net Assets, end of period (000's Omitted) ..................................... $1,386
<FN>
- ------------
* Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
- -------------------------------------------------------------
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 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 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
Dreyfus Corporation ("Manager") serves as
the Portfolio's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A.
As of April 30, 1995, Major Trading Corporation, a
subsidiary of Mellon Bank Investments Corporation, held 81,065
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 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 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 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.
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
- -------------------------------------------------------------
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 had undertaken from
October 18, 1994 to April 30, 1995 to waive receipt of the
management, service and distribution
fees. The expense reimbursement, pursuant to the undertaking
and expense limitation, amounted to $49,748 for the period 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) 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 April 30, 1995, $4,838 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 April 30, 1995, $1,554 was charged to the
Portfolio pursuant to the Shareholder Services Plan.
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(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. The Chairman
of the Board receives an additional 25% of such
compensation.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment
securities, excluding short-term securities, during the period
ended April 30, 1995 amounted to $2,074,973 and $834,107,
respectively.
At April 30, 1995, accumulated net unrealized appreciation
on investments was $87,951, consisting of $91,076 gross
unrealized appreciation and $3,125 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).
<PAGE>
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS INCOME PORTFOLIO
We have audited the accompanying statement of assets and
liabilities, including the statement of investments, of Dreyfus
Asset Allocation Fund, Inc., Dreyfus Income Portfolio (one of
the Series constituting the Dreyfus Asset
Allocation Fund, Inc.) as of April 30, 1995, and the related
statements of operations and changes in net assets and financial
highlights for the period from October 18, 1994 (commencement of
operations) to April 30, 1995. 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, 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 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., Dreyfus Income Portfolio at
April 30, 1995, and the results of its operations, the changes
in its net assets and the financial highlights for the period
from October 18, 1994 to April 30, 1995, in
conformity with generally accepted accounting principles.
(Ernst & Young LLP Signature Logo)
New York, New York
June 2, 1995
DREYFUS ASSET ALLOCATION FUND, INC.
DREYFUS INCOME 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.
<PAGE>
Dreyfus
Asset Allocation
Fund, Inc.
Dreyfus
Income Portfolio
Annual Report
April 30, 1995
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN THE DREYFUS INCOME PORTFOLIO OF DREYFUS ASSET ALLOCATION
FUND, INC. WITH THE SHEARSON LEHMAN INTERMEDIATE
TREASURY INDEX AND A CUSTOMIZED BLENDED INDEX
EXHIBIT A:
DREYFUS SHEARSON LEHMAN CUSTOMIZED
PERIOD INCOME INTERMEDIATE BLENDED
PORTFOLIO TREASURY INDEX* INDEX **
<S> <C> <C> <C>
10/18/94 10,000 10,000 10,000
10/31/94 10,072 10,000 10,000
1/31/95 10,268 10,148 10,099
4/30/95 11,114 10,665
*Source: Lehman Brothers
**Source: Lipper Analytical Services, Inc., Lehman
Brothers and Bank Rate Monitor
</TABLE>
<PAGE>
Dear Shareholder:
The Growth Portfolio of Dreyfus Asset Allocation Fund, Inc.
completed its latest semi-annual fiscal period October 31, 1995.
In this letter we report the results for the six months and
explain some of the major portfolio changes. To place the
half-year period in its broader setting, we also provide an
analysis of economic and market conditions that prevailed.
ECONOMIC ENVIRONMENT
The much-desired soft landing for the U.S. economy that the
Federal Reserve Board has been striving to attain appears to
have occurred.
This is the result of more than a year of moves by the Fed to
tighten interest rates, followed by a token loosening of the
reins last summer.
Now that some steam has been let out of the economic boiler,
the central bank must concern itself with the possibility that
the economy might slow down more than would be desirable.
However, the latest economic statistics do not contain
convincing evidence of that happening. The housing industry is
doing well. Industrial orders continue to expand and gross
domestic product keeps on growing, albeit at a reduced rate.
In the meantime, the rate of inflation appears to be under
firm control. Consumer prices have advanced only at a very
moderate pace, and average wages have barely inched ahead.
Unemployment is not getting out of hand, and hovers near the
so-called full employment level.
Retail spending has simmered down, in part because consumers
are carrying large debit balances in mortgage and credit card
debts. To what extent this will affect holiday shopping remains
to be seen. The industrial sector of the economy, however,
appears to be forging ahead.
MARKET ENVIRONMENT
As your Fund reached the end of its reporting period,
October 31, 1995, stocks were not far below the record levels
they had reached earlier in the fall.
Among the factors accounting for this market strength were
good corporate profits and low interest rates. Third quarter
profit reports from leading corporations, while not universally
favorable, were better
than earlier quarters. The extensive lean and mean corporate
reorganizations of the past few years appear to be paying off.
Even though the pricing environment for most corporate products
is extremely competitive, manufacturers and service providers
appear able to squeeze out improved profits.
How long that continuing improvement will last is an open
question. Many economists think that profit levels may flatten
out over the coming months. The recent record on that score,
however, has been encouraging.
Interest rates also have buoyed stock prices and sustained
the bond market. As the cost of borrowing has steadily
decreased, many corporations have benefitted.
Another factor in market strength has been the relentless
advance of technology, which has virtually forced corporations
- -- and now individual households as well -- to reequip in order
to keep up with technical progress. The obvious result has been
seen in record prices
commanded during the year by high technology stocks. While some
disillusionment may set in, the market clearly takes a very
optimistic view of the long-range outlook for these companies.
In addition, all equities have been favorably affected by
the very large inflow of investment money, on a regular basis,
from 401(k) and
other retirement plans. To be sure, money managers could at
some point turn off the spigot, and divert this cash flow into
bonds or money market instruments. During the past year,
however, equity purchases by
pension funds and other retirement investors have provided a
supportive background for stock prices.
However, there are some concerns. One of the most
significant has been the wrangling between Congress and the
White House over how
to reduce Government spending and cut the burden of the
Government's perennial deficit. Hopefully, this impasse will be
settled soon, perhaps by the time this letter reaches its
readers. In the meantime,
the uncertainties in Washington have been a source of worry to
investors.
The fading value of the U.S. dollar has also been a question
mark. Yet, after hitting a low last spring, the dollar has
gradually recovered
some lost ground. This dollar rebound reflects weakness in the
economies of Western Europe and Japan, but also the
strengthening of economic activity here at home.
PORTFOLIO OVERVIEW
For the six-month fiscal period, the Growth Portfolio
produced a total return of 9.65%.* This compares with a total
return of 15.27% for the Wilshire 5000 index, which is the
benchmark index used for the Portfolio for evaluating
performance.**
Three stock groups were primarily responsible for the fact
that the Portfolio's performance lagged the Wilshire 5000 Index.
Cable stocks, which we owned during the period, were affected by
the long delay in action by the U.S. Congress on the pending
telecommunications bill. In our view, the atmosphere of
uncertainty that this created weakened cable
industry issues. Also during the period, consumer stocks in the
Portfolio reflected the nationwide slump in retail sales. We
reduced our exposure in Process Industry and Producer
Manufacturing. Many of these companies are in the midst of
restructurings and in some cases,
their value has already been recognized. We continue to hold
investments in companies such as Crown Cork & Seal, duPont
(I.E.) de Nemours and Grace (W.R.). In retrospect, however, we
believe that we were ahead of the market cycle with some of the
investments in the
Process and Producer groups. Stocks that we sold included Roper
Industries, disposed of at a profit, and CBI at a loss.
Looking to the future, we believe the Portfolio will benefit
from other significant changes that we made during the period.
First, reflecting our belief that technology is becoming more
prevalent in everyday life, we have significantly increased the
weighting in the Technology sector. We have added new positions
in Gartner Group,
Hewlett-Packard and Safeguard Scientifics as well as adding to
our positions in Bay Networks and Cisco Systems. We further
believe that content will be very important for the development
of the Information Superhighway. To this end, we have added
positions in Disney (Walt), Liberty Media Group, Cl.A and Viacom
Cl.A.
We have reduced our weighting in the Energy sector, taking a
profit on a significant portion of our holdings. Our remaining
stocks in this area are Amerada Hess and ENSCO.
Thank you for investing with Dreyfus. We look forward to
continuing to serve your investment needs.
Sincerely,
Signature
Ernest G. Wiggins
Portfolio Manager
Signature
Paul Kandel
Assistant Portfolio Manager
November 22, 1995
New York, N.Y.
*Total return includes reinvestment of dividends and any
capital gains paid.
**SOURCE: WILSHIRE ASSOCIATES, INC.-- Reflects the reinvestment
of income dividends and, where applicable, capital gain
distributions.
The Wilshire 5000 Index consists of all publicly traded stocks
in The United States, and is a widely accepted unmanaged index
of overall stock market performance.
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
STATEMENT OF INVESTMENTS OCTOBER 31, 1995 (UNAUDITED)
COMMON STOCKS--91.4% SHARES VALUE
------ ----------
<S> <C> <C>
COMMERCIAL SERVICES--2.3% Gartner Group.......................... 1,000 (a) $ 43,625
----------
CONSUMER DURABLES--3.4% General Motors......................... 450 19,688
Mattel................................. 737 21,189
Sierra On-Line......................... 625 (a) 23,281
----------
64,158
----------
CONSUMER NON-DURABLES--5.3% CPC International...................... 500 33,187
PepsiCo................................ 570 30,068
Seagram................................ 1,000 36,000
----------
99,255
----------
CONSUMER SERVICES--9.7% Disney (Walt).......................... 400 23,050
Liberty Media Group, Cl. A............. 850 20,931
Mirage Resorts......................... 1,000 (a) 32,750
Tele-Communications, Cl. A............. 1,400 (a) 23,800
Time Warner............................ 1,000 36,500
Viacom, Cl. A.......................... 900 (a) 44,775
----------
181,806
----------
ELECTRONIC TECHNOLOGY--15.6% Applied Materials...................... 600 (a) 30,075
Bay Networks........................... 500 (a) 33,125
cisco Systems.......................... 400 (a) 31,000
DSC Communications..................... 700 (a) 25,900
Hewlett-Packard........................ 350 32,419
Intel.................................. 400 27,950
Micron Technology...................... 500 35,312
Rohr................................... 2,000 (a) 29,750
Texas Instruments...................... 300 20,475
Thiokol................................ 800 27,700
----------
293,706
----------
ENERGY--1.8% Amerada Hess........................... 740 33,393
----------
FINANCE--9.9% ACE.................................... 650 22,100
Allstate............................... 463 17,015
Chemical Banking....................... 400 22,750
CorVel................................. 1,100 (a) 35,200
EXEL................................... 575 30,763
First Union............................ 450 22,331
Reliance Group Holdings................ 4,800 35,400
----------
185,559
----------
HEALTH SERVICES--2.3% McKesson............................... 480 22,920
On-Gard Systems........................ 2,500 (a) 19,688
----------
42,608
----------
HEALTH TECHNOLOGY--10.2% Bristol-Myers Squibb................... 300 22,875
Guidant................................ 1,200 38,400
Johnson & Johnson...................... 400 32,600
Lilly (Eli)............................ 266 25,702
Mentor................................. 1,200 26,400
Merck & Co............................. 500 28,750
Pfizer................................. 300 17,212
----------
191,939
----------
INDUSTRIAL SERVICES--2.9% ENSCO.................................. 675 (a) 11,390
Schlumberger........................... 700 43,575
----------
54,965
----------
PROCESS INDUSTRIES--4.8% Crown Cork & Seal...................... 800 (a) 27,900
duPont (E.I.) deNemours................ 300 18,713
Grace (W.R.)........................... 800 44,600
----------
91,213
----------
PRODUCER MANUFACTURING--6.6% AlliedSignal........................... 850 36,125
Cooper Industries...................... 1,278 43,132
Raychem................................ 500 23,188
Thermo Electron........................ 480 (a) 22,080
----------
124,525
----------
RETAIL TRADE--5.1% Harcourt General....................... 500 19,812
Home Shopping Network.................. 2,500 (a) 20,313
May Department Stores.................. 400 15,700
Talbots................................ 310 7,517
Wal-Mart Stores........................ 1,500 32,438
----------
95,780
----------
TECHNOLOGY SERVICES--3.5% Microsoft.............................. 300 (a) 30,000
Safeguard Scientifics.................. 800 (a) 36,000
66,000
TRANSPORTATION--3.8% Burlington Northern Santa Fe........... 250 20,969
CSX.................................... 200 16,750
Tidewater.............................. 1,300 34,287
72,006
UTILITIES--4.2% Frontier............................... 1,150 31,050
MCI Communications..................... 1,000 24,937
SBC Communications..................... 430 24,026
----------
80,013
----------
TOTAL COMMON STOCKS
(cost $1,619,354).................... $1,720,551
==========
PRINCIPAL
SHORT-TERM INVESTMENTS--7.3% AMOUNT VALUE
---------- ----------
U.S. TREASURY BILLS: 5.17%, 12/21/95........................ $ 84,000 $ 83,394
5.15%, 12/28/95........................ 55,000 54,547
----------
TOTAL SHORT-TERM INVESTMENTS
(cost $137,950)...................... $ 137,941
==========
TOTAL INVESTMENTS (cost $1,757,304)........................................ 98.7% $1,858,492
====== ==========
CASH AND RECEIVABLES (NET)................................................. 1.3% $ 24,135
====== ==========
NET ASSETS................................................................. 100.0% $1,882,627
====== ==========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See independent accountants' review report and notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1995 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $1,757,304)--see statement..................................... $1,858,492
Receivable for investment securities sold.............................. 130,761
Dividends receivable................................................... 758
Prepaid expenses....................................................... 5,993
Due from The Dreyfus Corporation....................................... 7,082
----------
2,003,086
LIABILITIES:
Due to Distributor..................................................... $ 392
Payable for investment securities purchased............................ 93,033
Accrued expenses and other liabilities................................. 27,034 120,459
------- ----------
NET ASSETS................................................................. $1,882,627
==========
REPRESENTED BY:
Paid-in capital........................................................ $1,664,243
Accumulated undistributed investment income--net....................... 44,297
Accumulated undistributed net realized gain on investments............. 72,899
Accumulated net unrealized appreciation on investments--Note 3......... 101,188
----------
NET ASSETS at value applicable to 130,502 outstanding shares of
Common Stock, equivalent to $14.43 per share
(100 million shares of $.001 par value authorized)..................... $1,882,627
==========
See independent accountants' review report and notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $34 foreign taxes withheld at source)....... $ 12,447
Interest........................................................... 2,080
--------
TOTAL INCOME................................................... $ 14,527
EXPENSES:
Management fee--Note 2(a).......................................... 6,580
Registration fees.................................................. 14,094
Prospectus and shareholders' reports--Note 2(b).................... 11,296
Shareholder servicing costs--Note 2(b,c)........................... 7,411
Custodian fees..................................................... 2,395
Auditing fees...................................................... 1,968
Legal fees......................................................... 293
Directors' fees and expenses--Note 2(d)............................ 285
Miscellaneous...................................................... 396
--------
44,718
Less--expense reimbursement from Manager due to
undertakings, and expense limitation--Note 2(a).................... 30,226
--------
TOTAL EXPENSES................................................. 14,492
--------
INVESTMENT INCOME--NET......................................... 35
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 3............................... $153,388
Net unrealized (depreciation) on investments........................... (6,186)
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................ 147,202
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $147,237
========
See independent accountants' review report and notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1995
1995* (UNAUDITED)
---------- ----------------
OPERATIONS:
Investment income--net................................................. $ 46,798 $ 35
Net realized gain (loss) on investments................................ (80,489) 153,388
Net unrealized appreciation (depreciation) on investments
for the period..................................................... 107,374 (6,186)
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 73,683 147,237
---------- ----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net................................................. (2,536) --
---------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 1,789,201 581,825
Dividends reinvested................................................... 2,536 --
Cost of shares redeemed................................................ (494,560) (214,759)
---------- ----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............. 1,297,177 367,066
---------- ----------
TOTAL INCREASE IN NET ASSETS....................................... 1,368,324 514,303
NET ASSETS:
Beginning of period.................................................... -- 1,368,324
---------- ----------
End of period (including undistributed investment
income--net of $44,262 and $44,297, respectively).................. $1,368,324 $1,882,627
========== ==========
SHARES SHARES
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 143,001 41,398
Shares issued for dividends reinvested................................. 207 --
Shares redeemed........................................................ (39,204) (14,900)
---------- ----------
NET INCREASE IN SHARES OUTSTANDING................................. 104,004 26,498
========== ==========
- ----------
* From October 18, 1994 (commencement of operations) to April 30, 1995.
See independent accountants' review report and notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Portfolio's financial statements.
YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1995
1995(1) (UNAUDITED)
---------- ----------------
PER SHARE DATA:
Net asset value, beginning of period................................... $12.50 $13.16
------ ------
INVESTMENT OPERATIONS:
Investment income--net................................................. .45 --(3)
Net realized and unrealized gain on investments........................ .24 1.27
------ ------
TOTAL FROM INVESTMENT OPERATIONS................................... .69 1.27
------ ------
DISTRIBUTIONS;
Dividends from investment income-net................................... (.03) --
------ ------
Net asset value, end of period......................................... $13.16 $14.43
====== ======
TOTAL INVESTMENT RETURN(2)................................................. 5.53% 9.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(2)............................. 1.40% .83%
Ratio of net investment income to average net assets(2)................ 3.91% --
Decrease reflected in above expense ratios due to
undertaking by the Manager and expense limitation(2)............... 4.63% 1.73%
Portfolio Turnover Rate(2)............................................. 497.41% 124.43%
Net Assets, end of period (000's Omitted).............................. $1,368 $1,883
- ----------
(1) From October 18, 1994 (commencement of operations) to April 30, 1995.
(2) Not annualized.
(3) Based on an average of shares outstanding at each month end.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Growth Portfolio
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Asset Allocation Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company and
currently offers three portfolios
including the Dreyfus Growth Portfolio (the "Portfolio").
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 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 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, 1995, Major Trading Corporation, a
subsidiary of Mellon Bank Investments Corporation, held 80,189
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 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.
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 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 May 1,
1995 through July 3, 1995 to waive receipt of the management,
service and distribution fees, and thereafter has currently
undertaken through
December 31, 1995, to reduce the management fee paid by, or
reimburse such excess expenses of the Portfolio, to the extent
that the Portfolio's aggregate annual expenses (exclusive of
certain expenses as described above) exceed an annual rate of
1.25 of 1% of the average
daily value of the Portfolio's net assets. The expense
reimbursement, pursuant to the undertakings and expense
limitation, amounted to $30,226 for the six months ended October
31, 1995.
The undertaking may be modified by the Manager from time to
time, provided that the resulting expense reimbursement would
not be less than the amount required pursuant to the Agreement.
(B) Prior to September 1, 1995, the Portfolio had a
Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, which provided that the Portfolio (a) reimburse
the Distributor for payments
to certain Service Agents for distributing the Portfolio's
shares and (b) pay the Manager, Dreyfus Service Corporation or
any affiliate of either of them (collectively "Dreyfus") for
advertising and marketing
relating to the Portfolio and servicing shareholder 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 could 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 had a
servicing relationship or for whom the Service Agent was the
dealer or holder of record. Each
of the Distributor and Dreyfus determined the amounts to be paid
to Service Agents to which it made payments and the basis on
which such payments were made. The 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.
During the period May 1, 1995
through August 31, 1995, the Portfolio was charged $4,088
pursuant to the Plan. Effective September 1, 1995 the Plan was
terminated.
(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
the provision of
certain services. 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 six months ended October 31, 1995,
$2,193 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. The Chairman
of the Board receives an additional 25% of such compensation.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment
securities, excluding short-term securities, during the six
months ended October 31, 1995, amounted to $2,334,707 and
$2,066,004, respectively.
At October 31, 1995, accumulated net unrealized appreciation
on investments was $101,188, consisting of $149,954 gross
unrealized appreciation and $48,766 gross unrealized
depreciation.
At October 31, 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 Growth Portfolio
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS GROWTH PORTFOLIO
We have reviewed the accompanying statement of assets and
liabilities, including the statement of investments, of Dreyfus
Growth Portfolio (one of the Series constituting the Dreyfus
Asset Allocation Fund, Inc.) as of October 31, 1995, and the
related statements of
operations and changes in net assets and financial highlights
for the six month period ended October 31, 1995. These financial
statements and financial highlights are the responsibility of
the Fund's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data,
and making inquiries of persons responsible for financial and
accounting matters. It is substantially
less in scope than an audit conducted in accordance with
generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion
regarding the financial
statements and financial highlights taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the interim financial
statements and financial highlights referred to above for them
to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally
accepted auditing standards, the statement of changes in net
assets and financial
highlights for the period from October 18, 1994 (commencement of
operations) to April 30, 1995 and in our report dated June 2,
1995, we expressed an unqualified opinion on such statement of
changes in net assets and financial highlights.
Ernst & Young LLP signature
New York, New York
December 1, 1995
DREYFUS ASSET ALLOCATION FUND, INC.
DREYFUS GROWTH 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
First Data Investor Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Asset Allocation
Fund, Inc.
Dreyfus
Growth Portfolio
Semi-Annual Report
October 31, 1995
<PAGE>
Dear Shareholder:
The Income Portfolio of Dreyfus Asset Allocation Fund, Inc.
completed its latest semi-annual fiscal period October 31, 1995.
In this letter we summarize the major developments in the
Portfolio during this period, and report the results. To place
the events of the half-year in a broader setting, we also
outline the economic and securities market conditions that
prevailed.
ECONOMIC ENVIRONMENT
The much-desired soft landing for the U.S. economy that the
Federal Reserve Board has been striving to attain appears to
have occurred. This is the result of more than a year of moves
by the Fed to tighten interest rates, followed by a token
loosening of the reins last summer.
Now that the economy is no longer as overactive, the central
bank must concern itself with the possibility that the economy
might slow down more than would be desirable. However, the
latest economic
statistics do not contain convincing evidence of that happening.
The housing industry is doing well. Industrial orders continue
to expand and gross domestic product keeps on growing, albeit at
a reduced rate.
In the meantime, the rate of inflation appears to be under
firm control. Consumer prices have advanced only at a very
moderate pace, and average wages have barely inched ahead.
Unemployment is not getting out of hand, and hovers near the
so-called full employment level.
Retail spending has settled down, in part because consumers
are carrying large debit balances in mortgage and credit card
debts. To what extent this will affect holiday shopping remains
to be seen. The industrial sector of the economy, however,
appears to be forging ahead.
MARKET ENVIRONMENT
As your Fund reached the end of its reporting period,
October 31, 1995, stocks were not far below the record levels
they had reached earlier in the fall.
Among the factors accounting for this market strength were
good corporate profits and low interest rates. Third quarter
profit reports from leading corporations, while not universally
favorable, were better than earlier quarters. The extensive
lean and mean corporate reorganizations of the past few years
appear to be paying off. Even though the pricing environment
for most corporate products is extremely
competitive, manufacturers and service providers appear able to
squeeze out improved profits.
How long that continuing improvement will last is an open
question. Many economists think that profit levels may flatten
out over the coming months. The recent record on that score,
however, has been encouraging.
