DREYFUS INTERNATIONAL VALUE FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report that in the six-month fiscal period ended
February 28, 1997, the Dreyfus International Value Fund outperformed the
Morgan Stanley Europe, Australasia, Far East (EAFE) Index. Your Fund posted a
total return of 6.96%* whereas EAFE, net of dividends, returned 2.29%.**
The most significant factor influencing performance during this period
was Japan. Despite a mildly improving economy, low interest rates and a
slightly weaker currency (thereby supporting exports) Japanese investors
seemingly shunned the equity market. Poor local returns in both the equity
and bond markets in recent years have driven Japanese institutional investors
to seek the higher returns available in the U.S. and elsewhere. As a result,
the Morgan Stanley Japan Index lost 7.2% in local currency and lost nearly
16.5% in dollar terms.
In contrast, the returns in the European market were quite robust. In
local currency, the Morgan Stanley Europe Index returned 18.2% (+13.7% in
dollar terms). Driving the strong returns in Europe were two related factors,
declining interest rates and fiscal and political preparation for the
European Monetary Union. Those countries that are viewed as the most likely
participants in the new single currency garnered some of the best returns.
Germany, France and Ireland were standouts and are all likely to meet the
convergence criteria.
The two countries most likely not to join the single currency at its
outset were, coincidentally, among the weakest performers for the period.
They are Switzerland and the United Kingdom. The Swiss are reluctant to
surrender their neutrality and so are not likely to join the EMU in 1999.
In the U.K., the Morgan Stanley United Kingdom Index closed up only 12.4%
in local terms. The two issues that drove 1996 performance and, more
importantly, set the tone for 1997, are the upcoming election and the hotly
debated issue of joining the single currency. The election is now set for May
1, 1997 and while the consensus projects a Labor party victory, no one
expects that basic fiscal and monetary policies will change under a new
administration. The question of Britain's joining the single currency is not
an easy one to judge. Economic and fiscal policies appear to be working
towards meeting the convergence criteria. The underlying theory is that
should the U.K. decide not to join, it should be for reasons of its own
choosing and not because it failed to meet the convergence criteria. Either
way, fiscal and economic policies of both the Labor and Tory parties are
moving positively towards low inflation, slow growth and declining fiscal
deficit.
PORTFOLIO FOCUS
In recent months, we commenced selling several positions. We started to
take profits in Goodman Fielder and Southcorp Holdings in Australia. Both of
these companies are beginning to see the results of restructuring initiatives
undertaken in the last eighteen months. We trimmed our exposure to Hong Kong
Shanghai Bank (HSBC). This has been an excellent stock for your portfolio.
Since our initial purchase in October 1995, this stock has nearly doubled on
the back of declining interest rates. At this point we believe that earnings
have peaked for the cycle. We continue to hold a position. HSBC remains one
of the best banks in the region in terms of credit quality and valuation.
Another Hong Kong company that we started to trim was Yue Yuen Industrial.
Yue Yuen is the leading manufacturer of sneakers for Nike, Adidas and Reebok.
The stock had done quite well on the back of excellent results from Nike and
Adidas. The stock has also benefited from the rally in Hong Kong. Investors
are anticipating a smooth handover of the colony to the Chinese on July 1,
1997.
The portfolio engaged in a couple of swaps in order to maximize
valuation. In one instance we sold RWE AG and instead purchased Viag AG. Both
companies are German utilities; however, Viag had significantly
underperformed. We believe that Viag will be more successful in their efforts
to restructure and reduce cost than RWE. In addition we are seeing positive
earnings momentum coming from Viag's nonutility businesses. It was the poor
results from these businesses that caused Viag's underperformance in 1996.
In the most recent six months, we initiated positions in Cable &
Wireless, ANZ, Hong Kong Electric and GEA. Purchase of Cable & Wireless was
made because of its attractive valuation and the near-term potential for
divestiture of noncore assets, improvement in profitability and clarification
of its global strategy. ANZ was purchased because it had positive earnings
momentum and it was the least expensive of the four largest Australian banks.
In addition, ANZ is the most operationally leveraged for a bank merger should
such mergers be allowed. In the case of GEA, we saw orders begin to rise
dramatically in recent months. This should translate into earnings momentum.
In addition, the company recently reported seemingly disappointing earnings.
