Dreyfus
LifeTime
Portfolios, Inc.
ANNUAL REPORT
September 30, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
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2 Letter from the President
3 Discussion of Performance
8 Portfolio Performance
Statement of Investments
14 Income Portfolio
18 Growth & Income Portfolio
27 Growth Portfolio
Statement of Financial Futures
17 Income Portfolio
26 Growth & Income Portfolio
33 Growth Portfolio
34 Statement of Assets and Liabilities
36 Statement of Operations
Statement of Changes in Net Assets
38 Income Portfolio
40 Growth & Income Portfolio
42 Growth Portfolio
Financial Highlights
44 Income Portfolio
46 Growth & Income Portfolio
48 Growth Portfolio
50 Notes to Financial Statements
58 Report of Independent Auditors
59 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Portfolios
Dreyfus LifeTime Portfolios, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus LifeTime Portfolios,
Inc., covering the 12-month period from October 1, 1998 through September 30,
1999. Inside, you'll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, Steven A. Falci.
The past 12 months have been highly volatile for stocks and bonds, which began
the reporting period in the wake of a sharp correction caused primarily by the
spread of the global financial crisis in overseas markets. The Federal Reserve
Board responded to the crisis last fall by reducing short-term interest rates.
Its strategy apparently was effective, and the U.S. economy remained strong
through the remainder of the reporting period.
Because inflation is more likely to rise in a strong economy, the bond market
generally declined during the first nine months of 1999. To help forestall a
rise of inflation, the Federal Reserve Board raised short-term interest rates
twice during the summer of 1999, effectively reversing most of last fall's
interest-rate cuts.
Despite weakness in the U.S. stock market toward the end of the reporting
period, these economic conditions generally supported stock prices throughout
the year. Technology stocks and other stocks with high growth rates provided the
highest overall returns, while value-oriented stocks generally lagged the market
averages.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus LifeTime Portfolios, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 15, 1999
DISCUSSION OF PERFORMANCE
Steven A. Falci, Portfolio Manager
How did Dreyfus LifeTime Portfolios, Inc. perform relative to its benchmarks?
For the 12-month period ended September 30, 1999, Dreyfus LifeTime Portfolios,
Inc. produced the following total returns:(1)
GROWTH PORTFOLIO CUSTOMIZED BLENDED INDEX(2)
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Investor Shares 23.50% 21.58%
Restricted Shares 23.93%
GROWTH AND INCOME PORTFOLIO
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Investor Shares 14.17% 13.65%
Restricted Shares 14.51%
INCOME PORTFOLIO
- --------------------------------------------------------------------------------
Investor Shares 5.44% 7.13%
Restricted Shares 5.66%
The total returns for the Growth Portfolio and the Growth and Income Portfolio
compare with a 27.79% total return for the Standard & Poor's 500 Composite Stock
Price Index. The total return for the Income Portfolio compares with a 0.63%
total return for the Lehman Brothers Intermediate Government/Corporate Bond
Index.(3)
We attribute the outperformance of the Growth and Growth and Income Portfolios
to timely asset shifts between their stock and bond components, which enabled us
to capture higher returns as different market segments came into favor. In
addition, the stock components in these two portfolios helped drive returns, led
primarily by an effective security selection strategy. And while the Income
Portfolio's 12-month returns did not exceed those provided by its blended
benchmark, we are pleased that the portfolio handily outperformed the Lehman
Brothers Intermediate Government/Corporate Bond Index.
The Portfolios
DISCUSSION OF PERFORMANCE (CONTINUED)
What are the portfolios' investment approaches?
Dreyfus LifeTime Portfolios, Inc., consists of three separate portfolios
offering a range of investment approaches: Income Portfolio, the most
conservative; Growth and Income Portfolio, a more moderate fund; and Growth
Portfolio, the most aggressive of the three. While the portfolios are managed
using the same basic investment philosophy, each varies according to its own
investment goals and risk tolerance levels.
All three portfolios typically invest in stocks and bonds. However, each
allocates its assets between those two investment classes in a different way.
While the actual makeup of the Growth and Growth and Income Portfolios will vary
over time according to our view of prevailing market conditions, typical
portfolio allocations are as follows: Income Portfolio -- 67.5% bonds, 22.5%
stocks and 10% cash; Growth and Income Portfolio -- 50% bonds and 50% stocks;
Growth Portfolio -- 20% bonds and 80% stocks.
When selecting securities for each portfolio, we generally attempt to mirror the
sector weightings of the benchmark indices. However, we seek to produce returns
that exceed the benchmarks by using a highly disciplined security selection
process that considers variables such as price/earnings ratios, interest-rate
levels and the shape of the yield curve. In addition, we use proprietary
computer models that assess the relative values of stock and bond prices across
different markets.
What other factors influenced the performance of the portfolios?
At the beginning of the portfolios' 12-month reporting period, the global equity
markets were in the midst of turmoil, a crisis that resulted in a broad-based
stock market decline last summer in the United States. To take advantage of
lower stock prices, we allocated a larger percentage of the portfolios' assets
to equities. At the end of the year and into early 1999, we began to pare the
portfolios' equity allocation back to a more neutral position. In fact, by early
February 1999, we had positioned the portfolios even more defensively, moving
our
equity components to underweighted positions because of concerns regarding
conditions in the global equity markets. While this stance did not allow us to
fully participate in the brief U.S. stock market rally that occurred in
mid-April, it proved to be a positive move when stocks began to underperform
bonds during the third quarter of 1999. However, it is important to note that
for the 12-month period the equity component outperformed the S&P 500, driven
largely by gains in our holdings in America Online, Oracle, Lexmark
International Group, Cl. A, EMC and Sun Microsystems.
The most notable events within the fixed-income markets during the reporting
period were the interest-rate hikes initiated by the Federal Reserve Board in
June and August, 1999. In a rising interest-rate environment, the strongest
fixed-income gains were produced by the corporate bond sector, followed by
mortgage-backed securities, asset-backed securities, U.S. government agency
bonds and U.S. Treasuries.
What is the current strategy for the portfolios?
The primary driver of performance in these portfolios is our asset allocation
strategy. That is, our success is dependent upon our ability to make correct
asset shifts between the stock and bond components. As of the end of the
reporting period, our Growth and Growth and Income Portfolios remain positioned
near their minimum equity/maximum fixed-income exposure. We made that decision
due to the rising interest-rate environment, fears of inflation and our belief
that many stocks remain excessively priced.
In the equity component, we begin by using an investment approach that is sector
neutral to the S&P 500. Then, we attempt to add value to the portfolios by
actively selecting stocks within those sectors that we believe can produce
positive returns. As of the end of the period, some of the names that we are
emphasizing are Microsoft, International Business Machines, Exxon, Wal-Mart
Stores, General Electric and Citigroup.
October 15, 1999
The Portfolios
DISCUSSION OF PERFORMANCE (CONTINUED)
ASSET CLASS EXPOSURE AS OF SEPTEMBER 30, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION PORTFOLIO SHARES MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(2) FOR THE Growth Portfolio, THE CUSTOMIZED BLENDED INDEX HAS BEEN PREPARED BY
THE PORTFOLIO FOR PURPOSES OF MORE ACCURATE COMPARISON TO THE GROWTH
PORTFOLIO'S OVERALL PORTFOLIO COMPOSITION. WE
HAVE COMBINED THE PERFORMANCE OF UNMANAGED INDICES REFLECTING THE BASELINE
PERCENTAGE SET FORTH IN THE PROSPECTUS, BUT IN GREATER DETAIL THAN THE
BROADER PROSPECTUS BASELINE PERCENTAGES: DOMESTIC LARGE COMPANY STOCKS --
54.4.%; DOMESTIC SMALL COMPANY STOCKS -- 13.6%; FOREIGN STOCKS -- 12.0%;
DOMESTIC BONDS -- 17.0%; AND FOREIGN BONDS -- 3.0%. THE CUSTOMIZED BLENDED
INDEX COMBINES RETURNS FROM THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX ("S&P 500 INDEX"), THE RUSSELL 2000 INDEX, THE MORGAN STANLEY CAPITAL
INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST (FREE) INDEX -- HEDGED $U.S.
("EAFE((reg.tm)) INDEX"), THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX ("LEHMAN INDEX") AND THE J.P. MORGAN
NON-U.S. GOVERNMENT BOND INDEX -- HEDGED ("J.P. MORGAN GLOBAL INDEX") AND
IS WEIGHTED TO THE AFOREMENTIONED BASELINE PERCENTAGES. THE S&P 500 INDEX
IS A WIDELY ACCEPTED, UNMANAGED INDEX OF OVERALL STOCK MARKET PERFORMANCE.
THE RUSSELL 2000 INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF SMALL-CAP
STOCK PERFORMANCE. THE EAFE((reg.tm))INDEX, WHICH IS THE PROPERTY OF MORGAN
STANLEY & CO., INCORPORATED, IS AN UNMANAGED INDEX COMPOSED OF A SAMPLE OF
COMPANIES REPRESENTATIVE OF THE MARKET STRUCTURE OF EUROPEAN AND PACIFIC
BASIN COUNTRIES AND INCLUDES NET DIVIDENDS REINVESTED. THE LEHMAN INDEX IS
A WIDELY ACCEPTED, UNMANAGED INDEX OF GOVERNMENT AND CORPORATE BOND MARKET
PERFORMANCE COMPOSED OF U.S. GOVERNMENT, TREASURY AND AGENCY SECURITIES,
FIXED-INCOME SECURITIES AND NONCONVERTIBLE INVESTMENT-GRADE CORPORATE DEBT,
WITH AN AVERAGE MATURITY OF 1-10 YEARS. THE J.P. MORGAN GLOBAL INDEX IS AN
INDEX THAT MEASURES RETURN ON BONDS FROM 12 WORLD MARKETS, HEDGED INTO U.S.
DOLLARS. THIS INDEX DOES NOT INCLUDE A U.S. BOND COMPONENT. NONE OF THE
FOREGOING INDICES REFLECT ACCOUNT CHARGES, FEES OR OTHER EXPENSES.
FOR THE Growth and Income Portfolio, WE HAVE COMBINED THE PERFORMANCE OF
UNMANAGED INDICES REFLECTING THE BASELINE PERCENTAGES SET FORTH IN THE
PROSPECTUS, BUT IN GREATER DETAIL THAN THE BROADER PROSPECTUS BASELINE
PERCENTAGES: DOMESTIC LARGE COMPANY STOCKS -- 36%; DOMESTIC SMALL COMPANY
STOCKS -- 9%; FOREIGN STOCKS -- 5%; DOMESTIC BONDS -- 45%; AND FOREIGN
BONDS -- 5%. THE CUSTOMIZED BLENDED INDEX COMBINES RETURNS FROM THE S&P 500
INDEX, THE RUSSELL 2000 INDEX, THE EAFE((reg.tm)) INDEX, THE LEHMAN INDEX
AND THE J.P. MORGAN GLOBAL INDEX AND IS WEIGHTED TO THE AFOREMENTIONED
BASELINE PERCENTAGES. THE INDICES ARE DESCRIBED ABOVE.
FOR THE Income Portfolio, WE HAVE COMBINED THE PERFORMANCE OF UNMANAGED
INDICES REFLECTING THE BASELINE PERCENTAGES SET FORTH IN THE PROSPECTUS,
BUT IN GREATER DETAIL THAN THE BROADER PROSPECTUS BASELINE PERCENTAGES:
BONDS -- 67.5%; STOCKS -- 22.5%; AND TREASURY BILLS -- 10%. THE CUSTOMIZED
BLENDED INDEX COMBINES RETURNS FROM THE LEHMAN INDEX, THE S&P 500 INDEX
(BOTH DESCRIBED ABOVE) AND THE 90-DAY TREASURY BILL RATE, AS IT CHANGES
FROM TIME TO TIME, AND IS WEIGHTED TO THE AFOREMENTIONED BASELINE
PERCENTAGES.
