DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder,
For the 12-month period ended August 31, 1998, the Dreyfus International Value
Fund generated a negative return of -.62%* while the Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE) Index was down 0.14%.**
The Fund lagged the index by a small margin as value investing proved to be
difficult in 1998. Much like here in the U.S., value stocks lagged the markets
in Continental Europe and the UK. In Japan, value stocks fared better than the
overall market but by a lesser margin than last year.
However, absolute returns remained high in Europe with most major markets
registering double digit returns. Markets in Asia were weak across the board and
offset the positive returns in Europe. Japan, the largest foreign market at the
start of the year, declined over 30% since last August (in U.S. terms). As of
August 1998, the market capitalization of Japan was smaller than that of the UK
even though its Gross Domestic Product (GDP) is more than three times larger.
The strategy followed by your Fund was to be well diversified by country and
industry sectors. The focus was on stocks which we believe were undervalued
relative to their home markets. We steered away from the trouble-plagued banking
sector in Japan even though valuations declined dramatically during the past two
years. Our exposure in Japan was heavily weighted toward global companies able,
in our opinion, to compete successfully in the world marketplace. These firms
have been less affected by the slow recovery in Japan and have benefitted from
the weakness in the Japanese yen. In terms of country weightings the Fund was
slightly overweighted in Continental Europe and underweighted in the UK.
Exposure to emerging markets was limited to less than 2% of the portfolio.
Economic and Market Environment
Economies worldwide, with the exception of Japan and emerging nations,
continued to grow at a moderate pace. Inflation in the developed world has been
under control and interest rates have been stable or even declining. Generally
stock prices react favorably in this kind of environment. Markets in Continental
Europe extended their gains further during the past year. The Spanish market
rose 33% (in U.S. dollars) during the past 12 months following a 41% gain in the
prior year. Germany, the dominant economic power in Europe, saw its stock market
rise 26% following a 22% gain the prior year. With the exception of the Japanese
yen, which declined by 15%, currencies had a much lesser impact on returns than
in the previous year.
Stock markets worldwide weakened in August as economic problems in developing
countries worsened. In August, the last month of the Fund's fiscal year, the
EAFE Index declined by more than 12%. Weakness developed even though economic
statistics in industrialized countries remained favorable.
Among the major concerns for investors today are the following:
<PAGE>
*Persistent weak economic conditions in Japan and lack of decisive action by
their politicians. The necessary measures to get the economy moving forward will
be painful but necessary. The first step for Japan is to get its banking system
in order, but political bickering about who should pay the tab is delaying this
process. We believe that eventually Japan will implement the necessary measures
and the country will recover from its most serious economic downturn since World
War II. The problems in Japan are largely reflected in its stock market. The
Nikkei Index (the most popular measure of stock prices in Japan) closed on
August 31 at 14,107.89, or 64% below the close of December 31, 1989. During this
same time frame, major stock markets in Europe and the U.S. have doubled, and
some even tripled.
*Currency turmoil and weak economic conditions in Asia. After years of rapid
economic growth the "Asian Tigers" fell victim to overexpansion. During the past
year economic conditions in Asia continued to deteriorate. The situation is more
difficult because Japan, the major economic power in the region, is struggling
with its own economic problems.
The slowdown in Asia and the risk of some of its problems spilling over into
Europe and the U.S. have resulted in increased stock market volatility. However,
the slowdown has also had the beneficial impact of lowering inflationary
pressures. Normally, at this point of the economic cycle in the U.S. and Europe,
we would start to see inflationary pressures and that has not been the case this
time.
*Turmoil in Russia. The recent economic and political upheaval in Russia has
rattled the U.S. and European stock markets. Banks and financials have been
hard hit due to concern over loan write-offs. Industrial companies with
major investments in Russia have also been impacted adversely. We believe
that the economic impact of the turmoil in Russia will be limited for
the major industrialized countries. Trade with Russia is still a relatively
small part of world economic activity.
