DREYFUS AGGRESSIVE VALUE FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
It is a pleasure to once again have the opportunity to correspond with
you regarding the Dreyfus Aggressive Value Fund, a portfolio of the Dreyfus
Growth & Value Funds, Inc. This report covers the annual period ended August
31, 1996. Since the Fund's inception date was September 29, 1995, only the 11
active months of the Fund are addressed. During this period, the Fund's total
return was 61.00%* compared to 13.91% for the Standard and Poor's 500
Composite Stock Price Index.** This strong performance was due to numerous
successful investments, including several initial public offerings which
appreciated significantly between pricing and the first public trade. We
would expect future results for the Fund to be closer to the market index.
ECONOMIC REVIEW
The robust pace of the U.S. economy in the first half of 1996 was broken
temporarily by July's sluggishness. Somewhat faster growth is again evident
as summer ends. However, above-trend economic expansion this year has raised
fears of higher future inflation, even while reported inflation remains tame.
These inflation fears pushed bond yields higher and built expectations for a
Federal Reserve Board tightening.
This year's economic strength is due in large part to robust domestic
demand that has kept inventories lean. Real Gross Domestic Product grew 3.4%
in the first half, driven largely by consumer spending and housing
investment, although homebuilding saw slower activity. Industrial output
likewise surged, although producers bent on meeting demand have been unable
to also rebuild inventory. Support for sustained consumer spending growth is
coming from new jobs, wage increases, low summer utility bills and a fall
hike in the minimum wage. In addition, new orders for exports and capital
goods-both sluggish sectors this summer-have recently reaccelerated.
Corporate profits, however, are not sharing this year's prosperity as profit
growth is now decelerating.
Core consumer price inflation remains moderated, although rising food and
energy prices have begun to pull the overall inflation rate higher and wage
increases have accelerated in this year's tight labor market. As a result,
reports of a faster economic pace have boosted fears of accelerated
inflation, and bond yields have risen substantially; short-term market rates
have also surged on expectations of a Federal Reserve tightening in coming
months. So far, long-term rates have risen more than short-term rates,
forcing the yield curve to steepen. A steep yield curve is usually supportive
of sustained growth in the real economy.
MARKET OVERVIEW
The securities markets remained strong, as we said, through a good part
of the last 12 months but stumbled in late June and July of this year. The
summer sell-off was due to a number of factors, among them the higher price
levels and price-to-earnings ratios that many stocks had already achieved,
and indications that corporate profits might not be as strong in the last
half of the year as in the first half. The overriding influence, however, was
the market's anticipation of what the Federal Reserve might do about interest
rates.
In late 1995 and early 1996, the Fed was preoccupied with offsetting
economic weakness, and that occasioned the series of cuts in short-term rates
initiated by the Fed, the last one occurring at the end of January, 1996.
After that, through August 31, the Fed adopted a hands-off posture in regard
to interest rates. However, the stock and bond markets expected the Fed to
shift gears and slam on the monetary brakes as the economy continued to
expand.
These fears of an anti-inflation move by the Fed were particularly acute
in June and July, leading to a sharp shakeout in security prices-among bonds
as well as stocks. Technology stocks were affected the most, but large
capitalization blue chips also experienced setbacks. Bond prices slumped as
interest rates rose.
As July gave way to August, the markets appeared to make an adjustment to
the interest rate outlook, and regained some of the ground lost earlier.
However, high anxiety still prevailed as the country moved into the fall
season, bringing with it the unknowns of the pending Presidential and
Congressional elections.
FUNDAMENTAL ANALYSIS
We are practitioners of, and passionate believers in, fundamental
security analysis. This method of determining the value of a security starts
with our analysts and often our portfolio managers communicating directly
with the management of companies which are either current investments or are
being considered for investment in Dreyfus mutual funds. Not only do we
interview management by telephone on a regular basis, but we also
periodically visit corporate headquarters, divisional headquarters, factories
and distribution outlets. We meet with senior management and talk with all
levels of employees, as well as a company's customers and competitors. It is
through the mosaic of information collected in these meetings that investment
decisions begin to be made.
