Dreyfus Emerging Leaders Fund
Investing in small companies
for capital growth
PROSPECTUS January 1, 1999
As revised, February 15, 1999
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As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
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Contents
THE FUND
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What every investor 2 Goal/Approach
should know about
the fund 3 Main Risk
s
4 Past Performance
5 Expenses
6 Management
7 Financial Highlights
YOUR INVESTMENT
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Information 8 Account Policies
for managing your
fund account 11 Distributions and Taxes
12 Services for Fund Investors
14 Instructions for Regular Accounts
16 Instructions for IRAs
FOR MORE INFORMATION
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Where to learn more Back Cover
about this and other
Dreyfus funds
<PAGE>
The Fund Dreyfus Emerging Leaders Fund
------------------------------- The Fund
Ticker Symbol: DRELX
GOAL/APPROACH
The fund seeks capital growth. To pursue this goal, it invests in companies
Dreyfus believes to be emerging leaders: small companies characterized by new
orinnovative products, services or processes having the pot ential to enhance
earnings growth. The fund invests at least 65% of total assets in companies
withtotal market values of less than $1.5 billion at time of purchase. The
fund's investments may include common stocks, preferred stocks and convertible
securities.
In choosing stocks, the fund uses a blended approach, investing in growth
stocks, value stocks or stocks that exhibit characteristics of both. Using
fundamental research and direct management contact, the portfolio managers seek
stocks with dominant positions in major product lines, sustained achievement
records and strong financial condition. They also seek special situations, such
as corpo rate restructurings or management changes, that could increase the
stockprice. The fund managers use a sector management approach, supervising a
team of sectormanagers who each make buy and sell decisions within their
respective areas of expertise. The fund's sector weightings typically
approximate those of the Russell 2000 Index.
The fund typically sells a stock when the reasons for buying it no longer apply
or when the company begins to show deteriorating fundamentals or poor relative
performance.
INFORMATION ON THE FUND'S RECENT STRATEGIES AND HOLDINGS CAN BE FOUND IN THE
CURRENT ANNUAL/SEMIANNUAL REPORT (SEE BACK COVER).
Concepts to understand
SMALL COMPANIES: new, often entrepreneurial companies. Small companies tend to
grow faster than large-cap companies and are also more volatile than larger
companies and more vulnerable to major setbacks.
GROWTH COMPANIES: companies whose earnings are expected to grow faster than the
overall market. Often, growth stocks have relatively high price-to-earnings and
price-to-book ratios, and tend to be more volatile than value stocks.
VALUE COMPANIES: companies that appear underpriced according to certain
financial measurements (such as price-to-earnings or price-to-book ratios).
Because a stock can remain undervalued for years, value investors often look
forfactors that could trigger a rise in price.
MAIN RISKS
While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the fund will go up
and down, which means that you could lose money.
Small companies carry additional risks because their earnings tend to be less
predictable, their share prices more volatile and their securities less liquid
than larger, more established companies. Some of the fund's investments are
madein anticipation of future products and services that, if delayed, could
cause the stock price to drop.
Investments in growth companies may lack the dividend yield that can cushion
stock prices in market downdrafts. These companies are expected to increase
their earnings at a certain rate. If expectations are not met, investors can
punish the stocks inordinately, even if earnings do increase.
The fund's investments in value stocks are subject to the risk that their
intrinsic values may never be realized by the market, or their prices may go
down. Further, while the fund's investments in value stocks may limit the
overall downside risk of the fund over time, the fund may produce more modest
gains than riskier small-company stock funds as a trade-off for this
potentially lower risk.
Under adverse market conditions, the fund could invest some or all of its
assetsin money market securities. Although the fund would do this only in
seeking to avoid losses, it could have the effect of reducing the benefit from
any ups wing in the market.
Other potential risks
The fund may invest in derivative securities, such as options and futures, and
in foreign currencies. It may also sell short. These practices are used
primarily to hedge the fund's portfolio but may be used to increase returns;
however, such practices sometimes may lower returns or increase volatility.