Most of the decline actually came from nonrecurring charges that were taken
for restructuring. We believe the moves the company is making are positive
and will help position GEA for 1997.
As we look into the balance of 1997, we are actively examining the
market's perception of value. We believe that a critical review of value will
continue to help your portfolio achieve a positive risk/reward profile.
Sincerely,
[Sandor Cseh signature logo]
Sandor Cseh
Portfolio Manager
March 20, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC.-The Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE(R)) Index is an unmanaged
index composed of a sample of companies representative of the market
structure of European and Pacific Basin countries. The return indicated
includes net dividends reinvested. The Index is the property of Morgan
Stanley & Co., Incorporated.
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
STATEMENT OF INVESTMENTS FEBRUARY 28, 1997 (UNAUDITED)
Common Stocks-87.1% Shares Value
------- -------
<S> <C> <C> <C>
Argentina-.9% YPF Sociedad Anonima, ADR...... 17,500 $ 468,125
-------
Australia-3.4% Amcor......................... 60,000 395,846
Australia and New Zealand Banking...... 100,250 627,076
Boral....................................... 212,954 579,874
Commonwealth Bank of Australia
(Installment Receipt)................ 22,700 150,115
Goodman Fielder........................ 77,359 93,889
-------
1,846,800
-------
Austria-.2% Creditanstalt-Bankverein......... 800 94,415
-------
Brazil-.5% Telecomunicacoes Brasileiras, ADR 3,000 291,000
-------
Denmark-.8% Tele Danmark, ADR...................... 15,800 418,700
-------
France 9.2% Alcatel Alsthom, ADR................... 35,092 719,386
CLF-DEXIA France....................... 5,800 578,526
C.S.F. (Thompson)...................... 13,104 414,633
Danone................................. 4,026 609,775
Elf Aquitaine, ADR..................... 15,600 748,800
Michelin............................... 8,000 500,377
Rhone-Poulenc, ADR..................... 13,136 458,118
Societe Generale....................... 5,954 688,867
Usinor Sacilor......................... 20,000 308,528
-------
5,027,010
-------
Germany-8.3% Bayer........................... 15,500 653,941
Deutsche Bank.......................... 15,300 793,629
GEA......................................... 1,500 516,935
Henkel KGaA............................ 500 25,580
Siemens................................ 17,400 880,098
Tarkett..................................... 16,000 284,226
VEBA........................................ 10,300 589,164
Viag........................................ 1,200 529,725
Volkswagen............................. 550 266,402
-------
4,539,700
-------
Hong Kong-2.3% Cheung Kong................... 41,000 391,837
HSBC........................................ 12,474 304,480
HongKong Electric...................... 159,500 552,060
-------
1,248,377
-------
Italy-3.1% ENI S.p.A, ADR.................... 9,000 447,750
Fiat Spa............................... 70,000 214,509
Istituto Mobiliare Italiano, ADR....... 14,000 367,500
Seat SpA............................... 180,000 41,468
Stet Societa' Finanziaria Telefonica... 180,000 634,575
-------
1,705,802
-------
Japan-23.5% Canon............................ 30,000 628,952
Chudenko............................... 5,000 143,511
DREYFUS INTERNATIONAL VALUE FUND
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1997 (UNAUDITED)
Common Stocks (continued) Shares Value
------- ------
Japan (continued) Credit Saison.............. 36,500 $ 780,408
Dai-Tokyo Fire & Marine Insurance...... 98,000 497,338
Fuji Machine Manufacturing............. 10,000 259,567
Hitachi..................................... 60,000 519,135
Hitachi Koki........................... 40,000 264,559
Honda Motor............................ 13,000 403,411
Ito-Yokado............................. 16,000 729,451
Kao......................................... 50,000 549,085
Mabuchi Motor.......................... 12,000 600,000
Mikuni Coca Cola....................... 26,000 317,970
Minebea................................ 75,000 622,712
Mitsubishi Heavy Industries............ 100,000 722,962
Murata Manufacturing................... 15,000 527,870
Nichiei..................................... 5,600 419,301
Nishimatsu Construction................ 50,000 374,376
Ono Pharmaceutical..................... 6,000 193,677
Sankyo................................. 19,000 475,790
Sekisui Chemical....................... 55,000 571,964
Sekisui House.......................... 35,000 326,123
Sony........................................ 6,000 434,775
Toshiba................................ 105,000 594,010
Toyota Motor........................... 31,000 796,922
Yamanouchi Pharmaceutical.............. 20,000 419,301
Yamato Transport....................... 65,000 643,511
-------
12,816,681
-------
Malaysia-1.2% Affin Holdings................. 70,000 217,251
IOI Properties......................... 50,000 170,294
Perusahaan Otomobil Nasional........... 40,000 264,410
-------
651,955
-------