It is a massive undertaking for us, especially given the thousands of
securities which are available for investment on a worldwide basis. It can
only be accomplished with an experienced and dedicated team of security
analysts. Dreyfus currently employs 35 individuals who specialize in this
analytical work, one of the largest efforts of any mutual fund firm. Our
analysts are solely dedicated to finding the best investments for our
clients, the mutual fund shareholders. Their work is proprietary: It is only
distributed internally to our portfolio managers, and forms the basis for
security selection in the mutual funds.
Much like the complete and thorough mixture of information that we build
to make investment decisions, our analysts form a diverse mix of individuals.
Some are specialists in certain types of securities, while others are
industry specialists who concentrate on securities within a particular sector
of the economy. Most have actual industry experience in their particular
field of specialization. For example, our three-person health care team
includes a retired physician, a former medical researcher for the U.S. Army,
and a former health care lobbyist to Congress. Some are relatively young and
some are veterans, providing a blend of energy and experience. This diversity
is beneficial to the investment process. Investments are best made by
thinking somewhat differently from everyone else who is making similar
investments. Ideally, one tries to make investment choices a bit sooner than
other investors. The reason, of course, is that through an increase in demand
for ownership of a security, the price of that security rises.
PORTFOLIO FOCUS
The Dreyfus Aggressive Value Fund is dedicated to investments in
value-oriented securities. Most studies confirm the strong and consistent
long-term performance of a value style of investing.
Investment results during the annual period benefited from holdings such
as Jones Apparel Group, Reebok International, Storage Technology, Intel,
Sandoz, Warner-Lambert, Premark International, Grupo Industrial Maseca ADS,
Price/Costco, Genesee & Wyoming and NorAm Energy. Performance results were
penalized by holdings including Sensormatic Electronics, Grand Casinos,
Westinghouse Electric, Olin and AT&T.
Thank you for your trust and the privilege of managing your assets. All
of Dreyfus continues to work diligently on your behalf.
Sincerely,
[Timothy M. Ghriskey signature logo]
Timothy M. Ghriskey
Portfolio Manager
September 12, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
DREYFUS AGGRESSIVE VALUE FUND AUGUST 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS AGGRESSIVE
VALUE FUND AND
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[Exhibit A:
Dollars
$16,100
Dreyfus
Aggressive Value Fund
$11,391
Standard & Poor's 500
Composite Stock
Price Index*
*Source: Lipper Analytical Services, Inc.]
ACTUAL AGGREGATE TOTAL RETURN
FROM INCEPTION (9/29/95)
TO AUGUST 31, 1996
--------------
61.00%
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Aggressive
Value Fund on 9/29/95 (Inception Date) to a $10,000 investment made in the
Standard & Poor's 500 Composite Stock Price Index on that date. All dividends
and capital gain distributions are reinvested.
