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PROSPECTUS JANUARY 1, 1999
DREYFUS INTERNATIONAL VALUE FUND
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DREYFUS INTERNATIONAL VALUE FUND (THE "FUND") IS A SEPARATE
DIVERSIFIED PORTFOLIO OF DREYFUS GROWTH AND VALUE FUNDS, INC., AN OPEN-END,
MANAGEMENT INVESTMENT COMPANY (THE "COMPANY"), KNOWN AS A MUTUAL FUND. THE
FUND'S INVESTMENT OBJECTIVE IS LONG-TERM CAPITAL GROWTH. IT SEEKS TO ACHIEVE
THIS INVESTMENT OBJECTIVE BY INVESTING PRINCIPALLY IN A PORTFOLIO OF
PUBLICLY-TRADED EQUITY SECURITIES OF FOREIGN ISSUERS WHICH ARE CHARACTERIZED
AS "VALUE" COMPANIES ACCORDING TO CRITERIA ESTABLISHED BY THE DREYFUS
CORPORATION.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED JANUARY 1, 1999,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST
TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND
EXCHANGE COMMISSION MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS
THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE,
AND OTHER INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT
OF ADDITIONAL INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING,
ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
Table of Contents
Page
Page
Fee Table............................ 3
How to Redeem Shares .......... 14
Condensed Financial Information...... 4
Shareholder Services Plan...... 16
Description of the Fund.............. 4
Dividends, Distributions and Taxes 16
Management of the Fund............... 6
Performance Information........ 18
How to Buy Shares.................... 8
General Information............ 18
Shareholder Services................. 10
Appendix....................... 20
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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[This Page Intentionally Left Blank]
[Page 2]
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fee* (as a percentage of amount redeemed)................
1.00%
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
Management Fees.....................................................
1.00%
Other Expenses......................................................
.44%
Total Fund Operating Expenses.......................................
1.44%
* Shares held for less than 15 days may be subject to a 1% redemption fee
payable to the Fund. See "How to Redeem Shares."
EXAMPLE:
You would pay the following
expenses on a $1,000
investment, assuming (1) 5% 1 YEAR
3 YEARS 5 YEARS 10 YEARS
annual return and (2) redemption
at the end of each time period: $15
$46 $79 $172
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund and investors, the payment of which
will reduce investors' annual return. The information in the foregoing table
does not reflect any fee waivers or expense reimbursement arrangements that
may be in effect. Certain Service Agents (as defined below) may charge their
clients direct fees for effecting transactions in Fund shares; such fees are
not reflected in the foregoing table. A $12 fee may be charged to certain
accounts with balances below $2,000. See "Management of the Fund," "How to
Buy Shares," "How to Redeem Shares" and "Shareholder Services Plan."
[Page 3]
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors. Further financial data, related
notes and report of independent auditors accompany the Statement of
Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
Year Ended August 31,
___________________________________________
PER SHARE DATA:
1996(1) 1997 1998
_______ _______ _______
Net asset value, beginning of year.........................
$12.50 $13.23 $15.05
_______ _______ _______
Investment Operations:
Investment income_net......................................
.15 .07 .13
Net realized and unrealized loss
on investments.............................................
.65 1.98 (.20)
_______ _______ _______
Total from Investment Operations...........................
.80 2.05 (.07)
_______ _______ _______
Distributions:
Dividends from investment income_net.......................
(.04) (.10) (.08)
Dividends from net realized gain on investments............
(.03) (.13) (.40)
_______ _______ _______
Total Distributions........................................
(.07) (.23) (.48)
_______ _______ _______
Net asset value, end of year...............................
$13.23 $15.05 $14.50
====== ======== =======
TOTAL INVESTMENT RETURN......................................
6.43%(2) 15.72% (.62%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets....................
1.39%(2) 1.49% 1.44%
Ratio of net investment income
to average net assets......................................
1.78%(2) 1.09% 1.17%
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation.............
.51%(2) .03% __
Portfolio Turnover Rate....................................
19.14%(2) 25.35% 34.46%
Net Assets, end of year (000's omitted)....................
$25,638 $96,896 $162,707
(1) From September 29, 1995 (commencement of operations) to August 31,
1996.
(2) Not annualized.
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this
Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is long-term capital growth. It
cannot be changed without approval by the holders of a majority (as defined
in the Investment Company Act of 1940, as amended (the "1940 Act")) of the
Fund's outstanding voting shares. There can be no assurance that the Fund's
investment objective will be achieved.
INVESTMENT APPROACH
The Fund's investment approach is value-oriented, research-driven
and
risk averse. To manage the Fund, The Dreyfus Corporation classifies issuers
as "growth" or "value" companies. In general, The Dreyfus Corporation
believes that companies with relatively low price to book ratios, low price
to earnings ratios or higher than average dividend payments in relation to
price should be classified as value companies. Alternatively, companies
which
have above average earnings or sales growth and retention of
[Page 4]
earnings and command higher price to earnings ratios fit the classic growth
description. In addition, The Dreyfus Corporation intends to consider
broader
measures of value, including operating return characteristics, overall
financial health and positive changes in business momentum. This
value-oriented, bottom-up investment style is both quantitative and
fundamentally based, focusing first on stock selection then enhanced by
country allocation guidelines.
MANAGEMENT POLICIES
The Fund anticipates that at least 65% of the value of its total
assets (except when maintaining a temporary defensive position) will be
invested in equity securities principally of foreign issuers which are
characterized as "value" companies according to criteria established by The
Dreyfus Corporation. Under normal market conditions, the Fund expects that
substantially all of its assets will be invested in securities of foreign
issuers. While there are no prescribed limits on geographic asset
distribution
outside the United States, the Fund ordinarily will seek to invest its
assets in not less than three foreign countries. The Fund's securities
selections generally will be made without regard to an issuer's market
capitalization. Equity securities consist of common stocks, convertible
securities and preferred stocks.
The Fund may invest, to a limited extent, in debt securities issued
by foreign governments and securities issued by closed-end investment
companies. While seeking desirable investments, the Fund may invest in money
market instruments consisting of U.S. Government securities, certificates of
deposit, time deposits, bankers' acceptances, short-term investment grade
corporate bonds and other short-term debt instruments, and repurchase
agreements, as set forth under "Appendix _ Certain Portfolio Securities _
Money Market Instruments." Under normal market conditions, the Fund does not
expect to have a substantial portion of its assets invested in money market
instruments. However, when The Dreyfus Corporation determines that adverse
market conditions exist, the Fund may adopt a temporary defensive posture
and
invest all of its assets in money market instruments.
The Fund's annual portfolio turnover rate for the current fiscal
year
is not expected to exceed 150%. A turnover rate of 100% is equivalent to the
Fund buying and selling all of the securities in its portfolio once in the
course of a year. Higher portfolio turnover rates usually generate
additional
brokerage commissions and expenses and the short-term gains realized from
these transactions are taxable to shareholders as ordinary income. The Fund
currently intends, to a limited extent, to engage in various investment
techniques, such as foreign currency transactions and options and futures
transactions. For a discussion of the investment techniques and their
related
risks, see "Investment Considerations and Risks" and "Appendix _ Investment
Techniques" below and "Investment Objective and Management Policies _
Management Policies" in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ The Fund's net asset value per share should be expected to
fluctuate. Investors should consider the Fund as a supplement to an overall
investment program and should invest only if they are willing to undertake
the risks involved. See "Investment Objective and Management Policies" in
the
Statement of Additional Information for a further discussion of certain
risks.
EQUITY SECURITIES _ Equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors.
FOREIGN SECURITIES _ Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of
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comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
Because evidences of ownership of such securities usually are held
outside the United States, the Fund will be subject to additional risks
which
include possible adverse political and economic developments, seizure or
nationalization of foreign deposits and adoption of governmental
restrictions
which might adversely affect or restrict the payment of principal and
interest on the foreign securities to investors located outside the country
of the issuer, whether from currency blockage or otherwise.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations.
FOREIGN CURRENCY TRANSACTIONS _ Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central
banks, or the failure to intervene, or by currency controls or political
developments in the United States or abroad. See "Appendix _ Investment
Techniques _ Foreign Currency Transactions."
USE OF DERIVATIVES _ The Fund may invest in derivatives ("Derivatives").
These are financial instruments which derive their performance, at least in
part, from the performance of an underlying asset, index or interest rate.
The Derivatives the Fund may use include options and futures. While
Derivatives can be used effectively in furtherance of the Fund's investment
objective, under certain market conditions, they can increase the volatility
of the Fund's net asset value, decrease the liquidity of the Fund's
portfolio
and make more difficult the accurate pricing of the Fund's portfolio. See
"Appendix _ Investment Techniques _ Use of Derivatives" below and
"Investment
Objective and Management Policies _ Management Policies _ Derivatives" in
the
Statement of Additional Information.
YEAR 2000 RISKS _ The fund could be adversely affected if the computer
systems used by Dreyfus and the fund's other service providers do not
properly process and calculate date-related information from and after
January 1, 2000. While year 2000-related problems in its computer systems
could have a negative effect on the fund, Dreyfus is working to avoid such
problems and to obtain assurances from 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.
SIMULTANEOUS INVESTMENTS _ Investment decisions for the Fund are made
independently from those of the other investment companies advised by The
Dreyfus Corporation. If, however, such other investment companies desire to
invest in, or dispose of, the same securities as the Fund, available
investments or opportunities for sales will be allocated equitably to each
investment company. In some cases, this procedure may adversely affect the
size of the position obtained for or disposed of by the Fund or the price
paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
[Page 6]
Corporation ("Mellon"). As of October 30, 1998, The Dreyfus Corporation
managed or administered approximately $112 billion in assets for
approximately 1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Company, subject to the authority of the Company's Board in accordance with
Maryland law. The Fund's primary portfolio manager is Sandor Cseh. He has
held that position since September 1995 and has been employed by The Dreyfus
Corporation since May 1996 pursuant to a dual employee agreement between The
Dreyfus Corporation and The Boston Company Asset Management, Inc. ("TBC
Asset
Management"), an indirect wholly-owned subsidiary of Mellon and, thus, an
affiliate of The Dreyfus Corporation. Mr. Cseh has been employed by TBC
Asset
Management or its predecessor since October 1994. Prior to joining TBC Asset
Management, Mr. Cseh was President of Cseh International & Associates Inc.,
the international money management division of Cashman, Farrell &
Associates,
and was a securities analyst with several banks. The Fund's other portfolio
managers are identified in the Statement of Additional Information. The
Dreyfus Corporation also provides research services for the Fund and for
other funds advised by The Dreyfus Corporation through a professional staff
of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more
than
$334 billion in assets as of September 30, 1998, including approximately
$125
billion in proprietary mutual fund assets. As of September 30, 1998, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.642 trillion in
assets, including approximately $52 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of 1% of the
value of the Fund's average daily net assets. For the fiscal year ended
August 31, 1998, the Fund paid The Dreyfus Corporation a monthly management
fee at the effective annual rate of .1.00 of 1% of the value of the Fund's
average daily net assets. From time to time, The Dreyfus Corporation may
waive receipt of its fees and/or voluntarily assume certain expenses of the
Fund, which would have the effect of lowering the expense ratio of the Fund
and increasing yield to investors. The Fund will not pay The Dreyfus
Corporation at a later time for any amounts it may waive, nor will the Fund
reimburse The Dreyfus Corporation for any amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of
the Fund or other funds managed, advised or administered by The Dreyfus
Corporation or its affiliates as factors in the selection of broker-dealers
to execute portfolio transactions for the Fund. Brokerage transactions for
the Fund may be conducted through affiliates of The Dreyfus Corporation, in
accordance with procedures adopted by the Fund's Board. See "Portfolio
Transactions" in the Statement of Additional Information.
[Page 7]
The Dreyfus Corporation may pay the Fund's distributor for
shareholder
services from The Dreyfus Corporation's own
assets, including past profits but not including the management fee paid by
the Fund. The Fund's distributor may use part or all of such payments to pay
Service Agents in respect of these services.
DISTRIBUTOR _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts
02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent").The Bank of New York, 90 Washington
Street, New York, New York 10286, serves as the Fund's Custodian.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be charged a
fee
if you effect transactions in Fund shares through a securities dealer, bank
or other financial institution (collectively, "Service Agents"). Stock
certificates are issued only upon your written request. No certificates are
issued for fractional shares. The Fund reserves the right to reject any
purchase order. See "Appendix _ Additional Information About Purchases,
Exchanges and Redemptions."
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which maintains an omnibus account in the Fund and
has made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. However, the minimum initial
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular
IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and
rollover
IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum on subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
the Company's Board, or the spouse or minor child of any of the foregoing,
the minimum initial investment is $1,000. For full-time or part-time
employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries
who elect to have a portion of their pay directly deposited into their Fund
accounts, the minimum initial investment is $50. The Fund reserves the right
to offer Fund shares without regard to minimum purchase requirements to
employees participating in certain qualified or non-qualified employee
benefit plans or other programs where contributions or account information
can be transmitted in a manner and form acceptable to the Fund. The Fund
reserves the right to vary further the initial and subsequent investment
minimum requirements at any time. Fund shares also are offered without
regard
to the minimum initial investment requirements through Dreyfus-AUTOMATIC
Asset BuilderRegistration Mark, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan pursuant to the Dreyfus Step Program
described under "Shareholder Services." These services enable you to make
regularly scheduled investments and may provide you with a convenient way to
invest for long-term financial goals. You should be aware, however, that
periodic investment plans do not guarantee a profit and will not protect an
investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through the
Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to
"The
Dreyfus Family of Funds," or, if for Dreyfus retirement plan accounts, to
"The Dreyfus Trust Company, Custodian" and should specify that you are
[Page 8]
investing in the Fund. Payments to open new accounts which are mailed should
be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence, Rhode
Island 02940-9387, together with your Account Application. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL
BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA# 8900279605/Dreyfus
International Value Fund, for purchase of Fund shares in your name. The wire
must include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account
registratio
n and dealer number, if applicable. If your initial purchase of Fund shares
is by wire, please call 1-800-645-6561 after completing your wire payment to
obtain your Fund account number. Please include your Fund account number on
the Account Application and promptly mail the Account Application to the
Fund, as no redemptions will be permitted until the Account Application is
received. You may obtain further information about remitting funds in this
manner from your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear. The
Fund makes available to certain large institutions the ability to issue
purcha
se instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
Fund account number PRECEDED BY THE DIGITS "1111."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus, and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees. You should consult your Service Agent
in this regard. See "Shareholder Services Plan."
Fund shares are sold on a continuous basis at the net asset value
per
share next determined after an order in proper form is received by the
Transfer Agent or other entity authorized to receive orders on behalf of the
Fund. Net asset value per share is determined as of the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for business. Net
asset value per share is computed by dividing the value of the Fund's net
assets (I.E., the value of its assets less liabilities) by the total number
of Fund shares outstanding. The Fund's investments are valued based on
market
value or, where market quotations are not readily available, based on fair
value as determined in good faith by the Company's Board. Certain securities
may be valued by an independent pricing service approved by the Company's
Board and are valued at fair value as
[Page 9]
determined by the pricing service. For further information regarding the
methods employed in valuing the Fund's investments, see "Determination of
Net
Asset Value" in the Statement of Additional Information.
For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Fund shares may be transmitted, and
must be received by the Transfer Agent, within three business days after the
order is placed. If such payment is not received within three business days
after the order is placed, the order may be canceled and the institution
could be held liable for resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where
(i)
the employers or affiliated employers maintaining such plans or programs
have
a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in the
Dreyfus
Family of Funds or certain other products made available by the Distributor
to such plans or programs exceeds $1,000,000 ("Eligible Benefit Plans").
Shares of funds in the Dreyfus Family of Funds then held by Eligible Benefit
Plans will be aggregated to determine the fee payable. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
FEE FOR SMALL ACCOUNTS _ In order to offset the relatively higher costs of
servicing smaller accounts, the Fund will charge regular accounts with
balances below $2,000 an annual fee of $12. The valuation of accounts and
the
deductions are expected to take place during the last four months of each
year. The fee will be waived for any investor whose aggregate Dreyfus mutual
fund investments total at least $25,000, and will not apply to IRAaccounts
or
to accounts participating in automatic investment programs or opened through
a
securities dealer, bank or other financial institution, or to other
fiduciary accounts.
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Account Application or
have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will
be transferred between the bank account designated in one of these documents
and your Fund account. Only a bank account maintained in a domestic
financial
institution which is an Automated Clearing House member may be so
designated.
The Fund may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES
You may purchase, in exchange for shares of the Fund, shares of
certain other funds managed or administered by The Dreyfus Corporation, to
the extent such shares are offered for sale in your state of residence.
These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, you should consult your Service Agent or
call 1-800-645-6561 to determine if it is available and whether any
conditions are imposed on its use.
[Page 10]
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any
exchange, you must obtain and should review a copy of the current prospectus
of the fund into which the exchange is being made. Prospectuses may be
obtained by calling 1-800-645-6561. Except in the case of personal
retirement
plans, the shares being exchanged must have a current value of at least
$500;
furthermore, when establishing a new account by exchange, the shares being
exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. The ability to
issue exchange instructions by telephone is given to all Fund shareholders
automatically, unless you check the applicable "No" box on the Account
Application, indicating that you specifically refuse this Privilege. The
Telephone Exchange Privilege may be established for an existing account by
written request signed by all shareholders on the account, by a separate
signed Shareholder Services Form, available by calling 1-800-645-6561, or by
oral request from any of the authorized signatories on the account by
calling
1-800-645-6561. If you have established the Telephone Exchange Privilege,
you
may telephone exchange instructions (including over The Dreyfus Touch
Registration Mark automated telephone system) by calling 1-800-645-6561. If
you are calling from overseas, call 516-794-5452. See "How to Redeem
Shares_Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where available, will
be automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Wire Redemption Privilege, Telephone
Redemption
Privilege, Dreyfus TELETRANSFER Privilege and the dividend/capital gain
distribution option (except for Dreyfus Dividend Sweep) selected by the
investor.
The Fund will impose a redemption fee equal to 1% of the net asset
value of shares exchanged out of the Fund where the exchange is made less
than 15 days after issuance of such shares. See "How to Redeem Shares."
Otherwise, shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through
reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities
and
Exchange Commission. The Fund reserves the right to reject any exchange
request in whole or in part. See "Appendix _ Additional Information About
Purchases, Exchanges and Redemptions." The availability of Fund Exchanges
may
be modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on
a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of certain other funds in the Dreyfus Family of Funds of
which you are a shareholder. The amount you designate, which can be
expressed
either in terms of a specific dollar or share amount ($100 minimum), will be
exchanged automatically on the first and/or fifteenth day of the month
according to the schedule you have selected.
[Page 11]
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or
canceled
by the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The
Fund
may charge a service fee for the use of this Privilege. No such fee
currently
is contemplated. For more information concerning this Privilege and the
funds
in the Dreyfus Family of Funds eligible to participate in this Privilege, or
to obtain a Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member
may be so designated. To establish a Dreyfus-AUTOMATIC Asset Builder
account,
you must file an authorization form with the Transfer Agent. You may obtain
the necessary authorization form by calling 1-800-645-6561. You may cancel
your participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. To
enroll in Dreyfus Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment that
you desire to include in this Privilege. The appropriate form may be
obtained
by calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency. The
Fund may terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis.
Depending
upon your employer's direct deposit program, you may have part or all of
your
paycheck transferred to your existing Dreyfus account electronically through
the Automated Clearing House system at each pay period. To establish a
Dreyfus Payroll Savings Plan account, you must file an authorization form
with your employer's payroll department. Your employer must complete the
reverse side of the form and return it to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of your employer, not the
Distributor, The Dreyfus Corporation, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Dreyfus Payroll Savings
Plan. The Fund may modify or terminate this Privilege at any time or charge
a
service fee. No such fee currently is contemplated.
[Page 12]
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Fund shares without
regard to the Fund's minimum initial investment requirements through Dreyfus-
AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program account,
you must supply the necessary information on the Account Application and
file
the required authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary
authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing
your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may
be,
as provided under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to purchase Fund
shares through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs, SEP-IRAs and IRA
"Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. If you
are investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject on redemption to the contingent deferred
sales charge, if any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dreyfus Dividend ACH
permits you to transfer electronically dividends or dividends and capital
gain distributions, if any, from the Fund to a designated bank account. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. Banks may charge a fee
for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three
business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for Dreyfus Dividend Sweep.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account. An Automatic Withdrawal Plan may
be established by filing an Automatic Withdrawal Plan application with the
Transfer Agent or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561. The Automatic Withdrawal Plan may be
ended at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, SEP-IRAs, rollover IRAs and
[Page 13]
Education IRAs), 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan
support services also are available. You can obtain details on the various
plans by calling the following numbers toll free: for Keogh Plans, please
call 1-800-358-5566; for IRAs except SEP-IRAs, please call 1-800-645-6561;
or
for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below.
When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund, the Fund will redeem the
shares at the next determined net asset value. See "Appendix _ Additional
Information About Purchases, Exchanges and Redemptions."
The Fund will deduct a redemption fee of 1% of the net asset value
of
Fund shares redeemed or exchanged less than 15 days following the issuance
of
such shares. The fee will be retained by the Fund and used primarily to
offset the transaction costs that short-term trading imposes on the Fund and
its shareholders. For purposes of calculating the 15-day holding period, the
Fund will employ the "first-in, first-out" method, which assumes that the
shares you are redeeming or exchanging are the ones you have held the
longest. No redemption fee will be charged on the redemption or exchange of
shares (1) through the Fund's Automatic Withdrawal Plan or Dreyfus
Auto-Exchange Privilege, (2) through accounts that are reflected on the
records of the Transfer Agent as omnibus accounts approved by Dreyfus
Service
Corporation, (3) through accounts established by Service Agents approved by
Dreyfus Service Corporation that utilize the National Securities Clearing
Corporation's networking system, or (4) acquired through the reinvestment of
dividends or capital gains distributions. The redemption fee may be waived,
modified or discontinued at any time or from time to time. Service Agents
may
charge their clients a fee for effecting redemptions of Fund shares. Any
certi
ficates representing Fund shares being redeemed must be submitted with the
redemption request. The value of the shares redeemed may be more or less
than
their original cost, depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDERRegistration
Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK
CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR DREYFUS-
AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE FOR A PERIOD OF
EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
[Page 14]
The Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your
account's net asset value is $500 or less and remains so during the notice
period.
PROCEDURES
You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege
which is granted automatically unless you specifically refuse it by checking
the applicable "No" box on the Account Application. The Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or by oral request from any of the authorized
signatories on the account by calling 1-800-645-6561. You also may redeem
shares through the Wire Redemption Privilege or the Dreyfus TELETRANSFER
Privilege, if you have checked the appropriate box and supplied the
necessary
information on the account application or have filed a Shareholder Services
Form with the Transfer Agent. Other redemption procedures may be in effect
for clients of certain Service Agents. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities. The Fund reserves the right to refuse any
request made by wire or telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are
not
eligible for the Wire Redemption, Telephone Redemption or Dreyfus
TELETRANSFER Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, and reasonably believed by
the Transfer Agent to be genuine. The Fund will require the Transfer Agent
to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of
these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption
had
been used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each
signature
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit
[Page 15]
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges
Medallion
Program. If you have any questions with respect to signature-guarantees,
please call one of the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE _ You may request by wire, telephone or letter
that redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of not more than $250,000 wired within
any 30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed
to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse
it.
DREYFUS TELETRANSFER PRIVILEGE _ You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of
the
redemption request. Holders of jointly registered Fund or bank accounts may
redeem through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by calling 1-800-645-
6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
it
pays the Distributor for the provision of certain services to Fund
shareholders a fee at the annual rate of .25 of 1% of the value of the
Fund's
average daily net assets. 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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Internal Revenue Code of 1986, as amended (the "Code"),
the
Fund is treated as a separate corporation for purposes of qualification and
taxation as a regulated investment company. The Fund ordinarily pays
dividends from its net investment income and distributes net realized
securities gains, if any, once a year, but it may make distributions on a
more frequent basis to comply with the distribution requirements of the
Code,
in all events in a manner consistent with the provisions of the 1940 Act.
The
Fund will not make distributions from net realized securities gains unless
capital loss carryovers, if any, have been utilized or have expired. You may
choose whether to receive dividends and distributions
[Page 16]
in cash or to reinvest in additional shares at net asset value. If
you elect to receive dividends and distributions in cash, and your dividend
or distribution check is returned to the Fund as undeliverable or remains
uncashed for six months, the Fund reserves the right to reinvest such
dividend or distribution and all future dividends and distributions payable
to you in additional Fund shares at net asset value. No interest will accrue
on amounts represented by uncashed distribution or redemption checks. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in additional
shares. Distributions from net realized long-term securities gains of the
Fund will be taxable to U.S. shareholders as long-term capital gains for
Federal income tax purposes, regardless of how long shareholders have held
their Fund shares and whether such distributions are received in cash or
reinvested in Fund shares. The Code provides that an individual generally
will
be taxed on his or her net capital gain at a maximum rate of 28% with
respect
to capital gain from securities held for less than 12 months and at a
maximum
rate of 20% with respect to capital gain from securities held for more than
12 months. Dividends and distributions may be subject to state and local
taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain or
loss may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from
securities gains, if any, paid during the year.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject to backup
wi
thholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
[Page 17]
Management of the Fund believes that the Fund has qualified for the
fiscal year ended August 31, 1998 as a "regulated
investment company" under the Code. The Fund intends to continue to so
qualify if such qualification is in the best interests of its shareholders.