Netherlands-6.6% ABN-Amro.................... 5,887 422,404
Akzo Nobel NV, ADR..................... 7,000 504,000
Hollandsche Beton Groep................ 1,700 373,900
Hunter Douglas......................... 7,745 585,074
ING Groep.............................. 7,144 276,418
Koninklijke KNP........................ 18,000 411,244
Philips Electronics NV, ADR............ 15,000 675,000
Royal PTT Nederland, ADR............... 9,471 343,325
-------
3,591,365
-------
New Zealand-.7% Air New Zealand.............. 73,000 190,968
Fletcher Challenge Energy.............. 70,000 180,206
-------
371,174
-------
Norway-1.0% Christiania Bank................. 60,000 223,734
Orkla....................................... 4,500 332,593
-------
556,327
-------
DREYFUS INTERNATIONAL VALUE FUND
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1997 (UNAUDITED)
Common Stocks (continued) Shares Value
------- ------
Peru-.5% Telefonica del Peru, ADR............ 11,500 $ 253,000
-------
Philippines-.4% Philippine Long Distance Telephone, ADR 4,000 232,000
-------
Portugal-.5% Banco Comercial Portugues....... 20,000 287,213
-------
Singapore-1.1% Development Bank of Singapore 29,000 384,766
Far East Levingston Shipbuilding....... 52,000 213,549
-------
598,315
-------
South Korea-.3% Kookmin Bank, ADR............ 10,500 (a,b) 187,950
-------
Spain-3.5% Corporacion Bancaria de Espana, ADR 32,000 648,000
Gas Y Electridad....................... 10,000 540,126
Repsol, ADR............................ 19,000 722,000
-------
1,910,126
-------
Sweden-2.3% Marieberg Tidnings............... 13,400 371,468
Scania AB 'A'.......................... 6,000 147,137
Scania AB 'A', ADR..................... 9,250 226,047
Scania AB 'B', ADR..................... 1,250 30,781
Volvo AB 'B', ADR...................... 20,000 497,500
-------
1,272,933
-------
Switzerland-4.8% Magazine Zum Globus......... 885 381,161
Nestle...................................... 450 489,402
Schweizerischer Banksverein............ 3,000 568,836
Sulzer...................................... 900 560,709
Zurich Versicherungs................... 2,000 594,569
-------
2,594,677
-------
United Kingdom-12.0% BTR..................... 200,129 778,011
Bunzl....................................... 135,779 465,878
Cable & Wireless, ADR.................. 22,000 533,500
Devro....................................... 70,000 318,910
Energy, ADR............................ 1,000 34,000
Hanson, ADR............................ 1,000 22,250
Laird....................................... 35,000 205,095
National Westminster Bank.............. 55,813 690,047
Powergen............................... 65,854 667,667
RTZ......................................... 56,087 857,079
Safeway................................ 100,000 591,283
Scapa....................................... 55,000 199,920
Smith (David S.)....................... 50,765 203,557
Stakis...................................... 150,000 266,505
Tomkins................................ 160,000 739,368
-------
6,573,070
-------
TOTAL COMMON STOCKS
(cost $46,018,580)................... $47,536,715
=======
DREYFUS INTERNATIONAL VALUE FUND
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1997 (UNAUDITED)
Convertible Preferred Stocks-1.0% Shares Value
------- ------
Germany; Henkel KGaA-Vorzug
(cost $457,895)...................... 10,300 $ 548,910
=======
Principal
Short-Term Investments-11.5% Amount
------
U.S. Treasury Bills: 5.00%, 4/3/97.......................... $ 547,000 $ 544,500
5.01%, 4/17/97......................... 335,000 332,739
4.97%, 4/24/97......................... 538,000 533,943
5.01%, 5/1/97.......................... 337,000 334,119
4.98%, 5/8/97.......................... 1,841,000 1,823,474
4.95%, 5/15/97......................... 2,333,000 2,308,410
4.97%, 5/22/97......................... 413,000 408,242
-------
TOTAL SHORT-TERM INVESTMENTS
(cost $6,286,389).................... $ 6,285,427
=======
TOTAL INVESTMENTS (cost $52,762,864)........................................ 99.6% $54,371,052
==== =======
CASH AND RECEIVABLES (NET).................................................. .4% $ 229,341
==== =======
NET ASSETS.................................................................. 100.0% $54,600,393
==== =======
Notes to Statement of Investments:
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1997, this security amounted to $187,950 or approximately .34% of net
assets.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1997 (UNAUDITED)
Cost Value
------- ------
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $52,762,864 $54,371,052
Cash....................................... 273,511
Cash denominated in foreign currencies..... $ 671,047 662,434
Dividends receivable....................... 48,373
Prepaid expenses........................... 24,997
-------
55,380,367
-------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 33,200
Due to Distributor......................... 9,674
Payable for investment securities purchased 694,033
Net unrealized depreciation on forward
currency exchange contracts-Note 4(a) 270