The Fund's performance shown in the line graph takes into account all
applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price
Index is a widely accepted, unmanaged index of overall stock market
performance which does not take into account charges, fees and other
expenses. Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS AGGRESSIVE VALUE FUND
STATEMENT OF INVESTMENTS AUGUST 31, 1996
COMMON STOCKS-96.5% SHARES VALUE
------ ------
<S> <C> <C>
CONSUMER DURABLES-6.8% Mohawk Industries...................... (a) 9,400 $ 215,612
Newell................................. 5,700 177,413
North Face............................. 11,000 269,500
-----
662,525
-----
CONSUMER
NON-DURABLES-8.7% Cott................................... 19,000 148,438
Jones Apparel Group.................... (a) 3,400 188,275
Kimberly-Clark......................... 2,200 172,425
Philip Morris.......................... 1,700 152,575
Reebok International................... 5,200 187,200
-----
848,913
-----
ELECTRONIC TECHNOLOGY-9.5% Applied Voice Technology............... (a) 16,600 199,200
Digital Equipment...................... (a) 4,700 181,537
Intel.................................. 2,400 191,550
Perkin-Elmer........................... 2,800 145,250
Storage Technology..................... (a) 5,300 200,738
-----
918,275
-----
ENERGY MINERALS-6.6% Amerada Hess........................... 2,700 137,362
FX Energy.............................. (a) 25,000 207,813
Phillips Petroleum..................... 3,800 153,900
Tosco.................................. 3,000 144,000
-----
643,075
-----
FINANCE-10.2% Alexander & Alexander Services......... 8,200 129,150
Bank United, Cl. A..................... 8,500 205,063
CapMAC Holdings........................ 5,700 166,725
Enhance Financial Services Group....... 5,800 166,750
First Security......................... 6,200 168,950
Medallion Financial.................... 12,000 154,500
-----
991,138
----
HEALTH SERVICES-1.7% Tenet Healthcare....................... (a) 8,000 168,000
-----
HEALTH TECHNOLOGY-7.2% Baxter International................... 3,600 160,650
Sandoz................................. 155 184,220
Vitalcom .............................. 23,000 184,000
Warner-Lambert......................... 2,800 166,600
-----
695,470
-----
INDUSTRIAL SERVICES-1.9% Cooper Cameron......................... (a) 3,500 184,625
-----
NON-ENERGY MINERALS-3.9% Lone Star Industries................... 5,400 175,500
Southern Peru Copper................... 13,200 201,300
-----
376,800
-----
DREYFUS AGGRESSIVE VALUE FUND
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
------ ------
PROCESS INDUSTRIES-14.0% Aracruz Celulose, A.D.R. .............. 22,200 $ 197,025
Grupo Industrial Maseca, A.D.R. ....... 10,400 191,100
Hoechst Aktien......................... 4,900 171,599
National Service Industries............ 4,100 155,800
Premark International.................. 10,600 193,450
Union Carbide.......................... 3,500 151,375
Westinghouse Electric.................. 9,500 155,563
Witco.................................. 4,600 139,150
-----
1,355,062
-----
PRODUCER
MANUFACTURING-8.0% Borg-Warner Automotive................. 3,900 146,250
MagneTek............................... (a) 17,800 184,675
Masco.................................. 5,500 160,187
Olin................................... 1,800 142,650
Raychem................................ 2,100 144,113
-----
777,875
-----
RETAIL-5.4% K mart................................. 15,000 150,000
Pier 1 Imports......................... 12,000 201,000
Price/Costco........................... (a) 8,700 172,913
-----
523,913
-----
TECHNOLOGY SERVICES-1.3% Toolex-Alpha........................... 5,900 130,537
-----
TRANSPORTATION-4.3% Airborne Freight....................... 6,700 158,287
Genesee & Wyoming, Cl. A............... 3,500 87,500
Yellow................................. (a) 12,800 171,200
-----
416,987
-----
UTILITIES-7.0% AT&T................................... 2,600 136,500
GTE.................................... 3,200 126,000
Hong Kong Telecommunications, A.D.R.... 10,400 175,500
NorAm Energy........................... 16,500 241,312
-----
679,312
-----
TOTAL COMMON STOCKS
(cost $8,897,358).................... $9,372,507
=====
PRINCIPAL
CONVERTIBLE BOND-1.0% AMOUNT VALUE
------ ------
HEALTH SERVICES; INAMED
11%, 3/31/99
(cost $ 100,000)..................... (b) $ 100,000 $ 100,000
=====
DREYFUS AGGRESSIVE VALUE FUND
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1996
PRINCIPAL
SHORT-TERM INVESTMENTS-4.0% AMOUNT VALUE
------ ------
U.S. TREASURY BILLS: 5.06%, 11/7/96......................... $ 37,000 $ 36,643
5.02%, 11/14/96........................ 147,000 145,437
5.02%, 11/21/96........................ 52,000 51,398
5.10%, 11/29/96........................ 151,000 149,057
-----
TOTAL SHORT-TERM INVESTMENTS
(cost $382,643)...................... $ 382,535
=====
TOTAL INVESTMENTS (cost $9,380,001) 101.5% $9,855,042
==== =====
LIABILITIES, LESS CASH AND RECEIVABLES (1.5%) $ (144,315)
==== =====
NET ASSETS 100.0% $9,710,727
==== =====
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<CAPTION>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $100,000, represents
approximately 1.0% of net assets;
<S> <C> <C> <C> <C>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
- --- ------ ----- -------- ------
INAMED Conv. Bond, 11%, 3/31/99.............. 1/23/96 $100 1.03% cost
*The valuation of this security has been determined in good faith under
the direction of the Board of Directors.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS AGGRESSIVE VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $9,380,001)-see statement....................................... $ 9,855,042
