File No. 33-66088
811-7878
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 7 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 7 [X]
(Check appropriate box or boxes.)
DREYFUS LIFETIME PORTFOLIOS, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b)
----
X on January 1, 1997 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its common
stock under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the
fiscal year ended September 30, 1996 was filed on November 27, 1996.
DREYFUS LIFETIME PORTFOLIOS, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 4
3 Condensed Financial Information 5, 6, 7
4 General Description of Registrant 22
5 Management of the Fund 11
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 22
7 Purchase of Securities Being Offered 12
8 Redemption or Repurchase 18
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-32
13 Investment Objectives and Policies B-2
14 Management of the Fund B-12
15 Control Persons and Principal B-16, 17
Holders of Securities
16 Investment Advisory and Other B-17
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS LIFETIME PORTFOLIOS, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-29
18 Capital Stock and Other Securities B-32
19 Purchase, Redemption and Pricing B-22
of Securities Being Offered
20 Tax Status *
21 Underwriters B-32
22 Calculations of Performance Data B-30
23 Financial Statements B-38
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-12
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
- ------------------------------------------------------------------------------
PROSPECTUS JANUARY 1, 1997
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 FOLLOWS 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 RETAIL SHARES AND
INSTITUTIONAL SHARES. RETAIL SHARES AND INSTITUTIONAL SHARES ARE IDENTICAL,
EXCEPT AS TO THE SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS.
RETAIL SHARES ARE OFFERED TO ANY INVESTOR. INSTITUTIONAL SHARES ARE OFFERED
ONLY TO INSTITUTIONAL INVESTORS. INSTITUTIONAL SHARES MAY NOT BE PURCHASED
DIRECTLY BY INDIVIDUALS, ALTHOUGH INSTITUTIONS MAY PURCHASE SHARES FOR
ACCOUNTS MAINTAINED BY INDIVIDUALS.
INVESTORS CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT
CHARGE OR PENALTY. YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING
DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION SERVES AS EACH PORTFOLIO'S INVESTMENT
ADVISER. THE DREYFUS CORPORATION HAS ENGAGED ITS AFFILIATE, 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 1, 1997, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. 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.
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[This Page Intentionally Left Blank]
Page 2
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses.......................................... 4
Condensed Financial Information......................................... 5
Description of the Fund................................................. 8
Management of the Fund.................................................. 12
How to Buy Shares....................................................... 14
Shareholder Services.................................................... 16
How to Redeem Shares.................................................... 20
Shareholder Services Plan............................................... 22
Dividends, Distributions and Taxes...................................... 22
Performance Information................................................. 24
General Information..................................................... 24
Appendix................................................................ 26
Page 3
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
INCOME GROWTH AND INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
----------------------- ------------------------ -----------------------
Retail Institutional Retail Institutional Retail Institutional
Shares Shares Shares Shares Shares Shares
-------- ------------ -------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Management Fees.................. .60% .60% .75% .75% .75% .75%
Other Expenses................... .61% .86% .39% .64% .53% .78%
Total Portfolio Operating
Expenses......................... 1.21% 1.46% 1.14% 1.39% 1.28% 1.53%
</TABLE>
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C> <C> <C>
1 Year ............. $12 $15 $12 $14 $13 $16
3 Years ............ $38 $46 $36 $44 $41 $48
5 Years ............ $66 $80 $63 $76 $70 $83
10 Years ............ $147 $175 $139 $167 $155 $182
</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. The information in the foregoing table
does not reflect any fee waivers or expense reimbursement arrangements that
may be in effect. Certain Service Agents (as defined below) may charge their
clients direct fees for effecting transactions in Fund shares; such fees are
not reflected in the foregoing table. See "Management of the Fund," "How to
Buy Shares" and "Shareholder Services Plan."
Page 4
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 each year
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
-----------------------------------------------------
FISCAL YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
RETAIL SHARES INSTITUTIONAL SHARES
-------------------- ---------------------
PER SHARE DATA: 1995(1) 1996(2) 1995(1) 1996(2)
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of year.............................. $12.50 $14.84 $12.50 $14.82
------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net ......................................... .21 .28 .19 .32
Net realized and unrealized gain on investments................. 2.13 2.48 2.13 2.42
------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS................................ 2.34 2.76 2.32 2.74
------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income--net........................... _ (.31) _ (.28)
Dividends from net realized gain
on investments.................................................. _ (.70) _ (.70)
------- ------- ------- -------
TOTAL DISTRIBUTIONS............................................. _ (1.01) _ (.98)
------- ------- ------- -------
Net asset value, end of year.................................... $14.84 $16.59 $14.82 $16.58
======= ======= ======= =======
TOTAL INVESTMENT RETURN........................................... 18.72%(3) 19.73% 18.56%(3) 19.58%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......................... .38% .75% .51%(3) 1.00%
Ratio of net investment income to average net assets............ 1.51%(3) 2.38% 1.39%(3) 2.08%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation......................... .26%(3) .53% .26%(3) .53%
Portfolio Turnover Rate......................................... 52.86%(3) 77.83% 52.86%(3) 77.83%
Average commission rate paid(4)............................. _ $.0519 _ $.0519
Net Assets, end of year (000's omitted)......................... $11,898 $28,143 $11,939 $14,458
(1) From March 31, 1995 (commencement of operations) to September 30, 1995.
(2) Effective July 15, 1996, Class R shares were redesignated as Retail shares and Investor Class shares were redesignated
as Institutional shares.
(3) Not annualized.
(4) For fiscal years beginning on or after October 1, 1995, the Portfolio is required to disclose its average commission
rate paid per share for purchases and sales of investment securities.
</TABLE>
Page 5
<TABLE>
GROWTH AND INCOME PORTFOLIO
-----------------------------------------------------
FISCAL YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
RETAIL SHARES INSTITUTIONAL SHARES
-------------------- ---------------------
PER SHARE DATA: 1995(1) 1996(2) 1995(1) 1996(2)
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of year.............................. $12.50 $14.31 $12.50 $14.29
------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net ......................................... .27 .33 .27 .90(3)
Net realized and unrealized gain on investments................. 1.54 1.60 1.52 1.12(3)
------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS................................ 1.81 1.93 1.79 2.02(3)
------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income--net........................... _ (.42) _ (.40)
Dividends from net realized gain
on investments.................................................. _ (.48) _ (.48)
------- ------- ------- -------
TOTAL DISTRIBUTIONS............................................. _ (.90) _ (.88)
------- ------- ------- -------
Net asset value, end of year.................................... $14.31 $15.34 $14.29 $15.43
======= ======= ======= =======
TOTAL INVESTMENT RETURN........................................... 14.48%(4) 14.17% 14.32%(4) 14.84%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......................... .38%(4) .75% .51%(4) 1.00%
Ratio of net investment income to average net assets............ 2.10%(4) 3.60% 1.98%(4) 3.35%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation......................... .33% .39% .33%(4) .39%
Portfolio Turnover Rate......................................... 33.55%(4) 122.56%(2) 33.55%(4) 122.56%(2)
Average commission rate paid(5)................................. _ $.0480 _ $.0480
Net Assets, end of year (000's omitted)......................... $9,248 $124,677 $8,602 $160
(1) From March 31, 1995 (commencement of operations) to September 30, 1995.
(2) Effective July 15, 1996, Class R shares were redesignated as Retail shares and Investor Class shares were redesignated
as Institutional shares.
(3) Based on average shares outstanding.
(4) Not annualized.
(5) For fiscal years beginning on or after October 1, 1995, the Portfolio is required to disclose its average commission
rate paid per share for purchases and sales of investment securities.
</TABLE>
Page 6
<TABLE>
<CAPTION>
INCOME PORTFOLIO
-------------------------------------------------
FISCAL YEAR ENDED SEPTEMBER 30,
-------------------------------------------------
RETAIL SHARES INSTITUTIONAL SHARES
-------------------- ---------------------
PER SHARE DATA: 1995(1) 1996(2) 1995(1) 1996(2)
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of year.............................. $12.50 $13.52 $12.50 $13.51
------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net ......................................... .40 .64 .39 .73
Net realized and unrealized gain on investments................. .62 .31 .62 .18
------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS................................ 1.02 .95 1.01 .91
------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income_net............................ _ (.62) _ (.60)
Dividends from net realized gain
on investments.................................................. _ (.43) _ (.43)
------- ------- ------- -------
TOTAL DISTRIBUTIONS............................................. _ (1.05) _ (1.03)
------- ------- ------- -------
Net asset value, end of year.................................... $13.52 $13.42 $13.51 $13.39
======= ======= ======= =======
TOTAL INVESTMENT RETURN........................................... 8.24%(3) 7.30% 8.08%(3) 7.07%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......................... .30%(3) .60% .43%(3) .85%
Ratio of net investment income to average net assets............ 3.08%(3) 5.75% 2.95%(3) 5.50%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation......................... .26% .61% .26%(3) .61%
Portfolio Turnover Rate......................................... 5.66%(3) 32.95% 5.66%(3) 32.95%
Net Assets, end of year (000's omitted)....................... $8,141 $12,899 $8,122 $8,701
(1) From March 31, 1995 (commencement of operations) to September 30, 1995.
(2) Effective July 15, 1996, Class R shares were redesignated as Retail shares and Investor Class shares were redesignated
as Institutional shares.
(3) Not annualized.
</TABLE>
Further information about each Portfolio's performance 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 of this
Prospectus.
Page 7
DESCRIPTION OF THE FUND
GENERAL
By this Prospectus, two classes of shares of each Portfolio are being
offered--Institutional shares and Retail shares (each such class being
referred to as a "Class"). The Classes are identical, except that
Institutional shares are subject to an annual service fee as described under
"Shareholder Services Plan." The shareholder services fees paid by the
Institutional shares will cause such Class to have a higher expense ratio and
to pay lower dividends than Retail shares.
Institutional shares may not be purchased directly by individuals,
although institutions may purchase Institutional 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 Institutional shares, to the extent required by law. The Fund
treats the institution investing in Institutional 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 allocates 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).
Page 8
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 500Registration Mark
and Growth Index ("S&P 500 Index")*
Domestic Small Cap Equity Growth and Income and Growth Russell 2000Registration Mark 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 Ratings Group, 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.
Page 9
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 September 30, 1996,
approximately 46.9% of the S&P 500 Index was composed of the 50 largest
companies.
The Russell 2000Registration Mark 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 September 30, 1996.
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 September 30, 1996,
approximately 37.5% 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 September 30, 1996, 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
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. For a discussion of the investment
techniques and their related risks, see "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 -- Because each Portfolio will have at 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
Page 10
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, (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, seizure or
nationalization of foreign deposits or adoption of governmental restrictions
which might adversely affect the payment of principal, interest and dividends
on the foreign securities or 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.
USE OF DERIVATIVES -- Each Portfolio may invest in derivatives
("Derivatives"). These are financial instruments which derive their
performance, at least in part, from the performance of an underlying
Page 11
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.
SIMULTANEOUS INVESTMENTS -- Investment decisions for each Portfolio are made
independently from those of other investment companies or accounts advised by
the Advisers. If, however, such other investment companies or accounts desire
to invest in, or dispose of, the same securities as a Portfolio, available
investments or opportunities for sales will be allocated equitably to each.
In some cases, this procedure may adversely affect the size of the position
obtained for or disposed of by the Portfolio or the price paid or received by
the Portfolio.