Such qualification relieves the Fund of any liability for Federal income tax
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. The Fund is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on the
basis of average annual total return and/or total return.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment was purchased with an initial
payment of $1,000 and that the investment was redeemed at the end of a
stated
period of time, after giving effect to the reinvestment of dividends and
distributions during the period. The return is expressed as a percentage
rate
which, if applied on a compounded annual basis, would result in the
redeemable value of the investment at the end of the period. Advertisements
of the Fund's performance will include the Fund's average annual total
return
for one, five and ten year periods, or for shorter periods depending upon
the
length of time the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Standard & Poor's 500 Composite Stock Price
Index,
Wilshire 5000 Index, the Dow Jones Industrial Average, MONEY MAGAZINE,
Morningstar, Inc. and other industry publications.
GENERAL INFORMATION
The Company was incorporated under Maryland law on November 16,
1993,
and commenced operations on December 29, 1993. Before September 29, 1995,
the
Company's name was Dreyfus Focus Funds, Inc. The Company is authorized to
issue one billion shares of Common Stock (with 100 million shares allocated
to the Fund), par value $.001 per share. Each share has one vote.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members
or
the appointment of auditors. However, holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Board member from office.
Shareholders may remove a Board member by the affirmative vote of a majority
of the Company's outstanding voting shares. In addition, the Board will
[Page 18]
call a meeting of shareholders for the purpose of electing Board members if,
at any time, less than a majority of the Board members then holding office
have been elected by shareholders.
The Company is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of
one portfolio is not deemed to be a shareholder of any other portfolio. For
certain matters shareholders vote together as a group; as to others they
vote
separately by portfolio. By this Prospectus, shares of the Fund are being
offered. Other portfolios are sold pursuant to other offering documents.
To date, the Board has authorized the creation of nine series of
shares. All consideration received by the Company for shares of one of the
series and all assets in which such consideration is invested will belong to
that series (subject only to the rights of creditors of the Company) and
will
be subject to the liabilities related thereto. The income attributable to,
and the expenses of, one series are treated separately from those of the
other series. The Company has the ability to create, from time to time, new
series without shareholder approval.
The Transfer Agent maintains a record of your ownership and sends
you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144
Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call
1-718-895-1206; outside the U.S., call 516-794-5452.
[Page 19]
APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS _ Foreign currency transactions may be entered
into for a variety of purposes, including: to fix in U.S. dollars, between
trade and settlement date, the value of a security the Fund has agreed to
buy
or sell; to hedge the U.S. dollar value of securities the Fund already owns,
particularly if it expects a decrease in the value of the currency in which
the foreign security is denominated; or to gain exposure to the foreign
currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies, which would involve the Fund agreeing to
exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency the Fund contracted to receive in the
exchange. The Fund's success in these transactions will depend principally
on
The Dreyfus Corporation's ability to predict accurately the future exchange
rates between foreign currencies and the U.S. dollar.
BORROWING MONEY _ The Fund is permitted to borrow to the extent permitted
under the 1940 Act, which permits an investment company to borrow in an
amount up to 331/3% of the value of its total assets. The Fund currently
intends to borrow money only for temporary or emergency (not leveraging)
purposes, in an amount up to 15% of the value of its total assets (including
the amount borrowed) valued at the lesser of cost or market, less
liabilities
(not including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the Fund's total assets, the Fund will not make any
additional investments.
USE OF DERIVATIVES _ The Fund may invest in or enter into Derivatives, such
as futures and options. These instruments and certain related risks are
described more specifically under "Investment Objective and Management
Policies _ Management Policies _ Derivatives" in the Statement of
Additional Information.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the
portfolio as a whole. Derivatives permit the Fund to increase or decrease
the
level of risk, or change the character of the risk, to which its portfolio
is
exposed in much the same way as the Fund can increase or decrease the level
of risk, or change the character of the risk, of its portfolio by making
investments in specific securities.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives
could have a large potential impact on the Fund's performance.
If the Fund invests in Derivatives at inopportune times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. The Fund also could experience losses if its
Derivatives
were poorly correlated with its other investments, or if the Fund were
unable
to liquidate its position because of an illiquid secondary market. The
market
for many Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for Derivatives.
Although the Fund will not be a commodity pool, certain Derivatives
subject the Fund to the rules of the Commodity Futures Trading Commission
which limit the extent to which the Fund can invest in such Derivatives. The
Fund may invest in futures contracts and options with respect thereto for
hedging purposes without limit. However, the Fund may not invest in such
contracts and options for other purposes if the sum of the amount of initial
margin deposits and premiums paid for unexpired options with respect to
[Page 20]
such contracts, other than for bona fide hedging purposes, exceeds 5% of the
liquidation value of the Fund's assets, after taking into account unrealized
profits and unrealized losses on such contracts and options; provided,
however, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.
The Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. The Fund may write
(I.E
., sell) covered call and put option contracts to the extent of 20% of the
value of its net assets at the time such option contracts are written. When
required by the Securities and Exchange Commission, the Fund will set aside
permissible liquid assets in a segregated account to cover its obligations
relating to its transactions in Derivatives. To maintain this required
cover,
the Fund may have to sell portfolio securities at disadvantageous prices or
times since it may not be possible to liquidate a Derivative position at a
reasonable price.
FORWARD COMMITMENTS _ The Fund may purchase securities on a forward
commitment or when-issued basis, which means that delivery and payment take
place a number of days after the date of the commitment to purchase. The
payment obligation and the interest rate receivable on a forward commitment
or when-issued security are fixed when the Fund enters into the commitment,
but the Fund does not make payment until it receives delivery from the
counterparty. The Fund will commit to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. The Fund
will set aside in a segregated account permissible liquid assets at least
equal at all times to the amount of the Fund's purchase.
CERTAIN PORTFOLIO SECURITIES
DEPOSITARY RECEIPTS _ The Fund may invest in the securities of foreign
issuers in the form of American Depositary Receipts ("ADRs"), European
Depositary Receipts ("EDRs") and other forms of depositary receipts. These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts typically
issued by a United States bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation. EDRs, which are
sometimes referred to as Continental Depositary Receipts ("CDRs"), are
receipts issued in Europe typically by non-United States banks and trust
companies that evidence ownership of either foreign or domestic securities.
Generally, ADRs in registered form are designed for use in the United States
securities markets and EDRs and CDRs in bearer form are designed for use in
Europe.
MONEY MARKET INSTRUMENTS _ The Fund may invest in the following types of
money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides financial
support to such U.S. Government-sponsored agencies and instrumentalities, no
assurance can be given that it will always do so since it is not so
obligated
by law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund buys, and
the seller agrees to repurchase, a security at a mutually agreed upon time
and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's
[Page 21]
obligation to repurchase is secured by the value of the underlying security.
Repurchase agreements could involve risks in the event of a default or
insolvency of the other party to the agreement, including possible delays or
restrictions upon the Fund's ability to dispose of the underlying
securities.
The Fund may enter into repurchase agreements with certain banks or non-bank
dealers.
BANK OBLIGATIONS. The Fund may purchase certificates of deposit,
time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, the Fund may be subject to
additional investment risks that are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers. See "Description of the Fund _ Investment Considerations and Risks
_ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial
paper purchased by the Fund will consist only of direct obligations which,
at
the time of their purchase, are (a) rated not lower than Prime-1 by Moody's
Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's Ratings
Group
("S&P"), (b) issued by companies having an outstanding unsecured debt issue
currently rated at least A3 by Moody's or A- by S&P, or (c) if unrated,
determined by The Dreyfus Corporation to be of comparable quality to those
rated obligations which may be purchased by the Fund.
ILLIQUID SECURITIES _ The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, and certain privately
negotiated, non-exchange traded options and securities used to cover such
options. As to these securities, the Fund is subject to a risk that should
the Fund desire to sell them when a ready buyer is not available at a price
the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected.
ADDITIONAL INFORMATION ABOUT PURCHASES, EXCHANGES AND REDEMPTIONS. The Fund
is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculation on short-term market
movements.
A pattern of frequent purchases and exchanges can be disruptive to efficient
portfolio management and, consequently, can be detrimental to the Fund's
performance and its shareholders. Accordingly, if the Fund's management
determines that an investor is engaged in excessive trading, the Fund, with
or without prior notice, may temporarily or permanently terminate the
availability of Fund Exchanges, or reject in whole or part any purchase or
exchange request, with respect to such investor's account. Such investors
also may be barred from purchasing other funds in the Dreyfus Family of
Funds. Generally, an investor who makes more than four exchanges out of the
Fund during any calendar year or
[Page 22]
who makes exchanges that appear to coincide with an active market-timing
strategy may be deemed to be engaged in excessive trading. Accounts under
common ownership or control will be considered as one account for purposes
of
determining a pattern of excessive trading. In addition, the Fund may refuse
or restrict purchase or exchange requests by any person or group if, in the
judgment of the Fund's management, the Fund would be unable to invest the
money effectively in accordance with its investment objective and policies
or
could otherwise be adversely affected or if the Fund receives or anticipates
receiving simultaneous orders that may significantly affect the Fund (E.G.,
amounts equal to 1% or more of the Fund's total assets). If an exchange
request is refused, the Fund will take no other action with respect to the
shares until it receives further instructions from the investor. The Fund
may
delay forwarding redemption proceeds for up to seven days if the investor
redeeming shares is engaged in excessive trading or if the amount of the
redemption request otherwise would be disruptive to efficient portfolio
management or would adversely affect the Fund. The Fund's policy on
excessive
trading applies to investors who invest in the Fund directly or through
financial intermediaries, but does not apply to the Dreyfus Auto-Exchange
Privilege, to any automatic investment or withdrawal privilege described
herein, or to participants in employer-sponsored retirement plans.
During times of drastic economic or market conditions, the Fund may
suspend Fund Exchanges temporarily without notice and treat exchange
requests based on their separate components _ redemption orders with a
simultaneous request to purchase the other fund's shares. In such a case,
the
redemption request would be processed at the Fund's next determined net
asset
value but the purchase order would be effective only at the net asset value
next determined after the fund being purchased receives the proceeds of the
redemption, which may result in the purchase being delayed.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO
WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
[Page 23]
Dreyfus
International
Value Fund
Prospectus
Copy Rights 1998 Dreyfus Service Corporation
254p1298
- ----------------------------------------------------------------------------
PROSPECTUS JANUARY 1, 1999
DREYFUS TECHNOLOGY GROWTH FUND
- ----------------------------------------------------------------------------
Dreyfus Technology Growth Fund (the "Fund") is a separate
diversified portfolio of Dreyfus Growth and Value Funds, Inc., an open-end,
management investment company (the "Company"), known as a mutual fund. The
Fund's investment objective is capital appreciation. It seeks to achieve
this investment objective by investing principally in a portfolio of
publicly-traded equity securities of domestic and foreign issuers, which
provide or are expected to benefit from technological advances and
improvements, and are characterized as "growth" companies according to
criteria established by The Dreyfus Corporation.
You can purchase or redeem shares by telephone using Dreyfus
TeleTransfer.
The Dreyfus Corporation professionally manages the Fund's portfolio.
This Prospectus sets forth concisely information about the Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated January 1, 1999,
which may be revised from time to time, provides a further discussion of
certain areas in this Prospectus and other matters which may be of interest
to some investors. It has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. The Securities and
Exchange Commission maintains a Web site (http://www.sec.gov) that contains
the Statement of Additional Information, material incorporated by reference,
and other information regarding the Fund. For a free copy of the Statement
of Additional Information, write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-645-6561. When telephoning,
ask for Operator 144.
Mutual fund shares are not deposits or obligations of, or guaranteed
or endorsed by, any bank, and are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other
agency.
The net asset value of funds of this type will fluctuate from time to time.
TABLE OF CONTENTS
Page
Fee
Table......................................... 3
Condensed Financial
Information................... 4
Description of the
Fund........................... 5
Management of the
Fund............................ 7
How to Buy
Shares................................. 8
Shareholder
Services.............................. 11
How to Redeem
Shares.............................. 14
Shareholder Services
Plan......................... 16
Dividends, Distributions and
Taxes................ 16
Performance
Information........................... 17
General
Information............................... 18
Appendix.......................................... 19
- ----------------------------------------------------------------------------
- -
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ----------------------------------------------------------------------------
- -
[This Page Intentionally Left Blank]
[Page 2]
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fee* (as a percentage of amount
redeemed)....................... 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management
Fees............................................................
.75%
Other
Expenses.............................................................
1.44%
Total Fund Operating
Expenses..............................................
2.19%
*Shares held for less than 15 days may be subject to a 1% redemption fee
payable to the Fund. See "How to Redeem Shares."
EXAMPLE: 1 YEAR 3
YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $22
$69 $117 $252
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund and investors, the payment of which
will reduce investors' annual return. The information in the foregoing table
does not reflect any fee waivers or expense reimbursement arrangements that
may be in effect. Certain Service Agents (as defined below) may charge their
clients direct fees for effecting transactions in Fund shares; such fees are
not reflected in the foregoing table. A $12 fee may be charged to certain
accounts with balances below $2,000. For a further description of the
various
costs and expenses incurred in the operation of the Fund, as well as expense
reimbursement or waiver arrangements, see "Management of the Fund," "How to
Buy Shares," "How to Redeem Shares" and "Shareholder Services Plan."
[Page 3]
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young, LLP, the Fund's independent auditors. Further financial data, related
notes and report of independent auditors accompany the Statement of
Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for the period from October 13, 1997
(commencement of operations) to August 31, 1998. This information has been
derived from the Fund's financial statements.
PERSHAREDATA
Net asset value, beginning of period........................
$12.50
_______
Investment Operations:
Investment (loss)...........................................
(.10)1
Net realized and unrealized (loss) on investments...........
.29
_______
Total from Investment Operations............................
.39
_______
Net asset value, end of period..............................
$12.11
=======
TOTAL INVESTMENT RETURN.......................................
3.12%(2,3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets...........
1.12%(2)
Ratio of interest expense to average net assets.............
.01%(2)
Ratio of net investment income (loss) to average net assets.
(.77)%(2)
Decrease reflected in above expense ratios due to undertaking by
The Dreyfus Corporation
.81%(2)
Portfolio Turnover Rate.....................................
291.12%(2)
Net Assets, end of year (000's omitted).....................
$12,370
(1) Based on average shares outstanding at each month end.
(2) Not annualized.
(3) Calculated based on net asset value on the close of business on October
14, 1997
(commencement of initial offering) to August 31, 1998.
Further information about the Fund's performance is contained in the
Fund's annual report which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this
Prospectus.
[Page 4]
Debt Outstanding
PERIOD ENDED AUGUST 31, 1998(1)
_____________________________
PER SHARE DATA:
Amount of debt outstanding at
end of period (in thousands)............................................
__
Average amount of debt outstanding
throughout period (in thousands)(2).....................................
$26
Average number of shares outstanding
throughout period (in thousands)(3).....................................
707
Average amount of debt per
share throughout period.................................................
$.04
(1) From October 13, 1997 (commencement of
operations) to August 31, 1998.
(2) Based upon daily outstanding borrowings.
(3) Based upon month-end balances.
Description of the Fund
INVESTMENT OBJECTIVE
The Fund's investment objective is capital appreciation. The Fund's
investment objective cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) of the Fund's outstanding voting shares. There can be no
assurance that the Fund's investment objective will be achieved.
INVESTMENT APPROACH
To manage the Fund, The Dreyfus Corporation classifies issuers as
"growth" or "value" companies. In general, The Dreyfus Corporation believes
that companies which have above average earnings or sales growth and
retention of earnings and command higher price to earnings ratios fit the
classic growth description. Alternatively, companies with relatively low
price to book ratios, low price to earnings ratios or higher than average
dividend payments in relation to price should be classified as value
companies.
MANAGEMENT POLICIES
The Fund anticipates that at least 65% of the value of its total
assets (except when maintaining a temporary defensive position) will be
invested in equity securities of domestic and foreign issuers, which provide
or are expected to benefit from technological advances and improvements, and
are characterized as "growth" companies according to criteria established by
The Dreyfus Corporation. These companies may include those that develop,
produce or distribute products or services in the computer, semi-conductor,
electronics, communications, healthcare, biotechnology, computer software
and
hardware, electronic components and systems, network and cable broadcasting,
telecommunications, defense and aerospace, and environmental sectors.
Investments also may include companies that The Dreyfus Corporation expects
to benefit from the commercialization of technological advances although
they
may not be directly involved in research and development. The Fund's
investments may range from small companies developing new technologies or
pursuing scientific breakthroughs to large capitalization companies with
established track records of developing and marketing such advances. The
Fund
may invest up to 25% of the value of its total assets in the securities of
foreign issuers. Equity securities consist of common stocks, convertible
securities and preferred stocks, as well as warrants to purchase such
securities.
While seeking desirable equity investments, the Fund may invest in
money market instruments consisting of U.S. Government securities,
certificates of deposit, time deposits, bankers' acceptances, short-term
investment grade corporate bonds and other short-term debt instruments, and
repurchase agreements, as set forth under "Appendix_Certain Portfolio
Securities_Money Market Instruments." Under normal market conditions, the
Fund does not expect to have a substantial portion of its assets invested in
money market instruments. However, when The Dreyfus Corporation determines
that adverse market conditions exist, the Fund may adopt a temporary
defensive posture and invest all of its assets in money market instruments.
[Page 5]
In an effort to increase returns, the Fund expects to trade actively
and that the annual portfolio turnover rate for the
current fiscal year could exceed 100%. A turnover rate of 100% is equivalent
to the Fund buying and selling all of the securities in its portfolio once
in
the course of a year. Higher portfolio turnover rates usually generate
additional brokerage commissions and transaction costs and the short-term
gains realized from these transactions are taxable to shareholders as
ordinary income. The Fund may engage in various investment techniques, such
as leveraging, options and futures transactions, short-selling and lending
portfolio securities. For a discussion of the investment techniques and
their
related risks, see "Investment Considerations and Risks" and
"Appendix_Investment Techniques" below and "Investment Objective and
Management Policies_Management Policies" in the Statement of Additional
Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL_The Fund's net asset value per share should be expected to fluctuate
and, as described below, given the Fund's emphasis on the technology sector,
may be especially volatile. Investors should consider the Fund as a
supplement to an overall investment program and should invest only if they
are willing to undertake the risks involved. You could lose money by
investing in the Fund. See "Investment Objective and Management Policies" in
the Statement of Additional Information for a further discussion of certain
risks.
EQUITY SECURITIES; TECHNOLOGY SECTOR _ Equity securities fluctuate in value,
often based on factors unrelated to the value of the issuer of the
securities, and such fluctuations can be pronounced. Changes in the value of
the Fund's investments will result in changes in the value of its shares and
thus the Fund's total return to investors.
The technology sector has been among the most volatile sectors of
the
stock market. You should recognize that returns are likely to be highly
volatile and that, depending upon when you purchase and sell your Fund
shares, you may make or lose money.
The Fund may purchase securities of companies in initial public
offerings or shortly thereafter. The prices of these companies' securities
may be very volatile, rising and falling rapidly based, among other reasons,
solely on investor perceptions rather than economic reasons. The Fund may
purchase securities of companies which have no earnings or have experienced
losses. The Fund generally will make these investments based on a belief
that
actual or anticipated products or services will produce future earnings. If
the anticipated event is delayed or does not occur, or if investor
perceptions about the company change, the company's stock price may decline
sharply and its securities may become less liquid. The Fund may purchase
securities of smaller capitalization companies, the prices of which may be
subject to more abrupt or erratic market movements than larger, more
established companies, because these securities typically are traded in
lower
volume and the issuers typically are more subject to changes in earnings and
prospects. The Fund is not limited in the amount it may invest in these
securities or companies. The Fund, together with other investment companies
advised by The Dreyfus Corporation and its affiliates, may own significant
positions in portfolio companies which, depending on market conditions, may
affect adversely the Fund's ability to dispose of some or all of its
position
should it desire to do so.
YEAR 2000 RISKS _ The fund could be adversely affected if the computer
systems used by Dreyfus and the fund's other service providers do not
properly process and calculate date-related information from and after
January 1, 2000. While year 2000-related problems in its computer systems
could have a negative effect on the fund, Dreyfus is working to avoid such
problems and to obtain assurances from 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.
FOREIGN SECURITIES _ Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of
[Page 6]
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
Because evidences of ownership of such securities usually are held
outside the United States, the Fund will be subject to additional risks
which
include possible adverse political and economic developments, seizure or
nationalization of foreign deposits and adoption of governmental
restrictions
which might adversely affect or restrict the payment of principal and
interest to investors located outside the country of the issuer, whether
from
currency blockage or otherwise.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations.
USE OF DERIVATIVES _ The Fund may invest in, or enter into, derivatives
("Derivatives"). These are financial instruments which derive their
performance, at least in part, from the performance of an underlying asset,
index or interest rate. The Derivatives the Fund may use include options and
futures. While Derivatives can be used effectively in furtherance of the
Fund's investment objective, under certain market conditions, they can
increase the volatility of the Fund's net asset value, decrease the
liquidity
of the Fund's portfolio and make more difficult the accurate pricing of the
Fund's portfolio. See "Appendix_Investment Techniques_Use of Derivatives"
below and "Investment Objective and Management Policies_Derivatives" in the
Statement of Additional Information.
SIMULTANEOUS INVESTMENTS _ Investment decisions for the Fund are made
independently from those of the other investment companies advised by The
Dreyfus Corporation. If, however, such other investment companies desire to
invest in, or dispose of, the same securities as the Fund, available
investments or opportunities for sales will be allocated equitably to each
investment company. In some cases, this procedure may adversely affect the
size of the position obtained for or disposed of by the Fund or the price
paid or received by the Fund.
Management of the Fund
INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of October 30, 1998, The Dreyfus Corporation
managed or administered approximately $112 billion in assets for
approximately 1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Company, subject to the authority of the Company's Board in accordance with
Maryland law. The Fund's primary portfolio managers are Richard D. Wallman
and Mark Herskovitz. Richard D. Wallman has been employed by The Dreyfus
Corporation since 1995. From 1992 to 1995, Mr. Wallman was a Vice President
at Desai Capital Management. Mark Herskovitz has been employed by The
Dreyfus
Corporation since 1996. From 1992 to 1996, Mr. Herskovitz served as a Trust
Investment Officer at National City Bank. The Fund's other portfolio
managers
are identified in the Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund and for other funds
advised by The Dreyfus Corporation through a professional staff of portfolio
managers and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The
[Page 7]
Dreyfus Corporation, Mellon managed more than $334 billion in assets as of
September 30, 1998, including approximately $125 billion in proprietary
mutual fund assets. As of September 30, 1998, Mellon, through various
subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $1.642 trillion in assets, including
approximately $52 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .75 of 1% of
the value of the Fund's average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume
certain expenses of the Fund, which would have the effect of lowering the
expense ratio of the Fund and increasing yield to investors. The Fund will
not pay The Dreyfus Corporation at a later time for any amounts it may
waive,
nor will the Fund reimburse The Dreyfus Corporation for any amounts it may
assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of
the Fund or other funds managed, advised or administered by The Dreyfus
Corporation or its affiliates as factors in the selection of broker-dealers
to execute portfolio transactions for the Fund. Brokerage transactions for
the Fund may be conducted through affiliates of The Dreyfus Corporation, in
accordance with procedures adopted by the Company's Board. See "Portfolio
Transactions" in the Statement of Additional Information.
EXPENSES _ All expenses incurred in the operation of the Company are borne
by the Company, except to the extent specifically assumed by The Dreyfus
Corporation. The expenses borne by the Company include: organizational
costs,
taxes, interest, loan commitment fees, interest and distributions paid on
securities sold short, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or holders of 5% or more
of the outstanding voting securities of The Dreyfus Corporation or any of
its
affiliates, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining the Company's existence, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses. Expenses attributable to the Fund
are charged against the assets of the Fund; other expenses of the Company
are
allocated among the Company's portfolios on the basis determined by the
Board, including, but not limited to, proportionately in relation to the net
assets of each portfolio.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay Service
Agents
in respect of these services.
DISTRIBUTOR _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts
02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). Mellon Bank, N.A., One Mellon Bank
Center, Pittsburgh, Pennsylvania 15258, is the Fund's Custodian.