Interest rates also have buoyed stock prices and sustained
the bond market. As the cost of borrowing has steadily
decreased, many corporations have benefitted.
Another factor in market strength has been the relentless
advance of technology, which has virtually forced corporations
- -- and now individual households as well -- to reequip in order
to keep up with technical progress. The obvious result has been
seen in record prices
commanded during the year by high technology stocks. While some
disillusionment may set in, the market clearly takes a very
optimistic view of the long-range outlook for these companies.
In addition, all equities have been favorably affected by
the very large inflow of investment money, on a regular basis,
from 401(k) and other retirement plans. To be sure, money
managers could at some point
turn off the spigot, and divert this cash flow into bonds or
money market instruments. During the past year, however, equity
purchases by pension funds and other retirement investors have
provided a supportive background for stock prices.
However, there are some concerns. One of the most
significant has been the wrangling between Congress and the
White House over how to reduce Government spending and cut the
burden of the Government's perennial deficit. Hopefully, this
impasse will be settled soon, perhaps by the time this letter
reaches its readers. In the meantime,
the uncertainties in Washington have been a source of worry to
investors.
The fading value of the U.S. dollar has also been a question
mark. Yet, after hitting a low last spring, the dollar has
gradually recovered some lost ground. This dollar rebound
reflects weakness in the economies of Western Europe and Japan,
but also the strengthening of economic activity here at home.
PORTFOLIO OVERVIEW
For the first six months of its fiscal year, the period
ending October 31, 1995, the Income Portfolio of Dreyfus Asset
Allocation Fund provided a total return of 9.63%.* This
compares with a return of 6.25%
for the Lehman Intermediate Treasury Index** and 8.64% for the
Customized Blended Index which, like the Portfolio, is composed
of a defined weighting of Treasury obligations, common stocks
and cash equivalents that is more fully described below.***
The Income Portfolio continued to benefit during much of the
six-month period from its position in 30-year bonds. Our
analysis of the fixed income market was that the slowing down of
the U.S. economy would result in lower interest rates which
raises the selling price of bonds.
Further, there was the possibility that, if Congress and the
White House
could reach a budget aggreement, the Federal Reserve might feel
justified in reducing interest rates once again. At one point
during the six-month period we took profits in bonds, but still
hold a substantial position in these instruments.
In the common stock portion of the Fund, several significant
changes were made reflecting a new and less defensive posture
toward the domestic economy and its likely future prospects.
The Federal Reserve's cut in the Fed Funds rate in July caused
our view of the stock market to
turn more positive. A significant new position in automotive
stocks was established including both General Motors and Ford
Motor. Our positions in foods and beverages were much reduced
with the sales of CPC International, Coca Cola, General Mills
and Heinz, and replaced with a substantial new position in
entertainment content including names such
as Disney (Walt), Viacom, Cl.A. and Time Warner. Changes in
technology
are making American entertainment readily available to the world
audience and in our opinion it is an area where the U.S. is very
competitive, probably more so than in foods.
In the technology sector, profits were taken reflecting the
dramatic stock price increases in recent months.
The portfolio actually increased its weightings in
communications-related technology, often taking advantage of
recent price weakness as our longer-term outlook for this area
is very positive.
The energy sector has been profitable for the Fund and we
like its longer-term prospects. We maintained our positions in
Amerada Hess and Texaco.
As the investment environment became more turbulent in
recent months, investors searching for safe havens bid up health
care stocks to levels where we felt justified in taking profits.
Along with the Portfolio's new exposure to autos and the
diminished holdings in foods, beverages and health care, usually
considered defensive groups, the most significant changes are
reflected in the much increased weighting in chemicals and
railroad stocks. These include
increased positions in duPont (E.I.) de Nemours, Monsanto, a new
position in Praxair, and an expanded weighting in railroad
stocks including a new position in Union Pacific. It should be
noted that all of these companies are in the midst of
restructurings with their
respective managements endeavoring to provide value for their
shareholders.
We very much appreciate your investment in this portfolio.
We will of course continue our best efforts to help you achieve
your investment goals.
Sincerely,
Signature
Ernest G. Wiggins
Portfolio Manager
November 15, 1995
New York, N.Y.
*Total return includes reinvestment of dividends and any
capital gains paid.
**SOURCE: LEHMAN BROTHERS - The Lehman Intermediate Treasury
Index is a widely accepted index of U.S. Treasury notes and
bonds.
***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 Lehman Intermediate Treasury Index, an
unmanaged index viewed as being a leading indicator of overall
performance of U.S. Treasury notes and bonds. We have combined
the performance of unmanaged indices that reflect benchmark
percentages with respect to each asset class in which the
Portfolio invests as described in the Fund's Prospectus:
55% U.S. Treasury Notes and Bonds, 35% common stocks, and 10%
cash equivalents. The Customized Blended Index combines returns
from the Lehman Intermediate Treasury Index, the Standard &
Poor's 500 Composite Stock Price Index and the Bank Rate Monitor
Index of money market returns, and is weighted to the benchmark
percentages.
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Income Portfolio
STATEMENT OF INVESTMENTS October 31, 1995 (Unaudited)
COMMON STOCKS--45.7% SHARES VALUE
-------- -----------
<S> <C> <C>
CONSUMER DURABLES--4.5% Ford Motor....................... 1,200 $ 34,500
General Motors................... 1,000 43,750
----------
78,250
----------
CONSUMER NON-DURABLES--1.7% Seagram.......................... 800 28,800
----------
CONSUMER SERVICES--5.4% Disney (Walt).................... 800 46,100
Time Warner...................... 500 18,250
Viacom, Cl. A.................... 600 (a) 29,850
----------
94,200
----------
ELECTRONIC TECHNOLOGY--3.3% cisco Systems.................... 200 (a) 15,500
DSC Communications............... 600 (a) 22,200
Motorola......................... 300 19,687
----------
57,387
----------
ENERGY--4.6% Amerada Hess..................... 956 43,140
Texaco........................... 547 37,264
----------
80,404
----------
INDUSTRIAL SERVICES--4.9% Browning-Ferris Industries....... 1,100 32,038
Schlumberger..................... 500 31,125
WMX Technologies................. 817 22,978
----------
86,141
----------
NON-ENERGY MINERALS--1.1% Aluminum Co. of America.......... 200 10,200
Nucor............................ 200 9,625
----------
19,825
----------
PROCESS INDUSTRIES--11.6% Crown Cork & Seal................ 1,100 (a) 38,362
duPont (E.I.) deNemours.......... 800 49,900
Grace (W.R.)..................... 600 33,450
International Paper.............. 300 11,100
Monsanto......................... 400 41,900
Praxair.......................... 1,000 27,000
----------
201,712
----------
PRODUCER MANUFACTURING--3.4% Allied Signal.................... 500 21,250
Cooper Industries................ 821 27,709
Dresser Industries............... 500 10,375
----------
59,334
----------
RETAIL TRADE--2.7% Home Depot....................... 700 26,075
Wal-Mart Stores.................. 1,000 21,625
----------
47,700
----------
TRANSPORTATION--2.5% Burlington Northern Santa Fe..... 200 16,775
Union Pacific.................... 400 26,150
----------
42,925
----------
TOTAL COMMON STOCKS
(cost $810,834)................ $ 796,678
==========
PRINCIPAL
U.S. TREASURY NOTES--53.2% AMOUNT
---------
5-5/8%, 6/30/1997
(cost $926,135)................ $928,000 $ 928,000
==========
TOTAL INVESTMENTS (cost $1,736,969)........................................ 98.9% $1,724,678
====== ==========
CASH AND RECEIVABLES (NET)................................................. 1.1% $ 18,717
====== ==========
NET ASSETS................................................................. 100.0% $1,743,395
====== ==========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Income Portfolio
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $1,736,969)--see statement..................................... $1,724,678
Cash................................................................... 28,903
Receivable for investment securities sold.............................. 47,158
Dividends and interest receivable...................................... 18,308
Prepaid expenses....................................................... 4,731
Due from The Dreyfus Corporation....................................... 5,169
----------
1,828,947
LIABILITIES:
Due to Distributor..................................................... $ 364
Payable for investment securities purchased............................ 65,910
Accrued expenses....................................................... 19,278 85,552
------- ----------
NET ASSETS ................................................................ $1,743,395
==========
REPRESENTED BY:
Paid-in capital........................................................ $1,515,895
Accumulated undistributed investment income--net....................... 3,424
Accumulated undistributed net realized gain on investments............. 236,367
Accumulated net unrealized (depreciation) on investments--Note 3....... (12,291)
----------
NET ASSETS at value applicable to 117,562 outstanding shares of
Common Stock, equivalent to $14.83 per share
(100 million shares of $.001 par value authorized)..................... $1,743,395
==========
See independent accountants' review report and notes to financial statements.
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Income Portfolio
STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
Interest........................................................... $ 29,132
Cash dividends (net of $84 foreign taxes withheld at source)....... 7,338
---------
TOTAL INCOME................................................... $ 36,470
EXPENSES:
Management fee--Note 2(a).............................................. 6,099
Registration fees...................................................... 12,120
Prospectus and shareholders' reports--Note 2(b)........................ 10,586
Shareholder servicing costs--Note 2(b,c)............................... 7,040
Custodian fees......................................................... 2,371
Auditing fees.......................................................... 1,968
Legal fees............................................................. 365
Directors' fees and expenses--Note 2(d)................................ 322
Miscellaneous.......................................................... 348
---------
41,219
Less--expense reimbursement from Manager due to
undertaking and expense limitation--Note 2(a)........................ 27,644
---------
TOTAL EXPENSES..................................................... 13,575
--------
INVESTMENT INCOME--NET............................................. 22,895
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 3............................... $ 214,487
Net unrealized (depreciation) on investments........................... (100,242)
---------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS.................... 114,245
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $137,140
</TABLE>
========
See independent accountants' review report and notes to
financial
statements.
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Income Portfolio
STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1995
1995* (UNAUDITED)
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 18,604 $ 22,895
Net realized gain on investments....................................... 21,880 214,487
Net unrealized appreciation (depreciation)
on investments for the period ....................................... 87,951 (100,242)
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 128,435 137,140
---------- ----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net.................................................. (15,937) (22,138)
---------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 1,330,845 251,315
Dividends reinvested................................................... 15,022 20,909
Cost of shares redeemed................................................ (72,402) (29,794)
---------- ----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............. 1,273,465 242,430
---------- ----------
TOTAL INCREASE IN NET ASSETS................................... 1,385,963 357,432
NET ASSETS:
Beginning of period.................................................... -- 1,385,963
---------- ----------
End of period (including undistributed investment
income--net of $2,667 and $3,424, respectively).................... $1,385,963 $1,743,395
========== ==========
SHARES SHARES
------- -------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 105,429 17,108
Shares issued for dividends reinvested................................. 1,145 1,401
Shares redeemed.................................................... (5,515) (2,006)
------- -------
NET INCREASE IN SHARES OUTSTANDING................................. 101,059 16,503
======= =======
* From October 18, 1994 (commencement of operations) to April 30, 1995.
</TABLE>
See independent accountants' review report and notes to
financial
statements.
<TABLE>
<CAPTION>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Income Portfolio
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Common Stock outstanding, total investment return, ratios
to average net assets and other supplemental data for each period indicated. This information has been derived from the Portfolio's
financial statements.
YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1995
1995(1) (UNAUDITED)
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................... $12.50 $13.71
------ ------
INVESTMENT OPERATIONS:
Investment income--net................................................. .20 .20
Net realized and unrealized gain on investments........................ 1.18 1.12
------ ------
TOTAL FROM INVESTMENT OPERATIONS................................... 1.38 1.32
------ ------
DISTRIBUTIONS;
Dividends from investment income--net.................................. (.17) (.20)
------ ------
Net asset value, end of period............................................. $13.71 $14.83
====== ======
TOTAL INVESTMENT RETURN(2)................................................. 11.14% 9.63%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(2)............................. 1.40% .84%
Ratio of net investment income to average net assets(2)................ 1.60% 1.42%
Decrease reflected in above expense ratios due to
undertaking by the Manager and expense limitation(2)................. 4.28% 1.71%
Portfolio Turnover Rate(2)............................................. 94.33% 171.69%
Net Assets, end of period (000's Omitted).............................. $1,386 $1,743
- ----------
(1) From October 18, 1994 (commencement of operations) to April 30, 1995.
(2) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS ASSET ALLOCATION FUND, INC., Dreyfus Income Portfolio
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Asset Allocation Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company and
currently offers three portfolios, including the Dreyfus Income
Portfolio (the "Portfolio"). 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 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 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, 1995, Major Trading Corporation, a
subsidiary of Mellon Bank Investments Corporation, held 82,161
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 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 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 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.
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 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 May 1,
1995 through July 3, 1995 to waive receipt of the management,
service and distribution fees, and thereafter, has currently
undertaken through
December 31, 1995, to reduce the management fee paid by or
reimburse such excess expenses of the Portfolio, to the extent
that the Portfolio's aggregate annual expenses (exclusive of
certain expenses as described above) exceed an annual rate of
1.25 of 1% of the average daily value of the Portfolio's net
assets. The expense reimbursement,
pursuant to the undertakings and expense limitation, amounted to
$27,644 for the six months ended October 31, 1995.
The undertaking may be modified by the Manager from time to
time, provided that the resulting expense reimbursement would
not be less than the amount required pursuant to the Agreement.
(B) Prior to September 1, 1995, the Portfolio had a
Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, which
provided that the Portfolio (a) reimburse the Distributor for
payments to certain Service Agents for distributing the
Portfolio's shares and (b) pay the Manager, Dreyfus Service
Corporation or any affiliate of
either of them (collectively "Dreyfus") for advertising and
marketing relating to the Portfolio and servicing shareholder
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 could 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 had a
servicing relationship or for whom the Service Agent is the
dealer or holder of record. Each of
the Distributor and Dreyfus determined the amounts to be paid to
Service Agents to which it made payments and the basis on which
such payments were made. The 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. During the period May 1,
1995 through August 31, 1995, the Portfolio was charged $4,113
pursuant to
the Plan. Effective September 1, 1995, the Plan was terminated.
(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
the provision of certain services. 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 six months
ended October 31, 1995, the
Portfolio was charged $2,033 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. The Chairman
of the Board receives an additional 25% of such compensation.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment
securities, excluding short-term securities, during the six
months ended October 31, 1995 amounted to $2,950,009 and
$2,692,189, respectively.
At October 31, 1995, accumulated net unrealized depreciation
on investments was $12,291, consisting of $30,048 gross
unrealized appreciation and $42,339 gross unrealized
depreciation.
At October 31, 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 Income Portfolio
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS INCOME PORTFOLIO
We have reviewed the accompanying statement of assets and
liabilities, including the statement of investments, of Dreyfus
Income Portfolio (one of the Series constituting the Dreyfus
Asset Allocation Fund, Inc.) as of October 31, 1995, and the
related statements of
operations and changes in net assets and financial highlights
for the six month period ended October 31, 1995. These financial
statements and financial highlights are the responsibility of
the Fund's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data, and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in
accordance with generally
accepted auditing standards, which will be performed for the
full year with the objective of expressing an opinion regarding
the financial statements and financial highlights taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications
that should be made to the interim financial statements and
financial highlights referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing standards, the statement of changes in net
assets and financial
highlights for the period from October 18, 1994 (commencement of
operations) to April 30, 1995 and in our report dated June 2,
1995, we expressed an unqualified opinion on such statement of
changes in net assets and financial highlights.
Ernst & Young LLP signature
New York, New York
December 1, 1995
DREYFUS ASSET ALLOCATION FUND, INC.
DREYFUS INCOME 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
First Data Investor Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Asset Allocation
Fund, Inc.
Dreyfus
Income Portfolio
Semi-Annual Report
October 31, 1995
<PAGE>
<TABLE>
<CAPTION>
Dreyfus LifeTime Portfolios, Inc., Income Portfolio
Statement of Investments September 30, 1995
Bonds and Notes--66.5% Principal
Amount Value
------------ -------------
<S> <C> <C>
U.S. Treasury Bonds--5.1%
11 5/8%, 11/15/2004........................................... $ 600,000 $ 820,969
------------
U.S. Treasury Notes--61.4%
7 1/2%, 1/31/1997............................................. 2,945,000 3,008,041
5 5/8%, 1/31/1998............................................. 3,000,000 2,982,189
5 1/8%, 11/30/1998............................................ 250,000 244,141
7 1/8%, 9/30/1999............................................. 1,000,000 1,039,375
8 3/4%, 8/15/2000............................................. 700,000 779,078
8%, 5/15/2001................................................. 1,000,000 1,090,781
7 1/2%, 11/15/2001............................................ 180,000 192,740
7 1/2%, 2/15/2005............................................. 600,000 653,156
-------------
9,989,501
-------------
TOTAL BONDS AND NOTES
(cost $10,577,780)............................................ $ 10,810,470
============
Short-Term Investments--31.9%
U.S. Treasury Bills:
5.38%, 10/5/1995.............................................. 41,000 $ 40,971
5.33%, 10/12/1995............................................. 40,000 39,931
5.34%, 10/19/1995............................................. 161,000 160,554
5.40%, 11/2/1995.............................................. 75,000 74,636
5.41%, 11/16/1995..........................................(a) 2,448,000 2,431,035
5.27%, 11/30/1995............................................. 50,000 49,554
5.30%, 12/7/1995.............................................. 2,415,000 2,390,705
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $5,187,909)............................................. $ 5,187,386
============
TOTAL INVESTMENTS
(cost $15,765,689)............................................ $ 15,997,856
============
Note to Statement of Investments;
(a) Partially held by the custodian in a segregated account as collateral for open futures positions.
</TABLE>
<TABLE>
Statement of Financial Futures September 30, 1995
Financial Futures Purchased; Market Value Unrealized
Number of Covered Appreciation
Contracts by Contracts Expiration at 9/30/95
--------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Standard & Poor's 500............. 13 $3,823,300 December '95 $160,420
========
</TABLE>
Dreyfus Asset Allocation Fund Inc., Dreyfus Income
Portfolio
Statement of Investments
Common Stocks-45.7%
<TABLE>
<CAPTION>
Shares Value
____________ _____________
<S> <C> <C>
Consumer Durables--4.5% Ford Motor...................................... 1,200 $ 34,500
General Motors.................................. 1,000 43,750
____________
78,250
____________
Consumer Non-Durables--1.7% Seagram......................................... 800 28,800
____________
Consumer Services--5.4% Disney (Walt)................................... 800 46,100
Time Warner..................................... 500 18,250
Viacom, Cl. A................................... 600 (a) 29,850
____________
94,200
____________
Electronic Technology--3.3% cisco Systems................................... 200 (a) 15,500
DSC Communications.............................. 600 (a) 22,200
Motorola........................................ 300 19,687
____________
57,387
____________
Energy--4.6% Amerada Hess.................................... 956 43,140
Texaco.......................................... 547 37,264
____________
80,404
____________
Industrial Services--4.9% Browning-Ferris Industries...................... 1,100 32,038
Schlumberger.................................... 500 31,125
WMX Technologies................................ 817 22,978
____________
86,141
____________
Non-Energy Minerals--1.1% Aluminum Co. of America......................... 200 10,200
Nucor........................................... 200 9,625
____________
19,825
____________
Process Industries--11.6% Crown Cork & Seal............................... 1,100 (a) 38,362
duPont (E.I.) deNemours......................... 800 49,900
Grace (W.R.).................................... 600 33,450
International Paper............................. 300 11,100
Monsanto........................................ 400 41,900
Praxair......................................... 1,000 27,000
____________
201,712
____________
Producer Manufacturing--3.4% Allied Signal................................... 500 21,250
Cooper Industries............................... 821 27,709
Dresser Industries.............................. 500 10,375
____________
59,334
____________
Retail Trade--2.7% Home Depot...................................... 700 26,075
Wal-Mart Stores................................. 1,000 21,625
____________
47,700
____________
Transportation--2.5% Burlington Northern Santa Fe.................... 200 16,775
Union Pacific................................... 400 26,150
____________
42,925
____________
TOTAL COMMON STOCKS
(cost $810,834)............................... $ 796,678
============
Principal
Amount
U.S. Treasury Notes-53.2% ------------
5.625%, 6/30/1997
(cost $926,318)............................... $ 928,000 $ 928,000
============
TOTAL INVESTMENTS (cost $1,736,972)........................................................ $ 1,724,678
============
Note to Statement of Investments;
(a) Non-income producing.
</TABLE>
<TABLE>
<CAPTION>
Summary of Statement of Investments
Dreyfus Dreyfus
LifeTime Asset Allocation Proforma
Income Income Combined
Portfolio Portfolio Total
----------- ---------------- ------------
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS (cost $15,765,689, $1,736,972 and
and $17,502,661, respectively)......................... 98.4% $15,997,856 $ 1,724,678 $ 17,722,534
====== =========== ============= ============
CASH AND RECEIVABLE (NET)................................. 1.6% $ 264,679 $ 18,717 $ 283,396
====== =========== ============= ============
NET ASSETS................................................ 100.0% $16,262,535 $ 1,743,395 $ 18,005,930
====== =========== ============= ============
</TABLE>
See notes to pro forma financial statements.
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
September 30, 1995 (Unaudited) Dreyfus Dreyfus
LifeTime Asset Allocation Pro-Forma
Income Income Combined
Portfolio Portfolio Adjustments (Note 1)
------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value
--see statement................................ $ 15,997,856 $ 1,724,678 $ $ 17,722,534
Cash............................................. 82,413 28,903 111,316
Dividends and interest receivable................ 181,653 18,308 199,961
Receivable for investment securities sold........ -- 47,158 47,158
Prepaid expenses................................. 57,859 4,731 62,590
Due from The Dreyfus Corporation................. -- 5,169 5,169
------------ ------------ ------------ ------------
Total Assets.................................. 16,319,781 1,828,947 0 18,148,728
------------ ------------ ------------ ------------
LIABILITIES:
Due to The Dreyfus Corporation................... 10,683 -- 10,683
Due to Distributor............................... 1,662 364 2,026
Payable for investment securities purchased...... -- 65,910 65,910
Payable for futures variation margin............. 6,500 -- 6,500
Accrued expenses and other liabilities........... 38,401 19,278 57,679
------------ ------------ ------------ ------------
Total Liabilities............................. 57,246 85,552 0 142,798
------------ ------------ ------------ ------------
NET ASSETS.......................................... $ 16,262,535 $ 1,743,395 $ 0 $ 18,005,930
============ ============ ============ ============
REPRESENTED BY:
Paid-in capital.................................. $ 15,041,856 $ 1,515,895 $ $ 16,557,751
Accumulated undistributed investment income-net 474,272 3,424 477,696
Accumulated undistributed net realized gain on 590,187
investments.................................... 353,820 236,367
Accumulated net unrealized appreciation
(depreciation) on investments and foreign
currency transactions (including $160,420 net
unrealized appreciation on financial futures
for the LifeTime Income Portfolio)............. 392,587 (12,291) 380,296
------------ ------------ ------------ ------------
NET ASSETS, at value................................ $ 16,262,535 $ 1,743,395 $ 0 $ 18,005,930
============ ============ ============ ============
Shares of Common Stock outstanding:
LifeTime Income Portfolio
Investors Shares................................. 601,320 129,045 * 730,365
============
Asset Allocation Income Portfolio................... 117,562 (117,562) --
===========
NET ASSET VALUE per share:
LifeTime Income Portfolio
Investor Class Shares
($8,121,691 / 601,320 shares).................. $13.51
======
Asset Allocation Income Portfolio
($1,743,395 / 117,562 shares).................. $14.83
======
Proforma Combined Portfolio
($9,865,086 / 730,365 shares).................. $13.51
======
- -------------------
* Assures the issuance of 129,045 Investor shares applicable to common stockholders of Asset Allocation Income Portfolio.