MANAGEMENT OF THE FUND
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 November 30, 1996, The Dreyfus Corporation
managed or administered approximately $81 billion in assets for approximately
1.7 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 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 and, thus, an
affiliate of The Dreyfus Corporation. As of September 30, 1996, Mellon
Equity managed approximately $10.4 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
Page 12
a number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$226 billion in assets as of September 30, 1996, including approximately $85
billion in proprietary mutual fund assets. As of September 30, 1996, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $905 billion in assets,
including approximately $60 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 .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. For the fiscal year ended September 30,
1996, no management fee was paid by the Income Portfolio to The Dreyfus
Corporation pursuant to undertakings by The Dreyfus Corporation. For the
fiscal year ended September 30, 1996, the Growth and Income Portfolio paid
The Dreyfus Corporation a monthly management fee at the effective annual rate
of .36 of 1% of the value of the Growth and Income Portfolio's average daily
net assets pursuant to undertakings by The Dreyfus Corporation. For the
fiscal year ended September 30, 1996, the Growth Portfolio paid The Dreyfus
Corporation a monthly management fee at the effective annual rate of .22 of
1% of the value of the Growth Portfolio's average daily net assets pursuant
to undertakings by The Dreyfus Corporation.
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. For the fiscal year
ended September 30, 1996, Dreyfus paid Mellon Equity a monthly fee at the
annual rate of .35 of 1% of the Fund's average daily net assets with respect
to each Portfolio.
In allocating brokerage transactions for the Portfolios, the Advisers
seek to obtain the best execution of orders at the most favorable net price.
Subject to this determination, the Advisers may consider, among other things,
the receipt of research services and/or the sale of shares of a Portfolio or
other funds managed, advised or administered by The Dreyfus Corporation as
factors in the selection of broker-dealers to execute portfolio transactions
for the Portfolios. See "Portfolio Transactions" in the Statement of
Additional Information.
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
in respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). Mellon Bank, N.A. located at One
Mellon Bank Center, Pittsburgh, Pennsylvania 15258, serves as the Fund's
custodian.
Page 13
HOW TO BUY 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 Fund shares may charge their clients direct fees in
connection with such transactions.
Retail shares are offered to any investor. Institutional shares are
offered only to institutional investors, such as Service Agents that have
entered into a Selling Agreement with the Distributor. Institutional shares
may not be purchased directly by individuals, although institutions may
purchase Institutional shares for accounts maintained by individuals.
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 maintains an omnibus
account in the Fund and 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 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. Shares
also are offered without regard to the minimum initial investment
requirements through Dreyfus-AUTOMATIC Asset BuilderRegistration Mark,
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.
Investors may purchase Fund 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 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
Page 14
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 #8900251786 Dreyfus LifeTime Portfolios, Inc./Income Portfolio
DDA #8900118253 Dreyfus LifeTime Portfolios, Inc./Growth and Income Portfolio
DDA #8900251794 Dreyfus LifeTime Portfolios, Inc./Growth Portfolio.
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 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."
Management understands that some Service Agents and other
institutions may charge their clients fees in connection with purchases for
the accounts of their clients. These fees would be in addition to any amounts
which might be received under the Shareholder Services Plan. Service Agents
may receive different levels of compensation for selling different Classes of
shares. Investors should consult their Service Agents in this regard.
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,
Page 15
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.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in the Dreyfus
Family of Funds or certain other products made available by the Distributor
to such plans or programs exceeds $1,000,000 ("Eligible Benefit Plans").
Shares of funds in the Dreyfus Family of Funds then held by Eligible Benefit
Plans will be aggregated to determine the fee payable. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Federal regulations require that investors provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the 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
An investor may purchase shares (minimum $500, maximum $150,000 per
day) by telephone if he 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. 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, the
investor may request a Dreyfus TELETRANSFER purchase of shares by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES
An investor may purchase, in exchange for 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.
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
Page 16
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, by a separate signed Shareholder Services Form,
available by calling 1-800-645-6561, or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. If an
investor has established the Telephone Exchange Privilege, the investor may
telephone exchange instructions (including over The Dreyfus TouchRegistration
Mark automated telephone system) by calling 1-800-645-6561, or, if calling
from overseas, 516-794-5452. See "How to Redeem 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 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 administrative fee in accordance
with rules promulgated by the Securities and Exchange Commission. The Fund
reserves the right to reject any exchange request in whole or in part. The
availability of Fund Exchanges may be modified or terminated at any time upon
notice to shareholders. See "Dividends, Distributions and Taxes."
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 certain other funds in the Dreyfus Family of Funds of
which such shareholder is a shareholder. 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.
Page 17
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. See "Dividends, Distributions and Taxes."
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. 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
Page 18
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 Portfolio
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset BuilderRegistration Mark, 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 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 shares of
certain other funds in the Dreyfus Family of Funds of which the shareholder
is 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 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, IRAs or other retirement plans 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. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. 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.
Page 19
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; or for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM 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.
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
BUILDERRegistration Mark 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, the Dreyfus
TELETRANSFER Privilege. Other redemption procedures may be in effect for
clients of certain Service Agents and institutions. The
Page 20
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. Shares held under Keogh
Plans, IRAs or other retirement plans, and shares for which certificates have
been issued, are not eligible for the Wire Redemption, Telephone Redemption or
Dreyfus TELETRANSFER Privilege.
Investors may redeem Portfolio shares by telephone if they have
checked the appropriate box on the 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 (including
over The Dreyfus TouchRegistration Mark automated telephone system) 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
Page 21
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.
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.
DREYFUS TELETRANSFER PRIVILEGE -- 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 calling
1-800-645-6561 or, if calling from overseas, 516-794-5452.
SHAREHOLDER SERVICES PLAN
(INSTITUTIONAL SHARES ONLY)
The Fund has adopted a Shareholder Services Plan, pursuant to which
each Portfolio pays the Distributor for the provision of certain services to
holders of its Institutional shares a fee at an annual rate of .25 of 1% of
the value of the average daily net assets of the Portfolio's Institutional
shares. The services provided may include 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 Internal Revenue Code of 1986, as amended (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. 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 Institutional shares or Retail shares will be borne exclusively by such
Class. Institutional shares will receive lower per
Page 22
share dividends than Retail shares because of the higher expenses borne by the
Institutional shares. See "Annual Fund Operating Expenses."
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 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 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. 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 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.
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.
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 a taxable gain or loss.
With respect to individual investors and certain non-qualified
Retirement Plans, Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be realized,
paid to a shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that each Portfolio has qualified for
the fiscal year ended September 30, 1996 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
qualifi-
Page 23
cation 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
Institutional shares should be expected to be lower than that of Retail
shares. 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 2000Registration Mark
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_Institutional shares and
Retail shares. Each share has one vote and shareholders will vote in the
aggregate and not by class except as otherwise required by law. However,
Page 24
only holders of Institutional 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 Board members or
the appointment of auditors. However, pursuant to the Fund's By-Laws, the
holders of at least 10% of the shares outstanding and entitled to vote may
require the Fund to hold a special meeting of shareholders for purposes of
removing a Board member from office and for any other purpose. Fund
shareholders may remove a Board member by the affirmative vote of a majority
of the Fund's outstanding voting shares. In addition, the Fund's Board will
call a meeting of shareholders for the purpose of electing Board members if,
at any time, less than a majority of the Board members then holding office
have been elected by shareholders.
The 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.
Page 25
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; 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.
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.
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 its 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 -- The Portfolios may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations and
Risks -- Use of Derivatives." These instruments and certain related risks are
described more specifically under "Investments Objectives and Management
Policies _ Derivatives" in the Statement of Additional Information.
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 or
decrease the level of risk, or change the character of the risk, to which its
portfolio is exposed in much the same way as the Portfolio can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
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 if its Derivatives were poorly correlated with its other investments,
or if the Portfolio were
Page 26
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 and unpredictable changes in the
prices for 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 assets, 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.
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. The Portfolio continues
to be entitled to payments in amounts equal to the interest or other
distributions payable on the loaned securities which affords the Portfolio an
opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed 331\3%
of the value of the Portfolio's total assets, and 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 receivable on a forward commitment
or when-issued security are fixed when the Portfolio enters into the
commitment, but the Portfolio does not make payment until it receives
delivery from the counterparty. The Portfolio will commit 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
permissible liquid assets at least equal at all times to the amount of the
commitments will be established and maintained at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
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
Page 27
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, a security at a mutually agreed upon
time and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a default
or insolvency of the other party to the agreement, including possible delays
or restrictions upon the 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. See "Description
of the Fund -- Investment Considerations and Risks -- Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time 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
Page 28
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 total
assets with respect to any one investment company and (iii) 10% of the
Portfolio's total 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.
Page 29
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Page 30
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Page 31
LifeTime
Portfolios, Inc.
Prospectus
Registration Mark
Copy Rights 1997 Dreyfus Service Corporation
DRPp010197
Page 32
DREYFUS LIFETIME PORTFOLIOS, INC.
INCOME PORTFOLIO
GROWTH AND INCOME PORTFOLIO
GROWTH PORTFOLIO
RETAIL SHARES AND INSTITUTIONAL SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 1, 1997
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 1,
1997, as it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, 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 its affiliate, 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 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . B-20
Shareholder Services Plan. . . . . . . . . . . . . . . . . . . . . . . . B-21
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . B-22
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . B-26
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . B-27
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . B-29
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . . B-30
Information About the Fund . . . . . . . . . . . . . . . . . . . . . . . B-31
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors . . . . . . . . . . . . . . . . . . . B-32
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-33
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . B-38
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . B-69
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%
</TABLE>
__________
* Not held as an asset class. Money market instruments held for
transactional and liquidity purposes only.
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>
Asset Class Portfolios Asset Class Benchmark
- ----------- ---------- ---------------------
<S> <C> <C>
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(R) 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 being 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) These securities may be purchased through
"sponsored" or "unsponsored" facilities. A sponsored facility is
established jointly by the issuer of the underlying security and a
depositary, whereas a depositary may establish an unsponsored facility
without participation by the issuer of the deposited security. Holders of
unsponsored depositary receipts generally bear all the costs of such
facilities and the depositary of an unsponsored facility frequently is under
no obligation to distribute shareholder communications received from the
issuer of the deposited security or to pass through voting rights to the
holders of such receipts in respect of the deposited securities.
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 or
decrease the level of risk, or change the character of the risk, to which
its portfolio is exposed in much the same way as the Portfolio can increase
or decrease the level of risk, or change the character of 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.,
variation 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
permissible liquid assets 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, or at a specific date.
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 premiums,
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
Board members and officers of the Fund, together with information as
to their principal business occupations during at least the last five years,
are shown below. Each Board member who is deemed to be an "interested
person" of the Fund, as defined in the 1940 Act, is indicated by an
asterisk.
Board Members of the Fund
LUCY WILSON BENSON, Board Member. 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 69 years old and her address is 46 Sunset
Avenue, Amherst, Massachusetts 01002.
*DAVID W. BURKE, Board Member. Chairman of the Broadcasting Board of
Governors, an independent board within the United States Information
Agency, since August 1995. From August 1994 to December 1994, Mr.
Burke was Consultant to Dreyfus, and from October 1990 to August 1994,
he was Vice President and Chief Administrative Officer of Dreyfus.
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 60 years old and his address is Box 654, Eastham, Massachusetts
02642.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. He is
Chairman of the Board of the Noel Group, Inc., a venture capital
company; 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, Inc., a national
distributor of security products, chemicals and automotive and other
hardware, and Staffing Resources, Inc. For more than five years prior
to January 1995, he was President, a director and, until August 1994,
Chief Operating Officer of Dreyfus and Executive Vice President and a
director of Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus and, until August 24, 1994, the Fund's distributor. From
August 1994 until December 31, 1994, he was a director of Mellon Bank
Corporation. He is 53 years old and his address is c/o Noel Group,
Inc., 667 Madison Avenue, 25th Floor, New York, New York 10022.