Accrued expenses........................... 42,797
-------
779,974
-------
NET ASSETS.................................................................. $54,600,393
-------
-------
REPRESENTED BY: Paid-in capital............................ $52,504,057
Accumulated distributions in excess of
investment income-net (56,960)
Accumulated net realized gain (loss) on investments 553,064
Accumulated net unrealized appreciation (depreciation) on
investments and foreign currency transactions 1,600,232
-------
NET ASSETS.................................................................. $54,600,393
=======
SHARES OUTSTANDING
(100 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED)............. 3,924,058
NET ASSET VALUE, offering and redemption price per share.................... $13.91
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 28, 1997 (UNAUDITED)
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME: Cash dividends (net of $19,859 foreign taxes
withheld at source).................... $ 181,537
Interest................................... 111,786
------
Total Income......................... $ 293,323
EXPENSES: Management fee-Note 3(a)................... $ 185,617
Shareholder servicing costs-Note 3(b)...... 55,049
Custodian fees............................. 24,023
Registration fees.......................... 15,149
Professional fees.......................... 11,493
Directors' fees and expenses-Note 3(c)..... 4,990
Prospectus and shareholders' reports....... 3,007
Miscellaneous.............................. 642
------
Total Expenses....................... 299,970
Less-reduction in management fee due to
undertaking-Note 3(a).................. (21,545)
------
Net Expenses......................... 278,425
------
INVESTMENT INCOME-NET....................................................... 14,898
------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments
and foreign currency transactions ..... $ 845,591
Net realized gain (loss) on forward currency
exchange contracts..................... (110,483)
------
Net Realized Gain (Loss)............. 735,108
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions ..... 1,676,880
------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 2,411,988
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,426,886
======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 28, 1997 Year Ended
(Unaudited) August 31, 1996*
------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 14,898 $ 235,391
Net realized gain (loss) on investments................................. 735,108 208,090
Net unrealized appreciation (depreciation) on investments............... 1,676,880 (76,648)
------- -------
Net Increase (Decrease) in Net Assets Resulting from Operations....... 2,426,886 366,833
------- -------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net................................................... (290,696) (16,553)
Net realized gain on investments........................................ (376,194) (13,940)
------- -------
Total Dividends....................................................... (666,890) (30,493)
------- -------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 44,345,725 29,459,331
Dividends reinvested.................................................... 522,275 30,423
Cost of shares redeemed................................................. (17,665,435) (4,188,262)
------- -------
Increase (Decrease) in Net Assets from Capital Stock Transactions..... 27,202,565 25,301,492
------- -------
Total Increase (Decrease) in Net Assets........................... 28,962,561 25,637,832
NET ASSETS:
Beginning of Period..................................................... 25,637,832 ---
------- -------
End of Period........................................................... $54,600,393 $25,637,832
======= =======
UNDISTRIBUTED INVESTMENT INCOME (DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME)-NET $ (56,960) $ 218,838
------- -------
Shares Shares
------- -------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 3,228,525 2,260,166
Shares issued for dividends reinvested.................................. 38,601 2,436
Shares redeemed......................................................... (1,281,554) (324,116)
------- -------
Net Increase (Decrease) in Shares Outstanding......................... 1,985,572 1,938,486
======= =======
*From September 29, 1995 (commencement of operations) to August 31, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL 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 each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
Six Months Ended
February 28, 1997 Year Ended
PER SHARE DATA: (Unaudited) August 31, 1996(1)
------------ ------------------
<S> <C> <C>
Net asset value, beginning of period................................... $13.23 $12.50
---- ----
Investment Operations:
Investment income-net.................................................. .01(2) .15
Net realized and unrealized gain (loss)
on investments....................................................... .90 .65
---- ----
