<PAGE>
Aggressive Growth
Fund
Semi-Annual
Report
February 28, 1999
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by
The Dreyfus Corporation and the fund's other service providers do not
properly process and calculate date-related information from and after
January 1, 2000. The Dreyfus Corporation is working to avoid Year
2000-related problems in its systems and to obtain assurances from other
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.
<PAGE>
Dreyfus Aggressive Growth Fund
- ----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
Dreyfus Aggressive Growth Fund completed its latest semiannual
reporting period ended February 28, 1999. The total return for the six-month
period was 11.92%,* compared with a total return of 30.27% for the broad-
based Standard & Poor's 500 Composite Stock Price Index.**
Dreyfus Aggressive Growth Fund has the flexibility to invest in the
best growth companies, regardless of their size, to pursue its objective of
capital appreciation. During the reporting period, I felt the mid- and
small-cap range showed better relative earnings growth and more attractive
valuations than large caps, and therefore weighted our portfolio toward
these stocks. However, large-cap stocks continued to dominate the market
during the period. In addition, the fund continued its transition from its
previous emphasis on microcap stocks to focus on midcap growth companies.
Although we believe these changes better position the fund going forward,
performance suffered in the interim.
Economic Review
Stresses in the financial system, combined with slowing economic
growth, convinced the Federal Reserve Board to lower short-term interest
rates three times during the fall of 1998: at the end of September, in mid-
October, and in mid-November. As the calendar year ended, the Fed's official
stance toward rates was neutral, since they believed that they had
successfully stabilized the financial system and overall economic growth.
February of 1999 saw the bond market send interest rates higher,
however, as investors worried about an acceleration in economic strength and
the possibility that the Fed might have to reverse itself, and raise rates
to slow economic growth. During February, Fed Chairman Greenspan publicly
worried that the Board had gone too far with its mid-November action, which
in retrospect may not have been needed to stimulate the economy and may have
actually caused some overstimulation. The problem with too much growth is
that it can become uncontrollable and result in price inflation - and
ultimately in a recession.
Inflation, the Fed's other worry, remained well contained throughout
the period. The decline in inflation and the lower interest rates benefited
companies that sell to the consumer, as more income was left over after
price increases to buy goods and services, and the cost of debt was reduced.
Home mortgages could be refinanced at lower rates, thus putting more
discretionary income in consumers' pockets. As consumers spent more,
consumer-oriented companies benefited.
The industrial sector has not been as fortunate. Weak Asian economies
have continued to put a damper on demand in a number of sectors, such as
world-traded commodities (paper producers, for example) and exporters of
goods (some computer equipment manufacturers, for example).
Market Overview
The six months ended February 28, 1999 covered a period of market
volatility, in which stocks declined further from the end of August,
bottomed in early October and recovered thereafter, but with continued
volatility in the last couple of months. Although midcap stocks have been
performing better in recent months, they are still lagging the performance
of larger stocks. Investors' preference for liquidity and the perceived
safety of large caps has helped to drive this differential performance. In
addition, since April, approximately 90% of the fund's assets have been
invested in companies that are new to the fund. Many of these companies are
in the midcap range, which I believe provided buying opportunities due to
the ongoing weakness in the midcap market.
Portfolio Focus
The primary reason for the fund's underperformance relative to the S&P
500 was the fund's emphasis on midcap and small-cap stocks during a period
when large-cap stocks dominated the market.
<PAGE>
In terms of sector allocations, technology stocks, where we were
overweighted, contributed positively to the fund's performance over this
period. These included stocks in areas such as semiconductors, computer
hardware, communications equipment and electronics manufacturing. Many of
these companies have benefited from growth in the Internet and increased
data traffic. Stocks in the drug and biotechnology industries were also
positive contributors. Several biotechnology companies are reaping the
rewards of years of research, have received FDA approval to market their
products and are turning profitable. I also added some consumer growth
issues, such as restaurants and specialty retailers, which were
overweighted. Strong economic growth, low interest rates, rising wages and
stock market gains have led to a high level of consumer confidence. The
fund's performance was also helped by being underweighted in stocks in the
manufacturing and basic materials sectors.
Stocks in a few industries, such as healthcare services, which were
overweighted, hurt the fund's performance. Some healthcare services and
contract research organization stocks suffered disappointments, and although
the long-term prospects for growth may be intact, near term the stocks have
underperformed. I continue to believe that the healthcare industry presents
long-term opportunities to invest in rapidly growing companies, despite the
current negative perception of the group. Some of the fund's service stocks,
which were overweighted, also lagged the market. These included stocks in
environmental services, business services and information technology
services.
We appreciate your investment in Dreyfus Aggressive Growth Fund. Once
the portfolio has been realigned, we are confident that the fund will be
positioned to bring you competitive returns.