How to Buy Shares
Fund shares are sold without a sales charge. You may be charged a
fee
if you effect transactions in Fund shares through a securities dealer, bank
or other financial institution (collectively, "Service Agents"). Stock
certificates are issued only upon your written request. No certificates are
issued for fractional
[Page 8]
shares. The Fund reserves the right to reject any purchase order. See
"Appendix_Additional Information About Purchases, Exchanges and
Redemptions."
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which maintains an omnibus account in the Fund and
has made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. However, the minimum initial
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular
IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and
rollover
IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
the Company's Board, or the spouse or minor child of any of the foregoing,
the minimum initial investment is $1,000. For full-time or part-time
employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries
who elect to have a portion of their pay directly deposited into their Fund
accounts, the minimum initial investment is $50. The Fund reserves the right
to offer Fund shares without regard to minimum purchase requirements to
employees participating in certain qualified or non-qualified employee
benefit plans or other programs where contributions or account information
can be transmitted in a manner and form acceptable to the Fund. The Fund
reserves the right to vary further the initial and subsequent investment
minimum requirements at any time. Fund shares also are offered without
regard
to the minimum initial investment requirements through Dreyfus-AUTOMATIC
Asset BuilderRegistration Mark, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan pursuant to the Dreyfus Step Program
described under "Shareholder Services." These services enable you to make
regularly scheduled investments and may provide you with a convenient way to
invest for long-term financial goals. You should be aware, however, that
periodic investment plans do not guarantee a profit and will not protect an
investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through the
Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to
"The
Dreyfus Family of Funds," or, if for Dreyfus retirement plan accounts, to
"The Dreyfus Trust Company, Custodian" and should specify that you are
investing in the Fund. Payments to open new accounts which are mailed should
be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence, Rhode
Island 02940-9387, together with your Account Application. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427.
Neither initial nor subsequent investments should be made by third party
check. Purchase orders may be delivered in person only to a Dreyfus
Financial
Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED
ONLY
UPON RECEIPT THEREBY. For the location of the nearest Dreyfus Financial
Center, please call one of the telephone numbers listed under "General
Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA# 8900336722/Dreyfus
Technology Growth Fund, for purchase of Fund shares in your name. The wire
must include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account
registratio
n and dealer number, if applicable. If your initial purchase of Fund shares
is by wire, please call 1-800-645-6561 after completing your wire payment to
obtain your Fund account number. Please include your Fund account number on
the Account Application and promptly mail the Account
[Page 9]
Application to the Fund, as no redemptions will be permitted until the
Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be made
in
U.S. dollars and, to avoid fees and delays, should be drawn only on U.S.
banks. A charge will be imposed if any check used for investment in your
account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through compatible
computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
Fund account number preceded by the digits "1111."
Fund shares are sold on a continuous basis at the net asset value
per
share next determined after an order in proper form is received by the
Transfer Agent or other entity authorized to receive orders on behalf of the
Fund. Net asset value per share is determined as of the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for business. For
purposes of determining net asset value, options and futures contracts will
be valued 15 minutes after the close of trading on the floor of the New York
Stock Exchange. Net asset value per share is computed by dividing the value
of the Fund's net assets (I.E., the value of its assets less liabilities) by
the total number of Fund shares outstanding. The Fund's investments will be
valued based on market value or, where market quotations are not readily
available, based on fair value as determined in good faith by the Company's
Board. For further information regarding the methods employed in valuing the
Fund's investments, see "Determination of Net Asset Value" in the Statement
of Additional Information.
For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Fund shares may be transmitted, and
must be received by the Transfer Agent, within three business days after the
order is placed. If such payment is not received within three business days
after the order is placed, the order may be canceled and the institution
could be held liable for resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where
(i)
the employers or affiliated employers maintaining such plans or programs
have
a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in the
Dreyfus
Family of Funds or certain other products made available by the Distributor
to such plans or programs exceeds $1,000,000 ("Eligible Benefit Plans").
Shares of funds in the Dreyfus Family of Funds then held by Eligible Benefit
Plans will be aggregated to determine the fee payable. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
FEE FOR SMALL ACCOUNTS _ In order to offset the relatively higher costs of
servicing smaller accounts, the Fund will charge regular accounts with
balances below $2,000 an annual fee of $12. The valuation of accounts and
the
deductions are expected to take place during the last four months of each
year. The fee will be waived for any investor whose aggregate Dreyfus mutual
fund investments total at least $25,000, and will not apply to IRAaccounts
or
to accounts participating in automatic investment programs or opened through
a securities dealer, bank or other financial institution, or to other
fiduciary accounts.
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on
[Page 10]
the Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an Automated
Clearing House member may be so designated. The Fund may modify or terminate
this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
Shareholder Services
FUND EXCHANGES
You may purchase, in exchange for shares of the Fund, shares of
certain other funds managed or administered by The Dreyfus Corporation, to
the extent such shares are offered for sale in your state of residence.
These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, you should consult your Service Agent or
call 1-800-645-6561 to determine if it is available and whether any
conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $500; furthermore,
when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund
into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to all Fund shareholders automatically, unless you
check the applicable "No" box on the Account Application, indicating that
you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request signed by all
shareholders on the account, by a separate signed Shareholder Services Form,
available by calling 1-800-645-6561, or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. If you have
established the Telephone Exchange Privilege, you may telephone exchange
instructions (including over The Dreyfus TouchRegistration Mark automated
telephone system) by calling 1-800-645-6561. If you are calling from
overseas, call 516-794-5452. See "How to Redeem Shares_Procedures." Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Wire Redemption Privilege, Telephone Redemption Privilege,
Dreyfus
TeleTransfer Privilege and the dividend/capital gain distribution option
(except for Dreyfus Dividend Sweep) selected by the investor.
The Fund will impose a redemption fee equal to 1% of the net asset
value of Fund shares exchanged out of the Fund where the exchange is made
less than 15 days after issuance of such shares. See "How to Redeem Shares."
Otherwise, shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through
reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance
[Page 11]
with rules promulgated by the Securities and Exchange Commission. The Fund
reserves the right to reject any exchange request in whole or in part. See
"Appendix_Additional Information About Purchases, Exchanges and
Redemptions."
The availability of Fund Exchanges may be modified or terminated at any time
upon notice to shareholders. See "Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on
a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of certain other funds in the Dreyfus Family of Funds of
which you are a shareholder. The amount you designate, which can be
expressed
either in terms of a specific dollar or share amount ($100 minimum), will be
exchanged automatically on the first and/or fifteenth day of the month
according to the schedule you have selected. Shares will be exchanged at the
then-current net asset value; however, a sales load may be charged with
respect to exchanges into funds sold with a sales load. See "Shareholder
Services" in the Statement of Additional Information. The right to exercise
this Privilege may be modified or canceled by the Fund or the Transfer
Agent.
You may modify or cancel your exercise of this Privilege at any time by
mailing written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Fund may charge a service fee for
the use of this Privilege. No such fee currently is contemplated. See
"Dividends, Distributions and Taxes." For more information concerning this
Privilege and the funds in the Dreyfus Family of Funds eligible to
participate
in this Privilege, or to obtain a Dreyfus Auto-Exchange Authorization Form,
please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member
may be so designated. To establish a Dreyfus-AUTOMATIC Asset Builder
account,
you must file an authorization form with the Transfer Agent. You may obtain
the necessary authorization form by calling 1-800-645-6561. You may cancel
your participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. To
enroll in Dreyfus Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment that
you desire to include in this Privilege. The appropriate form may be
obtained
by calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency. The
Fund may terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis.
Depending
upon your employer's direct deposit program, you may have part or all of
your
paycheck transferred to your existing Dreyfus account electronically through
the Automated Clearing House system at each pay period. To establish a
Dreyfus Payroll Savings Plan account, you must file an authorization form
with your employer's payroll department.
[Page 12]
Your employer must complete the reverse side of the form and return it to
The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this
Privilege
at any time or charge a service fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Fund shares without
regard to the Fund's minimum initial investment requirements through Dreyfus-
AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program account,
you must supply the necessary information on the Account Application and
file
the required authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary
authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing
your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may
be,
as provided under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to purchase Fund
shares through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs, SEP-IRAs and IRA
"Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. If you
are investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject on redemption to the contingent deferred
sales charge, if any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dreyfus Dividend ACH
permits you to transfer electronically dividends or dividends and capital
gain distributions, if any, from the Fund to a designated bank account. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. Banks may charge a fee
for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three
business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for Dreyfus Dividend Sweep.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account. An Automatic Withdrawal Plan may
be established by filing an Automatic Withdrawal Plan application with the
Transfer Agent or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561.
[Page 13]
The Automatic Withdrawal Plan may be ended at any time by you, the Fund or
the Transfer Agent. Shares for which certificates have been issued may not
be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, SEP-IRAs, rollover IRAs and Education IRAs),
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services
also
are available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566;
for
IRAs (except SEP-IRAs), please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
How to Redeem Shares
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below.
When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund, the Fund will redeem the
shares at the next determined net asset value. See "Appendix_Additional
Information About Purchases, Exchanges and Redemptions."
The Fund will deduct a redemption fee of 1% of the net asset value
of
Fund shares redeemed or exchanged less than 15 days following the issuance
of
such shares. The fee will be retained by the Fund and used primarily to
offset the transaction costs that short-term trading imposes on the Fund and
its shareholders. For purposes of calculating the 15-day holding period, the
Fund will employ the "first-in, first-out" method, which assumes that the
shares you are redeeming or exchanging are the ones you have held the
longest. No redemption fee will be charged on the redemption or exchange of
shares (1) through the Fund's Automatic Withdrawal Plan or Dreyfus
Auto-Exchange Privilege, (2) through accounts that are reflected on the
records of the Transfer Agent as omnibus accounts approved by Dreyfus
Service
Corporation, (3) through accounts established by Service Agents approved by
Dreyfus Service Corporation that utilize the National Securities Clearing
Corporation's networking system, or (4) acquired through the reinvestment of
dividends or capital gains distributions. The redemption fee may be waived,
modified or discontinued at any time or from time to time. Service Agents
may
charge their clients a fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the Fund's then-current net asset
value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. However, if you have purchased Fund shares by check, by Dreyfus
TeleTransfer Privilege or through Dreyfus-AUTOMATIC Asset
BuilderRegistration
Mark and subsequently submit a written redemption request to the Transfer
Agent, the redemption proceeds will be transmitted to you promptly upon bank
clearance of your purchase check, Dreyfus TeleTransfer purchase or Dreyfus-
AUT
OMATIC Asset Builder order, which may take up to eight business days or
more.
In addition, the Fund will reject requests to redeem shares by wire or
telephone or pursuant to the Dreyfus TeleTransfer Privilege for a period of
eight business days after receipt by the Transfer Agent of the purchase
check, the Dreyfus TeleTransfer purchase or the Dreyfus-AUTOMATIC Asset
Builder order against which such redemption is requested. These procedures
will not apply if your shares were purchased by wire payment, or if you
otherwise have a sufficient collected balance in your account to cover the
redemption request. Prior to the time any redemption is effective, dividends
on such shares will accrue and be payable, and you will be entitled to
exercise all other rights of beneficial ownership. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
[Page 14]
The Fund reserves the right to redeem your account at its option
upon
not less than 45 days' written notice if your
account's net asset value is $500 or less and remains so during the notice
period.
PROCEDURES
You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege
which is granted automatically unless you specifically refuse it by checking
the applicable "No" box on the Account Application. The Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or by oral request from any of the authorized
signatories on the account by calling 1-800-645-6561. You also may redeem
shares through the Wire Redemption Privilege or the Dreyfus TELETRANSFER
Privilege, if you have checked the appropriate box and supplied the
necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. Other redemption procedures may be in effect
for clients of certain Service Agents. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities. The Fund reserves the right to refuse any
request made by wire or telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are
not
eligible for the Wire Redemption, Telephone Redemption or Dreyfus
TeleTransfer
Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, and reasonably believed by
the Transfer Agent to be genuine. The Fund will require the Transfer Agent
to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of
these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption
had
been used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. These requests will be forwarded to the Fund
and will be processed only upon receipt thereby. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each
signature
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program. If
you
have any questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
[Page 15]
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with
a written signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE _ You may request by wire, telephone or letter
that redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of not more than $250,000 wired within
any 30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed
to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse
it.
DREYFUS TeleTransfer PRIVILEGE _ You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of
the
redemption request. Holders of jointly registered Fund or bank accounts may
redeem through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by calling 1-800-645-
6561
or, if you are calling from overseas, call 516-794-5452.
Shareholder Services Plan
The Fund has adopted a Shareholder Services Plan pursuant to which
it
pays the Distributor for the provision of certain services to Fund
shareholders a fee at the annual rate of .25 of 1% of the value of the
Fund's
average daily net assets. 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.
Dividends, Distributions and Taxes
The Fund ordinarily pays dividends from its net investment income
and
distributes net realized securities gains, if any, once a year, but it may
make distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"),
in all events in a manner consistent with the provisions of the 1940 Act.
The
Fund will not make distributions from net realized securities gains unless
capital loss carryovers, if any, have been utilized or have expired. You may
choose whether to receive dividends and distributions in cash or to reinvest
in additional shares at net asset value. If you elect to receive dividends
and distributions in cash, and your dividend or distribution check is
returned to the Fund as undeliverable or remains uncashed for six months,
the
Fund reserves the right to reinvest such dividend or distribution and all
future dividends and distributions payable to you in additional Fund shares
at net asset value. No interest will accrue on amounts represented by
uncashed distribution or redemption checks. All expenses are accrued daily
and deducted before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income for Federal income tax purposes whether received in cash
or reinvested in additional shares. Distributions from net realized long-
term
securities gains of the Fund will be taxable to U.S. shareholders
[Page 16]
as long-term capital gains for Federal income tax purposes,
regardless of how long shareholders have held their Fund shares and whether
such distributions are received in cash or reinvested in Fund shares. The
Code provides that an individual generally will be taxed on the net amount
of
his or her capital gain at a maximum rate of 28% with respect to capital
gain
from securities held for less than 12 months and at a maximum rate of 20%
with respect to capital gains from securities held for more than 12 months.
Dividends and distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain or
loss may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from
securities gains, if any, paid during the year.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended August 31, 1998 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification
is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund
is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
Performance Information
For purposes of advertising, performance may be calculated on the
basis of average annual total return and/or total return.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment was purchased with an initial
payment of $1,000 and that the investment was redeemed at the end of a
stated
period of time, after giving effect to the reinvestment of dividends and
distributions during
[Page 17]
the period. The return is expressed as a percentage rate which, if applied
on
a compounded annual basis, would result in the redeemable value of the
investment at the end of the period. Advertisements of the Fund's
performance
will include the Fund's average annual total return for one, five and ten
year periods, or for shorter periods depending upon the length of time the
Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from broad-based
securities indexes and industry publications.
General Information
The Company was incorporated under Maryland law on November 16,
1993,
and commenced operations on December 29, 1993. Before September 29, 1995,
the
Company's name was Dreyfus Focus Funds, Inc. The Company is authorized to
issue one billion shares of Common Stock (with 100 million shares allocated
to the Fund), par value $.001 share. Each share has one vote.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members
or
the appointment of auditors. However, the holders of at least 10% of the
shares outstanding and entitled to vote may require the Company to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Shareholders may remove a Board member by the affirmative vote of a
majority of the Company's outstanding voting shares. In addition, the Board
will call a meeting of shareholders for the purpose of electing Board
members
if, at any time, less than a majority of the Board members then holding
office have been elected by shareholders.
The Company is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of
one portfolio is not deemed to be a shareholder of any other portfolio. For
certain matters shareholders vote together as a group; as to others they
vote
separately by portfolio. By this Prospectus, shares of the Fund are being
offered. Other portfolios are sold pursuant to other offering documents.
To date, the Board has authorized the creation of nine series of
shares. All consideration received by the Company for shares of one of the
series and all assets in which such consideration is invested will belong to
that series (subject only to the rights of creditors of the Company) and
will
be subject to the liabilities related thereto. The income attributable to,
and the expenses of, one series are treated separately from those of the
other series. The Company has the ability to create, from time to time, new
series without shareholder approval.
The Transfer Agent maintains a record of your ownership and sends
you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144
Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call 1-718-895-1206; outside the U.S.,
call
516-794-5452.
[Page 18]
Appendix
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS _ Foreign currency transactions may be entered
into for a variety of purposes, including: to fix in U.S. dollars, between
trade and settlement date, the value of a security the Fund has agreed to
buy
or sell; to hedge the U.S. dollar value of securities the Fund already owns,
particularly if it expects a decrease in the value of the currency in which
the foreign security is denominated; or to gain exposure to the foreign
currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies, which would involve the Fund agreeing to
exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency the Fund contracted to receive in the
exchange. The Fund's success in these transactions will depend principally
on
The Dreyfus Corporation's ability to predict accurately the future exchange
rates between foreign currencies and the U.S. dollar.
Currency exchange rates may fluctuate significantly over short
periods of time. They generally are determined by the forces of supply and
demand in the foreign exchange markets and the relative merits of
investments
in different countries, actual or perceived changes in interest rates and
other complex factors, as seen from an international perspective. Currency
exchange rates also can be affected unpredictably by intervention by U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States or abroad.
LEVERAGE _ Leveraging exaggerates the effect on net asset value of any
increase or decrease in the market value of the Fund's portfolio. Money
borrowed for leveraging is limited to 33-1/3% of the value of the Fund's
total assets. These borrowings would be subject to interest costs which may
or may not be recovered by appreciation of the securities purchased; in
certain cases, interest costs may exceed the return received on the
securities purchased.
The Fund may enter into reverse repurchase agreements with banks,
brokers or dealers. This form of borrowing involves the transfer by the Fund
of an underlying debt instrument in return for cash proceeds based on a
percentage of the value of the security. The Fund retains the right to
receive interest and principal payments on the security. At an agreed upon
future date, the Fund repurchases the security at principal plus accrued
interest. Except for these transactions, the Fund's borrowings generally
will
be unsecured.
SHORT-SELLING _ In these transactions, the Fund sells a security it does not
own in anticipation of a decline in the market value of the security. To
complete the transaction, the Fund must borrow the security to make delivery
to the buyer. The Fund is obligated to replace the security borrowed by
purchasing it subsequently at the market price at the time of replacement.
The price at such time may be more or less than the price at which the
security was sold by the Fund, which would result in a loss or gain,
respectiv
ely. The Fund also may make short sales "against the box," in which the Fund
enters into a short sale of a security it owns. Securities will not be sold
short if, after effect is given to any such short sale, the total market
value of all securities sold short would exceed 25% of the value of the
Fund's net assets.
USE OF DERIVATIVES _ The Fund may invest in, or enter into, Derivatives,
such as futures and options. These instruments and certain related risks are
described more specifically under "Investment Objective and Management
Policies_Management Policies_Derivatives" in the Statement of Additional
Information.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the
portfolio as a whole. Derivatives permit the Fund to increase or decrease
the
level of risk, or change the character of the risk, to which its portfolio
is
exposed in much the same way as the Fund can increase or decrease the level
of risk, or change the character of the risk, of its portfolio by making
investments in specific securities.
[Page 19]
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small
investment in Derivatives could have a large potential impact on the Fund's
performance.
If the Fund invests in Derivatives at inopportune times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. The Fund also could experience losses if its
Derivatives
were poorly correlated with its other investments, or if the Fund were
unable
to liquidate its position because of an illiquid secondary market. The
market
for many Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for Derivatives.
Although the Fund will not be a commodity pool, certain Derivatives
subject the Fund to the rules of the Commodity Futures Trading Commission
which limit the extent to which the Fund can invest in such Derivatives. The
Fund may invest in futures contracts and options with respect thereto for
hedging purposes without limit. However, the Fund may not invest in such
contracts and options for other purposes if the sum of the amount of initial
margin deposits and premiums paid for unexpired options with respect to such
contracts, other than for bona fide hedging purposes, exceeds 5% of the
liquidation value of the Fund's assets, after taking into account unrealized
profits and unrealized losses on such contracts and options; provided,
however, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.
The Fund may purchase call and put options and write (I.E., sell)
covered call and put options. When required by the Securities and Exchange
Commission, the Fund will set aside permissible liquid assets in a
segregated
account to cover its obligations relating to its transactions in
Derivatives.
To maintain this required cover, the Fund may have to sell portfolio
securities at disadvantageous prices or times since it may not be possible
to
liquidate a Derivative position at a reasonable price.
LENDING PORTFOLIO SECURITIES _ The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. The Fund continues to be
entitled to payments in amounts equal to the interest, dividends or other
distributions payable on the loaned securities which affords the Fund an
opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed 33 1\3%
of the value of the Fund's total assets, and the Fund will receive
collateral
consisting of cash, U.S. Government securities or irrevocable letters of
credit which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Such loans are
terminable by the Fund at any time upon specified notice. The Fund might
experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Fund.
FORWARD COMMITMENTS _ The Fund may purchase securities on a forward
commitment or when-issued basis, which means that delivery and payment take
place a number of days after the date of the commitment to purchase. The
payment obligation and the interest rate receivable on a forward commitment
or when-issued security are fixed when the Fund enters into the commitment,
but the Fund does not make payment until it receives delivery from the
counterparty. The Fund will commit to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. The Fund
will set aside in a segregated account, permissible liquid assets at least
equal at all times to the amount of the Fund's purchase commitments.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES _ Convertible securities may be converted at either a
stated price or stated rate into underlying shares of common stock.
Convertible securities have characteristics similar to both fixed-income and
equity securities. Convertible securities generally are subordinated to
other
similar but non-convertible securities of the same issuer, although
convertible bonds, as corporate debt obligations,
[Page 20]
enjoy seniority in right of payment to all equity securities, and
convertible
preferred stock is senior to common stock, of the same issuer. Because of
the
subordination feature, however, convertible securities typically have lower
ratings than similar non-convertible securities.
MONEY MARKET INSTRUMENTS _ The Fund may invest in the following types of
money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides financial
support to such U.S. Government-sponsored agencies and instrumentalities, no
assurance can be given that it will always do so since it is not so
obligated
by law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund buys, and
the seller agrees to repurchase, a security at a mutually agreed upon time
and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a
default
or insolvency of the other party to the agreement, including possible delays
or restrictions upon the Fund's ability to dispose of the underlying
securities. The Fund may enter into repurchase agreements with certain banks
or non-bank dealers.
BANK OBLIGATIONS. The Fund may purchase certificates of deposit,
time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, the Fund may be subject to
additional investment risks that are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers. See "Description of the Fund_Investment Considerations and
Risks_Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial
paper purchased by the Fund will consist only of direct obligations which,
at
the time of their purchase, are (a) rated not lower than Prime-1 by Moody's
Investors Service, Inc. ("Moody's"), A-1 by Standard &Poor's Rating Group
("S&P"), F-1 by Fitch IBCA, Inc. ("Fitch") or Duff-1 by Duff &Phelps &Co.
("Duff"), (b) issued by companies having an outstanding unsecured debt issue
currently rated at least A3 by Moody's or A- by S&P, Fitch or Duff, or (c)
if
unrated, determined by The Dreyfus Corporation to be of comparable quality
to
those rated obligations which may be purchased by the Fund.
Depositary Receipts_The Fund may invest in the securities of foreign issuers
in the form of American Depositary Receipts ("ADRs"), Global Depositary
Receipts ("GDRs") and other forms of depositary
[Page 21]
receipts. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are
receipts typically issued by a United States bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
GDRs are receipts issued outside the United States typically by non-United
States banks and trust companies that evidence ownership of either foreign
or
domestic securities. Generally, ADRs in registered form are designed for use
in the United States securities markets and GDRs in bearer form are designed
for use outside the United States.
WARRANTS _ A warrant is an instrument issued by a corporation which gives
the holder the right to subscribe to a specified amount of the corporation's
capital stock at a set price for a specified period of time.
INVESTMENT COMPANIES _ The Fund may invest in securities issued by other
investment companies. Under the 1940 Act, the Fund's investment in such
securities, subject to certain exceptions, currently is limited to (i) 3% of
the total voting stock of any one investment company, (ii) 5% of the Fund's
total assets with respect to any one investment company and (iii) 10% of the
Fund's total assets in the aggregate. Investments in the securities of other
investment companies may involve duplication of advisory fees and certain
othe
r expenses.
ILLIQUID SECURITIES _ The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, and certain privately
negotiated, non-exchange traded options and securities used to cover such
options. As to these securities, the Fund is subject to a risk that should
the Fund desire to sell them when a ready buyer is not available at a price
the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected.
ADDITIONAL INFORMATION ABOUT PURCHASES, EXCHANGES AND REDEMPTIONS _ The Fund
is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculation on short-term market
movements.