MARTIN D. FIFE, Board member. Chairman of the Board of Magar Inc., a
company specializing in financial products and developing early stage
companies, since November 1987. Mr. Fife is also Chairman of the
Board and Chief Executive Officer of Skysat Communications Network
Corporation, a company developing telecommunications systems. From
1960 to 1994, Mr. Fife was President of Fife Associates, Inc. and
other companies engaged in the chemical and plastics industries. He
also serves on the boards of various other companies. He is 69 years
old and his address is The Chrysler Building, 405 Lexington Avenue,
New York, New York 10174.
WHITNEY I. GERARD, Board Member. Partner of the New York City law firm of
Chadbourne & Parke. Mr. Gerard is 62 years old and his address is 30
Rockefeller Plaza, New York, New York 10112.
ROBERT R. GLAUBER, Board Member. 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 a director of Mid Ocean Reinsurance Co.
Ltd and Cooke and Bieler, Inc., investment counselors. He is 57 years
old and his address is 79 John F. Kennedy Street, Cambridge,
Massachusetts 02138.
ARTHUR A. HARTMAN, Board Member. Senior consultant with APCO Associates
Inc. From 1981 to 1987, he was United States Ambassador to the former
Soviet Union. He is a director of the Hartford Insurance Group, and a
member of the advisory councils of several other companies, research
institutes and foundations. He is Chairman of First NIS Regional
Funds (ING/Barings Management) and former President of the Harvard
Board of Overseers. He is 70 years old and his address is 2738
McKinley Street, N.W., Washington, D.C. 20015.
GEORGE L. PERRY, Board Member. An economist and Senior Fellow at the
Brookings Institution since 1969. He is co-director of the Brookings
Panel on Economic Activity and editor of its journal, The Brookings
Papers. He is also a director of the State Farm Mutual Automobile
Association and State Farm Life Insurance Company. He is 62 years old
and his address is 1775 Massachusetts Avenue, N.W., Washington, D.C.
20015.
PAUL WOLFOWITZ, Board Member. Dean of The Paul H. Nitze School of Advanced
International Studies at Johns Hopkins University. From 1989 to 1993,
he was 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 of the Department of State. He is 51 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 aggregate amount of
compensation payable by the Fund to each Board member for the fiscal year
ended September 30, 1996, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total compensation) for the
year ended December 31, 1995, were as follows:
Total Compensation
Aggregate from Fund and
Name of Board Compensation from Fund Complex Paid
Member Fund* to Board Members
Lucy Wilson Benson $2,250 $ 72,003 (14)
David W. Burke $2,250 $253,654 (52)
Joseph S. DiMartino $2,813 $448,618 (93)
Martin D. Fife $2,250 $ 59,253 (12)
Whitney I. Gerard $2,250 $ 59,503 (12)
Robert R. Glauber $2,250 $ 97,503 (20)
Arthur A. Hartman $2,250 $ 59,503 (12)
George L. Perry $2,250 $ 59,503 (12)
Paul Wolfowitz $2,000 $ 49,503 (11)
______________________________
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $672 for all Board members as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, and Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by Dreyfus. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. 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 39 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by Dreyfus. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc.
From August 1990 to February 1992, he was employed as an Associate at
Ropes & Gray. He is 32 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor
and an officer of other investment companies advised or administered
by Dreyfus. From July 1988 to August 1994, he was employed by The
Boston Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by Dreyfus. From March 1994 to November 1995,
he was Vice President and Division Manager for First Data Investor
Services Group. From 1989 to 1994, he was Vice President, Assistant
Treasurer and Tax Director - Mutual Funds of The Boston Company, Inc.
He is 40 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor and an officer of other investment
companies advised or administered by Dreyfus. She is 27 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Service and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by Dreyfus. From September 1989 to July 1994, she was an
Assistant Vice President and Client Manager for The Boston Company,
Inc. She is 32 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by
Dreyfus. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank and Trust Company. From December 1991
to March 1993, he was employed as a Fund Accountant at The Boston
Company, Inc. He is 27 years old.
MARK A. KARPE, Vice President and Assistant Treasurer. Senior Paralegal of
the Distributor and an officer of other investment companies advised
or administered by Dreyfus. Prior to September 1993, Mr. Karpe was
employed as an Associate Examiner in the Enforcement Department of the
National Association of Securities Dealers, Inc. He is 27 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
The Fund's Board members and officers, as a group, owned less than 1%
of the shares of each Portfolio outstanding on December 2, 1996.
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 as of December 2, 1996: Growth and
Income Portfolio, Institutional shares -- Stephen J. Vavra & Alda Jean Vavra
TTEES Stephen J. Vavra Family Trust, DTD 1/20/94, 16800 33rd Ave. S, Seatac
WA 98188-3131 - 34.8350%; MBC Investments Corporation, ATTN: Michael
Botsford, 4500 New Linden Hill Rd., Wilmington, DE 19808-2922 - 14.8739%;
Carol A. Coppinger & Matthew R. Coppinger Jt. Ten., 835 Handwerg Dr., River
Vale, NJ 07675-6456 - 11.1732%; Dreyfus Trust Co. CUST. FBO G. Edwin Boss
under IRA Plan, 879 Delaware Ave., Akron, OH 44303-1326 - 10.0556%; Growth
and Income Portfolio, Retail shares -- MAC & Co. A/C MLCF8548712 Mutual Fund
Operations, P.O. Box 3198, Pittsburgh, PA 15230-3198 - 51.9912%; MAC Co. A/C
MIDF959902 Mutual Fund Operations, P.O. Box 3198, Pittsburgh, PA 15230-3198 -
28.2217%; Foodmaker Savings Investment Trust Investment Account, 1 Cabot
Road., Medford, MA 02155-5158 - 6.8967%; Income Portfolio, Institutional
shares -- Allomon Corporation, C/O Mellon Bank, ATTN: John Gaynord, 1 Mellon
Bank Center 151-657, Pittsburgh, PA 15258 - 99.7453%; Income Portfolio,
Retail shares - APT Holdings Corporation, ATTN: Michael Botsford, 4500 New
Linden Hill Road, Wilmington, DE 19808-2922 - 63.0018%; MBC Investments
Corporation, ATTN: Michael Botsford, 4500 New Linden Hill Rd., Wilmington,
DE 19808-2922 - 9.7011%; MAC & Co. A/C MLCF8548702 Mutual Fund Operations,
P.O. Box 3198 Pittsburgh, PA 15230-3198 - 6.6904%; Growth Portfolio,
Institutional shares -- APT Holdings Corporation, ATTN: Michael Botsford,
4500 New Linden Hill Road, Wilmington, DE 19808-2922 - 97.9225%; Growth
Portfolio, Retail shares -- APT Holdings Corporation, ATTN: Michael
Botsford, 4500 New Linden Hill Road Wilmington, DE 19808-2922 - 45.6672%;
MAC & Co. A/C MLCF8548722 Mutual Fund Operations P.O. Box 3198 Pittsburgh,
PA 15258 - 19.7456%; Dreyfus Trust Co. TTEE AGRA Employee Investment Savings
Pl ATTN: Trust Officer, 144 Glenn Curtiss Blvd., Uniondale, NY 11556 -
6.1763%; Mac & Co. A/C FX SF1959682, Mutual Fund Operations, P.O. Box 3198,
Pittsburgh, PA 15230-3198 - 5.9191%
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 such 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. The
Management Agreement was last approved by the Board, including a majority of
the Board members who are not "interested persons" of any party to the
Agreement, at a meeting held on November 7, 1996. 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 Dreyfus: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman--Distribution and a director; Philip L. Toia, Vice
Chairman--Operations and Administration and a director; William T. Sandalls,
Jr., Senior Vice President and Chief Financial Officer; William F. Glavin,
Jr., Vice President--Corporate Development; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President--
Corporate Communications; Mary Beth Leibig, Vice President--Human Resources;
Jeffrey N. Nachman, Vice President--Mutual Fund Accounting; Andrew S.
Wasser, Vice President--Information Services; 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. The Sub-Advisory
Agreement was last approved by the Board, including a majority of the Board
members who are not "interested persons" of any party to the Sub-Advisory
Agreement, at a meeting held on November 7, 1996. 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 Institutional shares are subject
to an annual service fee. 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 .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 and for the fiscal year ended
September 30, 1996, the management fees payable by each Portfolio, the
amounts waived by Dreyfus and the net fees paid to Dreyfus were as follows:
Management Fee Reduction Net Fees
Payable In Fee Paid by Portfolio
Portfolio 1995 1996 1995 1996 1995 1996
Income Portfolio $47,599 $106,953 $41,157 $106,953 $6,442 0
Growth Portfolio $82,882 $222,888 $56,446 $156,678 $20,436 $ 66,210
Growth and
Income Portfolio $61,635 $363,726 $53,875 $186,888 $7,760 $176,838
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 March 31, 1995 (commencement of operations)
through September 30, 1995 and for the fiscal year ended September 30, 1996,
the sub-investment advisory fee payable by Dreyfus was as follows:
Sub-Investment Advisory
Portfolio Fee Payable by Dreyfus
1995 1996
Income Portfolio $27,766 $ 62,430
Growth Portfolio $38,678 $104,256
Growth and
Income Portfolio $28,763 $169,780
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 SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
The Distributor. The Distributor serves as the Fund's distributor on
a best efforts basis pursuant to an agreement 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,
certain financial institutions effecting transactions in Portfolio shares
may be required to register as dealers pursuant to state law.
Dreyfus TeleTransfer Privilege. 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 shares must be drawn on, and redemption
proceeds paid to, the same bank and account as are designated on the Account
Application or Shareholder Services Form on file. If the proceeds of a
particular redemption are to be wired to an account at any other bank, the
request must be in writing and signature-guaranteed. See "Redemption of
Shares--Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
SHAREHOLDER SERVICES PLAN
(INSTITUTIONAL SHARES 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 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 material amendments of the Plan must
be approved by 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. As to each Portfolio, the Shareholder Services
Plan is subject to annual approval by such vote of the Board members cast in
person at a meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan was last so approved at a
meeting held on November 7, 1996. 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.
For the fiscal year ended September 30, 1996, the amounts charged each
Portfolio pursuant to the Shareholder Services Plan were as follows:
Amount charged Pursuant
Portfolio to the Plan
Income Portfolio $21,007
Growth Portfolio $33,196
Growth and Income Portfolio $16,550
REDEMPTION OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Shares."
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
Shares--Dreyfus TeleTransfer Privilege--Investor Class."
Redemption Commitment. The Fund has committed 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 (which may include non-marketable securities) or
other assets in case of an emergency or any time a cash distribution would
impair the liquidity of the 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 (including over The
Dreyfus Touch(R) automated telephone system) 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.
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 certain other
funds in the Dreyfus Family of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value as 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. 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 automatically 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 certain other funds in the Dreyfus
Family of Funds of which the investor is a shareholder. Shares of other
funds purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with
a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("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
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 Institutional shares, 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, 1996 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 institu-
tions 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 period March 31, 1995 (commencement of operations) through
September 30, 1995 and for the fiscal year ended September 30, 1996, each
Portfolio paid total brokerage commissions, none of which was paid to the
Distributor, as follows:
Portfolio Brokerage Commissions Paid
1995 1996
Income Portfolio $410 $ 1,070
Growth Portfolio $32,428 $48,621
Growth and Income Portfolio $16,001 $69,824
The concessions paid by the Fund during such periods for the Growth
Portfolio and Growth and Income Portfolio were $13,246 and $7,620,
respectively.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
The total return and average annual total return for each Portfolio
for the indicated period ended September 30, 1996 were as follows:
<TABLE>
<CAPTION>
Average Annual Average Annual
Aggregate Total Return Total Return Since Total Return for
Portfolio Since March 31, 1995* March 31, 1995* One-Year Period
Retail Institutional Retail Institutional Retail Institutional
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Income Portfolio 16.15% 15.73% 10.49% 10.22% 7.30% 7.07%
Growth Portfolio 42.14% 41.77% 26.40% 26.18% 19.73% 19.58%
Growth and Income
Portfolio 30.70% 31.28% 19.53% 19.88% 14.17% 14.84%
______________________
* Commencement of operations.