Sincerely,
/s/ Paul A. LaRocco
Paul A. LaRocco
Portfolio Manager
March 18, 1999
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
<PAGE>
Dreyfus Aggressive Growth Fund
- ----------------------------------------------------------------------------
Statement of Investments February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks-88.7% Shares Value
- ---------------------------------------------------------------------------- --------------- -------------
<S> <C> <C> <C>
Apparel-1.6% Tommy Hilfiger............................ 7,000 (a) $ 483,438
-------------
Biotechnology-3.4% Amgen..................................... 2,900 (a) 362,137
BioChem Pharma............................ 16,000 (a) 393,000
Biomatrix................................. 4,075 (a) 283,213
-------------
1,038,350
-------------
Business Services-8.2% Affiliated Computer Services, Cl. A....... 7,500 (a) 346,875
Cambridge Technology Partners............. 12,925 (a) 324,741
Fiserv.................................... 11,000 (a) 517,000
IMRglobal................................. 6,900 (a) 125,062
Metzler Group............................. 9,775 (a) 415,438
Sterling Commerce......................... 17,000 (a) 442,000
SunGuard Data Systems..................... 9,000 (a) 356,625
-------------
2,527,741
-------------
Computer Equipment-.9% Maxtor.................................... 11,500 (a) 94,875
Seagate Technology........................ 6,325 (a) 183,030
TSL Holdings.............................. 10 (a) -
-------------
277,905
-------------
Computer Software/
Services-10.2% AXENT Technologies........................ 21,700 (a) 744,581
CSG Systems International................. 6,000 (a) 427,500
Citrix Systems............................ 3,950 (a) 304,644
Electronics for Imaging................... 10,500 (a) 366,844
Network Associates........................ 5,700 (a) 267,900
Newbridge Networks........................ 23,350 (a) 569,156
Symantec.................................. 16,500 (a) 298,031
Verity.................................... 4,950 (a) 191,194
-------------
3,169,850
-------------
Electronics-3.7% Celestica................................. 16,700 (a) 466,556
Jabil Circuit............................. 5,100 (a) 166,388
Read-Rite................................. 13,050 (a) 110,925
Sanmina................................... 8,000 (a) 418,000
-------------
1,161,869
-------------
Environmental Services-2.3% Republic Services, Cl. A.................. 20,500 (a) 357,469
Waste Management.......................... 7,500 366,562
-------------
724,031
-------------
Financial Services-2.7% Associates First Capital, Cl. A........... 13,775 559,609
FINOVA Group.............................. 5,750 292,172
-------------
851,781
-------------
Health Services-8.9% Biogen.................................... 4,000 (a) 384,500
Cardinal Health........................... 3,250 234,609
ChiRex.................................... 22,825 (a) 476,472
PAREXEL International..................... 8,000 (a) 166,500
Pharmaceutical Product Development........ 23,500 (a) 816,625
</TABLE>
<PAGE>
Dreyfus Aggressive Growth Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ---------------------------------------------------------------------------- --------------- -------------
<S> <C> <C> <C>
Health Services (continued) Renal Care Group.......................... 16,500 (a) $ 326,906
Total Renal Care Holdings................. 40,975 (a) 363,653
-------------
2,769,265
-------------
Insurance-.7% Conseco................................... 7,371 220,669
-------------
Leisure & Entertainment-.6% Sunterra.................................. 14,150 (a) 173,338
-------------
Manufacturing-3.1% Tyco International........................ 11,500 856,031
Zomax Optical Media....................... 8,000 (a) 104,250
-------------
960,281
-------------
Medical Supplies-1.7% CONMED.................................... 5,500 (a) 169,813
Sybron International...................... 14,500 (a) 356,156
-------------
525,969
-------------
Mining & Metals-.1% STELAX Industries......................... 81,200 (a) 37,352
-------------
Oil Services-1.0% Halliburton............................... 10,500 296,625
-------------
Pharmaceuticals-6.5% Elan, A.D.S............................... 4,850 (a) 371,934
Medicis Pharmaceuticals, Cl. A............ 18,750 (a) 707,813
Mylan Laboratories........................ 22,000 600,875
Teva Pharmaceuticals, A.D.R............... 8,150 329,566
-------------
2,010,188
-------------
Publishing & Broadcasting-1.1% EchoStar Communications, Cl. A............ 3,525 (a) 172,725
Fox Entertainment Group, Cl. A............ 6,175 (a) 160,550
-------------
333,275
-------------
Restaurants-7.0% CKE Restaurants........................... 27,500 730,469
Dave & Buster's........................... 8,000 (a) 157,500
Outback Steakhouse........................ 18,500 (a) 811,688
Starbucks................................. 8,725 (a) 461,334
-------------
2,160,991
-------------
Retail-10.8% Abercrombie & Fitch, Cl. A................ 8,000 (a) 608,000
Best Buy.................................. 5,300 (a) 491,575
Intellicell (Warrants).................... 76,250 (a) -
Kmart..................................... 12,000 (a) 210,000
Linens' n Things.......................... 23,000 (a) 828,000
Meyer (Fred).............................. 6,000 (a) 385,500
Rental Service............................ 19,675 (a) 437,769
United Rentals............................ 11,962 (a) 385,027
-------------
3,345,871
-------------
Semiconductors &
Equipment-7.0% Applied Materials......................... 6,500 (a) 361,562
Brooks Automation......................... 17,700 (a) 387,188
Maxim Integrated Products................. 4,600 (a) 191,762
SDL....................................... 4,500 (a) 245,250
Uniphase.................................. 5,000 (a) 440,625
Vitesse Semiconductor..................... 12,000 (a) 551,250
-------------
2,177,637
-------------
</TABLE>
<PAGE>
Dreyfus Aggressive Growth Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ---------------------------------------------------------------------------- --------------- -------------
<S> <C> <C> <C>
Telecommunication
Equipment-5.9% ADC Telecommunications.................... 11,125 (a) $ 450,562
ANTEC..................................... 15,725 (a) 438,334
L-3 Communications Holdings............... 8,575 (a) 367,653
Motorola.................................. 8,000 562,000
-------------
1,818,549
-------------
