File Nos. 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. 8 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 8 [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, 1998 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.
----
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 25
5 Management of the Fund 12
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 25
7 Purchase of Securities Being Offered 13
8 Redemption or Repurchase 20
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-13
15 Control Persons and Principal B-17
Holders of Securities
16 Investment Advisory and Other B-18
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-30
18 Capital Stock and Other Securities B-33
19 Purchase, Redemption and Pricing B-20, 22, 27
of Securities Being Offered
20 Tax Status *
21 Underwriters B-33
22 Calculations of Performance Data B-31
23 Financial Statements B-33
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-4
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-9
30 Location of Accounts and Records C-12
31 Management Services C-12
32 Undertakings C-12
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
- ---------------------------------------------------------------------------
PROSPECTUS JANUARY 1, 1998
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 INVESTOR CLASS SHARES
AND RESTRICTED CLASS SHARES. INVESTOR CLASS SHARES AND RESTRICTED CLASS
SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES OFFERED TO AND THE EXPENSES
BORNE BY EACH CLASS. INVESTOR CLASS SHARES ARE OFFERED TO ANY INVESTOR.
RESTRICTED CLASS SHARES ARE OFFERED ONLY TO CLIENTS OF CERTAIN BANKS,
SECURITIES DEALERS AND OTHER FINANCIAL INSTITUTIONS AS DESCRIBED HEREIN AND
OMNIBUS ACCOUNTS MAINTAINED BY INSTITUTIONS THAT PROVIDE SUB-ACCOUNTING OR
RECORDKEEPING SERVICES TO THEIR CLIENTS.
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, 1998, 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.
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............................... 25
Appendix.......................................... 26
[Page 2]
[This Page Intentionally Left Blank]
[Page 3]
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
INCOME GROWTH AND INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
______________________ ________________________ ________________________
Restricted Investor Restricted Investor Restricted Investor
Class Class Class Class Class Class
Shares Shares Shares Shares Shares Shares
________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
Management Fees.................. .60% .60% .75% .75% .75% .75%
Other Expenses................... .22% .52% .09% .30% .28% .58%
Total Portfolio Operating
Expenses......................... .82% 1.12% .84% 1.05% 1.03% 1.33%
EXAMPLE:
An investor would pay the following
expenses on a $1,000
investment, assuming (1) 5%
annual return and (2)
redemption at the end of each
time period:
1 Year ............. $8 $11 $9 $11 $11 $14
3 Years ............ $26 $36 $27 $33 $33 $42
5 Years ............ $46 $62 $47 $58 $57 $73
10 Years ............ $101 $136 $104 $128 $126 $160
</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. Further financial data, related
notes and the report of independent auditors accompany 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>
INCOME PORTFOLIO
_______________________________________________________________________
FISCAL YEAR ENDED SEPTEMBER 30,
_______________________________________________________________________
RESTRICTED CLASS SHARES INVESTOR CLASS SHARES
_______________________________ _________________________________
PER SHARE DATA: 1995(1) 1996(2) 1997(3) 1995(1) 1996(2) 1997(3)
________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year............... $12.50 $13.52 $13.42 $12.50 $13.51 $13.39
________ ________ ________ ________ ________ ________
INVESTMENT OPERATIONS:
Investment income_net ........................... .40 .64 .71 .39 .73 .72
Net realized and unrealized gain on investments... .62 .31 .99 .62 .18 .95
________ ________ ________ ________ ________ ________
TOTAL FROM INVESTMENT OPERATIONS........... 1.02 .95 1.70 1.01 .91 1.67
________ ________ ________ ________ ________ ________
DISTRIBUTIONS:
Dividends from investment income_net.............. __ (.62) (.65) __ (.60) (.62)
Dividends from net realized gain
on investments.................................. __ (.43) (.43) __ (.43) (.43)
________ ________ ________ ________ ________ ________
TOTAL DISTRIBUTIONS....................... __ (1.05) (1.08) __ (1.03) (1.05)
________ ________ ________ ________ ________ ________
Net asset value, end of year............. $13.52 $13.42 $14.04 $13.51 $13.39 $14.01
======== ======== ======== ======== ======== =======
TOTAL INVESTMENT RETURN.......................... 8.24%(4) 7.30% 13.50% 8.08%(4) 7.07% 13.19%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets. .30%(4) .60% .68% .43%(4) .85% .97%
Ratio of net investment income to average net assets 3.08%(4) 5.75% 5.87% 2.95%(4) 5.50% 5.52%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation........... .26% .61% .14% .26%(4) .61% .15%
Portfolio Turnover Rate........................... 5.66%(4) 32.95% 72.08% 5.66%(4) 32.95% 72.08%
Average commission rate paid(5)................. __ __ $.0200 __ __ $.0200
Net Assets, end of year (000's omitted)........... $8,141 $12,889 $22,727 $8,122 $8,701 $10,136
(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 Class shares.
(3) Effective August 7, 1997, Retail shares were redesignated as Restricted Class shares and Institutional shares were
redesignated as Investor Class shares.
(4) Not annualized.
(5) For fiscal years beginning October 1, 1995, the Portfolio is required to disclose its average commission rate paid per
share for purchases and sales of investment securities.
[Page 5]
GROWTH AND INCOME PORTFOLIO
_______________________________________________________________________
FISCAL YEAR ENDED SEPTEMBER 30,
_______________________________________________________________________
RESTRICTED CLASS SHARES INVESTOR CLASS SHARES
_______________________________ _________________________________
PER SHARE DATA: 1995(1) 1996(2) 1997(3) 1995(1) 1996(2) 1997(3)
________ ________ ________ ________ ________ ________
Net asset value, beginning of year............... $12.50 $14.31 $15.34 $12.50 $14.29 $15.43
________ ________ ________ ________ ________ ________
INVESTMENT OPERATIONS:
Investment income_net .......................... .27 .33 .58 .27 .90(4) .57(4)
Net realized and unrealized gain on investments... 1.54 1.60 3.16 1.52 1.12 3.36
________ ________ ________ ________ ________ ________
TOTAL FROM INVESTMENT OPERATIONS................ 1.81 1.93 3.74 1.79 2.02 3.93
________ ________ ________ ________ ________ ________
DISTRIBUTIONS:
Dividends from investment income_net............. __ (.42) (.34) __ (.40) __
Dividends from net realized gain
on investments.................................... __ (.48) (.31) __ (.48) (.31)
________ ________ ________ ________ ________ ________
TOTAL DISTRIBUTIONS....................... __ (.90) (.65) __ (.88) (.31)
________ ________ ________ ________ ________ ________
Net asset value, end of year.................. $14.31 $15.34 $18.43 $14.29 $15.43 $19.05
======== ======== ======== ======== ======== =======
TOTAL INVESTMENT RETURN........................... 14.48%(5) 14.17% 25.22% 14.32%(5) 14.84% 25.85%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......... .38%(5) .75% .78% .51%(5) 1.00% 1.00%
Ratio of net investment income to average net assets 2.10%(5) 3.60% 3.52% 1.98%(5) 3.35% 3.58%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation....... .33%(5) .39% .06% .33%(5) .39% .05%
Portfolio Turnover Rate....................... 33.55%(5) 122.52% 107.85% 33.55%(5) 122.52% 107.85%
Average commission rate paid(6).......... __ $.0480 $.0453 __ $.0480 $.0453
Net Assets, end of year (000's omitted)..... $9,248 $124,677 $172,705 $8,602. $160 $683
(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) Effective August 7, 1997, Retail shares were redesignated as Restricted Class shares and Institutional shares were
redesignated as Investor Class shares.