Cash.................................................................... 181,973
Receivable for investment securities sold............................... 190,400
Receivable for shares of Common Stock subscribed........................ 15,000
Dividends and interest receivable....................................... 11,802
Prepaid expenses........................................................ 7,449
Due from The Dreyfus Corporation and affiliates......................... 6,301
------
10,267,967
LIABILITIES:
Due to Distributor...................................................... $ 1,953
Payable for investment securities purchased............................. 543,260
Payable for Common Stock redeemed....................................... 450
Accrued expenses........................................................ 11,577 557,240
----- ------
NET ASSETS.................................................................. $ 9,710,727
======
REPRESENTED BY:
Paid-in capital......................................................... $ 7,375,618
Accumulated undistributed investment income-net......................... 24,871
Accumulated undistributed net realized gain on investments, securities sold short and
foreign currency transactions......................................... 1,835,188
Accumulated net unrealized appreciation on investments and
foreign currency transactions......................................... 475,050
------
NET ASSETS at value applicable to 483,692 shares outstanding
(100 million shares of $.001 par value Common Stock authorized)......... $ 9,710,727
======
NET ASSET VALUE, offering and redemption price per share
($9,710,727 / 483,692 shares)........................................... $20.08
======
See notes to financial statements.
DREYFUS AGGRESSIVE VALUE FUND
STATEMENT OF OPERATIONS
FROM SEPTEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $737 foreign taxes withheld at source)......... $ 80,001
Interest.............................................................. 28,122
-----
TOTAL INCOME...................................................... $ 108,123
EXPENSES:
Management fee-Note 3(a).............................................. 43,706
Shareholder servicing costs-Note 3(b)................................. 23,630
Auditing fees......................................................... 12,800
Legal fees............................................................ 12,740
Custodian fees-Note 3(b).............................................. 6,947
Registration fees..................................................... 5,888
Prospectus and shareholders' reports.................................. 4,016
Directors' fees and expenses-Note 3(c)................................ 2,617
Miscellaneous......................................................... 1,139
-----
TOTAL EXPENSES.................................................... 113,483
Less-reduction in management fee due to undertaking-Note 3(a)......... 39,945
-----
NET EXPENSES...................................................... 73,538
-----
INVESTMENT INCOME-NET............................................. 34,585
-----
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments:
Long transactions (including foreign currency transactions)........... $1,903,799
Short sale transactions............................................... (74,432)
Net realized gain on forward currency exchange contracts;
Short transactions.................................................... 5,821
-----
NET REALIZED GAIN..................................................... 1,835,188
Net unrealized appreciation on investments and foreign currency transactions 475,050
-----
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 2,310,238
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,344,823
=====
See notes to financial statements.
DREYFUS AGGRESSIVE VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
FROM SEPTEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996
OPERATIONS:
Investment income-net................................................................... $ 34,585
Net realized gain on investments........................................................ 1,835,188
Net unrealized appreciation on investments for the period............................... 475,050
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................. 2,344,823
-----
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net................................................................... (9,714)
-----
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................................... 13,366,799
Dividends reinvested.................................................................... 9,197
Cost of shares redeemed................................................................. (6,000,378)
-----
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................................ 7,375,618
-----
TOTAL INCREASE IN NET ASSETS...................................................... 9,710,727
NET ASSETS:
Beginning of period..................................................................... --
-----
End of period (including undistributed investment income-net;
$24,871 on August 31, 1996)........................................................... $ 9,710,727
=====
SHARES
-----
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................................. 795,837
Shares issued for dividends reinvested.................................................. 588
Shares redeemed......................................................................... (312,733)
-----
NET INCREASE IN SHARES OUTSTANDING.................................................... 483,692
=====
See notes to financial statements.