On the positive side, economic growth in Continental Europe is still robust
and inflation and interest rates are even lower than in the U.S. Corporate
restructuring, which has largely run its course in the U.S., is still at an
early stage in Europe. The movement toward European monetary union and lowering
of trade barriers will further enhance efficiency and economic progress.
Even in Japan we are beginning to hear talk of corporate restructuring and
share buybacks. Major Japanese corporations that were satisfied with single
digit returns on equity in exchange for providing lifetime employment are
beginning to talk about redirecting capital to more profitable businesses and
reducing staff in marginal operations.
Portfolio Focus
Our emphasis remains value oriented and the investment theme is to seek
undervalued securities. The average price-earnings ratio of the portfolio is 19
times compared with 24.9 times for the EAFE index, and the price-to-book and
price-to-cash flow ratios are also lower. The Fund is now invested in 22
different countries and is well diversified. The investments are concentrated in
major industrialized countries and exposure to emerging markets, as noted above,
is under 2%.
The major hurdle in 1998 was the underperformance of value stocks in
Continental Europe and the UK. Our country allocation has not changed
significantly over the course of the past year.
<PAGE>
Looking ahead, we will continue to search for securities that are temporarily
undervalued and out of favor, but where earnings momentum is improving. The
universe from which we can select is larger than the U.S. and many opportunities
exist. Value stocks after the recent period of underperformance are even more
compelling today.
Thank you for your continued participation in the Dreyfus International Value
Fund.
Sincerely,
[Sandor Cseh, signature logo]
Sandor Cseh
Portfolio Manager
September 15, 1998
New York, N.Y.
**Total return includes reinvestment of dividends and any capital gains paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE((reg.tm) )) Index is an
unmanaged index composed of a sample of companies representative of the market
structure of European and Pacific Basin countries and includes net dividends
reinvested. The Index is the property of Morgan Stanley & Co. Incorporated.
<PAGE>
DREYFUS INTERNATIONAL VALUE FUND AUGUST 31, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS INTERNATIONAL
VALUE FUND AND THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA, FAR
EAST (EAFE((reg.tm))) INDEX
Dollars
$12,240
Dreyfus International Value Fund
$11,522
Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE((reg.tm))) Index*
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
- -----------------------------------------------------------------------------
One Year Ended From Inception (9/29/95)
August 31, 1998 to August 31, 1998
____________________ ___________________________
(0.62%) 7.17%
- ---------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus International
Value Fund on 9/29/95 (Inception Date) to a $10,000 investment made in the
Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE((reg.tm) )) Index on that date. All dividends and capital gain
distributions are reinvested.
The Fund's performance shown in the line graph takes into account all applicable
fees and expenses. The Morgan Stanley Capital International Europe, Australasia,
Far East (EAFE((reg.tm))) Index, which is the property of Morgan Stanley & Co.