(4) Based on average shares outstanding.
(5) Not annualized.
(6) 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.
[Page 6]
GROWTH PORTFOLIO
_______________________________________________________________________
FISCAL YEAR ENDED SEPTEMBER 30,
_______________________________________________________________________
RESTRICTED CLASS SHARES INVESTOR CLASS SHARES
_______________________________ _________________________________
PER SHARE DATA: 1995(1) 1996(2) 1997(3) 1995(1) 1996(2) 1997(3)
________ ________ ________ ________ ________ ________
Net asset value, beginning of year........... $12.50 $14.84 $16.59 $12.50 $14.82 $16.58
________ ________ ________ ________ ________ ________
INVESTMENT OPERATIONS:
Investment income_net .................... .21 .28 .41 .19 .32 .62
Net realized and unrealized gain on investments... 2.13 2.48 4.94 2.13 2.42 4.68
________ ________ ________ ________ ________ ________
TOTAL FROM INVESTMENT OPERATIONS................. 2.34 2.76 5.35 2.32 2.74 5.30
________ ________ ________ ________ ________ ________
DISTRIBUTIONS:
Dividends from investment income_net............. __ (.31) (.30) __ (.28) (.26)
Dividends from net realized gain
on investments................................... __ (.70) (1.12) __ (.70) (1.12)
________ ________ ________ ________ ________ ________
TOTAL DISTRIBUTIONS............................... __ (1.01) (1.42) __ (.98) (1.38)
________ ________ ________ ________ ________ ________
Net asset value, end of year.................... $14.84 $16.59 $20.52 $14.82 $16.58 $20.50
======== ======== ======== ======== ======== =======
TOTAL INVESTMENT RETURN........................ 18.72%(4) 19.73% 34.70% 18.56%(4) 19.58% 34.32%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......... .38% .75% .83% .51%(4) 1.00% 1.06%
Ratio of net investment income to average net assets 1.51%(4) 2.38% 2.38% 1.39%(4) 2.08% 2.05%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation........... .26%(4) .53% .20% .26%(4) .53% .27%
Portfolio Turnover Rate........................... 52.86%(4) 77.83% 118.49% 52.86%(4) 77.83% 118.49%
Average commission rate paid(5).................. __ $.0519 $.0497 __ $.0519 $.0497
Net Assets, end of year (000's omitted)...... $11,898 $28,143 $46,960 $11,939 $14,458 $8,662
(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) Effective August 7, 1997, Retail shares were redesignated as Restricted Class shares and Institutional shares were
redesignated as Investor Class shares.
(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>
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_Investor Class shares and Restricted Class shares (each such class
being referred to as a "Class"). The Classes are identical, except that
Investor Class shares are subject to an annual service fee as described under
"Shareholder Services Plan." The shareholder services fees paid by the
Investor Class shares will cause such Class to have a higher expense ratio
and to pay lower dividends than Restricted Class shares.
Restricted Class shares may not be purchased directly by individuals,
although institutions may purchase Restricted Class 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 Restricted Class shares, to the extent required by law. The Fund
treats the institution investing in Restricted Class shares as the Fund shareh
older 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>
ASSET CLASS PORTFOLIOS BENCHMARK INDEX
______ _____________ ___________________
<S> <C> <C>
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. In
addition, Mellon Equity may use futures contracts to provide an efficient
means of achieving each Portfolio's target exposure to the asset classes. 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.
[Page 9]
A further explanation of the Fund's allocation process is provided in
the Statement of Additional Information.
COMMON STOCKS. The S&P 500 Index is composed of 500 common stocks,
most of which are listed on the New York Stock
Exchange. The weightings of stocks in the S&P500 Index are based on each
stock's relative total market capitalization; that is, its market price per
share times the number of shares outstanding. Because of this weighting, as
of October 31, 1997, approximately 50% of the S&P 500 Index was composed of
the 50 largest companies.
The Russell 2000Registration Mark Index is composed of approximately
2,000 common stocks of U.S. companies with market capitalizations ranging
between $50 million and $2.49 billion as of October 31, 1997.
The EAFE Index is a broadly diversified international index composed
of the equity securities of approximately 1,548 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 October 31, 1997,
approximately 50% 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, with an average
outstanding market value of more than $600 million and maturities of less
than ten years and greater than one year. As of October 31, 1997, U.S.
Government securities and corporate debt securities represented 28% and 72%,
respectively, of the Lehman Brothers Government/Corporate Intermediate Bond
Index, and the average maturity of such securities was 9.92 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 for the current
fiscal year is not expected to exceed 100%. A turnover rate of 100% is
equivalent to the Portfolio buying and selling all of the securities in its
portfolio once in the course of a year. Higher portfolio turnover rates
usually generate additional brokerage commissions and expenses and the
short-term gains realized from these transactions are taxable to shareholders
as ordinary income. 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.
[Page 10]
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 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" 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 Growth and Income Portfolio and Growth Portfolio may purchase
securities of smaller capitalization companies, the prices of which 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 more subject 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 IBCA, Inc. ("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 or restrict the payment of principal, interest
and dividends on the foreign securities 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, 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 ADVISERS _ 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, 1997, The Dreyfus Corporation
managed or administered approximately $94 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, 1997, Mellon Equity
managed approximately $15.6 billion in assets and serves as the investment
adviser for 17 other investment companies.