A pattern of frequent purchases and exchanges can be disruptive to efficient
portfolio management and, consequently, can be detrimental to the Fund's
performance and its shareholders. Accordingly, if the Fund's management
determines that an investor is following a market-timing strategy or is
otherwise engaging in excessive trading, the Fund, with or without prior
notice, may temporarily or permanently terminate the availability of Fund
Exchanges, or reject in whole or part any purchase or exchange request, with
respect to such investor's account. Such investors also may be barred from
purchasing other funds in the Dreyfus Family of Funds. Generally, an
investor
who makes more than four exchanges out of the Fund during any calendar year
or who makes exchanges that appear to coincide with a market-timing strategy
may be deemed to be engaged in excessive trading. Accounts under common
ownership or control will be considered as one account for purposes of
determining a pattern of excessive trading. In addition, the Fund may refuse
or restrict purchase or exchange requests by any person or group if, in the
judgment of the Fund's management, the Fund would be unable to invest the
money effectively in accordance with its investment objective and policies
or
could otherwise be adversely affected or if the Fund receives or anticipates
receiving simultaneous orders that may significantly affect the Fund (E.G.,
amounts equal to 1% or more of the Fund's total assets). The Fund may delay
forwarding redemption proceeds for up to seven days if the investor
redeeming
shares is engaged in excessive trading or if the amount of the redemption
request otherwise would be disruptive to efficient portfolio management or
would adversely affect the Fund. The Fund's policy on excessive trading
applies to investors who invest in the Fund directly or through financial
intermediaries, but does not apply to the Dreyfus Auto-Exchange Privilege,
to
any automatic investment or withdrawal privilege described herein, or to
participants in employer-sponsored retirement plans.
During times of drastic economic or market conditions, the Fund may
suspend the Exchange Privilege temporarily without notice and treat exchange
requests based on their separate components _
[Page 22]
redemption orders with a simultaneous request to purchase the other fund's
shares. In such a case, the redemption request would be processed at the
Fund's next determined net asset value but the purchase order would be
effective only at the net asset value next determined after the fund being
purchased receives the proceeds of the redemption, which may result in the
purchase being delayed.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO
WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
[Page 23]
Dreyfus
Technology Growth Fund
Prospectus
Copy Rights 1998 Dreyfus Service Corporation
255p1298
- ----------------------------------------------------------------------------
PROSPECTUS January 1, 1999
Dreyfus Aggressive Growth Fund
- ----------------------------------------------------------------------------
Dreyfus Aggressive Growth Fund (the "Fund") is a separate
diversified portfolio of Dreyfus Growth and Value Funds, Inc., an open-end,
management investment company (the "Company"), known as a mutual fund. The
Fund's investment objective is capital appreciation. It seeks to achieve this
investment objective by investing principally in a portfolio of
publicly-traded equity securities of domestic and foreign issuers which are
characterized as "growth" companies according to criteria established by The
Dreyfus Corporation.
You can purchase or redeem shares by telephone using Dreyfus
TELETRANSFER.
The Dreyfus Corporation professionally manages the Fund's portfolio.
This Prospectus sets forth concisely information about the Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated January 1, 1999,
which may be revised from time to time, provides a further discussion of
certain areas in this Prospectus and other matters which may be of interest
to some investors. It has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. The Securities and
Exchange Commission maintains a Web site (http://www.sec.gov) that contains
the Statement of Additional Information, material incorporated by reference,
and other information regarding the Fund. For a free copy of the Statement
of Additional Information, write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-645-6561. When telephoning,
ask for Operator 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
TABLE OF CONTENTS
Page
Fee
Table......................................... 3
Condensed Financial
Information................... 4
Description of the
Fund........................... 5
Management of the
Fund............................ 7
How to Buy
Shares................................. 8
Shareholder
Services.............................. 10
How to Redeem Shares
............................. 13
Shareholder Services
Plan......................... 15
Dividends, Distributions and
Taxes................ 16
Performance
Information........................... 17
General
Information............................... 17
Appendix.......................................... 19
- ----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ----------------------------------------------------------------------------
[This Page Intentionally Left Blank]
[Page 2]
Fee Table
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fee* (as a percentage of amount
redeemed)................... 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees (after fee
waivers).................................... .39%
Other
Expenses.........................................................
.81%
Total Fund Operating Expenses (after fee
waivers)...................... 1.20%
* Shares held for less than 15 days may be subject to a 1% redemption fee
payable to the Fund.
Example:
You would pay the following
expenses on a $1,000
investment, assuming (1) 5% 1 YEAR 3
YEARS 5 YEARS 10 YEARS
annual return and (2) redemption
at the end of each time period: $12
$38 $66 $145
The amounts listed in the example should not be considered as
representative of past or future expenses and actual
expenses may be greater or less than those indicated. Moreover, while the
example assumes a 5% annual return, the Fund's actual performance will vary
and may result in an actual return greater or less than 5%.
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund and investors, the payment of which
will reduce investors' annual return. The expenses noted above have been
restated to reflect an undertaking by The Dreyfus Corporation that, until
April 18, 1999, the Dreyfus Corporation may waive its management fee or bear
certain Fund expenses to the extent such expenses exceed 1.20% of the value
of the Fund's average net assets for the fiscal year ending August 31, 1999.
The expenses noted above, without reimbursement, would be: Management Fees _
.75%, and Total Fund Operating Expenses _ 1.56%. Certain Service Agents (as
defined below) may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the foregoing
table. See "Management of the Fund," "How to Buy Shares," "How to Redeem
Shares" and "Shareholder Services Plan."
[Page 3]
Condensed Financial Information
The information in the following table has been audited by Ernst &
Young, LLP, the Fund's independent auditors. Further financial data, related
notes and report of independent auditors accompany the Statement of
Additional Information, available upon request.
Financial Highlights
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
YEAR ENDED AUGUST 31,
__________________-
1996(1)
1997 1998
___- ___- ___-
PER SHARE DATA:
Net asset value, beginning of year...............................
$12.50 $22.71 $20.07
___- ___- ___-
Investment Operations:
Investment income (loss)-net.....................................
(.10) (.28) (.16)2
Net realized and unrealized gain (loss) on investments...........
10.31 (2.36)(11.34)
___- ___- ___-
Total from Investment Operations.................................
10.21(2.64) (11.50)
___- ___- ___-
Net asset value, end of year.....................................
$22.71 $20.07 $8.57
___- ___- ___-
___- ___- ___-
TOTAL INVESTMENT RETURN............................................
81.68%(3) (11.63%)(57.30%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets................
1.16%(3) 1.34%1.27%
Ratio of interest expense and loan commitment fees to average net assets
.24%(3) .39% .00%(4)
Ratio of investment (loss) to average net assets.................
(1.04%)(3) (1.62%)(.95%)
Decrease reflected in above expense ratio due to
undertakings by The Dreyfus Corporation..........................
.17%(3) .09% .29%
Portfolio Turnover Rate..........................................
125.17%(3) 76.45%86.53%
Net Assets, end of year (000's omitted)..........................
$119,341$131,604 $30,968
(1)................................................................
From September 29, 1995 (commencement of operations)
to August 31, 1996.
(2) Based on average shares outstanding at each month's end.
(3) Not annualized.
(4) Amount represents less than .01%.
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this
Prospectus.
Debt Outstanding
YEAR ENDED AUGUST 31,
___________-
1997(1)
1998
___- ___-
PER SHARE DATA:
Amount of debt outstanding at
end of year (in thousands)..............................................
_ _
Average amount of debt outstanding
throughout year (in thousands)(2).......................................
$22
Average number of shares outstanding
throughout year (in thousands)(3).......................................
5,609
Average amount of debt per
share throughout year...................................................
_(4)
(1).........................................................................
.. From September 29, 1995 (commencement of
operations) to August 31, 1996, the Fund had no outstanding debt.
(2).........................................................................
..
Based upon daily outstanding borrowings.
(3).........................................................................
..
Based upon month-end balances.
(4) Amount represents less than .01%.
[Page 4]
Description of the Fund
Investment Objective
The Fund's investment objective is capital appreciation. It cannot
be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of the Fund's
outstanding voting shares. There can be no assurance that the Fund's
investment objective will be achieved.
Investment Approach
To manage the Fund, The Dreyfus Corporation classifies issuers as
"growth" or "value" companies. In general, The Dreyfus Corporation believes
that companies which have above average earnings or sales growth and
retention of earnings and command higher price to earnings ratios fit the
classic growth description. Alternatively, companies with relatively low
price to book ratios, low price to earnings ratios or higher than average
dividend payments in relation to price should be classified as value
companies.
The Fund employs a growth-oriented approach to investing in stocks
based on the belief that relative stock performance is driven by relative
earnings performance. The Fund looks for companies, regardless of size,
which, in the opinion of The Dreyfus Corporation, will experience earnings
growth at an above average rate. When selecting its core holdings, the Fund
focuses on projected earnings growth for the upcoming 12 to 18 months.
Management Policies
The Fund anticipates that at least 65% of the value of its total
assets (except when maintaining a temporary defensive position) will be
invested in equity securities of domestic and foreign issuers which are
characterized as "growth" companies according to criteria established by The
Dreyfus Corporation. The Fund's securities selections generally will be made
without regard to an issuer's market capitalization. Equity securities
consist of common stocks and preferred stocks. The Fund may invest up to 30%
of the value of its total assets in the securities of foreign companies
which
are not publicly traded in the United States and the debt securities of
foreign governments.
While seeking desirable equity investments, the Fund may invest in
money market instruments consisting of U.S. Government securities,
certificates of deposit, time deposits, bankers' acceptances, short-term
investment grade corporate bonds and other short-term debt instruments, and
repurchase agreements, as set forth under "Appendix _ Certain Portfolio
Securities _ Money Market Instruments." Under normal market conditions, the
Fund does not expect to have a substantial portion of its assets invested in
m
oney market instruments. However, when The Dreyfus Corporation determines
that adverse market conditions exist, the Fund may adopt a temporary
defensive posture and invest all of its assets in money market instruments.
In an effort to increase returns, the Fund expects to trade actively
and that the annual portfolio turnover rate for the current fiscal year
could
exceed 150%. A turnover rate of 100% is equivalent to the Fund buying and
selling all of the securities in its portfolio once in the course of a year.
Higher portfolio turnover rates usually generate additional brokerage
commissions and transaction costs and the short-term gains realized from
these transactions are taxable to shareholders as ordinary income. The Fund
may engage in various investment techniques, such as foreign currency
transactions, leveraging, options and futures transactions and short-
selling.
For a discussion of the investment techniques and their related risks, see
"Investment Considerations and Risks" and "Appendix _ Investment Techniques"
below and "Investment Objective and Management Policies _ Management
Policies" in the Statement of Additional Information.
Investment Considerations and Risks
General _ The Fund's net asset value per share should be expected to
fluctuate. Investors should consider the Fund as a supplement to an overall
investment program and should invest only if they are willing to undertake
the risks involved. See "Investment Objective and Management Policies" in
the
Statement of Additional Information for a further discussion of certain
risks.
[Page 5]
Equity Securities _ Equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors. In light of the Fund's aggressive growth
investment approach, the prices of securities of companies in which the Fund
invests may be volatile, rising and falling based, among other reasons,
principally on investor perceptions rather than economic reasons. Those
securities may be issued by companies which have no earnings or have
experienced losses. The Fund generally will make these investments based on
a
belief that actual or anticipated products or services will produce future
earnings. If the anticipated event is delayed or does not occur, or if
investor perceptions about the company change, the stock price may decline
sharply and its securities may become less liquid. The Fund may purchase
securities in all available securities trading markets, including initial
public offerings and the aftermarket.
The Fund may purchase securities of smaller capitalization
companies,
the prices of which may be subject to more abrupt or erratic market
movements
than larger, more established companies, because these securities typically
are traded in lower volume and the issuers typically are more subject to
changes in earnings and prospects.
Foreign Securities _ Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
Because evidences of ownership of such securities usually are held
outside the United States, the Fund will be subject to additional risks
which
include possible adverse political and economic developments, seizure or
nationalization of foreign deposits and adoption of governmental
restrictions
which might adversely affect or restrict the payment of principal and
interest on the foreign securities to investors located outside the country
of the issuer, whether from currency blockage or otherwise.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations.
Use of Derivatives _ The Fund may invest in derivatives ("Derivatives").
These are financial instruments which derive their performance, at least in
part, from the performance of an underlying asset, index or interest rate.
The Derivatives the Fund may use include options and futures. While
Derivatives can be used effectively in furtherance of the Fund's investment
objective, under certain market conditions, they can increase the volatility
of the Fund's net asset value, decrease the liquidity of the Fund's
portfolio
and make more difficult the accurate pricing of the Fund's portfolio. See
"Appendix _ Investment Techniques _ Use of Derivatives" below and
"Investment
Objective and Management Policies _ Management Policies _ Derivatives" in
the
Statement of Additional Information.
Year 2000 Risks _ The Fund could be adversely affected if the computer
systems used by Dreyfus and the Fund's other service providers do not
properly process and calculate date-related information from and after
January 1, 1000. While year 2000-related problems in its computer systems
could have a negative effect on the Fund, Dreyfus is working to avoid such
problems and to obtain assurances from 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.
Simultaneous Investments _ Investment decisions for the Fund are made
independently from those of the other investment companies advised by The
Dreyfus Corporation. If, however, such other investment companies desire to
invest in, or dispose of, the same securities as the Fund, available
investments
[Page 6]
or opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
Management of the Fund
Investment Adviser _ The Dreyfus Corporation, located at 200 Park Avenue,
New
York, New York 10166, was formed in 1947 and serves as the Fund's investment
adviser. The Dreyfus Corporation is a wholly-owned subsidiary of Mellon
Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). As of October 30, 1998, The Dreyfus Corporation managed or
administered approximately $112 billion in assets for approximately 1.7
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Company, subject to the authority of the Company's Board in accordance with
Maryland law. The Fund's primary portfolio manager is Paul A. La Rocco. He
has held that position since April 8, 1998 and has been employed by The
Dreyfus Corporation since April 1998 and, since March 1998, as a Vice
President of Investments of Founders Asset Management LLC, an affiliate of
The Dreyfus Corporation. For at least five years prior thereto, Mr. LaRocco
was a Vice President and Portfolio Manager with Oppenheimer Funds Inc. The
Fund's other portfolio managers are identified in the Statement of
Additional
Information. The Dreyfus Corporation also provides research services for the
Fund and for other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more
than
$334 billion in assets as of September 30, 1998, including approximately
$125
billion in proprietary mutual fund assets. As of September 30, 1998, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.642 trillion in
assets, including approximately $52 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .75 of 1% of
the value of the Fund's average daily net assets. For the fiscal year ended
August 31, 1998, the Fund paid The Dreyfus Corporation a monthly management
fee at the effective annual rate of .46 of 1% of the value of the Fund's
average daily net assets. From time to time, The Dreyfus Corporation may
waive receipt of its fees and/or voluntarily assume certain expenses of the
Fund, which would have the effect of lowering the expense ratio of the Fund
and increasing yield to investors. The Fund will not pay The Dreyfus
Corporation at a later time for any amounts it may waive, nor will the Fund
reimburse The Dreyfus Corporation for any amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of
the Fund or other funds managed, advised or administered by The Dreyfus
Corporation or its affiliates as factors in the selection of broker-dealers
to execute portfolio transactions for the Fund. Brokerage transactions for
the Fund may be conducted through affiliates of The Dreyfus Corporation, in
accordance with procedures adopted by the Fund's Board. See "Portfolio
Transactions" in the Statement of Additional Information.
[Page 7]
The Dreyfus Corporation may pay the Fund's distributor for
shareholder
services from The Dreyfus Corporation's own
assets, including past profits but not including the management fee paid by
the Fund. The Fund's distributor may use part or all of such payments to pay
Service Agents in respect of these services.
Distributor _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts
02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
Transfer and Dividend Disbursing Agent and Custodian _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). Mellon Bank, N.A., One Mellon Bank
Center, Pittsburgh, Pennsylvania 15258, serves as the Fund's Custodian.
How to Buy Shares
Fund shares are sold without a sales charge. You may be charged a
fee
if you effect transactions in Fund shares through a securities dealer, bank
or other financial institution (collectively, "Service Agents"). Stock
certificates are issued only upon your written request. No certificates are
issued for fractional shares. The Fund reserves the right to reject any
purchase order. See "Appendix _ Additional Information About Purchases,
Exchanges and Redemptions."
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which has made an aggregate minimum initial
purchase for its customers of $2,500. Subsequent investments must be at
least
$100. However, the minimum initial investment is $750 for Dreyfus-sponsored
Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a non-working
spouse, Roth IRAs, SEP-IRAs and rollover IRAs) and 403(b)(7) Plans with only
one participant and $500 for Dreyfus-sponsored Education IRAs, with no
minimum on subsequent purchases The initial investment must be accompanied
by
the Account Application. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries, directors of The
Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Company's Board, or the spouse or
minor
child of any of the foregoing, the minimum initial investment is $1,000. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of their pay directly
deposited into their Fund accounts, the minimum initial investment is $50.
The Fund reserves the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified or
non-qualified employee benefit plans or other programs where contributions
or
account information can be transmitted in a manner and form acceptable to
the
Fund. The Fund reserves the right to vary further the initial and subsequent
investment minimum requirements at any time. Fund shares also are offered
without regard to the minimum initial investment requirements through
Dreyfus-AUTOMATIC Asset BuilderRegistration Mark, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to the Dreyfus
Step Program described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through the
Dreyfus
TeleTransfer Privilege described below. Checks should be made payable to
"The
Dreyfus Family of Funds," or, if for Dreyfus retirement plan accounts, to
"The Dreyfus Trust Company, Custodian" and should specify that you are
investing in the Fund. Payments to open new accounts which are mailed should
be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence, Rhode
Island 02940-9387, together with your Account Application. For subsequent
investments, your Fund account number should appear on the check and an
invest
ment slip should be enclosed and sent to The Dreyfus Family of Funds, P.O.
Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts,
both initial and subsequent investments should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island
[Page 8]
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL
BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA# 8900279621/Dreyfus
Aggressive Growth Fund, for purchase of Fund shares in your name. The wire
must include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account
registratio
n and dealer number, if applicable. If your initial purchase of Fund shares
is by wire, please call 1-800-645-6561 after completing your wire payment to
obtain your Fund account number. Please include your Fund account number on
the Account Application and promptly mail the Account Application to the
Fund, as no redemptions will be permitted until the Account Application is
received. You may obtain further information about remitting funds in this
manner from your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear. The
Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
Fund account number preceded by the digits "1111."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus, and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees. You should consult your Service Agent
in this regard. See "Shareholder Services Plan."
Fund shares are sold on a continuous basis at the net asset value
per
share next determined after an order in proper form is received by the
Transfer Agent or other entity authorized to receive orders on behalf of the
Fund. Net asset value per share is determined as of the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for business. For
purposes of determining net asset value, options and futures contracts will
be valued 15 minutes after the close of trading on the floor of the New York
Stock Exchange. Net asset value per share is computed by dividing the value
of the Fund's net assets (I.E., the value of its assets less liabilities) by
the total number of Fund shares outstanding. The Fund's investments are
valued based on market value or, where market quotations are not readily
available, based on fair value as determined in good faith by the Company's
Board. Certain securities may be valued by an independent pricing service
approved by the Company's Board and are valued at fair value as determined
by
the pricing service. For further information regarding the methods employed
in valuing the Fund's investments, see "Determination of Net Asset Value" in
the Statement of Additional Information.
For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Fund shares may be transmitted, and
must be received by the Transfer Agent, within three business days after the
order is placed. If such payment is not received within three business days
after the order is placed, the order may be canceled and the institution
could be held liable for resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where
(i)
the employers or affiliated employers maintaining such plans or programs
have
a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or
[Page 9]
program's aggregate investment in the Dreyfus Family of Funds or certain
other products made available by the Distributor to such plans or programs
exceeds $1,000,000 ("Eligible Benefit Plans"). Shares of funds in the
Dreyfus
Family of Funds then held by Eligible Benefit Plans will be aggregated to
determine the fee payable. The Distributor reserves the right to cease
paying
these fees at any time. The Distributor will pay such fees from its own
funds, other than amounts received from the Fund, including past profits or
any other source available to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
Dreyfus TELETRANSFER Privilege _ You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Account Application or
have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will
be transferred between the bank account designated in one of these documents
and your Fund account. Only a bank account maintained in a domestic
financial
institution which is an Automated Clearing House member may be so
designated.
The Fund may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the Dreyfus TeleTransfer Privilege, you may
request a Dreyfus TeleTransfer purchase of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
Shareholder Services
Fund Exchanges
You may purchase, in exchange for shares of the Fund, shares of
certain other funds managed or administered by The Dreyfus Corporation, to
the extent such shares are offered for sale in your state of residence.
These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, you should consult your Service Agent or
call 1-800-645-6561 to determine if it is available and whether any
conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $500; furthermore,
when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund
into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to all Fund shareholders automatically, unless you
check the applicable "No" box on the Account Application, indicating that
you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request signed by all
shareholders on the account, by a separate signed Shareholder Services Form,
available by calling 1-800-645-6561, or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. If you have
established the Telephone Exchange Privilege, you may telephone exchange
instructions (including over The Dreyfus TouchRegistration Mark automated
telephone system) by calling 1-800-645-6561. If you are calling from
overseas, call 516-794-5452. See "How to Redeem Shares_Procedures." Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Wire Redemption Privilege, Telephone Redemption Privilege,
Dreyfus
TeleTransfer Privilege and the dividend/capital gain distribution option
(except for Dreyfus Dividend Sweep) selected by the investor.
The Fund will impose a redemption fee equal to 1% of the net asset
value of Fund shares exchanged out of the Fund where the exchange is made
less than 15 days after issuance of such shares.
[Page 10]
See "How to Redeem Shares." Otherwise, shares will be exchanged at the next
determined net asset value; however, a sales load may be charged with
respect
to exchanges into funds sold with a sales load. If you are exchanging into a
fund that charges a sales load, you may qualify for share prices which do
not
include the sales load or which reflect a reduced sales load, if the shares
you are exchanging were: (a) purchased with a sales load, (b) acquired by a
previous exchange from shares purchased with a sales load, or (c) acquired
through reinvestment of dividends or distributions paid with respect to the
foregoing categories of shares. To qualify, at the time of the exchange you
must notify the Transfer Agent or your Service Agent must notify the
Distribut
or. Any such qualification is subject to confirmation of your holdings
through a check of appropriate records. See "Shareholder Services" in the
Statement of Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal administrative fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. See "Appendix _
Additional Information About Purchases, Exchanges and Redemptions." The
availability of Fund Exchanges may be modified or terminated at any time
upon
notice to shareholders. See "Dividends, Distributions and Taxes."
Dreyfus Auto-Exchange Privilege
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on
a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of certain other funds in the Dreyfus Family of Funds of
which you are a shareholder. The amount you designate, which can be
expressed
either in terms of a specific dollar or share amount ($100 minimum), will be
exchanged automatically on the first and/or fifteenth day of the month
according to the schedule you have selected. Shares will be exchanged at the
then-current net asset value; however, a sales load may be charged with
respect to exchanges into funds sold with a sales load. See "Shareholder
Services" in the Statement of Additional Information. The right to exercise
this Privilege may be modified or canceled by the Fund or the Transfer
Agent.
You may modify or cancel your exercise of this Privilege at any time by
mailing written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Fund may charge a service fee for
the use of this Privilege. No such fee currently is contemplated. For more
information concerning this Privilege and the funds in the Dreyfus Family of
Funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561. See
"Dividends, Distributions and Taxes."
Dreyfus-AUTOMATIC Asset BuilderRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member
may be so designated. To establish a Dreyfus-AUTOMATIC Asset Builder
account,
you must file an authorization form with the Transfer Agent. You may obtain
the necessary authorization form by calling 1-800-645-6561. You may cancel
your participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
Dreyfus Government Direct Deposit Privilege
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. To
enroll in Dreyfus
[Page 11]
Government Direct Deposit, you must file with the Transfer Agent a completed
Direct Deposit Sign-Up Form for each type of payment that you desire to
include in this Privilege. The appropriate form may be obtained by calling
1-800-645-6561. Death or legal incapacity will terminate your participation
in this Privilege. You may elect at any time to terminate your participation
by notifying in writing the appropriate Federal agency. The Fund may
terminate your participation upon 30 days' notice to you.
Dreyfus Payroll Savings Plan
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis.
Depending
upon your employer's direct deposit program, you may have part or all of
your
paycheck transferred to your existing Dreyfus account electronically through
the Automated Clearing House system at each pay period. To establish a
Dreyfus Payroll Savings Plan account, you must file an authorization form
with your employer's payroll department. Your employer must complete the
reverse side of the form and return it to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of your employer, not the
Distributor, The Dreyfus Corporation, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Dreyfus Payroll Savings
Plan. The Fund may modify or terminate this Privilege at any time or charge
a
service fee. No such fee currently is contemplated.
Dreyfus Step Program
Dreyfus Step Program enables you to purchase Fund shares without
regard to the Fund's minimum initial investment requirements through Dreyfus-
A
UTOMATIC Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program account,
you must supply the necessary information on the Account Application and
file
the required authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary
authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing
your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may
be,
as provided under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to purchase Fund
shares through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs, SEP-IRAs and IRA
"Rollover Accounts."