Derivatives can be illiquid, and a small investment in certain derivatives
couldhave a potentially large impact on the fund's performance.
At times, the fund may engage in short-term trading, which could produce higher
brokerage costs and taxable distributions.
The fund can buy securities with borrowed money (a form of leverage), which
could have the effect of magnifying the fund's gains or losses.
The Fund
<PAGE>
PAST PERFORMANCE
The two tables below show the fund's annual returns and its long-term
performance. The first table shows you how the fund's performance has varied
from year to year. The second compares the fund's performance over time to
thatof the Russell 2000 Index, a widely recognized unmanaged index of small
company stock performance. Both tables assume reinvestment of dividends and
distributions. As with all mutual funds, the past is not a prediction of the
future.
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Year-by-year total return AS OF 12/31 EACH YEAR (%)
BEST QUARTER: Q4 '98 +24.00%
WORST QUARTER: Q3 '98 -17.84%
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Average annual total return AS OF 12/31/98
Inception
1 Year (9/29/95)
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FUND 8.56% 32.33%
RUSSELL 2000 INDEX (2.55%) 11.38%*
* FOR COMPARATIVE PURPOSES, THE VALUE OF THE INDEX ON 9/30/95 IS USED AS THE
BEGINNING VALUE ON 9/29/95.
What this fund is --and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives
toreach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual fund operating expenses are paid out of fund assets,
so their effect is included in the share price. The fund has no sales charge
(load) or 12b-1 distribution fees.
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Fee table
SHAREHOLDER TRANSACTION FEES
OF TRANSACTION AMOUNT
Maximum redemption fee 1.00%
CHARGED ONLY WHEN SELLING SHARES YOU
HAVE OWNED FOR LESS THAN 15 DAYS
Maximum account fee $12
CHARGED ONLY TO REGULAR ACCOUNTS WITH BALANCES
BELOW $2,000 (SEE "ACCOUNT POLICIES")
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ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.90%
Shareholder services fee 0.25%
Other expenses 0.24%
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TOTAL 1.39%
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Expense example
1 Year 3 Years 5 Years 10 Years
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$142 $440 $761 $1,669
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return andexpenses will be different, the example is
for comparison only.
Concepts to understand
MANAGEMENT FEE: the fee paid to the investment adviser for managing the fund's
portfolio and assisting in all aspects of the fund's operations.
SHAREHOLDER SERVICES FEE: a fee of 0.25% paid to the fund's distributor for
shareholder account service and maintenance.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
The Fund
<PAGE>
MANAGEMENT
The investment adviser for the fund is The Dreyfus Corporation, 200 Park
Avenue,New York, New York 10166. Founded in 1947, Dreyfus manages one of the
nation's leading mutual fund complexes, with more than $117 billion in more than
163 mutual fund portfolios. Dreyfus is the mutual fund business of Mellon Bank
Corporation, a broad-based financial services company with a bank at its core.
With more than $350 billion of assets under management and $1.7 trillion of
assets under administration and custody, Mellon provides a full range of
banking, investment and trust products and services to individuals, businesses
and institutions. Its mutual fund companies place Mellon as the leading bank
manager of mutual funds. Mellon is headquartered in Pittsburgh, Pennsylvania.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, the firm
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
with a distinct, stable identity.
Paul Kandel and Hilary Woods have been the fund's primary portfolio managers
since October 1996. Mr. Kandel joined Dreyfus in 1994 as Senior Sector Manager
for the technology and telecommunications industries. For the two years prior
tojoining Dreyfus, Mr. Kandel was a manager at Ark Asset Management. Ms. Woods
joined Dreyfus in 1987 as Senior Sector Manager for the capital goods
industry.
Concepts to understand
YEAR 2000 ISSUES: 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.
Dreyfus is working to avoid year 2000-related problems in its systems 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.