DREYFUS AGGRESSIVE VALUE FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for the period September 29, 1995
(commencement of operations) to August 31, 1996. This information has been
derived from the Fund's financial statements.
PER SHARE DATA:
Net asset value, beginning of period.............................................. ...... $12.50
---
INVESTMENT OPERATIONS:
Investment income-net................................................................... .09
Net realized and unrealized gain on investments......................................... 7.53
---
TOTAL FROM INVESTMENT OPERATIONS...................................................... 7.62
---
DISTRIBUTIONS;
Dividends from investment income-net.................................................... (.04)
---
Net asset value, end of period.......................................................... $20.08
===
TOTAL INVESTMENT RETURN..................................................................... 61.00%(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................................. 1.17%(1)
Ratio of net investment income to average net assets.................................... .55%(1)
Decrease reflected in above expense ratio due to
undertaking by the Manager............................................................ .63%(1)
Portfolio Turnover Rate................................................................. 260.98%(1)
Average commission rate paid(2)......................................................... $.0508
Net Assets, end of period (000's omitted)............................................... $9,711
(1) Not annualized.
(2) The Fund is required to disclose its average commission rate paid per share for purchases and sales of investment
securities.
See notes to financial statements.
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DREYFUS AGGRESSIVE VALUE FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Growth and Value Funds, Inc. (the "Company") is registered under
the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company and operates as a series company currently
offering eight series, including the Dreyfus Aggressive Value Fund (the
"Fund") which commenced operations on September 29, 1995. The Fund's
investment objective is capital appreciation. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. ("Mellon"). Premier Mutual Fund Services,
Inc. (the "Distributor") acts as the distributor of the Fund's shares, which
are sold to the public without a sales charge.
The Company accounts separately for the assets, liabilities and
operations of each fund. Expenses directly attributable to each fund are
charged to that Fund's operations; expenses which are applicable to all
series are allocated among them on a pro rata basis.
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.
(A) PORTFOLIO VALUATION: The Fund's investments in securities (including
options and financial futures) are valued at the last sales price on the
securities exchange on which such securities are primarily traded or at the
last sales price on the national securities market. Securities not listed on
an exchange or the national securities market, or securities for which there
were no transactions, are valued at the average of the most recent bid and
asked prices, except for open short positions, where the asked price is used
for valuation purposes. Bid price is used when no asked price is available.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Forward currency exchange contracts are
valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
DREYFUS AGGRESSIVE VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by complying with
the applicable provisions of the Internal Revenue Code, and to make
distributions of taxable income sufficient to relieve it from substantially
all Federal income and excise taxes.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed Funds in a $300 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ending August 31, 1996 the Fund did not
borrow under the line of credit.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full fiscal year the aggregate expenses of the Fund,
exclusive of taxes, brokerage, interest on borrowings (which, in the view of
Stroock & Stroock & Lavan, counsel to the Fund, also contemplates dividends
and interest accrued on securities sold short) and extraordinary expenses,
exceed the expense limitation of any state having jurisdiction over the Fund,
the Fund may deduct from payments to be made to the Manager, or the Manager
will bear the amount of such excess to the extent required by state law. The
most stringent state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full fiscal year that such expenses
(exclusive of certain expenses as described above) exceed 21\2% of the first
$30 million, 2% of the next $70 million and 11\2% of the excess over $100
million of the average value of the Fund's net assets in accordance with
California "blue sky" regulations. The Manager has currently undertaken from
September 29, 1995 through August 31, 1997 to reduce the management fee paid
by or reimburse such excess expenses of the Fund, to the extent that the
Fund's aggregate annual expenses (exclusive of certain expenses as described
above) exceed an annual rate of 1.25% of the value of the Fund's average
daily net assets. The reduction in management fee, pursuant to the
undertaking, amounted to $39,945 for the period ended August 31, 1996.