</TABLE>
See notes to proforma financial statements.
<TABLE>
<CAPTION>
Statement of Operations
September 30, 1995 (Unaudited) Dreyfus Dreyfus
LifeTime Asset Allocation Pro-Forma
Income Income Combined
Portfolio Portfolio Adjustments (Note 1)
------------- ---------------- ------------- ---------
<S> <C> <C> <C> <C>
Investment Income:
Income:
Interest.............................................. $ 531,783 $ 58,846 $ $ 590,629
Cash dividends ....................................... -- 12,513 12,513
------------- ------------- ------------- ----------
Total Income...................................... 531,783 71,359 0 603,142
------------- ------------- ------------- ----------
Expenses:
Management fee........................................ $ 47,599 $ 10,760 $ (2,426)* $ 55,933
Legal fees............................................ 12,908 18,014 30,922
Distribution fees (Investor Class shares)............. 9,913 -- 9,913
Organization expenses................................. 7,641 -- 7,641
Registration fees..................................... 5,187 24,421 29,608
Auditing fees......................................... 4,083 16,968 21,051
Director's fees and expenses.......................... 3,400 520 (520) 3,400
Shareholder servicing costs........................... 3,049 13,818 16,867
Prospectus and shareholders' reports.................. 2,667 15,761 18,428
Custodian fees........................................ 1,405 5,243 6,648
Miscellaneous......................................... 816 1,747 2,563
------------ ------------ ------------ ----------
98,668 107,252 (2,946) 202,974
Less--expense reimbursement from Manager due to
undertakings........................................ 41,157 77,392 118,549
------------ ------------ ------------ ----------
Total Expenses................................... 57,511 29,860 (2,946) 84,425
------------ ------------ ------------ ----------
INVESTMENT INCOME--NET........................... 474,272 41,499 2,946 518,717
------------ ------------ ------------ ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments........................ $ 5,000 $ 236,367 $ $ 241,367
Net realized gain on financial futures;
Long Transactions..................................... 348,820 -- 348,820
------------ ------------ ------------ ----------
Net Realized Gain..................................... 353,820 236,367 0 590,187
------------ ------------ ------------ ----------
Net unrealized appreciation (depreciation) on investment
(including $160,420 net unrealized appreciation on
financial futures for the Income Portfolio)........... 392,587 (12,291) 380,296
------------ ------------ ------------ ----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS.. 746,407 224,076 0 970,483
------------ ------------ ------------ ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $ 1,220,679 $ 265,575 $ 2,946 $1,489,200
============ ============ ============ ==========
- -----------
* Represents Average Net Assets of Asset Allocation Income Portfolio multiplied by .15%.
</TABLE>
See notes to pro forma financial statements.
<PAGE>
DREYFUS LIFETIME PORTFOLIOS, INC.--Income Portfolio
NOTES TO PRO FORMA FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - Basis of Combination:
On February 1, 1996, the Boards of Dreyfus LifeTime
Portfolios, Inc. and Dreyfus Asset Allocation Fund, Inc.
approved an Agreement and Plan of Reorganization whereby,
subject to approval by the Investor Class shareholders of
Dreyfus LifeTime Portfolios, Inc., Income Portfolio, it will
acquire all the assets of the Income Portfolio of Dreyfus Asset
Allocation Fund Inc., subject to the liabilities of such series,
in exchange for a number of shares equal to the pro rata net
assets of Investor Class shares of the Income Portfolio of
Dreyfus LifeTime Portfolios, Inc. (the "Merger").
The Merger will be accounted for as a tax free merger of
investment companies. The unaudited pro forma statements of
investments, and of assets and liabilities reflect the financial
position of the respective series of Dreyfus LifeTime
Portfolios, Inc., Income Portfolio, and Dreyfus Asset Allocation
Fund, Inc., Income Portfolio, at September 30, 1995 and October
31, 1995, respectively, as though the Merger occurred as of that
date. The unaudited pro forma statement of operations reflects
the results of operations of the respective series of Dreyfus
LifeTime Portfolios, Inc. and Dreyfus Asset Allocation Fund,
Inc. for the year ended September 30, 1995 and the twelve months
ended October 31, 1995. These statements have been derived from
the Funds' books and records utilized in calculating daily net
asset value at the dates indicated above for Dreyfus LifeTime
Portfolios, Inc., Income Portfolio, and Dreyfus Asset Allocation
Fund, Inc., Income Portfolio, under generally accepted
accounting principles. The historical cost of investment
securities will be carried forward to the surviving entity and
results of operations of Dreyfus LifeTime Portfolios, Inc.,
Income Portfolio, for pre-combination periods will not be
restated.
The pro forma statements of investments, assets and
liabilities and operations should be read in conjunction with
the historical financial statements of the Funds included or
incorporated by reference in the Statements of Additional
Information. The pro forma combined financial statements are
presented for the information of the reader and may not
necessarily be representative of what the actual combined
financial statements would have been had the reorganization
occurred at September 30, 1995.
NOTE 2 - Portfolio Valuation:
Investments in securities (including options and financial
futures) are valued at the last sale 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. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing
rates of exchange.
Most debt securities (excluding short-term investments) are
valued each business day by an independent pricing service (the
"Service") approved by the Board. Debt securities for which
quoted bid prices are readily available and are representative
of the bid side of the market in the judgment of the Service are
valued at the mean between the quoted bid prices (as obtained by
the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the
market for such securities). Other debt securities are carried
at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of securities
of comparable quality, coupon, maturity and type; indications as
to values from dealers; and general market conditions.
NOTE 3 - Capital Shares:
The pro forma net asset value per share assumes 129,045
additional shares of Common Stock of Dreyfus LifeTime
Portfolios, Inc., Income Portfolio, were issued in connection
with the proposed acquisition of the Income Portfolio of Dreyfus
Asset Allocation Fund, Inc. by the Income Portfolio of Dreyfus
LifeTime Portfolios, Inc., as of September 30, 1995. The number
of additional shares issued was calculated by dividing the net
assets of Dreyfus Asset Allocation Fund, Inc., Income Portfolio,
at October 31, 1995 by the net asset value per share of Dreyfus
LifeTime Portfolios, Inc., Income Portfolio, at September 30,
1995 of $13.51 for Investor Class shares. The pro forma
combined number of shares outstanding of 730,365 consists of the
129,045 shares issuable to Dreyfus Asset Allocation Fund, Inc.,
Income Portfolio, in connection with the Merger and 601,320
shares of Dreyfus LifeTime Portfolios, Inc., Income Portfolio,
outstanding at September 30, 1995.
NOTE 4 - Pro Forma Operating Expenses:
Although it is anticipated that there will be an
elimination of certain duplicative expenses as a result of the
Merger, the actual amount of such expenses can not be determined
because it is not possible to predict the cost of future
operations.
NOTE 5 - Merger Costs:
Merger costs are estimated at approximately $62,000 and are
not included in the pro forma statement of operations since
these costs are not recurring. These costs represent the
estimated expense of both Funds carrying out their obligations
under the Agreement and Plan of Reorganization and consist of
management's estimate of legal fees, accounting fees, printing
costs and mailing charges related to the Merger.
NOTE 6 - Federal Income Taxes:
Each Fund has elected to be taxed as a "regulated
investment company" under the Internal Revenue Code. After the
Merger, Dreyfus LifeTime Portfolios, Inc. intends 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.
The identified cost of investments for the Funds is
substantially the same for both financial accounting and federal
income tax purposes. The tax cost of investments will remain
unchanged for the combined entity.
<PAGE>
DREYFUS LIFETIME PORTFOLIOS, INC.
PART C
OTHER INFORMATION
Item 15. Indemnification.
The response to this item is incorporated by reference
to Item 27 of Part C of Post-Effective Amendment No. 6 to the
Registrant's Registration Statement on Form N-1A as filed on
January 12, 1996.
Item 16. Exhibits - All references are to Pre-Effective
Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A, filed on July 23, 1993 (File
No. 33-66088) (the "Registration Statement") unless
otherwise noted.
(1) Registrant's Articles of Incorporation, as amended.
(2) Registrant's Bylaws, as revised.
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization.
(5) Not Applicable.
(6)(a)Registrant's Management Agreement, as revised.
(6)(b)Registrant's Sub-Investment Advisory Agreement, as
revised.
(7) Registrant's Distribution Agreement, as revised.
(8) Not Applicable.
(9) Registrant's Amended and Restated Custody Agreement.
(10) Rule 18f-3 Plan is incorporated by reference to
Exhibit (18) of Post-Effective Amendment No. 6 to the
Registrant's Registration Statement on Form N-1A
filed on January 12, 1996.
(11) Opinion and consent of Stroock & Stroock & Lavan
regarding legality of issuance of shares and other
matters is incorporated by reference to Exhibit (10)
to the Registration Statement.
(12) Opinion and consent of Stroock & Stroock & Lavan
regarding tax matters.
(13) Not Applicable.
(14) Consent of Independent Auditors.
(15) Not Applicable.
(16) Powers of Attorney.
(17) Form of Proxy.
Item 17. Undertakings.
(1) The undersigned Registrant agrees that prior to any
public reoffering of the securities registered
through the use of a prospectus which is a part of
this registration statement by any person or party
who is deemed to be an underwriter within the meaning
of Rule 145(c) of the Securities Act of 1933, as
amended, the reoffering prospectus will contain the
information called for by the applicable registration
form for reofferings by persons who may be deemed
underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every
prospectus that is filed under paragraph (1) above
will be filed as a part of an amendment to the
registration statement and will not be used until the
amendment is effective, and that, in determining any
liability under the Securities Act of 1933, as
amended, each post-effective amendment shall be
deemed to be a new registration statement for the
securities offered therein, and the offering of the
securities at that time shall be deemed to be the
initial bona fide offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this
Registration Statement has been signed on behalf of the
Registrant, in the City of New York, State of New York, on the
26th day of February, 1996.
DREYFUS LIFETIME PORTFOLIOS, INC.
(Registrant)
By:/s/Marie E. Connolly
Marie E. Connolly, President
Each person whose signature appears below on this
Registration Statement hereby constitutes and appoints
Eric B. Fischman and Elizabeth Bachman, 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.
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 and Treasurer February 26, 1996
Marie E. Connolly (Principal Executive
Officer)
/s/John F. Tower, III Assistant Treasurer February 26, 1996
John F. Tower, III (Principal Financial
and Accounting Officer)
/s/Joseph S. DiMartino Director February 26, 1996
Joseph S. DiMartino
/s/Lucy Wilson Benson Director February 26, 1996
Lucy Wilson Benson
/s/David W. Burke Director February 26, 1996
David W. Burke
/s/Martin D. Fife Director February 26, 1996
Martin D. Fife
/s/Whitney I. Gerard Director February 26, 1996
Whitney I. Gerard
/s/Robert R. Glauber Director February 26, 1996
Robert R. Glauber
/s/Arthur A. Hartman Director February 26, 1996
Arthur A. Hartman
/s/George L. Perry Director February 26, 1996
George L. Perry
/s/Paul Wolfowitz Director February 26, 1996
Paul Wolfowitz
INDEX OF EXHIBITS
(1) Articles of Incorporation, as amended.
(2) By-Laws, as revised.
(6)(a) Management Agreement, as revised.
(6)(b) Sub-Investment Advisory Agreement, as revised.
(7) Distribution Agreement, as revised.
(9) Amended and Restated Custody Agreement.
(12) Opinion and consent of Stroock & Stroock & Lavan
regarding tax matters.
(14) Consent of Ernst & Young LLP, Independent Auditors.
<PAGE>
EXHIBIT 1
ARTICLES OF INCORPORATION
OF
DREYFUS GROWTH ALLOCATION FUND, INC.
FIRST: The undersigned, David Stephens, whose address
is Seven Hanover Square, New York, New York 10004-2696, being at
least eighteen years of age, hereby forms a corporation under
the Maryland General Corporation Law.
SECOND: The name of the corporation (hereinafter
called the "corporation") is Dreyfus Growth Allocation Fund,
Inc.
THIRD: The corporation is formed for the following
purpose or purposes:
(a) to conduct, operate and carry on the
business of an investment company;
(b) to subscribe for, invest in, reinvest
in, purchase or otherwise acquire, hold, pledge, sell,
assign, transfer, lend, write options on, exchange,
distribute or otherwise dispose of and deal in and with
securities of every nature, kind, character, type and
form, including without limitation of the generality of
the foregoing, all types of stocks, shares, futures
contracts, bonds, debentures, notes, bills and other
negotiable or non-negotiable instruments, obligations,
evidences of interest, certificates of interest,
certificates of participation, certificates, interests,
evidences of ownership, guarantees, warrants, options or
evidences of indebtedness issued or created by or
guaranteed as to principal and interest by any state or
local government or any agency or instrumentality
thereof, by the United States Government or any agency,
instrumentality, territory, district or possession
thereof, by any foreign government or any agency,
instrumentality, territory, district or possession
thereof, by any corporation organized under the laws of
any state, the United States or any territory or
possession thereof or under the laws of any foreign
country, bank certificates of deposit, bank time
deposits, bankers' acceptances and commercial paper; to
pay for the same in cash or by the issue of stock,
including treasury stock, bonds or notes of the
corporation or otherwise; and to exercise any and all
rights, powers and privileges of ownership or interest
in respect of any and all such investments of every kind
and description, including without limitation, the right
to consent and otherwise act with respect thereto, with
power to designate one or more persons, firms,
associations or corporations to exercise any of said
rights, powers and privileges in respect of any said
instruments;
(c) to borrow money or otherwise obtain credit
and to secure the same by mortgaging, pledging or
otherwise subjecting as security the assets of the
corporation;
(d) to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue, dispose
of, transfer, and otherwise deal in, shares of stock of
the corporation, including shares of stock of the
corporation in fractional denominations, and to apply to
any such repurchase, redemption, retirement,
cancellation or acquisition of shares of stock of the
corporation any funds or property of the corporation
whether capital or surplus or otherwise, to the full
extent now or hereafter permitted by the laws of the
State of Maryland;
(e) to conduct its business, promote its
purposes and carry on its operations in any and all of
its branches and maintain offices both within and
without the State of Maryland, in any States of the
United States of America, in the District of Columbia
and in any other parts of the world; and
(f) to do all and everything necessary,
suitable, convenient, or proper for the conduct,
promotion and attainment of any of the businesses and
purposes herein specified or which at any time may be
incidental thereto or may appear conducive to or
expedient for the accomplishment of any of such
businesses and purposes and which might be engaged in or
carried on by a corporation incorporated or organized
under the Maryland General Corporation Law, and to have
and exercise all of the powers conferred by the laws of
the State of Maryland upon corporations incorporated or
organized under the Maryland General Corporation Law.
The foregoing provisions of this Article THIRD shall be
construed both as purposes and powers and each as an independent
purpose and power. The foregoing enumeration of specific
purposes
and powers shall not be held to limit or restrict in any manner
the purposes and powers of the corporation, and the purposes and
powers herein specified shall, except when otherwise provided in
this Article THIRD, be in no wise limited or restricted by
reference to, or inference from, the terms of any provision of
this or any other Article of these Articles of Incorporation;
provided, that the corporation shall not conduct any business,
promote any purpose, or exercise any power or privilege within
or
without the State of Maryland which, under the laws thereof, the
corporation may not lawfully conduct, promote, or exercise.
FOURTH: The post office address of the principal office
of the corporation within the State of Maryland, and of the
resident agent of the corporation within the State of Maryland,
is
The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202.
FIFTH: (1) The total number of shares of stock which
the corporation has authority to issue is three hundred million
(300,000,000) shares of Common Stock, all of which are of a par
value of one tenth of one cent ($.001) each.
(2) The aggregate par value of all the authorized
shares of stock is three hundred thousand dollars ($300,000.00).
(3) The Board of Directors of the corporation is
authorized, from time to time, to fix the price or the minimum
price or the consideration or minimum consideration for, and to
authorize the issuance of, the shares of stock of the
corporation.
(4) The Board of Directors of the corporation is
authorized, from time to time, to further classify or to re-
classify, as the case may be, any unissued shares of stock of
the corporation by setting or changing the preferences,
conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms or
conditions of redemption of the stock.
(5) Subject to the power of the Board of Directors to
reclassify unissued shares, the shares of each class of stock of
the corporation shall have the following preferences, conversion
and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of
redemption:
(a) (i) All consideration received by the
corporation for the issuance or sale of shares together
with all income, earnings, profits and proceeds thereof,
shall irrevocably belong to such class for all purposes,
subject only to the rights of creditors, and are herein
referred to as "assets belonging to" such class.
(ii) The assets belonging to such class shall
be charged with the liabilities of the corporation in
respect of such class and with such class's share of the
general liabilities of the corporation, in the latter
case in proportion that the net asset value of such
class bears to the net asset value of all classes. The
determination of the Board of Directors shall be
conclusive as to the allocation of liabilities,
including accrued expenses and reserves, to a class.
(iii) Dividends or distributions on shares of
each class, whether payable in stock or cash, shall be
paid only out of earnings, surplus or other assets
belonging to such class.
(iv) In the event of the liquidation or
dissolution of the corporation, stockholders of each
class shall be entitled to receive, as a class, out of
the assets of the corporation available for distribution
to stockholders, the assets belonging to such class and
the assets so distributable to the stockholders of such
class shall be distributed among such stockholders in
proportion to the number of shares of such class held by
them.
(b) A class may be invested with one or more other
classes in a common investment portfolio. Notwith-
standing the provisions of paragraph (5)(a) of this
Article Fifth, if two or more classes are invested in a
common investment portfolio, the shares of each such
class of stock of the corporation shall be subject to
the following preferences, conversion and other rights,
voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of
redemption, and, if there are other classes of stock
invested in a different investment portfolio, shall also
be subject to the provisions of paragraph (5)(a) of this
Article Fifth at the portfolio level as if the classes
invested in the common investment portfolio were one
class:
(i) The income and expenses of the investment
portfolio shall be allocated among the classes invested
in the investment portfolio in accordance with the
number of shares outstanding of each such class or as
otherwise determined by the Board of Directors.
(ii) As more fully set forth in this paragraph
(5)(b) of Article Fifth, the liabilities and expenses of
the classes invested in the same investment portfolio
shall be determined separately from those of each other
and, accordingly, the net asset value, the dividends and
distributions payable to holders, and the amounts
distributable in the event of liquidation of the
corporation to holders of shares of the corporation's
stock may vary from class to class invested in the same
investment portfolio. Except for these differences and
certain other differences set forth in this paragraph
(5) of Article Fifth, the classes invested in the same
investment portfolio shall have the same preferences,
conversion and other rights, voting powers,
restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption.
(iii) The dividends and distributions of
investment income and capital gains with respect to the
classes invested in the same investment portfolio shall
be in such amounts as may be declared from time to time
by the Board of Directors, and such dividends and
distributions may vary among the classes invested in the
same investment portfolio to reflect differing
allocations of the expenses of the corporation among the
classes and any resultant differences between the net
asset values per share of the classes, to such extent
and for such purposes as the Board of Directors may deem
appropriate. The allocation of investment income,
capital gains, expenses and liabilities of the
corporation among the classes shall be determined by the
Board of Directors in a manner that is consistent with
the order dated January 14, 1993 (Investment Company Act
of 1940 Release No. 19214) issued by the Securities and
Exchange Commission in connection with the application
for exemption filed by Dreyfus A Bonds Plus, Inc.,
et al., and any existing or future amendment to such
order or any rule or interpretation under the Investment
Company Act of 1940, as amended, that modifies or
supersedes such order (the "Order").
(c) On each matter submitted to a vote of the
stockholders, each holder of a share of stock shall be
entitled to one vote for each share standing in his name
on the books of the corporation irrespective of the
class thereof. All holders of shares of stock shall
vote as a single class except as may otherwise be
required by law pursuant to any applicable order, rule
or interpretation issued by the Securities and Exchange
Commission, or otherwise, or except with respect to any
matter which affects only one or more classes of stock,
in which case only the holders of shares of the class or
classes affected shall be entitled to vote.
Except as provided above, all provisions of the Articles of
Incorporation relating to stock of the corporation shall apply
to shares of, and to the holders of, all classes of stock.
(6) Notwithstanding any provisions of the Maryland
General Corporation Law requiring a greater proportion than a
majority of the votes of stockholders entitled to be cast in
order
to take or authorize any action, any such action may be taken or
authorized upon the concurrence of a majority of the aggregate
number of votes entitled to be cast thereon.
(7) The presence in person or by proxy of the holders
of one-third of the shares of stock of the corporation entitled
to vote (without regard to class) shall constitute a quorum at
any
meeting of the stockholders, except with respect to any matter
which, under applicable statutes or regulatory requirements,
requires approval by a separate vote of one or more classes of
stock, in which case the presence in person or by proxy of the
holders of one-third of the shares of stock of each class
required
to vote as a class on the matter shall constitute a quorum.
(8) The corporation may issue shares of stock in
fractional denominations to the same extent as its whole shares,
and shares in fractional denominations shall be shares of stock
having proportionately to the respective fractions represented
thereby all the rights of whole shares, including, without
limitation, the right to vote, the right to receive dividends
and
distributions and the right to participate upon liquidation of
the corporation, but excluding the right to receive a stock
certificate evidencing a fractional share.
(9) No holder of any shares of any class of the
corporation shall be entitled as of right to subscribe for,
purchase, or otherwise acquire any shares of any class which the
corporation proposes to issue, or any rights or options which
the
corporation proposes to issue or to grant for the purchase of
shares of any class or for the purchase of any shares, bonds,
securities, or obligations of the corporation which are
convertible into or exchangeable for, or which carry any rights
to subscribe for, purchase, or otherwise acquire shares of any
class of the corporation; and any and all of such shares, bonds,
securities or obligations of the corporation, whether now or
hereafter authorized or created, may be issued, or may be
reissued or transferred if the same have been reacquired and
have treasury
status, and any and all of such rights and options may be
granted by the Board of Directors to such persons, firms,
corporations and associations, and for such lawful
consideration, and on such
terms, as the Board of Directors in its discretion may
determine, without first offering the same, or any thereof,
to any said holder.
SIXTH: (1) The number of directors of the
corporation, until such number shall be increased or decreased
pursuant to the by-laws of the corporation, is one. The number
of directors shall never be less than the minimum number
prescribed by the Maryland General Corporation Law.
(2) The name of the person who shall act as director of
the corporation until the first annual meeting or until his
successor or successors are duly chosen and qualify is as
follows:
A. Thomas Smith III
(3) The initial by-laws of the corporation shall be
adopted by the directors at their organizational meeting or by
their informal written action, as the case may be. Thereafter,
the power to make, alter, and repeal the by-laws of the
corporation shall be vested in the Board of Directors of the
corporation.