Dreyfus Dividend Options
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. If you
are investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject on redemption to the contingent deferred
sales charge, if any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dreyfus Dividend ACH
permits you to transfer electronically dividends or dividends and capital
gain distributions, if any, from the Fund to a designated bank account. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. Banks may charge a fee
for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please
[Page 12]
call toll free 1-800-645-6561. You may cancel these privileges by mailing
written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. To select a new fund after
cancellation,
you must submit a new Dividend Options Form. Enrollment in or cancellation
of
these privileges is effective three business days following receipt. These
privileges are available only for existing accounts and may not be used to
open new accounts. Minimum subsequent investments do not apply for Dreyfus
Dividend Sweep. The Fund may modify or terminate these privileges at any
time
or charge a service fee. No such fee currently is contemplated. Shares held
under Keogh Plans, IRAs or other retirement plans are not eligible for
Dreyfus Dividend Sweep.
Automatic Withdrawal Plan
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account. An Automatic Withdrawal Plan may
be established by filing an Automatic Withdrawal Plan application with the
Transfer Agent or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561. The Automatic Withdrawal Plan may be
ended at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Retirement Plans
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, SEP-IRAs,rollover IRAs and Education IRAs),
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services
also
are available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566;
for
IRAs except SEP-IRAs please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
How to Redeem Shares
General
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below.
When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund, the Fund will redeem the
shares at the next determined net asset value. See "Appendix _ Additional
Information About Purchases, Exchanges and Redemptions."
The Fund will deduct a redemption fee of 1% of the net asset value
of
Fund shares redeemed or exchanged less than 15 days following the issuance
of
such shares. The fee will be retained by the Fund and used primarily to
offset the transaction costs that short-term trading imposes on the Fund and
its shareholders. For purposes of calculating the 15-day holding period, the
Fund will employ the "first-in, first-out" method, which assumes that the
shares you are redeeming or exchanging are the ones you have held the
longest. No redemption fee will be charged on the redemption or exchange of
shares (1) through the Fund's Automatic Withdrawal Plan or Dreyfus
Auto-Exchange Privilege, (2) through accounts that are reflected on the
records of the Transfer Agent as omnibus accounts approved by Dreyfus
Service
Corporation, (3) through accounts established by Service Agents approved by
Dreyfus Service Corporation that utilize the National Securities Clearing
Corporation's networking system, or (4) acquired through the reinvestment of
dividends or capital gains distributions. The redemption fee may be waived,
modified or discontinued at any time or from time to time. Service Agents
may
charge their clients a fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the Fund's then-current net asset
value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities
[Page 13]
and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK,
BY DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER
Registration Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO
THE
TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY
UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR
DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS
DAYS OR MORE.
IN ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE FOR A PERIOD OF
EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option
upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
Procedures
You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege
which is granted automatically unless you specifically refuse it by checking
the applicable "No" box on the Account Application. The Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or by oral request from any of the authorized
signatories on the account by calling 1-800-645-6561. You also may redeem
shares through the Wire Redemption Privilege or the Dreyfus TeleTransfer
Privilege, if you have checked the appropriate box and supplied the
necessary
information on the account application or have filed a Shareholder Services
Form with the Transfer Agent. Other redemption procedures may be in effect
for clients of certain Service Agents. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities. The Fund reserves the right to refuse any
request made by wire or telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are
not
eligible for the Wire Redemption, Telephone Redemption or Dreyfus
TeleTransfer
Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, and reasonably believed by
the Transfer Agent to be genuine. The Fund will require the Transfer Agent
to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of
these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption
had
been used. During the delay, the Fund's net asset value may fluctuate.
[Page 14]
Regular Redemption _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each
signature
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program. If
you
have any questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
Wire Redemption Privilege _ You may request by wire, telephone or letter
that
redemption proceeds (minimum $1,000) be wired to your account at a bank
which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. Holders of jointly registered Fund or bank accounts
may
have redemption proceeds of not more than $250,000 wired within any 30-day
period. You may telephone redemption requests by calling 1-800-645-6561 or,
if you are calling from overseas, call 516-794-5452. The Statement of
Addition
al Information sets forth instructions for transmitting redemption requests
by wire.
Telephone Redemption Privilege _ You may request by telephone that
redemption
proceeds (maximum $150,000 per day) be paid by check and mailed to your
address. You may telephone redemption instructions by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452. The Telephone
Redemption Privilege is granted automatically unless you refuse it.
Dreyfus TELETRANSFER Privilege _ You may request by telephone that
redemption
proceeds (minimum $500 per day) be transferred between your Fund account and
your bank account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be designated.
Redemption proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of the
redemption request. Holders of jointly registered Fund or bank accounts may
redeem through the Dreyfus TeleTransfer Privilege for transfer to their bank
account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TeleTransfer Privilege, you may
request a Dreyfus TeleTransfer redemption of shares by calling 1-800-645-
6561
or, if you are calling from overseas, call 516-794-5452.
Shareholder Services Plan
The Fund has adopted a Shareholder Services Plan pursuant to which
it
pays the Distributor for the provision of certain services to Fund
shareholders a fee at the annual rate of .25 of 1% of the value of the
Fund's
average daily net assets. 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.
[Page 15]
Dividends, Distributions and Taxes
Under the Internal Revenue Code of 1986, as amended (the "Code"),
the
Fund is treated as a separate corporation for purposes of qualification and
taxation as a regulated investment company. The Fund ordinarily pays
dividends from its net investment income and distributes net realized
securities gains, if any, once a year, but it may make distributions on a
more frequent basis to comply with the distribution requirements of the
Code,
in all events in a manner consistent with the provisions of the 1940 Act.
The
Fund will not make distributions from net realized securities gains unless
capital loss carryovers, if any, have been utilized or have expired. You may
choose whether to receive dividends and distributions in cash or to reinvest
in additional shares at net asset value. If you elect to receive dividends
and distributions in cash, and your dividend or distribution check is
returned to the Fund as undeliverable or remains uncashed for six months,
the
Fund reserves the right to reinvest such dividend or distribution and all
future dividends and distributions payable to you in additional Fund shares
at net asset value. No interest will accrue on amounts represented by
uncashed distribution or redemption checks. All expenses are accrued daily
and deducted before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds paid by the Fund, will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in additional
shares. Distributions from net realized long-term securities gains of the
Fund will be taxable to U.S. shareholders as long-term capital gains for
Feder
al income tax purposes, regardless of how long shareholders have held their
Fund shares and whether such distributions are received in cash or
reinvested
in Fund shares. The Code provides that an individual generally will be taxed
on his or her net capital gain at a maximum rate of 28% with respect to
capital gain from securities held for less than 12 months and at a maximum
rate of 20% with respect to capital gain from securities held for more than
12 months. Dividends and distributions may be subject to state and local
taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain or
loss may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from
securities gains, if any, paid during the year.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject to backup
wi
thholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines
[Page 16]
a shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended August 31, 1998 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification
is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund
is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
Performance Information
For purposes of advertising, performance may be calculated on the
basis of average annual total return and/or total return.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment was purchased with an initial
payment of $1,000 and that the investment was redeemed at the end of a
stated
period of time, after giving effect to the reinvestment of dividends and
distributions during the period. The return is expressed as a percentage
rate
which, if applied on a compounded annual basis, would result in the
redeemable value of the investment at the end of the period. Advertisements
of the Fund's performance will include the Fund's average annual total
return
for one, five and ten year periods, or for shorter periods depending upon
the
length of time the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Standard & Poor's 500 Composite Stock Price
Index,
Wilshire 5000 Index, the Dow Jones Industrial Average, Money Magazine,
Morningstar, Inc. and other industry publications.
General Information
The Company was incorporated under Maryland law on November 16,
1993,
and commenced operations on December 29, 1993. Before September 29, 1995,
the
Company's name was Dreyfus Focus Funds, Inc. The Company is authorized to
issue one billion shares of Common Stock (with 100 million shares allocated
to the Fund), par value $.001 per share. Each share has one vote.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members
or
the appointment of auditors. However, the holders of at least 10% of the
shares
[Page 17]
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Board member from office.
Shareholders may remove a Board member by the affirmative vote of a majority
of the Company's outstanding voting shares. In addition, the Board will call
a meeting of shareholders for the purpose of electing Board members if, at
any time, less than a majority of the Board members then holding office have
been elected by shareholders.
The Company is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of
one portfolio is not deemed to be a shareholder of any other portfolio. For
certain matters shareholders vote together as a group; as to others they
vote
separately by portfolio. By this Prospectus, shares of the Fund are being
offered. Other portfolios are sold pursuant to other offering documents.
To date, the Board has authorized the creation of nine series of
shares. All consideration received by the Company for shares of one of the
series and all assets in which such consideration is invested will belong to
that series (subject only to the rights of creditors of the Company) and
will
be subject to the liabilities related thereto. The income attributable to,
and the expenses of, one series are treated separately from those of the
other series. The Company has the ability to create, from time to time, new
series without shareholder approval.
The Fund is currently a defendant in an action pending in the United
States District Court, Southern District of New York. The action was
consolidated on November 12, 1998 from a number of complaints brought by
persons and entities, on behalf of themselves and others who were
shareholders of the Fund and Dreyfus Premier Aggressive Growth Fund
(collectively, the "Funds") between November 1, 1995 and June 8, 1998.
Plaintiffs have also named as defendants the Company, Dreyfus Premier Equity
Funds, Inc., The Dreyfus Corporation and Michael L. Schonbert. Plaintiffs
allege Mr. Schonberg used his position as primary portfolio manager of the
Funds to purchase stocks for the Funds that he and his acquaintances had
previously purchased for themselves' the Funds violated their own purported
investment policy by failing to invest in "growth" and "capital
appreciation"
stocks; and the defendants disseminated false and misleading information
regarding the nature of the stocks that would be purchased for the Funds'
portfolios, as well as The Dreyfus Corporations's research capabilities and
general oversight of the Funds' investments. The plaintiffs seek, among
other
relief, recissory or compensatory damages. This action is at an early stage
and to date, none of the defendants has moved against or answered the
complaint.
The Transfer Agent maintains a record of your ownership and sends
you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144
Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call
1-718-895-1206; outside the U.S., call 516-794-5452.
[Page 18]
Appendix
Investment Techniques
Foreign Currency Transactions _ Foreign currency transactions may be entered
into for a variety of purposes, including: to fix in U.S. dollars, between
trade and settlement date, the value of a security the Fund has agreed to
buy
or sell; to hedge the U.S. dollar value of securities the Fund already owns,
particularly if it expects a decrease in the value of the currency in which
the foreign security is denominated; or to gain exposure to the foreign
currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies, which would involve the Fund agreeing to
exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency the Fund contracted to receive in the
exchange. The Fund's success in these transactions will depend principally
on
The Dreyfus Corporation's ability to predict accurately the future exchange
rates between foreign currencies and the U.S. dollar.
Currency exchange rates may fluctuate significantly over short
periods of time. They generally are determined by the forces of supply and
demand in the foreign exchange markets and the relative merits of
investments
in different countries, actual or perceived changes in interest rates and
other complex factors, as seen from an international perspective. Currency
exchange rates also can be affected unpredictably by intervention by U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States or abroad.
Leverage _ Leveraging exaggerates the effect on net asset value of any
increase or decrease in the market value of the Fund's portfolio. Money
borrowed for leveraging will be limited to 331/3% of the value of the Fund's
total assets. These borrowings will be subject to interest costs which may
or
may not be recovered by appreciation of the securities purchased; in certain
cases, interest costs may exceed the return received on the securities
purchased.
The Fund may enter into reverse repurchase agreements with banks,
brokers or dealers. This form of borrowing involves the transfer by the Fund
of an underlying debt instrument in return for cash proceeds based on a
percentage of the value of the security. The Fund retains the right to
receive interest and principal payments on the security. At an agreed upon
future date, the Fund repurchases the security at principal plus accrued
interest. Except for these transactions, the Fund's borrowings generally
will
be unsecured.
Short-Selling _ In these transactions, the Fund sells a security it does not
own in anticipation of a decline in the market value of the security. To
complete the transaction, the Fund must borrow the security to make delivery
to the buyer. The Fund is obligated to replace the security borrowed by
purchasing it subsequently at the market price at the time of replacement.
The price at such time may be more or less than the price at which the
security was sold by the Fund, which would result in a loss or gain,
respectively.
Securities will not be sold short if, after effect is given to any
such short sale, the total market value of all securities sold short would
exceed 25% of the value of the Fund's net assets. The Fund may not make a
short sale which results in the Fund having sold short in the aggregate more
than 5% of the outstanding securities of any class of an issuer.
The Fund also may make short sales "against the box," in which the
Fund enters into a short sale of a security it owns. At no time will more
than 15% of the value of the Fund's net assets be in deposits on short sales
against the box.
[Page 19]
Use of Derivatives _ The Fund may invest in or enter into the types of
Derivatives, such as futures and options. These instruments and certain
related risks are described more specifically under "Investment Objective
and
Management Policies _ Management Policies _ Derivatives" in the Statement
of Additional Information.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the
portfolio as a whole. Derivatives permit the Fund to increase or decrease
the
level of risk, or change the character of the risk, to which its portfolio
is
exposed in much the same way as the Fund can increase or decrease the level
of risk, or change the character of the risk, of its portfolio by making
investments in specific securities.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives
could have a large potential impact on the Fund's performance.
If the Fund invests in Derivatives at inopportune times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. The Fund also could experience losses if its
Derivatives
were poorly correlated with its other investments, or if the Fund were
unable
to liquidate its position because of an illiquid secondary market. The
market
for many Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for Derivatives.
Although the Fund will not be a commodity pool, certain Derivatives
subject the Fund to the rules of the Commodity Futures Trading Commission
which limit the extent to which the Fund can invest in such Derivatives. The
Fund may invest in futures contracts and options with respect thereto for
hedging purposes without limit. However, the Fund may not invest in such
contracts and options for other purposes if the sum of the amount of initial
margin deposits and premiums paid for unexpired options with respect to such
contracts, other than for bona fide hedging purposes, exceeds 5% of the
liquidation value of the Fund's assets, after taking into account unrealized
profits and unrealized losses on such contracts and options; provided,
however, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.
The Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. The Fund may write
(I.E
., sell) covered call and put option contracts to the extent of 20% of the
value of its net assets at the time such option contracts are written. When
required by the Securities and Exchange Commission, the Fund will set aside
permissible liquid assets in a segregated account to cover its obligations
relating to its transactions in Derivatives. To maintain this required
cover,
the Fund may have to sell portfolio securities at disadvantageous prices or
times since it may not be possible to liquidate a Derivative position at a
reasonable price.
Forward Commitments _ The Fund may purchase securities on a forward
commitment or when-issued basis, which means that delivery and payment take
place a number of days after the date of the commitment to purchase. The
payment obligation and the interest rate receivable on a forward commitment
or when-issued security are fixed when the Fund enters into the commitment,
but the Fund does not make payment until it receives delivery from the
counterparty. The Fund will commit to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. The Fund
will set aside in a segregated account, permissible liquid assets at least
equal at all times to the amount of the Fund's purchase commitments.
[Page 20]
Certain Portfolio Securities
American Depositary Receipts _ The Fund may invest in the securities of
foreign issuers in the form of American Depositary Receipts ("ADRs"). These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts typically
issued by a United States bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation.
Warrants _ A warrant is an instrument issued by a corporation which gives
the
holder the right to subscribe to a specified amount of the corporation's
capital stock at a set price for a specified period of time. The Fund may
invest up to 5% of its net assets in warrants, except that this limitation
does not apply to warrants purchased by the Fund that are sold in units
with,
or attached to, other securities. Included in such amount, but not to exceed
2% of the value of the Fund's net assets, may be warrants which are not
listed on the New York or American Stock Exchange.
Money Market Instruments _ The Fund may invest in the following types of
money market instruments.
U.S. Government Securities. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides financial
support to such U.S. Government-sponsored agencies and instrumentalities, no
assurance can be given that it will always do so since it is not so
obligated
by law.
Repurchase Agreements. In a repurchase agreement, the Fund buys, and
the seller agrees to repurchase, a security at a mutually agreed upon time
and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a
default
or insolvency of the other party to the agreement, including possible delays
or restrictions upon the Fund's ability to dispose of the underlying
securities. The Fund may enter into repurchase agreements with certain banks
or non-bank dealers.
Bank Obligations. The Fund may purchase certificates of deposit,
time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, the Fund may be subject to
additional investment risks that are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers. See "Description of the Fund _ Investment Considerations and Risks
_ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect
the obligation both of the bank and the drawer to pay the
[Page 21]
face amount of the instrument upon maturity. The other short-term
obligations
may include uninsured, direct obligations bearing fixed, floating or
variable
interest rates.
Commercial Paper. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial
paper purchased by the Fund will consist only of direct obligations which,
at
the time of their purchase, are (a) rated not lower than Prime-1 by Moody's
Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's Ratings
Group
("S&P"), (b) issued by companies having an outstanding unsecured debt issue
currently rated at least A3 by Moody's or A- by S&P, or (c) if unrated,
determined by The Dreyfus Corporation to be of comparable quality to those
rated obligations which may be purchased by the Fund.
Investment Companies _ The Fund may invest in securities issued by
registered and unregistered investment companies. Under the 1940 Act, the
Fund's investment in such securities, subject to certain exceptions,
currently is limited to (i) 3% of the total voting stock of any one
investment company, (ii) 5% of the Fund's total assets with respect to any
one investment company and (iii) 10% of the Fund's total assets in the
aggregate. Investments in the securities of other investment companies may
involve duplication of advisory fees and certain other expenses.
Illiquid Securities _ The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, and certain privately
negotiated, non-exchange traded options and securities used to cover such
options. As to these securities, the Fund is subject to a risk that should
the Fund desire to sell them when a ready buyer is not available at a price
the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected.
ADDITIONAL INFORMATION ABOUT PURCHASES, EXCHANGES AND REDEMPTIONS. The Fund
is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculation on short-term market
movements.
A pattern of frequent purchases and exchanges can be disruptive to efficient
portfolio management and, consequently, can be detrimental to the Fund's
performance and its shareholders. Accordingly, if the Fund's management
determines that an investor is engaged in excessive trading, the Fund, with
or without prior notice, may temporarily or permanently terminate the
availability of Fund Exchanges, or reject in whole or part any purchase or
exchange request, with respect to such investor's account. Such investors
also may be barred from purchasing other funds in the Dreyfus Family of
Funds. Generally, an investor who makes more than four exchanges out of the
Fund during any calendar year or who makes exchanges that appear to coincide
with an active market-timing strategy may be deemed to be engaged in
excessive trading. Accounts under common ownership or control will be
considered as one account for purposes of determining a pattern of excessive
trading. In addition, the Fund may refuse or restrict purchase or exchange
requests by any person or group if, in the judgment of the Fund's
management,
the Fund would be unable to invest the money effectively in accordance with
its investment objective and policies or could otherwise be adversely
affected or if the Fund receives or anticipates receiving simultaneous
orders
that may significantly affect the Fund (E.G., amounts equal to 1% or more of
the Fund's total assets). If an exchange request is refused, the Fund will
take no other action with respect to the shares until it receives further
instructions from the investor. The Fund may delay forwarding redemption
proceeds for up to seven days if the investor redeeming shares is engaged in
excessive trading or if the amount of the redemption request otherwise would
be disruptive to efficient portfolio management or would adversely affect
the
Fund. The Fund's policy on excessive trading applies to investors who invest
in the Fund directly or through financial intermediaries, but does not apply
to the Dreyfus Auto-Exchange Privilege, to any automatic
[Page 22]
investment or withdrawal privilege described herein, or to participants
in employer-sponsored retirement plans.
During times of drastic economic or market conditions, the Fund may
suspend Fund Exchanges temporarily without notice and treat exchange
requests
based on their separate components _ redemption orders with a simultaneous
request to purchase the other fund's shares. In such a case, the redemption
request would be processed at the Fund's next determined net asset value but
the purchase order would be effective only at the net asset value next
determined after the fund being purchased receives the proceeds of the
redemption, which may result in the purchase being delayed.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and in the
Fund's official sales literature in connection with the offer of the Fund's
shares, and, if given or made, such other information or representations
must
not be relied upon as having been authorized by the Fund. This Prospectus
does not constitute an offer in any State in which, or to any person to
whom,
such offering may not lawfully be made.
[Page 23]
Dreyfus
Aggressive
Growth Fund
Prospectus
Copy Rights 1998 Dreyfus Service Corporation
256p1298
____________________________________________________________________________
DREYFUS GROWTH AND VALUE FUNDS, INC.
DREYFUS AGGRESSIVE GROWTH FUND
DREYFUS LARGE COMPANY VALUE FUND
DREYFUS AGGRESSIVE VALUE FUND
DREYFUS MIDCAP VALUE FUND
DREYFUS SMALL COMPANY VALUE FUND
DREYFUS INTERNATIONAL VALUE FUND
DREYFUS EMERGING LEADERS FUND
DREYFUS TECHNOLOGY GROWTH FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 1, 1999
____________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Aggressive Growth Fund, Dreyfus International Value Fund, Dreyfus
Technology Growth Fund, Dreyfus Aggressive Value Fund, Dreyfus Midcap Value
Fund and Dreyfus Emerging Leaders Fund, each dated January 1, 1999, Dreyfus
Large Company Value Fund, dated June 1, 1998, and Dreyfus Small Company
Value Fund dated March 2, 1998 (each, a "Fund" and collectively, the
"Funds") of Dreyfus Growth and Value Funds, Inc. (the "Company"), as each
may be revised from time to time. To obtain a copy of the relevant Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. -- Call 516-794-5452
Each Fund's most recent Annual Report and Semi-Annual Report to
Shareholders are separate documents supplied with this Statement of
Additional Information, and the financial statements, accompanying notes and
report of independent auditors appearing in the Annual Report are
incorporated by reference in this Statement of Additional Information.
TABLE OF CONTENTS
Page
Description of the Company and Funds B-3
Management of the Company B-13
Management Arrangements B-19
How to Buy Shares B-24
Shareholder Services Plan B-25
How to Redeem Shares B-26
Shareholder Services B-29
Determination of Net Asset Value B-33
Dividends, Distributions and Taxes B-33
Portfolio Transactions B-36
Performance Information B-38
Information About the Company and Funds B-39
Financial Statements and Reports of Independent Auditors B-41
Appendix B-42
DESCRIPTION OF THE COMPANY AND FUNDS
The Company is a Maryland corporation formed on November 16, 1993.
Before September 29, 1995, the Company's name was Dreyfus Focus Funds, Inc.
The Company is an open-end management investment company comprised of
separate portfolios, each of which is treated as a separate fund. Each Fund
is diversified, which means that, with respect to 75% of its total assets,
the Fund will not invest more than 5% of its assets in the securities of any
single issuer.
The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
Investment Techniques
The following information supplements and should be read in conjunction
with each Fund's Prospectus, except as noted.
Foreign Currency Transactions. (All Funds) Foreign currency transactions
may be entered into for a variety of purposes, including: to fix in U.S.
dollars, between trade and settlement date, the value of a security a Fund
has agreed to buy or sell; to hedge the U.S. dollar value of securities the
Fund already owns, particularly if it expects a decrease in the value of the
currency in which the foreign security is denominated; or to gain exposure
to the foreign currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, a Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies, which would involve the Fund agreeing to
exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency the Fund contracted to receive in the
exchange. A Fund's success in these transactions will depend principally on
the Manager's ability to predict accurately the future exchange rates
between foreign currencies and the U.S. dollar.
Currency exchange rates may fluctuate significantly over short periods
of time. They generally are determined by the forces of supply and demand
in the foreign exchange markets and the relative merits of investments in
different countries, actual or perceived changes in interest rates and other
complex factors, as seen from an international perspective. Currency
exchange rates also can be affected unpredictably by intervention, or
failure to intervene, by U.S. or foreign governments or central banks, or by
currency controls or political developments in the United States or abroad.
Short-Selling. (All Funds) In these transactions, a Fund sells a security
it does not own in anticipation of a decline in the market value of the
security. To complete the transaction, the Fund must borrow the security to
make delivery to the buyer. The Fund is obligated to replace the security
borrowed by purchasing it subsequently at the market price at the time of
replacement. The price at such time may be more or less than the price at
which the security was sold by the Fund, which would result in a loss or
gain, respectively.
Securities will not be sold short if, after effect is given to any such
short sale, the total market value of all securities sold short would exceed
25% of the value of the relevant Fund's net assets.
A Fund also may make short sales "against the box," in which the Fund
enters into a short sale of a security it owns. At no time will more than
15% of the value of a Fund's net assets be in deposits on short sales
against the box.