Telecommunication Services-.8% Genesys Telecommunications Laboratories... 6,025 (a) 101,672
SkyTel Communications..................... 8,675 (a) 156,150
-------------
257,822
-------------
Utilities-.5% Montana Power............................. 2,650 161,319
-------------
TOTAL COMMON STOCKS
(cost $26,153,720)...................... $ 27,484,116
-------------
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Short-Term Investments-12.4% Amount
- --------------------------------------------------------------------------------- ------------
<S> <C> <C> <C>
U.S. Treasury Bills: 4.68%, 4/22/99............................ $ 2,113,000 $ 2,097,945
4.36%, 4/29/99............................ 490,000 486,206
4.36%, 5/6/99............................. 192,000 190,353
4.38%, 5/13/99............................ 161,000 159,517
4.54%, 5/20/99............................ 505,000 499,789
4.51%, 5/27/99............................ 404,000 399,444
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,835,365)....................... $ 3,833,254
------------
------------
TOTAL INVESTMENTS (cost $29,989,085)............................................. 101.1% $ 31,317,370
------ ------------
------ ------------
LIABILITIES, LESS CASH AND RECEIVABLES........................................... (1.1%) $ (353,789)
------ ------------
------ ------------
NET ASSETS....................................................................... 100.0% $ 30,963,581
------ ------------
------ ------------
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
<FN>
(a) Non-income producing.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Growth Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
----------- ------------
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments.... $29,989,085 $31,317,370
Cash...................................................... 8,500
Receivable for investment securities sold................. 633,473
Dividends receivable...................................... 1,800
Prepaid expenses.......................................... 10,467
-----------
31,971,610
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates............. 18,548
Due to Distributor........................................ 6,279
Payable for investment securities purchased............... 891,495
Payable for shares of Common Stock redeemed............... 53,022
Accrued expenses.......................................... 38,685
-----------
1,008,029
-----------
NET ASSETS...................................................................... $30,963,581
-----------
-----------
REPRESENTED BY: Paid-in capital.......................................... $96,172,242
Accumulated investment (loss)............................ (111,344)
Accumulated net realized gain (loss) on ................. (66,425,602)
Accumulated net unrealized appreciation investments
(depreciation) on investments-Note 4................... 1,328,285
-----------
NET ASSETS...................................................................... $30,963,581
-----------
-----------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized)................. 3,233,075
NET ASSET VALUE, offering and redemption price per share-Note 3(d).............. $ 9.58
------
------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Growth Fund
- ------------------------------------------------------------------------------
Statement of Operations Six Months Ended February 28, 1999 (Unaudited)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME: Interest................................................ $ 42,252
Cash dividends (net of $222 foreign taxes
withheld at source)................................... 20,715
------------
Total Income....................................... $ 62,967
EXPENSES: Management fee-Note 3(a)................................ 122,599
Legal fees.............................................. 131,817
Shareholder servicing costs-Note 3(b)................... 117,445
Prospectus and shareholders' reports.................... 20,583
Registration fees....................................... 20,332
Auditing fees........................................... 14,346
Directors' fees and expenses-Note 3(c).................. 10,120
Custodian fees-Note 3(b)................................ 7,819
Miscellaneous........................................... 21
------------
Total Expenses..................................... 445,082
Less-expense reimbursement from the Manager
due to undertaking-Note 3(a).......................... (270,771)
------------
Net Expenses..................................... 174,311
-----------
INVESTMENT (LOSS)............................................................. (111,344)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments................. $(24,402,282)
Net unrealized appreciation (depreciation) on investments 28,287,331
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 3,885,049
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $ 3,773,705
-----------
-----------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Growth Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1999 Year Ended
(Unaudited) August 31, 1998
-------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment (loss)........................................................... $ (111,344) $ (807,227)
Net realized gain (loss) on investments..................................... (24,402,282) (32,526,537)
Net unrealized appreciation (depreciation) on investments.................. 28,287,331 (19,139,188)
-------------- --------------
Net Increase (Decrease) in Net Assets Resulting from Operations......... 3,773,705 (52,472,952)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.............................................. 6,180,940 32,766,191
Cost of shares redeemed.................................................... (9,959,425) (80,928,451)
-------------- --------------
Increase (Decrease) in Net Assets from Capital Stock Transactions....... (3,778,485) (48,162,260)
-------------- --------------
Total Increase (Decrease) in Net Assets.............................. (4,780) (100,635,212)
NET ASSETS:
Beginning of Period........................................................ 30,968,361 131,603,573
-------------- --------------
End of Period.............................................................. $ 30,963,581 $ 30,968,361
-------------- --------------
-------------- --------------
Shares Shares
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................ 655,664 1,927,600