(3) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX AND THE LEHMAN BROTHERS
INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX ARE DESCRIBED ABOVE.
The Portfolios
PORTFOLIO PERFORMANCE
Comparison of change in value of $10,000 investment in the Investor shares and
Restricted shares of Dreyfus Lifetime Portfolios, Inc., Growth and Income
Portfolio with the Standard & Poor's 500 Composite Stock Price Index and a
Customized Blended Index
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
* SOURCE: LIPPER ANALYTICAL SERVICES, INC.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC., LEHMAN BROTHERS, MORGAN STANLEY &
CO. INCORPORATED AND J.P. MORGAN & CO. INCORPORATED
Average Annual Total Returns AS OF 9/30/99
Inception From
Date 1 Year Inception
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INVESTOR SHARES 3/31/95 14.17% 16.66%
RESTRICTED SHARES 3/31/95 14.51% 16.55%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN EACH OF THE INVESTOR
SHARES AND RESTRICTED SHARES OF THE GROWTH AND INCOME PORTFOLIO ON 3/31/95
(INCEPTION DATE) TO A $10,000 INVESTMENT MADE ON THAT DATE IN THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500 INDEX") AS WELL AS TO A
CUSTOMIZED BLENDED INDEX REFLECTING THE PORTFOLIO'S ASSET ALLOCATION BASELINE
PERCENTAGES ("BASELINE") WHICH ARE DESCRIBED BELOW AND IN THE FUND'S PROSPECTUS.
THE CUSTOMIZED BLENDED INDEX IS CALCULATED ON A YEAR-TO-YEAR BASIS. ALL
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE GROWTH AND INCOME PORTFOLIO ALLOCATES YOUR MONEY AMONG DOMESTIC AND FOREIGN
STOCKS AND BONDS. THE PORTFOLIO'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO
ACCOUNT ALL APPLICABLE FEES AND EXPENSES. THE S&P 500 INDEX IS A WIDELY
ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE. THE S&P 500 INDEX
WAS SELECTED BECAUSE (1) DOMESTIC COMMON STOCKS REPRESENT A SIGNIFICANT PORTION
OF THE BASELINE AND (2) THE MAJORITY OF THE STOCK PORTION OF THE PORTFOLIO IS
INVESTED IN STOCKS INCLUDED IN THE S&P 500 INDEX. BECAUSE THE PORTFOLIO HAS
SIGNIFICANT FIXED-INCOME HOLDINGS, THOUGH, IT CAN UNDERPERFORM AN EQUITY-ONLY
INDEX. THE CUSTOMIZED BLENDED INDEX HAS BEEN PREPARED BY THE FUND FOR PURPOSES
OF MORE ACCURATE COMPARISON TO THE PORTFOLIO'S OVERALL PORTFOLIO COMPOSITION. WE
HAVE COMBINED THE PERFORMANCE OF UNMANAGED INDICES REFLECTING THE BASELINE
PERCENTAGES SET FORTH IN THE PROSPECTUS, BUT IN GREATER DETAIL THAN THE BROADER
PROSPECTUS BASELINE PERCENTAGES: DOMESTIC LARGE COMPANY STOCKS - 36%; DOMESTIC
SMALL COMPANY STOCKS - 9%; FOREIGN STOCKS - 5%; DOMESTIC BONDS - 45%; FOREIGN
BONDS - 5%. THE CUSTOMIZED BLENDED INDEX COMBINES RETURNS FROM THE S&P 500
INDEX, THE RUSSELL 2000 INDEX, THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE,
AUSTRALASIA, FAR EAST (FREE) INDEX-HEDGED, $U.S. ("EAFE INDEX"), THE LEHMAN
BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX ("LEHMAN INDEX") AND THE
J.P. MORGAN NON-U.S. GOVERNMENT BOND INDEX - HEDGED ("J.P. MORGAN GLOBAL
INDEX"), AND IS WEIGHTED TO THE AFOREMENTIONED BASELINE PERCENTAGES. THE RUSSELL
2000 INDEX IS AN UNMANAGED INDEX AND IS COMPOSED OF THE 2,000 SMALLEST COMPANIES
IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF 3,000 OF THE
LARGEST U.S. COMPANIES BY MARKET CAPITALIZATION. THE EAFE INDEX, WHICH IS THE
PROPERTY OF MORGAN STANLEY & CO. INCORPORATED, IS AN UNMANAGED INDEX COMPOSED OF
A SAMPLE OF COMPANIES REPRESENTATIVE OF THE MARKET STRUCTURE OF EUROPEAN AND
PACIFIC BASIN COUNTRIES AND INCLUDES NET DIVIDENDS REINVESTED. THE LEHMAN INDEX
IS A WIDELY ACCEPTED, UNMANAGED INDEX OF GOVERNMENT AND CORPORATE BOND MARKET
PERFORMANCE COMPOSED OF U.S. GOVERNMENT, TREASURY AND AGENCY SECURITIES,
FIXED-INCOME SECURITIES AND NONCONVERTIBLE INVESTMENT GRADE CORPORATE DEBT, WITH
AN AVERAGE MATURITY OF 1-10 YEARS. THE J.P. MORGAN GLOBAL INDEX IS AN INDEX THAT
MEASURES RETURNS ON BONDS FROM 12 WORLD MARKETS, HEDGED INTO U.S. DOLLARS. THIS
INDEX DOES NOT INCLUDE A U.S. BONDS COMPONENT. NONE OF THE FOREGOING INDICES
REFLECT ACCOUNT CHARGES, FEES OR OTHER EXPENSES. FURTHER INFORMATION RELATING TO
THE PORTFOLIO'S PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS
CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN
THIS REPORT.
The Portfolios
PORTFOLIO PERFORMANCE
Comparison of change in value of $10,000 investment in the Investor shares and
Restricted shares of Dreyfus Lifetime Portfolios, Inc., Income Portfolio with
the Lehman Brothers Intermediate Government/Corporate Bond Index and a
Customized Blended Index
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN EACH OF THE INVESTOR
SHARES AND RESTRICTED SHARES OF THE INCOME PORTFOLIO ON 3/31/95 (INCEPTION DATE)
TO A $10,000 INVESTMENT MADE ON THAT DATE IN THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX ("LEHMAN INDEX")AS WELL AS TO A CUSTOMIZED
BLENDED INDEX REFLECTING THE PORTFOLIO'S ASSET ALLOCATION BASELINE PERCENTAGES
("BASELINE") WHICH ARE DESCRIBED BELOW AND IN THE FUND'S PROSPECTUS. THE
CUSTOMIZED BLENDED INDEX IS CALCULATED ON A YEAR-TO-YEAR BASIS. ALL DIVIDENDS
AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE INCOME PORTFOLIO ALLOCATES YOUR MONEY AMONG DOMESTIC BONDS AND STOCKS AND
MONEY MARKET INSTRUMENTS. THE PORTFOLIO'S PERFORMANCE SHOWN IN THE LINE GRAPH
TAKES INTO ACCOUNT ALL APPLICABLE FEES AND EXPENSES. THE LEHMAN INDEX DOES NOT
TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE LEHMAN INDEX WAS
SELECTED BECAUSE (1) GOVERNMENT AND CORPORATE BONDS REPRESENT THE HIGHEST
BASELINE PERCENTAGE OF THE PORTFOLIO AND (2) THE FIXED-INCOME PORTION OF THE
PORTFOLIO IS INVESTED TO REPRESENT THE LEHMAN INDEX. THE CUSTOMIZED BLENDED
INDEX HAS BEEN PREPARED BY THE FUND FOR PURPOSES OF MORE ACCURATE COMPARISON TO
THE PORTFOLIO'S OVERALL PORTFOLIO COMPOSITION. WE HAVE COMBINED THE PERFORMANCE
OF UNMANAGED INDICES REFLECTING THE BASELINE PERCENTAGES SET FORTH IN THE
PROSPECTUS, BUT IN GREATER DETAIL THAN THE BROADER PROSPECTUS BASELINE
PERCENTAGES: BONDS - 67.5%; STOCKS - 22.5%; AND TREASURY BILLS - 10%. THE
CUSTOMIZED BLENDED INDEX COMBINES RETURNS FROM THE LEHMAN INDEX, THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500 INDEX") AND THE 90-DAY TREASURY
BILL RATE, AS IT CHANGES FROM TIME TO TIME, AND IS WEIGHTED TO THE
AFOREMENTIONED BASELINE PERCENTAGES. THE LEHMAN INDEX IS A WIDELY ACCEPTED,
UNMANAGED INDEX OF GOVERNMENT AND CORPORATE BOND MARKET PERFORMANCE COMPOSED OF
U.S. GOVERNMENT, TREASURY AND AGENCY SECURITIES, FIXED-INCOME SECURITIES AND
NONCONVERTIBLE INVESTMENT GRADE CORPORATE DEBT, WITH AN AVERAGE MATURITY OF 1-10
YEARS. THE S&P 500 INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK
MARKET PERFORMANCE. NONE OF THE FOREGOING INDICES REFLECT ACCOUNT CHARGES, FEES
OR OTHER EXPENSES. FURTHER INFORMATION RELATING TO THE PORTFOLIO'S PERFORMANCE,
INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL
HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
Average Annual Total Returns AS OF 9/30/99
Inception From
Date 1 Year Inception
- --------------------------------------------------------------------------------
INVESTOR SHARES 3/31/95 5.44% 9.50%
RESTRICTED SHARES 3/31/95 5.66% 9.75%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
* SOURCE: LEHMAN BROTHERS
** SOURCE: LEHMAN BROTHERS, LIPPER ANALYTICAL SERVICES, INC., AND THE WALL
STREET JOURNAL
The Portfolios
PORTFOLIO PERFORMANCE
Comparison of change in value of $10,000 investment in the Investor shares and
Restricted shares of Dreyfus Lifetime Portfolios, Inc., Growth Portfolio with
the Standard & Poor's 500 Composite Stock Price Index and a Customized Blended
Index
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
* SOURCE: LIPPER ANALYTICAL SERVICES, INC.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC., LEHMAN BROTHERS, MORGAN STANLEY &
CO. INCORPORATED AND J.P. MORGAN & CO. INCORPORATED
Average Annual Total Returns AS OF 9/30/99
Inception From
Date 1 Year Inception
- --------------------------------------------------------------------------------
INVESTOR SHARES 3/31/95 23.50% 21.72%
RESTRICTED SHARES 3/31/95 23.93% 22.01%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN EACH OF THE INVESTOR
SHARES AND RESTRICTED SHARES OF THE GROWTH PORTFOLIO ON 3/31/95 (INCEPTION DATE)
TO A $10,000 INVESTMENT MADE ON THAT DATE IN THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX ("S&P 500 INDEX") AS WELL AS TO A CUSTOMIZED BLENDED INDEX
REFLECTING THE PORTFOLIO'S ASSET ALLOCATION BASELINE PERCENTAGES ("BASELINE")
WHICH ARE DESCRIBED BELOW AND IN THE FUND'S PROSPECTUS. THE CUSTOMIZED BLENDED
INDEX IS CALCULATED ON A YEAR-TO-YEAR BASIS. ALL DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS ARE REINVESTED.