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods indicated.
"Total return" shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends
anddistributions. These figures have been independently audited by Ernst & Young
LLP, whose report, along with the fund's financial statements, is included in
the annual report.
<TABLE>
YEAR ENDED AUGUST 31,
1998 1997 1996(1)
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PER-SHARE DATA ($)
<S> <C> <C> <C>
Net asset value, beginning of period 25.17 18.67 12.50
Investment operations: Investment income (loss) -- net (.16)(2) (.11) .03
Net realized and unrealized gain (loss)
on investments (2.14) 8.02 6.17
Total from investment operations (2.30) 7.91 6.20
Distributions:
Dividends from investment income -- net -- -- (.03)
Dividends from net realized gain
on investments (2.67) (1.41) --
Total distributions (2.67) (1.41) (.03)
Net asset value, end of period 20.20 25.17 18.67
Total return (%) (10.82) 44.45 46.09(3,4)
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RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.39 1.39 1.16(4)
Ratio of net investment income (loss)
to average net assets (%) (.63) (.62) .09(4)
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) -- .09 .36(4)
Portfolio turnover rate (%) 199.08 197.99 203.66(4)
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Net assets, end of period ($ x 1,000) 105,550 104,481 37,206
(1) FROM SEPTEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996.
(2) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(3) CALCULATED BASED ON NET ASSET VALUE ON THE CLOSE OF BUSINESS ON SEPTEMBER
29, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 1996.
(4) NOT ANNUALIZED.
</TABLE>
The Fund
<PAGE>
Your Investment
ACCOUNT POLICIES
Buying shares
You pay no sales charges to invest in this fund. Your price for fund shares is
the fund's net asset value per share (NAV), which is generally calculated as of
the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern
time) every day the exchange is open. Your order will be priced at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. The fund's investments are generally valued based on market
value or, where market quotations are not readily available, based on fair
valueas determined in good faith by the fund's board.
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Minimum investments
Initial Additional
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REGULAR ACCOUNTS $2,500 $100
$500 FOR TELETRANSFER INVESTMENTS
TRADITIONAL IRAS $750 NO MINIMUM
SPOUSAL IRAS $750 NO MINIMUM
ROTH IRAS $750 NO MINIMUM
EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR
DREYFUS AUTOMATIC $100 $100
INVESTMENT PLANS
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
Third-party investments
If you invest through a third party (rather than directly with Dreyfus), the
policies and fees may be different than those described here. Banks, brokers,
401(k) plans, financial advisers and financial supermarkets may charge
transaction fees and may set different minimum investments or limitations on
buying or selling shares.
Consult a represent ative of your plan or financial institution if in doubt.
Selling shares
You may sell shares at any time. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly
andyou will generally receive the proceeds within a week.
Before selling recently purchased shares, please
note that:
(pound) if the fund has not yet collected payment for
the shares you are selling, it may delay sending the
proceeds for up to eight business days or until it
has collected payment
(pound) if you are selling or exchanging shares you have
owned for less than 15 days, the fund may deduct a
1% redemption fee (not charged on shares sold
through the Automatic Withdrawal Plan or Dreyfus
Auto-Exchange Privilege, or on shares acquired
through dividend reinvestment)
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Limitations on
selling shares by phone
Proceeds
sent by Minimum Maximum
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CHECK NO MINIMUM $150,000 PER DAY
WIRE $1,000 $250,000 FOR JOINT ACCOUNTS
EVERY 30 DAYS
TELETRANSFER $500 $250,000 FOR JOINT ACCOUNTS
EVERY 30 DAYS
Written sell orders
Some circumstances require written sell orders along with
signature guarantees.