Incorporated, is an unmanaged index composed of a sample of companies
representative of the market structure of European and Pacific Basin countries
and includes net dividends reinvested. The Index does not take into account
charges, fees and other expenses. Further information relating to Fund
performance, including expense reimbursements, if applicable, is contained in
the Financial Highlights section of the Prospectus and elsewhere in this report
<PAGE>
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS AUGUST 31, 1998
Common Stocks--85.0% Shares Value
- ------------------------------------------------------- _____________ ____________
<S> <C> <C>
Argentina--.6% YPF Sociedad Anonima, ADS . . . . . . . . . . . . . . 41,000 $ 907,125
_____________
Australia--1.8% Australia and New Zealand Banking Group . . . . . . . 262,404 1,320,773
Boral . . . . . . . . . . . . . . . . . . . . . . . . 388,562 520,387
Pacific Dunlop . . . . . . . . . . . . . . . . . . . . 633,187 1,099,159
_____________
2,940,319
_____________
Austria--.8% Bank Austria . . . . . . . . . . . . . . . . . . . . . 16,800 923,227
Bank Austria (Participating Certificates) . . . . . . 8,320 426,959
_____________
1,350,186
_____________
Denmark--.7% Jyske Bank . . . . . . . . . . . . . . . . . . . . . . 11,960 1,098,953
_____________
Finland--.7% Kesko . . . . . . . . . . . . . . . . . . . . . . . . 88,550 1,191,879
_____________
France 9.8% ALSTOM, ADS . . . . . . . . . . . . . . . . . . . . . 42,770(a) 1,007,768
Air Liquide . . . . . . . . . . . . . . . . . . . . . 10,588 1,470,756
Bongrain . . . . . . . . . . . . . . . . . . . . . . . 2,278 1,155,227
Danone . . . . . . . . . . . . . . . . . . . . . . . . 5,570 1,518,147
Dexia France . . . . . . . . . . . . . . . . . . . . . 10,200 1,385,719
Elf Aquitaine, ADS . . . . . . . . . . . . . . . . . . 38,700 1,891,463
Guyenne et Gascogne . . . . . . . . . . . . . . . . . 3,588 1,400,878
Michelin . . . . . . . . . . . . . . . . . . . . . . . 25,311 1,188,706
Pechiney . . . . . . . . . . . . . . . . . . . . . . . 22,500 730,792
Societe Generale . . . . . . . . . . . . . . . . . . . 12,925 2,363,153
Thomson CSF . . . . . . . . . . . . . . . . . . . . . 28,104 961,427
Usinor . . . . . . . . . . . . . . . . . . . . . . . . 73,000 783,734
_____________
15,857,770
_____________
Germany--10.1% Bayer . . . . . . . . . . . . . . . . . . . . . . . . 52,500 1,977,750
Deutsche Bank . . . . . . . . . . . . . . . . . . . . 25,200 1,573,118
Deutsche Lufthansa . . . . . . . . . . . . . . . . . . 71,000 1,757,525
GEA . . . . . . . . . . . . . . . . . . . . . . . . . 45,000 1,331,588
Hoechst . . . . . . . . . . . . . . . . . . . . . . . 32,000 1,314,744
KM Europa Metal . . . . . . . . . . . . . . . . . . . 10,400 565,777
Merck . . . . . . . . . . . . . . . . . . . . . . . . 38,000 1,466,113
Siemens . . . . . . . . . . . . . . . . . . . . . . . 40,000 2,606,271
Tarkett Sommer . . . . . . . . . . . . . . . . . . . . 22,000 475,730
VEBA . . . . . . . . . . . . . . . . . . . . . . . . . 53,650 2,713,488
Volkswagen . . . . . . . . . . . . . . . . . . . . . . 9,400 678,268
_____________
16,460,372
_____________
Greece--.4% Hellenic Telecommunication Organization, GDR . . . . . 60,000(b) 660,000
_____________
Hong Kong--1.7% Guoco Group . . . . . . . . . . . . . . . . . . . . . 155,000 93,514
HSBC . . . . . . . . . . . . . . . . . . . . . . . . . 28,805 611,504
Henderson Investment . . . . . . . . . . . . . . . . . 1,517,000 743,935
HongKong Electric . . . . . . . . . . . . . . . . . . 336,000 997,316
Swire Pacific . . . . . . . . . . . . . . . . . . . . 634,500 284,546
_____________
2,730,815
_____________
<PAGE>
</TABLE>
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1998
Common Stocks--85.0% (continued) Shares Value
- ------------------------------------------------------- _____________ ____________
<S> <C> <C>
Italy--2.9% ENI, ADS . . . . . . . . . . . . . . . . . . . . . . . 38,000 $ 1,923,750