Leverage. (All Funds) Leveraging (that is, buying securities using
borrowed money) exaggerates the effect on net asset value of any increase or
decrease in the market value of a Fund's portfolio. These borrowings will
be subject to interest costs which may or may not be recovered by
appreciation of the securities purchased; in certain cases, interest costs
may exceed the return received on the securities purchased. For borrowings
for investment purposes, the Investment Company Act of 1940, as amended (the
"1940 Act"), requires a Fund to maintain continuous asset coverage (that is,
total assets including borrowings, less liabilities exclusive of borrowings)
of 300% of the amount borrowed. If the required coverage should decline as
a result of market fluctuations or other reasons, a Fund may be required to
sell some of its portfolio holdings within three days to reduce the amount
of its borrowings and restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities at that
time. Each Fund also may be required to maintain minimum average balances
in connection with such borrowing or pay a commitment or other fee to
maintain a line of credit; either of these requirements would increase the
cost of borrowing over the stated interest rate.
A Fund may enter into reverse repurchase agreements with banks, brokers
or dealers. This form of borrowing involves the transfer by the Fund of an
underlying debt instrument in return for cash proceeds based on a percentage
of the value of the security. The Fund retains the right to receive
interest and principal payments on the security. At an agreed upon future
date, the Fund repurchases the security at principal plus accrued interest.
Except for these transactions, the Fund's borrowings generally will be
unsecured.
Use of Derivatives. (All Funds) Each Fund may invest in, or enter into,
derivatives, such as options and futures for a variety of reasons, including
to hedge certain market risks, to provide a substitute for purchasing or
selling particular securities or to increase potential income gain.
Derivatives may provide a cheaper, quicker or more specifically focused way
for the Fund to invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular derivative and
the portfolio as a whole. Derivatives permit a Fund to increase or decrease
the level of risk, or change the character of the risk, to which its
portfolio is exposed in much the same way as the Fund can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
Derivatives may entail investment exposures that are greater than their
cost would suggest, meaning that a small investment in derivatives could
have a large potential impact on the Fund's performance.
If a Fund invests in derivatives at inopportune times or judges market
conditions incorrectly, such investments may lower the Fund's return or
result in a loss. The Fund also could experience losses if its derivatives
were poorly correlated with its other investments, or if the Fund were
unable to liquidate its position because of an illiquid secondary market.
The market for many derivatives is, or suddenly can become, illiquid.
Changes in liquidity may result in significant, rapid and unpredictable
changes in the prices for derivatives.
Although none of the Funds will be a commodity pool, certain
derivatives subject the Funds to the rules of the Commodity Futures Trading
Commission which limit the extent to which a Fund can invest in such
derivatives. Each Fund may invest in futures contracts and options on
futures contacts for hedging purposes without limit. However, a Fund may
not invest in such contracts and options for other purposes if the sum of
the amount of initial margin deposits and premiums paid for unexpired
options with respect to such contracts, other than for bona fide hedging
purposes, exceeds 5% of the liquidation value of the Fund's assets, after
taking into account unrealized profits and unrealized losses on such
contracts and options. In the case of an option that is in-the-money at the
time of purchase, the in-the-money amount may be excluded in calculating the
5% limitation.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
derivatives. Exchange-traded derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated
with derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter derivatives. Therefore, each party to an over-
the-counter derivative bears the risk that the counterparty will default.
Accordingly, the Manager will consider the creditworthiness of
counterparties to over-the-counter derivatives in the same manner as it
would review the credit quality of a security to be purchased by a Fund.
Over-the-counter derivatives are less liquid than exchange-traded
derivatives since the other party to the transaction may be the only
investor with sufficient understanding of the derivative to be interested in
bidding for it.
Futures Transactions--In General. (All Funds) A Fund may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade and
the International Monetary Market of the Chicago Mercantile Exchange or, if
applicable, on exchanges located outside the United States, such as the
London International Financial Futures Exchange, the Deutsche Termine Boroe
and the Sydney Futures Exchange Limited. Foreign markets may offer
advantages such as trading opportunities or arbitrage possibilities not
available in the United States. Foreign markets, however, may have greater
risk potential than domestic markets. For example, some foreign exchanges
are principal markets so that no common clearing facility exists and an
investor may look only to the broker for performance of the contract. In
addition, any profits a Fund might realize in trading could be eliminated by
adverse changes in the exchange rate, or the Fund could incur losses as a
result of those changes. Transactions on foreign exchanges may include both
commodities which are traded on domestic exchanges and those which are not.
Unlike trading on domestic commodity exchanges, trading on foreign commodity
exchanges is not regulated by the Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to a Fund which
could adversely affect the value of the Fund's net assets. Although each
Fund intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid
market will exist for any particular contract at any particular time. Many
futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the
daily limit has been reached in a particular contract, no trades may be
made that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions and
potentially subjecting the Fund to substantial losses.
Successful use of futures by a Fund also is subject to the ability of
the Manager to predict correctly movements in the direction of the relevant
market and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the transaction
being hedged and the price movements of the futures contract. For example,
if a Fund uses futures to hedge against the possibility of a decline in the
market value of securities held in its portfolio and the prices of such
securities instead increase, the Fund will lose part or all of the benefit
of the increased value of securities which it has hedged because it will
have offsetting losses in its futures positions. Furthermore, if in such
circumstances the Fund has insufficient cash, it may have to sell securities
to meet daily variation margin requirements. A Fund may have to sell such
securities at a time when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, a Fund may be required to set aside permissible
liquid assets in a segregated account to cover its obligations relating to
its transactions in derivatives. To maintain this required cover, the Fund
may have to sell portfolio securities at disadvantageous prices or times
since it may not be possible to liquidate a derivative position at a
reasonable price. In addition, segregation of such assets will have the
effect of limiting a Fund's ability otherwise to invest those assets.
Specific Futures Transactions. A Fund may purchase and sell stock index
futures contracts. A stock index future obligates a Fund to pay or receive
an amount of cash equal to a fixed dollar amount specified in the futures
contract multiplied by the difference between the settlement price of the
contract on the contract's last trading day and the value of the index based
on the stock prices of the securities that comprise it at the opening of
trading in such securities on the next business day.
A Fund may purchase and sell interest rate futures contracts. An
interest rate future obligates the Fund to purchase or sell an amount of a
specific debt security at a future date at a specific price.
A Fund may purchase and sell currency futures. A foreign currency
future obligates the Fund to purchase or sell an amount of a specific
currency at a future date at a specific price.
Options--In General. (All Funds) A Fund may invest up to 5% of its assets,
represented by the premium paid, in the purchase of call and put options.
Each Fund may write (i.e. sell) covered call and put option contracts to the
extent of 20% of the value of its net assets at the time such option
contracts are written. A call option gives the purchaser of the option the
right to buy, and obligates the writer to sell, the underlying security or
securities at the exercise price at any time during the option period, or at
a specific date. Conversely, a put option gives the purchaser of the option
the right to sell, and obligates the writer to buy, the underlying security
or securities at the exercise price at any time during the option period, or
at a specific date.
A covered call option written by a Fund is a call option with respect
to which the Fund owns the underlying security or otherwise covers the
transaction by segregating cash or other securities. A put option written
by a Fund is covered when, among other things, permissible liquid assets
having a value equal to or greater than the exercise price of the option are
placed in a segregated account with the Fund's custodian to fulfill the
obligation undertaken. The principal reason for writing covered call and
put options is to realize, through the receipt of premiums, a greater return
than would be realized on the underlying securities alone. A Fund receives
a premium from writing covered call or put options which it retains whether
or not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen events,
at times have rendered certain of the clearing facilities inadequate and
resulted in the institution of special procedures, such as trading
rotations, restrictions on certain types of orders or trading halts or
suspensions in one or more options. There can be no assurance that similar
events, or events that may otherwise interfere with the timely execution of
customers' orders, will not recur. In such event, it might not be possible
to effect closing transactions in particular options. If, as a covered call
option writer, the Fund is unable to effect a closing purchase transaction
in a secondary market, it will not be able to sell the underlying security
until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.
Specific Options Transactions. A Fund may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of
specific securities) or stock indices listed on national securities
exchanges or traded in the over-the-counter market. An option on a stock
index is similar to an option in respect of specific securities, except that
settlement does not occur by delivery of the securities comprising the
index. Instead, the option holder receives an amount of cash if the closing
level of the stock index upon which the option is based is greater than, in
the case of a call, or less than, in the case of a put, the exercise price
of the option. Thus, the effectiveness of purchasing or writing stock index
options will depend upon price movements in the level of the index rather
than the price of a particular stock.
A Fund may purchase and sell call and put options on foreign currency.
These options convey the right to buy or sell the underlying currency at a
price which is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.
A Fund may purchase cash-settled options on equity index swaps in
pursuit of its investment objective. Equity index swaps involve the
exchange by the Fund with another party of cash flows based upon the
performance of an index or a portion of an index of securities which usually
includes dividends. A cash-settled option on a swap gives the purchaser the
right, but not the obligation, in return for the premium paid, to receive an
amount of cash equal to the value of the underlying swap as of the exercise
date. These options typically are purchased in privately negotiated
transactions from financial institutions, including securities brokerage
firms.
Successful use by a Fund of options will be subject to the ability of
the Manager to predict correctly movements in the prices of individual
stocks, the stock market generally or foreign currencies. To the extent
such predictions are incorrect, a Fund may incur losses.
Future Developments. A Fund may take advantage of opportunities in the
area of options and futures contracts and options on futures contracts and
any other derivatives which are not presently contemplated for use by the
Fund or which are not currently available but which may be developed, to the
extent such opportunities are both consistent with the Fund's investment
objective and legally permissible for the Fund. Before entering into such
transactions or making any such investment, the Fund will provide
appropriate disclosure in its Prospectus or Statement of Additional
Information.
Lending Portfolio Securities. (Dreyfus Large Company Value Fund and Dreyfus
Small Company Value Fund only) Each of these Funds may lend securities from
its portfolio to brokers, dealers and other financial institutions needing
to borrow securities to complete certain transactions. In connection with
such loans, the Fund continues to be entitled to payments in amounts equal
to the interest, dividends or other distributions payable on the loaned
securities, which affords the Fund an opportunity to earn interest on the
amount of the loan and on the loaned securities' collateral. Loans of
portfolio securities may not exceed 33-1/3% of the value of the Fund's total
assets and the Fund will receive collateral consisting of cash, U.S.
Government securities or irrevocable letters of credit which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. These loans are terminable by the
Fund at any time upon specified notice. The Fund might experience risk of
loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
Forward Commitments. (All Funds) Each Fund may purchase securities on a
forward commitment or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate receivable on a
forward commitment or when-issued security are fixed when the Fund enters
into the commitment, but the Fund does not make payment until it receives
delivery from the counterparty. The Fund will commit to purchase such
securities only with the intention of actually acquiring the securities, but
the Fund may sell these securities before the settlement date if it is
deemed advisable. The Fund will set aside in a segregated account
permissible liquid assets at least equal at all times to the amount of the
Fund's purchase commitments.
Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may expose
the Fund to risks because they may experience such fluctuations prior to
their actual delivery. Purchasing securities on a when-issued basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. Purchasing securities on a forward commitment or when-
issued basis when the Fund is fully or almost fully invested may result in
greater potential fluctuation in the value of the Fund's net assets and its
net asset value per share.
Certain Portfolio Securities
The following information supplements and should be read in conjunction
with each Fund's Prospectus, except as noted.
Convertible Securities. (All Funds) Convertible securities may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities generally are
subordinated to other similar but non-convertible securities of the same
issuer, although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and convertible
preferred stock is senior to common stock, of the same issuer. Because of
the subordination feature, however, convertible securities typically have
lower ratings than similar non-convertible securities.
Although to a lesser extent than with fixed-income securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the
underlying common stock. A unique feature of convertible securities is that
as the market price of the underlying common stock declines, convertible
securities tend to trade increasingly on a yield basis, and so may not
experience market value declines to the same extent as the underlying common
stock. When the market price of the underlying common stock increases, the
prices of the convertible securities tend to rise as a reflection of the
value of the underlying common stock. While no securities investments are
without risk, investments in convertible securities generally entail less
risk than investments in common stock of the same issuer.
Convertible securities are investments that provide for a stable stream
of income with generally higher yields than common stocks. There can be no
assurance of current income because the issuers of the convertible
securities may default on their obligations. A convertible security, in
addition to providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the holder to
benefit from increases in the market price of the underlying common stock.
There can be no assurance of capital appreciation, however, because
securities prices fluctuate. Convertible securities, however, generally
offer lower interest or dividend yields than non-convertible securities of
similar quality because of the potential for capital appreciation.
Depositary Receipts. (All Funds, except Dreyfus Emerging Leaders Fund)
Each of these Funds may invest in the securities of foreign issuers in the
form of American Depositary Receipts ("ADRs"), Global Depositary Receipts
("GDRs") and other forms of depositary receipts. ADRs are receipts
typically issued by a United States bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. GDRs
are receipts issued outside the United States typically by non-United States
banks and trust companies that evidence ownership of either foreign or
domestic securities. These securities may not necessarily be denominated in
the same currency as the securities into which they may be converted.
Generally, ADRs in registered form are designed for use in the United States
securities markets and GDRs in bearer form are designed for use outside the
United States.
These securities may be purchased through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of
the underlying security and a depositary, whereas a depositary may establish
an unsponsored facility without participation by the issuer of the deposited
security. Holders of unsponsored depositary receipts generally bear all the
costs of such facilities and the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited
securities.
Warrants. (All Funds) A warrant gives the holder the right to subscribe to
a specified amount of the issuing corporation's capital stock at a set price
for a specified period of time. Each Fund may invest up to 5% of its net
assets in warrants, except that this limitation does not apply to warrants
purchased by the Fund that are sold in units with, or attached to, other
securities.
Investment Companies. (All Funds) Each Fund may invest in securities
issued by registered and unregistered investment companies. Under the 1940
Act, a Fund's investment in such securities, subject to certain exceptions,
currently is limited to (i) 3% of the total voting stock of any one
investment company, (ii) 5% of the Fund's total assets with respect to any
one investment company and (iii) 10% of the Fund's total assets in the
aggregate. Investments in the securities of other investment companies may
involve duplication of advisory fees and certain other expenses.
Illiquid Securities. (All Funds) Each Fund may invest up to 15% of the
value of its net assets in securities as to which a liquid trading market
does not exist, provided such investments are consistent with the Fund's
investment objective. These securities may include securities that are not
readily marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, and certain privately
negotiated, non-exchange traded options and securities used to cover such
options. As to these securities, a Fund is subject to a risk that should
the Fund desire to sell them when a ready buyer is not available at a price
the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected.
Lower Rated Securities. (Dreyfus Aggressive Value Fund only) The Fund may
invest in higher yielding (and, therefore, higher risk) debt securities
rated below investment grade by one or more rating agencies, such as Moody's
Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Group
("S&P"). These securities are commonly known as junk bonds and may be
subject to certain risks and to greater market fluctuations than lower
yielding investment grade securities. These securities are considered by
rating agencies to be, on balance, predominantly speculative as to the
payment of principal and interest and generally involve more credit risk
than investment grade securities. The retail market for these securities
may be less liquid than that of investment grade securities. Adverse market
conditions could make it difficult for the Fund to sell these securities or
could result in the Fund obtaining lower prices for these securities which
would adversely affect the Fund's net asset value.
Although ratings of the rating agencies may be an initial criterion for
the selection of these securities, the Manager also will evaluate these
securities and the ability of the issuers to pay principal and interest on
these securities.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with the higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
not have sufficient revenues to meet their interest payment obligations.
The issuer's ability to service its debt obligations also may be affected
adversely by specific corporate developments, forecasts, or the
unavailability of additional financing. The risk of loss because of default
by the issuer is significantly greater for the holders of these securities
because such securities generally are unsecured and often are subordinated
to other creditors of the issuer.
Because there is no established retail secondary market for many of
these securities, the Fund may be able to sell such securities only to a
limited number of dealers or institutional investors. To the extent a
secondary trading market for these securities does exist, it generally is
not as liquid as the secondary market for rated securities. The lack of a
liquid secondary market may have an adverse impact on market price and yield
and the Fund's ability to dispose of particular issues when necessary to
meet the Fund's liquidity needs or in response to a specific economic event
such as a deterioration in the creditworthiness of the issuer. The lack of
a liquid secondary market for certain securities also may make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing the Fund's portfolio and calculating its net asset value. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of these securities. In
such cases, judgment may play a greater role in valuation because less
reliable, objective data may be available.
These securities may be particularly susceptible to economic downturns.
It is likely that an economic recession could disrupt severely the market
for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.
Dreyfus Aggressive Value Fund may acquire these securities during an
initial offering. Such securities may involve special risks because they
are new issues. The Fund has no arrangement with any persons concerning the
acquisition of such securities, and the Manager will review carefully the
credit and other characteristics pertinent to such new issues.
Money Market Instruments. (All Funds) When the Manager determines that
adverse market conditions exist, each Fund may adopt a temporary defensive
position and invest some or all of its assets in money market instruments,
including U.S. Government securities, repurchase agreements, bank
obligations and commercial paper.
Investment Restrictions
Each Fund's investment objective is a fundamental policy, which cannot
be changed, as to a Fund, without approval by the holders of a majority (as
defined in the 1940 Act) of such Fund's outstanding voting shares. In
addition, each Fund has adopted market restrictions numbered 1 through 10 as
fundamental policies. Investment restrictions numbered 11 through 16 are
not fundamental policies and may be changed by vote of a majority of the
Company's Board members at any time. No Fund may:
1. Invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of the Fund's total assets may be
invested, and securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities may be purchased, without regard to any such
limitation.
2. Hold more than 10% of the outstanding voting securities of any
single issuer. This Investment Restriction applies only with respect to 75%
of the Fund's total assets.
3. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be
no limitation on the purchase of obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. For purposes of this
Investment Restriction with respect to Dreyfus Technology Growth Fund, the
technology sector in general is not considered an industry.
4. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
5. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but the Fund may purchase and
sell securities that are secured by real estate or issued by companies that
invest or deal in real estate or real estate investment trusts.
6. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets). For purposes of this Investment Restriction, the
entry into options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices shall not
constitute borrowing.
7. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Company's Board.
8. Act as an underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
9. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 4, 6, 13 and 14 may be deemed to give rise to a
senior security.
10. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, including those relating to indices, and options on
futures contracts or indices.
11. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets. This Investment
Restriction has not been adopted with respect to Dreyfus Technology Growth
Fund.
12. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views. This
Investment Restriction has not been adopted with respect to Dreyfus
Technology Growth Fund.
13. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.
14. Purchase, sell or write puts, calls or combinations thereof,
except as described in the relevant Fund's Prospectus and Statement of
Additional Information.
15. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Fund's net assets would
be so invested.
16. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of
such restriction.
MANAGEMENT OF THE COMPANY
The Company's Board is responsible for the management and supervision
of the Funds. The Board approves all significant agreements between the
Company, on behalf of the Funds, and those companies that furnish services
to the Funds. These companies are as follows:
The Dreyfus Corporation Investment Adviser
Premier Mutual Fund Services, Inc. Distributor
Dreyfus Transfer, Inc. Transfer Agent
Mellon Bank,
N.A.........................................................Custodian
for all Funds except Dreyfus
International Value Fund
The Bank of New York Custodian for Dreyfus
International Value Fund
Board members and officers of the Company, together with information as
to their principal business occupations during at least the last five years,
are shown below.
Board Members of the Company
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is also
a director of The Noel Group, Inc., a venture capital company (for
which, from February 1995 until November 1997, he was Chairman of the
Board), The Muscular Dystrophy Association, HealthPlan Services
Corporation, a provider of marketing, administrative and risk
management services to health and other benefit programs, Carlyle
Industries, Inc. (formerly, Belding Heminway Company, Inc.), a button
packager and distributor, Century Business Services, Inc., a provider
of various outsourcing functions for small and medium sized companies
and Career Blazers Inc. (formerly, Staffing Resources), a temporary
placement agency. For more than five years prior to January 1995, he
was President, a director and, until August 1994, Chief Operating
Officer of the Manager and Executive Vice President and a director of
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager
and, until August 24, 1994, the Company's distributor. From
August 1994 until December 31, 1994, he was a director of Mellon Bank
Corporation. He is 55 years old and his address is 200 Park Avenue,
New York, New York 10166.
DAVID P. FELDMAN, Board Member. Trustee of Corporate Property Investors, a
real estate investment company, and a director of several mutual funds
in the 59 Wall Street Mutual Funds Group, and of the Jeffrey Company, a
private investment company. He was employed at AT&T from July 1961 to
his retirement in April 1997, most recently serving as Chairman and
Chief Executive Officer of AT&T Investment Management Corporation. He
is 59 years old and his address is c/o AT&T, One Oak Way, Berkeley
Heights, New Jersey 07922.
JOHN M. FRASER, JR., Board Member. President of Fraser Associates, a
service company for planning and arranging corporate meetings and other
events. From September 1975 to June 1978, he was Executive Vice
President of Flagship Cruises, Ltd. Prior thereto, he was Senior Vice
President and Resident Director of the Swedish-American Line for the
United States and Canada. He is 76 years old and his address is 133
East 64th Street, New York, New York 10021.
EHUD HOUMINER, Board Member. Professor and Executive-in-Residence at the
Columbia Business School, Columbia University. Since January 1996,
Principal of Lear, Yavitz and Associates, a management consulting firm.
He was President and Chief Executive Officer of Philip Morris USA,
manufacturers of consumer products, from December 1988 to September
1990. He also is a Director of Avnet Inc. and Super-Sol Limited. He
is 57 years old and his address is c/o Columbia Business School,
Columbia University, Uris Hall, Room 526, New York, New York 10027.
GLORIA MESSINGER, Board Member. From 1981 to 1993, Managing Director and
Chief Executive Officer of ASCAP (American Society of Composers,
Authors and Publishers). She is a member of the Board of Directors of
the Yale Law School Fund and Theater for a New Audience, Inc., and was
secretary of the ASCAP Foundation and served as a Trustee of the
Copyright Society of the United States. She is also a member of
numerous professional and civic organizations. She is 68 years old and
her address is 747 Third Avenue, 11th Floor, New York, New York 10017.
JACK R. MEYER, Board Member. President and Chief Executive Officer of
Harvard Management Company, an investment management company, since
September 1990. For more than five years prior thereto, he was
Treasurer and Chief Investment Officer of The Rockefeller Foundation.
He is 52 years old and his address is 600 Atlantic Avenue, Boston,
Massachusetts 02210.
JOHN SZARKOWSKI, Board Member. Director Emeritus of Photography at The
Museum of Modern Art. Consultant in Photography. He is 72 years old
and his address is Bristol Road, Box 221, East Chatham, New York 12060.
ANNE WEXLER, Board Member. Chairman of the Wexler Group, consultants
specializing in government relations and public affairs. She is also a
director of Alumax, Comcast Corporation, The New England Electric
System, and Nova Corporation, and a member of the Board of the Carter
Center of Emory University, the Council of Foreign Relations, the
National Park Foundation, Visiting Committee of the John F. Kennedy
School of Government at Harvard University and the Board of Visitors of
the University of Maryland School of Public Affairs. She is 67 years
old and her address is c/o The Wexler Group, 1317 F Street, N.W., Suite
600, Washington, D.C. 20004.
The Company typically pays its Board members an annual retainer and a
per meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members, if any, are entitled to receive an annual retainer and a per
meeting fee of one-half the amount paid to them as Board members. The
aggregate amount of compensation paid to each Board member by the Company
for the fiscal year ended August 31, 1998, and by all other funds in the
Dreyfus Family of Funds for which such person is a Board member (the number
of which is set forth in parenthesis next to each Board member's total
compensation) for the year ended December 31, 1997, were as follows:
Total Compensation
From Company and
Aggregate Fund Complex
Name of Board Compensation Paid to Board
Member From the Company
Member
Joseph S. DiMartino $11,250 $597,128 (94)
David P. Feldman $ 8,500 $129,375 (27)
John M. Fraser, Jr. $ 8,500 $ 76,750 (12)
Ehud Houminer $ 7,000 $ 68,250 (12)
Gloria Messinger $ 9,000 $ 26,000 (1)
Jack R. Meyer $ 8,000 $ 22,000 (4)
John Szarkowski $ 8,500 $ 23,500 (4)
Anne Wexler $ 8,000 $ 65,625 (16)
Officers of the Company
MARIE E. CONNOLLY*, President and Treasurer. President, Chief Executive
Officer, Chief Compliance Officer and a director of the Distributor and
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc., and an officer of other investment companies
advised or administered by the Manager. She is 41 years old.
MARY A. NELSON*, Vice President and Assistant Treasurer. Vice President of
the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
September 1989 to July 1994, she was an Assistant Vice President and
Client Manager for The Boston Company, Inc. She is 34 years old.
JOSEPH F. TOWER, III*, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From July
1988 to August 1994, he was employed by The Boston Company, Inc. where
he held various management positions in the Corporate Finance and
Treasury areas. He is 36 years old.
MICHAEL S. PETRUCELLI*, Vice President, Assistant Secretary and Assistant
Treasurer. Senior Vice President Funds Distributor and an officer of
certain investment companies advised or administered by the Manager.
From December 1989 through November 1996 he was employed by GE
Investment Services where he held various financial, business
development and compliance positions. He also served as Treasurer of
the GE Funds and as a Director of the GE Investment Services. He is 37
years old.