THE GROWTH PORTFOLIO ALLOCATES YOUR MONEY AMONG DOMESTIC AND FOREIGN STOCKS AND
BONDS. THE PORTFOLIO'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT
ALL APPLICABLE FEES AND EXPENSES. THE S&P 500 INDEX IS A WIDELY ACCEPTED,
UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE. THE S&P 500 INDEX WAS SELECTED
BECAUSE (1) DOMESTIC COMMON STOCKS REPRESENT THE HIGHEST BASELINE PERCENTAGE OF
THE PORTFOLIO'S ASSETS AND (2) THE MAJORITY OF THE STOCK PORTION OF THE
PORTFOLIO IS INVESTED IN STOCKS INCLUDED IN THE S&P 500 INDEX. THE CUSTOMIZED
BLENDED INDEX HAS BEEN PREPARED BY THE FUND FOR PURPOSES OF MORE ACCURATE
COMPARISON TO THE PORTFOLIO'S OVERALL PORTFOLIO COMPOSITION. WE HAVE COMBINED
THE PERFORMANCE OF UNMANAGED INDICES REFLECTING THE BASELINE PERCENTAGES SET
FORTH IN THE PROSPECTUS, BUT IN GREATER DETAIL THAN THE BROADER PROSPECTUS
BASELINE PERCENTAGES: DOMESTIC LARGE COMPANY STOCKS - 54.4%; DOMESTIC SMALL
COMPANY STOCKS - 13.6%; FOREIGN STOCKS - 12.0%; DOMESTIC BONDS - 17.0%; AND
FOREIGN BONDS - 3.0%. THE CUSTOMIZED BLENDED INDEX COMBINES RETURNS FROM THE S&P
500 INDEX, THE RUSSELL 2000 INDEX, THE MORGAN STANLEY CAPITAL INTERNATIONAL
EUROPE, AUSTRALASIA, FAR EAST (FREE) INDEX-HEDGED, $U.S. ("EAFE INDEX"), THE
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX ("LEHMAN INDEX")
AND THE J.P. MORGAN NON-U.S. GOVERNMENT BOND INDEX-HEDGED ("J.P. MORGAN GLOBAL
INDEX") AND IS WEIGHTED TO THE AFOREMENTIONED BASELINE PERCENTAGES. THE RUSSELL
2000 INDEX IS AN UNMANAGED INDEX AND IS COMPOSED OF THE 2,000 SMALLEST COMPANIES
IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF 3,000 OF THE
LARGEST U.S. COMPANIES BY MARKET CAPITALIZATION. THE EAFE INDEX, WHICH IS THE
PROPERTY OF MORGAN STANLEY & CO. INCORPORATED, IS AN UNMANAGED INDEX COMPOSED OF
A SAMPLE OF COMPANIES REPRESENTATIVE OF THE MARKET STRUCTURE OF EUROPEAN AND
PACIFIC BASIN COUNTRIES AND INCLUDES NET DIVIDENDS REINVESTED. THE LEHMAN
BROTHERS INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF GOVERNMENT AND CORPORATE
BOND MARKET PERFORMANCE COMPOSED OF U.S. GOVERNMENT, TREASURY AND AGENCY
SECURITIES, FIXED-INCOME SECURITIES AND NONCONVERTIBLE INVESTMENT GRADE
CORPORATE DEBT, WITH AN AVERAGE MATURITY OF 1-10 YEARS. THE J.P. MORGAN GLOBAL
INDEX IS AN INDEX THAT MEASURES RETURNS ON BONDS FROM 12 WORLD MARKETS, HEDGED
INTO U.S. DOLLARS. THIS INDEX DOES NOT INCLUDE A U.S. BONDS COMPONENT. NONE OF
THE FOREGOING INDICES REFLECT ACCOUNT CHARGES, FEES OR OTHER EXPENSES. FURTHER
INFORMATION RELATING TO THE PORTFOLIO'S PERFORMANCE, INCLUDING EXPENSE
REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION
OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
The Portfolios
STATEMENT OF INVESTMENTS
September 30, 1999
INCOME PORTFOLIO
<TABLE>
<CAPTION>
Principal
BONDS AND NOTES--67.5% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL--10.7%
American Express Credit Account Master Trust,
Asset Backed Ctfs., Ser. 1997-1, Cl. A,
<S> <C> <C>
6.40%, 2005 1,000,000 1,000,115
Atlantic Richfield, Notes,
5.55%, 2003 500,000 485,891
Bank One, Medium-Term Notes, Ser. A,
6%, 2009 300,000 275,129
Citibank Credit Card Master Trust,
Asset Backed Ctfs., Ser. 1998-1, Cl. A,
5.75%, 2003 1,000,000 994,325
Fairfax Financial Holdings, Notes,
7.375%, 2006 150,000 137,351
General Motors Acceptance Corp.,
Medium-Term Notes,
5.63%, 2003 800,000 776,580
HSBC Holding PLC, Sub. Notes,
7.50%, 2009 100,000 100,080
Household Finance, Sr. Notes,
5.875%, 2009 500,000 451,015
Inter-American Development, Sr. Unsub. Notes,
6.125%, 2002 300,000 299,670
Merrill Lynch, Notes,
6%, 2009 500,000 458,215
Norwest, Sr. Notes,
6.75%, 2006 400,000 390,233
Salomon Smith Barney Holdings, Notes,
6.25%, 2003 250,000 245,429
Sanwa Finance Aruba, Notes,
8.35%, 2009 100,000 102,595
Transamerica Financial, Notes,
7.25%, 2002 300,000 302,713
US Bank, Notes,
5.70%, 2008 300,000 269,312
Wells Fargo, Notes,
6.50%, 2002 275,000 274,064
6,562,717
INDUSTRIAL--8.7%
Carter Holt Harvey, Sr. Notes,
8.875%, 2004 200,000 210,789
INCOME PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL (CONTINUED)
Comcast Cable Communications, Notes,
6.20%, 2008 250,000 229,212
Comdisco, Notes,
6.375%, 2001 500,000 494,167
duPont (EI)deNemours, Deb.,
6.50%, 2002 500,000 502,745
Federated Department Stores, Sr. Notes,
8.125%, 2002 300,000 309,954
Mobil, Deb.,
8.375%, 2001 1,000,000 1,027,287
Monsanto, Notes,
5.375%, 2001 500,000 (a) 487,815
Nordstrom, Sr. Notes,
5.625%, 2009 200,000 179,656
Norfolk Southern, Sr. Notes,
6.20%, 2009 250,000 231,574
Petro Geo-Services, Sr. Notes,
6.625%, 2008 180,000 166,805
Safeway, Notes,
7.50%, 2009 200,000 200,750
Time Warner, Notes,
7.75%, 2005 250,000 257,616
Wal-Mart Stores, Sr. Notes,
6.875%, 2009 1,000,000 1,003,481
5,301,851
UTILITIES--4.8%
MCI Worldcom, Sr. Notes,
6.40%, 2005 500,000 488,575
National Rural Utilities Cooperative Finance,
Collateral Trust,
5.50%, 2005 500,000 476,647
Niagara Mohawk Power, First Mortgage,
7.75%, 2006 200,000 204,155
Philadelphia Electric, First Mortgage,
6.625%, 2003 500,000 498,514
Southern New England Telecommunications,
Medium-Term Notes,
6.50%, 2002 1,000,000 1,004,220
The Portfolios
STATEMENT OF INVESTMENTS (CONTINUED)
INCOME PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
Sprint Capital, Notes,
5.70%, 2003 300,000 287,030
2,959,141
U.S. GOVERNMENT & AGENCIES--43.3%
Federal Farm Credit Bank, Bonds,
5.25%, 5/1/2002 500,000 489,642
Federal Home Loan Bank, Bonds,
Ser. 121, 5.25%, 4/25/2002 830,000 812,968
Federal Home Loan Bank, Notes,
Ser. 98, 5.50%, 8/13/2001 1,000,000 991,210
Ser. 114, 5.125%, 2/26/2002 1,000,000 977,500
Federal Home Loan Mortgage Corp.,
Real Estate Mortgage Investment Conduit,
5%, 2/15/2001 1,000,000 987,696
Federal National Mortgage Association:
5.25%, 1/15/2003 1,400,000 1,359,071
5.125%, 2/13/2004 1,000,000 952,430
5.75%, 6/15/2005 500,000 484,722
5.25%, 1/15/2009 500,000 451,045
U.S. Treasury Bonds:
11.625%, 11/15/2004 650,000 808,776
7.625%, 2/15/2007 500,000 517,550
U.S. Treasury Notes:
6.125%, 9/30/2000 1,000,000 1,006,360
5.625%, 11/30/2000 300,000 300,357
5.25%, 1/31/2001 280,000 279,017
6.375%, 3/31/2001 1,050,000 1,061,529
8%, 5/15/2001 1,000,000 1,036,620
6.625%, 6/30/2001 200,000 203,144
7.875%, 8/15/2001 1,905,000 1,979,447
7.50%, 11/15/2001 835,000 865,068
6.375%, 8/15/2002 770,000 783,321
5.75%, 10/31/2002 250,000 250,125
5.375%, 6/30/2003 600,000 591,462
5.75%, 8/15/2003 1,885,000 1,879,684
7.25%, 8/15/2004 1,620,000 1,711,984
7.875%, 11/15/2004 260,000 281,913
6.50%, 8/15/2005 1,000,000 1,024,350
6.875%, 5/15/2006 350,000 365,337
7%, 7/15/2006 1,085,000 1,139,706
6.625%, 5/15/2007 1,000,000 1,031,530
5.625%, 5/15/2008 1,070,000 1,039,013
INCOME PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCIES (CONTINUED)
U.S. Treasury Notes (continued):
4.75%, 11/15/2008 900,000 819,414
26,481,991
TOTAL BONDS AND NOTES
(cost $42,054,202) 41,305,700
Principal
SHORT-TERM INVESTMENTS--31.5% Amount Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS:
4.56%, 10/14/1999 136,000 135,780
4.67%, 10/28/1999 595,000 593,048
4.35%, 11/4/1999 1,284,000 (b) 1,278,569
4.48%, 11/12/1999 364,000 362,100
4.49%, 11/18/1999 4,719,000 (b) 4,690,355
4.57%, 11/26/1999 1,632,000 1,620,462
4.50%, 12/9/1999 10,679,000 (b) 10,584,811
TOTAL SHORT-TERM INVESTMENTS
(cost $19,263,625) 19,265,125
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $61,317,827) 99.0% 60,570,825
CASH AND RECEIVABLES (NET) 1.0% 603,618
NET ASSETS 100.0% 61,174,443
</TABLE>
(a) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933, AS AMENDED. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT SEPTEMBER 30,
1999, THIS SECURITY AMOUNTED TO $487,815 OR APPROXIMATELY .8% OF NET
ASSETS.