These include:
(pound) amounts of $1,000 or more on accounts whose address has been
changed within the last 30 days
(pound) requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
Your Investment
<PAGE>
ACCOUNT POLICIES (CONTINUED)
General policies
Unless you decline telephone privileges on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
The fund reserves the right to:
(pound) refuse any purchase or exchange request that could adversely
affect the fund or its operations, including those from any
individual or group who, in the fund's view, is likely to
engage in excessive trading (usually defined as more than
four exchanges out of the fund within a calendar year)
(pound) refuse any purchase or exchange request in excess o f1% of
the fund's total assets
(pound) change or discontinue its exchange privilege, or temporarily
suspend this privilege during unusual market conditions
(pound) change its minimum investment amounts
(pound) delay sending out redemption proceeds for up to seven days
(generally applies only in cases of very large redemptions,
excessivetrading or during unusual market conditions)
The fund also reserves the right to make a "redemption in kind"
--payment in portfolio securities rather than cash -- if the
amount you are redeeming is large enough to affect fund
operations (for example, if it represents more than 1% of the
fund's assets).
Small account policies
To offset the relatively higher costs of servicing smaller accounts, the fund
charges regular accounts with balances below $2,000 an annual fee of $12. The
fee will be imposed during the fourth quarter of each calendar year.
The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; IRA accounts; accounts participating in
automatic investment programs; and accounts opened through a financial
institution.
If your account falls below $500, the fund may ask you to increase your
balance.If it is still below $500 after 45 days, the fund may close your account
and send you the proceeds.
DISTRIBUTIONS AND TAXES
The fund usually pays its shareholders dividends from its net investment
income,and distributes any net capital gains that it has realized once a year.
Your distributions will be reinvested in the fund unless you instruct the
fund otherwise. There are no fees or sales charges on reinvestments. Fund
dividends and distributions are taxable to most investors (unless your
investment is in an IRA or other tax-advantaged account). The tax status of any
distribution is the same regardless of how long you have been in the fund and
whether you reinvest your distributions or take them in cash. In general,
distributions are taxable as follows:
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Taxability of distributions
Type of Tax rate for Tax rate for
distribution 15% bracket 28% bracket or above
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INCOME ORDINARY ORDINARY
DIVIDENDS INCOME RATE INCOME RATE
SHORT-TERM ORDINARY ORDINARY
CAPITAL GAINS INCOME RATE INCOME RATE
LONG-TERM
CAPITAL GAINS 10% 20%
The tax status of your dividends and distributions will be detailed in your
annual tax statement from the fund.
Because everyone's tax situation is unique, always consult your tax
professionalabout federal, state and local tax consequences.
Taxes on transactions
Except for tax-deferred accounts, any sale or exchange of fund shares may
generate a tax liability.
The table at right also can provide a guide for your potential tax liability
when selling or exchanging fund shares. "Short-term capital gains" applies to
fund shares sold up to 12 months after buying them. "Long-term capital gains"
applies to shares sold after 12 months.
Your Investment
<PAGE>
SERVICES FOR FUND INVESTORS
Automatic services
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application or by
calling 1-800-645-6561.
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For investing
DREYFUS AUTOMATIC For making automatic investments
ASSET BUILDER((reg.tm)) from a designated bank account.
DREYFUS PAYROLL For making automatic investments
SAVINGS PLAN through a payroll deduction.
DREYFUS GOVERNMENT For making automatic investments
DIRECT DEPOSIT from your federal employment,
PRIVILEGE Social Security or other regular
federal government check.
DREYFUS DIVIDEND For automatically reinvesting the
SWEEP dividends and distributions from
one Dreyfus fund into another
(not available for IRAs).
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For exchanging shares
DREYFUS For making regular exchanges
AUTO- from one Dreyfus fund into
EXCHANGE PRIVILEGE another.
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For selling shares
DREYFUS AUTOMATIC For making regular withdrawals
WITHDRAWAL PLAN from most Dreyfus funds.