Mellon Equity, subject to the supervision and approval of The Dreyfus
Corporation, provides investment advisory assistance and the day-to-day
management of each Portfolio's investments, as well as investment research
and statistical information, under a Sub-Investment Advisory Agreement with
The Dreyfus Corporation, subject to the overall authority of the Fund's Board
in accordance with Maryland law. In providing its services, Mellon Equity may
use the services of one or more of its affiliates. Each Portfolio's primary
portfolio manager is Steven A. Falci. He has held that position since the
inception of the Fund and has been employed by Mellon Equity since April
1994. For more than five years prior thereto, he was a managing director for
pension investments at NYNEX Corporation.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$299 billion in assets
[Page 12]
as of September 30, 1997, including approximately $102 billion in proprietary
mutual fund assets. As of September 30, 1997, Mellon, through various
subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $1.488 trillion 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,
1997, the Income Portfolio paid The Dreyfus Corporation a monthly management
fee at the effective annual rate of .45 of 1% of the value of the Income
Portfolio's average daily net assets pursuant to undertakings by The Dreyfus
Corporation. For the fiscal year ended September 30, 1997, the Growth and
Income Portfolio paid The Dreyfus Corporation a monthly management fee at the
effective annual rate of .69 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, 1997, the Growth
Portfolio paid The Dreyfus Corporation a monthly management fee at the
effective annual rate of .53 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, 1997, The Dreyfus Corporation paid Mellon Equity a
monthly sub-investment advisory fee at the annual rate of .35 of 1% of the
value of each Portfolio's average daily net assets.
In allocating brokerage transactions, 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., 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.
Investor Class shares are offered to any investor. Restricted Class
shares are offered only to clients of Service Agents that have entered into a
selling agreement with the Distributor, and omnibus accounts maintained by
institutions that provide sub-accounting or recordkeeping services to their
clients. Restricted Class shares also may be purchased by investors who held
Restricted Class shares (formerly, Retail Class shares) in a Fund account on
August 31, 1997 and who are purchasing the shares for such account.
Otherwise, Restricted Class shares may not be purchased directly by
individuals, although institutions may purchase Restricted Class 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. See "Appendix _ Additional
Information About Purchases, Exchanges and Redemptions."
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 is $750 for Dreyfus-sponsored Keogh
Plans, IRAs (including regular IRAs, spousal IRAs for a non-working spouse,
Roth IRAs, SEP-IRAs and rollover IRAs) and 403(b)(7) Plans with only one
participant and $500 for Dreyfus-sponsored Education IRAs, with no minimum on
subsequent purchases. 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 accounts, 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-AUTOMATI
C 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
[Page 14]
Fund account number should appear on the check and an investment slip should
be enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105, Newark,
New Jersey 07101-0105. For Dreyfus retirement plan accounts, both initial and
subsequent investments should be sent to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427. Neither
initial nor subsequent investments should be made by third party check.
Purchase orders may be delivered in person only to a Dreyfus Financial
Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY
UPON RECEIPT THEREBY. For the location of the nearest Dreyfus Financial
Center, please call one of the telephone numbers listed under "General
Information."
Wire payments may be made if the investor's bank account is in a
commercial bank that is a member of the Federal Reserve System or any other
bank having a correspondent bank in New York City. Immediately available
funds may be transmitted by wire to The Bank of New York, together with the
relevant Portfolio's DDA # as shown below, for purchase of shares in the
investor's name:
DDA #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 must
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 must 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. 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 entity authorized to receive orders on behalf of the
Fund. 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
[Page 15]
value of its assets less liabilities) by the total number of Portfolio shares
of such Class outstanding. Each Portfolio's investments are valued based on
market value or, where market quotations are not readily available, based on
fair value as determined in good faith by the Board of Directors. For further
information regarding the methods employed in valuing the Portfolio's
investments, see "Determination of Net Asset Value" in the Statement of
Additional Information.
For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Portfolio shares may be transmitted,
and must be received by the Transfer Agent, within three business days after
the order is placed. If such payment is not received within three business
days after the order is placed, the order may be canceled and the institution
could be held liable for resulting fees and/or losses.
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
[Page 16]
prospectus of the fund into which the exchange is being made. Prospectuses
may be obtained by calling 1-800-645-6561. Except in the case of personal
retirement plans, the shares being exchanged must have a current value of at
least $500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. The
ability to issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless the investor checks the applicable "No"
box on the Account Application, indicating that the investor specifically
refuses this Privilege. The Telephone Exchange Privilege may be established
for an existing account by written request signed by all shareholders on the
account, 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. See
"Appendix _ Additional Information About Purchases, Exchanges and
Redemptions." 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
[Page 17]
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. 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
[Page 18]
Corporation, the Fund, the Transfer Agent or any other person, to arrange for
transactions under the Dreyfus Payroll Savings Plan. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for this Privilege.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables a shareholder to purchase 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 shar
eholder 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
Automatic Withdrawal Plan may be established by filing an Automatic
Withdrawal Plan application with the Transfer Agent or by oral request from
any of the authorized signatories on the account by calling 1-800-645-6561.
The Automatic Withdrawal Plan may be ended at any time by
[Page 19]
the shareholder, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, SEP-IRAs and rollover IRAs), 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 by the Transfer Agent or
other entity authorized to receive orders on behalf of the Fund, the
Portfolio will redeem the shares at the next determined net asset value. See
"Appendix _ Additional Information About Purchases, Exchanges and
Redemptions."
The Fund imposes no charges when shares are redeemed. Service Agents
or other institutions may charge their clients a 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 BUILDER
Registration 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 through the Telephone Redemption Privilege,
which is granted automatically unless the investor
[Page 20]
specifically refuses it by checking the applicable "No" box on the Account
Application. The Telephone Redemption Privilege may be established for an
existing account by a separate signed Shareholder Services Form or by oral
request from any of the authorized signatories on the account by calling
1-800-645-6561. Investors also may redeem shares through the Wire Redemption
Privilege or Dreyfus TeleTransfer Privilege, 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.
Other redemption procedures may be in effect for clients of certain Service
Agents and institutions. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities. The Fund reserves the right to refuse any request made
by wire or telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
The Fund may modify or terminate any redemption Privilege at any time or
charge a service fee upon notice to shareholders. No such fee is currently
contemplated. 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.
The Telephone Redemption Privilege or Telephone Exchange Privilege
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."
[Page 21]
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, telephone or
letter that redemption proceeds (minimum $1,000) be wired to the investor's
account at a bank which is a member of the Federal Reserve System, or a
correspondent bank if the investor's bank is not a member. 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. The
Telephone Redemption Privilege is granted automatically unless the investor
refuses it.
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. 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
(INVESTOR CLASS 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 Investor Class shares a fee at an annual rate of .25 of 1% of
the value of the average daily net assets of the Portfolio's Investor Class
shares. The services provided may include 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. TheDistributor 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. If an investor elects to
receive dividends and distributions in cash, and the investor's dividend or
distribution check is returned to the Fund as undeliverable or remains
uncashed for six months, the Fund reserves the right to reinvest such
dividend or distribution and all future dividends and distributions payable
to such investor in additional Fund shares
[Page 22]
at net asset value. No interest will accrue on amounts represented by
uncashed distribution or redemption checks. All expenses are accrued daily
and deducted before declaration of dividends to investors. Dividends paid by
each Class will be calculated at the same time and in the same manner and
will be of the same amount, except that the expenses attributable solely to
the Investor Class shares or Restricted Class shares will be borne
exclusively by such Class. Investor Class shares will receive lower per share
dividends than Restricted Class shares because of the higher expenses borne
by the Investor Class 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 an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more than 18 months.