(4) Any determination made in good faith by or
pursuant to the direction of the Board of Directors, as to: the
amount of the assets, debts, obligations, or liabilities of the
corporation;
the amount of any reserves or charges set up and the propriety
thereof; the time of or purpose for creating such reserves or
charges; the use, alteration or cancellation of any reserves or
charges (whether or not any debt, obligation or liability for
which such reserves or charges shall have been created shall
have
been paid or discharged or shall be then or thereafter required
to be paid or discharged); the value of any investment or fair
value
of any other asset of the corporation; the amount of net
investment income; the number of shares of stock outstanding;
the
estimated expense in connection with purchases or redemptions of
the corporation's stock; the ability to liquidate investments in
orderly fashion; the extent to which it is practicable to
deliver
a cross-section of the portfolio of the corporation in payment
for any such shares, or as to any other matters relating to the
issue, sale, purchase, redemption and/or other acquisition or
disposition of investments or shares of the corporation, or the
determination
of the net asset value of shares of the corporation shall be
final and conclusive, and shall be binding upon the corporation
and all holders of its shares, past, present and future, and
shares of the corporation are issued and sold on the condition
and understanding that any and all such determinations shall be
binding as aforesaid.
SEVENTH: (1) To the fullest extent that limitations on
the liability of directors and officers are permitted by the
Maryland General Corporation Law, no director or officer of the
corporation shall have any liability to the corporation or its
stockholders for damages. This limitation on liability applies
to events occurring at the time a person serves as a director or
officer of the corporation whether or not such person is a
director or officer at the time of any proceeding in which
liability is asserted.
(2) The corporation shall indemnify and advance
expenses to its currently acting and its former directors to the
fullest extent that indemnification of directors is permitted by
the Maryland General Corporation Law. The corporation shall
indemnify and advance expenses to its officers to the same
extent as its directors and to such further extent as is
consistent with law. The board of directors may, through a
by-law, resolution or
agreement, make further provisions for indemnification of
directors, officers, employees and agents to the fullest extent
permitted by the Maryland General Corporation Law.
(3) No provision of this Article SEVENTH shall be
effective to protect or purport to protect any director or
officer of the corporation against any liability to the
corporation or its
stockholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
(4) References to the Maryland General Corporation Law
in this Article SEVENTH are to the law as from time to time
amended. No amendment to the Articles of Incorporation of the
corporation shall affect any right of any person under this
Article SEVENTH based on any event, omission or proceeding prior
to such amendment.
EIGHTH: Any holder of shares of stock of the
corporation may require the corporation to redeem and the
corporation shall be obligated to redeem at the option of such
holder all or any part of the shares of the corporation owned by
said holder, at the redemption price, pursuant to the method,
upon the terms and subject to the conditions hereinafter set
forth:
(a) The redemption price per share shall be the
net asset value per share determined at such time or
times as the Board of Directors of the corporation shall
designate in accordance with any provision of the
Investment Company Act of 1940, any rule or regulation
thereunder or exemption or exception therefrom, or any
rule or regulation made or adopted by any securities
association registered under the Securities Exchange Act
of 1934.
(b) Net asset value per share of a class shall
be determined by dividing:
(i) The total value of the assets of
such class or, in the case of a class invested
in a common investment portfolio with other
classes, such class's proportionate share of
the total value of the assets of the common
investment portfolio, such value determined as
provided in Subsection (c) below less, to the
extent determined by or pursuant to the
direction of the Board of Directors, all
debts, obligations and liabilities of such
class (which debts, obligations and
liabilities shall include, without limitation
of the generality of the foregoing, any and
all debts, obligations, liabilities, or
claims, of any and every kind and nature,
fixed, accrued and otherwise, including the
estimated accrued expenses of management and
supervision, administration and distribution
and any reserves or charges for any or all of
the foregoing, whether for taxes, expenses or
otherwise) but excluding such class' liability
upon its shares and its surplus, by
(ii) The total number of shares of such
class outstanding.
The Board of Directors is empowered, in its
absolute discretion, to establish other methods for
determining such net asset value whenever such other
methods are deemed by it to be necessary in order to
enable the corporation to comply with, or are deemed by
it to be desirable provided they are not inconsistent
with, any provision of the Investment Company Act of
1940 or any rule or regulation thereunder.
(c) In determining for the purposes of these
Articles of Incorporation the total value of the assets
of the corporation at any time, investments and any
other assets of the corporation shall be valued in such
manner as may be determined from time to time by the
Board of Directors.
(d) Payment of the redemption price by the
corporation may be made either in cash or in securities
or other assets at the time owned by the corporation or
partly in cash and partly in securities or other assets
at the time owned by the corporation. The value of any
part of such payment to be made in securities or other
assets of the corporation shall be the value employed in
determining the redemption price. Payment of the
redemption price shall be made on or before the seventh
day following the day on which the shares are properly
presented for redemption hereunder, except that delivery
of any securities included in any such payment shall be
made as promptly as any necessary transfers on the books
of the issuers whose securities are to be delivered may
be made.
The corporation, pursuant to resolution of the
Board of Directors, may deduct from the payment made for
any shares redeemed a liquidating charge not in excess
of five percent (5%) of the redemption price of the
shares so redeemed, and the Board of Directors may alter
or suspend any such liquidating charge from time to
time.
(e) Redemption of shares of stock by the
corporation is conditional upon the corporation having
funds or property legally available therefor.
(f) The corporation, either directly or through
an agent, may repurchase its shares, out of funds
legally available therefor, upon such terms and
conditions and for such consideration as the Board of
Directors shall deem advisable, by agreement with the
owner at a price not exceeding the net asset value per
share as determined by the corporation at such time or
times as the Board of Directors of the corporation shall
designate, less a charge not to exceed five percent (5%)
of such net asset value, if and as fixed by resolution
of the Board of Directors of the corporation from time
to time, and take all other steps deemed necessary or
advisable in connection therewith.
(g) The corporation, pursuant to resolution of
the Board of Directors, may cause the redemption, upon
the terms set forth in such resolution and in
subsections (a) through (e) and subsection (h) of this
Article EIGHTH, of shares of stock owned by stockholders
whose shares have an aggregate net asset value less than
such amount as may be fixed from time to time by the
Board of Directors. Notwithstanding any other provision
of this Article EIGHTH, if certificates representing
such shares have been issued, the redemption price need
not be paid by the corporation until such certificates
are presented in proper form for transfer to the
corporation or the agent of the corporation appointed
for such purpose; however, the redemption shall be
effective, in accordance with the resolution of the
Board of Directors, regardless of whether or not such
presentation has been made.
(h) The obligations set forth in this Article
EIGHTH may be suspended or postponed as may be
permissible under the Investment Company Act of 1940 and
the rules and regulations thereunder.
(i) The Board of Directors may establish other
terms and conditions and procedures for redemption,
including requirements as to delivery of certificates
evidencing shares, if issued.
NINTH: All persons who shall acquire stock or other
securities of the corporation shall acquire the same subject to
the provisions of the corporation's Charter, as from time to
time amended.
TENTH: From time to time any of the provisions of the
Charter of the corporation may be amended, altered or repealed,
including amendments which alter the contract rights of any
class of stock outstanding, and other provisions authorized by
the Maryland General Corporation Law at the time in force may be
added or
inserted in the manner and at the time prescribed by said Law,
and all rights at any time conferred upon the stockholders of
the corporation by its Charter are granted subject to the
provisions of this Article.
IN WITNESS WHEREOF, I have adopted and signed these
Articles of Incorporation and do hereby acknowledge that the
adoption and signing are my act.
Dated: July 15, 1993
/s/ David Stephens
David Stephens, Incorporator
ARTICLES OF AMENDMENT
DREYFUS GROWTH 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 charter of the Corporation is hereby amended by
striking Article SECOND of the Articles of Incorporation and
inserting in lieu thereof the following:
"SECOND: The name of the corporation (hereinafter called
the corporation') is Dreyfus Retirement Portfolios, Inc."
SECOND: The charter of the Corporation is hereby amended by
striking Article FIFTH (1) of the Articles of Incorporation and
inserting in lieu thereof the following:
"FIFTH : (1) The total number of shares of stock which
the corporation has authority to issue is three hundred million
(300,000,000) shares of Common Stock, all of which are of a par
value of one tenth of one
cent ($.001) each, of which one hundred million (100,000,000)
shares are classified as shares of the Growth and Income
Portfolio, one hundred million (100,000,000) shares are
classified shares of the Income Portfolio and
one hundred million (100,000,000) shares are classified as
shares
of the Growth Portfolio. All of the authorized shares of Common
Stock are further classified as Investor Class shares
(50,000,000) allocated to each Portfolio) and Class R shares
(50,000,000 allocated to each Portfolio)."
THIRD: Each share of Common Stock
of the Corporation that is issued and outstanding when these
Articles of Amendment become effective will at such time
automatically convert into and be reclassified as an issued and
outstanding Class R share of the Growth and Income Portfolio.
FOURTH: The Board of Directors of
the Corporation approved the foregoing amendments to the charter
as set forth in Articles FIRST, SECOND and THIRD hereto, and
declared that said amendment was advisable. The Corporation's
sole stockholder approved said amendment by consent action on
March 9, 1995.
The undersigned Vice President acknowledges these Articles of
Amendment to be the corporate act of the Corporation and states
that to the best of his knowledge, information and belief the
matters and facts set forth in
these Articles with respect to the authorization and approval of
the
amendment of the Corporation's charter are true in all material
respects, and that this statement is made under the penalties of
perjury.
IN WITNESS WHEREOF, Dreyfus Growth Allocation Fund,
Inc. has caused this instrument to be filed in its name and on
its behalf by its Vice
President, Eric B. Fischman, and witnessed by its Assistant
Secretary, Ruth D. Leibert, on the 10th day of March, 1995.
DREYFUS GROWTH ALLOCATION FUND, INC.
BY:/s/Eric B. Fischman
Eric B. Fischman, Vice President
WITNESSED:
/s/Ruth D. Leibert
Ruth D. Leibert, Assistant Secretary
ARTICLES OF AMENDMENT
DREYFUS RETIREMENT PORTFOLIOS, INC., a Maryland
corporation having its principal office in the State of Maryland
in Baltimore City, Maryland
(hereinafter called the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The charter of the Corporation is hereby amended
by striking Article SECOND of the Articles of Incorporation and
inserting in lieu thereof the following:
"SECOND: The name of the corporation (hereinafter called the
corporation) is Dreyfus LifeTime Portfolios, Inc."
SECOND: The Corporation is registered as an open-end investment
company under the Investment Company Act of 1940.
THIRD: These Articles of Amendment were approved by at least a
majority of the entire Board of Directors of the Corporation and
are limited to changes
expressly permitted by Section 2-605 of subtitle 6 of Title 2 of
the Maryland General Corporation Law to be made without the
affirmative vote of the stockholders of the Corporation.
The Vice President acknowledges these Articles of Amendment to
be the corporate act of the Corporation and states that to the
best of his knowledge, information and belief the matters and
facts set forth in these
Articles with respect to the authorization and approval of the
amendment of the Corporation's charter are true in all material
respects, and that this statement is made under the penalties of
perjury.
IN WITNESS WHEREOF, Dreyfus Retirement Portfolios, Inc.
has caused
this instrument to be filed in its name and on its behalf by its
Vice President, Eric B. Fischman, and witnessed by its Assistant
Secretary, Ruth D. Leibert, on the 27th day of April, 1995.
DREYFUS RETIREMENT PORTFOLIOS, INC.
BY:/s/ Eric B. Fischman
Eric B. Fischman, Vice President
ATTEST:
/s/ Ruth D. Leibert
Ruth D. Leibert,
Assistant Secretary
<PAGE>
EXHIBIT 2
BY-LAWS
OF
DREYFUS LIFETIME PORTFOLIOS, INC.
(A Maryland Corporation)
___________
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates
representing shares of stock shall set forth thereon the
statements prescribed by Section 2-211 of the Maryland General
Corporation Law ("General Corporation Law") and by any other
applicable provision of law and shall be signed by the Chairman
of the Board or the President or a Vice President and
countersigned by the Secretary or an Assistant Secretary or the
Treasurer or an
Assistant Treasurer and may be sealed with the corporate seal.
The signatures of any such officers may be either manual or
facsimile signatures and the corporate seal may be either
facsimile or any other form of seal. In case any such officer
who has signed manually or by facsimile any such certificate
ceases to be such officer before the certificate is issued, it
nevertheless
may be issued by the corporation with the same effect as if the
officer had not ceased to be such officer as of the date of its
issue.
No certificate representing shares of stock shall be
issued for any share of stock until such share is fully paid,
except as otherwise authorized in Section 2-207 of the General
Corporation Law.
The corporation may issue a new certificate of stock in
place of any certificate theretofore issued by it, alleged to
have been lost, stolen or destroyed, and the Board of Directors
may require, in its discretion, the owner of any such
certificate or his legal representative to give bond, with
sufficient surety, to
the corporation to indemnify it against any loss or claim that
may arise by reason of the issuance of a new certificate.
2. SHARE TRANSFERS. Upon compliance with provisions
restricting the transferability of shares of stock, if any,
transfers of shares of stock of the corporation shall be made
only
on the stock transfer books of the corporation by the record
holder thereof or by his attorney thereunto authorized by power
of attorney duly executed and filed with the Secretary of the
corporation or with a transfer agent or a registrar, if any, and
on surrender of the certificate or certificates for such shares
of stock properly endorsed and the payment of all taxes due
thereon.
3. RECORD DATE FOR STOCKHOLDERS. The Board of
Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to
vote at, any meeting of stockholders, or stockholders entitled
to receive payment of any dividend or the allotment of any
rights or in order to make a determination of stockholders for
any other
proper purpose. Such date, in any case, shall be not more than
90 days, and in case of a meeting of stockholders not less than
10 days, prior to the date on which the meeting or particular
action requiring such determination of stockholders is to be
held or taken. In lieu of fixing a record date, the Board of
Directors
may provide that the stock transfer books shall be closed for a
stated period but not to exceed 20 days. If the stock transfer
books are closed for the purpose of determining stockholders
entitled to notice of, or to vote at, a meeting of stockholders,
such books shall be closed for at least 10 days immediately
preceding such meeting. If no record date is fixed and the
stock
transfer books are not closed for the determination of stock-
holders: (1) The record date for the determination of stock-
holders entitled to notice of, or to vote at, a meeting of
stockholders shall be at the close of business on the day on
which the notice of meeting is mailed or the day 30 days before
the meeting, whichever is the closer date to the meeting; and
(2) The record date for the determination of stockholders
entitled to receive payment of a dividend or an allotment of any
rights shall be at the close of business on the day on which the
resolution of
the Board of Directors declaring the dividend or allotment of
rights is adopted, provided that the payment or allotment date
shall not be more than 60 days after the date on which the
resolution is adopted.
4. MEANING OF CERTAIN TERMS. As used herein in respect
of the right to notice of a meeting of stockholders or a waiver
thereof or to participate or vote thereat or to consent or
dissent
in writing in lieu of a meeting, as the case may be, the term
"share of stock" or "shares of stock" or "stockholder" or
"stock-holders" refers to an outstanding share or shares of
stock and to a holder or holders of record of outstanding shares
of stock when the corporation is authorized to issue only one
class of shares of
stock and said reference also is intended to include any
outstanding share or shares of stock and any holder or holders
of record of outstanding shares of stock of any class or series
upon which
or upon whom the Charter confers such rights where there are two
or more classes or series of shares or upon which or upon whom
the General Corporation Law confers such rights notwithstanding
that the Charter may provide for more than one class or series
of shares of stock, one or more of which are limited or denied
such rights thereunder.
5. STOCKHOLDER MEETINGS.
- ANNUAL MEETINGS. If a meeting of the stockholders of
the corporation is required by the Investment Company Act of
1940, as amended, to elect the directors, then there shall be
submitted
to the stockholders at such meeting the question of the election
of directors, and a meeting called for that purpose shall be
designated the annual meeting of stockholders for that year. In
other years in which no action by stockholders is required for
the aforesaid election of directors, no annual meeting need be
held.
- SPECIAL MEETINGS. Special stockholder meetings for
any purpose may be called by the Board of Directors or the
President and shall be called by the Secretary for the purpose
of removing a Director and for all other purposes whenever the
holders of shares entitled to at least ten percent of all the
votes entitled to be cast at such meeting shall make a duly
authorized request that such meeting be called. Such request
shall state the purpose of such meeting and the matters proposed
to be acted on thereat, and no other business shall be
transacted
at any such special meeting. Notwithstanding the foregoing,
unless requested by stockholders entitled to cast a majority of
the votes entitled to be cast at the meeting, a special meeting
of the stockholders need not be called at the request of
stockholders to consider any matter that is substantially the
same as a matter
voted on at any special meeting of the stockholders held during
the preceding twelve (12) months.
- PLACE AND TIME. Stockholder meetings shall be held
at such place, either within the State of Maryland or at such
other place within the United States, and at such date or dates
as the directors from time to time may fix.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE.
Written or printed notice of all meetings shall be given by the
Secretary and shall state the time and place of the meeting.
The notice of a special meeting shall state in all instances the
purpose or purposes for which the meeting is called. Written or
printed notice of any meeting shall be given to each stockholder
either by mail or by presenting it to him personally or by
leaving it at his residence or usual place of business not less
than ten days and not more than ninety days before the date of
the meeting,
unless any provisions of the General Corporation Law shall
prescribe a different elapsed period of time, to each
stockholder
at his address appearing on the books of the corporation or the
address supplied by him for the purpose of notice. If mailed,
notice shall be deemed to be given when deposited in the United
States mail addressed to the stockholder at his post office
address as it appears on the records of the corporation with
postage thereon prepaid. Whenever any notice of the time, place
or purpose of any meeting of stockholders is required to be
given
under the provisions of these by-laws or of the General Corpora-
tion Law, a waiver thereof in writing, signed by the stockholder
and filed with the records of the meeting, whether before or
after the holding thereof, or actual attendance or
representation at the meeting shall be deemed equivalent to the
giving of such notice to
such stockholder. The foregoing requirements of notice also
shall apply, whenever the corporation shall have any class of
stock which is not entitled to vote, to holders of stock who are
not entitled to vote at the meeting, but who are entitled to
notice thereof and to dissent from any action taken thereat.
- STATEMENT OF AFFAIRS. The President of the
corporation or, if the Board of Directors shall determine
otherwise, some
other executive officer thereof, shall prepare or cause to be
prepared annually a full and correct statement of the affairs of
the corporation, including a balance sheet and a financial
statement of operations for the preceding fiscal year, which
shall be filed at the principal office of the corporation in the
State of Maryland.
- CONDUCT OF MEETING. Meetings of the stockholders
shall be presided over by one of the following officers in the
order of seniority and if present and acting: the President,
the Chairman of the Board, a Vice President or, if none of the
foregoing is in office and present and acting, by a chairman to
be chosen by the stockholders. The Secretary of the corporation
or, in his absence, an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present the chairman of the meeting shall
appoint a secretary of the meeting.
- PROXY REPRESENTATION. Every stockholder may
authorize another person or persons to act for him by proxy in
all matters in which a stockholder is entitled to participate,
whether for the purposes of determining his presence at a
meeting, or whether by waiving notice of any meeting, voting or
participating at a meeting, expressing consent or dissent
without a meeting or otherwise. Every proxy shall be executed
in writing by the stockholder or by his duly authorized
attorney-in-fact and filed with
the Secretary of the corporation. No unrevoked proxy shall be
valid after eleven months from the date of its execution, unless
a longer time is expressly provided therein.
- INSPECTORS OF ELECTION. The directors, in advance of
any meeting, may, but need not, appoint one or more inspectors
to act at the meeting or any adjournment thereof. If an
inspector or inspectors are not appointed, the person presiding
at the meeting may, but need not, appoint one or more
inspectors. In case any
person who may be appointed as an inspector fails to appear or
act, the vacancy may be filled by appointment made by the direc-
tors in advance of the meeting or at the meeting by the person
presiding thereat. Each inspector, if any, before entering upon
the discharge of his duties, shall take and sign an oath to
execute faithfully the duties of inspector at such meeting with
strict impartiality and according to the best of his ability.
The inspectors, if any, shall determine the number of shares
outstanding and the voting power of each, the shares represented
at the meeting, the existence of a quorum and the validity and
effect of proxies, and shall receive votes, ballots or consents,
hear and determine all challenges and questions arising in
connection with
the right to vote, count and tabulate all votes, ballots or
consents, determine the result and do such acts as are proper to
conduct the election or vote with fairness to all stockholders.
On request of the person presiding at the meeting or any stock-
holder, the inspector or inspectors, if any, shall make a report
in writing of any challenge, question or matter determined by
him or them and execute a certificate of any fact found by him
or them.
- VOTING. Each share of stock shall entitle the holder
thereof to one vote, except in the election of directors, at
which each said vote may be cast for as many persons as there
are directors to be elected. Except for election of directors,
a majority of the votes cast at a meeting of stockholders, duly
called and at which a quorum is present, shall be sufficient to
take or authorize action upon any matter which may come before a
meeting,
unless more than a majority of votes cast is required by the
corporation's Articles of Incorporation. A plurality of all the
votes cast at a meeting at which a quorum is present shall be
sufficient to elect a director.
6. INFORMAL ACTION. Any action required or permitted
to be taken at a meeting of stockholders may be taken without a
meeting if a consent in writing, setting forth such action, is
signed by all the stockholders entitled to vote on the subject
matter thereof and any other stockholders entitled to notice of
a meeting of stockholders (but not to vote thereat) have waived
in writing any rights which they may have to dissent from such
action and such consent and waiver are filed with the records of
the corporation.
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and
affairs of the corporation shall be managed under the direction
of a Board of Directors. The use of the phrase "entire board"
herein refers to the total number of directors which the
corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be
a natural person of full age. A director need not be a
stockholder, a citizen of the United States or a resident of the
State of Maryland. The initial Board of Directors shall consist
of one person. Thereafter, the number of directors constituting
the entire board shall never be less than three or the number of
stockholders, whichever is less. At any regular meeting or at
any special meeting called for that purpose, a majority of the
entire Board of Directors may increase or decrease the number of
directors, provided that the number thereof shall never be less
than
three or the number of stockholders, whichever is less, nor more
than twelve and further provided that the tenure of office of a
director shall not be affected by any decrease in the number of
directors.
3. ELECTION AND TERM. The first Board of Directors
shall consist of the director named in the Articles of
Incorporation and shall hold office until the first meeting of
stockholders or until his successor has been elected and
qualified.
Thereafter, directors who are elected at a meeting of
stockholders, and directors who are elected in the interim to
fill vacancies and newly created directorships, shall hold
office until their successors have been elected and qualified.
Newly created directorships and any vacancies in the Board of
Directors, other than vacancies resulting from the removal of
directors by the stockholders, may be filled by the Board of
Directors, subject to
the provisions of the Investment Company Act of 1940. Newly
created directorships filled by the Board of Directors shall be
by action of a majority of the entire Board of Directors then in
office. All vacancies to be filled by the Board of Directors
may be filled by a majority of the remaining members of the
Board of Directors, although such majority is less than a quorum
thereof.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the
Board shall fix, except that the first meeting of a newly
elected Board shall be held as soon after its election as the
directors conveniently may assemble.