DOUGLAS C. CONROY*, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
April 1993 to January 1995, he was a Senior Fund Accountant for
Investors Bank & Trust Company. He is 29 years old.
CHRISTOPHER J. KELLEY*, Vice President and Assistant Secretary. Vice
President and Senior Associate General Counsel of the Distributor and
Funds Distributor, Inc., and an officer of other investment companies
advised or administered by the Manager. From April 1994 to July 1996,
he was Assistant Counsel at Forum Financial Group. From October 1992
to March 1994, he was employed by Putnam Investments in legal and
compliance capacities. He is 33 years old.
KATHLEEN K. MORRISEY*, Vice President and Assistant Secretary. Manager of
Treasury Services Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From July 1994 to November 1995, she was a Fund Accountant
for Investors Bank & Trust Company. She is 25 years old.
ELBA VASQUEZ*, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
March 1990 to May 1996, she was employed by U.S. Trust Company of New
York, she held various sales positions and marketing positions. She is
36 years old.
MARGARET W. CHAMBERS**, Vice President and Secretary. Senior Vice President
and General Counsel of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
August 1996 to March 1998, she was Vice President and Assistant General
Counsel for Loomis, Sayles & Company, L.P. From January 1986 to July
1996, she was an associate with the law firm of Ropes & Gray. She is
38 years old.
STEPANIE D. PIERCE*, Vice President, Assistant Secretary and Assistant
Treasurer. Vice President and Client Development Manager of Funds
Distributor, Inc., and an officer of other investment companies advised
or administered by the Manager. From April 1997 to March 1998, she was
employed as a Relationship Manager with Citibank, N.A. From August
1995 to April 1997, she was an Assistant Vice President with Hudson
Valley Bank, and from September 1990 to August 1995, she was Second
Vice President with Chase Manhattan Bank. She is 30 years old.
GEORGE A. RIO**, Vice President and Assistant Treasurer. Executive Vice
President and Client Service Director of Funds Distributor, Inc., and
an officer of other investment companies advised or administered by the
Manager. From June 1995 to March 1998, he was Senior Vice President
and Senior Key Account Manager for Putnam Mutual Funds. From May 1994
to June 1995, he was Director of Business Development for First Data
Corporation. From September 1983 to May 1994, he was Senior Vice
President and Manager of Client Services and Director of Internal Audit
at The Boston Company, Inc. He is 43 years old.
* The principal business address of each officer of the Company
is 200 Park Avenue, New York, New York 10166.
** The principal business address of each officer of the Company is
60 State Street,
Boston, Massachusetts 02109.
The Company's Board members and officers, as a group, owned less than
1% of each Fund's voting securities outstanding on October 30, 1998.
The following persons are known by the Company to own of record 5% or
more of a Fund's outstanding voting securities as of October 30, 1998. A
shareholder who beneficially owns, directly or indirectly, more than 25% of
a Fund's voting securities may be deemed a "control person" (as defined in
the 1940 Act) of the Fund.
Dreyfus Large Company Value Fund
Charles Schwab & Co. Inc. ..........................................
11.3713%
101 Montgomery Street
San Francisco, CA 94104-4122
Dreyfus Small Company Value Fund
Charles Schwab & Co. Inc..........................................
17.4460%
101 Montgomery Street
San Francisco, CA 94104-4122
Citibank NA............................................................
11.4526%
111 Wall Street
New York, New York 10005-3509
Boston Safe Deposit & Trust Company
1 Cabot Road............................................................
8.8357%
Medford, MA 02155-5141
Dreyfus Aggressive Growth Fund
Charles Schwab & Co. Inc. ..........................................
6.4232%
101 Montgomery Street
San Francisco, CA 94104-4122
Dreyfus Aggressive Value Fund
Charles Schwab & Co. Inc. ............................................
18.8111%
101 Montgomery Street
San Francisco, CA 94104-4122
Dreyfus Midcap Value Fund
Charles Schwab & Co. Inc. ............................................
17.7794%
101 Montgomery Street
San Francisco, CA 94104-4122
Dreyfus Emerging Leaders Fund
Charles Schwab & Co. Inc. ............................................
11.3223%
101 Montgomery Street
San Francisco, CA 94104-4122
MANAGEMENT ARRANGEMENTS
Investment Adviser. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned-subsidiary of Mellon Bank Corporation
("Mellon"). Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the Federal
Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest
bank holding companies in the United States based on total assets.
Management Agreement. The Manager provides management services
pursuant to the Management Agreement (the "Agreement") dated August 24,
1994, as amended May 23, 1996, with the Company. As to each Fund, the
Agreement is subject to annual approval by (i) the Company's Board or (ii)
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund, provided that in either event the continuance also
is approved by a majority of the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Company or the Manager, by vote
cast in person at a meeting called for the purpose of voting on such
approval. The Agreement was approved by shareholders on August 5, 1994 in
respect of Dreyfus Large Company Value Fund, and on September 29, 1995 in
respect of Dreyfus Small Company Value Fund, and was last approved by the
Company's Board, including a majority of the Board members who are not
"interested persons" of any party to the Agreement, at a meeting held on
February 11, 1998. As to each Fund, the Agreement is terminable without
penalty, on 60 days' notice, by the Company's Board or by vote of the
holders of a majority of such Fund's shares, or, on not less than 90 days'
notice, by the Manager. The Agreement will terminate automatically, as to
the relevant Fund, in the event of its assignment (as defined in the 1940
Act).
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman--Distribution and a director; Ronald P. O'Hanley III,
Vice Chairman; J. David Officer, Vice Chairman and a Director; William T.
Sandalls, Jr., Executive Vice President; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President--
Corporate Communications; Mary Beth Leibig, Vice President--Human Resources;
Andrew S. Wasser, Vice President--Information Services; Theodore A.
Schachar, Vice President; Wendy Strutt, Vice President; Richard Terres, Vice
President; William H. Maresca, Controller; James Bitetto, Assistant
Secretary; Steven F. Newman, Assistant Secretary; and Mandell L. Berman,
Burton C. Borgelt, Frank V. Cahouet and Richard F. Syron, directors.
The Manager manages each Fund's investments in accordance with the
stated policies of the Fund, subject to the approval of the Company's Board.
The Manager is responsible for investment decisions, and provides the Funds
with portfolio managers who are authorized by the Board to execute purchases
and sales of securities.
The Funds' portfolio managers are as follows:
Dreyfus Aggressive Growth Fund Paul A. LaRocco
Dreyfus Large Company Value Fund Jeffrey F. Friedman
Timothy M. Ghriskey
Douglas Ramos
Dreyfus Aggressive Value Fund Timothy M. Ghriskey
Douglas Ramos
Dreyfus Midcap Value Fund Peter I. Higgins
Dreyfus Small Company Value Fund Peter I. Higgins
Jeffrey F. Friedman
Dreyfus International Value Fund Sandor Cseh
Dreyfus Emerging Leaders Fund Paul Kandel
Hilary Woods
Dreyfus Technology Growth Fund Richard D. Wallman
Mark Herskovitz
The Manager also maintains a research department with a professional
staff of portfolio managers and securities analysts who provide research
services for the Funds and for other funds advised by the Manager.
The Manager maintains office facilities on behalf of the Funds, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Funds. The Manager may pay the Distributor for shareholder
services from the Manager's own assets, including past profits but not
including the management fees paid by the Funds. The Distributor may use
part or all of such payments to pay Service Agents (as defined below) in
respect of these services. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
Expenses. All expenses incurred in the operation of the Company are
borne by the Company, except to the extent specifically assumed by the
Manager. The expenses borne by the Company include: organizational costs,
taxes, interest, loan commitment fees, interest and distributions paid on
securities sold short, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or holders of 5% or more
of the outstanding voting securities of the Manager or its affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Company's existence,
costs of independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel expenses),
costs of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders, costs of shareholders' reports and meetings, and any
extraordinary expenses. In addition, Fund shares are subject to an annual
service fee. See "Shareholder Services Plan." Expenses attributable to a
particular Fund are charged against the assets of that Fund; other expenses
of the Company are allocated among the Funds on the basis determined by the
Board, including, but not limited to, proportionately in relation to the net
assets of each Fund.
As compensation for the Manager's services to the Company, the Company
has agreed to pay the Manager a monthly management fee at the annual rate of
1.00% of the value of Dreyfus International Value Fund's average daily net
assets, .90 of 1% of the value of Dreyfus Emerging Leaders Fund's average
daily net assets and .75 of 1% of the value of each other Fund's average
daily net assets.
For the fiscal years ended October 31, 1995, 1996 and 1997, the
management fees payable by each indicated Fund, the amounts waived by the
Manager and the net fee paid by the Fund were as follows:
Name of Management Reduction Net
Fund Fee in Fee Paid
Payable Fee _
_ 1996 1997
1995 1996 1995 1996 1998
1997 1997
Dreyfus $43,242 $134,679 $43,242 $56,640 -0- $78,039
Large $745,927 $54,892 $691,035
Company
Value
Fund
Dreyfus $42,383 $ 70,529 $42,383 $38,175 -0- $32,354
Small $860,360 $51,774 $808,586
Company
Value
Fund
For the period September 29, 1995 (commencement of operations of the
following Funds) through August 31, 1996, and for the fiscal years ended
August 31, 1997 and 1998, the management fees payable by each indicated
Fund, the amounts waived by the Manager and the net fee paid by the Fund
were as follows:
Name of Fund Management Fee Reduction in Fee Net Fee Paid
Payable
1996 1997 1998 1996 1997 1998 1995 1996 1997
Dreyfus $352 $852 $636,7 $86, $106, $247 $266 $745 $389,6
Aggressive ,634 ,091 09 505 990 ,049 ,129 ,101 60
Growth Fund
Dreyfus $ $550 $1,127 $39, $99,2 $0 $ $451 $1,127
Aggressive 43,7 ,479 ,829 945 35 3,76 ,243 ,829
Value Fund 06 1
Dreyfus $122 $567 $1,359 $67, $18,5 $0 $ $548 $1,359
International ,121 ,130 ,639 691 65 54,4 ,565 ,639
Value Fund 30
Dreyfus $205 $665 $1,225 $89, $64,1 $0 $115 $601 $1,225
Emerging ,324 ,291 ,265 685 25 ,639 ,166 ,265
Leaders Fund
Dreyfus Midcap $ $188 $ $19, $66,3 $0 $0 $122 $941,5
Value Fund 19,4 ,561 961,50 408 02 ,259 08
08 8
Dreyfus - - $61,09 - - $61, - - $0
Technology 8 098
Growth Fund*
As to each Fund, the Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the management
fee, exceed the expense limitation of any state having jurisdiction over the
Fund, the Fund may deduct from the payment to be made to the Manager under
the Agreement, or the Manager will bear, such excess expense to the extent
required by state law. Such deduction or payment, if any, will be estimated
daily, and reconciled and effected or paid, as the case may be, on a monthly
basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of a Fund's net assets increases.
The Distributor. Premier Mutual Fund Services, Inc. (the
"Distributor"), located at 60 State Street, Boston, Massachusetts 02109,
serves as each Fund's distributor on a best efforts basis pursuant to an
agreement with the company which is renewable annually. The Distributor may
pay dealers a fee of up to 5% of the amount invested through such dealers in
Fund shares by employees participating in qualified employee benefit plans
or other programs where (i) the employers or affiliated employers
maintaining such pals or programs have a minimum of 250 employees eligible
for participation in such plans or programs or (ii) such plan's or program's
aggregate investment in the Dreyfus Family of Funds or certain other
products made available by the Distributor to such plans or programs exceeds
$1,000,000 ("Eligible Benefit Plans"). Shares of funds in the Dreyfus
Family of Funds then held by Eligible Benefit Plans will be aggregated to
determine the fee payable. The Distributor will pay such fees from its own
funds, other than amounts received from the Fund, including past profits or
any other source available to it.
Transfer and Dividend Disbursing Agent and Custodian. Dreyfus
Transfer, Inc., (the "Transfer Agent"), a wholly-owned subsidiary of the
Manager, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Company's transfer and dividend disbursing agent. Under a transfer agency
agreement with the Company, the Transfer Agent arranges for the maintenance
of shareholder account records for each Fund, the handling of certain
communications between shareholders and the Fund and the payment of
dividends and distributions payable by the Fund. For these services, the
Transfer Agent receives a monthly fee computed on the basis of the number of
shareholder accounts it maintains for each Fund during the month, and is
reimbursed for certain out-of-pocket expenses. For the indicated fiscal
year end, each Fund paid the Transfer Agent the following:
Name of Fund Amount Paid to Transfer Agent
Dreyfus Large Company Value $ 71,471
Fund(1)
Dreyfus Small Company Value $ 58,629
Fund(1)
Dreyfus Aggressive Growth Fund(2) $155,531
Dreyfus Aggressive Value Fund(2) $136,272
Dreyfus Emerging Leaders Fund(2) $105,963
Dreyfus International Value $ 23,028
Fund(2)
Dreyfus Midcap Value Fund(2) $ 99,998
Dreyfus Technology Growth Fund(3) $ 8,223
- -----------------------------------------
(1) Fiscal year ended October 31, 1997.
(2) Fiscal year ended August 31, 1997.
(3) For period October 13, 1997 (Commencement of operations) through August
31, 1998.
The Bank of New York, 90 Washington Street, New York, New York 10286,
acts as custodian for the investments of Dreyfus International Value Fund.
The Bank of New York has no part in determining the investment policies of
the Fund or which securities are to be purchased or sold by the Fund.
Mellon Bank, N.A. (the "Custodian"), the Manager's parent, One Mellon Bank
Center, Pittsburgh, Pennsylvania 15258, acts as custodian for the
investments of each Fund, except Dreyfus International Value Fund. Under a
custody agreement with such Funds, the Custodian holds the Fund's securities
and keeps all necessary accounts and records. For its custody services, the
Custodian receives a monthly fee based on the market value of each
respective Fund's assets held in custody and receives certain securities
transaction charges. For the indicated fiscal year end, each Fund (other
than Dreyfus International Value Fund) paid the Custodian the following:
Name of Fund Amount Paid to Custodian
Dreyfus Large Company Value $ 32,356
Fund(1)
Dreyfus Small Company Value $ 32,940
Fund(1)
Dreyfus Aggressive Growth Fund(2) $ 21,512
Dreyfus Aggressive Value Fund(2) $ 31,294
Dreyfus Emerging Leaders Fund(2) $ 18,533
Dreyfus Midcap Value Fund(2) $ 23,738
Dreyfus Technology Growth Fund(3) $ 8,859
- -----------------------------------------
(1) Fiscal year ended October 31, 1997.
(2) Fiscal year ended August 31, 1997.
(3) For period October 13, 1997 (commencement of operations) through August
31, 1998.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be charged a fee
if you effect transactions in Fund shares through a securities dealer, bank
or other financial institution (collectively, "Service Agents"). Stock
certificates are issued only upon your written request. No certificates are
issued for fractional shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different
from those described in the relevant Fund's Prospectus and this Statement of
Additional Information, and, to the extent permitted by Service Agents in
this regard. The Fund reserves the right to reject any purchase order. The
minimum initial investment is $2,500, or $1,000 if you are a client of a
Service Agent which maintains an omnibus account in the Fund and has made an
aggregate minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. However, the minimum initial investment
is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs,
spousal IRAs for a non-working spouse, Roth IRAs, IRAs set up under a
Simplified Pension Plan, SEP-IRAs and rollover IRAs) and 403(b)(7) Plans
with only one participant and $500 for Dreyfus-sponsored Education IRAs,
with no minimum for subsequent purchases. The initial investment must be
accompanied by the Account Application. For full-time or part-time
employees of the Manager or any of its affiliates or subsidiaries, directors
of the Manager, Board members of a fund advised by the Manager, including
members of the Company's Board, or the spouse or minor child of any of the
foregoing, the minimum initial investment is $1,000. For full-time or part-
time employees of the Manager or any of its affiliates or subsidiaries who
elect to have a portion of their pay directly deposited into their Fund
accounts, the minimum initial investment is $50. The Fund reserves the
right to offer Fund shares without regard to minimum purchase requirements
to employees participating in certain qualified or non-qualified employee
benefit plans or other programs where contributions or account information
can be transmitted in a manner and form acceptable to the Fund. The Fund
reserves the right to vary further the initial and subsequent investment
minimum requirements at any time.
Fund shares also are offered without regard to the minimum initial
investment requirements through Dreyfus-Automatic Asset Builderr, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan pursuant
to the Dreyfus Step Program described under "Shareholder Services." These
services enable you to make regularly scheduled investments and may provide
you with a convenient way to invest for long-term financial goals. You
should be aware, however, that periodic investment plans do not guarantee a
profit and will not protect an investor against loss in a declining market.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the
Transfer Agent or other entity authorized to receive orders on behalf of the
Fund. Net asset value per share is determined as of the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for business. For
purposes of determining net asset value, options and futures contracts will
be valued 15 minutes after the close of trading on the floor of the
New York Stock Exchange. Net asset value per share is computed by dividing
the value of the Fund's net assets (i.e., the value of its assets less
liabilities) by the total number of Fund shares outstanding. The Fund's
investments are valued based on market value or, where market quotations are
not readily available, based on fair value as determined in good faith by
the Company's Board. Certain securities may be valued by an independent
pricing service approved by the Company's Board and are valued at fair value
as determined by the pricing service. For further information regarding the
methods employed in valuing the Fund's investments, see "Determination of
Net Asset Value."
For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Fund shares may be transmitted, and
must be received by the Transfer Agent, within three business days after the
order is placed. If such payment is not received within three business days
after the order is placed, the order may be concealed and the institution
could be held liable for resulting fees and/or losses.
Dreyfus TeleTransfer Privilege. You may purchase shares by telephone
if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred between the
bank account designated in one of these documents and your Fund account.
Only a bank account maintained in a domestic financial institution which is
an Automated Clearing House member may be so designated.
Dreyfus TeleTransfer purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any business day that the
Transfer Agent and the New York Stock Exchange are open for business will be
credited to the shareholder's Fund account on the next bank business day
following such purchase order. Purchase orders made after 4:00 p.m., New
York time, on any business day the Transfer Agent and the New York Stock
Exchange are open for business, or orders made on Saturday, Sunday or any
Fund holiday (e.g., when the New York Stock Exchange is not open for
business), will be credited to the shareholder's Fund account on the second
bank business day following such purchase order. To qualify to use the
Dreyfus TeleTransfer Privilege, the initial payment for purchase of shares
must be drawn on, and redemption proceeds paid to, the same bank and account
as are designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and
signature-guaranteed. See "How to Redeem Shares--Dreyfus TeleTransfer
Privilege."
Reopening an Account. You may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
SHAREHOLDER SERVICES PLAN
The Company has adopted a Shareholder Services Plan, pursuant to which
the Company pays the Distributor for the provision of certain services to
each Fund's shareholders a fee at the annual rate of .25 of 1% of the value
of the Fund's average daily net assets. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Company and providing reports and other
information, and services related to the maintenance of such shareholder
accounts. Under the Shareholder Services Plan, the Distributor may make
payments to Service Agents in respect of these services. The Distributor
determines the amounts to be paid to Service Agents.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Board for its review. In addition, the Shareholder
Services Plan provides that material amendments of the Shareholder Services
Plan must be approved by the Board, and by the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Company and have no
direct or indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection with the
Shareholder Services Plan, by vote cast in person at a meeting called for
the purpose of considering such amendments. As to each Fund, the
Shareholder Services Plan is subject to annual approval by such vote of the
Board members cast in person at a meeting called for the purpose of voting
on the Shareholder Services Plan. The Shareholder Services Plan was last so
approved on February 11, 1998. The Shareholder Services Plan is terminable
with respect to each Fund at any time by vote of a majority of the Board
members who are not "interested persons" and who have no direct or indirect
financial interest in the operation of the Shareholder Services Plan or in
any agreements entered into in connection with the Shareholder Services
Plan.
For the fiscal year ended October 31, 1997, the amount charged to each
indicated Fund pursuant to the Shareholder Services Plan was as follows:
Name of Fund Amount Charged
Dreyfus Large Company Value Fund $248,642
Dreyfus Small Company Value Fund $286,787
For the fiscal year ended August 31, 1998, the amount charged to each
indicated Fund pursuant to the Shareholder Services Plan was as follows:
Name of Fund Amount Charged
Dreyfus Aggressive Growth Fund $212,236
Dreyfus Aggressive Value Fund $375,943
Dreyfus Emerging Leaders Fund $340,351
Dreyfus International Value Fund $339,910
Dreyfus Midcap Value Fund $313,836
Dreyfus Technology Growth Fund* $ 20,366
________________________
* For the period October 13, 1997 (commencement of operations) through
August 31, 1998.
HOW TO REDEEM SHARES
Redemption Fee. Each Fund will deduct a redemption fee equal to 1% of
the net asset value of Fund shares redeemed (including redemptions through
the use of the Fund Exchanges service) less than 15 days following the
issuance of such shares. The redemption fee will be deducted from the
redemption proceeds and retained by the Fund and used primarily to offset
the transaction costs that short-term trading imposes on the Fund and its
shareholders. For purposes of calculating the 15-day holding period, the
Fund will employ the "first-in, first-out" method, which assumes that the
shares you are redeeming or exchanging are the ones you have held the
longest.
No redemption fee will be charged on the redemption or exchange of
shares (1) through the Fund's Automatic Withdrawal Plan or Dreyfus
Auto-Exchange Privilege, (2) through accounts that are reflected on the
records of the Transfer Agent as omnibus accounts approved by Dreyfus
Service Corporation, (3) through accounts established by Service Agents
approved by Dreyfus Service Corporation that utilize the National Securities
Clearing Corporation's networking system, or (4) acquired through the
reinvestment of dividends or capital gains distributions. The redemption
fee may be waived, modified or terminated at any time.
Wire Redemption Privilege. By using this Privilege, you authorize the
Transfer Agent to act on wire, telephone or letter redemption instructions
from any person representing himself or herself to be you and reasonably
believed by the Transfer Agent to be genuine. Ordinarily, the Company will
initiate payment for shares redeemed pursuant to this Privilege on the next
business day after receipt by the Transfer Agent of the redemption request
in proper form. Redemption proceeds ($1,000 minimum) will be transferred by
Federal Reserve wire only to the commercial bank account specified by you on
the Account Application or Shareholder Services Form, or to a correspondent
bank if your bank is not a member of the Federal Reserve System. Fees
ordinarily are imposed by such bank and borne by you. Immediate
notification by the correspondent bank to your bank is necessary to avoid a
delay in crediting the funds to your bank account.
If you have access to telegraphic equipment, you may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
If you do not have direct access to telegraphic equipment, you may have
the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171,
toll free. You should advise the operator that the above transmittal code
must be used and should also inform the operator of the Transfer Agent's
answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. You may request by telephone that
redemption proceeds be transferred between your Fund account and your bank
account. Only a bank account maintained in a domestic financial institution
which is an Automated Clearing House member may be designated. Holders of
jointly registered Fund or bank accounts may redeem through the Dreyfus
TeleTransfer Privilege for transfer to their bank account not more than
$250,000 within any 30-day period. You should be aware that if you have
selected the Dreyfus TeleTransfer Privilege, any request for a wire
redemption will be effected as a Dreyfus TeleTransfer transaction through
the Automated Clearing House ("ACH") system unless more prompt transmittal
specifically is requested. Redemption proceeds will be on deposit in your
account at an ACH member bank ordinarily two business days after receipt of
the redemption request. See "How to Buy Shares--Dreyfus TeleTransfer
Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Company has committed itself to pay in cash
all redemption requests by any shareholder of record of a Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value
of such Fund's net assets at the beginning of such period. Such commitment
is irrevocable without the prior approval of the Securities and Exchange
Commission and is a fundamental policy of the Company which may not be
changed without shareholder approval. In the case of requests for
redemption in excess of such amount, the Board reserves the right to make
payments in whole or in part in securities or other assets in case of an
emergency or any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Fund's securities are
valued. If the recipient sold such securities, brokerage charges may be
incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the relevant Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
Fund Exchanges. You may purchase, in exchange for shares of a Fund,
shares of certain other funds managed or administered by the Manager, to the
extent such shares are offered for sale in your state of residence. A 1%
redemption fee will be charged upon an exchange of Fund shares where the
exchange occurs less than 15 days following the issuance of such shares.
Shares of other funds purchased by exchange, will be purchased on the basis
of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a
sales load will be made without a sales load in shares of other
funds that are offered without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and
the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales
load and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, you must notify the
Transfer Agent of the prior ownership of fund shares and your account
number.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this Privilege. By using the
Telephone Exchange Privilege, you authorize the Transfer Agent to act on
telephonic instructions (including over The Dreyfus Touchr automated
telephone system) from any person representing himself or herself to be you
and reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange. No fees currently are charged
shareholders directly in connection with exchanges, although the Company
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal administrative fee in accordance with rules
promulgated by the Securities and Exchange Commission.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits you to purchase, in exchange for shares of a Fund, shares of another
fund in the Dreyfus Family of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value as described above under "Fund Exchanges." Enrollment in or
modification or cancellation of this Privilege is effective three business
days following notification by you. You will be notified if your account
falls below the amount designated to be exchanged under this Privilege. In
this case, your account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible
for this Privilege. Exchanges of IRA shares may be made between IRA
accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between accounts
having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Company reserves the right to
reject any exchange request in whole or in part. The Fund Exchanges service
or Dreyfus Auto-Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.