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.
[Page 23]
A TIN is either the Social Security number, IRS individual taxpayer
identification 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, 1997 as a "regulated investment company"
under the Code. Each Portfolio intends to continue to so qualify if such
qualification is in the best interests of its shareholders. Such
qualification relieves the Portfolio of any liability for Federal income tax
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. In addition, each Portfolio is subject to a non-deduct
ible 4% excise tax, measured with respect to certain undistributed amounts of
taxable investment income and capital gains.
Investors should consult their tax advisers regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may be
calculated on the basis of average annual total return and/or total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made by
the Portfolio during the measuring period were reinvested in shares of the
same Class. These figures also take into account any applicable shareholder
services fees. As a result, at any given time, the performance of the
Investor Class shares should be expected to be lower than that of Restricted
Class 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 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.
[Page 24]
GENERAL INFORMATION
The Fund was organized as a corporation under the laws of Maryland on
July 15, 1993, and commenced operations on March 31, 1995. The Fund is
authorized to issue 300 million shares of Common Stock (with 100 million
shares allocated to each Portfolio), par value $.001 per share. Each
Portfolio's shares are classified into two classes_Investor Class shares and
Restricted Class shares. Each share has one vote and shareholders will vote
in the aggregate and not by class except as otherwise required by law. However
, only holders of Investor Class shares will be entitled to vote on matters
submitted to shareholders pertaining to the Shareholder Services Plan. Before
August 31, 1997, Investor Class shares and Restricted Class shares were
designated as Institutional shares and Retail shares, respectively, and,
before July 15, 1996, were designated as Investor Class shares and Class R
shares, respectively.
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., call 516-794-5452.
[Page 25]
APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS) _ The Growth and Income Portfolio and Growth
Portfolio may enter into foreign currency transactions 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 "Investment 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 inopportune times or judges
market conditions incorrectly, such investments may lower the Portfolio's
return or result in a loss. ThePortfolio also could experience losses if its
Derivatives were poorly correlated with its other investments, or if the
Portfolio were unable to liquidate its position because of an illiquid
secondary market. The market for many
[Page 26]
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,
certain Derivatives subject the Portfolio to the rules of the Commodity
Futures Trading Commission which limit the extent to which the Portfolio can
invest in such 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, exceeds 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, dividends 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 33-1\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. ThePortfolio 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. Each Portfolio may purchase securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities which include U.S. Treasury securities that differ in the
interest rates, maturities and times of issuance. Some obligations issued or
guaranteed by U.S.
[Page 27]
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. Each Portfolio may enter into 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. Each Portfolio may purchase commercial paper consisting 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.
[Page 28]
Treasury securities. A zero coupon security pays no interest to its holder
during its life and is sold at a discount to its face value at maturity. The
amount of the discount fluctuates with the market price of the security. The
market prices of zero coupon securities generally are more volatile than the
market prices of securities that pay interest periodically and are likely to
respond to a greater degree to changes in interest rates than non-zero coupon
securities having similar maturities and credit qualities.
FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL ENTITIES _ Each
of the Growth and Income Portfolio and Growth Portfolio may invest in
obligations issued or guaranteed by one or more foreign governments or any of
their political subdivisions, agencies or instrumentalities that are
determined by the Advisers to be of comparable quality to the other
obligations in which the Portfolio may invest. Such securities also include
debt obligations of supranational entities. Supranational entities include
international organizations designated or supported by governmental entities
to promote economic reconstruction or development and international banking
institutions and related government agencies.
AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS _ Each of the Growth
and Income Portfolio and Growth Portfolio may invest in the securities of
foreign issuers in the form of American Depositary Receipts ("ADRs") and
European Depositary Receipts ("EDRs"). These securities may not necessarily
be denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or
trust company which evidence ownership of underlying securities issued by a
foreign corporation. EDRs, which are sometimes referred to as Continental
Depositary Receipts ("CDRs"), are receipts issued in Europe typically by
non-United States banks and trust companies that evidence ownership of either
foreign or domestic securities. Generally, ADRs in registered form are
designed for use in the United States securities markets and EDRs and CDRs in
bearer form are designed for use in Europe.
INVESTMENT COMPANIES _ Each Portfolio may invest in securities issued by
other investment companies to the extent consistent with its investment
objective. Under the 1940 Act, the Portfolio's investment in such securities,
subject to certain exceptions, currently is limited to (i) 3% of the total
voting stock of any one investment company, (ii) 5% of the Portfolio's 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.
ADDITIONAL INFORMATION ABOUT PURCHASES, EXCHANGES AND REDEMPTIONS _ The Fund
is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculation on short-term market movements.
A pattern of frequent purchases and exchanges can be disruptive to efficient
portfolio management and, consequently, can be detrimental to the Fund's
performance and its shareholders. Accordingly, if the Fund's management
determines that an investor is engaged in excessive trading, the Fund, with
or without prior notice, may temporarily or permanently terminate the
availability of Fund Exchanges, or reject in whole or part any purchase or
exchange request, with respect to such investor's
[Page 29]
account. Such investors also may be barred from purchasing other funds in the
Dreyfus Family of Funds. Generally, an investor who makes more than four
exchanges out of a Portfolio during any calendar year (for calendar year
1998, beginning on January 15th) or who makes exchanges that appear to
coincide with an active market-timing strategy may be deemed to be engaged in
excessive trading. Accounts under common ownership or control will be
considered as one account for purposes of determining a pattern of excessive
trading. In addition, with respect to each Portfolio, the Fund may refuse or
restrict purchase or exchange requests by any person or group if, in the
judgment of the Fund's management, the Portfolio would be unable to invest
the money effectively in accordance with its investment objective and
policies or could otherwise be adversely affected or if the Fund receives or
anticipates receiving simultaneous orders that may significantly affect the
Fund (e.g., amounts equal to 1% or more of the Portfolio's total assets). If
an exchange request is refused, the Fund will take no other action with
respect to the shares until it receives further instructions from the
investor. The Fund may delay forwarding redemption proceeds for up to seven
days if the investor redeeming shares is engaged in excessive trading or if
the amount of the redemption request otherwise would be disruptive to
efficient portfolio management or would adversely affect the Portfolio. The
Fund's policy on excessive trading applies to investors who invest in the
Fund directly or through financial intermediaries, but does not apply to the
Dreyfus Auto-Exchange Privilege, to any automatic investment or withdrawal
privilege described herein, or to participants in employer-sponsored
retirement plans.