Dreyfus Financial Centers
Through a nationwide network of Dreyfus Financial Centers, Dreyfus offers a
fullarray of investment services and products. This includes information on
mutual funds, brokerage services, tax-advantaged products and retirement
planning. Our experienced financial consultants can help you m ake informed
choices and provide you with personalized attention in handling account
transactions. The Financial Centers also offer informative seminars and events.
To find the Financial Center nearest you, call 1-800-499-3327.
Exchange privilege
You can exchange $500 or more from one Dreyfus fund into another (no minimum
forretirement accounts). You can request your exchange in writing or by phone.
Be sure to read the current prospectus for any fund into which you are
exchanging. Any new account established through an exchange will have the same
privileges asyour original account (as long as they are available). There is
currently no feefor exchanges, although you may be charged a sales load when
exchanging into anyfund that has one.
Dreyfus TeleTransfer privilege
To move money between your bank account and your Dreyfus fund account with a
phone call, use the Dreyfus TeleTransfer privilege. You can set up TeleTransfer
on your account by providing bank account information and following the
instructions on your application.
The Dreyfus Touch((reg.tm))
For 24-hour automated account access, use Dreyfus Touch. With a touch-tone
phone, you can easily manage your Dreyfus accounts, obtain information on other
Dreyfus mutual funds and get current stock market quotes.
Retirement plans
Dreyfus offers a variety of retirement plans, including traditional, Roth and
Education IRAs. Here's where you call for information:
(pound) for traditional, rollover, Roth and Education IRAs, call
1-800-645-656
(pound) for SEP-IRAs, Keogh accounts, 401(k) and 403(b)
accounts, call 1-800-358-0910
Your Investment
<PAGE>
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
In Writing
Complete the application.
Mail your application and a check to:
The Dreyfus Family of Funds
P.O. Box 9387, Providence, RI 02940-9387
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to:
The Dreyfus Family of Funds
P.O. Box 105, Newark, NJ 07101-0105
By Telephone
WIRE Have your bank send your
investment to The Bank of New York,
with these instructions:
* DDA# 8900279664
* the fund name
* your Social Security or tax ID number
* name(s) of investor(s)
Call us to obtain an account number.
Return your application.
WIRE Have your bank send your
investment to The Bank of New York,
with these instructions:
* DDA# 8900279664
* the fund name
* your account number
* name(s) of investor(s)
ELECTRONIC CHECK Same as wire, but insert
"1111" before your account number and add
ABA# 021000018
TELETRANSFER Request TeleTransfer on your
application. Call us to request your transaction.
Automatically
WITH AN INITIAL INVESTMENT Indicate on your application which automatic
service(s) you want. Return your application with your investment.
WITHOUT ANY INITIAL INVESTMENT Check the Dreyfus Step Program option on
yourapplication. Return your application, then complete the additional
materials when they are sent to you.
ALL SERVICES Call us to request a form to add any automatic investing service
(see "Services for Fund Investors"). Complete and return the forms along with
any other required materials.
Via the Internet
COMPUTER Visit the Dreyfus Web site http://www.dreyfus.com and follow the
instructions to download an account application.
TO SELL SHARES
Write a letter of instruction that includes:
* your name(s) and signature(s)
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see
"Account Policies -- Selling Shares").
Mail your request to:
The Dreyfus Family of Funds
P.O. Box 9671, Providence, RI02940-9671
WIRE Be sure the fund has your bank account information on file. Call us to
request your transaction. Proceeds will be wired to your bank.
TELETRANSFER Be sure the fund has your bank account information on file. Call
us to request your transaction. Proceeds will be sent to your bank by
electroniccheck.
CHECK Call us to request your transaction. A check will be sent to the address
of record.
DREYFUS AUTOMATIC WITHDRAWAL PLAN Call us to request a form to add the plan.
Complete the form, specifying the amount and frequency of withdrawals you would
like.
Be sure to maintain an account balance of $5,000 or more.
To reach Dreyfus, call toll free in the U.S.