Istituto Mobiliare Italiano, ADS . . . . . . . . . . . 15,000 671,250
Telecom Italia . . . . . . . . . . . . . . . . . . . . 440,000 2,189,355
_____________
4,784,355
_____________
Japan--22.4% Canon . . . . . . . . . . . . . . . . . . . . . . . . 92,000 1,871,685
Credit Saison . . . . . . . . . . . . . . . . . . . . 94,200 1,852,897
Dai-Tokyo Fire & Marine Insurance . . . . . . . . . . 311,000 949,619
Fuji Machine Manufacturing . . . . . . . . . . . . . . 51,000 1,586,225
Hitachi . . . . . . . . . . . . . . . . . . . . . . . 165,000 828,368
Honda Motor . . . . . . . . . . . . . . . . . . . . . 45,000 1,552,991
Ito-Yokado . . . . . . . . . . . . . . . . . . . . . . 39,000 1,819,493
Kao . . . . . . . . . . . . . . . . . . . . . . . . . 110,000 1,698,917
Mabuchi Motor . . . . . . . . . . . . . . . . . . . . 35,000 2,363,572
Marubeni . . . . . . . . . . . . . . . . . . . . . . . 520,000 860,358
Matsumotokiyoshi . . . . . . . . . . . . . . . . . . . 38,000 1,214,273
Mikuni Coca-Cola Bottling . . . . . . . . . . . . . . 24,000 403,905
Minebea . . . . . . . . . . . . . . . . . . . . . . . 205,000 2,084,574
Mitsubishi Heavy Industries . . . . . . . . . . . . . 245,000 894,230
Murata Manufacturing . . . . . . . . . . . . . . . . . 63,000 2,084,716
NAMCO . . . . . . . . . . . . . . . . . . . . . . . . 44,500 966,944
Nichiei . . . . . . . . . . . . . . . . . . . . . . . 24,060 1,708,504
Nishimatsu Construction . . . . . . . . . . . . . . . 166,000 766,199
Rinnai . . . . . . . . . . . . . . . . . . . . . . . . 89,000 1,390,378
Rohm . . . . . . . . . . . . . . . . . . . . . . . . . 17,000 1,738,327
Sankyo . . . . . . . . . . . . . . . . . . . . . . . . 46,000 728,421
Sekisui Chemical . . . . . . . . . . . . . . . . . . . 233,000 1,073,793
Sony . . . . . . . . . . . . . . . . . . . . . . . . . 28,000 2,049,921
Toshiba . . . . . . . . . . . . . . . . . . . . . . . 205,000 738,043
Toyota Motor . . . . . . . . . . . . . . . . . . . . . 46,000 983,206
Yamanouchi Pharmaceutical . . . . . . . . . . . . . . 70,000 1,521,036
Yamato Transport . . . . . . . . . . . . . . . . . . . 73,000 793,112
_____________
36,523,707
_____________
Mexico--.3% Telefonos de Mexico, Cl. L, ADS . . . . . . . . . . . 15,000 535,313
_____________
Netherlands--6.6% ABN AMRO . . . . . . . . . . . . . . . . . . . . . . . 100,529 2,280,603
Akzo Nobel, ADS . . . . . . . . . . . . . . . . . . . 34,000 1,343,000
Buhrmann . . . . . . . . . . . . . . . . . . . . . . . 53,600 1,215,971
Hollandsche Beton Groep . . . . . . . . . . . . . . . 74,653 1,215,614
Hunter Douglas . . . . . . . . . . . . . . . . . . . . 41,250 1,709,393
KPN, ADR . . . . . . . . . . . . . . . . . . . . . . . 19,795 791,800
Philips Electronics . . . . . . . . . . . . . . . . . 16,500 988,969
Stork . . . . . . . . . . . . . . . . . . . . . . . . 27,000 762,250
TNT Post Group, ADR . . . . . . . . . . . . . . . . . 19,795 415,695
_____________
10,723,295
_____________
New Zealand--.3% Air New Zealand . . . . . . . . . . . . . . . . . . . 184,000 172,807
Fletcher Challenge Paper . . . . . . . . . . . . . . . 533,580 329,686
_____________
502,493
_____________
<PAGE>
</TABLE>
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1998
Common Stocks--85.0% (continued) Shares Value
- ------------------------------------------------------- _____________ ____________
<S> <C> <C>
Norway--.7% Fred Olsen Energy . . . . . . . . . . . . . . . . . . 63,000(a) $ 599,529
Orkla ASA, Cl. B . . . . . . . . . . . . . . . . . . . 34,000 459,099
_____________
1,058,628
_____________
Peru--.3% Telefonica del Peru, ADS . . . . . . . . . . . . . . . 38,000 489,250
_____________
Portugal--.3% Banco Pinto & Sotto Mayor . . . . . . . . . . . . . . 29,040 557,426
_____________
Singapore--.7% Development Bank of Singapore . . . . . . . . . . . . 320,000 1,109,357
_____________
Spain--5.2% Banco Popular Espanol . . . . . . . . . . . . . . . . 16,260 1,098,663
Corporacion Bancaria de Espana, ADS . . . . . . . . . 38,500 1,410,063
Endesa . . . . . . . . . . . . . . . . . . . . . . . . 108,000 2,057,591