During times of drastic economic or market conditions, the Fund may
suspend Fund Exchanges temporarily without notice and treat exchange requests
based on their separate components _ redemption orders with a simultaneous
request to purchase the other fund's shares. In such a case, the redemption
request would be processed at the Fund's next determined net asset value but
the purchase order would be effective only at the net asset value next
determined after the fund being purchased receives the proceeds of the
redemption, which may result in the purchase being delayed.
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 30]
[This Page Intentionally Left Blank]
[Page 31]
LifeTime
Portfolios, Inc.
Prospectus
Registration Mark
Copy Rights 1998 Dreyfus Service Corporation
DRPp0198
[Page 32]
DREYFUS LIFETIME PORTFOLIOS, INC.
INCOME PORTFOLIO
GROWTH AND INCOME PORTFOLIO
GROWTH PORTFOLIO
INVESTOR CLASS SHARES AND RESTRICTED CLASS SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 1, 1998
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, 1998, 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. -- 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-13
Management Arrangements B-18
Purchase of Shares B-20
Shareholder Services Plan B-21
Redemption of Shares B-22
Shareholder Services B-24
Determination of Net Asset Value B-27
Dividends, Distributions and Taxes B-28
Portfolio Transactions B-30
Performance Information B-31
Information About the Fund B-32
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors B-33
Financial Statements and Report of Independent Auditors B-33
Appendix B-34
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
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio Int'l Domestic Instruments Equity Income Equity Income Large Cap Small Cap
INCOME N/A 90% 10% N/A N/A 25% 75% 100% N/A
GROWTH
AND
INCOME 10% 90% * 50% 50% 50% 50% 80% 20%
GROWTH 15% 85% * 80% 20% 80% 20% 80% 20%
__________
* Not held as an asset class. Money market instruments held for transactional and
liquidity purposes only.
</TABLE>
Mellon Equity will attempt to maintain relative asset class weights
consistent with the Portfolio Baseline as adjusted by the Active Allocation
Overlay described below. At any given time, however, actual weights will
not equal the Portfolio Baseline because of fluctuations in market values,
money market instruments held for transactional and liquidity purposes, and
Mellon Equity's active allocation overlay decisions as described below.
II. Active Allocation Overlay. For each of the Growth Portfolio and
the Growth and Income Portfolio, Mellon Equity will establish two active
allocation ranges ("Portfolio Overlay One" and "Portfolio Overlay Two").
Portfolio Overlay One describes the amount of over/under weighing to the
Portfolio Baseline for the relative weighing between international and
domestic assets. Portfolio Overlay Two describes the amount of over/under
weighing to the Portfolio Baseline for the relative weighing of domestic
assets between common stock and fixed-income assets. The following table
illustrates these ranges:
Portfolio Portfolio Overlay One Portfolio Overlay Two
Range for Relative Range for Relative
Weighing of Weighing of Domestic
International and Assets Between Equity
Domestic Assets Assets and Fixed-
Income Assets
GROWTH AND INCOME +/- 5% of Portfolio +/- 15% of Portfolio
Baseline Baseline
GROWTH +/- 10% of Portfolio +20%/-15% of
Baseline Portfolio Baseline
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:
Asset Class Portfolios Asset Class Benchmark
Domestic Large Cap Equity Income, Standard & Poor's 500
Growth and Income and Index
Growth
Domestic Small Cap Equity Growth and Russell 2000r Index
Income and Growth
International Growth and Income and Morgan Stanley Capital
Equity Growth International Europe,
Australia, Far East
(Free) Index*
Domestic Fixed- Income, Growth and Lehman Brothers
Income Income and Growth Government/Corporate
Intermediate Bond Index
International Growth and Income and J.P. Morgan Non-US
Fixed-Income Growth Government Bond Index -
Hedged
____________________________
* In U.S. dollars
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.
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 a 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 197 Eighth Street, Charleston,
Massachusetts 02109.
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 Staffing Resources, Inc., a temporary
placement agency; and a director of The Muscular Dystrophy Association,
HealthPlan Services Corporation, a provider of marketing,
administrative and risk management services to health and other benefit
programs, The Noel Group, Inc., a venture capital company, and Carlyle
Industries, Inc. (formerly, Belding Heminway, Inc.), a button packager
and distributor. 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
54 years old and his address 200 Park Avenue, New York, New York 10106.
MARTIN D. FIFE, Board member. Chairman of the Board of Magar Inc., a
company specializing in financial products and developing early stage
companies. In addition, Mr. Fife is Chairman of the Board and Chief
Executive Officer of Skysat Communications Network Corporation, a
company developing telecommunications systems. Mr. Fife also serves on
the boards of various other companies. He is 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, Ford
Meter Box Corporation and Lawter International and a member of the
advisory councils of several other companies, research institutes and
foundations. Ambassador Hartman is Chairman of First NIS Regional
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, State Farm Life Insurance Company and Federal Realty
Investment Trust. 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, 1997, 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, 1996, 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 $ 69,018 (14)
David W. Burke $2,250 $232,699 (52)
Joseph S. DiMartino $2,813 $517,075 (93)
Martin D. Fife $2,000 $ 54,167(12)
Whitney I. Gerard $2,250 $ 58,417 (12)
Robert R. Glauber $2,250 $103,549 (20)
Arthur A. Hartman $2,000 $ 58,167(12)
George L. Perry $2,250 $ 58,167 (12)
Paul Wolfowitz $2,000 $ 48,046 (11)
______________________________
*Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $784 for all Board members as a group.
Officers of the Company
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer, Chief Compliance Officer and a director of the Distributor and
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc., and an officer of other investment companies
advised or administered by Dreyfus. She is 40 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., 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 35 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Executive Vice
President of the Distributor and 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 42 years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Vice President
of the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by Dreyfus. She has been
employed by the Distributor since September 1995. She is 28 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President of
the Distributor and 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 33 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Assistant Vice
President 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 & Trust Company. From December 1991 to March 1993, he was employed
as a Fund Accountant at The Boston Company, Inc. He is 28 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Vice
President of Funds Distributor, Inc. and an officer of other investment
companies advised or administered by Dreyfus. From December 1989
through November 1996, he was employed by GE Investments where he held
various financial, business developments and compliance positions. He
also served as Treasurer of the GE Funds and a Director of GE
Investment Services. He is 36 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, 1997.