Total from Investment Operations....................................... .91 .80
---- ----
Distributions:
Dividends from investment income-net................................... (.10) (.04)
Dividends from net realized gain on investments........................ (.13) (.03)
---- ----
Total Distributions.................................................... (.23) (.07)
---- ----
Net asset value, end of period......................................... $13.91 $13.23
==== ====
TOTAL INVESTMENT RETURN(2)................................................. 6.96% 6.43%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(3)............................. .74% 1.39%
Ratio of net investment income
to average net assets(3)............................................. .04% 1.78%
Decrease reflected in above expense ratios
due to undertakings by the Manager(3)................................ .06% .51%
Portfolio Turnover Rate(3)............................................. 14.55% 19.14%
Average commission rate paid (4)....................................... $.0314 $.0348
Net Assets, end of period (000's Omitted).............................. $54,600 $25,638
(1) From September 29, 1995 (commencement of operations) to August 31, 1996.
(2) Based on average shares outstanding at each month end.
(3) Not annualized.
(4) The Fund is required to disclose its average commission rate paid per share for purchases and sales of investment
securities.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus International Value Fund (the "Fund") is a series of Dreyfus
Growth and Value Funds, Inc. (the "Company") which 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 Fund. The Fund's investment objective is long-term
capital growth. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. (the "Distributor") is 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 funds' operations; expenses which are applicable to all funds
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 Funds' 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 INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (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 $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended
February 28, 1997, the Fund did not borrow under the Facility.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement with the Manager, the management
fee is computed at the annual rate of 1% of the value of the Fund's average
daily net assets and is payable monthly. The Manager has undertaken from
September 1, 1996 through August 31, 1997 to reduce the management fee paid
by the Fund, to the extent that the Fund's aggregate expenses, exclusive of
taxes, brokerage, interest on borrowings (which, in the view of Stroock &
Stroock & Lavan, counsel to the Fund, also contemplates loan commitment fees)
and extraordinary expenses, exceed an annual rate of 1.50% of the value of
the Fund's average daily net assets. The reduction in management fee,
pursuant to the undertaking, amounted to $21,545 during the period ended
February 28, 1997.
(b) Under the 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 February 28, 1997, the Fund was charged an
aggregate of $46,404 pursuant to the Shareholder Services Plan.
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 $3,722 during the period ended February 28, 1997.
(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) Effective March 1, 1997, a 1% redemption fee is charged on certain
redemptions of Fund shares (including redemptions through the use of the Fund
Exchanges service) where the shares being redeemed were issued subsequent to
a specified effective date and the redemption or exchange occurs less than
fifteen days following the date of issuance.
DREYFUS INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 4-SECURITIES TRANSACTIONS:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the period ended February 28, 1997, amounted to $27,392,192 and
$4,888,080, respectively.
In addition, the following summarizes open forward currency exchange
contracts at February 28, 1997:
<TABLE>
Foreign
Currency Unrealized
Forward Currency Sales Contracts Amounts Proceeds Value (Depreciation)
- ---------------------------------- -------------- ------------ ------- --------------
<S> <C> <C> <C> <C>
Australian Dollar, expiring 3/3/97........... 299,723 $233,184 $233,454 $(270)
====
</TABLE>
The Fund enters into forward currency exchange contracts in order to hedge
its exposure 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 gain on each
open contract.
(b) At February 28, 1997, accumulated net unrealized appreciation on
investments and forward currency exchange contracts was $1,607,918,
consisting of $3,490,648 gross unrealized appreciation and $1,882,730 gross
unrealized depreciation.
At February 28, 1997, 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).
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Registration Mark
DREYFUS INTERNATIONAL VALUE FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 254SA972
[Dreyfus logo]
Registration Mark
International
Value Fund
Semi-Annual
Report
February 28, 1997