Gas y Electricidad . . . . . . . . . . . . . . . . . . 20,945 1,655,065
Repsol, ADS . . . . . . . . . . . . . . . . . . . . . 50,000 2,196,875
_____________
8,418,257
_____________
Sweden--1.7% Autoliv . . . . . . . . . . . . . . . . . . . . . . . 66,200 2,051,423
Scania AB, Cl. A . . . . . . . . . . . . . . . . . . . 33,250 753,114
_____________
2,804,537
_____________
Switzerland--3.2% Barry Callebaut . . . . . . . . . . . . . . . . . . . 4,001(a) 915,306
Forbo Holding . . . . . . . . . . . . . . . . . . . . 3,070 1,383,363
Sulzer . . . . . . . . . . . . . . . . . . . . . . . . 1,650 907,071
UBS . . . . . . . . . . . . . . . . . . . . . . . . . 6,200 2,007,210
_____________
5,212,950
_____________
United Kingdom--12.5% BTR . . . . . . . . . . . . . . . . . . . . . . . . . 478,104 1,036,610
British Airways . . . . . . . . . . . . . . . . . . . 40,671 306,332
British Airways, ADS . . . . . . . . . . . . . . . . . 8,000 588,000
Bunzl . . . . . . . . . . . . . . . . . . . . . . . . 381,779 1,521,031
Laird Group . . . . . . . . . . . . . . . . . . . . . 240,000 907,863
LucasVarity . . . . . . . . . . . . . . . . . . . . . 556,681 1,979,724
Medeva . . . . . . . . . . . . . . . . . . . . . . . . 285,000 504,382
PowerGen . . . . . . . . . . . . . . . . . . . . . . . 185,123 2,294,919
Rio Tinto . . . . . . . . . . . . . . . . . . . . . . 130,554 1,278,986
Royal & Sun Alliance Insurance Group . . . . . . . . . 214,107 1,803,006
Safeway . . . . . . . . . . . . . . . . . . . . . . . 355,164 1,840,984
Stakis . . . . . . . . . . . . . . . . . . . . . . . . 725,000 1,149,298
Standard Chartered . . . . . . . . . . . . . . . . . . 150,000 1,157,476
Storehouse . . . . . . . . . . . . . . . . . . . . . . 530,510 1,940,048
Tomkins . . . . . . . . . . . . . . . . . . . . . . . 475,798 1,971,433
_____________
20,280,092
_____________
United States--1.3% Pharmacia & Upjohn . . . . . . . . . . . . . . . . . . 52,200 2,169,563
_____________
TOTAL COMMON STOCKS
(cost $151,785,408) . . . . . . . . . . . . . . . $138,366,642
_____________
<PAGE>
</TABLE>
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1998
Preferred Stocks--.5% Shares Value
- ------------------------------------------------------- _____________ _____________
Germany; Rheinmetall
<S> <C> <C>
(cost $605,926) . . . . . . . . . . . . . . . . . 35,200 $ 723,109
_____________
Principal
Short-Term Investments--10.2% Amount
- ------------------------------------------------------------------------------------------ _____________
Cash Management Bills--3.4% 5.46%, 9/15/98 . . . . . . . . . . . . . . . . . . . . $ 5,486,000 $ 5,474,205
_____________
U.S. Treasury Bills--6.8% 4.92%, 9/17/98 . . . . . . . . . . . . . . . . . . . . 86,000 85,803
4.88%, 9/24/98 . . . . . . . . . . . . . . . . . . . . 386,000 384,857
4.89%, 10/1/98 . . . . . . . . . . . . . . . . . . . . 1,140,000 1,135,611
4.90%, 10/8/98 . . . . . . . . . . . . . . . . . . . . 310,000 308,472
4.99%, 10/15/98 . . . . . . . . . . . . . . . . . . . 3,351,000 3,331,296
4.93%, 10/22/98 . . . . . . . . . . . . . . . . . . . 2,550,000 2,532,711
4.96%, 11/5/98 . . . . . . . . . . . . . . . . . . . . 645,000 639,479
4.90%, 11/12/98 . . . . . . . . . . . . . . . . . . . 2,558,000 2,533,290
4.84%, 11/27/98 . . . . . . . . . . . . . . . . . . . 172,000 170,012
_____________
11,121,531
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $16,593,617) . . . . . . . . . . . . . . . . $ 16,595,736
_____________
TOTAL INVESTMENTS (cost $168,984,951). . . . . . . . . . . . . . . . . . . . . . . . . . . 95.7% $155,685,487
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3% $ 7,021,180
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $162,706,667
_______ _____________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
(b)Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At August 31, 1998, this security
amounted to $660,000 or approximately .4% of net assets.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