</TABLE>
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, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and dividend
disbursing agent. Under a transfer agency agreement with the Fund, the Transfer
Agent arranges for the maintenance of shareholder account records for the Fund,
the handling of certain communications between shareholders and the Fund and the
payment of dividends and distributions payable by the Fund. For these services,
the Transfer Agent receives a monthly fee computed on the basis of the number of
shareholder accounts it maintains for the Fund during the month, and is
reimbursed for certain out-of-pocket expenses. For the period December 1, 1995
(effective date of transfer agency agreement) through September 30, 1996, the
Fund paid the Transfer Agent $484 with respect to the Income Portfolio, $949
with respect to the Growth portfolio and $819 with respect to the Growth and
Income Portfolio.
Mellon Bank, N.A. (the "Custodian"), Dreyfus' parent, One Mellon Bank
Center, Pittsburgh, Pennsylvania 15258, serves as the Fund's custodian.
Under a custody agreement with the Fund, the Custodian holds each
Portfolio's securities and keeps all necessary accounts and records. For
its custody services, the Custodian receives a monthly fee based on the
market value of each Portfolio's assets held in custody and receives certain
securities transactions charges. For the period May 3, 1996 (effective date
of custody agreement) through September 30, 1996 the Fund paid the Custodian
$2,209, $1,342 and $0 with respect to the Income Portfolio, Growth and
Income Portfolio and Growth Portfolio, respectively.
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
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 ("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, 1996
PRINCIPAL
BONDS AND NOTES-66.7% AMOUNT VALUE
___________ ___________
<S> <C> <C>
U.S. GOVERNMENT SECURITIES: U.S. Treasury Bonds;
10.75%, 8/15/2005.................... $ 600,000 $ 759,281
___________
U.S. Treasury Notes:
7.50%, 1/31/1997..................... 615,000 619,228
5.625%, 1/31/1998.................... 2,550,000 2,539,242
5.875%, 4/30/1998.................... 375,000 374,238
5.875%, 8/15/1998.................... 1,000,000 995,938
5.125%, 11/30/1998................... 550,000 538,742
8.875%, 2/15/1999.................... 225,000 238,113
6%, 8/15/1999........................ 800,000 794,500
7.125%, 9/30/1999.................... 1,000,000 1,022,813
8.75%, 8/15/2000..................... 1,300,000 1,403,391
7.75%, 2/15/2001..................... 500,000 524,844
8%, 5/15/2001........................ 1,150,000 1,220,437
7.875%, 8/15/2001.................... 300,000 317,203
7.50%, 11/15/2001.................... 180,000 187,847
6.25%, 2/15/2003..................... 700,000 689,063
7.875%, 11/15/2004................... 110,000 118,250
7.50%, 2/15/2005..................... 1,450,000 1,526,125
6.50%, 5/15/2005..................... 325,000 321,293
6.875%, 5/15/2006.................... 200,000 202,313
___________
13,633,580
___________
TOTAL BONDS AND NOTES
(cost $ 14,532,834).................. $14,392,861
============
SHORT-TERM INVESTMENTS- 32.9%
U.S. TREASURY BILLS: 5.09%, 10/3/1996....................... $ 497,000 $ 496,866
5.08%, 10/10/1996...................... 140,000 139,832
5.13%, 10/17/1996...................... 160,000 159,653
5.06%, 11/7/1996....................... 3,024,000 3,008,698
5.04%, 11/14/1996...................... 1,750,000 1,739,465
5.04%, 11/21/1996...................... (a) 727,000 721,940
5.09%, 12/12/1996...................... 849,000 840,578
___________
TOTAL SHORT-TERM INVESTMENTS
(cost $ 7,105,982)................... $ 7,107,032
============
TOTAL INVESTMENTS (cost $ 21,638,816)....................................... 99.6% $21,499,893
======== ============
CASH AND RECEIVABLES (NET).................................................. .4% $90,248
======== ============
NET ASSETS.................................................................. 100.0% $21,590,141
======== ============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Partially held by the custodian in a segregated account as
collateral for open futures positions.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Income Portfolio (continued)
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1996
MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
FINANCIAL FUTURES PURCHASED; CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/96
_____________ ______________ ____________ ____________
<S> <C> <C> <C> <C>
Standard & Poor's 500........................ 14 $4,839,800 December `96 $16,660
===========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth and Income Portfolio
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1996
COMMON STOCKS-46.6% SHARES VALUE
__________ ___________
<S> <C> <C>
BASIC INDUSTRIES-2.9%. Champion International................. 5,100 $ 233,963
Dow Chemical........................... 3,800 304,950
duPont (E.I.) de Nemours & Co.......... 6,600 582,450
Georgia-Pacific........................ 3,000 237,375
International Paper.................... 12,200 518,500
Morton International................... 8,500 337,875
Olin................................... 1,400 117,600
Owens-Illinois......................... (a) 10,200 178,500
PPG Industries......................... 6,600 358,875
Praxair................................ 4,800 206,400
Sherwin-Williams....................... 3,100 143,762
Union Carbide.......................... 6,000 273,750
Willamette Industries.................. 1,000 65,500
___________
3,559,500
___________
CAPITAL SPENDING-10.3% 3COM................................... (a) 7,400 444,463
Applied Materials...................... (a) 6,800 187,850
COMPAQ Computer........................ (a) 7,200 461,700
Cabletron Systems...................... (a) 4,000 273,500
Case................................... 9,000 438,750
Caterpillar............................ 9,500 716,062
cisco Systems.......................... (a) 14,700 912,319
Computer Associates International...... 5,200 310,700
General Electric....................... 11,300 1,028,300
General Motors, Cl. H.................. 3,500 202,125
HBO & Co............................... 4,200 280,350
Harnischfeger Industries............... 6,800 256,700
Harsco................................. 900 56,700
HealthCare COMPARE..................... (a) 4,900 232,138
Illinois Tool Works.................... 5,300 382,263
Intel.................................. 11,000 1,049,813
LSI Logic.............................. (a) 11,500 267,375
Lockheed Martin........................ 5,700 513,713
McDonnell Douglas...................... 6,200 325,500
Microsoft.............................. (a) 10,700 1,411,063
Newbridge Networks..................... (a) 8,200 522,750
Oracle................................. (a) 15,500 659,719
Pitney Bowes........................... 4,000 210,500
Raytheon............................... 10,100 561,813
Rockwell International................. 5,400 304,425
Tellabs................................ (a) 2,400 169,500
Xerox.................................. 11,600 622,050
___________
12,802,141
___________
DREYFUS LIFETIME PORTFOLIOS, INC.,
Growth and Income Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
CONSUMER CYCLICAL-6.2% Black & Decker......................... 3,500 $ 145,250
Brunswick.............................. 7,200 172,800
Chrysler............................... 14,500 415,063
Dayton Hudson.......................... 17,200 567,600
Eckerd................................. (a) 10,400 291,200
Federated Department Stores............ (a) 12,600 422,100
Gannett................................ 2,100 147,788
Gap.................................... 21,300 615,038
General Motors......................... 14,000 672,000
Goodyear Tire & Rubber................. 2,200 101,475
King World Productions................. (a) 5,300 195,438
Leggett & Platt........................ 5,100 149,813
Magna International, Cl. A............. 2,700 130,275
McDonald's............................. 8,500 402,687
Mirage Resorts......................... (a) 6,900 176,813
NIKE, Cl. B............................ 4,900 595,350
New York Times, Cl. A.................. 12,300 415,125
OfficeMax.............................. (a) 5,700 79,800
Safeway................................ (a) 19,100 814,138
Sara Lee............................... 9,000 321,750
Sears, Roebuck & Co.................... 5,500 246,125
TJX Companies.......................... 13,700 491,487
V.F. Corp.............................. 2,400 144,300
Waban.................................. (a) 2,300 52,612
___________
7,766,027
___________
CONSUMER STAPLES-5.9% Avon Products.......................... 13,000 645,125
Campbell Soup.......................... 3,000 234,000
Clorox................................. 1,600 153,400
Coca-Cola.............................. 33,000 1,678,875
Coca-Cola Enterprises.................. 4,300 194,575
Eastman Kodak.......................... 6,000 471,000
Gillette............................... 8,600 620,275
Hershey Foods.......................... 8,200 412,050
IBP.................................... 16,800 390,600
Johnson & Johnson...................... 25,800 1,322,250
Philip Morris Cos...................... 9,800 879,550
Ralston-Ralston Purina Group........... 5,200 356,200
___________
7,357,900
___________
ENERGY-4.4% Amoco.................................. 3,200 225,600
British Petroleum, A.D.S............... 4,600 575,000
Chevron................................ 12,000 751,500
DREYFUS LIFETIME PORTFOLIOS, INC.,
Growth and Income Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
ENERGY (CONTINUED) Coastal................................ 8,600 $ 354,750
Consolidated Natural Gas............... 4,800 257,400
Exxon.................................. 10,500 874,125
PanEnergy.............................. 4,800 166,200
Phillips Petroleum..................... 12,800 547,200
Texaco................................. 7,000 644,000
Transocean Offshore.................... 4,600 281,750
USX-Marathon Group..................... 7,700 166,512
Unocal................................. 13,300 478,800
Williams Cos........................... 4,200 214,200
___________
5,537,037
___________
HEALTH CARE-4.4% Abbott Laboratories.................... 11,900 586,075
Amgen.................................. (a) 10,000 631,250
Becton, Dickinson & Co................. 14,800 654,900
Bristol-Myers Squibb................... 4,700 452,962
Columbia/HCA Healthcare................ 8,927 507,723
Medtronic.............................. 6,200 397,575
Merck & Co............................. 16,300 1,147,112
Pfizer................................. 7,600 601,350
Schering-Plough........................ 9,000 553,500
___________
5,532,447
___________
INTEREST SENSITIVE-6.6% Allstate............................... 11,700 576,225
American National Insurance............ 2,000 136,000
AmSouth Bancorp........................ 3,500 155,750
BankAmerica............................ 12,500 1,026,562
Bear Stearns Cos....................... 14,700 341,775
CIGNA.................................. 4,300 515,462
Chase Manhattan........................ 4,900 392,612
Citicorp............................... 6,000 543,750
Comerica............................... 13,800 710,700
Conseco................................ 6,100 300,425
Dean Witter, Discover & Co............. 3,400 187,000
EXEL................................... 13,600 472,600
First Chicago NBD...................... 10,000 452,500
Green Tree Financial................... 9,000 353,250
Loews.................................. 3,200 247,600
Morgan (J.P.) & Co..................... 2,400 213,300
NationsBank............................ 3,900 338,812
Oxford Health Plans.................... (a) 3,000 149,250
Republic New York...................... 2,500 172,812
DREYFUS LIFETIME PORTFOLIOS, INC.,
Growth and Income Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
INTEREST SENSITIVE
(CONTINUED) Standard Federal Bancorporation........ 2,600 $ 118,950
Student Loan Marketing Association..... 6,000 447,750
Travelers Group........................ 7,900 388,087
___________
8,241,172
___________
MINING & METALS-.7% ASARCO................................. 6,600 175,725
Aluminum Co. of America................ 3,000 177,000
Nucor.................................. 2,500 126,875
Phelps Dodge........................... 3,000 192,375
USX-U.S. Steel......................... 6,300 179,550
___________
851,525
___________
TRANSPORTATION-.8% CSX.................................... 10,850 547,925
Carnival, Cl. A........................ 4,900 151,900
Delta Air Lines........................ 1,600 115,200
Illinois Central, Ser. A............... 6,200 196,075
___________
1,011,100
___________
UTILITIES-4.4% AT&T................................... 8,400 438,900
Ameritech.............................. 15,800 831,475
BellSouth.............................. 15,200 562,400
Consolidated Edison.................... 13,500 374,625
DQE.................................... 6,700 186,762
Entergy................................ 23,200 626,400
Frontier............................... 10,100 268,912
GPU.................................... 12,000 369,000
MCI Communications..................... 21,600 553,500