The undertaking may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund pays the
Distributor at an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended August 31, 1996, the Fund was charged an
aggregate of $14,569 pursuant to the Shareholder Services Plan.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of the Manager, under a transfer agency agreement
for providing personnel and facilities to perform transfer agency services
for the Fund. Such compensation amounted to $2,828 during the period from
December 1, 1995 through August 31, 1996.
DREYFUS AGGRESSIVE VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Effective May 10, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund.
During the period from May 10, 1996 through August 31, 1996, $2,120 was paid
to Mellon pursuant to the custody agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of
$500 per meeting. The Chairman of the Board receives an additional 25% of
such compensation.
(D) BROKERAGE COMMISSIONS: During the period ended August 31, 1996, the
Fund incurred total brokerage commissions of $39,015 of which $5,943 was paid
to Dreyfus Investment Services Corporation, a subsidiary of Mellon Bank
Corporation.
NOTE 4-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities
and securities sold short, excluding short-term securities and forward
currency exchange contracts, during the period ended August 31, 1996 is
summarized as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------- --------
<S> <C> <C>
Long transactions.................................................... $22,453,202 $15,359,901
Short sale transactions.............................................. 549,314 474,882
-------- --------
TOTAL............................................................ $23,002,516 $15,834,783
======== ========
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at
current market value. The Fund would incur a loss if the price of the
security increases between the date of the short sale and the date on which
the Fund replaces the borrowed security. The Fund would realize a gain if the
price of the security declines between those dates. Until the Fund replaces
the borrowed security, the Fund will maintain daily, a segregated account
with a broker and/or custodian, of cash and/or U.S. Government securities
sufficient to cover its short position. There were no securities sold short
outstanding for the period ended August 31, 1996.
The Fund 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, the Fund 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, the Fund 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. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to
purchases of forward currency exchange contracts, the Fund 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. The Fund realizes a
gain if the value of the contract increases between those dates. The Fund is
also exposed to credit risk associated with counter party nonperformance on
these forward currency exchange contracts which is typically limited to the
unrealized gains on such contracts that are recognized in the Statement of
Assets and Liabiliities. At August 31, 1996, there were no forward currency
exchange contracts outstanding.
(B) At August 31, 1996, accumulated net unrealized appreciation on
investments was $475,041, consisting of $746,730 gross unrealized
appreciation and $271,689 gross unrealized depreciation.
At August 31, 1996, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS AGGRESSIVE VALUE FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS AGGRESSIVE VALUE FUND
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Aggressive Value Fund (one
of the Series constituting Dreyfus Growth and Value Funds, Inc.) as of August
31, 1996, and the related statements of operations and changes in net assets
and financial highlights for the period from September 29, 1995 (commencement
of operations) to August 31, 1996. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included verification by
examination of securities held by the custodian as of August 31, 1996 and conf-
irmation 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Aggressive Value Fund at August 31, 1996, and the results
of its operations, the changes in its net assets and the financial highlights
for the period from September 29, 1995 to August 31, 1996, in conformity with
generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
September 27, 1996
[Dreyfus lion "d" logo]
DREYFUS AGGRESSIVE VALUE FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
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
Printed in U.S.A. 257AR968
[Dreyfus logo]
Aggressive Value
Fund
Annual Report
August 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS AGGRESSIVE VALUE FUND AND THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
___________________________________________________________
| | STANDARD | |
| | & POOR'S 500 | DREYFUS |
| PERIOD | COMPOSITE STOCK | AGGRESSIVE VALUE |
| | PRICE INDEX* | FUND
|--------- | --------------- | -------------------- |
| 9/29/95 | 10,000 | 10,000 |
|11/30/95 | 10,401 | 11,680 |
| 2/29/96 | 11,064 | 14,224 |
| 5/31/96 | 11,627 | 16,164 |
| 8/31/96 | 11,391 | 16,100 |
|--------- | --------------- | -------------------- |
*Source: Lipper Analytical Services, Inc.