</TABLE>
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1998
Cost Value
_____________ ____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $168,984,951 $155,685,487
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 60,400
Cash denominated in foreign currencies . . . . . . . . . 5,976,750 5,890,528
Receivable for investment securities sold . . . . . . . . 1,162,622
Dividends receivable . . . . . . . . . . . . . . . . . . 836,423
Net unrealized appreciation on forward currency
exchange contracts--Note 4(a) . . . . . . . . . . . . . 1,098
Receivable for shares of Common Stock subscribed . . . . 1,000
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 13,055
_____________
163,650,613
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 143,928
Due to Distributor . . . . . . . . . . . . . . . . . . . 35,378
Payable for shares of Common Stock redeemed . . . . . . . 501,003
Payable for investment securities purchased . . . . . . . 176,065
Accrued expenses . . . . . . . . . . . . . . . . . . . . 87,572
_____________
943,946
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $162,706,667
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $166,604,435
Accumulated undistributed investment income--net . . . . 1,528,896
Accumulated net realized gain (loss) on investments
and foreign currency transactions . . . . . . . . . . . 7,953,806
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions . . . (13,380,470)
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $162,706,667
_____________
SHARES OUTSTANDING
(100 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 11,221,650
NET ASSET VALUE, offering and redemption price per share--Note 3(d). . . . . . . . . . . . $14.50
_______
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED AUGUST 31, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME: Cash dividends (net of $334,152 foreign taxes
withheld at source) . . . . . . . . . . . . . . . . . . $ 3,024,019
Interest . . . . . . . . . . . . . . . . . . . . . . . . 516,521
___________
Total Income . . . . . . . . . . . . . . . . . . . $ 3,540,540
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . . . . . 1,359,639
Shareholder servicing costs--Note 3(b) . . . . . . . . . 374,609
Custodian fees . . . . . . . . . . . . . . . . . . . . . 109,610
Registration fees . . . . . . . . . . . . . . . . . . . . 54,056
Professional fees . . . . . . . . . . . . . . . . . . . . 32,237
Prospectus and shareholders' reports . . . . . . . . . . 13,550
Directors' fees and expenses--Note 3(c) . . . . . . . . . 6,769
Loan commitment fees--Note 2 . . . . . . . . . . . . . . 605
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 3,013
___________
Total Expenses . . . . . . . . . . . . . . . . . . 1,954,088
___________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,586,452
___________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and foreign
currency transactions . . . . . . . . . . . . . . . . $ 9,252,282
Net realized gain (loss) on forward
currency exchange contracts . . . . . . . . . . . . . (257,648)
___________
Net Realized Gain (Loss) . . . . . . . . . . . . . 8,994,634
Net unrealized appreciation (depreciation) on
investments and foreign currency transactions . . . . (17,114,291)
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . (8,119,657)
___________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . $(6,533,205)
___________
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
August 31, 1998 August 31, 1997
_______________ _______________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,586,452 $ 620,027
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . 8,994,634 2,131,982
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . (17,114,291) 3,810,469
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . (6,533,205) 6,562,478
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (605,725) (290,696)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,990,766) (376,194)