(b) PARTIALLY HELD BY THE CUSTODIAN/BROKER IN A SEGREGATED ACCOUNT AS
COLLATERAL FOR OPEN FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF FINANCIAL FUTURES
September 30, 1999
<TABLE>
<CAPTION>
Market Value Unrealized
Covered (Depreciation)
Contracts by Contracts ($) Expiration at 9/30/99 ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES PURCHASED
<S> <C> <C> <C> <C>
Standard & Poor's 500 41 13,306,550 December '99 (622,753)
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS (CONTINUED)
GROWTH AND INCOME PORTFOLIO
COMMON STOCKS--25.9% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICAL--2.4%
<S> <C> <C>
Delphi Automotive Systems 3,962 63,640
Delta Air Lines 5,500 266,750
Federated Department Stores 6,400 (a) 279,600
Ford Motor 20,300 1,018,806
Gap 18,050 577,600
General Motors 5,700 358,744
Home Depot 8,800 603,900
Kmart 14,000 (a) 163,625
Office Depot 18,600 (a) 189,488
Safeway 13,400 (a) 510,037
TJX Cos. 23,000 645,438
Tommy Hilfiger 8,300 (a) 233,956
Wal-Mart Stores 36,000 1,712,250
6,623,834
CONSUMER STAPLES--1.7%
Coca-Cola 8,000 384,500
Fortune Brands 12,200 393,450
IBP 11,000 271,562
Procter & Gamble 13,000 1,218,750
Quaker Oats 7,000 433,125
Ralston-Purina Group 14,600 406,063
Sara Lee 33,000 773,437
Unilever, A.D.R. 9,288 632,745
4,513,632
ENERGY--1.8%
Amerada Hess 6,400 392,000
Chevron 3,900 346,125
Coastal 6,600 270,188
Conoco, Cl. B 7,027 192,369
El Paso Energy 7,300 290,631
Exxon 23,100 1,754,156
Global Marine 12,800 (a) 210,400
Royal Dutch Petroleum 17,700 1,045,406
Texaco 7,000 441,875
4,943,150
GROWTH AND INCOME PORTFOLIO (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE--3.0%
Amgen 17,100 (a) 1,393,650
Bausch & Lomb 3,500 230,781
Biomet 7,400 194,713
Bristol-Myers Squibb 20,100 1,356,750
Cardinal Health 7,500 408,750
Johnson & Johnson 9,300 854,437
Merck & Co. 15,500 1,004,594
Schering-Plough 22,700 990,288
Tyco International 10,700 1,104,775
United HealthCare 3,600 175,275
Warner-Lambert 8,400 557,550
8,271,563
INTEREST SENSITIVE--4.6%
Allstate 20,500 511,219
Ambac Financial Group 6,500 307,937
BankBoston 7,700 333,988
Bank of America 14,100 785,194
Bank One 6,600 229,763
Chase Manhattan 17,600 1,326,600
Citigroup 36,450 1,603,800
Comerica 8,900 450,563
Conseco 12,400 239,475
Edwards (A.G.) 4,400 116,050
Everest Reinsurance Holdings 5,500 130,969
Fannie Mae 11,800 739,712
Fleet Financial Group 16,500 604,313
General Electric 13,900 1,648,019
Golden West Financial 2,900 284,925
Household International 7,800 312,975
MBNA 20,500 467,656
MGIC Investment 4,800 229,200
Merrill Lynch 5,600 376,250
Morgan Stanley Dean Witter & Co. 6,800 606,475
SLM Holding 7,100 305,300
SunTrust Banks 6,700 440,525
The Portfolios
STATEMENT OF INVESTMENTS (CONTINUED)
GROWTH AND INCOME PORTFOLIO (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
UnionBanCal 5,300 192,125
XL Capital, Cl. A 6,000 270,000
12,513,033
PRODUCER GOODS & SERVICES--1.9%
American Power Conversion 12,000 (a) 228,000
Boeing 9,800 417,725
Centex 4,200 124,163
Dow Chemical 4,700 534,037
duPont(EI)deNemours 8,950 544,831
General Dynamics 7,600 474,525
Georgia Pacific Group 12,600 510,300
Ingersoll-Rand 10,900 598,819
Kimberly-Clark 11,000 577,500
PPG Industries 3,700 222,000
Rohm & Haas 8,100 292,613
USG 3,200 152,000
Union Carbide 6,700 380,644
United Technologies 3,479 206,348
5,263,505
SERVICES--1.8%
America Online 10,200 (a) 1,060,800
Ceridian 11,600 (a) 288,550
Comcast, Cl. A (non-voting) 13,000 518,375
Fox Entertainment Group, Cl. A 16,400 (a) 346,450
Gannett 9,400 650,363
IMS Health 11,700 266,906
Infinity Broadcasting, Cl. A 18,300 (a) 536,419
Tribune 15,400 766,150
Vodafone AirTouch, A.D.R. 1,750 416,062
4,850,075
TECHNOLOGY--5.9%
ADC Telecommunications 10,100 (a) 423,569
Applied Materials 5,200 (a) 404,950
BMC Software 7,400 (a) 529,562
Cisco Systems 20,500 (a) 1,405,531
Compuware 10,000 (a) 260,625
GROWTH AND INCOME PORTFOLIO (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Dell Computer 30,400 (a) 1,271,100
EMC 11,900 (a) 850,106
General Instrument 7,600 (a) 365,750
Hewlett-Packard 6,700 616,400
Intel 17,400 1,293,037
International Business Machines 15,400 1,869,175
Lexmark International Group, Cl. A 6,700 (a) 539,350
Lucent Technologies 10,800 700,650
Microsoft 37,400 (a) 3,387,037
Nokia, A.D.R. 4,400 395,175
Tellabs 15,200 (a) 865,450
Texas Instruments 5,300 435,925
USWeb 10,600 (a) 363,712
15,977,104
TOBACCO--.1%
Philip Morris Cos. 10,000 341,875
UTILITIES--2.7%
AT&T 22,100 961,350
Ameren 6,900 260,906
Ameritech 23,600 1,585,625
BellSouth 25,200 1,134,000
Consolidated Edison 8,400 348,600
FPL Group 12,600 634,725
GTE 5,400 415,125
MCI WorldCom 20,500 (a) 1,473,437
Sempra Energy 10,700 222,694
UtiliCorp United 8,650 182,191
7,218,653
TOTAL COMMON STOCKS
(cost $57,260,681) 70,516,424
- ------------------------------------------------------------------------------------------------------------------------------------
Principal
BONDS AND NOTES--64.0% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL--11.1%
American Express Credit Account Master Trust,
Asset Backed Ctfs., Ser. 1997-1, Cl. A,
6.40%, 2005 3,000,000 3,000,345
The Portfolios
STATEMENT OF INVESTMENTS (CONTINUED)
GROWTH AND INCOME PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL (CONTINUED)
American General, Notes,
7.75%, 2005 500,000 518,532
Associates N.A., Sr. Notes:
7.50%, 2002 550,000 562,219
5.75%, 2003 2,100,000 2,022,449
Atlantic Richfield, Notes,
5.55%, 2003 3,500,000 3,401,240
BankAmerica, Sub. Notes,
7.875%, 2002 1,000,000 1,036,420
Citibank Credit Card Master Trust,
Asset Backed Ctfs., Ser. 1998-1, Cl. A,
5.75%, 2003 3,500,000 3,480,137
Citigroup, Sr. Notes,
6.60%, 2000 1,000,000 1,004,367
Ford Motor Credit, Sr. Notes,
5.75%, 2004 500,000 480,288
Frank Russell, Notes,
5.625%, 2009 750,000 (b) 674,579
General Motors Acceptance Corp.,
Medium-Term Notes,
5.63%, 2003 1,500,000 1,456,087
Hyatt Equities, Notes, Series MTN,
6.80%, 2000 500,000 (b) 500,322
International Lease Finance, Notes,
5.625%, 2002 500,000 490,333
Lehman Brothers, Sr. Sub. Notes,
7.625%, 2006 1,000,000 1,000,772
Lehman Brothers Holdings, Notes,
7.50%, 2006 2,500,000 2,489,478
Merrill Lynch, Notes,
6%, 2009 3,000,000 2,749,290
NationsBank Credit Card Master Trust, Notes,
Ser. 1995-1, Cl. A,
6.45%, 2003 500,000 501,235
Norwest, Sr. Notes,
6.75%, 2006 1,500,000 1,463,373
Ontario (Province of), Bonds,
7.75%, 2002 2,000,000 2,067,020
US Bank, Notes,
5.70%, 2008 1,500,000 1,346,559
30,245,045
GROWTH AND INCOME PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--11.1%
Albertson's, Sr. Notes,
6.95%, 2009 2,000,000 1,987,678
BP Amoco, Notes,
6.25%, 2004 2,000,000 1,988,916
Coca-Cola Enterprises, Notes,
5.75%, 2008 1,000,000 909,076
Comcast Cable Communications, Notes,
6.20%, 2008 2,000,000 1,833,700
Delphi Auto Systems, Notes,
6.125%, 2004 1,000,000 963,294
duPont(EI)deNemours, Notes,
6.50%, 2002 3,000,000 3,016,467
Federated Department Stores, Notes,
6.30%, 2009 2,000,000 1,850,984
Penney (JC), Deb.,
9.05%, 2001 1,000,000 1,028,358
Monsanto, Notes,
5.375%, 2001 1,500,000 (b) 1,463,445
Norfolk Southern, Notes,
6.20%, 2009 5,500,000 5,094,617
Philip Morris, Notes:
6.95%, 2006 500,000 501,658
7.625%, 2002 1,000,000 1,017,803
PPG Industries, Notes,
6.75%, 2004 5,000,000 5,002,860
Viacom, Sr. Notes,
7.75%, 2005 500,000 509,557
Wal-Mart Stores, Sr. Notes,
6.875%, 2009 3,000,000 3,010,443
30,178,856
UTILITIES--5.2%
AT&T, Notes,
5.625%, 2004 3,000,000 2,879,064
K N Energy, Sr. Notes,
6.65%, 2005 500,000 485,934
MCI Worldcom, Sr. Notes,
6.40%, 2005 1,500,000 1,465,726
National Rural Utilities Cooperative Finance,
Collateral Trust,
5.50%, 2005 1,800,000 1,715,927
The Portfolios
STATEMENT OF INVESTMENTS (CONTINUED)
GROWTH AND INCOME PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
PP&L, First Mortgage,
6.125%, 2001 600,000 597,913
Paramount Communications, Sr. Notes,
7.50%, 2002 3,150,000 3,206,536
Peco Energy Transition Trust, Notes,
Ser. 1999-A, Cl. A2,
5.63%, 2005 500,000 489,408
Philadelphia Electric, First Mortgage,
6.625%, 2003 2,000,000 1,994,056
Public Service Electric and Gas, First Mortgage,
8.875%, 2003 500,000 531,695
Teco Energy, Notes,
5.54%, 2001 300,000 296,106
Wisconsin Electric Power, First Mortgage,
7.25%, 2004 500,000 513,294
14,175,659
U.S. GOVERNMENT & AGENCIES--36.6%
Federal Farm Credit Bank, Bonds,
6%, 10/1/2001 6,000,000 5,972,100
Federal Home Loan Bank, Bonds:
5.50%, 7/14/2000 1,300,000 1,297,205
4.875%, 1/26/2001 1,250,000 1,233,537
5.625%, 3/19/2001 1,300,000 1,294,462
5.875%, 8/15/2001 3,500,000 3,487,785
5.25%, 4/25/2002 13,100,000 12,831,175
Federal Home Loan Bank, Notes:
5.125%, 2/26/2002 1,350,000 1,319,625
4.875%, 1/22/2002 2,300,000 2,239,984
5.125%, 9/15/2003 2,450,000 2,350,481
Federal Home Loan Bank, Sr. Notes,
5.80%, 9/2/2008 500,000 471,048
Federal Home Loan Mortgage Corp., Notes:
5.75%, 7/15/2003 800,000 785,544
5.125%, 10/15/2008 200,000 179,268
Federal National Mortgage Association, Notes:
5.10%, 9/25/2000 1,500,000 1,490,640
5.625%, 3/15/2001 1,600,000 1,593,008
5.375%, 3/15/2002 500,000 491,250
5.25%, 1/15/2003 4,900,000 4,756,749
4.75%, 11/14/2003 6,100,000 5,763,164
GROWTH AND INCOME PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCIES (CONTINUED)
Federal National Mortgage Association, Notes (continued):
5.625%, 5/14/2004 1,000,000 971,061
8.50%, 2/1/2005 500,000 504,160
5.75%, 6/15/2005 900,000 872,499
6.50%, 4/29/2009 4,500,000 4,308,660
Tennessee Valley Authority, Deb.,
6.375%, 6/15/2005 1,950,000 1,934,940
U.S. Treasury Bonds,
11.625%, 11/15/2004 170,000 211,526
U.S. Treasury Notes:
5.625%, 11/30/2000 3,500,000 3,504,165
5.25%, 1/31/2001 6,000,000 5,978,940
5.375%, 2/15/2001 1,750,000 1,745,642
8%, 5/15/2001 4,300,000 4,457,466
6.25%, 10/31/2001 1,600,000 1,618,816
7.50%, 5/15/2002 3,200,000 3,337,344
6.375%, 8/15/2002 2,725,000 2,772,143
5.875%, 9/30/2002 1,400,000 1,405,502
5.75%, 10/31/2002 1,300,000 1,300,650
5.625%, 12/31/2002 1,500,000 1,494,795
6.25%, 2/15/2003 3,200,000 3,244,224
5.50%, 5/31/2003 600,000 594,078
5.25%, 8/15/2003 200,000 196,150
5.75%, 8/15/2003 2,450,000 2,443,091
7.50%, 2/15/2005 1,500,000 1,603,995
6.875%, 5/15/2006 1,080,000 1,127,326
7%, 7/15/2006 1,030,000 1,081,933
6.50%, 10/15/2006 1,350,000 1,381,252
6.25%, 2/15/2007 3,500,000 3,532,550
6.125%, 8/15/2007 860,000 861,247
100,041,180
TOTAL BONDS AND NOTES
(cost $177,275,657) 174,640,740
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--9.0%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS:
4.56%, 10/14/99 141,000 140,772
4.67%, 10/28/99 409,000 407,658
4.35%, 11/4/99 661,000 (c) 658,204
4.48%, 11/12/99 283,000 281,523
4.49%, 11/18/99 8,457,000 8,405,666
The Portfolios
STATEMENT OF INVESTMENTS (CONTINUED)
GROWTH AND INCOME PORTFOLIO (CONTINUED)
Principal
SHORT-TERM INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS (CONTINUED)
4.57%, 11/26/99 963,000 956,192
4.50%, 12/9/99 13,945,000 (c) 13,822,005
TOTAL SHORT-TERM INVESTMENTS
(cost $24,670,241) 24,672,020
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $259,206,579) 98.9% 269,829,184
CASH AND RECEIVABLES (NET) 1.1% 3,105,426
NET ASSETS 100.0% 272,934,610
</TABLE>
(a) NON-INCOME PRODUCING.