- PLACE. Meetings shall be held at such place within
or without the State of Maryland as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings
for which the time and place have been fixed. Special meetings
may be called by or at the direction of the President or of a
majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Whenever
any notice of the time, place or purpose of any meeting of
directors or any committee thereof is required to be given under
the provisions of the General Corporation Law or of these
by-laws, a waiver thereof in writing, signed by the director or
committee
member entitled to such notice and filed with the records of the
meeting, whether before or after the holding thereof, or actual
attendance at the meeting shall be deemed equivalent to the
giving of such notice to such director or such committee member.
- QUORUM AND ACTION. A majority of the entire Board of
Directors shall constitute a quorum except when a vacancy or
vacancies prevents such majority, whereupon a majority of the
directors in office shall constitute a quorum, provided such
majority shall constitute at least one-third of the entire Board
and, in no event, less than two directors. A majority of the
directors present, whether or not a quorum is present, may
adjourn a meeting to another time and place. Except as
otherwise specifically provided by the Articles of
Incorporation, the General Corporation Law or these by-laws, the
action of a majority of the directors present at a meeting at
which a quorum is present
shall be the action of the Board of Directors.
- CHAIRMAN OF THE MEETING. The Chairman of the Board,
if any and if present and acting, or the President or any other
director chosen by the Board, shall preside at all meetings.
5. REMOVAL OF DIRECTORS. Any or all of the directors
may be removed for cause or without cause by the stockholders,
who may elect a successor or successors to fill any resulting
vacancy or vacancies for the unexpired term of the removed
director or directors.
6. COMMITTEES. The Board of Directors may appoint from
among its members an Executive Committee and other committees
composed of two or more directors and may delegate to such
committee or committees, in the intervals between meetings of
the Board of Directors, any or all of the powers of the Board of
Directors in the management of the business and affairs of the
corporation, except the power to amend the by-laws, to approve
any consolidation, merger, share exchange or transfer of assets,
to declare dividends, to issue stock or to recommend to
stockholders any action requiring the stockholders' approval.
In the absence of any member of any such committee, the members
thereof present at any meeting, whether or not they constitute a
quorum, may appoint a member of the Board of Directors to act in
the place of such absent member.
7. INFORMAL ACTION. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if a written
consent to such action is signed by all members of the Board of
Directors or any such committee, as the case may be, and such
written consent is filed with the minutes of the proceedings of
the Board or any such committee.
Members of the Board of Directors or any committee
designated thereby may participate in a meeting of such Board or
committee by means of a conference telephone or similar
communications equipment by means of which all persons
participating in the
meeting can hear each other at the same time. Participation by
such means shall constitute presence in person at a meeting.
ARTICLE III
OFFICERS
The corporation may have a Chairman of the Board and
shall have a President, a Secretary and a Treasurer, who shall
be elected by the Board of Directors, and may have such other
officers, assistant officers and agents as the Board of
Directors
shall authorize from time to time. Any two or more offices,
except those of President and Vice President, may be held by the
same person, but no person shall execute, acknowledge or verify
any instrument in more than one capacity, if such instrument is
required by law to be executed, acknowledged or verified by two
or more officers.
Any officer or agent may be removed by the Board of
Directors whenever, in its judgment, the best interests of the
corporation will be served thereby.
ARTICLE IV
PRINCIPAL OFFICE - RESIDENT AGENT - STOCK LEDGER
The address of the principal office of the corporation
in the State of Maryland prescribed by the General Corporation
Law is 32 South Street, c/o The Corporation Trust Incorporated,
Baltimore, Maryland 21202. The name and address of the resident
agent in the State of Maryland prescribed by the General
Corporation Law are: The Corporation Trust Incorporated, 32
South Street, Baltimore, Maryland 21202.
The corporation shall maintain, at its principal office
in the State of Maryland prescribed by the General Corporation
Law or at the business office or an agency of the corporation,
an original or duplicate stock ledger containing the names and
addresses of all stockholders and the number of shares of each
class held by each stockholder. Such stock ledger may be in
written
form or any other form capable of being converted into written
form within a reasonable time for visual inspection.
The corporation shall keep at said principal office in
the State of Maryland the original or a certified copy of the
by-laws, including all amendments thereto, and shall duly file
thereat the annual statement of affairs of the corporation
prescribed by Section 2-314 of the General Corporation Law.
ARTICLE V
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name
of the corporation and shall be in such form and contain such
other words and/or figures as the Board of Directors shall
determine or the law require.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and
shall be subject to change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BY-LAWS
The power to make, alter, amend and repeal the by-laws
is vested in the Board of Directors of the corporation.
ARTICLE VIII
INDEMNIFICATION
1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
corporation shall indemnify its directors to the fullest extent
that indemnification of directors is permitted by the law. The
corporation shall indemnify its officers to the same extent as
its directors and to such further extent as is consistent with
law. The corporation shall indemnify its directors and officers
who while serving as directors or officers also serve at the
request of the corporation as a director, officer, partner,
trustee, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust, other enterprise or employee
benefit plan to the same extent as its directors and, in the
case of officers, to
such further extent as is consistent with law. The indemnifica-
tion and other rights provided by this Article shall continue as
to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators
of such a person. This Article shall not protect any such
person against any liability to the corporation or any
stockholder thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless
disregard of the duties involved in the conduct of his office
("disabling conduct").
2. ADVANCES. Any current or former director or officer
of the corporation seeking indemnification within the scope of
this Article shall be entitled to advances from the corporation
for payment of the reasonable expenses incurred by him in con-
nection with the matter as to which he is seeking
indemnification
in the manner and to the fullest extent permissible under the
General Corporation Law. The person seeking indemnification
shall provide to the corporation a written affirmation of his
good faith belief that the standard of conduct necessary for
indemnification by the corporation has been met and a written
undertaking to repay
any such advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least one
of the following additional conditions shall be met: (a) the
person seeking indemnification shall provide a security in form
and amount acceptable to the corporation for his undertaking;
(b) the corporation is insured against losses arising by reason
of the advance; or (c) a majority of a quorum of directors of
the corporation who are neither "interested persons" as defined
in Section 2(a)(19) of the Investment Company Act of 1940, as
amended, nor parties to the proceeding ("disinterested non-party
directors"), or independent legal counsel, in a written opinion,
shall have determined, based on a review of facts readily avail-
able to the corporation at the time the advance is proposed to
be
made, that there is reason to believe that the person seeking
indemnification will ultimately be found to be entitled to
indemnification.
3. PROCEDURE. At the request of any person claiming
indemnification under this Article, the Board of Directors shall
determine, or cause to be determined, in a manner consistent
with the General Corporation Law, whether the standards required
by this Article have been met. Indemnification shall be made
only following: (a) a final decision on the merits by a court
or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of disabling
conduct or (b) in the absence of such a decision, a reasonable
determination,
based upon a review of the facts, that the person to be
indemnified was not liable by reason of disabling conduct by
(i) the vote of a majority of a quorum of disinterested
non-party directors or (ii) an independent legal counsel in a
written opinion.
4. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Employees
and agents who are not officers or directors of the corporation
may be indemnified, and reasonable expenses may be advanced to
such employees or agents, as may be provided by action of the
Board of Directors or by contract, subject to any limitations
imposed by the Investment Company Act of 1940, as amended.
5. OTHER RIGHTS. The Board of Directors may make
further provision consistent with law for indemnification and
advance of expenses to directors, officers, employees and agents
by resolution, agreement or otherwise. The indemnification
provided by this Article shall not be deemed exclusive of any
other right, with respect to indemnification or otherwise, to
which those seeking indemnification may be entitled under any
insurance or other agreement or resolution of stockholders or
disinterested non-party directors or otherwise.
6. AMENDMENTS. References in this Article are to the
General Corporation Law and to the Investment Company Act of
1940 as from time to time amended. No amendment of the by-laws
shall affect any right of any person under this Article based on
any event, omission or proceeding prior to the amendment.
Dated: July 15, 1993
As Revised: April 28, 1995
<PAGE>
EXHIBIT 6(a)
MANAGEMENT AGREEMENT
DREYFUS LIFETIME PORTFOLIOS, INC.
200 Park Avenue
New York, New York 10166
August 24, 1994
Amended, February 2, 1995
Revised, April 28, 1995
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. We have discussed and concur in your
employing on
this basis Mellon Equity Associates, Inc. to act as the sub-
investment adviser to each Series (the "Sub-Investment Adviser")
to provide day-to-day management of each Series' investments.
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 supervise the continuous program
of investment, evaluation and, if appropriate, sale and
reinvestment
of each Series' assets conducted by the Sub-Investment Adviser.
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
initative, 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 the 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
neither you nor
the Sub-Investment Adviser shall 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 or the Sub-Investment
Adviser against any liability to the Fund or the relevant 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, or
to which the Sub-Investment Adviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties under its Sub-Investment
Advisory Agreement with you or by reason of its reckless
disregard of its obligations and duties under said Agreement.
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 and will pay
all fees of the Sub-Investment Adviser in connection with its
duties in respect of the Fund. All other expenses to be
incurred in the
operation of the Fund (other than those borne by the Sub-
Investment Adviser) 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 officers, directors, employees or holders of 5% or
more of
the outstanding voting securities of you or the Sub-Investment
Adviser or any affiliate of you or the Sub-Investment Adviser,
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 Series (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 and the Sub-Investment
Adviser now act, and that from time to time hereafter you or the
Sub-Investment Adviser 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 and the Sub-
Investment Adviser's 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 such companies or accounts
which have available funds for investment, the available
securities will be allocated in a manner believed 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.
Neither you nor the Sub-Investment Adviser shall 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 and, in the
case
of the Sub-Investment Adviser, for a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of
its obligations and duties under its Sub-Investment Advisory
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,
as amended) 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.
The Fund is agreeing to the provisions of this
Agreement that limit the Sub-Investment Adviser's liability and
other provisions relating to the Sub-Investment Adviser so as to
induce the Sub-Investment Adviser to enter into its
Sub-Investment
Advisory Agreement with you and to perform its obligations
thereunder. The Sub-Investment Adviser is expressly made a
third party beneficiary of this Agreement with rights as
respects the Fund to the same extent as if it had been a party
hereto.
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 LIFETIME PORTFOLIOS, 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
Income Portfolio .60 of 1% February 2, 1997
February 2nd
Growth and Income
Portfolio .75 of 1% February 2, 1997
February 2nd
Growth Portfolio .75 of 1% February 2, 1997
February 2nd
<PAGE>
EXHIBIT 6(b)
SUB-INVESTMENT ADVISORY AGREEMENT
THE DREYFUS CORPORATION
200 Park Avenue
New York, New York 10166
February 2, 1995
Revised, April 28, 1995
Mellon Equity Associates, Inc.
500 Grant Street
Pittsburgh, Pennsylvania 15258
Dear Sirs:
As you are aware, Dreyfus Lifetime Portfolios, Inc. (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 Pros-
pectus 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 intends to employ
The Dreyfus Corporation (the "Adviser") to act as its investment
adviser pursuant to a written agreement (the "Management
Agreement"), a copy of which has been furnished to you. The
Adviser desires to employ you to act as the sub-investment
adviser
to each of the Fund's series named on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a "Series").
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 Adviser,
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 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 Adviser or the Fund such statistical
information, with respect to the investments which a Series may
hold or contemplate purchasing, as the Adviser or the Fund may
reasonably request. The Fund and the Adviser wish to be
informed of important developments materially affecting any
Series' portfolio and shall expect you, on your own initiative,
to furnish to the Fund or the Adviser from time to time such
information as you may believe appropriate for this purpose.
You shall exercise your best judgment in rendering the
services to be provided hereunder, and the Adviser 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 the Fund or the Adviser, provided that
nothing herein shall be deemed to protect or purport to protect
you against any liability to the Adviser, the Fund or the Series
or 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 Adviser will pay you, on the first business day
of each month, out of the management fee it receives with
respect to
the Series and only to the extent thereof, 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
following the commencement of the public sale of a Series'
shares (after any sales are made to the Adviser) 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 within 10
business days of 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 (other than
those borne by the Adviser) 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 officers, directors, employees or holders of 5% or
more of
the outstanding voting securities of you or the Adviser or any
affiliate of you or the Adviser, Securities and Exchange Commis-
sion 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 Series (including fees pursuant to the Fund's
Management 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
Adviser may deduct from the fees to be paid hereunder, or you
will bear such excess expense on a pro-rata basis with the
Adviser, in
the proportion that the sub-advisory fee payable to you pursuant
to this Agreement bears to the fee payable to the Adviser
pursuant to the Management Agreement, 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 Adviser 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 Adviser has no objection to your so acting,
provided that when 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 services 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 or the
Adviser 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, as
amended) 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 (i) by the Adviser upon 60 days'
notice
to you, (ii) by the Fund's Board or by vote of the holders of a
majority of such Series' shares upon 60 days' notice to you, or
(iii) by you upon not less than 90 days' notice to the Fund and
the Adviser. This Agreement also will terminate automatically,
as to the relevant Series, in the event of its assignment (as
defined in said Act). In addition, notwithstanding anything
herein to the
contrary, if the Management Agreement terminates for any reason,
this Agreement shall terminate effective upon the date the
Management Agreement terminates.
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,
THE DREYFUS CORPORATION
By:_________________________
Accepted:
MELLON EQUITY ASSOCIATES, INC.
By:__________________________
SCHEDULE 1
Annual Fee as
a Percentage
of Average
Daily Net
Name of Series Assets Reapproval Date
Reapproval
Day
Income Portfolio * February 2, 1997
February 2nd
Growth and Income
Portfolio * February 2, 1997
February 2nd
Growth Portfolio * February 2, 1997
February 2nd
________________________________
* .35% of the Portfolio's average daily net assets up to $600
million in Fund assets; .25% of the Portfolio's average daily
net assets when the Fund's assets are between $600 million and
$1.2 billion; .20% of the Portfolio's average daily net assets
when the Fund's assets are between $1.2 billion and $1.8
billion; and .15% of the Portfolio's average daily
net assets when the Fund's assets are over $1.8 billion.
<PAGE>
EXHIBIT 7
DISTRIBUTION AGREEMENT
DREYFUS LIFETIME PORTFOLIOS, INC.
200 Park Avenue
New York, New York 10166
August 24, 1994
Amended, February 2, 1995
Revised, April 28, 1995
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
statements 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 LIFETIME PORTFOLIOS, INC.
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:_______________________________
EXHIBIT A
Name of Series Reapproval Date Reapproval Day
Income Portfolio February 2, 1997 February 2nd
Growth and Income
Portfolio February 2, 1997 February 2nd
Growth Portfolio February 2, 1997 February 2nd
<PAGE>
EXHIBIT 9
AMENDED AND RESTATED
CUSTODY AGREEMENT
Amended and Restated Custody Agreement made as of
April 28, 1995 between DREYFUS LIFETIME PORTFOLIOS, INC., a
corporation organized and existing under the laws of the State
of Maryland, having its principal office and place of business
at 200 Park Avenue, New York, New York 10166
(hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New
York corporation authorized to do a banking business, having its
principal office and place of business at 90 Washington Street,
New York, New York 10286 (hereinafter called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter
set forth the Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have
the following meanings:
1. "Authorized Person" shall be deemed to include the
Treasurer, the Controller or any other person, whether or not
any such person is an Officer or employee of the Fund, duly
authorized by the Directors of the Fund to give Oral
Instructions and Written
Instructions on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix A or such other Certificate as may be
received by the Custodian from time to time.
2. "Available Balance" shall mean for any given day
during a calendar year the aggregate amount of Federal Funds
held in the Fund's custody account(s) at The Bank of New York,
or its successors, as of the close of such day or, if such day
is not a business day, the close of the preceding business day.
3. "Bankruptcy" shall mean with respect to a party
such party's making a general assignment, arrangement or
composition with or for the benefit of its creditors, or
instituting or having
instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or the entry of an order for relief
under the Federal bankruptcy law or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or if a petition is presented for the winding
up or liquidation of the party or a resolution is passed for its
winding up or liquidation, or it seeks, or becomes subject to,
the appointment of an administrator, receiver, trustee,
custodian or other similar official for it or for all or
substantially all of
its assets or its taking any action in furtherance of, or
indicating its consent to approval of, or acquiescence in, any
of the foregoing.
4. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and Federal
agency securities, its successor or successors and its nominee
or nominees.
5. "Call Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts and Futures Contract Options entitling the
holder, upon timely exercise and payment of the exercise price,
as specified therein, to purchase from the writer thereof the
specified underlying Securities.
6. "Certificate" shall mean any notice, instruction, or
other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, which is actually
received by the Custodian and signed on behalf of the Fund by
any two Officers of the Fund.
7. "Clearing Member" shall mean a registered broker-
dealer which is a clearing member under the rules of O.C.C. and
a member of a national securities exchange qualified to act as a
custodian for an investment company, or any broker-dealer
reasonably believed by the Custodian to be such a clearing
member.
8. "Collateral Account" shall mean a segregated account
so denominated and pledged to the Custodian as security for, and
in consideration of, the Custodian's issuance of (a) any Put
Option guarantee letter or similar document described in para-
graph 8 of Article V herein, or (b) any receipt described in
Article V or VIII herein.
9. "Consumer Price Index" shall mean the U.S.
Consumer Price Index, all items and all urban consumers, U.S.
city average 1982-84 equals 100, as first published without
seasonal adjustment by the Bureau of Labor Statistics, the
Department of Labor, without regard to subsequent revisions or
corrections by such Bureau.
10. "Covered Call Option" shall mean an exchange
traded option entitling the holder, upon timely exercise and
payment of the exercise price, as specified therein, to purchase
from the writer thereof the specified Securities (excluding
Futures Contracts) which are owned by the writer thereof and
subject to appropriate restrictions.
11. "Depository" shall mean The Depository Trust
Company ("DTC"), a clearing agency registered with the
Securities
and Exchange Commission, its successor or successors and its
nominee or nominees, provided the Custodian has received a
certified copy of a resolution of the Fund's Directors
specifically approving deposits in DTC. The term "Depository"
shall further mean and include any other person authorized to
act as a depository under the Investment Company Act of 1940,
its successor or successors and its nominee or nominees,
specifically identified in a certified copy of a resolution of
the Fund's Directors specifically approving deposits therein by
the Custodian.
12. "Earnings Credit" shall mean for any given day
during a calendar year the product of (a) the Federal Funds Rate
for such date minus .25%, and (b) 82% of the Available Balance.
13. "Federal Funds" shall mean immediately available
same day funds.
14. "Federal Funds Rate" shall mean, for any day, the
Federal Funds (Effective) interest rate so denominated as
published in Federal Reserve Statistical Release H.15 (519) and
applicable to such day and each succeeding day which is not a
business day.
15. "Financial Futures Contract" shall mean the firm
commitment to buy or sell fixed income securities, including,
without limitation, U.S. Treasury Bills, U.S. Treasury Notes,
U.S.
Treasury Bonds, domestic bank certificates of deposit, and
Eurodollar certificates of deposit, during a specified month at
an agreed upon price.
16. "Futures Contract" shall mean a Financial Futures
Contract and/or Stock Index Futures Contracts.
17. "Futures Contract Option" shall mean an option
with respect to a Futures Contract.
18. "Margin Account" shall mean a segregated account in
the name of a broker, dealer, futures commission merchant or
Clearing Member, or in the name of the Fund for the benefit of a
broker, dealer, futures commission merchant or Clearing Member,
or otherwise, in accordance with an agreement between the Fund,
the Custodian and a broker, dealer, futures commission merchant
or Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities
and/or money of the Fund shall be deposited and withdrawn from
time to time in connection with such transactions as the Fund
may from time to time determine. Securities held in the
Book-Entry System or the Depository shall be deemed to have been
deposited in, or withdrawn from, a Margin Account upon the
Custodian's effecting an appropriate entry on its books and
records.
19. "Merger" shall mean (a) with respect to the Fund,
the consolidation or amalgamation with, merger into, or transfer
of all or substantially all of its assets to, another entity,
where the Fund is not the surviving entity, and (b) with respect
to the Custodian, any consolidation or amalgamation with, merger
into, or transfer of all or substantially all of its assets to,
another entity, except for any such consolidation, amalgamation,
merger or transfer of assets between the Custodian and The Bank
of New York Company, Inc. or any subsidiary thereof, or the
Irving Bank Corporation or any subsidiary thereof, provided that
the surviving entity agrees to be bound by the terms of this
Agreement.
20. "Money Market Security" shall be deemed to include,
without limitation, debt obligations issued or guaranteed as to
principal and interest by the government of the United States or
agencies or instrumentalities thereof, commercial paper,
certificates of deposit and bankers' acceptances, repurchase and
reverse repurchase agreements with respect to the same and bank
time deposits, where the purchase and sale of such securities
normally requires settlement in Federal funds on the same date
as such purchase or sale.
21. "O.C.C." shall mean Options Clearing Corporation, a
clearing agency registered under Section 17A of the Securities
Exchange Act of 1934, its successor or successors, and its
nominee or nominees.
22. "Officers" shall be deemed to include the
President, any Vice President, the Secretary, the Treasurer, the
Controller, any Assistant Secretary, any Assistant Treasurer or
any other person or persons duly authorized by the Directors of
the Fund to execute any Certificate, instruction, notice or
other
instrument on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix B or such other Certificate as may be
received by the Custodian from time to time.
23. "Option" shall mean a Call Option, Covered Call
Option, Stock Index Option and/or a Put Option.
24. "Oral Instructions" shall mean verbal
instructions actually received by the Custodian from an
Authorized Person or from a person reasonably believed by the
Custodian to be an Authorized Person.
25. "Put Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts, and Futures Contract Options entitling the
holder, upon timely exercise and tender of the specified
underlying Securities, to sell such Securities to the writer
thereof for the exercise price.
26. "Reverse Repurchase Agreement" shall mean an
agreement pursuant to which the Fund sells Securities and agrees
to repurchase such Securities at a described or specified date
and price.
27. "Security" shall be deemed to include, without
limitation, Money Market Securities, Call Options, Put Options,
Stock Index Options, Stock Index Futures Contracts, Stock Index
Futures Contract Options, Financial Futures Contracts, Financial
Futures Contract Options, Reverse Repurchase Agreements, common
stock and other instruments or rights having characteristics
similar to common stocks, preferred stocks, debt obligations
issued by state or municipal governments and by public
authorities
(including, without limitation, general obligation bonds,
revenue bonds and industrial bonds and industrial development
bonds), bonds, debentures, notes, mortgages or other
obligations, and any
certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe for
the same, or
evidencing or representing any other rights or interest therein,
or any property or assets.
28. "Segregated Security Account" shall mean an
account maintained under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the
custody account in which certain Securities and/or other assets
of the Fund shall
be deposited and withdrawn from time to time in accordance with
Certificates received by the Custodian in connection with such
transactions as the Fund may from time to time determine.
29. "Shares" shall mean the shares of Common Stock of
the Fund, each of which, in the case of a Fund having Series, is
allocated to a particular Series.