Shares redeemed............................................................ (1,038,110) (4,870,650)
-------------- --------------
Net Increase (Decrease) in Shares Outstanding........................... (382,446) (2,943,050)
-------------- --------------
-------------- --------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Growth Fund
- ------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1999 Year Ended August 31,
-------------------------------
PER SHARE DATA: (Unaudited) 1998 1997 1996(1)
----------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period............... $ 8.57 $20.07 $22.71 $12.50
------ ------ ------ ------
Investment Operations:
Investment (loss).................................. (.12) (.16)(2) (.26) (.10)
Net realized and unrealized gain (loss)
on investments................................... 1.13 (11.34) (2.38) 10.31
------ ------ ------ ------
Total from Investment Operations................... 1.01 (11.50) (2.64) 10.21
------ ------ ------ ------
Net asset value, end of period..................... $ 9.58 $ 8.57 $20.07 $22.71
------ ------ ------ ------
------ ------ ------ ------
TOTAL INVESTMENT RETURN............................... 11.92%(3) (57.30%) (11.63%) 81.68%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets.. .53%(3) 1.27% 1.34% 1.16%(3)
Ratio of interest expense and loan commitment fees
to average net assets........................... -- .00%(4) .39% .24%(3)
Ratio of investment (loss) to average net assets... (.34%)(3) (.95%) (1.62%) (1.04%)(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager.............. .82%(3) .29% .09% .17%(3)
Portfolio Turnover Rate............................ 80.85%(3) 86.53% 76.45% 125.17%(3)
Net Assets, end of period (000's Omitted).......... $30,964 $30,968 $131,604 $119,341
- --------------------
<FN>
(1) From September 29, 1995 (commencement of operations) to August 31, 1996.
(2) Based on average shares outstanding at each month end.
(3) Not annualized.
(4) Amount represents less than .01%.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Growth Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1-Significant Accounting Policies:
Dreyfus Aggressive Growth Fund (the "Fund") is a separate diversified
series of Dreyfus Growth and Value Funds, Inc. (the "Company") which is
registered under the Investment Company Act of 1940, as amended (the "Act"),
as an open-end management investment company and operates as a series
company currently offering eight series, including the Fund. The Fund's
investment objective is capital appreciation. The Dreyfus Corporation (the
"Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. ("Mellon"). Premier Mutual Fund Services,
Inc. (the "Distributor") is the distributor of the Fund's shares, which are
sold to the public without a sales charge.
The Company accounts separately for the assets, liabilities and
operations of each fund. Expenses directly attributable to each fund are
charged to that fund's operations; expenses which are applicable to all
funds are allocated among them on a pro rata basis.
The Fund's financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in securities (including options
and financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an
exchange or the national securities market, or securities for which there
were no transactions, are valued at the average of the most recent bid and
asked prices, except for open short positions, where the asked price is used
for valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value
as determined in good faith under the direction of the Board of Directors.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis. Under the terms of the custody agreement, the Fund
received net earnings credits of $2,254 during the period ended February 28,
1999 based on available cash balances left on deposit. Income earned under
this arrangement is included in interest income.
(c) Dividends to shareholders: Dividends are recorded on the ex-
dividend date. Dividends from investment income-net and dividends from net
realized capital gain, if any, are normally declared and paid annually, but
the Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended
(the "Code"). To the extent that net realized capital gain can be offset by
capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise
taxes.
The Fund has an unused capital loss carryover of approximately
$7,605,000 available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to August 31,
1998. The carryover does not include net realized securities losses from
November 1, 1997 through August 31, 1998 which are treated, for Federal
income tax purposes, as arising in fiscal 1999. If not applied, $33,000 of
the carryover expires in fiscal 2004, $5,794,000 expires in fiscal 2005 and
$1,778,000 expires in fiscal 2006.
<PAGE>
Dreyfus Aggressive Growth Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 2-Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100
million unsecured line of credit primarily to be utilized for temporary or
emergency purposes, including the financing of redemptions. Interest is
charged to the Fund at rates which are related to the Federal Funds rate in
effect at the time of borrowings. During the period ended
February 28, 1999, the Fund did not borrow under the line of credit.
NOTE 3-Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .75 of 1% of the value of the Fund's average
daily net assets and is payable monthly. The Manager has undertaken from
September 1, 1998 through April 18, 1999 to reduce the management fee paid by
the Fund, to the extent that the Fund's aggregate expenses, exclusive of taxes,
brokerage and extraordinary expenses, exceed an annual rate of 1.20% of the
value of the Fund's average daily net assets. The expense reimbursement,
pursuant to the undertaking, amounted to $270,771 during the period ended
February 28, 1999.
(b) Under the Shareholder Services Plan, the Fund pays the Distributor
at an annual rate of .25 of 1% of the value of the Fund's average daily net
assets for the provision of certain services. The services provided may
include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended February 28, 1999, the Fund was charged
$40,866 pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary
of the Manager, under a transfer agency agreement for providing personnel
and facilities to perform transfer agency services for the Fund. During the
period ended February 28, 1999, the Fund was charged $52,985 pursuant to the
transfer agency agreement.