(b) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933, AS AMENDED. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT
FROM REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT SEPTEMBER
30, 1999, THESE SECURITIES AMOUNTED TO $2,638,346, OR APPROXIMATELY 1.0% OF
NET ASSETS.
(C) PARTIALLY HELD BY THE CUSTODIAN/BROKER IN A SEGREGATED ACCOUNT AS COLLATERAL
FOR OPEN FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF FINANCIAL FUTURES
September 30, 1999
<TABLE>
<CAPTION>
Unrealized
Market Value Appreciation
Covered (Depreciation)
Contracts by Contracts ($) Expiration at 9/30/99 ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES PURCHASED:
<S> <C> <C> <C> <C>
Australian All Ordinaries 8 378,835 December '99 (17,084)
CAC 40 37 1,764,685 December '99 (67,864)
Deutsche Akteinindex 14 1,868,507 December '99 (138,570)
Financial Times 31 3,052,038 December '99 (106,439)
Hang Seng 6 492,151 October '99 (53,690)
Nikkei 300 137 3,626,661 December '99 6,742
Russell 2,000 57 12,240,750 December '99 (261,345)
Standard & Poor's 500 1 324,550 December '99 (15,533)
(653,783)
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
COMMON STOCKS--38.9% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICAL--3.7%
<S> <C> <C>
Delphi Automotive Systems 1,900 30,519
Delta Air Lines 2,700 130,950
Federated Department Stores 3,100 (a) 135,431
Ford Motor 9,900 496,856
Gap 8,800 281,600
General Motors 2,800 176,225
Home Depot 4,300 295,087
Kmart 6,800 (a) 79,475
Office Depot 9,000 (a) 91,687
Safeway 6,500 (a) 247,406
TJX Cos. 11,200 314,300
Tommy Hilfiger 4,100 (a) 115,569
Wal-Mart Stores 17,500 832,344
3,227,449
CONSUMER STAPLES--2.5%
Coca-Cola 3,900 187,444
Fortune Brands 5,900 190,275
IBP 5,300 130,844
Procter & Gamble 6,400 600,000
Quaker Oats 3,400 210,375
Ralston-Purina Group 7,100 197,469
Sara Lee 16,000 375,000
Unilever, A.D.R. 4,500 306,562
2,197,969
ENERGY--2.7%
Amerada Hess 3,200 196,000
Chevron 1,900 168,625
Coastal 3,200 131,000
Conoco, Cl. B 3,563 97,554
El Paso Energy 3,600 143,325
Exxon 11,200 850,500
Global Marine 6,200 (a) 101,912
Royal Dutch Petroleum 8,600 507,937
Texaco 3,400 214,625
2,411,478
The Portfolios
STATEMENT OF INVESTMENTS (CONTINUED)
GROWTH PORTFOLIO (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE--4.6%
Amgen 8,300 (a) 676,450
Bausch & Lomb 1,700 112,094
Biomet 3,600 94,725
Bristol-Myers Squibb 9,800 661,500
Cardinal Health 3,700 201,650
Johnson & Johnson 4,500 413,437
Merck & Co. 7,500 486,094
Schering-Plough 11,000 479,875
Tyco International 5,200 536,900
United HealthCare 1,800 87,637
Warner-Lambert 4,100 272,138
4,022,500
INTEREST SENSITIVE--6.9%
Allstate 10,000 249,375
Ambac Financial Group 3,100 146,862
BankBoston 3,700 160,487
Bank of America 6,900 384,244
Bank One 3,200 111,400
Chase Manhattan 8,600 648,225
Citigroup 17,700 778,800
Comerica 4,300 217,687
Conseco 6,200 119,738
Edwards (A.G.) 2,100 55,388
Fannie Mae 5,900 369,856
Fleet Financial Group 8,000 293,000
General Electric 6,900 818,081
Golden West Financial 1,400 137,550
Household International 3,800 152,475
MBNA 9,900 225,844
MGIC Investment 2,300 109,825
Merrill Lynch 2,700 181,406
Morgan Stanley Dean Witter & Co. 3,300 294,319
SLM Holding 3,500 150,500
SunTrust Banks 3,300 216,975
GROWTH PORTFOLIO (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
UnionBanCal 2,600 94,250
XL Capital, Cl. A 4,200 189,000
6,105,287
PRODUCER GOODS & SERVICES--2.9%
American Power Conversion 5,800 (a) 110,200
Boeing 4,700 200,338
Centex 2,100 62,081
Dow Chemical 2,300 261,337
duPont(EI)deNemours 4,300 261,763
General Dynamics 3,700 231,019
Georgia Pacific Group 6,100 247,050
Ingersoll-Rand 5,300 291,169
Kimberly-Clark 5,300 278,250
PPG Industries 1,800 108,000
Rohm & Haas 3,900 140,887
USG 1,600 76,000
Union Carbide 3,300 187,481
United Technologies 1,700 100,831
2,556,406
SERVICES--2.6%
America Online 4,900 (a) 509,600
Ceridian 5,600 (a) 139,300
Comcast, Cl. A (non-voting) 6,300 251,213
Fox Entertainment Group, Cl. A 7,900 (a) 166,887
Gannett 4,500 311,344
IMS Health 5,700 130,031
Infinity Broadcasting, Cl. A 8,800 (a) 257,950
Tribune 7,400 368,150
Vodafone AirTouch, A.D.R. 800 190,200
2,324,675
TECHNOLOGY--8.8%
ADC Telecommunications 4,900 (a) 205,494
Applied Materials 2,500 (a) 194,687
BMC Software 3,600 (a) 257,625
The Portfolios
STATEMENT OF INVESTMENTS (CONTINUED)
GROWTH PORTFOLIO (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Cisco Systems 9,900 (a) 678,769
Compuware 4,900 (a) 127,706
Dell Computer 14,800 (a) 618,825
EMC 5,700 (a) 407,194
General Instrument 3,800 (a) 182,875
Hewlett-Packard 3,300 303,600
Intel 8,500 631,656
International Business Machines 7,500 910,313
Lexmark International Group, Cl. A 3,200 (a) 257,600
Lucent Technologies 5,300 343,837
Microsoft 18,200 (a) 1,648,238
Nokia, A.D.R. 2,200 197,588
Tellabs 7,400 (a) 421,338
Texas Instruments 2,600 213,850
USWeb 5,100 (a) 174,994
7,776,189
TOBACCO--.2%
Philip Morris Cos. 4,900 167,519
UTILITIES--4.0%
AT&T 10,700 465,450
Ameren 3,400 128,563
Ameritech 11,500 772,656
BellSouth 12,200 549,000
Consolidated Edison 4,100 170,150
FPL Group 6,000 302,250
GTE 2,600 199,875
MCI WorldCom 10,000 (a) 718,750
Sempra Energy 5,100 106,144
UtiliCorp United 4,100 86,356
3,499,194
TOTAL COMMON STOCKS
(cost $25,812,885) 34,288,666
GROWTH PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES--34.5% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds,
11.125%, 8/15/2003 550,000 647,488
U.S. Treasury Notes:
5.75%, 10/31/2000 650,000 651,918
5.75%, 11/15/2000 400,000 401,172
5.50%, 12/31/2000 450,000 449,793
5.25%, 1/31/2001 440,000 438,456
7.75%, 2/15/2001 425,000 437,091
6.375%, 3/31/2001 500,000 505,490
6.25%, 4/30/2001 1,050,000 1,060,122
6.625%, 6/30/2001 490,000 497,703
7.875%, 8/15/2001 280,000 290,942
6.25%, 10/31/2001 500,000 505,880
7.50%, 11/15/2001 460,000 476,565
5.875%, 11/30/2001 490,000 492,171
6.125%, 12/31/2001 565,000 570,170
6.25%, 2/28/2002 500,000 506,425
6.625%, 4/30/2002 1,000,000 1,022,090
7.50%, 5/15/2002 975,000 1,016,847
6%, 7/31/2002 500,000 503,820
6.375%, 8/15/2002 925,000 941,002
5.875%, 9/30/2002 480,000 481,886
5.75%, 10/31/2002 90,000 90,045
5.625%, 12/31/2002 550,000 548,091
5.50%, 1/31/2003 230,000 228,259
6.25%, 2/15/2003 910,000 922,576
5.50%, 2/28/2003 1,000,000 991,370
5.50%, 5/31/2003 1,000,000 990,130
5.375%, 6/30/2003 1,030,000 1,015,343
5.25%, 8/15/2003 250,000 245,187
5.75%, 8/15/2003 460,000 458,703
5.875%, 2/15/2004 500,000 502,345
7.25%, 5/15/2004 500,000 527,530
7.25%, 8/15/2004 1,300,000 1,373,814
7.875%, 11/15/2004 1,685,000 1,827,012
7.50%, 2/15/2005 600,000 641,598
6.875%, 5/15/2006 570,000 594,977
7%, 7/15/2006 1,100,000 1,155,462
6.50%, 10/15/2006 4,655,000 4,762,763
The Portfolios
STATEMENT OF INVESTMENTS (CONTINUED)
GROWTH PORTFOLIO (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes (continued)
6.625%, 5/15/2007 450,000 464,189
6.125%, 8/15/2007 1,170,000 1,171,697
TOTAL BONDS AND NOTES
(cost $30,973,092) 30,408,122
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--25.7%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS:
4.35%, 10/21/1999 37,000 36,910
4.67%, 10/28/1999 1,218,000 1,214,005
4.35%, 11/4/1999 176,000 175,255
4.48%, 11/12/1999 268,000 266,601
4.49%, 11/18/1999 876,000 (b) 870,683
4.57%, 11/26/1999 126,000 (b) 125,109
4.50%, 12/9/1999 20,182,000 (b) 20,003,995
TOTAL SHORT-TERM INVESTMENTS
(cost $22,693,691) 22,692,558
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $79,479,668) 99.1% 87,389,346
CASH AND RECEIVABLES (NET) .9% 820,368
NET ASSETS 100.0% 88,209,714
(a) NON-INCOME PRODUCING.