1-800-645-6561
Outside the U.S. 516-794-5452
Make checks payable to:
THE DREYFUS FAMILY OF FUNDS
You also can deliver requests to any Dreyfus Financial Center. Because
processing time may vary, please ask the representative when your account will
be credited or debited.
Concepts to understand
WIRE TRANSFER: for transferring money from one financial institution to
another.Wiring is the fastest way to move money, although your bank may charge a
fee to send or receive wire transfers. Wire redemptions from the fund are
subject to a $1,000 minimum.
ELECTRONIC CHECK: for transferring money out of a bank account. Your
transactionis entered electronically, but may take up to eight business days to
clear. Electronic checks usually are available without a fee at all
Automated Clearing House (ACH) banks.
Your Investment
<PAGE>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
In Writing
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427, Providence, RI 02940-6427
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your
check. Indicate the year the contribution is for.
Mail in the slip and the check (see "To Open an Account" at left).
By Telephone
WIRE Have your bank send your investment to The Bank of New York,
with these instructions:
* DDA# 8900279664
* the fund name
* your account number
* nameof investor
* the contribution year
ELECTRONIC CHECK Same as wire, but insert "1111" before your
account number andadd ABA# 021000018
TELEPHONE CONTRIBUTION Call to request us to move money from a regular
Dreyfus account to an IRA (both accounts must have the same shareholder
name).
Automatically
WITHOUT ANY INITIAL INVESTMENT Call us to request a Dreyfus Step Program
form. Complete and return the form along with your application.
ALL SERVICES Call us to request a form to add an automatic investing
service (see "Services for Fund Investors"). Complete and return the
form along with anyother required materials.
All contributions will count as current year.
Via the Internet
COMPUTER
Visit the Dreyfus Web site http://www.dreyfus.com and follow
the instructions to download an account application.
TO SELL SHARES
Write a letter of instruction that includes:
* your name and signature
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
* whether the distribution is qualified or premature
* whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required.
Mail in your request (see "To Open an Account" at left).
DREYFUS AUTOMATIC WITHDRAWAL PLAN Call us to request instructions to
establish the plan.
To reach Dreyfus, call toll
free in the U.S.
1-800-645-6561
Outside the U.S. 516-794-5452
Make checks payable to:
THE DREYFUS TRUST CO.,
CUSTODIAN
You also can deliver requests to any Dreyfus Financial Center. Because
processing time may vary, please ask the representative when your account
will be credited or debited.
Concept s to understand
WIRE TRANSFER: for transferring money from one financial institution to
another. Wiring is the fastest way to move money, although your bank may
charge a fee to send or receive wire transfers. Wire redemptions from
the fund are subject to a $1,000 minimum.
ELECTRONIC CHECK: for transferring money out of a bank account. Your
transactionis entered electronically, but may take up to eight business
days to clear. Electronic checks usually are available without a fee
at all Automated Clearing House (ACH) banks.
Your Investment
For More Information
Dreyfus Emerging Leaders Fund
A Series of The Dreyfus Growth and
Value Funds, Inc.
----------------------------
SEC file number: 811-7123
More information on this fund is available free
upon request, including the following:
Annual/Semiannual Report
Describes the fund's performance, lists portfolio
holdings and contains a letter from the fund's
manager discussing recent market conditions, economic
trends and fund strategies that significantly affected
the fund's performance during the last fiscal year.
Statement of Additional Information (SAI)
Provides more details about the fund and its policies.
A current SAI is on file with the Securities and Exchange
Commission (SEC) and is incorporated by reference (is
legally considered part of this prospectus).
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Text-only
versions of fund documents
can be viewed online or
downloaded from:
SEC
http://www.sec.gov
DREYFUS
http://www.dreyfus.com
You can also obtain copies by
visiting the SEC's Public
Reference Room in Washington, DC
(phone 1-800-SEC-0330) or by
sending your request and a
plicating fee to the SEC's Public
Reference Section, Washington,
DC 20549-6009.