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, 1997: Growth and
Income Portfolio, Investor Class Shares --
FTC & CO, ATTN: Datalynx T10, PO Box 173736, Denver, CO 80217-3736 --
49.4971%; Charles Carcone & Denise Rose Carcone JTWROS, 12 Griggs Drive,
Greenlawn, NY 11740-1425 -- 12.1580%; Andrew A. Hays & Marilyn G. Hays
JTWROS, 616 Spokane Avenue, Albany, CA 94706-1409 -- 8.5235%; Growth and
Income Portfolio, Restricted Class Shares -- MAC & CO A/C MLCF8548712,
Mutual Funds Operations, P.O. Box 3198, Pittsburgh, PA 15230-3198 --
42.1612%; MAC & CO A/C MIDF1959902, Mutual Fund Operations, P.O. Box 3198,
Pittsburgh, PA 15230-3198 -- 23.4383%; Boston Safe Deposit & Trust Co. TTEE
as Agent-Omnibus Account, 1 Cabot Road, Medford, MA 02155-5141 -- 14.9917%;
Foodmaker Savings Investment Trust, Investment Account, 1 Cabot Road,
Medford, MA 02155-5141 -- 6.1073%; Income Portfolio, Investor Class Shares -
- - APT Holdings Corporation, ATTN: Michael Botsford, 4500 New Linden Hill
Road, Wilmington, DE 19808 -- 97.2136%; Income Portfolio, Restricted Class
Shares -- APT Holdings Corporation, ATTN: Michael Botsford, 4500 New Linden
Hill Road, Wilmington, DE 19808-2922 -- 42.9955%; Boston Safe Deposit &
Trust Co. TTEE as Agent-Omnibus Account, 1 Cabot Road, Medford, MA 02155-
5141 -- 14.9960%; MAC & Co A/C MLCF8548702, Mutual Funds Operations, P.O.
Box 3198, Pittsburgh, PA 15230-3198 -- 12.0335%; MAC & Co A/C 195-859, FBO
Easy 401(k) Plan, A/C DEPF1958592, ATTN: Mutual Fund Operations, P.O. Box
3198, Pittsburgh, PA 15230-3198 -- 9.7696%; Growth Portfolio, Investor
Shares -- APT Holdings Corporation, ATTN: Michael Botsford, 4500 New Linden
Hill Road, Wilmington, DE 19808-2922 -- 81.1963%; FTC & CO, ATTN: Datalynx
T10, P.O. Box 173736, Denver, CO 80217-3736 -- 7.7129%; Growth Portfolio,
Restricted Class Shares -- MAC & CO, A/C MLCF8548722, Mutual Funds
Operations, P.O. Box 3198 Pittsburgh, PA 15230-3198 -- 31.6208%; MAC & CO,
A/C FXSF1959682, Mutual Funds, P.O. Box 3198, Pittsburgh, PA 15230-3198 --
11.6656%; MAC & CO, A/C 195-861, FBO Easy 401(k) Plan, A/C DEPF1958612,
ATTN: Mutual Fund Operations, P.O. Box 3198, Pittsburgh, PA 15230-3198 --
11.2110%; APT Holdings Corporation, ATTN: Michael Botsford, 4500 New Linden
Hill Road, Wilmington, DE 19808-2922 -- 10.9620%; Boston Safe Deposit &
Trust Co. TTEE as Agent-Omnibus Account, 1 Cabot Road, Medford, MA, 02155-
5141 -- 7.5272%; Dreyfus Trust Co. TTEE, AGRA Employee Investment Savings
PL, ATTN: Trust Officer, 144 Glenn Curtiss Boulevard, Uniondale NY 11556 --
5.3777%.
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 6, 1997. 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; William T. Sandalls, Jr.,
Senior Vice President and Chief Financial Officer; Mark N. Jacobs, Vice
President--Legal, 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; William V. Healey,
Assistant Secretary; and Mandell L. Berman, Burton C. Borgelt, Frank V.
Cahouet and Richard F. Syron, 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 6, 1997. 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 and for
other funds advised by Dreyfus and Mellon Equity.
Expenses. All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by Dreyfus. The
expenses borne by the Fund include: organizational costs, taxes, interest,
loan commitment fees, interest and distributions paid on securities sold
short, brokerage fees and commissions, if any, fees of Board members who are
not officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Advisers or their affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Fund's existence,
costs of independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel expenses),
costs of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders, costs of shareholders' reports and meetings, and any
extraordinary expenses. In addition, the Investor Class shares are subject
to an annual service fee. 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 years ended
September 30, 1996 and 1997, the management fees payable by each Portfolio,
the amounts waived by Dreyfus and the net fees paid to Dreyfus were as
follows:
<TABLE>
<CAPTION>
Management Fee Reduction Net Fees
Payable In Fee Paid by Portfolio
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio 1995 1996 1997 1995 1996 1997 1995 1996 1997
Income Portfolio $47,599 $106,953 $164,651 $41,157 $106,953 $39,831 $6,442 0 $124,820
Growth
and
Income
Portfolio $61,635 $363,726 $1,114,168 $53,875 $186,888 $88,813 $7,760 $176,838 $1,025,355
Growth Portfolio $82,882 $222,888 $392,656 $56,446 $156,687 $115,735 $20,436 $66,210 $276,921
</TABLE>
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 years ended September 30, 1996
and 1997, the sub-investment advisory fee payable by Dreyfus was as follows:
Sub-Investment Advisory
Portfolio Fee Payable by Dreyfus
1995 1996 1997
Income Portfolio $27,766 $ 62,430 $95,953
Growth and
Income Portfolio $28,763 $169,780 $519,418
Growth Portfolio $38,678 $104,256 $183,033
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.
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
(INVESTOR CLASS 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 Investor Class 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 6, 1997. 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, 1997, the amounts charged
Investor Class shares (formerly, Institutional Shares) of each Portfolio
pursuant to the Shareholder Services Plan were as follows:
Amount charged Pursuant
Portfolio to the Plan
Income Portfolio $23,277
Growth and Income Portfolio $568
Growth Portfolio $33,001
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, telephone or letter 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 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 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 Touchr 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. The minimum
initial investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs
(including regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs,
IRAs set up under a Simplified Employee Pension Plan ("SEP-IRAs") and
rollover IRAs) and 403(b)(7) Plans with only one participant, and $500 for
Dreyfus-sponsored Education IRAs. To exchange shares held in corporate
plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, the
minimum initial investment is $100 if the plan has at least $2,500 invested
among the funds in the Dreyfus Family of Funds. To exchange shares held in
a retirement plan account, the shares exchanged must have a current value of
at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange 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 Regular IRAs, Spousal IRAs, Roth
IRAs, SEP-IRAs and rollover IRA, 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 is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for the non-working spouse, Roth IRAs, SEP-IRAs
and rollover IRAs) and 403(b)(7) Plans with only one participant and $500
for Dreyfus-sponsored Education IRAs, with no minimum on subsequent
purchases.