30. "Stock Index Futures Contract" shall mean a
bilateral agreement pursuant to which the parties agree to take
or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the value of a
particular stock index at the close of the last business day of
the contract and the price at which the futures contract is
originally struck.
31. "Stock Index Option" shall mean an exchange
traded option entitling the holder, upon timely exercise, to
receive an amount of cash determined by reference to the
difference between the exercise price and the value of the index
on the date of exercise.
32. "Written Instructions" shall mean written
communications actually received by the Custodian from an
Authorized Person or from a person reasonably believed by the
Custodian to be an Authorized Person by telex or any other such
system whereby the receiver of such communications is able to
verify by codes or otherwise with a reasonable degree of
certainty the authenticity of the sender of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the
Custodian as custodian of all the Securities and moneys at any
time owned by the Fund during the period of this Agreement,
except that (a) if the Custodian fails to provide for the
custody of any
of the Fund's Securities and moneys located or to be located
outside the United States in a manner satisfactory to the Fund,
the Fund shall be permitted to arrange for the custody of such
Securities and moneys located or to be located outside the
United States other than through the Custodian at rates to be
negotiated and borne by the Fund and (b) if the Custodian fails
to continue any existing sub-custodial or similar arrangements
on substantially the same terms as exist on the date of this
Agreement, the Fund shall be permitted to arrange for such or
similar services other than through the Custodian at rates to be
negotiated and borne by the Fund. The Custodian shall not
charge the Fund for any such terminated services after the date
of such termination.
2. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as
hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of
this Article and in Article VIII, the Fund will deliver or cause
to be delivered to the Custodian all Securities and all moneys
owned by it, including cash received for the issuance of its
shares, at any time during the period of this Agreement. The
Custodian will not be responsible for such Securities and such
moneys until actually received by it. The Custodian will be
entitled to reverse any credits made on the Fund's behalf where
such credits have been previously made and moneys are not
finally collected. The Fund
shall deliver to the Custodian a certified resolution of the
Directors of the Fund approving, authorizing and instructing the
Custodian on a continuous and on-going basis to deposit in the
Book-Entry System all Securities eligible for deposit therein
and
to utilize the Book-Entry System to the extent possible in
connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and
sales
of Securities, loans of Securities, and deliveries and returns
of
Securities collateral. Prior to a deposit of Securities of the
Fund in the Depository the Fund shall deliver to the Custodian a
certified resolution of the Directors of the Fund approving,
authorizing and instructing the Custodian on a continuous and
on-going basis until instructed to the contrary by a Certificate
actually received by the Custodian to deposit in the Depository
all Securities eligible for deposit therein and to utilize the
Depository to the extent possible in connection with its
performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of
Securities,
loans of Securities, and deliveries and returns of Securities
collateral. Securities and moneys of the Fund deposited in
either
the Book-Entry System or the Depository will be represented in
accounts which include only assets held by the Custodian for
customers, including, but not limited to, accounts in which the
Custodian acts in a fiduciary or representative capacity. Prior
to the Custodian's accepting, utilizing and acting with respect
to Clearing Member confirmations for Options and transactions in
Options as provided in this Agreement, the Custodian shall have
received a certified resolution of the Fund's Board of Directors
approving, authorizing and instructing the Custodian on a
continuous and on-going basis, until instructed to the contrary
by a Certificate actually received by the Custodian, to accept,
utilize and act in accordance with such confirmations as
provided in this Agreement.
2. The Custodian shall credit to a separate account in
the name of the Fund all moneys received by it for the account
of the Fund, and shall disburse the same only:
(a) In payment for Securities purchased, as provided
in Article IV hereof;
(b) In payment of dividends or distributions, as
provided in Article XI hereof;
(c) In payment of original issue or other taxes, as
provided in Article XII hereof;
(d) In payment for Shares redeemed by it, as provided
in Article XII hereof;
(e) Pursuant to Certificates setting forth the name
and address of the person to whom the payment is to be made, and
the purpose for which payment is to be made; or
(f) In payment of the fees and in reimbursement of
the expenses and liabilities of the Custodian, as provided in
Article XV hereof.
3. Promptly after the close of business on each day,
the Custodian shall furnish the Fund with confirmations and a
summary of all transfers to or from the account of the Fund
during
said day. Where Securities are transferred to the account of
the Fund, the Custodian shall also by book-entry or otherwise
identify as belonging to the Fund a quantity of Securities in a
fungible bulk of Securities registered in the name of the
Custodian (or its
nominee) or shown on the Custodian's account on the books of the
Book-Entry System or the Depository. At least monthly and from
time to time, the Custodian shall furnish the Fund with a
detailed
statement of the Securities and moneys held for the Fund under
this Agreement.
4. Except as otherwise provided in paragraph 7 of
this Article and in Article VIII, all Securities held for the
Fund, which are issued or issuable only in bearer form, except
such Securities as are held in the Book-Entry System, shall be
held by the Custodian in that form; all other Securities held
for the Fund may be registered in the name of the Fund, in the
name of any duly
appointed registered nominee of the Custodian as the Custodian
may from time to time determine, or in the name of the
Book-Entry System or the Depository or their successor or
successors, or their nominee or nominees. The Fund agrees to
furnish to the
Custodian appropriate instruments to enable the Custodian to
hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of the
Book-Entry System
or the Depository, any Securities which it may hold for the
account of the Fund and which may from time to time be
registered
in the name of the Fund. The Custodian shall hold all such
Securities which are not held in the Book-Entry System or in the
Depository in a separate account in the name of the Fund
physically segregated at all times from those of any other
person or persons.
5. Except as otherwise provided in this Agreement and
unless otherwise instructed to the contrary by a Certificate,
the
Custodian by itself, or through the use of the Book-Entry System
or the Depository with respect to Securities therein deposited,
shall with respect to all Securities held for the Fund in
accordance with this Agreement:
(a) Collect all income due or payable and, in any
event, if the Custodian receives a written notice from the Fund
specifying that an amount of income should have been received by
the Custodian within the last 90 days, the Custodian will
provide
a conditional payment of income within 60 days from the date the
Custodian received such notice, unless the Custodian reasonably
concludes that such income was not due or payable to the Fund,
provided that the Custodian may reverse any such conditional
payment upon its reasonably concluding that all or any portion
of such income was not due or payable, and provided further that
the Custodian shall not be liable for failing to collect on a
timely basis the full amount of income due or payable in respect
of a "floating rate instrument" or "variable rate instrument"
(as such terms are defined under Rule 2a-7 under the Investment
Company Act of 1940, as amended) if it has acted in good faith,
without negligence or willful misconduct.
(b) Present for payment and collect the amount
payable
upon such Securities which are called, but only if either (i)
the Custodian receives a written notice of such call, or (ii)
notice of such call appears in one or more of the publications
listed in
Appendix C annexed hereto, which may be amended at any time by
the Custodian upon five business days' prior notification to the
Fund;
(c) Present for payment and collect the amount
payable upon all Securities which may mature;
(d) Surrender Securities in temporary form for
definitive Securities;
(e) Execute, as Custodian, any necessary declarations
or certificates of ownership under the Federal Income Tax Laws
or the laws or regulations of any other taxing authority now or
hereafter in effect; and
(f) Hold directly, or through the Book-Entry System or
the Depository with respect to Securities therein deposited, for
the account of the Fund all rights and similar securities issued
with respect to any Securities held by the Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise, the
Custodian, directly or through the use of the Book-Entry System
or the Depository, shall:
(a) Execute and deliver to such persons as may be
designated in such Certificate proxies, consents,
authorizations,
and any other instruments whereby the authority of the Fund as
owner of any Securities may be exercised;
(b) Deliver any Securities held for the Fund in
exchange for other Securities or cash issued or paid in
connection
with the liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation, or the
exercise of any conversion privilege;
(c) Deliver any Securities held for the Fund to any
protective committee, reorganization committee or other person
in connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to
evidence such delivery;
(d) Make such transfers or exchanges of the assets of
the Fund and take such other steps as shall be stated in said
order to be for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund; and
(e) Present for payment and collect the amount payable
upon Securities not described in preceding paragraph 5(b) of
this Article which may be called as specified in the
Certificate.
7. Notwithstanding any provision elsewhere contained
herein, the Custodian shall not be required to obtain possession
of any instrument or certificate representing any Futures
Contract, Option or Futures Contract Option until after it shall
have determined, or shall have received a Certificate from the
Fund stating, that any such instruments or certificates are
available. The Fund shall deliver to the Custodian such a
Certificate no later than the business day preceding the
availability of any such instrument or certificate. Prior to
such
availability, the Custodian shall comply with Section 17(f) of
the Investment Company Act of 1940, as amended, in connection
with the
purchase, sale, settlement, closing out or writing of Futures
Contracts, Options or Futures Contract Options by making
payments or deliveries specified in Certificates received by the
Custodian
in connection with any such purchase, sale, writing, settlement
or closing out upon its receipt from a broker, dealer or futures
commission merchant of a statement or confirmation reasonably
believed by the Custodian to be in the form customarily used by
brokers, dealers, or futures commission merchants with respect
to
such Futures Contracts, Options or Futures Contract Options, as
the case may be, confirming that such Security is held by such
broker, dealer or futures commission merchant, in book-entry
form
or otherwise, in the name of the Custodian (or any nominee of
the Custodian) as custodian for the Fund, provided, however,
that payments to or deliveries from the Margin Account shall be
made in
accordance with the terms and conditions of the Margin Account
Agreement. Whenever any such instruments or certificates are
available, the Custodian shall, notwithstanding any provision in
this Agreement to the contrary, make payment for any Futures
Contract, Option or Futures Contract Option for which such
instruments or such certificates are available only against the
delivery to the Custodian of such instrument or such
certificate,
and deliver any Futures Contract, Option or Futures Contract
Option for which such instruments or such certificates are
available only against receipt by the Custodian of payment
therefor. Any such instrument or certificate delivered to the
Custodian shall be held by the Custodian hereunder in accordance
with, and subject to, the provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND OTHER THAN
OPTIONS, FUTURES CONTRACTS, FUTURES CONTRACT OPTIONS AND REVERSE
REPURCHASE AGREEMENTS
1. Promptly after each purchase of Securities by the
Fund, other than a purchase of any Option, Futures Contract,
Futures Contract Option or Reverse Repurchase Agreement, the
Fund
shall deliver to the Custodian (i) with respect to each purchase
of Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each purchase of Money
Market Securities, a Certificate, Oral Instructions or Written
Instructions, specifying with respect to each such purchase:
(a) the name of the issuer and the title of the Securities; (b)
the number of shares or the principal amount purchased and
accrued interest, if any; (c) the date of purchase and
settlement; (d) the
purchase price per unit; (e) the total amount payable upon such
purchase; (f) the name of the person from whom or the broker
through whom the purchase was made, and the name of the clearing
broker, if any; and (g) the name of the broker to which payment
is
to be made. The Custodian shall, upon receipt of Securities
purchased by or for the Fund, pay out of the moneys held for the
account of the Fund the total amount payable to the person from
whom, or the broker through whom, the purchase was made,
provided
that the same conforms to the total amount payable as set forth
in such Certificate, Oral Instructions or Written Instructions.
2. Promptly after each sale of Securities by the Fund,
other than a sale of any Option, Futures Contract, Futures
Contract Option or Reverse Repurchase Agreement, the Fund shall
deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Certificate,
and (ii) with respect to each sale of Money Market Securities, a
Certificate, Oral Instructions or Written Instructions,
specifying
with respect to each such sale: (a) the name of the issuer and
the title of the Security; (b) the number of shares or principal
amount sold, and accrued interest, if any; (c) the date of sale;
(d) the sale price per unit; (e) the total amount payable to the
Fund upon such sale; (f) the name of the broker through whom or
the person to whom the sale was made, and the name of the
clearing
broker, if any; and (g) the name of the broker to whom the
Securities are to be delivered. The Custodian shall deliver the
Securities upon receipt of the total amount payable to the Fund
upon such sale, provided that the same conforms to the total
amount payable as set forth in such Certificate, Oral
Instructions or Written Instructions. Subject to the foregoing,
the Custodian
may accept payment in such form as shall be satisfactory to it,
and may deliver Securities and arrange for payment in accordance
with the customs prevailing among dealers in Securities.
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the
Fund, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each Option purchased: (a) the type
of Option (put or call); (b) the name of the issuer and the
title and number of shares subject to such Option or, in the
case of a Stock
Index Option, the stock index to which such Option relates and
the number of Stock Index Options purchased; (c) the expiration
date; (d) the exercise price; (e) the dates of purchase and
settlement;
(f) the total amount payable by the Fund in connection with such
purchase; (g) the name of the Clearing Member through which such
Option was purchased; and (h) the name of the broker to whom
payment is to be made. The Custodian shall pay, upon receipt of
a Clearing Member's statement confirming the purchase of such
Option held by such Clearing Member for the account of the
Custodian (or
any duly appointed and registered nominee of the Custodian) as
custodian for the Fund, out of moneys held for the account of
the Fund, the total amount payable upon such purchase to the
Clearing
Member through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth in such
Certificate.
2. Promptly after the sale of any Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall deliver
to the Custodian a Certificate specifying with respect to each
such sale: (a) the type of Option (put or call); (b) the name
of the issuer and the title and number of shares subject to such
Option or, in the case of a Stock Index Option, the stock index
to which
such Option relates and the number of Stock Index Options sold;
(c) the date of sale; (d) the sale price; (e) the date of
settlement; (f) the total amount payable to the Fund upon such
sale; and (g) the name of the Clearing Member through which the
sale was made. The Custodian shall consent to the delivery of
the
Option sold by the Clearing Member which previously supplied the
confirmation described in preceding paragraph 1 of this Article
with respect to such Option against payment to the Custodian of
the total amount payable to the Fund, provided that the same
conforms to the total amount payable as set forth in such
Certificate.
3. Promptly after the exercise by the Fund of any Call
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying
with
respect to such Call Option: (a) the name of the issuer and the
title and number of shares subject to the Call Option; (b) the
expiration date; (c) the date of exercise and settlement; (d)
the
exercise price per share; (e) the total amount to be paid by the
Fund upon such exercise; and (f) the name of the Clearing Member
through which such Call Option was exercised. The Custodian
shall, upon receipt of the Securities underlying the Call Option
which was exercised, pay out of the moneys held for the account
of
the Fund the total amount payable to the Clearing Member through
whom the Call Option was exercised, provided that the same
conforms to the total amount payable as set forth in such
Certificate.
4. Promptly after the exercise by the Fund of any Put
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying
with
respect to such Put Option: (a) the name of the issuer and the
title and number of shares subject to the Put Option; (b) the
expiration date; (c) the date of exercise and settlement; (d)
the
exercise price per share; (e) the total amount to be paid to the
Fund upon such exercise; and (f) the name of the Clearing Member
through which such Put Option was exercised. The Custodian
shall,
upon receipt of the amount payable upon the exercise of the Put
Option, deliver or direct the Depository to deliver the
Securities, provided the same conforms to the amount payable to
the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Stock
Index Option purchased by the Fund pursuant to paragraph 1
hereof,
the Fund shall deliver to the Custodian a Certificate specifying
with respect to such Stock Index Option: (a) the type of Stock
Index Option (put or call); (b) the number of Options being
exercised; (c) the stock index to which such Option relates;
(d) the expiration date; (e) the exercise price; (f) the total
amount to be received by the Fund in connection with such
exercise; and (g) the Clearing Member from which such payment is
to be received.
6. Whenever the Fund writes a Covered Call Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Covered Call Option: (a) the
name
of the issuer and the title and number of shares for which the
Covered Call Option was written and which underlie the same;
(b) the expiration date; (c) the exercise price; (d) the premium
to be received by the Fund; (e) the date such Covered Call
Option
was written; and (f) the name of the Clearing Member through
which the premium is to be received. The Custodian shall
deliver or cause to be delivered, in exchange for receipt of the
premium specified in the Certificate with respect to such
Covered Call Option, such receipts as are required in accordance
with the customs prevailing among Clearing Members dealing in
Covered Call
Options and shall impose, or direct the Depository to impose,
upon
the underlying Securities specified in the Certificate such
restrictions as may be required by such receipts.
Notwithstanding
the foregoing, the Custodian has the right, upon prior written
notification to the Fund, at any time to refuse to issue any
receipts for Securities in the possession of the Custodian and
not deposited with the Depository underlying a Covered Call
Option.
7. Whenever a Covered Call Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate instructing the Custodian to deliver, or to direct
the Depository to deliver, the Securities subject to such
Covered Call
Option and specifying: (a) the name of the issuer and the title
and number of shares subject to the Covered Call Option; (b) the
Clearing Member to whom the underlying Securities are to be
delivered; and (c) the total amount payable to the Fund upon
such
delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Custodian
shall deliver, or direct the Depository to deliver, the
underlying
Securities as specified in the Certificate for the amount to be
received as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying
with respect to such Put Option: (a) the name of the issuer and
the title and number of shares for which the Put Option is
written
and which underlie the same; (b) the expiration date; (c) the
exercise price; (d) the premium to be received by the Fund;
(e) the date such Put Option is written; (f) the name of the
Clearing Member through which the premium is to be received and
to
whom a Put Option guarantee letter is to be delivered; (g) the
amount of cash, and/or the amount and kind of Securities, if
any,
to be deposited in the Segregated Security Account; and (h) the
amount of cash and/or the amount and kind of Securities to be
deposited into the Collateral Account. The Custodian shall,
after
making the deposits into the Collateral Account specified in the
Certificate, issue a Put Option guarantee letter substantially
in the form utilized by the Custodian on the date hereof, and
deliver
the same to the Clearing Member specified in the Certificate
against receipt of the premium specified in said Certificate.
Notwithstanding the foregoing, the Custodian shall be under no
obligation to issue any Put Option guarantee letter or similar
document if it is unable to make any of the representations
contained therein.
9. Whenever a Put Option written by the Fund and
described in the preceding paragraph is exercised, the Fund
shall
promptly deliver to the Custodian a Certificate specifying:
(a) the name of the issuer and title and number of shares
subject
to the Put Option; (b) the Clearing Member from which the
underlying Securities are to be received; (c) the total amount
payable by the Fund upon such delivery; (d) the amount of cash
and/or the amount and kind of Securities to be withdrawn from
the Collateral Account; and (e) the amount of cash and/or the
amount and kind of Securities, if any, to be withdrawn from the
Segregated Security Account. Upon the return and/or
cancellation
of any Put Option guarantee letter or similar document issued by
the Custodian in connection with such Put Option, the Custodian
shall pay out of the moneys held for the account of the Fund the
total amount payable to the Clearing Member specified in the
Certificate as set forth in such Certificate, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Stock Index Option: (a) whether
such Stock Index Option is a put or a call; (b) the number of
Options written; (c) the stock index to which such Option
relates;
(d) the expiration date; (e) the exercise price; (f) the
Clearing
Member through which such Option was written; (g) the premium to
be received by the Fund; (h) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in the
Segregated
Security Account; (i) the amount of cash and/or the amount and
kind of Securities, if any, to be deposited in the Collateral
Account; and (j) the amount of cash and/or the amount and kind
of Securities, if any, to be deposited in a Margin Account, and
the name in which such account is to be or has been established.
The Custodian shall, upon receipt of the premium specified in
the Certificate, make the deposits, if any, into the Segregated
Security Account specified in the Certificate, and either (1)
deliver such receipts, if any, which the Custodian has
specifically agreed to issue, which are in accordance with the
customs prevailing among Clearing Members in Stock Index Options
and make the deposits into the Collateral Account specified in
the
Certificate, or (2) make the deposits into the Margin Account
specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Stock Index Option:
(a) such information as may be necessary to identify the Stock
Index Option being exercised; (b) the Clearing Member through
which such Stock Index Option is being exercised; (c) the total
amount payable upon such exercise, and whether such amount is to
be paid by or to the Fund; (d) the amount of cash and/or amount
and kind of Securities, if any, to be withdrawn from the Margin
Account; and (e) the amount of cash and/or amount and kind of
Securities, if any, to be withdrawn from the Segregated Security
Account and the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account.
Upon the return and/or cancellation of the receipt, if any,
delivered pursuant to the preceding paragraph of this Article,
the
Custodian shall pay to the Clearing Member specified in the
Certificate the total amount payable, if any, as specified
therein.
12. Whenever the Fund purchases any Option identical to
a previously written Option described in paragraphs 6, 8 or 10
of this Article in a transaction expressly designated as a
"Closing
Purchase Transaction" in order to liquidate its position as a
writer of an Option, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to the Option
being purchased: (a) that the transaction is a Closing Purchase
Transaction; (b) the name of the issuer and the title and number
of shares subject to the Option, or, in the case of a Stock
Index
Option, the stock index to which such Option relates and the
number of Options held; (c) the exercise price; (d) the premium
to
be paid by the Fund; (e) the expiration date; (f) the type of
Option (put or call); (g) the date of such purchase; (h) the
name of the Clearing Member to which the premium is to be paid;
and (i)
the amount of cash and/or the amount and kind of Securities, if
any, to be withdrawn from the Collateral Account, a specified
Margin Account or the Segregated Security Account. Upon the
Custodian's payment of the premium and the return and/or
cancellation of any receipt issued pursuant to paragraphs 6, 8
or
10 of this Article with respect to the Option being liquidated
through the Closing Purchase Transaction, the Custodian shall
remove, or direct the Depository to remove, the previously
imposed
restrictions on the Securities underlying the Call Option.
13. Upon the expiration or exercise of, or consummation
of a Closing Purchase Transaction with respect to, any Option
purchased or written by the Fund and described in this Article,
the Custodian shall delete such Option from the statements
delivered to the Fund pursuant to paragraph 3 of Article III
herein, and upon the return and/or cancellation of any receipts
issued by the Custodian, shall make such withdrawals from the
Collateral Account, the Margin Account and/or the Segregated
Security Account as may be specified in a Certificate received
in connection with such expiration, exercise, or consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures
Contract, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Futures Contract (or with
respect to any number of identical Futures Contract(s)): (a)
the category
of Futures Contract (the name of the underlying stock index or
financial instrument); (b) the number of identical Futures
Contracts entered into; (c) the delivery or settlement date of
the Futures Contract(s); (d) the date the Futures Contract(s)
was (were) entered into and the maturity date; (e) whether the
Fund is
buying (going long) or selling (going short) on such Futures
Contract(s); (f) the amount of cash and/or the amount and kind
of Securities, if any, to be deposited in the Segregated
Security Account; (g) the name of the broker, dealer or futures
commission merchant through which the Futures Contract was
entered into; and
(h) the amount of fee or commission, if any, to be paid and the
name of the broker, dealer or futures commission merchant to
whom such amount is to be paid. The Custodian shall make the
deposits,
if any, to the Margin Account in accordance with the terms and
conditions of the Margin Account Agreement. The Custodian shall
make payment of the fee or commission, if any, specified in the
Certificate and deposit in the Segregated Security Account the
amount of cash and/or the amount and kind of Securities
specified in said Certificate.