Pacific Gas & Electric................. 8,500 184,875
Pinnacle West Capital.................. 5,000 148,125
SBC Communications..................... 12,800 616,000
WorldCom............................... (a) 17,500 374,062
___________
5,535,036
___________
TOTAL COMMON STOCKS
(cost $55,791,614)................... $58,193,885
===========
PRINCIPAL
NOTES AND BONDS-33.1% AMOUNT
_________
BASIC INDUSTRIES-0.5% duPont (E.I.) de Nemours & Co., Deb.,
8.50%, 2/15/2001..................... $ 250,000 $ 265,646
International Paper, Notes,
7%, 6/1/2001......................... 300,000 301,493
___________
567,139
___________
DREYFUS LIFETIME PORTFOLIOS, INC.,
Growth and Income Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
PRINCIPAL
NOTES AND BONDS (CONTINUED) AMOUNT VALUE
_______ _______
CAPITAL SPENDING-.8% WMX Technologies, Notes,
6.375%, 12/1/2003.................... $ 1,000,000 $ 963,203
___________
CONSUMER CYCLICAL-1.1% General Motors, Notes,
7.10%, 3/15/2006..................... 350,000 344,313
Penney (J.C.), Deb.,
9.05%, 3/1/2001...................... 1,000,000 1,081,915
___________
1,426,228
___________
HEALTH CARE-.8% American Home Products, Notes,
7.70%, 2/15/2000..................... 1,000,000 1,031,509
___________
INTEREST SENSITIVE-4.8% American General, Notes,
7.75%, 4/1/2005...................... 500,000 514,888
Associated N.A., Sr. Notes,
6%, 6/15/2000........................ 1,000,000 976,177
Avco Financial, Sr. Notes,
5.50%, 5/1/1998...................... 330,000 326,245
BankAmerica, Sub. Notes,
7.875%, 12/1/2002.................... 1,000,000 1,041,849
Citicorp, Sub. Notes,
6.375%, 1/15/2006.................... 250,000 233,534
Dean Witter, Discover & Co., Notes,
6.30%, 1/15/2006..................... 250,000 231,737
Ford Motor Credit, Notes:
5.75%, 1/25/2001..................... 250,000 240,052
7.75%,11/15/2002..................... 450,000 465,354
Norwest Financial, Sr. Notes,
7.875%, 2/15/2002.................... 1,000,000 1,044,116
Province of Ontario, Bonds,
7%, 8/4/2005......................... 200,000 198,950
Santander Finance, Gtd. Sub. Notes,
7.25%, 5/30/2006..................... 400,000 394,630
Wells Fargo,Sub. Notes,
8.375%, 5/15/2002.................... 250,000 265,807
___________
5,933,339
___________
U.S. GOVERNMENT &
AGENCIES-25.1% Federal National Mortgage Association
8.50%, 2/1/2000...................... 500,000 520,793
U.S. Treasury Bonds
10.75%, 8/15/2005.................... 500,000 632,734
DREYFUS LIFETIME PORTFOLIOS, INC.,
Growth and Income Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
PRINCIPAL
NOTES AND BONDS (CONTINUED) AMOUNT VALUE
_______ _______
U.S. GOVERNMENT &
AGENCIES (CONTINUED) U.S. Treasury Notes:
5.75%, 10/31/1997.................... $ 800,000 $ 799,375
7.375%, 11/15/1997................... 1,300,000 1,320,719
5.625%, 1/31/1998.................... 1,150,000 1,145,149
7.25%, 2/15/1998..................... 1,000,000 1,016,250
5.875%, 4/30/1998.................... 240,000 239,513
5.875, 8/15/1998..................... 6,800,000 6,772,375
5.125%, 11/30/1998................... 350,000 342,836
8.875%, 2/15/1999.................... 4,200,000 4,444,781
6.875%, 8/31/1999.................... 2,000,000 2,031,250
7.125%, 9/30/1999.................... 500,000 511,406
7.75%, 1/31/2000..................... 650,000 677,117
6.25%, 5/31/2000..................... 2,000,000 1,991,875
8.75%, 8/15/2000..................... 300,000 323,859
8%, 5/15/2001........................ 1,175,000 1,246,969
6.625%, 7/31/2001.................... 1,800,000 1,810,406
7.50%, 11/15/2001.................... 100,000 104,359
6.25%, 2/15/2003..................... 2,500,000 2,460,938
5.75%, 8/15/2003..................... 130,000 124,028
7.875%, 11/15/2004................... 60,000 64,500
7.50%, 2/15/2005..................... 400,000 421,000
6.50%, 5/15/2005..................... 1,400,000 1,384,031
6.875%, 5/15/2006.................... 1,000,000 1,011,563
___________
31,397,826
___________
TOTAL NOTES & BONDS
(cost $41,454,963)................... $ 41,319,244
=============
SHORT-TERM INVESTMENTS-12.7%
U.S. TREASURY BILLS: 5.08%, 10/10/1996...................... $ 78,000 $ 77,906
5.14%, 10/17/1996...................... (b) 2,455,000 2,449,673
5%, 11/07/1996......................... 101,000 100,489
5.01%, 11/14/1996...................... 96,000 95,422
4.99%, 11/21/1996...................... 11,264,000 11,185,603
5.01%, 11/29/1996...................... 337,000 334,277
5.10%, 12/05/1996...................... 299,000 296,315
5.08%, 12/12/1996...................... 1,327,000 1,313,836
___________
TOTAL SHORT-TERM INVESTMENTS
(cost $15,851,547)................... $ 15,853,521
=============
DREYFUS LIFETIME PORTFOLIOS, INC.,
Growth and Income Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
TOTAL INVESTMENTS (cost $113,098,124)....................................... 92.4% $115,366,650
======= =============
CASH AND RECEIVABLES (NET).................................................. 7.6% $ 9,469,723
======= =============
NET ASSETS.................................................................. 100.0% $124,836,373
======= =============
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.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.,
Growth and Income Portfolio (continued)
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1996
UNREALIZED
MARKET VALUE APPRECIATION
NUMBER OF COVERED (DEPRECIATION)
FINANCIAL FUTURES PURCHASED: CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/96
_______ __________ _____________ ______________
<S> <C> <C> <C> <C>
CAC 40....................................... 6 $ 499,109 December `96 $ 14,574
Deutsche Akteinindex......................... 5 882,315 December `96 22,860
Financial Times 100.......................... 10 1,552,245 December `96 6,711
Hang Seng.................................... 7 535,942 October `96 21,563
Nikkei 300 .................................. 97 2,681,685 December `96 95,808
Russell 2000................................. 88 15,268,000 December `96 22,020
Standard & Poor's 500........................ 6 2,074,200 December `96 (8,760)
__________
$174,776
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1996
COMMON STOCKS-67.8% SHARES VALUE
_________ _________
<S> <C> <C>
BASIC INDUSTRIES-4.2%. Champion International................. 2,500 $ 114,688
Dow Chemical........................... 1,900 152,475
duPont (E.I.) de Nemours & Co.......... 2,900 255,925
Georgia-Pacific........................ 1,500 118,688
International Paper.................... 6,000 255,000
Morton International................... 4,200 166,950
Olin................................... 1,100 92,400
Owens-Illinois......................... (a) 5,000 87,500
PPG Industries......................... 3,300 179,438
Praxair................................ 2,400 103,200
Sherwin-Williams....................... 1,600 74,200
Union Carbide.......................... 3,000 136,875
Willamette Industries.................. 500 32,750
__________
1,770,089
__________
CAPITAL SPENDING-15.0% 3COM................................... (a) 3,700 222,231
Applied Materials...................... (a) 3,400 93,925
COMPAQ Computer........................ (a) 3,600 230,850
Cabletron Systems...................... (a) 2,000 136,750
Case................................... 4,400 214,500
Caterpillar............................ 4,700 354,263
cisco Systems.......................... (a) 8,000 496,500
Computer Associates International...... 2,600 155,350
General Electric....................... 5,600 509,600
General Motors, Cl. H.................. 1,700 98,175
HBO & Co............................... 2,100 140,175
Harnischfeger Industries............... 3,400 128,350
Harsco................................. 400 25,200
HealthCare COMPARE..................... (a) 2,400 113,700
Illinois Tool Works.................... 2,600 187,525
Intel.................................. 5,400 515,363
LSI Logic.............................. (a) 5,700 132,525
Lockheed Martin........................ 2,800 252,350
McDonnell Douglas...................... 3,100 162,750
Microsoft.............................. (a) 5,300 698,938
Newbridge Networks..................... (a) 4,100 261,375
Oracle................................. (a) 7,700 327,731
Pitney Bowes........................... 2,000 105,250
Raytheon............................... 4,600 255,875
Rockwell International................. 2,700 152,213
Tellabs................................ (a) 1,300 91,812
Xerox.................................. 5,700 305,663
__________
6,368,939
__________
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
________ _______
CONSUMER CYCLICAL-9.0% Black & Decker......................... 1,700 $ 70,550
Brunswick.............................. 3,600 86,400
Chrysler............................... 7,200 206,100
Dayton Hudson.......................... 8,500 280,500
Eckerd................................. (a) 5,100 142,800
Federated Department Stores............ (a) 4,500 150,750
Gannett................................ 1,000 70,375
Gap.................................... 10,600 306,075
General Motors......................... 6,900 331,200
Goodyear Tire & Rubber................. 1,100 50,738
King World Productions................. (a) 2,600 95,875
Leggett & Platt........................ 2,500 73,438
Magna International, Cl. A............. 1,300 62,725
McDonald's............................. 4,200 198,975
Mirage Resorts......................... (a) 3,800 97,375
NIKE, Cl. B............................ 2,400 291,600
New York Times, Cl. A.................. 6,100 205,875
OfficeMax.............................. (a) 3,100 43,400
Safeway................................ (a) 9,500 404,938
Sara Lee............................... 4,500 160,875
Sears, Roebuck & Co.................... 3,900 174,525
TJX Companies.......................... 6,800 243,950
V.F. Corp.............................. 1,200 72,150
Waban.................................. (a) 1,100 25,163
__________
3,846,352
__________
CONSUMER STAPLES-8.5% Avon Products.......................... 6,400 317,600
Campbell Soup.......................... 1,500 117,000
Clorox................................. 800 76,700
Coca-Cola.............................. 16,300 829,263
Coca-Cola Enterprises.................. 3,100 140,275
Eastman Kodak.......................... 3,000 235,500
Gillette............................... 4,300 310,138
Hershey Foods.......................... 3,000 150,750
IBP.................................... 8,300 192,975
Johnson & Johnson...................... 12,800 656,000
Philip Morris Cos...................... 4,800 430,800
Ralston-Ralston Purina Group........... 2,600 178,100
__________
3,635,101
__________
ENERGY-6.4% Amoco.................................. 1,500 105,750
British Petroleum, A.D.S............... 2,300 287,500
Chevron................................ 5,900 369,487
Coastal................................ 4,300 177,375
Consolidated Natural Gas............... 2,400 128,700
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
________ ________
ENERGY (CONTINUED) Exxon.................................. 5,200 $ 432,900
PanEnergy.............................. 2,400 83,100
Phillips Petroleum..................... 6,300 269,325
Texaco................................. 3,500 322,000
Transocean Offshore.................... 2,300 140,875
USX-Marathon Group..................... 3,800 82,175
Unocal................................. 6,600 237,600
Williams Cos........................... 2,100 107,100
__________
2,743,887
__________
HEALTH CARE-6.4% Abbott Laboratories.................... 5,200 256,100
Amgen.................................. (a) 5,000 315,625
Becton, Dickinson & Co................. 7,300 323,025
Bristol-Myers Squibb................... 2,600 250,575
Columbia/HCA Healthcare................ 3,500 199,062
Guilford Pharmaceuticals............... 2,500 68,750
Medtronic.............................. 3,000 192,375
Merck & Co............................. 8,100 570,037
Pfizer................................. 3,800 300,675
Schering-Plough........................ 4,300 264,450
__________
2,740,674
__________
INTEREST SENSITIVE-9.8% Allstate............................... 5,800 285,650
American National Insurance............ 1,000 68,000
AmSouth Bancorp........................ 1,700 75,650
BankAmerica............................ 6,600 542,025
Bear Stearns Cos....................... 7,300 169,725
CIGNA.................................. 2,100 251,737
Chase Manhattan........................ 2,400 192,300
Citicorp............................... 3,000 271,875
Comerica............................... 6,800 350,200
Conseco................................ 3,000 147,750
Dean Witter, Discover & Co............. 1,700 93,500
EXEL................................... 6,800 236,300
First Chicago NBD...................... 5,000 226,250
Green Tree Financial................... 4,500 176,625
Loews.................................. 1,600 123,800
Morgan (J.P.) & Co..................... 1,700 151,087
NationsBank............................ 2,100 182,437
Oxford Health Plans.................... (a) 1,500 74,625
Republic New York...................... 1,200 82,950
Standard Federal Bancorporation........ 1,300 59,475
Student Loan Marketing Association..... 3,000 223,875