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 Investor Class 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, Martin
Luther King, Jr. 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, 1997 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, override or modify 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.
The Taxpayer Relief Act of 1997 included constructive sale provisions
that generally will apply if the Fund either (1) holds an appreciated
financial position with respect to stock, certain debt obligations, or
partnership interests ("appreciated financial position") and then enters
into a short sale, futures, forward, or offsetting notional principal
contract (collectively, a "Contract") respecting the same or substantially
identical property or (2) holds an appreciated financial position that is a
Contract and then acquires property that is the same as, or substantially
identical to, the underlying property. In each instance, with certain
exceptions, the Fund generally will be taxed as if the appreciated financial
position were sold at its fair market value on the date the Fund enters into
the financial position or acquires the property, respectively. Transactions
that are identified hedging or straddle transactions under other provisions
of the Code can be subject to the constructive sale provisions.
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, and, for tax years beginning after December 31, 1997, under
Section 1291 or, with respect to PFIC securities that are marked-to-market,
under Section 1296, in which case the income resulting from the marking-to-
market of the PFIC securities is also treated as ordinary income.
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 the Advisers in serving both the Fund
and other funds which either 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 years ended September 30, 1996 and
1997, each Portfolio paid total brokerage commissions, none of which was
paid to the Distributor, as follows:
Portfolio Brokerage Commissions Paid
1995 1996 1997
Income Portfolio $410 $ 1,070 $9,640
Growth and Income Portfolio $16,001 $69,824 $136,654
Growth Portfolio $32,428 $48,621 $66,374
The above figures for brokerage commissions do not include gross spreads and
concessions on principal transactions, which, where determinable during the
period March 31, 1995 (commencement of operations) through September 30,
1995 and for the fiscal years ended September 30, 1996 and 1997 amounted to
$0, $7,620 and $9,695, respectively, for the Growth and Income Portfolio and
$0, $13,246 and $5,755, respectively, for the Growth Portfolio, none of
which was paid to the Distributor.
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, 1997 were as follows:
Average Annual Average Annual
Aggregate Total Return Total Return Since Total Return for
Portfolio Since March 31, 1995* March 31, 1995* One-Year Period
Restricted Investor Restricted Investor Restricted Investor
Class Class Class Class Class Class
Shares Shares Shares Shares Shares Shares
Income
Portfolio 31.83% 30.99% 11.64% 11.36% 13.50% 13.19%
Growth and
Income
Portfolio 63.66% 65.22% 21.68% 22.14% 25.22% 25.85%
Growth
Portfolio 91.46% 90.43% 29.53% 29.26% 34.70% 34.32%
______________________
* Commencement of operations.
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.
From time to time, advertising material for the Fund may include
biographical information relating to its portfolio manager and may refer to,
or include commentary by a portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.
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, 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 fiscal year ended September 30, 1997, the Fund
paid the Transfer Agent $1,750 with respect to the Income Portfolio, $6,687
with respect to the Growth Portfolio and $6,247 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 fiscal year ended September 30,
1997 the Fund paid the Custodian $5,057, $33,411 and $26,286 with respect to
the Income Portfolio, Growth and Income Portfolio and Growth Portfolio,
respectively.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, 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.
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT AUDITORS
The Funds' Annual Report to Shareholders for the fiscal year ended
September 30, 1997 is a separate document supplied with this Statement of
Additional Information, and the financial statements, accompanying notes,
and report of independent auditors appearing therein are incorporated by
reference into this Statement of Additional Information.
APPENDIX
Description of certain ratings assigned by Standard & Poor's Ratings
Group ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch IBCA, Inc.
("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.
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 two years ended September 30, 1997.
Included in Part B of the Registration Statement:
Statement of Investments-- September 30, 1997*
Statement of Financial Futures -- September 30, 1997*
Statement of Assets and Liabilities--
September 30, 1997*
Statement of Operations--year ended
September 30, 1997*
Statement of Changes in Net Assets--for the years ended September 30, 1996
and September 30, 1997*
Notes to Financial Statements*
Report of Ernst & Young LLP, Independent
Auditors, dated November 12, 1997*
* Items are incorporated by reference to the Registrant's Annual Report
on Form N-30D, filed on December 9, 1997.
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.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(16) Schedules of Computation of Performance Data is incorporated
by reference to Exhibit (16) of Post-Effective Amendment No. 7 to
the Registration Statement on Form N-1A, filed on December 27,
1996.
(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.
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, 1997
______________ _____________________________
Common Stock
(Par value $.001)
Growth Portfolio
Investor Shares 46
Restricted Shares 393
Income Portfolio
Investor Shares 9
Restricted Shares 119
Growth and Income Portfolio
Investor Shares 34
Restricted Shares 226
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.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
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
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 Officer:
and a Director 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****
RICHARD F. SYRON Chairman of the Board and
Director Chief Executive Officer:
American Stock Exchange
86 Trinity Place
New York, New York 10006;
Director:
John Hancock Mutual Life Insurance Company
John Hancock Place, Box 111
Boston, Massachusetts, 02117;
Thermo Electron Corporation
81 Wyman Street, Box 9046
Waltham, Massachusetts 02254-9046;
American Business Conference
1730 K Street, NW, Suite 120
Washington, D.C. 20006;
Trustee:
Boston College - Board of Trustees
140 Commonwealth Ave.
Chestnut Hill, Massachusetts 02167-3934
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
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 Service Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
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
WILLIAM V. HEALEY President:
Assistant Secretary The Truepenny Corporation*;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
Secretary and Director:
Dreyfus Partnership Management Inc.*;
Director:
The Dreyfus Trust Company++;
Assistant Secretary:
Dreyfus Service Corporation*;
Dreyfus Investment Advisors, Inc.*;
Assistant Clerk:
Dreyfus Insurance Agency of Massachusetts,
Inc.+++++
______________________________________
* The address of the business so indicated is 200 Park Avenue, New York,
New York 10166.
** 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.
+++ The address of the business so indicated is 69, Route `d'Esch, L-
1470 Luxembourg.
++++ The address of the business so indicated is 69, Route `d'Esch, L-
2953 Luxembourg.
+++++ The address of the business so indicated is 53 State Street, Boston,
Massachusetts 02103.
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 Premier California Municipal Bond Fund
63) Dreyfus Premier Equity Funds, Inc.
64) Dreyfus Premier International Growth Fund, Inc.
65) Dreyfus Premier GNMA Fund
66) Dreyfus Premier Worldwide Growth Fund, Inc.
67) Dreyfus Premier Insured Municipal Bond Fund
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Fund
72) Dreyfus Index Funds, Inc.
73) Dreyfus Short-Intermediate Government Fund
74) Dreyfus Short-Intermediate Municipal Bond Fund
75) The Dreyfus Socially Responsible Growth Fund, Inc.