_____________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,596,491) (666,890)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,161,453 89,144,565
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,744,488 522,275
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (102,965,527) (24,304,311)
_____________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . . 75,940,414 65,362,529
_____________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . . 65,810,718 71,258,117
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,895,949 25,637,832
_____________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $162,706,667 $ 96,895,949
_____________ _____________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,528,896 $ 548,169
_____________ _____________
Shares Shares
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,143,833 6,171,987
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . 185,941 38,601
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,545,043) (1,712,155)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . 4,784,731 4,498,433
_____________ _____________
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Year Ended August 31,
______________________________
<S> <C> <C> <C>
PER SHARE DATA: 1998 1997 1996(1)
______ ______ ______
Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . $15.05 $13.23 $12.50
______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 .07 .15
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.20) 1.98 .65
______ ______ ______
Total from Investment Operations . . . . . . . . . . . . . . . . . . . . . . . . . (.07) 2.05 .80
______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . . . . . . . . . . . (.08) (.10) (.04)
Dividends from net realized gain on investments . . . . . . . . . . . . . . . . . . (.40) (.13) (.03)
______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.48) (.23) (.07)
______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . $14.50 $15.05 $13.23
______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.62%) 15.72% 6.43%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . . . . . . . 1.44% 1.49% 1.39%(2)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.17% 1.09% 1.78%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . . . . . . . . . . . . . . . . . . -- .03% .51%(2)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.46% 25.35% 19.14%(2)
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . . . . . . . $162,707 $96,896 $25,638
- -----------------------------
(1) From September 29, 1995 (commencement of operations) to August 31, 1996.
(2) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus International Value Fund (the "Fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering eight series, including the Fund. The Fund's investment objective is
long-term capital growth. The Dreyfus Corporation (the "Manager") serves as the
Fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares, which are sold to the public without a sales charge.
The Company accounts separately for the assets, liabilities and operations of
each fund. Expenses directly attributable to each fund are charged to that
funds' operations; expenses which are applicable to all fund's are allocated
among them on a pro rata basis.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities
of short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Funds' books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains or losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custodian agreement, the Fund received net
earnings credits of $3,942 during the period ended August 31, 1998, based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
<PAGE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(e) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended August
31, 1998, the Fund did not borrow under the Facility.
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of 1% of the value of the Fund's average daily net
assets and is payable monthly.