The Fund compensates Mellon under a custody agreement for providing
custodial services for the Fund. During the period ended February 28, 1999,
the Fund was charged $7,819 pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the
Act receives from the Company an annual fee of $5,000 and an attendance fee
of $500 per meeting. The Chairman of the Board receives an additional 25% of
such compensation.
(d) A 1% redemption fee is charged and retained by the Fund on shares
redeemed within fifteen days following the date of issuance, including
redemptions made through the use of the Fund Exchange privilege.
NOTE 4-Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended February 28, 1999,
amounted to $25,223,714 and $31,915,326, respectively.
At February 28, 1999, accumulated net unrealized appreciation on
investments was $1,328,285, consisting of $4,259,494 gross unrealized
appreciation and $2,931,209 gross unrealized depreciation.
At February 28, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
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<PAGE>
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<PAGE>
Dreyfus Aggressive Growth Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 256SA992
<PAGE>
[LOGO]
Aggressive Value
Fund
Semi-Annual
Report
February 28, 1999
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by
The Dreyfus Corporation and the fund's other service providers do not
properly process and calculate date-related information from and after
January 1, 2000. The Dreyfus Corporation is working to avoid Year
2000-related problems in its systems and to obtain assurances from other
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.
<PAGE>
Dreyfus Aggressive Value Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Fellow Shareholder:
It is a pleasure to have this opportunity to communicate with my fellow
shareholders of the Dreyfus Aggressive Value Fund.
This letter accompanies the semiannual report of the Dreyfus Aggressive Value
Fund for the 6-month period ended February 26, 1999. Over this period, your fund
produced a total return of 22.08%,* which compares with a total return of 30.27%
for the Standard & Poor's 500 Composite Stock Price Index (S&P 500),** 17.19%
for the Wilshire Large Company Value Index*** and 8.14% for the Wilshire Midcap
Value Index.+
The fund's concentrated equity structure, holding approximately 45 equity
securities when fully invested in equities, makes it more volatile than the
diversified indices referred to above, which are each composed of 147 to 500
equity securities. During most periods, therefore, the performance of the fund
can be expected to differ significantly from these indices.
The fund was fully invested in stocks throughout most of the semiannual
period, and this was good for returns, as this asset class solidly outperformed
fixed income and money market investments. Some cash was raised during the late
summer's financial crisis, but was quickly put back to work in the stock market
as it bottomed.
As you know, the fund invests in value stocks. Value stocks underperformed
growth stocks during the period. The margin was among the widest in memory. Any
value manager who remained true to his or her discipline could not hope to have
matched the returns of the S&P 500 Index. There will be periods--the past six
months, for example--when value stocks underperform the S&P 500 Index, and even
periods when our particular definition of value underperforms certain value
stock indices. However, while staying true to its value discipline, your fund
did achieve returns that exceeded major value category benchmark indices, as
noted above. Generally, strength was spread among various securities, many
within the financial, healthcare, communications and technology sectors of the
stock market.
The performance of the S&P 500 Index during the last six months was largely
driven by a relatively few so-called "megacap" growth stocks, or the very
largest domestically traded companies. The S&P 500 Index and many of its major
security components carry valuations well above those of any historic period by
almost any financial measure, according to our calculations. This concentrated
overvaluation, in our opinion, is reminiscent of the early 1970s' "nifty fifty"
stocks or oil stocks in the early 1980s. Both of those markets ended with quick
and severe corrections of the overvalued securities. No one can predict such an
occurrence today, but many market participants may conclude that the risk level
of the S&P 500 Index and many of its major security components is high by
historic standards. Regardless, at least for the time being, positive price
momentum in this index and in many of these megacap stocks has continued, even
through this past summer's stock market correction and subsequent recovery.
Our disciplined investment process has kept the fund largely out of what we
considered were overvalued megacap securities. Unfortunately, many of these
high-priced megacap securities were the best-performing stocks in the market,
restraining the fund's relative performance. Quite often, disciplined value
investment processes will underperform when the overall stock market reaches
speculative overvaluation. There is better potential for a performance rebound
as security prices settle and as economic change occurs. Importantly, remember
that value stocks also are a diversification component for an equity
portfolio, and can particularly serve that purpose well in today's concentrated
performance environment.
Economic Review
Stresses in the financial system combined with slowing economic growth
convinced the Federal Reserve Board to lower short-term interest rates three
times during the fall of 1998: at the end of September, in mid-
<PAGE>
October, and in mid-November. As the calendar year ended, the Fed's official
stance toward rates was neutral, since they believed that they had successfully
stabilized the financial system and overall economic growth.
February of 1999 saw the bond market send interest rates higher, however, as
investors worried about an acceleration in economic strength and the possibility
that the Fed might have to reverse itself, and raise rates to slow economic
growth. During February, Fed Chairman Greenspan publicly worried that the Board
had gone too far with its mid-November action, which in retrospect may not have
been needed to stimulate the economy and may have actually caused some
overstimulation. The problem with too much growth is that it can become
uncontrollable, result in price inflation, and ultimately in a recession.
Inflation, the Fed's other worry, remained well contained throughout the
period. The decline in inflation and lower interest rates benefited companies
that sell to the consumer, as more income was left over after price increases to
buy goods and services, and the cost of debt was reduced. Home mortgages could
be refinanced at lower rates, thus putting more discretionary income in
consumers' pockets. As consumers spent more, consumer oriented companies
benefited.