2. (a) Any variation margin payment or similar payment
required to be made by the Fund to a broker, dealer or futures
commission merchant with respect to an outstanding Futures
Contract shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment
from a broker, dealer or futures commission merchant to the Fund
with respect to an outstanding Futures Contract shall be
received
and dealt with by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian
hereunder is retained by the Fund until delivery or settlement
is made on such Futures Contract, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the Futures Contract;
(b) with respect to a Stock Index Futures Contract, the total
cash settlement amount to be paid or received, and with respect
to a Financial Futures Contract, the Securities and/or amount of
cash to be delivered or received; (c) the broker, dealer or
futures commission merchant to or from which payment or delivery
is to be
made or received; and (d) the amount of cash and/or Securities
to be withdrawn from the Segregated Security Account. The
Custodian
shall make the payment or delivery specified in the Certificate
and delete such Futures Contract from the statements delivered
to the Fund pursuant to paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures
Contract to offset a Futures Contract held by the Custodian
hereunder, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b)
the
Futures Contract being offset. The Custodian shall make payment
of the fee or commission, if any, specified in the Certificate
and
delete the Futures Contract being offset from the statements
delivered to the Fund pursuant to paragraph 3 of Article III
herein, and make such withdrawals from the Segregated Security
Account as may be specified in such Certificate. The
withdrawals,
if any, to be made from the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract
Option by the Fund, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Futures Contract
Option: (a) the type of Futures Contract Option (put or call);
(b) the type of Futures Contract and such other information as
may
be necessary to identify the Futures Contract underlying the
Futures Contract Option purchased; (c) the expiration date; (d)
the exercise price; (e) the dates of purchase and settlement;
(f) the amount of premium to be paid by the Fund upon such
purchase; (g) the name of the broker or futures commission
merchant through
which such option was purchased; and (h) the name of the broker
or futures commission merchant to whom payment is to be made.
The Custodian shall pay the total amount to be paid upon such
purchase
to the broker or futures commission merchant through whom the
purchase was made, provided that the same conforms to the amount
set forth in such Certificate.
2. Promptly after the sale of any Futures Contract
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to each such sale: (a) the type of
Futures Contract Option (put or call); (b) the type of Futures
Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract
Option; (c) the date of sale; (d) the sale price; (e) the date
of
settlement; (f) the total amount payable to the Fund upon such
sale; and (g) the name of the broker or futures commission
merchant through which the sale was made. The Custodian shall
consent to the cancellation of the Futures Contract Option being
closed against payment to the Custodian of the total amount
payable to the Fund, provided the same conforms to the total
amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the
Fund pursuant to paragraph 1 is exercised by the Fund, the Fund
shall promptly deliver to the Custodian a Certificate
specifying:
(a) the particular Futures Contract Option (put or call) being
exercised; (b) the type of Futures Contract underlying the
Futures
Contract Option; (c) the date of exercise; (d) the name of the
broker or futures commission merchant through which the Futures
Contract Option is exercised; (e) the net total amount, if any,
payable by the Fund; (f) the amount, if any, to be received by
the Fund; and (g) the amount of cash and/or the amount and kind
of Securities to be deposited in the Segregated Security
Account.
The Custodian shall make the payments, if any, and the deposits,
if any, into the Segregated Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract Option,
the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Futures Contract Option: (a)
the
type of Futures Contract Option (put or call); (b) the type of
Futures Contract and such other information as may be necessary
to identify the Futures Contract underlying the Futures Contract
Option; (c) the expiration date; (d) the exercise price; (e) the
premium to be received by the Fund; (f) the name of the broker
or futures commission merchant through which the premium is to
be received; and (g) the amount of cash and/or the amount and
kind of
Securities, if any, to be deposited in the Segregated Security
Account. The Custodian shall, upon receipt of the premium
specified in the Certificate, make the deposits into the
Segregated Security Account, if any, as specified in the
Certificate. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
5. Whenever a Futures Contract Option written by the
Fund which is a call is exercised, the Fund shall promptly
deliver
to the Custodian a Certificate specifying: (a) the particular
Futures Contract Option exercised; (b) the type of Futures
Contract underlying the Futures Contract Option; (c) the name of
the broker or futures commission merchant through which such
Futures Contract Option was exercised; (d) the net total amount,
if any, payable to the Fund upon such exercise; (e) the net
total
amount, if any, payable by the Fund upon such exercise; and (f)
the amount of cash and/or the amount and kind of Securities to
be
deposited in the Segregated Security Account. The Custodian
shall, upon its receipt of the net total amount payable to the
Fund, if any, specified in such Certificate make the payments,
if
any, and the deposits, if any, into the Segregated Security
Account as specified in the Certificate. The deposits, if any,
to be made to the Margin Account shall be made by the Custodian
in accordance with the terms and conditions of the Margin
Account Agreement.
6. Whenever a Futures Contract Option which is written
by the Fund and which is a Put Option is exercised, the Fund
shall promptly deliver to the Custodian a Certificate
specifying: (a) the particular Futures Contract Option
exercised; (b) the type
of Futures Contract underlying such Futures Contract Option; (c)
the name of the broker or futures commission merchant through
which such Futures Contract Option is exercised; (d) the net
total amount, if any, payable to the Fund upon such exercise;
(e) the
net total amount, if any, payable by the Fund upon such
exercise;
and (f) the amount and kind of Securities and/or cash to be
withdrawn from or deposited in the Segregated Security Account,
if any. The Custodian shall, upon its receipt of the net total
amount payable to the Fund, if any, specified in the
Certificate,
make the payments, if any, and the deposits, if any, into the
Segregated Security Account as specified in the Certificate.
The deposits to and/or withdrawals from the Margin Account, if
any, shall be made by the Custodian in accordance with the terms
and conditions of the Margin Account Agreement.
7. Whenever the Fund purchases any Futures Contract
Option identical to a previously written Futures Contract Option
described in this Article in order to liquidate its position as
a writer of such Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with
respect to
the Futures Contract Option being purchased: (a) that the
transaction is a closing transaction; (b) the type of Futures
Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract
Option; (c) the exercise price; (d) the premium to be paid by
the
Fund; (e) the expiration date; (f) the name of the broker or
futures commission merchant to which the premium is to be paid;
and (g) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Segregated Security
Account. The Custodian shall effect the withdrawals from the
Segregated Security Account specified in the Certificate. The
withdrawals, if any, to be made from the Margin Account shall be
made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
8. Upon the expiration or exercise of, or consummation
of a closing transaction with respect to, any Futures Contract
Option written or purchased by the Fund and described in this
Article, the Custodian shall (a) delete such Futures Contract
Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein, and (b) make such withdrawals
from, and/or, in the case of an exercise, such deposits into,
the Segregated Security Account as may be specified in a
Certificate.
The deposits to and/or withdrawals from the Margin Account, if
any, shall be made by the Custodian in accordance with the terms
and conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the
exercise of a Futures Contract Option described in this Article
shall be subject to Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sale, the Fund shall
deliver to the Custodian a Certificate specifying: (a) the name
of the issuer and the title of the Security; (b) the number of
shares or principal amount sold, and accrued interest or
dividends, if any; (c) the dates of the sale and settlement; (d)
the sale price per unit; (e) the total amount credited to the
Fund
upon such sales, if any; (f) the amount of cash and/or the
amount
and kind of Securities, if any, which are to be deposited in a
Margin Account and the name in which such Margin Account has
been or is to be established; (g) the amount of cash and/or the
amount
and kind of Securities, if any, to be deposited in a Segregated
Security Account; and (h) the name of the broker through which
such short sale was made. The Custodian shall upon its receipt
of a statement from such broker confirming such sale and that
the total amount credited to the Fund upon such sale, if any, as
specified in the Certificate is held by such broker for the
account of the Custodian (or any nominee of the Custodian) as
custodian of the Fund, issue a receipt or make the deposits into
the Margin Account and the Segregated Security Account specified
in the Certificate.
2. In connection with the closing-out of any short
sale, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to each such closing-out:
(a) the name of the issuer and the title of the Security; (b)
the number of shares or the principal amount, and accrued
interest or
dividends, if any, required to effect such closing-out to be
delivered to the broker; (c) the dates of the closing-out and
settlement; (d) the purchase price per unit; (e) the net total
amount payable to the Fund upon such closing-out; (f) the net
total amount payable to the broker upon such closing-out; (g)
the
amount of cash and the amount and kind of Securities to be
withdrawn, if any, from the Margin Account; (h) the amount of
cash and/or the amount and kind of Securities, if any, to be
withdrawn
from the Segregated Security Account; and (i) the name of the
broker through which the Fund is effecting such closing-out.
The Custodian shall, upon receipt of the net total amount
payable to the Fund upon such closing-out and the return and/or
cancellation
of the receipts, if any, issued by the custodian with respect to
the short sale being closed-out, pay out of the moneys held for
the account of the Fund to the broker the net total amount
payable
to the broker, and make the withdrawals from the Margin Account
and the Segregated Security Account, as the same are specified
in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters into a Reverse
Repurchase Agreement with respect to Securities and money held
by the Custodian hereunder, the Fund shall deliver to the
Custodian a
Certificate or in the event such Reverse Repurchase Agreement is
a Money Market Security, a Certificate, Oral Instructions or
Written Instructions specifying: (a) the total amount payable
to the Fund
in connection with such Reverse Repurchase Agreement; (b) the
broker or dealer through or with which the Reverse Repurchase
Agreement is entered; (c) the amount and kind of Securities to
be delivered by the Fund to such broker or dealer; (d) the date
of such Reverse Repurchase Agreement; and (e) the amount of cash
and/or the amount and kind of Securities, if any, to be
deposited
in a Segregated Security Account in connection with such Reverse
Repurchase Agreement. The Custodian shall, upon receipt of the
total amount payable to the Fund specified in the Certificate,
Oral Instructions or Written Instructions make the delivery to
the broker or dealer, and the deposits, if any, to the
Segregated Security Account, specified in such Certificate, Oral
Instructions or Written Instructions.
2. Upon the termination of a Reverse Repurchase
Agreement described in paragraph 1 of this Article, the Fund
shall
promptly deliver a Certificate or, in the event such Reverse
Repurchase Agreement is a Money Market Security, a Certificate,
Oral Instructions or Written Instructions to the Custodian
specifying: (a) the Reverse Repurchase Agreement being
terminated; (b) the total amount payable by the Fund in
connection
with such termination; (c) the amount and kind of Securities to
be received by the Fund in connection with such termination; (d)
the date of termination; (e) the name of the broker or dealer
with or through which the Reverse Repurchase Agreement is to be
terminated; and (f) the amount of cash and/or the amount and
kind
of Securities to be withdrawn from the Segregated Security
Account. The Custodian shall, upon receipt of the amount and
kind of Securities to be received by the Fund specified in the
Certificate, Oral Instructions or Written Instructions, make the
payment to the broker or dealer, and the withdrawals, if any,
from the Segregated Security Account, specified in such
Certificate, Oral Instructions or Written Instructions.
ARTICLE X
CONCERNING MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such
deposits to, or withdrawals from, a Segregated Security Account
as specified in a Certificate received by the Custodian. Such
Certificate shall specify the amount of cash and/or the amount
and kind of Securities to be deposited in, or withdrawn from,
the Segregated Security Account. In the event that the Fund
fails to
specify in a Certificate the name of the issuer, the title and
the number of shares or the principal amount of any particular
Securities to be deposited by the Custodian into, or withdrawn
from, a Segregated Securities Account, the Custodian shall be
under no obligation to make any such deposit or withdrawal and
shall so notify the Fund.
2. The Custodian shall make deliveries or payments from
a Margin Account to the broker, dealer, futures commission
merchant or Clearing Member in whose name, or for whose benefit,
the account was established as specified in the Margin Account
Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin
Account shall be dealt with in accordance with the terms and
conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and
security interest in and to any property at any time held by the
Custodian in any Collateral Account described herein. In
accordance with applicable law, the Custodian may enforce its
lien
and realize on any such property whenever the Custodian has made
payment or delivery pursuant to any Put Option guarantee letter
or similar document or any receipt issued hereunder by the
Custodian.
In the event the Custodian should realize on any such property
net proceeds which are less than the Custodian's obligations
under any
Put Option guarantee letter or similar document or any receipt,
such deficiency shall be a debt owed the Custodian by the Fund
within the scope of Article XIII herein.
5. On each business day, the Custodian shall furnish
the Fund with a statement with respect to each Margin Account in
which money or Securities are held specifying as of the close of
business on the previous business day: (a) the name of the
Margin
Account; (b) the amount and kind of Securities held therein; and
(c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer or futures
commission
merchant specified in the name of a Margin Account a copy of the
statement furnished the Fund with respect to such Margin
Account.
6. Promptly after the close of business on each
business day in which cash and/or Securities are maintained in a
Collateral Account, the Custodian shall furnish the Fund with a
Statement with respect to such Collateral Account specifying the
amount of cash and/or the amount and kind of Securities held
therein. No later than the close of business next succeeding
the delivery to the Fund of such statement, the Fund shall
furnish to
the Custodian a Certificate or Written Instructions specifying
the then market value of the securities described in such
statement.
In the event such then market value is indicated to be less than
the Custodian's obligation with respect to any outstanding Put
Option, guarantee letter or similar document, the Fund shall
promptly specify in a Certificate the additional cash and/or
Securities to be deposited in such Collateral Account to
eliminate such deficiency.
ARTICLE XI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of
the resolution of the Directors, certified by the Secretary or
any Assistant Secretary, either (i) setting forth the date of
the declaration of a dividend or distribution, the date of
payment thereof, the record date as of which shareholders
entitled to payment shall be determined, the amount payable per
share to the shareholders of record as of that date and the
total amount
payable to the Dividend Agent of the Fund on the payment date,
or (ii) authorizing the declaration of dividends and
distributions on
a daily basis and authorizing the Custodian to rely on Oral
Instructions, Written Instructions or a Certificate setting
forth the date of the declaration of such dividend or
distribution, the
date of payment thereof, the record date as of which
shareholders
entitled to payment shall be determined, the amount payable per
share to the shareholders of record as of that date and the
total amount payable to the Dividend Agent on the payment date.
2. Upon the payment date specified in such
resolution,
Oral Instructions, Written Instructions or Certificate, as the
case may be, the Custodian shall pay out of the moneys held for
the account of the Fund the total amount payable to the Dividend
Agent of the Fund.
ARTICLE XII
SALE AND REDEMPTION OF SHARES OF COMMON STOCK
1. Whenever the Fund shall sell any of its Shares, it
shall deliver to the Custodian a Certificate duly specifying:
(a) The number of Shares sold, trade date, and price; and
(b) The amount of money to be received by the
Custodian for the sale of such Shares.
2. Upon receipt of such money from the Transfer
Agent, the Custodian shall credit such money to the account of
the Fund.
3. Upon issuance of any of the Fund's Shares in
accordance with the foregoing provisions of this Article, the
Custodian shall pay, out of the money held for the account of
the Fund, all original issue or other taxes required to be paid
by the
Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund
shall hereafter redeem any of its Shares, it shall furnish to
the Custodian a Certificate specifying:
(a) The number of Shares redeemed; and
(b) The amount to be paid for the Shares redeemed.
5. Upon receipt from the Transfer Agent of an advice
setting forth the number of Shares received by the Transfer
Agent for redemption and that such Shares are valid and in good
form for
redemption, the Custodian shall make payment to the Transfer
Agent out of the moneys held for the account of the Fund of the
total amount specified in the Certificate issued pursuant to the
foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the
redemption of any of the Fund's Shares, whenever its Shares are
redeemed pursuant to any check redemption privilege which may
from time to time be offered by the Fund, the Custodian, unless
otherwise instructed by a Certificate, shall, upon receipt of an
advice from the Fund or its agent setting forth that the
redemption is in good form for redemption in accordance with the
check redemption procedure, honor the check presented as part of
such check redemption privilege out of the money held in the
account of the Fund for such purposes.
ARTICLE XIII
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion
advance funds on behalf of the Fund which results in an
overdraft
because the moneys held by the Custodian for the account of the
Fund shall be insufficient to pay the total amount payable upon
a purchase of Securities as set forth in a Certificate or Oral
Instructions issued pursuant to Article IV, or which results in
an overdraft for some other reason, or if the Fund is for any
other reason indebted to the Custodian (except a borrowing for
investment or for temporary or emergency purposes using
Securities
as collateral pursuant to a separate agreement and subject to
the provisions of paragraph 2 of this Article XIII), such
overdraft or
indebtedness shall be deemed to be a loan made by the Custodian
to the Fund payable on demand and shall bear interest from the
date
incurred at a rate per annum (based on a 360-day year for the
actual number of days involved) equal to the Federal Funds Rate
plus l/2%, such rate to be adjusted on the effective date of any
change in such Federal Funds Rate but in no event to be less
than
6% per annum, except that any overdraft resulting from an error
by
the Custodian shall bear no interest. Any such overdraft or
indebtedness shall be reduced by an amount equal to the total of
all amounts due the Fund which have not been collected by the
Custodian on behalf of the Fund when due because of the failure
of the Custodian to make timely demand or presentment for
payment. In addition, the Fund hereby agrees that the Custodian
shall have
a continuing lien and security interest in and to any property
at any time held by it for the benefit of the Fund or in which
the Fund may have an interest which is then in the Custodian's
possession or control or in possession or control of any third
party acting in the Custodian's behalf. The Fund authorizes the
Custodian, in its sole discretion, at any time to charge any
such
overdraft or indebtedness together with interest due thereon
against any balance of account standing to the Fund's credit on
the Custodian's books. For purposes of this Section 1 of
Article XIII, "overdraft" shall mean a negative Available
Balance.
2. The Fund will cause to be delivered to the Custodian
by any bank (including, if the borrowing is pursuant to a
separate agreement, the Custodian) from which it borrows money
for investment or for temporary or emergency purposes using
Securities as collateral for such borrowings, a notice or
undertaking in the form currently employed by any such bank
setting forth the amount which such bank will loan to the Fund
against delivery of a stated
amount of collateral. The Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such
borrowing: (a) the name of the bank; (b) the amount and terms
of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the
Fund, or other loan agreement; (c) the time and date, if known,
on which the loan is to be entered into; (d) the date on which
the loan becomes due and payable; (e) the total amount payable
to the Fund on the borrowing date; (f) the market value of
Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of
shares or the principal amount
of any particular Securities; and (g) a statement specifying
whether such loan is for investment purposes or for temporary or
emergency purposes and that such loan is in conformance with the
Investment Company Act of 1940 and the Fund's prospectus. The
Custodian shall deliver on the borrowing date specified in a
Certificate the specified collateral and the executed promissory
note, if any, against delivery by the lending bank of the total
amount of the loan payable, provided that the same conforms to
the
total amount payable as set forth in the Certificate. The
Custodian may, at the option of the lending bank, keep such
collateral in its possession, but such collateral shall be
subject
to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver
such Securities as additional collateral as may be specified in
a Certificate to collateralize further any transaction described
in this paragraph. The Fund shall cause all Securities released
from collateral status to be returned directly to the Custodian,
and the Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that the Fund
fails to specify in a Certificate the name of the issuer, the
title and number of shares or the principal amount of any
particular Securities to be delivered as collateral by the
Custodian, the Custodian shall not be under any obligation to
deliver any Securities.
ARTICLE XIV
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of its
Articles of Incorporation and as disclosed in its most recent
and currently effective prospectus to lend its portfolio
Securities, within 24 hours after each loan of portfolio
Securities the Fund shall deliver or cause to be delivered to
the Custodian a Certificate specifying with respect to each such
loan: (a) the name of the issuer and the title of the
Securities; (b) the number of shares or the principal amount
loaned; (c) the date of loan and
delivery; (d) the total amount to be delivered to the Custodian
against the loan of the Securities, including the amount of cash
collateral and the premium, if any, separately identified; and
(e) the name of the broker, dealer or financial institution to
which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial
institution to
which the loan was made upon receipt of the total amount
designated as to be delivered against the loan of Securities.
The Custodian may accept payment in connection with a delivery
otherwise than through the Book-Entry System or Depository only
in the form of a certified or bank cashier's check payable to
the order of the Fund or the Custodian drawn on New York
Clearing House funds and may deliver Securities in accordance
with the customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of
Securities by the Fund, the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with respect
to each such loan termination and return of Securities: (a) the
name of the issuer and the title of the Securities to be
returned;
(b) the number of shares or the principal amount to be returned;
(c) the date of termination; (d) the total amount to be
delivered
by the Custodian (including the cash collateral for such
Securities minus any offsetting credits as described in said
Certificate); and (e) the name of the broker, dealer or
financial
institution from which the Securities will be returned. The
Custodian shall receive all Securities returned from the broker,
dealer, or financial institution to which such Securities were
loaned and upon receipt thereof shall pay, out of the moneys
held for the account of the Fund, the total amount payable upon
such return of Securities as set forth in the Certificate.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, neither the
Custodian nor its nominee shall be liable for any loss or
damage,
including counsel fees, resulting from its action or omission to
act or otherwise, either hereunder or under any Margin Account
Agreement, except for any such loss or damage arising out of its
own negligence or willful misconduct. The Custodian may, with
respect to questions of law arising hereunder or under any
Margin Account Agreement, apply for and obtain the advice and
opinion of counsel to the Fund or of its own counsel, at the
expense of the Fund, and shall be fully protected with respect
to anything done or omitted by it in good faith in conformity
with such advice or opinion. The Custodian shall be liable to
the Fund for any loss
or damage resulting from the use of the Book-Entry System or any
Depository arising by reason of any negligence, misfeasance or
willful misconduct on the part of the Custodian or any of its
employees or agents.
2. Without limiting the generality of the foregoing,
the Custodian shall be under no obligation to inquire into, and
shall not be liable for:
(a) The validity of the issue of any Securities
purchased, sold or written by or for the Fund, the legality of
the purchase, sale or writing thereof, or the propriety of the
amount paid or received therefor;
(b) The legality of the issue or sale of any of the
Fund's Shares, or the sufficiency of the amount to be received
therefor;
(c) The legality of the redemption of any of the
Fund's Shares, or the propriety of the amount to be paid
therefor;
(d) The legality of the declaration or payment of any
dividend by the Fund;
(e) The legality of any borrowing by the Fund using
Securities as collateral;
(f) The legality of any loan of portfolio Securities
pursuant to Article XIV of this Agreement, nor shall the
Custodian be under any duty or obligation to see to it that any
cash collateral delivered to it by a broker, dealer or financial
institution or held by it at any time as a result of such loan
of portfolio Securities of the Fund is adequate collateral for
the Fund against any loss it might sustain as a result of such
loan.
The Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or
notify the Fund that the amount of such cash collateral held by
it for the Fund is sufficient collateral for the Fund, but such
duty or obligation shall be the sole responsibility of the Fund.