Dreyfus-Automatic Asset Builderr. Dreyfus-Automatic Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum of $150,000
per transaction) at regular intervals selected by you. Fund shares are
purchased by transferring funds from the bank account designated by you.
Dreyfus Government Direct Deposit Privilege. Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans' military or other payments from the U.S.
Government automatically deposited into your fund account. You may deposit
as much of such payments as you elect.
Dreyfus Payroll Savings Plan. Dreyfus Payroll Savings Plan permits you
to purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon you employer's direct deposit program, you
may have part or all of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House system at each
pay period. To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll department. It is
the sole responsibility of your employer, not the Distributor, the Manager,
the Fund, the Transfer agent or any other person, to arrange for
transactions under the Dreyfus Payroll Savings Plan.
Dreyfus Step Program. Dreyfus Step Program enables you to purchase
Fund shares without regard to the Fund's minimum initial investment
requirements through Dreyfus-Automatic Asset Builderr, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan. To establish a
Dreyfus Step Program account, you must supply the necessary information on
the Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing participation in Dreyfus-Automatic Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the
case may be, as provided under the terms of such Privilege(s). The Fund may
modify or terminate this Program at any time. If you wish to purchase Fund
shares through the Dreyfus Step Program in conjunction with a Dreyfus-
sponsored retirement plan, you may do so only for IRAs, SEP-IRAs and
rollover IRAs.
Dreyfus Dividend Options. Dreyfus Dividend Sweep allows you to invest
automatically your dividends or dividends and capital gain distributions, if
any, from a Fund in shares of another fund in the Dreyfus Family of Funds
of which you are a shareholder. Shares of other funds purchased pursuant to
this privilege will be purchased on the basis of relative net asset value
per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not
charge a sales load may be invested in shares of other funds sold
with a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund that charges a
sales load may be invested in shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds
the maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
Dreyfus Dividend ACH permits you to transfer electronically dividends
or dividends and capital gain distributions, if any, from a Fund to a
designated bank account. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so
designated. Banks may charge a fee for this service.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits you
to request withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis if you have a $5,000 minimum account.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Company or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Corporate Pension/Profit-Sharing and Retirement Plans. The Company
makes available to corporations a variety of prototype pension and profit-
sharing plans, including a 401(k) Salary Reduction Plan. In addition, the
Company makes available Keogh Plans, IRAs (including regular IRAs, spousal
IRAs for a non-working spouse, Roth IRAs, SEP-IRAs, rollover IRAs and
Education IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan
support services also are available. You can obtain details on the various
plans by calling the following numbers toll free: for Keogh Plans, please
call 1-800-358-5566; for IRAs (except SEP-IRAs), please call 1-800-645-6561;
or for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please
call 1-800-322-7880.
If you wish to purchase Fund shares in conjunction with a Keogh Plan, a
403(b)(7) Plan or an IRA, including a SEP-IRA, you may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans may
not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, is
$2,500 with no minimum for subsequent purchases. The minimum initial
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and
rollover IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.
You should read the prototype retirement plan and the appropriate form
of custodial agreement for further details on eligibility, service fees and
tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
Valuation of Portfolio Securities. Each Fund's securities, including
covered call options written by a Fund, are valued at the last sale price on
the securities exchange or national securities market on which such
securities primarily are traded. Securities not listed on an exchange or
national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except in the case of open short positions where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Any assets or liabilities initially expressed in terms of foreign
currency will be translated into U.S. dollars at the midpoint of the New
York interbank market spot exchange rate as quoted on the day of such
translation or, if no such rate is quoted on such date, such other quoted
market exchange rate as may be determined to be appropriate by the Manager.
Forward currency contracts will be valued at the current cost of offsetting
the contract. If a Fund has to obtain prices as of the close of trading on
various exchanges throughout the world, the calculation of net asset value
may not take place contemporaneously with the determination of prices of
certain of the Funds' securities. Short-term investments are carried at
amortized cost, which approximates value. Expenses and fees, including the
management fee and fees pursuant to the Shareholder Services Plan, are
accrued daily and taken into account for the purpose of determining the net
asset value of a Fund's shares.
Restricted securities, as well as securities or other assets for which
recent market quotations are not readily available, or are not valued by a
pricing service approved by the Board, are valued at fair value as
determined in good faith by the Board. The Board will review the method of
valuation on a current basis. In making their good faith valuation of
restricted securities, the Board members generally will take the following
factors into consideration: restricted securities which are, or are
convertible into, securities of the same class of securities for which a
public market exists usually will be valued at market value less the same
percentage discount at which purchased. This discount will be revised
periodically by the Board if the Board members believe that it no longer
reflects the value of the restricted securities. Restricted securities not
of the same class as securities for which a public market exists usually
will be valued initially at cost. Any subsequent adjustment from cost will
be based upon considerations deemed relevant by the Board.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Management of the Company believes that each Fund has qualified for its
most recent fiscal year as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). Each Fund intends
to continue to so qualify if such qualification is in the best interests of
its shareholders. As a regulated investment company, the Fund will pay no
Federal income tax on net investment income and net realized securities
gains to the extent that such income and gains are distributed to
shareholders in accordance with applicable provisions of the Code. To
qualify as a regulated investment company, the Fund must distribute at least
90% of its net income (consisting of net investment income and net
short-term capital gain) to its shareholders and meet certain asset
diversification and other requirements. If a Fund did not qualify as a
regulated investment company, it would be treated for tax purposes as an
ordinary corporation subject to Federal income tax. The term "regulated
investment company" does not imply the supervision of management or
investment practices or policies by any government agency.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest
such dividends or distributions and all future dividends and distributions
payable to you in additional Fund shares at net asset value. No interest
will accrue on amounts represented by uncashed distribution or redemption
checks.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the aggregate net asset value of the shares
below the cost of the investment. Such a dividend or distribution would be
a return of investment in an economic sense, although taxable as stated in
the Fund's Prospectus. In addition, the Code provides that if a shareholder
holds shares of a Fund for six months or less and has received a capital
gain distribution with respect to such shares, any loss incurred on the sale
of such shares will be treated as long-term capital loss to the extent of
the capital gain distribution received.
Depending upon the composition of a Fund's income, the entire amount or
a portion of the dividends paid by such Fund from net investment income may
qualify for the dividends received deduction allowable to qualifying U.S.
corporate shareholders ("dividends received deduction"). In general,
dividend income from a Fund distributed to qualifying corporate shareholders
will be eligible for the dividends received deduction only to the extent
that such Fund's income consists of dividends paid by U.S. corporations.
However, Section 246(c) of the Code provides that if a qualifying corporate
shareholder has disposed of Fund shares held for less than 46 days, which 46
days generally must be during the 90 day period commencing 45 days before
the shares become ex-dividend, and has received a dividend from net
investment income with respect to such shares, the portion designated by the
Fund as qualifying for the dividends received deduction will not be eligible
for such shareholder's dividends received deduction. In addition, the Code
provides other limitations with respect to the ability of a qualifying
corporate shareholder to claim the dividends received deduction in
connection with holding Fund shares.
A Fund may qualify for and may make an election permitted under Section
853 of the Code so that shareholders may be eligible to claim a credit or
deduction on their Federal income tax returns for, and will be required to
treat as part of the amounts distributed to them, their pro rata portion of
qualified taxes paid or incurred by the Fund to foreign countries (which
taxes relate primarily to investment income). A Fund may make an election
under Section 853 of the Code, provided that more than 50% of the value of
the Fund's total assets at the close of the taxable year consists of
securities in foreign corporations, and the Fund satisfies the applicable
distribution provisions of the Code. The foreign tax credit available to
shareholders is subject to certain limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or
loss realized from the disposition of foreign currencies (including foreign
currency denominated bank deposits) and non-U.S. dollar denominated
securities (including debt instruments and certain futures or forward
contracts and options) may be treated as ordinary income or loss under
Section 988 of the futures or Code. In addition, all or a portion of any
gains realized from the sale or other disposition of certain market discount
bonds will be treated as ordinary income under Section 1276 of the Code.
Finally, all or a portion of the gain realized from engaging in "conversion
transactions" may be treated as ordinary income under Section 1258 of the
Code. "Conversion transactions" are defined to include certain forward,
futures, option and straddle transactions, transactions marketed or sold to
produce capital gains, or transactions described in Treasury regulations to
be issued in the future.
Under Section 1256 of the Code, any gain or loss realized by a Fund
from certain financial futures or forward contracts and options transactions
(other than those taxed under Section 988 of the Code) will be treated as
60% long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such contract and option
as well as from closing transactions. In addition, any such contract or
option remaining unexercised at the end of the Fund's taxable year will be
treated as sold for their then fair market value, resulting in additional
gain or loss to such Fund characterized in the manner described above.
Offsetting positions held by a Fund involving certain financial futures
or forward contracts or options transactions may be considered, for tax
purposes, to constitute "straddles." "Straddles" are defined to include
"offsetting positions" in actively traded personal property. The tax
treatment of "straddles" is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, override or modify the provisions of
Sections 1256 and 988 of the Code. As such, all or a portion of any short
or long-term capital gain from certain "straddle" transactions may be
recharacterized to ordinary income.
If a Fund were treated as entering into "straddles" by reason of its
engaging in financial futures or, forward contracts or options transactions,
such "straddles" would be characterized as "mixed straddles" if the futures
or, forward contracts or options transactions comprising a part of such
"straddles" were governed by Section 1256 of the Code. A Fund may make one
or more elections with respect to "mixed straddles." Depending upon which
election is made, if any, the results to the Fund may differ. If no
election is made, to the extent the "straddle" and conversion transaction
rules apply to positions established by the Fund, losses realized by the
Fund will be deferred to the extent of unrealized gain in the offsetting
position. Moreover, as a result of the "straddle" and conversion
transaction rules, short-term capital loss on "straddle" positions may be
recharacterized as long-term capital loss, and long-term capital gain on
"straddle" positions may be treated as short-term capital gains or ordinary
income.
The Taxpayer Relief Act of 1997 included constructive sale provisions
that generally will apply if the Fund either (1) holds an appreciated
financial position with respect to stock, certain debt obligations, or
partnership interests ("appreciated financial position") and then enters
into a short sale, futures or forward contract, or offsetting notional
principal contract (collectively, a "Contract") with respect to the same or
substantially identical property or (2) holds an appreciated financial
position that is a Contract and then acquires property that is the same as,
or substantially identical to, the underlying property. In each instance,
with certain exceptions, the Fund generally will be taxed as if the
appreciated financial position were sold at its fair market value on the
date the Fund enters into the financial position or acquires the property,
respectively. Transactions that are identified hedging or straddle
transactions under other provisions of the Code can be subject to the
constructive sale provisions.
If a Fund invests in an entity that is classified as a "passive foreign
investment company" ("PFIC") for Federal income tax purposes, the operation
of certain provisions of the Code applying to PFICs could result in the
imposition of certain Federal income taxes on the Fund. In addition, gain
realized from the sale or other disposition of PFIC securities held beyond
the end of the Fund's taxable year may be treated as ordinary income under
Section 1291 of the Code and, with respect to PFIC securities that are
marked-to-market, under Section 1296 of the Code.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing orders on behalf
of the Company for the purchase or sale of portfolio securities. Allocation
of brokerage transactions, including their frequency, is made in the best
judgment of the Manager and in a manner deemed fair and reasonable to
shareholders. The primary consideration is prompt execution of orders at
the most favorable net price. Subject to this consideration, the brokers
selected will include those that supplement the Manager's research
facilities with statistical data, investment information, economic facts and
opinions. Information so received is in addition to and not in lieu of
services required to be performed by the Manager and the Manager's fees are
not reduced as a consequence of the receipt of such supplemental
information. Such information may be useful to the Manager in serving both
the Company and other funds which it advises and, conversely, supplemental
information obtained by the placement of business of other clients may be
useful to the Manager in carrying out its obligations to the Company.
Sales by a broker of shares of a Fund or other funds advised by the
manager or its affiliates may be taken into consideration, and brokers also
will be selected because of their ability to handle special executions such
as are involved in large block trades or broad distributions, provided the
primary consideration is met. Large block trades may, in certain cases,
result from two or more funds advised or administered by the Manager being
engaged simultaneously in the purchase or sale of the same security.
Certain of the Funds' transactions in securities of foreign issuers may not
benefit from the negotiated commission rates available to the Funds for
transactions in securities of domestic issuers. When transactions are
executed in the over-the-counter market, each Fund will deal with the
primary market makers unless a more favorable price or execution otherwise
is obtainable. Foreign exchange transactions are made with banks or
institutions in the interbank market at prices reflecting a mark-up or mark-
down and/or commission.
Portfolio turnover may vary from year to year as well as within a year.
In periods in which extraordinary market conditions prevail, the Manager
will not be deterred from changing a Fund's investment strategy as rapidly
as needed, in which case higher turnover rates can be anticipated which
would result in greater brokerage expenses. The overall reasonableness of
brokerage commissions paid is evaluated by the Manager based upon its
knowledge of available information as to the general level of commissions
paid by other institutional investors for comparable services.
For the fiscal years ended October 31, 1995, 1996 and 1997, the amounts
paid by the indicated Funds for brokerage commissions, gross spreads and
concessions on principal transactions, none of which was paid to the
Distributor, were as follows:
Name of Fund Brokerage Commissions Paid
1995 1996 1997
Dreyfus Large Company Value Fund $ 52,979 $358,011 $ 584,746
Dreyfus Small Company Value Fund $117,084 $223,341 $1,304,668
________________
For the fiscal years ended August 31, 1996, 1997 and 1998 the amounts
paid by the indicated Funds for brokerage commissions, gross spreads and
concessions on principal transactions, none of which was paid to the
Distributor, were as follows:
Name of Fund
1996(1) 1997 1998
Dreyfus Aggressive $2,840,34 $ $
Growth Fund 0 945,195 536,245
Dreyfus Aggressive $ $ $
Value Fund 375,964 763,570 962,236
Dreyfus Emerging $ $2,104,86 $2,289,60
Leaders Fund 948,862 1 1
Dreyfus International $ $ $
Value Fund 96,586 275,265 340,173
Dreyfus Midcap Value $ $ $
Fund 77,113 408,251 726,775
Dreyfus Technology - - $
Growth Fund 206,639(2
)
__________________________
(1) For the period September 29, 1995 (commencement of operations) through
August 31, 1996.
(2) For the period October 13, 1997 (commencement of operations) through
August 31, 1998.
The aggregate amount of transactions during the last fiscal year in
securities effected on an agency basis through a broker for, among other
things, research services, and the commissions and concessions related to
such transactions were as follows:
Transaction Commissions &
Amount Concessions
Dreyfus Large Company $23,579,063 $ 33,027
Value Fund
Dreyfus Small Company $40,761,630 $107,616
Value Fund
Dreyfus Aggressive Growth $ $ 4,386
Fund 687,068
Dreyfus Aggressive Value $18,382,599 $ 26,370
Fund
Dreyfus Emerging Leaders $ $ 53,508
Fund 7,712,594
Dreyfus Midcap Value Fund $56,245,252 $101,395
Dreyfus International 0 0
Value Fund
The Company contemplates that, consistent with the policy of obtaining
the most favorable net price, brokerage transactions may be conducted
through the Manager or its affiliates, including Dreyfus Investment Services
Corporation ("DISC"). The Company's Board has adopted procedures in
conformity with Rule 17e-1 under the 1940 Act to ensure that all brokerage
commissions paid to the Manager or its affiliates are reasonable and fair.
During the fiscal years ended August 31, 1996 and 1997, Dreyfus
Aggressive Value Fund paid brokerage commissions of $5,943, and $39,084,
respectively, to DISC. During the fiscal year ended August 31, 1997, this
amounted to approximately 9% of the aggregate brokerage commissions paid by
the fund for transactions involving approximately 20% of the aggregate
dollar amount of transactions for which the fund paid brokerage commissions.
During the fiscal years ended October 31, 1995, 1996 and 1997, Dreyfus
Large Company Value Fund paid brokerage commissions of $0, $17,828 and
$47,101, respectively, to DISC. During the fiscal year ended October 31,
1997, this amounted to approximately 10% of the aggregate brokerage
commissions paid by the fund for transactions involving approximately 23% of
the aggregate dollar amount of transactions for which the fund paid
brokerage commissions.
With respect to Dreyfus Small Company Growth Fund, Dreyfus Aggressive
Growth Fund, Dreyfus Aggressive Value Fund, Dreyfus Emerging Leaders Fund,
Dreyfus International Equity Fund and Dreyfus Midcap Value Fund, there were
no brokerage commissions paid to the Manager or its affiliates for their
most current fiscal years.
PERFORMANCE INFORMATION
Performance for each Fund for the period ended August 31, 1998 (October
31, 1997 with respect to Dreyfus Large Company Value Fund and Dreyfus Small
Company Value Fund), (other than Dreyfus Technology Growth Fund which had
commenced operations on October 13, 1997) was as follows:
Average Average
Total Return Annual Annual
Since Total Return Total
Inception Since Return
Inception One Year
Dreyfus Large Company 113.85% 21.89% 25.29%
Value Fund(1)
Dreyfus Small Company 130.00% 24.22% 40.22%
Value Fund(1)
Dreyfus Aggressive 60.45% (12.13%) (57.30%)
Growth Fund(2)
Dreyfus Aggressive 131.14% 24.99% (17.02%)
Value Fund(2)
Dreyfus Midcap Value 97.24% 13.13% (27.32%)
Fund(2)
Dreyfus International 23.17% 7.17% (0.62%)
Value Fund(2)
Dreyfus Emerging 111.03% 24.18% (10.82%)
Leaders Fund(2)
Dreyfus Technology - (3.12%) NA
Growth Fund (3)
_______________________________________
(1) Commencement of operations: December 29, 1993.
(2) Commencement of operations: September 29, 1995.
(3) Commencement of operations: October 13, 1997.
Total return is calculated by subtracting the amount of the Fund's net
asset value per share at the beginning of a stated period from the net asset
value per share at the end of the period (after giving effect to the
reinvestment of dividends and distributions during the period), and dividing
the result by the net asset value per share at the beginning of the period.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result.
From time to time, the Company may compare a Fund's performance against
inflation with the performance of other instruments against inflation, such
as short-term Treasury Bills (which are direct obligations of the U.S.
Government) and FDIC-insured bank money market accounts.
From time to time, advertising materials for each Fund may include
biographical information relating to its portfolio manager, and may refer to
or include commentary by the Fund's portfolio manager relating to investment
strategy, (including "growth" and "value" investing) asset growth, current
or past business, political, economic or financial conditions and other
matters of general interest to investors. In addition, from time to time,
advertising materials for each Fund may include information concerning
retirement and investing for retirement, may refer to the approximate number
of then-current Fund shareholders and may refer to Lipper or Morningstar
ratings and related analysis supporting the ratings. Advertisements for
Dreyfus Emerging Leaders Fund, Dreyfus Small Company Value Fund and Dreyfus
Technology Growth Fund also may discuss the potential benefits and risks of
small cap investing.
INFORMATION ABOUT THE COMPANY AND FUNDS
Each Fund share has one vote and, when-issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Fund shares are of one class and have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Company to hold annual meetings of shareholders. As a
result, Fund shareholders may not consider each year the election of Board
members or the appointment of auditors. However, the holders of at least
10% of the shares outstanding and entitled to vote may require the Company
to hold a special meeting of shareholders for purposes of removing a Board
member from office. Shareholders may remove a Board member by the
affirmative vote of a majority of the Company's outstanding voting shares.
In addition, the Board will call a meeting of shareholders for the purpose
of electing Board members if, at any time, less than a majority of the Board
members then holding office have been elected by shareholders.
The Company is a "series fund," which is a mutual fund dividend into
separate portfolios, each of which is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of
one portfolio is not deemed to be a shareholder of any other portfolio. For
certain matters shareholders vote together as a group; as to others they
vote separately by portfolio.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an
investment company, such as the Company, will not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each series affected by such matter. Rule 18f-2
further provides that a series shall be deemed to be affected by a matter
unless it is clear that the interests of each series in the matter are
identical or that the matter does not affect any interest of such series.
The Rule exempts the selection of independent accountants and the election
of Board members from the separate voting requirements of the Rule.
Each Fund will send annual and semi-annual financial statements to all
its shareholders.
Each Fund is intended to be a long-term investment vehicle and is not
designed to provide investors with a means of speculation on short-term
market movements. A pattern of frequent purchases and exchanges can be
disruptive to efficient portfolio management and, consequently, can be
detrimental to the Fund's performance and its shareholders. Accordingly, if
the Company's management determines that an investor is engaged in excessive
trading, the Company, with or without prior notice, may temporarily or
permanently terminate the availability of Fund Exchanges, or reject in whole
or part any purchase or exchange request, with respect to such investor's
account. Such investors also may be barred from purchasing other funds in
the Dreyfus Family of Funds. Generally, an investor who makes more than
four exchanges out of a Fund during any calendar year or who makes exchanges
that appear to coincide with an active market-timing strategy may be deemed
to be engaged in excessive trading. Accounts under common ownership or
control will be considered as one account for purposes of determining a
pattern of excessive trading. In addition, the Company may refuse or
restrict purchase or exchange requests by any person or group if, in the
judgment of the Company's management, the Fund would be unable to invest the
money effectively in accordance with its investment objective and policies
or could otherwise be adversely affected or if the Fund receives or
anticipated receiving simultaneous orders that may significantly affect the
Fund (e.g., amounts equal to 1% or more of the Fund's total assets). If an
exchange request is refused, the Company will take no other action with
respect to the shares until it receives further instructions from the
investor. A Fund may delay forwarding redemption proceeds for up to seven
days if the investor redeeming shares is engaged in excessive trading or if
the amount of the redemption request otherwise would be disruptive to
efficient portfolio management or would adversely affect the Fund. The
Company's policy on excessive trading applies to investors who invest in a
Fund directly or through financial intermediaries, but does not apply to the
Dreyfus Auto-Exchange Privilege, to any automatic investment or withdrawal
privilege described herein, or to participants in employer-sponsored
retirement plans.
During times of drastic economic or market conditions, the Company may
suspend Fund Exchanges temporarily without notice and treat exchange
requests based on their separate components - redemption orders with a
simultaneous request to purchase the other fund's shares. In such a case,
the redemption request would be processed at the Fund's next determined net
asset value but the purchase order would be effective only at the net asset
value next determined after the fund being purchased receives the proceeds
of the redemption, which may result in the purchase being delayed.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Company, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance of
the shares being sold pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the
Company.
FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT AUDITORS
The Annual Report to Shareholders for the fiscal year ended August 31,
1999 for Dreyfus Aggressive Growth Fund, Dreyfus Aggressive Value Fund,
Dreyfus Emerging Leaders Fund, Dreyfus International Value Fund, Dreyfus
Midcap Value Fund and Dreyfus Technology Growth Fund (for the period October
13, 1997 (commencement of operations) through August 31, 1998, and the
Annual Report to Shareholders for the fiscal year ended October 31, 1997 for
Dreyfus Large Company Value Fund and Dreyfus Small Company Value Fund are
separate documents supplied with this Statement of Additional Information,
and the financial statements, accompanying notes and reports of independent
auditors appearing therein are incorporated by reference into this Statement
of Additional Information.
APPENDIX
Description of certain ratings assigned by S&P, Moody's, Fitch IBCA,
Inc. ("Fitch") and Duff & Phelps Credit Rating Co. ("Duff"):
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated
categories.
BB
Debt rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default
and are dependent upon favorable business, financial and economic conditions
to meet timely payments of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, they are not
likely to have the capacity to pay interest and repay principal.
S&P's letter ratings may be modified by the addition of a plus (+) or a
minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Rating
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. Issues assigned an A rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.
A-3
Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and generally are referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and, therefore, not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and
in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations.
The effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes
in the level of debt protection measurements and the requirements for
relatively high financial leverage. Adequate alternate liquidity is
maintained.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition and
operative performance of the issuer and of any guarantor, as well as the
political and economic environment that might affect the issuer's future
financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations requires
an advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because
of economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection factors
but still considered sufficient for prudent investment. Considerable
variability in risk exists during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial
protection factors fluctuate according to industry conditions or company
fortunes. Overall quality may move up or down frequently within the
category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating
within this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such bonds
may be in default or have considerable uncertainty as to timely payment of
interest, preferred dividends and/or principal. Protection factors are
narrow and risk can be substantial with unfavorable economic or industry
conditions and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol (except AAA)
to indicate the relative position of a credit within the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor.
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* For period October 13, 1997 (commencement of operations) through August
31, 1998.