(b) PARTIALLY HELD BY THE CUSTODIAN/BROKER IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF FINANCIAL FUTURES
September 30, 1999
<TABLE>
<CAPTION>
Unrealized
Market Value Appreciation
Covered (Depreciation)
Contracts by Contracts ($) Expiration at 9/30/99 ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES PURCHASED:
<S> <C> <C> <C> <C>
Australian All Ordinaries 6 284,126 December '99 (12,813)
CAC 40 33 1,573,908 December '99 (60,527)
Deutsche Akteinindex 12 1,601,578 December '99 (118,774)
Financial Times 30 2,953,585 December '99 (103,006)
Hang Seng 4 328,101 October '99 (35,793)
Nikkei 300 117 3,097,222 December '99 5,758
Russell 2,000 44 9,449,000 December '99 (201,740)
Standard & Poor's 500 10 3,245,500 December '99 (71,205)
(598,100)
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
<TABLE>
<CAPTION>
Growth and
Income Income Growth
Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--
See Statement of Investments
<S> <C> <C> <C>
[cost--Note 5(b)] 60,570,825 269,829,184 87,389,346
Cash 241,962 685,839 338,241
Receivable for investment securities sold 930,503 15,161,582 1,705,176
Dividends and interest receivable 568,946 2,787,896 580,590
Receivable for futures variation margin--Note 5(a) 187,575 283,274 280,551
Receivable for shares of Common Stock subscribed 25,533 2,500 2,500
Prepaid expenses 14,015 27,980 8,997
62,539,359 288,778,255 90,305,401
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 31,215 155,289 55,620
Due to Distributor 3,226 14,239 1,983
Payable for investment securities purchased 1,050,663 15,358,475 1,725,210
Payable for shares of Common Stock redeemed 246,433 229,257 273,638
Accrued expenses 33,379 86,385 39,236
1,364,916 15,843,645 2,095,687
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 61,174,443 272,934,610 88,209,714
- ------------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 58,884,958 238,520,257 70,834,553
Accumulated undistributed investment
income--net 2,056,920 6,263,750 1,503,393
Accumulated net realized gain (loss)
on investments 1,602,320 18,181,781 8,560,190
Accumulated net unrealized appreciation
(depreciation) on investments [including
($622,753), ($653,783) and ($598,100) net
unrealized (depreciation) on financial futures for
the Income Portfolio, the Growth and Income
Portfolio and the Growth Portfolio,
respectively]--Note 5(b) (1,369,755) 9,968,822 7,311,578
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 61,174,443 272,934,610 88,209,714
Growth and
Income Income Growth
NET ASSET VALUE PER SHARE Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
RESTRICTED CLASS SHARES
Net Assets ($) 45,221,370 204,096,040 78,553,539
Shares Outstanding 3,336,181 11,525,195 4,253,881
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 13.55 17.71 18.47
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS SHARES
Net Assets ($) 15,953,073 68,838,570 9,656,175
Shares Outstanding 1,179,322 3,734,640 521,316
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 13.53 18.43 18.52
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
</TABLE>
STATEMENT OF OPERATIONS
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Growth and
Income Income Growth
Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
<S> <C> <C> <C>
Interest 3,147,583 8,808,697 2,058,243
Cash dividends (net of $12,367 and $8,741
foreign taxes withheld at source for the Growth
and Income Portfolio and the
Growth Portfolio, respectively) -- 806,561 481,522
TOTAL INCOME 3,147,583 9,615,258 2,539,765
EXPENSES--NOTE 2(D):
Investment advisory fee--Note 4(a) 334,929 1,603,591 576,980
Shareholder servicing costs--Note 4(b) 40,227 40,650 27,855
Auditing fees 27,249 39,448 40,530
Registration fees 27,780 55,419 44,942
Prospectus and shareholders' reports 9,373 24,673 14,558
Legal fees 7,319 19,956 9,123
Custodian fees--Note 4(b) 8,582 39,737 26,171
Directors' fees and expenses--Note 4(c) 3,997 12,478 4,921
Loan commitment fees--Note 3 226 705 295
Miscellaneous 16,024 25,553 12,793
TOTAL EXPENSES 475,706 1,862,210 758,168
Less--reduction in management fee due to
undertaking--Note 4(a) -- (20,137) --
NET EXPENSES 475,706 1,842,073 758,168
INVESTMENT INCOME--NET 2,671,877 7,773,185 1,781,597
</TABLE>
<TABLE>
<CAPTION>
Growth and
Income Income Growth
Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS--NOTE 5 ($):
<S> <C> <C> <C>
Net realized gain (loss) on investments (281,198) 14,491,298 5,920,704
Net realized gain (loss) on forward currency
exchange contracts -- 9,923 6,961
Net realized gain (loss) on financial futures 2,780,314 5,125,801 3,280,766
NET REALIZED GAIN (LOSS) 2,499,116 19,627,022 9,208,431
Net unrealized appreciation (depreciation) on
investments [including ($498,186),
($136,492) and ($237,212) net unrealized
(depreciation) on financial futures for
the Income Portfolio, the Growth and Income
Portfolio and the Growth Portfolio, respectively] (2,406,310) 298,845 3,485,618
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 92,806 19,925,867 12,694,049
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 2,764,683 27,699,052 14,475,646
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------------------
INCOME PORTFOLIO 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS ($):
<S> <C> <C>
Investment income--net 2,671,877 2,045,142
Net realized gain (loss) on investments 2,499,116 366,825
Net unrealized appreciation (depreciation)
on investments (2,406,310) 955,546
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,764,683 3,367,513
- ------------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Restricted Class shares (1,893,485) (1,195,123)
Investor Class shares (342,649) (503,416)
Net realized gain on investments:
Restricted Class shares (946,742) (1,162,380)
Investor Class shares (185,368) (510,607)
TOTAL DIVIDENDS (3,368,244) (3,371,526)
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Restricted Class shares 34,163,058 26,320,416
Investor Class shares 17,711,187 1,337,588
Dividends reinvested:
Restricted Class shares 2,836,547 2,347,119
Investor Class shares 522,995 1,013,674
Cost of shares redeemed:
Restricted Class shares (31,820,840) (10,884,363)
Investor Class shares (14,079,208) (549,851)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 9,333,739 19,584,583
TOTAL INCREASE (DECREASE) IN NET ASSETS 8,730,178 19,580,570
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 52,444,265 32,863,695
END OF PERIOD 61,174,443 52,444,265
Undistributed investment income--net 2,056,920 1,621,177
Year Ended September 30,
----------------------------------------
INCOME PORTFOLIO (CONTINUED) 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
RESTRICTED CLASS SHARES
Shares sold 2,502,527 1,946,584
Shares issued for dividends reinvested 213,596 182,513
Shares redeemed (2,325,407) (802,212)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 390,716 1,326,885
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS SHARES
Shares sold 1,307,028 101,421
Shares issued for dividends reinvested 39,382 78,947
Shares redeemed (1,030,673) (40,536)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 315,737 139,832
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended September 30,
-------------------------------------------
GROWTH AND INCOME PORTFOLIO 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 7,773,185 7,596,661
Net realized gain (loss) on investments 19,627,022 4,470,025
Net unrealized appreciation (depreciation)
on investments 298,845 (872,552)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 27,699,052 11,194,134
- ------------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Restricted Class shares (7,141,044) (5,849,219)
Investor Class shares (145,634) (32,948)
Net realized gain on investments:
Restricted Class shares (5,112,081) (21,725,669)
Investor Class shares (111,323) (126,391)
TOTAL DIVIDENDS (12,510,082) (27,734,227)
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Restricted Class shares 49,284,067 90,798,976
Investor Class shares 10,805,692 3,980,556
Dividends reinvested:
Restricted Class shares 12,251,329 27,548,779
Investor Class shares 256,461 136,621
Cost of shares redeemed:
Restricted Class shares (58,520,579) (88,118,244)
Investor Class shares (1,262,237) (821,513)
Net assets received in connection with
reorganization--Note 1
Investor Class shares 54,557,437 --
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 67,372,170 33,525,175
TOTAL INCREASE (DECREASE) IN NET ASSETS 82,561,140 16,985,082
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 190,373,470 173,388,388
END OF PERIOD 272,934,610 190,373,470
Undistributed investment income--net 6,263,750 5,777,243
Year Ended September 30,
-----------------------------------------
GROWTH AND INCOME PORTFOLIO (CONTINUED) 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
RESTRICTED CLASS SHARES
Shares sold 2,787,679 5,567,273
Shares issued for dividends reinvested 728,812 1,762,559
Shares redeemed (3,312,365) (5,379,862)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 204,126 1,949,970
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS SHARES
Shares sold 585,101 236,425
Shares issued for dividends reinvested 14,621 8,397
Shares redeemed (67,897) (48,209)
Shares issued in connection with reorganization--Note 1 2,970,357 --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 3,502,182 196,613
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended September 30,
--------------------------------------------
GROWTH PORTFOLIO 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,781,597 1,681,377
Net realized gain (loss) on investments 9,208,431 2,498,256
Net unrealized appreciation (depreciation)
on investments 3,485,618 (2,255,918)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 14,475,646 1,923,715
- ------------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Restricted Class shares (1,457,071) (1,250,906)
Investor Class shares (73,161) (138,717)
Net realized gain on investments:
Restricted Class shares (2,589,945) (10,416,640)
Investor Class shares (152,993) (1,381,134)
TOTAL DIVIDENDS (4,273,170) (13,187,397)
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Restricted Class shares 52,573,276 31,959,042
Investor Class shares 6,501,470 2,944,441
Dividends reinvested:
Restricted Class shares 3,995,453 11,662,994
Investor Class shares 225,768 1,519,851
Cost of shares redeemed:
Restricted Class shares (44,050,777) (23,893,043)
Investor Class shares (1,414,942) (8,374,798)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 17,830,248 15,818,487
TOTAL INCREASE (DECREASE) IN NET ASSETS 28,032,724 4,554,805
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 60,176,990 55,622,185
END OF PERIOD 88,209,714 60,176,990
Undistributed investment income--net 1,503,393 1,252,028
Year Ended September 30,
-----------------------------------------------
GROWTH PORTFOLIO (CONTINUED) 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
RESTRICTED CLASS SHARES
Shares sold 2,899,690 1,910,064
Shares issued for dividends reinvested 237,966 755,375
Shares redeemed (2,434,295) (1,403,323)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 703,361 1,262,116
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS SHARES
Shares sold 351,259 183,691
Shares issued for dividends reinvested 13,375 98,055
Shares redeemed (78,498) (469,015)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 286,136 (187,269)
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
</TABLE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single fund share. Total return shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had reinvested
all dividends and distributions. These figures have been derived from the fund's
financial statements.
<TABLE>
<CAPTION>
RESTRICTED CLASS SHARES
--------------------------------------------------------------
Year Ended September 30,
----------------------------------------------------------------
INCOME PORTFOLIO 1999 1998 1997(a) 1996(b) 1995(c)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 13.78 14.04 13.42 13.52 12.50
Investment Operations:
Investment income--net .65(d) .61 .71 .64 .40
Net realized and unrealized gain (loss)
on investments .11 .57 .99 .31 .62
Total from Investment Operations .76 1.18 1.70 .95 1.02
Distributions:
Dividends from investment income--net (.66) (.73) (.65) (.62) --
Dividends from net realized gain
on investments (.33) (.71) (.43) (.43) --
Total Distributions (.99) (1.44) (1.08) (1.05) --
Net asset value, end of period 13.55 13.78 14.04 13.42 13.52
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 5.66 9.14 13.50 7.30 8.24(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .79 .88 .68 .60 .30(e)
Ratio of net investment income
to average net assets 4.84 5.15 5.87 5.75 3.08(e)
Decrease reflected in above expense ratios
due to undertakings by Dreyfus -- -- .14 .61 .26(e)
Portfolio Turnover Rate 158.10 64.58 72.08 32.95 5.66(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 45,221 40,582 22,727 12,889 8,141
(a) EFFECTIVE AUGUST 7, 1997, RETAIL SHARES WERE REDESIGNATED AS RESTRICTED CLASS SHARES.
(b) EFFECTIVE JULY 15, 1996, CLASS R SHARES WERE REDESIGNATED AS RETAIL SHARES.
(c) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.