In addition, the Custodian shall be under no duty or obligation
to see that any broker, dealer or financial institution to which
portfolio Securities of the Fund are lent pursuant to Article
XIV of this Agreement makes payment to it of any dividends or
interest which are payable to or for the account of the Fund
during the period of such loan or at the termination of such
loan, provided,
however, that the Custodian shall promptly notify the Fund in
the event that such dividends or interest are not paid and
received when due; or
(g) The sufficiency or value of any amounts of money
and/or Securities held in any Margin Account, Segregated
Security
Account or Collateral Account in connection with transactions by
the Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer, futures commission
merchant or Clearing Member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may
be entitled to receive from such broker, dealer, futures
commission merchant or Clearing Member, to see that any payment
received by the Custodian from any broker, dealer, futures
commission merchant or Clearing Member is the amount the Fund is
entitled to receive,
or to notify the Fund of the Custodian's receipt or non-receipt
of any such payment; provided however that the Custodian, upon
the Fund's written request, shall, as Custodian, demand from any
broker, dealer, futures commission merchant or Clearing Member
identified by the Fund the payment of any variation margin
payment or similar payment that the Fund asserts it is entitled
to receive pursuant to the terms of a Margin Account Agreement
or otherwise from such broker, dealer, futures commission
merchant or Clearing Member.
3. The Custodian shall not be liable for, or
considered to be the Custodian of, any money, whether or not
represented by any check, draft or other instrument for the
payment of money, received by it on behalf of the Fund until the
Custodian actually
receives and collects such money directly or by the final
crediting of the account representing the Fund's interest at the
Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall
not be liable for ascertaining or acting upon any calls,
conversions, exchange, offers, tenders, interest rate changes or
similar matters relating to Securities held in the Depository,
unless the Custodian shall have actually received timely notice
from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to
collect, or for the late collection or late crediting by the
Depository of any amount payable upon Securities deposited in
the Depository which may mature or be redeemed, retired, called
or otherwise become payable. However, upon receipt of a
Certificate from the Fund of an overdue amount on Securities
held in the Depository, the Custodian shall make a claim against
the Depository on behalf of the Fund, except that the Custodian
shall not be under any obligation to appear in, prosecute or
defend any action, suit or proceeding in respect to any
Securities held by the Depository which in its opinion may
involve it in expense or liability, unless indemnity
satisfactory to it against all
expense and liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount due
to the Fund from the Transfer Agent of the Fund nor to take any
action to effect payment or distribution by the Transfer Agent
of the Fund of any amount paid by the Custodian to the Transfer
Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount, if
the Securities upon which such amount is payable are in default,
or if payment is refused after due demand or presentation,
unless and until (i) it shall be directed to take such action by
a Certificate and (ii) it shall be assured to its satisfaction
of reimbursement of its costs and expenses in connection with
any such action.
7. The Custodian may appoint one or more banking
institutions as Depository or Depositories or as Sub-Custodian
or
Sub-Custodians, including, but not limited to, banking
institutions located in foreign countries, of Securities and
moneys at any time owned by the Fund, upon terms and conditions
approved in a Certificate, which shall, if requested by the
Custodian, be accompanied by an approving resolution of the
Fund's Board of Directors adopted in accordance with Rule 17f-5
under the Investment Company Act of 1940, as amended.
Notwithstanding anything to the contrary contained in this
Agreement, the Custodian shall hold harmless and indemnify the
Fund from and against any losses, actions, claims, demands,
expenses and proceedings, including counsel fees, that occur as
a result of any
act or omission of any Foreign Sub-Custodian or Depository with
respect to the safekeeping of moneys and securities of the Fund.
8. The Custodian shall not be under any duty or
obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Fund are such
as properly may be held by the Fund under the provisions of its
Articles of Incorporation.
9. (a) The Custodian shall be entitled to receive and
the Fund agrees to pay to the Custodian all reasonable out-of-
pocket expenses and such compensation and fees as are specified
on Schedule A hereto. The Custodian shall not deem amounts
payable in respect of foreign custodial services to be
out-of-pocket expenses, it being the parties' intention that all
fees for such services shall be as set forth on Schedule B
hereto and shall be provided for the term of this Agreement
without any automatic or unilateral increase. The Custodian
shall have the right to unilaterally increase the figures on
Schedule A on or after March 1, 1994 and on or after each
succeeding March 1 thereafter by an amount equal to 50% of the
increase in the Consumer Price Index for the calendar year
ending on the December 31 immediately
preceding the calendar year in which such March 1 occurs,
provided, however, that during each such annual period
commencing on a March 1, the aggregate increase during such
period shall not be in excess of 10%. Any increase by the
Custodian shall be specified in a written notice delivered to
the Fund at least thirty days prior to the effective date of the
increase. The Custodian may charge such compensation and any
expenses incurred by the Custodian in the performance of its
duties pursuant to such
agreement against any money held by it for the account of the
Fund. The Custodian shall also be entitled to charge against
any money held by it for the account of the Fund the amount of
any loss, damage, liability or expense, including counsel fees,
for which it shall be entitled to reimbursement under the
provisions of this Agreement. The expenses which the Custodian
may charge against the account of the Fund include, but are not
limited to, the expenses of Sub-Custodians and foreign branches
of the Custodian incurred in settling outside of New York City
transactions involving the purchase and sale of Securities of
the Fund.
(b) The Fund shall receive a credit for each
calendar month against such compensation and fees of the
Custodian as may be payable by the Fund with respect to such
calendar month in an amount equal to the aggregate of its
Earnings Credit for such calendar month. In no event may any
Earnings Credits be carried forward to any fiscal year other
than the fiscal year in which it was earned, or, unless
permitted by applicable law, transferred to, or utilized by, any
other person or entity, provided that any such transferred
Earnings Credit can be used only to offset compensation and fees
of the Custodian for services
rendered to such transferee and cannot be used to pay the
Custodian's out-of-pocket expenses. For purposes of this sub-
section (b), the Fund is permitted to transfer Earnings Credits
only to The Dreyfus Corporation, its affiliates and/or any
investment company now or in the future sponsored by The Dreyfus
Corporation or any of its affiliates or for which The Dreyfus
Corporation or any of its affiliates acts as the sole investment
adviser or as the principal distributor. For purposes of this
sub-section (b), a fiscal year shall mean the twelve-month
period commencing on the effective date of this Agreement and on
each anniversary thereof.
10. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by
the Custodian and reasonably believed by the Custodian to be a
Certificate. The Custodian shall be entitled to rely upon any
Oral Instructions and any Written Instructions actually received
by the Custodian pursuant to Article IV or XI hereof. The Fund
agrees to forward to the Custodian a Certificate or facsimile
thereof, confirming such Oral Instructions or Written
Instructions in such manner so that such Certificate or
facsimile thereof is received by the Custodian, whether by hand
delivery, telex or otherwise, by the close of business of the
same day that such Oral Instructions or Written Instructions are
given to the Custodian.
The Fund agrees that the fact that such confirming instructions
are not received by the Custodian shall in no way affect the
validity of the transactions or enforceability of the
transactions hereby authorized by the Fund. The Fund agrees
that the Custodian
shall incur no liability to the Fund in acting upon Oral
Instructions given to the Custodian hereunder concerning such
transactions, provided such instructions reasonably appear to
have been received from an Authorized Person.
11. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian and
reasonably believed by the Custodian to be given in accordance
with the terms and conditions of any Margin Account Agreement.
Without limiting the generality of the foregoing, the Custodian
shall be under no duty to inquire into, and shall not be liable
for, the accuracy of any statements or representations contained
in any such instrument or other notice including, without
limitation, any specification of any amount to be paid to a
broker, dealer, futures commission merchant or Clearing Member.
12. The books and records pertaining to the Fund which
are in the possession of the Custodian shall be the property of
the Fund. Such books and records shall be prepared and
maintained as required by the Investment Company Act of 1940, as
amended, and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized
representatives, shall have access
to such books and records during the Custodian's normal business
hours. Upon the reasonable request of the Fund, copies of any
such books and records shall be provided by the Custodian to the
Fund or the Fund's authorized representative at the Fund's
expense.
13. The Custodian shall provide the Fund with any
report obtained by the Custodian on the system of internal
accounting control of the Book-Entry System or the Depository,
or O.C.C., and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from time
to time.
14. The Fund agrees to indemnify the Custodian against
and save the Custodian harmless from all liability, claims,
losses and demands whatsoever, including attorney's fees,
howsoever arising or incurred because of or in connection with
the Custodian's payment or non-payment of checks pursuant to
paragraph 6 of Article XII as part of any check redemption
privilege program of the Fund, except for any such liability,
claim, loss and demand arising out of the Custodian's own
negligence or willful misconduct.
15. Subject to the foregoing provisions of this
Agreement, the Custodian may deliver and receive Securities, and
receipts with respect to such Securities, and arrange for
payments to be made and received by the Custodian in accordance
with the customs prevailing from time to time among brokers or
dealers in such Securities.
16. The Custodian shall have no duties or responsi-
bilities whatsoever except such duties and responsibilities as
are specifically set forth in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the
Custodian.
ARTICLE XVI
TERMINATION
1. (a) Any termination may be effected only by the
terminating party giving to the other party a notice in writing
specifying the date of such termination, which shall be not less
than two hundred seventy (270) days after the date of giving of
such notice.
(b) The Fund may at any time terminate this
Agreement if the Custodian has materially breached its
obligations
under this Agreement and such breach has remained uncured for a
period of thirty days after the Custodian's receipt from the
Fund of written notice specifying such breach.
(c) Either party, immediately upon written notice
to the other party, may terminate this Agreement upon the Merger
or Bankruptcy of the other party.
(d) The Fund may at any time terminate this
Agreement if the Custodian has materially breached its
obligations under the "Amendment to Transfer Agency Agreements"
dated August 18, 1989 and has not cured such breach as promptly
as practicable
and in any event within seven days of its receipt of written
notice of such breach, provided that the Custodian shall not be
permitted to cure any such material breach arising from the
willful misconduct of the Custodian.
In the event notice of termination is given by the Fund,
it shall be accompanied by a copy of a resolution of the
Directors of the Fund, certified by the Secretary or any
Assistant Secretary, electing to terminate this Agreement and
designating a
successor custodian or custodians, each of which shall be a bank
or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. In the event notice of
termination is given by the Custodian, the Fund shall, on or
before the termination date, deliver to the Custodian a copy of
a resolution of its Directors, certified by the Secretary or any
Assistant Secretary, designating a successor custodian or
custodians. In the absence of such designation by the Fund, the
Custodian may designate a successor custodian which shall be a
bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. Upon the date set forth
in such notice, this Agreement shall terminate and the Custodian
shall, upon receipt of a notice of acceptance by the successor
custodian, on that date deliver directly to the successor
custodian all Securities and moneys then owned by the Fund and
held by it as Custodian, after deducting all fees, expenses and
other amounts for the payment or reimbursement of which it shall
then be entitled.
2. If a successor custodian is not designated by the
Fund or the Custodian in accordance with the preceding
paragraph,
the Fund shall, upon the date specified in the notice of
termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and
moneys then owned by the Fund, be deemed to be its own
custodian,
and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty
with respect to Securities held in the Book-Entry System, in any
Depository or by a Clearing Member which cannot be delivered to
the Fund, to hold such Securities hereunder in accordance with
this Agreement.
ARTICLE XVII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate
setting forth the names of the present Authorized Persons. The
Fund agrees to furnish to the Custodian a new Certificate in
similar form in the event that any such present Authorized
Person
ceases to be an Authorized Person or in the event that other or
additional Authorized Persons are elected or appointed. Until
such new Certificate shall be received, the Custodian shall be
fully protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the present Authorized
Persons as set forth in the last delivered Certificate.
2. Annexed hereto as Appendix B is a Certificate signed
by two of the present Officers of the Fund setting forth the
names
of the present Officers of the Fund. The Fund agrees to furnish
to the Custodian a new Certificate in similar form in the event
any such present Officer ceases to be an Officer of the Fund, or
in the event that other or additional Officers are elected or
appointed. Until such new Certificate shall be received, the
Custodian shall be fully protected in acting under the
provisions of this Agreement upon the signatures of the Officers
as set forth in the last delivered Certificate.
3. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the
Custodian, shall be sufficiently given if addressed to the
Custodian and mailed or delivered to it at its offices at 110
Washington Street, 13th Floor, New York, New York 10286, or at
such other place as the Custodian may from time to time
designate in writing.
4. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the
Fund, shall be sufficiently given if addressed to the Fund and
mailed or
delivered to it at its offices at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or at such other place as the
Fund may from time to time designate in writing.
5. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties
with the same formality as this Agreement and approved by a
resolution of the Board of Directors of the Fund.
6. This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent of
the Fund, authorized or approved by a resolution of its Board of
Directors.
7. This Agreement shall be construed in accordance with
the laws of the State of New York.
8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers, thereunto
duly authorized, as of the day and year first above written.
DREYFUS LIFETIME PORTFOLIOS, INC.
By:______________________
Attest:
THE BANK OF NEW YORK
By: ___________________
Attest:
Appendix A
DREYFUS LIFETIME PORTFOLIOS, INC.
AUTHORIZED SIGNATORIES:
CASH ACCOUNT AND/OR CUSTODIAN ACCOUNT
FOR PORTFOLIO SECURITIES TRANSACTIONS
Group I Group II
Frank Greene, Phyllis Paul R. Casti, Jr. Thomas J. Durante
Meiner, Paul R. Casti, Jr., Jeffrey N. Nachman James M. Windels
Thomas J. Durante Jean Philip Toia Paul T. Molloy
Farley, Gregory S. Gruber, Lawrence Kash Jean Farley
Paul T. Molloy, Jeffrey N. Joseph I. Connolly
Nachman, James M. Windels, Gregory S. Gruber
Anna Mancini and Mary
Kate Macchia
Cash Account
1. Fees payable to The Bank of New York pursuant to written
agreement with the Fund for services rendered in its
capacity as Custodian or agent of the Fund, or to The
Shareholder Services Group, Inc. in its capacity as Transfer
Agent or agent of the Fund:
Two (2) signatures required, one of which must be from
Group II, except that an officer of the Fund who also
is listed in Group II shall sign only once.
2. Other expenses of the Fund, $5,000 and under:
Any combination of two (2) signatures from either
Group I or Group II, or both such Groups, except that an
officer of the Fund who also is listed in Group II
shall sign only once.
3. Other expenses of the Fund, over $5,000 but not over
$25,000:
Two (2) signatures required, one of which must be from
Group II, except that an officer of the Fund who also
is listed in Group II shall sign only once.
4. Other expenses of the Fund, over $25,000:
Two (2) signatures required, one from Group I or Group
II, including any one of the following: Paul R.
Casti, Jr., James M. Windels, Jeffrey N. Nachman, Joseph I.
Connolly or Philip Toia, except that no individual shall
be authorized to sign more than once.
Custodian Account for Portfolio Securities Transactions
Two (2) signatures required from any of the following:
Joseph I. Connolly, Philip Toia, Paul R. Casti,
Jr., Thomas J. Durante, Jean Farley, Gregory S.
Gruber, Paul T. Molloy, Jeffrey N. Nachman,
James M. Windels, Mary Kate Macchia, Robert
Salviolo, Katya Jiminez, Paul Goerke, Christine
O'Hara and Anna Mancini.
DREYFUS LIFETIME PORTFOLIOS, INC.
CUSTODY AGREEMENT
APPENDIX B
The undersigned Officers of the Fund do hereby certify
that the following individuals, whose specimen signatures are on
file with The Bank of New York, have been duly elected or
appointed by the Fund's Board to the position set forth opposite
their names and have qualified therefor:
Name Position
Marie E. Connolly President and Treasurer
John E. Pelletier Vice President and Secretary
Frederick C. Dey Vice President and Assistant
Treasurer
Eric B. Fischman Vice President and Assistant
Secretary
Joseph S. Tower, III Assistant Treasurer
John J. Pyburn Assistant Treasurer
Elizabeth Bachman Assistant Secretary
Steven A. Falci Portfolio Manager
___________________ ____________________
Eric B. Fischman, Elizabeth Bachman,
Vice President Assistant Secretary
<PAGE>
CUSTODY AGREEMENT
APPENDIX C
The following are designated publications for purposes
of paragraph 5(b) of Article III:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
The New York Times
Standard & Poor's Called Bond Record
The Wall Street Journal
<PAGE>
CUSTODY AGREEMENT
APPENDIX D
Name of Series
Growth
Income
Growth & Income
<PAGE>
Schedule A
The fees payable to the Custodian with respect to
securities held in domestic custody are annexed hereto.
<PAGE>
DREYFUS LIFETIME PORTFOLIOS, INC.
Domestic Custody Fees
Basic Fee: 1/100 of 1% per annum of the first $500,000,000,
and 1/200 of 1% of the excess over $500,000,000
per annum of the total market value of domestic
securities held.
Custodial Transactions:
$8.00 per transaction for each receipt and
delivery of book entry securities through DTC/FRB.
$20.00 per transaction for physical settlements,
municipal sub-custodian settlements, writing
options (preparation of depository or escrow
receipts) and initial futures transactions.
$5.00 for futures variation margin maintenance.
$7.00 for P&I paydowns.
$10.00 for GNMA PTC settlements.
$200.00 for the collection of interest on
securities held in "street name".
Schedule B
The fees payable to the Custodian with respect to
securities held in foreign custody are as set forth in a letter
dated January 13, 1995 from Jerome P. Isoldi of The Bank of New
York to Frederick C. Dey, a copy of which is attached hereto.
<PAGE>
Exhibit 12
February 26, 1996
Dreyfus LifeTime Portfolios, Inc.
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
Dreyfus Asset Allocation Fund, Inc.
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
Re: Registration Statement on Form N-14
(Registration No. 33- )
Gentlemen:
You have requested our opinion as to certain Federal income tax
consequences of the reorganization contemplated by the Agreement
and Plan of Reorganization, substantially in the form included
as
Exhibit A to the Registration Statement on Form N-14 of Dreyfus
LifeTime Portfolios, Inc. (Reg. No. 33-_____) (the "Registration
Statement"), between Dreyfus Asset Allocation Fund, Inc.
("DAAF"), on behalf of each of its Growth Series (the "Growth
Series") and Income Series (the "Income Series) (each, an
"Acquired Series"), and Dreyfus LifeTime Portfolios, Inc.
("DLPI"), on behalf of each of its Growth Portfolio (the "Growth
Portfolio") and Income Portfolio (the "Income Portfolio") (each,
an "Acquiring Fund"). You have advised us that each Acquired
Series and Acquiring Fund has qualified and will qualify as a
"regulated investment company" within the meaning of Subchapter
M
of Chapter 1 of the Internal Revenue Code of 1986, as amended
(the "Code"), for each of its taxable years ending on or before
or including the Closing Date.
In rendering this opinion, we have examined the Agreement and
Plan of Reorganization, the Registration Statement, the Articles
of Incorporation of DLPI dated July 15, 1993, as amended on
March
10, 1995 and April 24, 1995, the Articles of Incorporation of
DAAF dated May 11, 1993, the Prospectus and Statement of
Additional Information of each of DLPI and DAAF, incorporated by
reference in the Registration Statement, and such other
documents
as we have deemed necessary or relevant for the purpose of this
opinion. In issuing our opinion, we have relied upon the
representation of DAAF that its Articles of Incorporation is the
document pursuant to which it has operated to date and that it
has operated in accordance with all laws applicable to such
entity and the statements and representations made herein and in
the Registration Statement. We also have relied upon the
representation of DLPI that its Articles of Incorporation, as
amended, is the document pursuant to which it has operated to
date and will operate following the reorganization and that it
has operated and will operate following the reorganization in
accordance with all laws applicable to such entity and the
statements and representations made herein and in the
Registration Statement. As to various questions of fact
material
to this opinion, where relevant facts were not independently
established by us, we have relied upon statements of, and
written
information provided by, representatives of DLPI and DAAF. We
also have examined such matters of law as we have deemed
necessary or appropriate for the purpose of this opinion. We
note that our opinion is based on our examination of such law,
our review of the documents described above, the statements and
representations referred to above and in the Registration
Statement and the Agreement and Plan of Reorganization, the
provisions of the Code, the regulations, published rulings and
announcements thereunder, and the judicial interpretations
thereof currently in effect. Any change in applicable law or
any
of the facts and circumstances described in the Registration
Statement, or inaccuracy of any statements or representations on
which we have relied, may affect the continuing validity of our
opinion.
Capitalized terms not defined herein have the respective
meanings given such terms in the Agreement and Plan of
Reorganization.
Based on the foregoing, it is our opinion that for Federal
income tax purposes:
(a) The transfer of all or substantially all of an
Acquired
Series' assets in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of certain identified
liabilities of the Acquired Series will constitute a
"reorganization" within the meaning of Section 368(a)(1)(C) of
the Code;
(b) No gain or loss will be recognized by the Acquiring
Fund upon the receipt of the assets of an Acquired Series solely
in exchange for the Acquiring Fund Shares and the assumption by
the Acquiring Fund of certain identified liabilities of the
Acquired Series;
(c) No gain or loss will be recognized by an Acquired
Series upon the transfer of the Acquired Series' assets to the
Acquiring Fund in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of certain identified
liabilities of the Acquired Series or upon the distribution of
the Acquiring Fund Shares to Acquired Series Shareholders in
exchange for their shares of the Acquired Series;
(d) No gain or loss will be recognized by Acquired Series
Shareholders upon the exchange of their Acquired Series shares
for the Acquiring Fund Shares;
(e) The aggregate tax basis for the Acquiring Fund Shares
received by an Acquired Series Shareholder pursuant to the
reorganization will be the same as the aggregate tax basis of
the
Acquired Series shares held by such shareholder immediately
prior
to the reorganization, and the holding period of the Acquiring
Fund Shares to be received by the Acquired Series Shareholder
will include the period during which the Acquired Series shares
exchanged therefor were held by such shareholder (provided the
Acquired Series shares were held as capital assets on the date
of the reorganization); and
(f) The tax basis of an Acquired Series' assets acquired
by
the Acquiring Fund will be the same as the tax basis of such
assets to the Acquired Series immediately prior to the
reorganization, and the holding period of the assets of the
Acquired Series in the hands of the Acquiring Fund will include
the period during which those assets were held by the Acquired
Series.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us in the
Proxy Statement/Prospectus included in the Registration
Statement, and to the filing of this opinion as an exhibit to
any
Statement, and to the filing of this opinion as an exhibit to
any
application made by or on behalf of DLPI or any distributor or
dealer in connection with the registration and qualification of
DLPI or the Acquiring Fund Shares under the securities laws of
any state or jurisdiction. In giving such permission, we do not
admit hereby that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of
1933
or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
STROOCK & STROOCK & LAVAN
<PAGE>
EXHIBIT 14
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Financial Statements and Experts" in this Registration
Statement (Form N-14) of Dreyfus LifeTime Portfolios, Inc.
We also consent to the use of our reports dated November 8,
1995, June 2, 1995 and June 2, 1995 for Dreyfus LifeTime
Portfolios, Inc., Dreyfus Asset Allocation Fund, Inc., Dreyfus
Income Portfolio and Dreyfus
Asset Allocation Fund, Inc., Dreyfus Growth Portfolio,
respectively, and to the references to our firm under the
captions "Condensed Financial Information" and "Custodian,
Transfer and Dividend Disbursing Agent, Counsel and Independent
Auditors" included in the Registration Statements of Dreyfus
Lifetime Portfolios, Inc. dated January 15, 1996 and Dreyfus
Asset Allocation Fund, Inc. dated September 1, 1995 which are
incorporated by reference in this Registration Statement.
ERNST & YOUNG LLP
New York, New York
February 22, 1996