76) Dreyfus Stock Index Fund, Inc.
77) Dreyfus Tax Exempt Cash Management
78) The Dreyfus Third Century Fund, Inc.
79) Dreyfus Treasury Cash Management
80) Dreyfus Treasury Prime Cash Management
81) Dreyfus Variable Investment Fund
82) Dreyfus Worldwide Dollar Money Market Fund, Inc.
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market 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+ Director, Senior Vice President, Vice President
Tresurer and Chief Financial Officer and Assistant
Treasurer
Richard W. Ingram Executive Vice President Vice President
and Assistant
Treasurer
Elizabeth A. Keeley++ Vice President Vice President
and Assistant
Secretary
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is 60 State Street, 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. Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
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 19th day of December, 1997.
DREYFUS LIFETIME PORTFOLIOS, INC.
BY: /s/Marie E. Connolly*
__________________________________________
Marie E. Connolly, PRESIDENT
<TABLE>
<CAPTION>
Pursuant to the requirements of the Securities Act of 1933, 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> <C> <C>
/s/Marie E. Connolly* President and Treasurer (Principal 12/19/97
______________________________ Executive, Financial and
Marie E. Connolly Accounting Officer)
/s/Joseph S. DiMartino* Chairman of the Board of Directors 12/19/97
_____________________________
Joseph S. DiMartino
/s/Lucy Wilson Benson* Director 12/19/97
______________________________
Lucy Wilson Benson
/s/David W. Burke* Director 12/19/97
_____________________________
David W. Burke
/s/Martin D. Fife* Director 12/19/97
_____________________________
Martin D. Fife
/s/Robert R. Glauber* Director 12/19/97
_____________________________
Robert R. Glauber
/s/Whitney I. Gerard* Director 12/19/97
_____________________________
Whitney I. Gerard
/s/Arthur A. Hartman* Director 12/19/97
_____________________________
Arthur A. Hartman
/s/George L. Perry* Director 12/19/97
_____________________________
George L. Perry
/s/Paul D. Wolfowitz* Director 12/19/97
_____________________________
Paul D. Wolfowitz
Elizabeth A. Keeley
*BY: __________________________
Elizabeth A. Keeley,
Attorney-in-Fact
EXHIBIT INDEX
Exhibits
(11) Consent of Independent Auditors
(17) Financial Data Schedule
OTHER EXHIBITS
(a) Powers of Attorney
(b) Secretary's Certificate
</TABLE>
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 12, 1997, which is incorporated by reference, in this Registration
Statement (Form N-1A 33-66080) of Dreyfus LifeTime Portfolios, Inc.
ERNST & YOUNG LLP
New York, New York
December 18, 1997
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<APPREC-INCREASE-CURRENT> 1930
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<DISTRIBUTIONS-OF-INCOME> 223
<DISTRIBUTIONS-OF-GAINS> 978
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 753
<NUMBER-OF-SHARES-REDEEMED> 10032
<SHARES-REINVESTED> 1201
<NET-CHANGE-IN-ASSETS> 13022
<ACCUMULATED-NII-PRIOR> 509
<ACCUMULATED-GAINS-PRIOR> 2898
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 393
<INTEREST-EXPENSE> 1
<GROSS-EXPENSE> 580
<AVERAGE-NET-ASSETS> 13201
<PER-SHARE-NAV-BEGIN> 16.58
<PER-SHARE-NII> .62
<PER-SHARE-GAIN-APPREC> 4.68
<PER-SHARE-DIVIDEND> (.26)
<PER-SHARE-DISTRIBUTIONS> (1.12)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.50
<EXPENSE-RATIO> .010
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Elizabeth A. Keeley,
Marie E. Connolly, Richard W. Ingram, Michael S. Petrucelli, Douglas C.
Conroy, Mary A. Nelson and Joseph F. Tower, and each of them, with full
power to act without the other, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him or
her, and in his or her name, place and stead, in any and all capacities
(until revoked in writing) to sign any and all amendments to the
Registration Statement of Dreyfus LifeTime Portfolios, Inc. (including post-
effective amendments and amendments thereto), and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each
and every act and thing ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Joseph S. DiMartino August 25, 1997
Joseph S. DiMartino
/s/ Lucy Wilson Benson August 25, 1997
Lucy Wilson Benson
/s/ David W. Burke August 25, 1997
David W. Burke
/s/ Martin D. Fife August 25, 1997
Martin D. Fife
/s/ Whitney I. Gerard August 25, 1997
Whitney I. Gerard
/s/ Robert R. Glauber August 25, 1997
Robert R. Glauber
/s/ Arthur A. Hartman August 25, 1997
Arthur A. Hartman
/s/ George L. Perry August 25, 1997
George L. Perry
/s/ Paul D. Wolfowitz August 25, 1997
Paul D. Wolfowitz
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Elizabeth A. Keeley,
Richard W. Ingram, Michael S. Petrucelli, Douglas C. Conroy, Mary A. Nelson
and Joseph F. Tower, and each of them, with full power to act without the
other, his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him or her, and in his or her
name, place and stead, in any and all capacities (until revoked in writing)
to sign any and all amendments to the Registration Statement of Dreyfus
LifeTime Portfolios, Inc. (including post-effective amendments and
amendments thereto), and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
/s/ Marie E. Connolly August 25, 1997
Marie E. Connolly
ASSISTANT SECRETARY'S CERTIFICATE
I, Michael S. Petrucelli, Vice President and Assistant Treasurer of
Dreyfus LifeTime Portfolios, Inc, (the "Fund"), hereby certify the following
resolution was adopted by written consent dated August 25, 1997 and remains
in full force and effect:
RESOLVED, that the Registration Statement and any and
all amendments and supplements thereto may be signed by
any one of Elizabeth A. Keeley, Marie E. Connolly,
Richard W. Ingram, Douglas C. Conroy, Mary A. Nelson,
Joseph F. Tower and Michael S. Petrucelli as the
attorney-in-fact for the proper officers of the Fund, a
with full power of substitution and resubstitution; and
that the appointment of each of such persons as such
attorney-in-fact hereby is authorized and approved; and
that such attorneys-in-fact, and each of them, shall
have full power and authority to do and perform each and
every act and thing requisite and necessary to be done
in connection with such Registration Statement and any
and all amendments and supplements thereto, as whom he
or she is acting as attorney-in-fact, might or could do
in person.
IN WITNESS WHEREOF, I have hereunto set my hand as Assistant Secretary
of the Funds and affixed the seal this 11th day of December, 1997.
/s/Michael S. Petrucelli
MICHAEL S. PETRUCELLI
(Seal)
DREYFUS LIFETIME PORTFOLIOS, INC.