(d) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(e) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
INVESTOR CLASS SHARES
--------------------------------------------------------------
Year Ended September 30,
--------------------------------------------------------------
INCOME PORTFOLIO (CONTINUED) 1999 1998 1997(a) 1996(b) 1995(c)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 13.74 14.01 13.39 13.51 12.50
Investment Operations:
Investment income--net .60(d) .65 .72 .73 .39
Net realized and unrealized gain (loss)
on investments .13 .49 .95 .18 .62
Total from Investment Operations .73 1.14 1.67 .91 1.01
Distributions:
Dividends from investment income--net (.61) (.70) (.62) (.60) --
Dividends from net realized gain
on investments (.33) (.71) (.43) (.43) --
Total Distributions (.94) (1.41) (1.05) (1.03) --
Net asset value, end of period 13.53 13.74 14.01 13.39 13.51
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 5.44 8.92 13.19 7.07 8.08(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.07 1.13 .97 .85 .43(e)
Ratio of net investment income
to average net assets 4.59 4.92 5.52 5.50 2.95(e)
Decrease reflected in above expense ratios
due to undertakings by Dreyfus -- -- .15 .61 .26(e)
Portfolio Turnover Rate 158.10 64.58 72.08 32.95 5.66(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 15,953 11,862 10,136 8,701 8,122
(a) EFFECTIVE AUGUST 7, 1997, INSTITUTIONAL SHARES WERE REDESIGNATED AS INVESTOR CLASS SHARES.
(b) EFFECTIVE JULY 15, 1996, INVESTOR CLASS SHARES SHARES WERE REDESIGNATED AS INSTITUTIONAL SHARES.
(c) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.
(d) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(e) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
</TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RESTRICTED CLASS SHARES
--------------------------------------------------------------
Year Ended September 30,
--------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO 1999 1998 1997(a) 1996(b) 1995(c)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 16.46 18.43 15.34 14.31 12.50
Investment Operations:
Investment income--net .64(d) .70 .58 .33 .27
Net realized and unrealized gain (loss)
on investments 1.69 .30 3.16 1.60 1.54
Total from Investment Operations 2.33 1.00 3.74 1.93 1.81
Distributions:
Dividends from investment income--net (.63) (.63) (.34) (.42) --
Dividends from net realized gain
on investments (.45) (2.34) (.31) (.48) --
Total Distributions (1.08) (2.97) (.65) (.90) --
Net asset value, end of period 17.71 16.46 18.43 15.34 14.31
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 14.51 6.28 25.22 14.17 14.48(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .84 .84 .78 .75 .38(e)
Ratio of net investment income
to average net assets 3.65 4.06 3.52 3.60 2.10(e)
Decrease reflected in above expense ratios
due to undertakings by Dreyfus .01 -- .06 .39 .33(e)
Portfolio Turnover Rate 142.50 76.78 107.85 122.52 33.55(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 204,096 186,397 172,705 124,677 9,248
(a) EFFECTIVE AUGUST 7, 1997, RETAIL SHARES WERE REDESIGNATED AS RESTRICTED CLASS SHARES.
(b) EFFECTIVE JULY 15, 1996, CLASS R SHARES WERE REDESIGNATED AS RETAIL SHARES.
(c) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.
(d) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(e) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
INVESTOR CLASS SHARES
--------------------------------------------------------------
GROWTH AND Year Ended September 30,
--------------------------------------------------------------
INCOME PORTFOLIO (CONTINUED) 1999 1998 1997(a) 1996(b) 1995(c)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 17.10 19.05 15.43 14.29 12.50
Investment Operations:
Investment income--net .45(d) .72(d) .57(d) .90(d) .27
Net realized and unrealized gain (loss)
on investments 1.92 .28 3.36 1.12 1.52
Total from Investment Operations 2.37 1.00 3.93 2.02 1.79
Distributions:
Dividends from investment income-net (.59) (.61) -- (.40) --
Dividends from net realized gain
on investments (.45) (2.34) (.31) (.48) --
Total Distributions (1.04) (2.95) (.31) (.88) --
Net asset value, end of period 18.43 17.10 19.05 15.43 14.29
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 14.17 6.04 25.85 14.84 14.32(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.35 1.08 1.00 1.00 .51(e)
Ratio of net investment income
to average net assets 3.37 3.81 3.58 3.35 1.98(e)
Decrease reflected in above expense ratios
due to undertakings by Dreyfus .06 -- .05 .39 .33(e)
Portfolio Turnover Rate 142.50 76.78 107.85 122.52 33.55(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 68,839 3,976 683 160 8,602
(a) EFFECTIVE AUGUST 7, 1997, INSTITUTIONAL SHARES WERE REDESIGNATED AS INVESTOR CLASS SHARES.
(b) EFFECTIVE JULY 15, 1996, INVESTOR CLASS SHARES WERE REDESIGNATED AS INSTITUTIONAL SHARES.
(c) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.
(d) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(e) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
</TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RESTRICTED CLASS SHARES
--------------------------------------------------------------
Year Ended September 30,
--------------------------------------------------------------
GROWTH PORTFOLIO 1999 1998 1997(a) 1996(b) 1995(c)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 15.89 20.52 16.59 14.84 12.50
Investment Operations:
Investment income--net .42(d) .52 .41 .28 .21
Net realized and unrealized gain (loss)
on investments 3.27 (.02) 4.94 2.48 2.13
Total from Investment Operations 3.69 .50 5.35 2.76 2.34
Distributions:
Dividends from investment income--net (.40) (.55) (.30) (.31) --
Dividends from net realized gain
on investments (.71) (4.58) (1.12) (.70) --
Total Distributions (1.11) (5.13) (1.42) (1.01) --
Net asset value, end of period 18.47 15.89 20.52 16.59 14.84
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 23.93 3.17 34.70 19.73 18.72(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .96 .94 .83 .75 .38(e)
Ratio of net investment income
to average net assets 2.33 2.84 2.38 2.38 1.51(e)
Decrease reflected in above expense ratios
due to undertakings by Dreyfus -- -- .20 .53 .26(e)
Portfolio Turnover Rate 95.42 89.23 118.49 77.83 52.86(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 78,554 56,431 46,960 28,143 11,898
(a) EFFECTIVE AUGUST 7, 1997, RETAIL SHARES WERE REDESIGNATED AS RESTRICTED CLASS SHARES.
(b) EFFECTIVE JULY 15, 1996, CLASS R SHARES WERE REDESIGNATED AS RETAIL SHARES.
(c) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.
(d) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(e) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
INVESTOR CLASS SHARES
--------------------------------------------------------------
Year Ended September 30,
--------------------------------------------------------------
GROWTH PORTFOLIO (CONTINUED) 1999 1998 1997(a) 1996(b) 1995(c)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 15.93 20.50 16.58 14.82 12.50
Investment Operations:
Investment income--net .39(d) .44(d) .62 .32 .19
Net realized and unrealized gain (loss)
on investments 3.25 .03 4.68 2.42 2.13
Total from Investment Operations 3.64 .47 5.30 2.74 2.32
Distributions:
Dividends from investment income--net (.34) (.46) (.26) (.28) --
Dividends from net realized gain
on investments (.71) (4.58) (1.12) (.70) --
Total Distributions (1.05) (5.04) (1.38) (.98) --
Net asset value, end of period 18.52 15.93 20.50 16.58 14.82
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 23.50 2.97 34.32 19.58 18.56(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.24 1.18 1.06 1.00 .51(e)
Ratio of net investment income
to average net assets 2.14 2.65 2.05 2.08 1.39(e)
Decrease reflected in above expense ratios
due to undertakings by Dreyfus -- -- .27 .53 .26(e)
Portfolio Turnover Rate 95.42 89.23 118.49 77.83 52.86(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 9,656 3,746 8,662 14,458 11,939
(a) EFFECTIVE AUGUST 7, 1997, INSTITUTIONAL SHARES WERE REDESIGNATED AS INVESTOR CLASS SHARES.
(b) EFFECTIVE JULY 15, 1996, INVESTOR CLASS SHARES WERE REDESIGNATED AS INSTITUTIONAL SHARES.
(c) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.
(d) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(e) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolios
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--General:
Dreyfus LifeTime Portfolios, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering three diversified Portfolios: the Income Portfolio, the primary
investment objective of which is to maximize current income and the secondary
investment objective of which is capital appreciation, the Growth and Income
Portfolio, the investment objective of which is to maximize total return,
consisting of capital appreciation and current income and the Growth Portfolio,
the investment objective of which is capital appreciation. The fund accounts
separately for the assets, liabilities and operations of each portfolio. The
Dreyfus Corporation ("Dreyfus") serves as each Portfolio's investment adviser.
Dreyfus is a direct subsidiary of Mellon Bank, N.A. ("Mellon"), which is a
wholly-owned subsidiary of Mellon Financial Corporation. Mellon Equity
Associates ("Mellon Equity"), an indirect wholly-owned subsidiary of Mellon
Financial Corporation, serves as each Portfolio's sub-investment adviser.
On September 23, 1999, pursuant to an Agreement and Plan of Reorganization,
previously approved by the fund's Board of Directors, all or substantially all
of the Dreyfus Asset Allocation Fund's assets and liabilities were transferred
to the Growth & Income Portfolio in a tax free exchange for Investor Class
shares of the Growth & Income Portfolio at net asset value. 4,291,269 shares
valued at $12.71 per share, representing net assets of $54,557,437 [including
$147,484 net unrealized appreciation on investments] were exchanged by Dreyfus
Asset Allocation Fund for 2,970,357 Investor Class shares of the Growth & Income
Portfolio.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund's shares. The fund is authorized to issue 50 million shares of $.001 par
value Common Stock in each of the following classes of shares: Restricted and
Investor. Investor Class shares are offered to any
investor and Restricted Class shares are offered only to clients of certain
banks, securities brokers or dealers and other financial institutions
(collectively, Service Agents) that have entered into selling agreements with
the Distributor. Other differences between the classes include the services
offered to and the expenses borne by each class.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
NOTE 2--Significant Accounting Policies:
(a) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is used
when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
Most debt securities are valued each business day by an independent pricing
service ("Service") approved by the Board of Directors. Debt securities for
which quoted bid prices are readily available and are representative of the bid
side of the market in the judgment of the Service are valued at the mean between
the quoted bid prices (as obtained by the Service from dealers in such
securities) and asked prices (as calculated by the Service based upon its
evaluation of the market for such securities). Other debt securities are carried
at fair value as determined by the Service, based on methods which include
consideration of: yields or prices of securities of comparable quality, coupon,
maturity
The Portfolios
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
and type; indications as to values from dealers; and general market conditions.
(b) FOREIGN CURRENCY TRANSACTIONS: Each Portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in the market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amount of
dividends, interest and foreign withholding taxes recorded on the Portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, each Portfolio receives
net earnings credits based on available cash balances left on deposit. During
the period ended September 30, 1999, the Income Portfolio and the Growth and
Income Portfolio received net earnings credits of $2,710 and $11,802,
respectively. Income earned under this arrangement is included in interest
income.
(d) EXPENSES: Expenses directly attributable to each Portfolio are charged to
that Portfolio's operations; expenses which are applicable to all Portfolios are
allocated among them on a pro rata basis.
(e) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded by each Portfolio on the
ex-dividend date. Dividends from investment income-net and dividends from net
realized capital gain, with respect to each Portfolio, are normally declared and
paid annually, but each Portfolio may make distributions on a more frequent
basis to comply with the distribution requirements of the Internal Revenue Code
of 1986, as amended (the "Code"). To the extent that a net realized capital gain
of a Portfolio can be offset by a capital loss carryover of that Portfolio, such
gain will not be distributed.
(f) FEDERAL INCOME TAXES: It is the policy of each Portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes. For Federal income tax
purposes, each Portfolio is treated as a single entity for the purpose of
determining such qualification.
The Growth and Income Portfolio has an unused capital loss carryover of
approximately $164,000 available for Federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to September
30, 1999. The amount of this loss which can be utilized in subsequent years is
subject to an annual limitation due to the fund's merger with Dreyfus Asset
Allocation Fund. If not applied, the carryover expires in fiscal 2007.