Travelers Group........................ 3,900 191,587
__________
4,177,423
__________
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
__________ __________
MINING & METALS-1.0% ASARCO................................. 3,300 $ 87,862
Aluminum Co. of America................ 1,500 88,500
Nucor.................................. 1,300 65,975
Phelps Dodge........................... 1,500 96,187
USX-U.S. Steel......................... 3,100 88,350
__________
426,874
__________
TRANSPORTATION-1.1% CSX.................................... 4,700 237,350
Carnival, Cl. A........................ 2,400 74,400
Delta Air Lines........................ 800 57,600
Illinois Central, Ser. A............... 3,100 98,037
__________
467,387
__________
UTILITIES-6.4% 360 Communications..................... 1 23
AT&T................................... 4,500 235,125
Ameritech.............................. 7,800 410,475
BellSouth.............................. 7,500 277,500
Consolidated Edison.................... 6,700 185,925
DQE.................................... 3,300 91,987
Entergy................................ 11,500 310,500
Frontier............................... 3,700 98,513
GPU.................................... 5,900 181,425
MCI Communications..................... 10,700 274,187
Pacific Gas & Electric................. 4,200 91,350
Pinnacle West Capital.................. 2,500 74,063
SBC Communications..................... 6,300 303,187
WorldCom............................... (a) 8,700 185,963
__________
2,720,223
__________
TOTAL COMMON STOCKS
(cost $24,946,342)................... $28,896,949
=============
PRINCIPAL
SHORT-TERM INVESTMENTS-47.1% AMOUNT
___________
U.S. TREASURY BILLS: 5.09%, 10/3/1996....................... $ 5,271,000 $ 5,269,577
5.09%, 10/10/1996...................... 375,000 374,550
5.14%, 10/17/1996...................... 393,000 392,147
5.05%, 11/7/1996....................... 3,217,000 3,200,722
5.04%, 11/14/1996...................... 2,669,000 2,652,932
5%, 11/21/1996......................... (b) 4,603,000 4,570,963
5.05%, 11/29/1996...................... 391,000 387,841
5.10%, 12/5/1996....................... 310,000 307,216
5.08%, 12/12/1996...................... 2,934,000 2,904,895
__________
TOTAL SHORT-TERM INVESTMENTS
(cost $20,058,693)................... $20,060,843
=============
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio (continued)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30,1996
TOTAL INVESTMENTS (cost $45,005,035)........................................ 114.9% $48,957,792
======= =============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (14.9%) $ (6,357,112)
======= =============
NET ASSETS.................................................................. 100.0% $42,600,680
======= =============
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.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio (continued)
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1996
MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
FINANCIAL FUTURES PURCHASED: CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/96
________ ____________ ___________ ______________
<S> <C> <C> <C> <C>
CAC 40...................................... 4 $ 332,714 December `96 $ 12,732
Deutsche Akteinindex........................ 3 530,256 December `96 17,219
Financial Times 100......................... 7 1,084,662 December `96 6,888
Hang Seng................................... 5 382,823 October `96 16,184
Nikkei 300.................................. 68 1,885,981 December `96 104,817
Russell 2000................................ 45 7,807,500 December `96 37,250
Standard & Poor's 500....................... 3 1,037,100 December `96 3,570
___________
$198,660
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996
INCOME GROWTH AND INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
_________ ____________ __________
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value
[cost-Note 5(b)]-see statement........................ $21,499,893 $115,366,650 $48,957,792
Cash.................................................... 91,017 156,308 120,146
Dividends and interest receivable....................... 174,780 650,494 36,231
Receivable for investment securities sold............... - 2,816,715 1,563,069
Receivable for shares of Common Stock subscribed........ - 40,759,027 -
Receivable for futures variation margin................. - 107,711 142,090
Prepaid expenses........................................ 41,669 55,243 29,817
Due from The Dreyfus Corporation and affiliates......... 25,890 - 25,687
_________ _________ __________
21,833,249 159,912,148 50,874,832
_________ _________ __________
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........... - 20,179 -
Due to Distributor...................................... 1,767 32 2,898
Payable for investment securities purchased............. 207,600 34,701,831 8,232,453
Payable for Common Stock redeemed....................... - 297,994 -
Accrued expenses and other liabilities.................. 33,741 55,739 38,801
_________ _________ __________
243,108 35,075,775 8,274,152
_________ _________ __________
NET ASSETS ...................................... $21,590,141 $124,836,373 $42,600,680
=========== ============= ============
REPRESENTED BY:
Paid-in capital......................................... $20,380,624 $118,499,756 $35,042,057
Accumulated undistributed investment income-net......... 743,394 1,548,756 509,145
Accumulated undistributed net realized gain on investments 588,386 2,344,559 2,898,061
Accumulated net unrealized appreciation (depreciation) on
investments and foreign currency transactions [including
$16,660, $174,776 and $198,660 net unrealized appreciation
on financial futures for the Income Portfolio, Growth and Income
Portfolio and Growth Portfolio, respectively]-Note 5(b) (122,263) 2,443,302 4,151,417
_________ _________ __________
NET ASSETS at value......................................... $21,590,141 $124,836,373 $42,600,680
=========== ============= ============
NET ASSET VALUE per share:
Retail Shares
50 million shares of $.001 par value shares authorized
($12,889,510 / 960,534 shares of Common Stock outstanding) $13.42
=======
50 million shares of $.001 par value shares authorized
($124,676,178 / 8,126,889 shares of Common Stock outstanding) $15.34
=======
50 million shares of $.001 par value shares authorized
($28,143,078 / 1,696,822 shares of Common Stock outstanding) $16.59
=======
Institutional Shares
50 million shares of $.001 par value shares authorized
($8,700,631 / 649,860 shares of Common Stock outstanding) $13.39
=======
50 million shares of $.001 par value shares authorized
($160,195 / 10,384 shares of Common Stock outstanding).. $15.43
=======
50 million shares of $.001 par value shares authorized
($14,457,602 / 872,223 shares of Common Stock outstanding) $16.58
=======
See notes to financial statements.
DREYFUS LIFETIME PORTFOLIOS, INC.
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1996
INCOME GROWTH AND INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
_________ ____________ __________
INVESTMENT INCOME:
INCOME:
Interest.............................................. $1,132,348 $1,655,460 $529,788
Cash dividends (net of $1,534 and $1,796 foreign taxes
withheld at source for the Growth and Income Portfolio
and the Growth Portfolio, respectively)........... - 455,834 393,908
_________ _________ __________
TOTAL INCOME.................................... 1,132,348 2,111,294 923,696
_________ _________ __________
EXPENSES-Note 2(d):
Management fee-Note 4(a).............................. $ 106,953 $ 363,726 $ 222,888
Legal fees............................................ 58,908 32,282 68,797
Shareholder servicing costs-Note 4(b)................. 27,422 27,024 42,735
Auditing fees......................................... 13,917 15,417 18,217
Registration fees..................................... 11,196 74,074 20,393
Director's fees and expenses-Note 4(c)................ 4,475 8,590 8,269
Prospectus and shareholders' reports.................. 4,236 6,340 8,526
Custodian fees-Note 4(b).............................. 3,140 22,679 21,270
Miscellaneous......................................... 7,639 18,054 2,379
_________ _________ __________
TOTAL EXPENSES.................................. 237,886 568,186 413,474
Less-expense reimbursement from Manager due to
undertakings-Note 4(a)............................ 109,255 186,888 156,678
_________ _________ __________
NET EXPENSES.................................... 128,631 381,298 256,796
_________ _________ __________
INVESTMENT INCOME-NET........................... 1,003,717 1,729,996 666,900
_________ _________ __________
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 5:
Net realized gain on investments........................ $ 86,502 $2,511,715 $2,270,496
Net realized gain (loss) on financial futures;
Long Transactions..................................... 665,740 (117,672) 684,758
_________ _________ __________
NET REALIZED GAIN..................................... 752,242 2,394,043 2,955,254
_________ _________ __________
Net unrealized appreciation (depreciation) on investments and
foreign currency transactions [including ($143,760), $140,116
and $176,685 net unrealized appreciation (depreciation) on
financial futures for the Income Portfolio, the Growth and
Income Portfolio and the Growth Portfolio, respectively].... (514,850) 1,137,447 1,810,027
_________ _________ __________
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS.............................. 237,392 3,531,490 4,765,281
_________ _________ __________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................................... $1,241,109 $5,261,486 $5,432,181
========== ========== ===========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Income Portfolio
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
_____________________________
1995(1) 1996(2)
___________ ___________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 474,272 $ 1,003,717
Net realized gain on investments........................................ 353,820 752,242
Net unrealized appreciation (depreciation) on investments for the year.. 392,587 (514,850)
______________ ____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 1,220,679 1,241,109
______________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Retail shares......................................................... - (373,549)
Institutional shares.................................................. - (360,792)
Net realized gain on investments:
Retail shares......................................................... - (259,074)
Institutional shares.................................................. - (258,568)
______________ ____________
TOTAL DIVIDENDS................................................... - (1,251,983)
______________ ____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Retail shares......................................................... 7,508,845 10,745,770
Proceeds from acquisition of Dreyfus Asset Allocation Fund, Inc.,
Dreyfus Income Portfolio-Note 1................................... - 2,175,198
Institutional shares.................................................. 7,504,669 8,402,990
Dividends reinvested:
Retail shares......................................................... - 632,623
Institutional shares.................................................. - 619,360
Cost of shares redeemed:
Retail shares......................................................... - (8,836,511)
Institutional shares.................................................. (4,658) (8,400,950)
______________ ____________
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............ 15,008,856 5,338,480
______________ ____________
TOTAL INCREASE IN NET ASSETS.................................... 16,229,535 5,327,606
NET ASSETS:
Beginning of year....................................................... 33,000 16,262,535
______________ ____________
End of year (including undistributed investment income-net:
$474,272 in 1995 and $744,137 in 1996)................................ $16,262,535 $21,590,141
============== =============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Income Portfolio
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
SHARES
_______________________________________________________________________
RETAIL CLASS INSTITUTIONAL CLASS
__________________________________ ______________________________
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
__________________________________ ______________________________
1995(1) 1996(2) 1995(1) 1996(2)
_____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 600,655 784,543 600,353 607,155
Shares issued in connection with acquisition of
Dreyfus Asset Allocation Fund, Inc., Dreyfus
Income Portfolio-Note 1.................... - 163,672 - -
Shares issued for dividends reinvested. - 49,308 - 48,312
Shares redeemed........................ - (638,964) (353) (606,927)
_____________ ____________ ____________ ____________
NET INCREASE IN SHARES OUTSTANDING 600,655 358,559 600,000 48,540
============= ============= =========== ==============
(1) From March 31, 1995 (commencement of operations) to September 30, 1995.