(b) Under the Shareholder Services Plan, the Fund pays the Distributor at an
annual rate of .25 of 1% of the value of the Fund's average daily net assets for
the provision of certain services. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. The Distributor may
make payments to Service Agents (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
August 31, 1998, the Fund was charged $339,910 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended August 31, 1998, the Fund was charged $23,028 pursuant to the transfer
agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged and retained by the Fund on certain
redemptions of Fund shares (including redemptions through the use of the Fund
Exchanges service) where the redemption or exchange occurs less than fifteen
days following the date of issuance.
NOTE 4--SECURITIES TRANSACTIONS:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts, during
the period ended August 31, 1998, amounted to $96,718,946 and $42,414,827,
respectively.
In addition, the following summarizes open forward currency exchange contracts
at August 31, 1998:
<TABLE>
Foreign
Currency Unrealized
Forward Currency Exchange Contracts Amounts Cost Value Appreciation
_________________________________ _______________ _____________ ____________ ____________
Purchases:
__________
<S> <C> <C> <C> <C>
New Zealand Dollars, expiring 9/2/98 161,432 $78,698 $79,796 $1,098
_______
<PAGE>
</TABLE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund enters into forward currency exchange contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to settle foreign currency transactions. When executing forward
currency exchange contracts, the Fund is obligated to buy or sell a foreign
currency at a specified rate on a certain date in the future. With respect to
sales of forward currency exchange contracts, the Fund would incur a loss if the
value of the contract increases between the date the forward contract is opened
and the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to purchases
of forward currency exchange contracts, the Fund would incur a loss if the value
of the contract decreases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the value
of the contract increases between those dates. The Fund is also exposed to
credit risk associated with counter party nonperformance on these forward
currency exchange contracts which is typically limited to the unrealized gain on
each open contract.
(b) At August 31, 1998, accumulated net unrealized depreciation on investments
and forward currency exchange contracts was $13,298,366, consisting of
$8,914,160 gross unrealized appreciation and $22,212,526 gross unrealized
depreciation.
At August 31, 1998, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
<PAGE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus International Value Fund
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus International Value Fund,
(one of the Series constituting Dreyfus Growth and Value Funds, Inc.) as of
August 31, 1998, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the years indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund' s management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus International Value Fund at August 31, 1998, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with generally accepted accounting
principles.
New York, New York
October 5, 1998
<PAGE>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund elects to provide each
shareholder with their portion of the Fund's foreign taxes paid and the income
sourced from foreign countries. Accordingly, the Fund hereby makes the following
designations regarding its fiscal year ended August 31, 1998:
-- the total amount of taxes paid to foreign countries was $334,152
-- the total amount of income sourced from foreign countries was $2,343,632
As required by Federal tax law rules, shareholders will receive notification
of their proportionate share of foreign taxes paid and foreign sourced income
for the 1998 calendar year with Form 1099-DIV which will be mailed by Janurary
31, 1999.
For Federal tax purposes, the Fund hereby designates $.097 per share as a
long-term capital gain distribution (of which 46.39% is subject to the 20%
maximum Federal tax rate) of the $.475 per share paid on December 18, 1997.
<PAGE>
<PAGE>
[dreyfus lion "d" logo] (reg.tm)
[dreyfus logo] (reg.tm)
DREYFUS INTERNATIONAL VALUE FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 254AR988
International Value
Fund
Annual Report
August 31, 1998
<PAGE>
Dreyfus International Value Fund August 31, 1998
Comparison of change in value of $10,000 investment in Dreyfus International
Value Fund and the Morgan Stanley Capital International Europe, Australia,
Far East (EAFE) Index
EXHIBIT A
Dreyfus Morgan Stanley
International International Europe
Period Value Australia, Far East
Fund (EAFE) Index
- ----------------------------------------------------------------------------
9/29/95 10,000 10,000
8/31/96 10,643 10,580
8/31/97 12,317 11,538
8/31/98 12,240 11,522
- ----------------------------------------------------------------------------
* Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
One Year Ended From Inception (9/29/95)
August 31, 1998 to August 31, 1998
(0.62%) 7,17%