NOTE 3--Bank Line of Credit:
Each Portfolio participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, each Portfolio has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to a Portfolio at rates based on
prevailing market rates in effect at the time of borrowings. During the period
ended September 30, 1999, no Portfolios borrowed under the Facility.
The Portfolios
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions with Affiliates:
(a) Pursuant to a Investment Advisory agreement with Dreyfus, the Investment
Advisory fee is computed on the value of each Portfolio's average daily net
assets and is payable monthly at the following annual rates: .60 of 1% of the
Income Portfolio and .75 of 1% of the Growth and Income Portfolio and the Growth
Portfolio.
Dreyfus has undertaken from September 24, 1999 through December 31, 1999, that,
if the aggregate expenses of the Growth & Income Portfolio, exclusive of taxes,
brokerage commissions, extraordinary expenses, interest expenses and commitment
fees on borrowings, cause the expenses of its Investor Class to exceed 1.13% of
the value of the average daily net assets of the Investor Class, the Growth &
Income Portfolio may deduct from the payment to be made to Dreyfus under the
Investment Advisory Agreement, or Dreyfus will bear, such excess expense. The
reduction in investment advisory fee, pursuant to the undertaking, amounted to
$20,137 during the period ended September 30, 1999.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Mellon
Equity, Dreyfus has agreed to pay Mellon Equity a monthly sub-advisory fee for
each Portfolio, computed at the following annual rates:
ANNUAL FEE AS A PERCENTAGE OF
TOTAL PORTFOLIO NET ASSETS AVERAGE DAILY NET ASSETS OF EACH PORTFOLIO
- --------------------------------------------------------------------------------
0 to $600 million .35 of 1%
$600 million up to $1.2 billion .25 of 1%
$1.2 billion up to $1.8 billion .20 of 1%
In excess of $1.8 billion .15 of 1%
(b) Under the Shareholder Services Plan, each Portfolio pays the Distributor, at
an annual rate of .25 of 1% of the value of the average daily net assets of each
Portfolio's Investor Class shares for the provision of certain services. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the fund and
providing reports and other information, and services related to the maintenance
of shareholder
accounts. The Distributor may make payments to Service Agents in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents.
During the period ended September 30, 1999, each Portfolio's Investor Class was
charged the following pursuant to the Shareholder Services Plan:
Income Portfolio $ 30,707
Growth and Income Portfolio 21,692
Growth Portfolio 14,704
Each Portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for each Portfolio. During the
period ended September 30, 1999, each Portfolio was charged the following
pursuant to the transfer agency agreement:
Income Portfolio $ 5,100
Growth and Income Portfolio 12,983
Growth Portfolio 9,233
Each Portfolio compensates Mellon under a custody agreement for providing
custodial services for each Portfolio. During the period ended September 30,
1999, each Portfolio was charged the following pursuant to the custody
agreement:
Income Portfolio $ 8,582
Growth and Income Portfolio 39,737
Growth Portfolio 26,171
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $1,000 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 5--Securities Transactions:
(a) The following summarizes the aggregate amount of purchases and sales of
investment securities, excluding short-term securities, financial
The Portfolios
NOTES TO FINANCIAL STATEMENTS (continued)
futures and forward currency exchange contracts during the period ended
September 30, 1999:
<TABLE>
<CAPTION>
PURCHASES ($) SALES ($)
-------------------------------------------------------------------
<S> <C> <C>
Income Portfolio 67,568,614 58,158,823
Growth and Income Portfolio 279,763,836 263,289,474
Growth Portfolio 65,512,629 53,916,877
</TABLE>
Each Portfolio enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings. When executing forward currency exchange contracts, a
Portfolio is obligated to buy or sell a foreign currency at a specified rate on
a certain date in the future. With respect to sales of forward currency exchange
contracts, a Portfolio would incur a loss if the value of the contract increases
between the date the forward contract is opened and the date the forward
contract is closed. A Portfolio realizes a gain if the value of the contract
decreases between those dates. With respect to purchases of forward currency
exchange contracts, a Portfolio would incur a loss if the value of the contract
decreases between the date the forward contract is opened and the date the
forward contract is closed. A Portfolio realizes a gain if the value of the
contract increases between those dates. Each Portfolio is also exposed to credit
risk associated with counter party nonperformance on these forward currency
exchange contracts which is typically limited to the unrealized gain on each
open contract. At September 30, 1999, there were no open forward currency
exchange contracts.
Each Portfolio may invest in financial futures contracts in order to gain
exposure to or protect against changes in the market. A Portfolio is exposed to
market risk as a result of changes in the value of the under
lying financial instruments. Investments in financial futures require a
Portfolio to "mark to market" on a daily basis, which reflects the change in the
market value of the contract at the close of each day's trading. Typically,
variation margin payments are received or made to reflect daily unrealized gains
or losses. When the contracts are closed, a Portfolio recognizes a realized gain
or loss. These investments require initial margin deposits with a custodian or
broker, which consist of cash or cash equivalents, up to approximately 10% of
the contract amount. The amount of these deposits is determined by the exchange
or Board of Trade on which the contract is traded and is subject to change.
Contracts open at September 30, 1999, are set forth in the Statements of
Financial Futures.
(B) The following summarizes accumulated net unrealized appreciation
(depreciation) on investments and financial futures for each Portfolio at
September 30, 1999:
GROSS GROSS
APPRECIATION ($) (DEPRECIATION) ($) NET ($)
- --------------------------------------------------------------------------------
Income Portfolio 37,513 (1,407,268) (1,369,755)
Growth and
Income Portfolio 15,819,737 (5,850,915) 9,968,822
Growth Portfolio 9,662,596 (2,351,018) 7,311,578
At September 30, 1999, the cost of investments of each Portfolio for Federal
income tax purposes was substantially the same as the cost for financial
reporting purposes. The cost of investments for each Portfolio for financial
reporting purposes as of September 30, 1999 was as follows:
Income Portfolio $ 61,317,827
Growth and Income Portfolio 259,206,579
Growth Portfolio 79,479,668
The Portfolios
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors Dreyfus LifeTime Portfolios, Inc.
We have audited the accompanying statement of assets and liabilities, including
the statements of investments and financial futures, of Dreyfus LifeTime
Portfolios, Inc., (comprising, respectively, the Income Portfolio, the Growth
and Income Portfolio and the Growth Portfolio) as of September 30, 1999, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
financial highlights for each of the years indicated therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included verification by
examination of securities held by the custodian as of September 30, 1999 and
confirmation of securities not held by the custodian by correspondence with
others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the Dreyfus LifeTime Portfolios, Inc.,
at September 30, 1999, and the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and the financial highlights for each of the indicated years, in
conformity with generally accepted accounting principles.
Ernst & Young LLP (signature logo)
New York, New York
November 4, 1999
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal and State (where applicable) tax law, Dreyfus
LifeTime Portfolios, Inc. (Income Portfolio, Growth and Income Portfolio and
Growth Portfolio) hereby make the following designations of dividends and
distributions paid during the fiscal year ended September 30, 1999:
<TABLE>
<CAPTION>
LONG-TERM
CAPITAL
GAINS QUALIFYING INTEREST FROM
DISTRIBUTION PAYABLE ORDINARY U.S. GOVERNMENT
NAME OF ISSUER PER SHARE ($) PERIOD DIVIDENDS OBLIGATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income Portfolio .172 12/10/98 Not Applicable 59.41%
Growth & Income
Portfolio .284 12/10/98 7.05% Not Applicable
Growth Portfolio .610 12/10/98 16.41% Not Applicable
</TABLE>
The percentage of qualifying ordinary dividends shown qualify for the corporate
dividends received deduction. Shareholders will receive notification in January
2000 of the percentage applicable to the preparation of their 1999 income tax
returns.
The percentage shown for interest from U.S. Government Obligations represents
the percentage of the ordinary dividends attributable to interest income from
direct obligations of the United States. Such portion of the dividend is
currently exempt from taxation for individual income tax purposes in most
states, including New York, California and the District of Columbia.
The Portfolios
NOTES
For More Information
Dreyfus LifeTime
Portfolios, Inc.
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Mellon Equity
500 Grant Street
Pittsburgh, PA 15258
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 1999 Dreyfus Service Corporation DRPAR999
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE INVESTOR
SHARES AND RESTRICTED SHARES OF DREYFUS LIFETIME PORTFOLIOS, INC.-
GROWTH AND INCOME PORTFOLIO WITH THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX AND A CUSTOMIZED BLENDED INDEX
EXHIBIT A:
DREYFUS DREYFUS
LIFETIME LIFETIME
PORTFOLIOS- PORTFOLIOS- STANDARD
GROWTH AND GROWTH AND & POOR'S 500
INCOME INCOME COMPOSITE
PORTFOLIO PORTFOLIO STOCK CUSTOMIZED
PERIOD (INVESTOR (RESTRICTED PRICE BLENDED
SHARES) SHARES) INDEX * INDEX **
3/31/95 10,000 10,000 10,000 10,000
9/30/95 11,432 11,448 11,823 11,241
9/30/96 13,128 13,070 14,226 12,619
9/30/97 16,521 16,366 19,976 15,520
9/30/98 17,519 17,394 21,791 16,533
9/30/99 20,003 19,918 27,845 18,790
* Source: Lipper Analytical Services, Inc.
** Source: Lipper Analytical Services, Inc., Lehman Brothers, Morgan Stanley &
Co. Incorporated and J.P. Morgan & Co. Incorporated
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE INVESTOR
SHARES AND RESTRICTED SHARES OF DREYFUS LIFETIME PORTFOLIOS, INC.-
INCOME PORTFOLIO WITH THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT /
CORPORATE BOND INDEX AND A CUSTOMIZED BLENDED INDEX
EXHIBIT A:
DREYFUS DREYFUS LEHMAN
LIFETIME LIFETIME BROTHERS
PORTFOLIOS- PORTFOLIOS- INTERMEDIATE
INCOME INCOME GOVERNMENT /
PORTFOLIO PORTFOLIO CORPORATE CUSTOMIZED
(INVESTOR (RESTRICTED BOND BLENDED
PERIOD SHARES) SHARES) INDEX * INDEX **
3/31/95 10,000 10,000 10,000 10,000
9/30/95 10,808 10,824 10,673 10,893
9/30/96 11,573 11,615 11,221 11,824
9/30/97 13,099 13,183 12,140 13,615
9/30/98 14,268 14,388 13,407 14,921
9/30/99 15,044 15,202 13,491 15,985
* Source: Lehman Brothers
** Source: Lehman Brothers, Lipper Analytical Services, Inc., and The Wall
Street Journal
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
INVESTOR SHARES AND RESTRICTED SHARES OF DREYFUS LIFETIME
PORTFOLIOS, INC. -GROWTH PORTFOLIO WITH THE STANDARD & POOR'S
500 COMPOSITE STOCK PRICE INDEX AND A CUSTOMIZED BLENDED INDEX
EXHIBIT A:
DREYFUS DREYFUS STANDARD
LIFETIME LIFETIME & POOR'S
PORTFOLIOS- PORTFOLIOS- 500
GROWTH GROWTH COMPOSITE
PORTFOLIO PORTFOLIO STOCK CUSTOMIZED
PERIOD (INVESTOR (RESTRICTED PRICE BLENDED
SHARES) SHARES) INDEX * INDEX **
3/31/95 10,000 10,000 10,000 10,000
9/30/95 11,856 11,872 11,823 11,545
9/30/96 14,177 14,214 14,226 13,399
9/30/97 19,043 19,146 19,976 17,551
9/30/98 19,610 19,752 21,791 18,169
9/30/99 24,218 24,478 27,845 22,089
* Source: Lipper Analytical Services, Inc.
** Source: Lipper Analytical Services, Inc., Lehman Brothers, Morgan Stanley
& Co. Incorporated and J.P. Morgan & Co. Incorporated