(c) 1999, Dreyfus Service Corporation
259P0199
<PAGE>
____________________________________________________________________________
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
STATEMENT OF ADDITIONAL INFORMATION
JANUARY 1, 1999
(as revised, February 15, 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 and Dreyfus Midcap
Value Fund, each dated January 1, 1999, Dreyfus Emerging Leaders Fund dated
January 1, 1999, as revised, February 15, 1999, Dreyfus Large Company Value
Fund, dated June 1, 1998, and Dreyfus Small Company Value Fund dated March
1, 1999 (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 into this Statement of Additional Information.
TABLE OF CONTENTS
Page
Description of the Company and Funds B-3
Management of the Company B-14
Management Arrangements B-19
How to Buy Shares B-24
Shareholder Services Plan B-26
How to Redeem Shares B-27
Shareholder Services B-29
Determination of Net Asset Value B-33
Dividends, Distributions and Taxes B-34
Portfolio Transactions B-37
Performance Information B-39
Information About the Company and Funds B-40
Financial Statements and Reports of Independent Auditors B-42
Appendix B-43
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, the 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. The 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 a 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 Borse
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, Dreyfus
Small Company Value Fund and Dreyfus Technology Growth 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. In connection with its securities lending transactions, a Fund may
return to the borrower or a third party which is unaffiliated with the Fund,
and which is acting as a "placing broker", a part of the interest earned
from the investment of collateral received for securities loaned.
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 investment 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, Inc.), 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 October 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 $ 8,000 $129,375 (27)
John M. Fraser, Jr. $ 8,000 $ 76,750 (12)
Ehud Houminer $ 7,000 $ 68,250 (12)
Gloria Messinger $ 8,500 $ 26,000 (1)
Jack R. Meyer $ 7,500 $ 22,000 (4)
John Szarkowski $ 8,000 $ 23,500 (4)
Anne Wexler $ 7,500 $ 65,625 (16)
_____________________________
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $2,575 for all Board members as a group.
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.
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.
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.
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.
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.
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.
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.
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, where she held various sales positions and marketing positions.
She is 36 years old.
The address of each officer of the Company is 200 Park Avenue, New
York, New York 10166, except those officers indicated by an (*), whose
address 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 November 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 November 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. ....................................11.3384%
101 Montgomery Street
San Francisco, CA 94104-4122
Dreyfus Small Company Value Fund
Charles Schwab & Co. Inc......................................16.4235%
101 Montgomery Street
San Francisco, CA 94104-4122
Citibank, NA..................................................11.5612%
111 Wall Street
New York, New York 10005-3509
Boston Safe Deposit & Trust Company............................ 9.9007%
1 Cabot Road
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; J. David Officer, Vice
Chairman and a director; Ronald P. O'Hanley III, Vice Chairman; 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 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, 1996, 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:
<TABLE>
Name of Fund Management Fee Payable Reduction in Fee Net Fee Paid_
1996 1997 1998 1996 1997 1998 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dreyfus Large $134,679 $745,927 $1,196,867 $56,640 $54,892 $0 $78,039 $691,035 $1,196,867
Company Value Fund
Dreyfus Small $70,529 $860,360 $3,078,535 $38,175 $51,774 $0 $32,354 $808,586 $3,078,535
Company Value Fund
</TABLE>
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:
<TABLE>
Name of Fund Management Fee Payable Reduction in Fee Net Fee Paid_
1996 1997 1998 1996 1997 1998 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dreyfus Aggressive
Growth Fund $352,634 $852,091 $636,709 $86,505 $106,990 $247,049 $266,129 $745,101 $389,660
Dreyfus Aggressive $ 43,706 $550,479 $1,127,829 $39,945 $ 99,235 $0 $ 3,761 $451,244 $1,127,829
Value Fund
Dreyfus International $122,121 $567,130 $1,359,639 $67,691 $ 18,565 $0 $ 54,430 $548,565 $1,359,639
Value Fund
Dreyfus Emerging $205,324 $665,291 $1,225,265 $89,685 $ 64,125 $0 $115,639 $601,166 $1,225,265
Leaders Fund
Dreyfus Midcap Value $ 19,408 $188,561 $ 941,508 $19,408 $ 66,302 $0 $0 $122,259 $ 941,508
Fund
Dreyfus Technology - - $ 61,098 - - $61,098 - - $0
___________________________
* For period October 13, 1997 (commencement of operations) through August
31, 1998.