(2) Effective July 15, 1996, Class R shares were redesignated as
Retail shares and Investor Class shares were redesignated
as Institutional shares.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth and Income Portfolio
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
YEAR ENDED SEPTEMBER 30,
_______________________________
1995(1) 1996(2)
____________ ____________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 332,653 $ 1,729,996
Net realized gain on investments........................................ 545,329 2,394,043
Net unrealized appreciation on investments for the year................. 1,305,855 1,137,447
_____________ ____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 2,183,837 5,261,486
_____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Retail shares......................................................... - (272,975)
Institutional shares.................................................. - (240,918)
Net realized gain on investments:
Retail shares......................................................... - (308,722)
Institutional shares.................................................. - (286,091)
_____________ ____________
TOTAL DIVIDENDS................................................... - (1,108,706)
_____________ ____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Retail shares......................................................... 8,144,735 157,954,660
Institutional shares.................................................. 7,509,353 9,277,898
Dividends reinvested:
Retail shares......................................................... - 581,166
Institutional shares.................................................. - 527,010
Cost of shares redeemed:
Retail shares......................................................... (20,620) (46,831,889)
Institutional shares.................................................. (915) (18,675,642)
_____________ ____________
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............ 15,632,553 102,833,203
_____________ ____________
TOTAL INCREASE IN NET ASSETS.................................... 17,816,390 106,985,983
NET ASSETS:
Beginning of year....................................................... 34,000 17,850,390
_____________ ____________
End of year (including undistributed investment income-net:
$332,653 in 1995 and $1,548,756 in 1996).............................. $ 17,850,390 $124,836,373
============== =============
</TABLE>
<TABLE>
<CAPTION>
SHARES
______________________________________________________________________
RETAIL CLASS INSTITUTIONAL CLASS
_____________________________________ __________________________
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
_____________________________________ __________________________
1995(1) 1996(2) 1995(1) 1996(2)
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 646,375 10,597,594 600,654 629,738
Shares issued for dividends reinvested. - 42,205 - 38,272
Shares redeemed........................ (1,438) (3,159,207) (66) (1,259,574)
___________ ___________ ___________ ___________
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING............. 644,937 7,480,592 600,588 (591,564)
============ ============ ========== ============
(1) From March 31, 1995 (commencement of operations) to September 30, 1995.
(2) Effective July 15, 1996, Class R shares were redesignated
as Retail shares and Investor Class shares were redesignated
as Institutional shares.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
YEAR ENDED SEPTEMBER 30,
_______________________________
1995(1) 1996(2)
_____________ __________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 318,027 $ 666,900
Net realized gain on investments........................................ 1,074,382 2,955,254
Net unrealized appreciation on investments for the year................. 2,341,390 1,810,027
_____________ __________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 3,733,799 5,432,181
_____________ __________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Retail shares......................................................... - (249,191)
Institutional shares.................................................. - (226,359)
Net realized gain on investments:
Retail shares......................................................... - (562,690)
Institutional shares.................................................. - (565,898)
_____________ __________
TOTAL DIVIDENDS................................................... __ (1,604,138)
_____________ __________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Retail shares......................................................... 10,007,843 23,280,910
Proceeds from acquisition of Dreyfus Asset Allocation Fund, Inc.,
Dreyfus Growth Portfolio-Note 1................................... - 2,803,938
Institutional shares.................................................. 10,067,618 12,713,945
Dividends reinvested:
Retail shares......................................................... - 811,742
Institutional shares.................................................. - 792,257
Cost of shares redeemed:
Retail shares......................................................... - (12,912,596)
Institutional shares.................................................. (5,256) (12,554,563)
_____________ __________
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............ 20,070,205 14,935,633
_____________ __________
TOTAL INCREASE IN NET ASSETS.................................... 23,804,004 18,763,676
NET ASSETS:
Beginning of year....................................................... 33,000 23,837,004
_____________ __________
End of year (including undistributed investment income-net:
$318,027 in 1995 and $509,145 in 1996)................................ $ 23,837,004 $ 42,600,680
============== ============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
SHARES
______________________________________________________________________
RETAIL CLASS INSTITUTIONAL CLASS
_____________________________________ __________________________
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
_____________________________________ __________________________
1995(1) 1996(2) 1995(1) 1996(2)
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 800,540 1,500,411 804,636 828,585
Shares issued in connection with acquisition of
Dreyfus Asset Allocation Fund, Inc., Dreyfus
Growth Portfolio-Note 1.................... - 175,795 - -
Shares issued for dividends reinvested. - 57,044 - 55,675
Shares redeemed........................ - (838,288) (370) (817,623)
___________ ___________ ___________ ___________
NET INCREASE IN SHARES OUTSTANDING 800,540 894,962 804,266 66,637
========== ============ =========== =============
(1) From March 31, 1995 (commencement of operations) to September 30, 1995.
(2) Effective July 15, 1996, Class R shares were redesignated as Retail
shares and Investor Class shares were redesignated
as Institutional shares.
See notes to financial statements.
</TABLE>
DREYFUS LIFETIME PORTFOLIOS, INC., Income Portfolio
FINANCIAL HIGHLIGHTS
Reference is made to page 7 of the Fund's Prospectus dated January 1, 1997.
DREYFUS LIFETIME PORTFOLIOS, INC., Growth and Income Portfolio
FINANCIAL HIGHLIGHTS (CONTINUED)
Reference is made to page 6 of the Fund's Prospectus dated January 1, 1997.
DREYFUS LIFETIME PORTFOLIOS, INC., Growth Portfolio
FINANCIAL HIGHLIGHTS (CONTINUED)
Reference is made to page 5 of the Fund's Prospectus dated January 1, 1997.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-GENERAL:
Dreyfus LifeTime Portfolios, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, ("Act") as a diversified open-end
management investment company and operates as a series company currently
offering three Portfolios: the Income Portfolio, the primary investment
objective of which is to maximize current income and the secondary investment
objective of which is capital appreciation, the Growth and Income Portfolio,
the investment objective of which is to maximize total return, consisting of
capital appreciation and current income and the Growth Portfolio, the
investment objective of which is capital appreciation. The Fund accounts
separately for the assets, liabilities and operations of each portfolio. The
Dreyfus Corporation ("Manager") serves as each Portfolio's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon").
Mellon Equity Associates ("Mellon Equity") serves as each Portfolio's
sub-investment adviser.
As of September 30, 1996, Allomon Corporation, an indirect subsidiary of
Mellon Bank Corporation, held the following shares:
<TABLE>
<CAPTION>
<S> <C> <S> <C>
Income Portfolio............... 1,297,310 Growth Portfolio.................... 1,711,876
As of September 30, 1996, MBIC Investment Corp., an indirect subsidiary
of Mellon Bank Corporation, held the following shares;
Income Portfolio............... 101,376
</TABLE>
On February 2, 1996, the Board of Directors of the Fund approved an
Agreement and Plan of Reorganization providing for the
transfer of all or substantially all of the assets and liabilities of two
portfolios of Dreyfus Asset Allocation Fund, Inc., Dreyfus Income Portfolio
and Dreyfus Growth Portfolio to the Income Portfolio and Growth Portfolio of
the Fund, respectively, in a tax free exchange for shares of Common Stock of
the respective portfolios of the Fund at net asset value and the assumption
of stated liabilities (the "Exchange"). The Exchange was approved by Dreyfus
Asset Allocation Fund, Inc. shareholders on August 19, 1996, and became
effective after the close of business on August 21, 1996, at which time the
Fund issued 163,672 shares valued at $13.29 per share of the Income
Portfolio's Retail Class shares and 175,795 shares valued at $15.95 per share
of the Growth Portfolio's Retail shares to the shareholders of the Dreyfus
Income Portfolio and the Dreyfus Growth Portfolio, respectively, of Dreyfus
Asset Allocation Fund, Inc., in exchange for 167,323 shares of the Dreyfus
Asset Allocation Fund, Inc., Dreyfus Income Portfolio valued at $13.00 per
share and 203,775 shares of the Dreyfus Asset Allocation Fund, Inc., Dreyfus
Growth Portfolio valued at $13.76 per share representing net assets of
$2,175,198 and $2,803,938, respectively. Included in the net assets of the
Dreyfus Asset Allocation Fund, Inc., Dreyfus Income Portfolio is $64 of
unrealized appreciation. The combined net assets immediately after the
Exchange was $20,976,239 for the Income Portfolio of the Fund. Included in
the net assets of Dreyfus Asset Allocation Fund, Inc., Dreyfus Growth
Portfolio is $69,702 of unrealized appreciation. The combined net assets
immediately after the exchange was $39,343,700 for Dreyfus Growth Portfolio.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. Effective July 15, 1996, each Portfolio's
Class R shares were redesignated as Retail shares and each Portfolio's
Investor shares were redesignated as Institutional shares. Retail shares are
offered to any investor and Institutional shares are offered only to clients
of banks, securities brokers or dealers and other financial institutions
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(collectively, Service Agents) that have entered into selling agreements with
the Fund's distributor. Other differences between the two classes include the
services offered to and the expenses borne by each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
NOTE 2-SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Each Portfolio's 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. 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.
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.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of the operations resulting from changes in foreign exchange
rates on investments from the fluctuations arising from changes in the market
prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amount of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) EXPENSES: Expenses directly attributable to each Portfolio are
charged to that Portfolio's operations; expenses which are applicable to all
portfolios are allocated among them on a pro rata basis.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 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. For Federal income tax purposes, each Portfolio is treated as a
single entity for the purpose of determining such qualification.
NOTE 3-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed Funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the year ended September 30, 1996, each Portfolio did
not borrow under the line of credit.
NOTE 4-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 value of each Portfolio's average daily
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 (exclusive of certain expenses as
described above) exceed 21\2% of the first $30 million, 2% of the next $70
million and 11\2% of the excess over $100 million of the value of that
Portfolio's average net assets in accordance with California "blue sky"
regulations. The Manager has undertaken with respect to the Income Portfolio
from October 1, 1995 through March 31, 1997 to reduce to 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 Shareholder
Services Plan and certain expenses as described above) exceed an annual rate
of .60 of 1% of the value of the Portfolio's average daily net assets. With
respect to the Growth and Income Portfolio and the Growth Portfolio, the
Manager has undertaken from October 1, 1995 through March 31, 1997 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 Shareholder Services Plan and certain expenses as described
above) exceed an annual rate of .75 of 1% of the value of the Portfolio's
average daily net assets.
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The expense reimbursements, pursuant to the undertakings, amounted to the
following for the year ended September 30, 1996:
<TABLE>
<CAPTION>
<S> <C> <S> <C>
Income Portfolio............... $109,255 Growth Portfolio............... $156,678
Growth and Income Portfolio.... 186,888
</TABLE>
The undertakings may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement
would not be less than the amount required pursuant to the Agreement.