The industrial sector has not been as fortunate. Weak Asian economies
have continued to put a damper on demand in a number of sectors such as
world-traded commodities (paper producers, for example) and exporters of
goods (some computer equipment manufacturers, for example).
Stock Market Overview
The six-month period ended February 28, 1999 was highlighted in the U.S.
stock market by a drop in security prices during the late summer months and a
rebound in prices during the fall. Stocks declined over the summer due to
implosion of the Russian financial system and the collapse of a major U.S. hedge
fund, causing the Federal Reserve Board to take its first action lowering
interest rates during the period, which generally stabilized equity prices. The
two subsequent interest rate reductions by the Fed during the fall were probably
more directly related to worries about economic growth, and helped send stock
prices up.
Over the six-month period, large-cap growth stocks (the largest and most
expensively priced securities) turned in the highest returns, followed by
large-cap stocks in general, then large-cap value stocks (the largest companies
selling at value prices), midcap stocks (midsized companies) and finally
small-cap stocks. For example, the total return for the period on the Russell
1000 Growth Index (574 high-growth companies) was 37.89%, with the Russell 1000
Index (1,000 of the largest companies) returning 30.45%, and the Russell 1000
Value Index (710 value-priced companies) returning 22.53%. The return on the
Russell Midcap Index was 21.70%, while the small-cap Russell 2000 Index return
was 16.78%.++
Expectations for slower profit growth at corporations have contributed to
the significant outperformance by a select few megacap growth stocks.
Investors have had more confidence in the consistent earnings growth
from this small group of stocks than for the broader stock market.
Value Investing and Our Investment Process
To once again summarize our investment philosophy for the fund, our bias is
to be fully invested in value equity securities, given the historically superior
long-term returns of equities compared to bonds and money market
investments.+++ There will be periods of time, however, when we will raise
cash to protect principal, and times when we purchase bonds as an investment
alternative, consistent with the fund's long-term growth objective.
<PAGE>
Regarding our stock selection process, while there are other investment
disciplines practiced at Dreyfus, members of the Dreyfus Value Team are
passionate believers in value investing. As value investors, we want to buy
growing companies, but we want to own them at a bargain price. In one sense,
value investing can be a lower risk, more conservative style of equity investing
because the prices of value stocks may decline less in falling markets, due to
their already perceived underpricing. Of course, they can underperform if
company valuations do not improve as expected. Also, our relatively more
concentrated portfolios can result in higher relative volatility among value
funds.
Our approach to the selection of securities begins and ends with our analysts
who are an integral part of our investment team. Our Dreyfus analysts contribute
their proprietary forecasts on corporate earnings and cash flows to our computer
models, their analysis and opinions to our decision-making process and their
constant flow of information to our ongoing assessment of owned securities.
We screen the universe of stocks by computer, according to two principal
methods. The first computer screen determines value by calculating each
security's earnings yield (our forecast for earnings divided by the current
security price) which, to justify purchase, should be greater than the yield
available on reasonably long-term U.S. Treasury securities. Being paid more than
this risk-free rate in order to take the risk inherent in equity investing is
central to our value discipline. The second computer screen looks at 19 other
factors that have historically influenced stock returns, including various
growth, valuation and leverage measures. We input into this computer model the
current economic and stock market trends, and the computer calculates each
security's exposure to this environment. The model is an idea generator, and
further detailed fundamental analysis is conducted on each potential holding to
determine its suitability for the fund. Combining all of this data with our
analysts' in-depth knowledge of the individual companies, we then construct a
fully invested portfolio of approximately 45 stocks. We use similar disciplined
criteria and several other factors to determine when selling a security is in
our shareholders' best interest.
Examples of Our Investment Process
Describing the detailed fundamental analysis, computer modeling and portfolio
strategy that go into the decision-making process for each security in the
fund is not possible in this short report. To generally illustrate our process,
provided below are several brief summaries of some of the better and poorer
performing securities within the fund's portfolio during the semiannual period.
Perkin-Elmer's most promising business is the manufacturing of the medical
research equipment used to map the human gene. The future of ethical drug
discovery is focused on genetics. The stock has been a strong performer and
remained a holding at the end of the fund's fiscal year.
American International Group (AIG) is the world's largest insurance company,
focused primarily on the corporate property and casualty market worldwide. This
stock and most other financials staged an impressive rebound after last year's
worldwide financial crisis. AIG was one of the best performing securities in the
fund and was a holding at fiscal year-end.
Texaco was one of several poor performing energy securities in the fund
during the period and at fiscal year-end. While the fund has been underweight in
the sector, some exposure was deemed necessary given the volatility of oil
prices, which can rebound quickly and unexpectedly.
<PAGE>
Owens-Illinois, a virtual worldwide monopoly in glass packaging, has been
hurt by weak demand for packaged foods and beverages in the developing world.
The security performed poorly and was sold during the period as the economic
rebound in developing countries has been restrained.
In almost any fund there are both strong performing and poor performing
securities. Our job is to maximize the good and minimize the bad, while keeping
risk at tolerable levels. We will not be successful every quarter or every year,
but we work hard to reward our fellow investors over the long term.