</TABLE>
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.
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 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 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 Fund(1) $135,763
Dreyfus Small Company Value Fund(1) $280,533
Dreyfus Aggressive Growth Fund(2) $155,531
Dreyfus Aggressive Value Fund(2) $136,272
Dreyfus Emerging Leaders Fund(2) $105,963
Dreyfus International Value Fund(2) $ 23,028
Dreyfus Midcap Value Fund(2) $ 99,998
Dreyfus Technology Growth Fund(3) $ 8,223
- -----------------------------------------
(1) Fiscal year ended October 31, 1998.
(2) Fiscal year ended August 31, 1998.
(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 Fund(1) $ 20,765
Dreyfus Small Company Value Fund(1) $ 81,585
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, 1998.
(2) Fiscal year ended August 31, 1998.
(3) For period October 13, 1997 (commencement of operations) through August
31, 1998.
HOW TO BUY SHARES
General. 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.
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 Employee 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.
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.
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 each 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, 1998, 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 $398,956
Dreyfus Small Company Value Fund $1,026,178
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, 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 Brokerage Commissions
Paid
1996 1997 1998
Dreyfus Large Company Value Fund $358,011 $ 584,746 $ 912,073
Dreyfus Small Company Value Fund $223,341 $1,304,668 $1,870,438
________________
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 Growth Fun $2,840,340 $ 945,195 $ 536,245
Dreyfus Aggressive Value Fund $ 375,964 $ 763,570 $ 962,236
Dreyfus Emerging Leaders Fund $ 948,862 $2,104,861 $2,289,601
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 Value Fund $58,857,362 $ 67,075
Dreyfus Aggressive Growth Fund $ 1,442,981 $ 6,140
Dreyfus Aggressive Value Fund $59,461,491 $ 67,802
Dreyfus Emerging Leaders $22,144,136 $ 66,038
Dreyfus International Value Fund 0 0
Dreyfus Technology Growth Fund $ 4,898,260 $ 5,302
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, 1996 and 1997, Dreyfus Large
Company Value Fund paid brokerage commissions of $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 Large Company Growth Fund, Dreyfus Small
Company Growth Fund, Dreyfus Aggressive Growth Fund, Dreyfus Aggressive
Value Fund, Dreyfus Midcap Value Fund, Dreyfus International Equity Fund,
Dreyfus Emerging Leaders Fund and Dreyfus Technology Growth 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, 1998 with respect to Dreyfus Large Company Value Fund and Dreyfus Small
Company Value Fund), was as follows:
Average Average
Total Return Annual Annual
Since Total Return Total
Inception Since Return
Inception One Year
Dreyfus Large Company Value Fund(1) 124.19% 18.15% 4.83
Dreyfus Small Company Value Fund(1) 82.10% 13.18% (20.83%)
Dreyfus Aggressive Growth Fund(2) 60.45% (12.13%) (57.30%)
Dreyfus Aggressive Value Fund(2) 131.14% 24.99% (17.02%)
Dreyfus Midcap Value Fund(2) 97.24% 13.13% (27.32%)
Dreyfus International Value Fund(2) 23.17% 7.17% (0.62%)
Dreyfus Emerging Leaders Fund(2) 111.03% 24.18% (10.82%)
Dreyfus Technology Growth Fund (3) - (3.12%) -
_______________________________________
(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,
1998 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, and the Annual Report
to Shareholders for the fiscal year ended October 31, 1998 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.