Pursuant to a Sub-Investment Advisory Agreement between 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:
<TABLE>
<CAPTION>
ANNUAL FEE AS A PERCENTAGE OF
TOTAL FUND NET ASSETS AVERAGE DAILY NET ASSETS OF EACH PORTFOLIO
_____________ ________________________________________
<S> <C>
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%
</TABLE>
(B) Effective October 1, 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 Institutional shares for the
provision of certain services. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. The Distributor
may make payments to Service Agents in respect of these services. The
Distributor determines the amounts to be paid to Service Agents.
During the year ended September 30, 1996, the following was charged to
each Portfolio's Institutional Shares pursuant to the Shareholder Services
Plan.
<TABLE>
<CAPTION>
<S> <C> <S> <C>
Income Portfolio............... $21,007 Growth Portfolio................ $33,196
Growth and Income Portfolio.... 16,550
</TABLE>
Effective December 1, 1995, each Portfolio compensates Dreyfus Transfer,
Inc., a wholly-owned subsidiary of the Manager,
under a transfer agency agreement for providing personnel and facilities to
perform transfer agency services for each Portfolio. During the period ended
September 30, 1996, each Portfolio compensated the following:
<TABLE>
<CAPTION>
<S> <C> <S> <C>
Income Portfolio............... $484 Growth Portfolio................ $949
Growth and Income Portfolio.... 819
Effective May 3, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for each Portfolio. During the period
ended September 30, 1996, each Portfolio paid the following to Mellon
pursuant to the custody agreement:
Income Portfolio............... $2,209 Growth and Income Portfolio. $1,342
</TABLE>
DREYFUS LIFETIME PORTFOLIOS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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.
NOTE 5-SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and sales
of investment securities, excluding short-term securities, during the year
ended September 30, 1996:
<TABLE>
<CAPTION>
PURCHASES SALES
_____________ ______________
<S> <C> <C>
Income Portfolio................................................. $ 7,813,522 $ 3,886,245
Growth and Income Portfolio...................................... 130,304,458 48,238,423
Growth Portfolio................................................. 23,515,861 15,513,324
</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
received or made 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, 1996 and their related unrealized market appreciation
(depreciation) are set forth in the Statements of Financial Futures.
(B) The following summarizes accumulated net unrealized appreciation (depr
eciation) on investments for each Portfolio at September 30, 1996:
<TABLE>
<CAPTION>
GROSS GROSS
APPRECIATION (DEPRECIATION) NET
____________ _______________ ___________
<S> <C> <C> <C>
Income Portfolio............................... $ 72,816 $(195,079) $ (122,263)
Growth and Income Portfolio.................... 3,381,475 (938,173) 2,443,302
Growth Portfolio............................... 4,307,531 (156,114) 4,151,417
</TABLE>
At September 30, 1996, 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
each Portfolio for financial reporting purposes as of September 30, 1996 was
as follows:
<TABLE>
<CAPTION>
<S> <C> <S> <C>
Income Portfolio............ $21,638,816 Growth Portfolio............ $45,005,035
Growth and Income Portfolio. 113,098,124
</TABLE>
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, 1996, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in
the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included verification by
examination of securities held by the custodian as of September 30, 1996 and
confirmation of securities not held by the custodian by correspondence with
others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of each of the respective portfolios constituting the Dreyfus
LifeTime Portfolios, Inc. at September 30, 1996, the results of their
operations for the year then ended, the changes in their net assets for each
of the two years in the period then ended, and the financial highlights for
each of the indicated years, in conformity with generally accepted accounting
principles.
[Ernst & Young LLP signature logo]
New York, New York
November 8, 1996
DREYFUS LIFETIME PORTFOLIOS, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information for the period from March
31, 1995 (commencement of operations) to September 30, 1995
and for the year ended September 30, 1996.
Included in Part B of the Registration Statement:
Statement of Investments-- September 30, 1996
Statement of Assets and Liabilities-- September 30,
1996
Statement of Operations--year ended September 30, 1996
Statement of Changes in Net Assets--for the period
ended September 30, 1995 and the year ended September
30, 1996
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors,
dated November 8, 1996
All Schedules and other financial statement information, for which
provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Registrant's Articles of Incorporation and Articles of Amendment
are incorporated by reference to Exhibit (1) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A, filed
on July 23, 1995, and Exhibit (1)(b) of Post-Effective Amendment
No. 4 to the Registration Statement on Form N-1A, filed on March
30, 1995.
(2) Registrant's By-Laws, as amended, are incorporated by reference
to Exhibit (2) of Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on July 23, 1993.
(5)(a) Management Agreement is incorporated by reference to Exhibit
(5)(a) of Pre-Effective Amendment No. 4 to the Registration
Statement on Form N-1A, filed on March 30, 1995.
(5)(b) Sub-Investment Advisory Agreement is incorporated by reference to
Exhibit (5)(b) of Post-Effective Amendment No. 4 to the
Registration Statement on form N-1A, filed on March 30, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Pre-Effective Amendment No. 4 to the Registration
Statement on Form N-1A, filed on March 30, 1995.
(8)(a) Amended and Restated Custody Agreement is incorporated by
reference to Exhibit 8(a) of Post-Effective Amendment No. 1 to
the Registration Statement on Form N-1A, filed on July 23, 1993.
(9) Shareholder Services Plan is incorporated by reference to Exhibit
9 of Post-Effective Amendment No. 6 to the Registration Statement
on Form N-1A, filed on January 12, 1996.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on July 23, 1993.
(11) Consent of Independent Auditors.
(14) Model Retirement Plans are incorporated by reference to Exhibit
(14) of Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A, filed on January 12, 1996.
(15) Service Plan is incorporated by reference to Exhibit (15) of Pre
Effective Amendment No. 4 to the Registration Statement on Form
N-1, filed on March 30, 1995.
(16) Schedules of Computation of Performance Data.
(17) Financial Data Schedule.
(18) Rule 18f-3 Plan is incorporated by reference to Exhibit (18) of
Post-Effective Amendment No. 6 to the Registration Statement on
Form N-1A, filed on January 12, 1996.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney of the Directors and officers are
incorporated by reference to Other Exhibits (a) of
Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed on October 13, 1996.
(b) Certificate of Secretary is incorporated by reference
to Other Exhibits (b) of Post-Effective Amendment No. 4
to the Registration Statement on Form N-1A, filed on
March 30, 1995.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of December 2, 1996
______________ _____________________________
Common Stock
(Par value $.001)
Growth Portfolio
Institutional Shares 26
Retail Shares 275
Income Portfolio
Institutional Shares 5
Retail Shares 132
Growth and Income Portfolio
Institutional Shares 20
Retail Shares 157
Item 27. Indemnification
_______ _______________
The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is insured or
indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own
protection, is incorporated by reference to Item 4 of Part II of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on July 23, 1993.
Item 27. Indemnification (continued)
_______ _______________
Reference is also made to the Distribution Agreement attached as
Exhibit (6) of Pre-Effective Amendment No. 4 to the Registration
Statement on Form N-1A, filed on March 30, 1995.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser, manager and distributor for
sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other
investment companies. Dreyfus Service Corporation, a wholly
owned subsidiary of Dreyfus, serves primarily as a registered
broker-dealer of shares of investment companies sponsored by
Dreyfus and of other investment companies for which Dreyfus
acts as investment adviser, sub-investment adviser or
administrator. Dreyfus Management, Inc., another wholly-owned
subsidiary, provides investment management services to various
pension plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation****;
Mellon Bank, N.A.****
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and Member of the Executive
Committee of Avnet, Inc.**
LAWRENCE M. GREENE None
Director
JULIAN M. SMERLING None
Director
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company*****;
Vice Chairman of the Board:
Mellon Bank Corporation****;
Mellon Bank, N.A.****;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation****;
Executive Officer, The Boston Company*****;
Chief Operating Deputy Director:
Officer and a Mellon Trust****;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****;
President:
Boston Safe Deposit and Trust
Company*****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive
and a Director Officer:
Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.***;
Director:
Dreyfus America Fund
The Dreyfus Consumer Credit
Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company*****;
Laurel Capital Advisors****;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.****;
Boston Safe Deposit and Trust
Company*****;
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company++;
and a Director Chairman of the Board and Chief Operating
Officer:
Major Trading Corporation*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903
Director:
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit
Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization, Inc.***;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund
Vice President and Director:
The Dreyfus Consumer Credit
Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit
Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation****
Services
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation+
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 131 Second Street,
Lewes, Delaware 19958.
**** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston Place,
Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium Building,
80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus S&P 500 Index Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Stock Index Fund, Inc.
67) Dreyfus Tax Exempt Cash Management
68) The Dreyfus Third Century Fund, Inc.
69) Dreyfus Treasury Cash Management
70) Dreyfus Treasury Prime Cash Management
71) Dreyfus Variable Investment Fund
72) Dreyfus Worldwide Dollar Money Market Fund, Inc.
73) General California Municipal Bond Fund, Inc.
74) General California Municipal Money Market Fund
75) General Government Securities Money Market Fund, Inc.
76) General Money Market Fund, Inc.
77) General Municipal Bond Fund, Inc.
78) General Municipal Money Market Fund, Inc.
79) General New York Municipal Bond Fund, Inc.
80) General New York Municipal Money Market Fund
81) Premier Insured Municipal Bond Fund
82) Premier California Municipal Bond Fund
83) Premier Equity Funds, Inc.
84) Premier Global Investing, Inc.
85) Premier GNMA Fund
86) Premier Growth Fund, Inc.
87) Premier Municipal Bond Fund
88) Premier New York Municipal Bond Fund
89) Premier State Municipal Bond Fund
90) Premier Strategic Growth Fund
91) Premier Value Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Roy M. Moura+ First Vice President None
Dale F. Lampe+ Vice President None
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Elizabeth A. Bachman++ Assistant Vice President Vice President
and Assistant
Secretary
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, and
State of New York on the 30th day of December, 1996.
DREYFUS LIFETIME PORTFOLIOS, INC.
BY: /s/Marie E. Connolly*
__________________________________________
Marie E. Connolly, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement has
been signed below by the following persons in the capacities and on the dates
indicated.
Signatures Title Date
__________________________ _______________________________ _________
/s/Marie E. Connolly* President, Treasurer (Principal 12/30/96
______________________________ Executive Financial and
Marie E. Connolly Accounting Officer)
/s/Joseph S. DiMartino* Chairman of the Board 12/30/96
_____________________________
Joseph S. DiMartino
/s/Lucy Wilson Benson* Director 12/30/96
______________________________
Lucy Wilson Benson
/s/David W. Burke* Director 12/30/96
_____________________________
David W. Burke
/s/Martin D. Fife* Director 12/30/96
_____________________________
Martin D. Fife
/s/Robert R. Glauber* Director 12/30/96
_____________________________
Robert R. Glauber
/s/Whitney I. Gerard* Director 12/30/96
_____________________________
Whitney I. Gerard
/s/Arthur A. Hartman* Director 12/30/96
_____________________________
Arthur A. Hartman
/s/George L. Perry* Director 12/30/96
_____________________________
George L. Perry
/s/Paul D. Wolfowitz* Director 12/30/96
_____________________________
Paul D. Wolfowitz
Elizabeth Bachman
*BY: __________________________
Elizabeth Bachman,
Attorney-in-Fact
EXHIBIT INDEX
Exhibits
(11) Consent of Independent Auditors
(17) Financial Data Schedule
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information", "Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors" and to the use of our report dated
November 8, 1996, in this Registration Statement (Form N-1A 33-66080)
of Dreyfus LifeTime Portfolios, Inc.
ERNST & YOUNG LLP
New York, New York
December 24, 1996
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