Diligent management of your investment is our highest priority. Thank you for
entrusting us with your assets.
Sincerely,
/s/ Timothy M. Ghriskey
Timothy M. Ghriskey
Portfolio Manager
March 10, 1999
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
*** SOURCE: WILSHIRE ASSOCIATES, INC. -- Wilshire Asset Management's style
indexes are derived by applying screening criteria to a preliminary list
of companies for the Top 750 universe. Companies that are placed in the
growth portfolio must rank high in terms of historical earnings, sales
growth and return on equity. The value stocks are companies with low
price/earnings and price/book ratios and high yields.
+ SOURCE: WILSHIRE ASSOCIATES, INC. -- Wilshire Asset Management's style
indices are derived by applying screening criteria to a preliminary list
of companies for its Midcap 750 universe. Companies that are placed in the
growth portfolio must rank high in terms of historical earnings, sales
growth and return on equity. The value stocks are companies with low
price/earnings and price/book ratios and high yields.
++ SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Russell 1000 Index
measures the performance of the 1,000 largest companies in the Russell 3000
Index, which represent approximately 89% of the total market
capitalization of the Russell 3000 Index. The Russell 1000 Growth Index
measures the performance of those Russell 1000 companies with higher
price-to-book ratios and higher forecasted growth values. The Russell 1000
Value Index measures the performance of those Russell 1000 companies with
lower price-to-book ratios and lower forecasted growth values. The Russell
Midcap Index consists of the bottom 800 securities in the Russell 1000
Index as ranked by total market capitalization, and is a widely accepted
measure of medium-cap stock market performance. The Russell 2000 Index is
composed of the 2,000 smallest companies in the Russell 3000 Index. The
Russell 3000 Index is composed of 3,000 of the largest U.S. companies by
market capitalization. All indices are unmanaged and include reinvested
dividends.
+++ SOURCE: Ibbotson Associates, Stocks, Bonds, Bills and Inflation 1999
Yearbook. Large-company stocks have outperformed long-term corporate bonds
and Treasury bills over the past 30 years. For large-company stocks, total
return is based on the performance of the Standard & Poor's 500 Composite
Stock Price Index. For long-term corporate bonds, total return is
based on the Salomon Brothers Long-Term High-Grade Corporate Bond Index. For
Treasury bills, total return is based on monthly rollover of a one-bill
portfolio containing, at the beginning of each month, the bill having the
shortest maturity of not less than one month.
<PAGE>
Dreyfus Aggressive Value Fund
- ----------------------------------------------------------------------------
Statement of Investments February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks--99.3% Shares Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Consumer Non-Durables--2.6% Dean Foods............................ 62,700 $ 2,284,631
-----------
Consumer Services--7.0% Cendant............................... 137,000 (a) 2,269,063
Time Warner........................... 29,500 1,902,750
Wendy's International................. 84,000 2,010,750
-----------
6,182,563
-----------
Electronic Technology--13.6% Compaq Computer....................... 49,200 1,734,300
Hewlett-Packard....................... 30,800 2,046,275
International Business Machines....... 11,400 1,938,000
Perkin-Elmer.......................... 20,600 1,951,850
Storage Technology.................... 56,500 (a) 1,966,906
Sun Microsystems...................... 24,000 (a) 2,335,500
-----------
11,972,831
-----------
Energy Minerals--6.6% BP Amoco, A.D.S....................... 24,000 2,040,000
Texaco................................ 45,700 2,127,906
USX-Marathon Group.................... 80,000 1,655,000
-----------
5,822,906
-----------
Finance--19.9% Chase Manhattan....................... 34,200 2,723,175
Citigroup............................. 41,800 2,455,750
First Tennessee National.............. 67,500 2,569,219
First Union........................... 41,000 2,185,812
Fleet Financial Group................. 58,700 2,520,431
National City......................... 35,300 2,466,588
Wells Fargo........................... 70,500 2,590,875
-----------
17,511,850
-----------
Health Services--2.2% Foundation Health Systems, Cl. A...... 235,000 (a) 1,880,000
-----------
Health Technology--6.7% Allergan.............................. 24,400 1,988,600
Pharmacia & Upjohn.................... 36,200 1,972,900
Zeneca Group, A.D.R................... 46,500 1,909,406
-----------
5,870,906
-----------
Industrial Services--2.3% Waste Management...................... 42,000 2,052,750
-----------
Insurance--12.2% Allstate.............................. 52,000 1,950,000
American International Group.......... 20,800 2,369,900
Everest Reinsurance Holdings.......... 70,000 2,323,125
Torchmark............................. 59,000 1,961,750
XL Capital, Cl. A..................... 35,000 2,143,750
-----------
10,748,525
-----------
</TABLE>
<PAGE>
Dreyfus Aggressive Value Fund
- ----------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Non-Energy Minerals--1.9% Lone Star Industries.................. 50,000 $ 1,650,000
-----------
Producer Manufacturing--3.4% General Electric...................... 30,000 3,009,375
-----------
Retail--8.2% American Stores....................... 85,500 2,885,625
K mart................................ 128,000 (a) 2,240,000
Saks.................................. 59,000 (a) 2,120,313
-----------
7,245,938
-----------
Transportation--2.4% CNF Transportation.................... 50,000 2,112,500
-----------
Utilities--10.3% Ameritech............................. 37,000 2,418,875
Bell Atlantic......................... 39,000 2,240,063
Coastal............................... 61,500 1,968,000
MCI WorldCom.......................... 29,000 (a) 2,392,500
-----------
9,019,438
-----------
TOTAL INVESTMENTS (cost $80,306,889)................................... 99.3% $87,364,213
====== ===========
CASH AND RECEIVABLES (NET)............................................. .7% $ 653,657
====== ===========
NET ASSETS............................................................. 100.0% $88,017,870
====== ===========
<FN>
Notes to Statement of Investments:
- --------------------------------------------------------------------------------------------------------------
(a) Non-income producing.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Value Fund
- -----------------------------------------------------------------------
Statement of Assets and Liabilities February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments. $80,306,889 $87,364,213
Receivable for investment securities sold.............. 4,529,099
Dividends receivable................................... 131,773
Receivable for shares of Common Stock subscribed....... 47,750
Prepaid expenses....................................... 23,439
-----------
92,096,274
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.......... 80,821
Due to Distributor..................................... 18,507
Cash overdraft due to Custodian........................ 302,695
Payable for investment securities purchased............ 1,958,683
Bank loan payable--Note 2.............................. 1,470,000
Payable for shares of Common Stock redeemed............ 212,119
Interest payable--Note 2............................... 2,772
Accrued expenses....................................... 32,807
-----------
4,078,404
-----------
NET ASSETS ................................................................... $88,017,870
===========
REPRESENTED BY: Paid-in capital........................................ $77,207,675
Accumulated undistributed investment income--net....... 119,651
Accumulated net realized gain (loss) on investments.... 3,633,220
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b)............................ 7,057,324
-----------
NET ASSETS ................................................................... $88,017,870
===========
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized)................ 3,687,313
NET ASSET VALUE, offering and redemption price per share--Note 3(d)............ $23.87
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Value Fund
- ----------------------------------------------------------------------------
Statement of Operations Six Months Ended February 28, 1999 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $2,978 foreign taxes
withheld at source)................................. $ 763,026
Interest............................................... 45,239
-----------
Total Income....................................... $ 808,265
EXPENSES: Management fee--Note 3(a).............................. 396,399
Shareholder servicing costs--Note 3(b)................. 217,328
Professional fees...................................... 23,964
Prospectus and shareholders' reports................... 19,942
Registration fees...................................... 10,728
Custodian fees--Note 3(b).............................. 7,179
Interest expense--Note 2............................... 3,019
Directors' fees and expenses--Note 3(c)................ 2,817
Miscellaneous.......................................... 1,665
-----------
Total Expenses..................................... 683,041
-----------
INVESTMENT INCOME--NET......................................................... 125,224
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments................ $ 3,653,826
Net unrealized appreciation (depreciation) on investments 17,141,141
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 20,794,967
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $20,920,191
===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Value Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1999 Year Ended
(Unaudited) August 31, 1998
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 125,224 $ 242,141
Net realized gain (loss) on investments.............................. 3,653,826 8,680,708
Net unrealized appreciation (depreciation) on investments............ 17,141,141 (27,545,197)
------------ -------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 20,920,191 (18,622,348)
------------ -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net............................................... (187,969) (158,949)
Net realized gain on investments..................................... (4,934,176) (10,776,662)
------------ -------------
Total Dividends.................................................. (5,122,145) (10,935,611)
------------ -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................ 23,158,895 66,660,408
Dividends reinvested................................................. 4,906,660 10,405,246
Cost of shares redeemed.............................................. (47,754,280) (115,127,697)
------------ -------------
Increase (Decrease) in Net Assets from Capital Stock Transactions (19,688,725) (38,062,043)
------------ -------------
Total Increase (Decrease) in Net Assets........................ (3,890,679) (67,620,002)
NET ASSETS:
Beginning of Period.................................................. 91,908,549 159,528,551
------------ -------------
End of Period........................................................ $ 88,017,870 $ 91,908,549
============ =============
Undistributed investment income--net.................................... $ 119,651 $ 182,395
------------ -------------
Shares Shares
------------ -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................................................... 981,980 2,595,360
Shares issued for dividends reinvested............................... 206,683 430,859
Shares redeemed...................................................... (1,995,554) (4,573,819)
------------ -------------
Net Increase (Decrease) in Shares Outstanding.................... (806,891) (1,547,600)
============ =============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Value Fund
- ----------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1999 Year Ended August 31,
-------------------------------------
PER SHARE DATA: (Unaudited) 1998 1997 1996(1)
-------------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $20.45 $26.40 $20.08 $12.50
------ ------ ------ ------
Investment Operations:
Investment income--net............................... .03 .05 .02 .09
Net realized and unrealized gain (loss) on investments 4.48 (4.27) 8.22 7.53
------ ------ ------ ------
Total from Investment Operations..................... 4.51 (4.22) 8.24 7.62
------ ------ ------ ------
Distributions:
Dividends from investment income--net................ (.04) (.03) (.05) (.04)
Dividends from net realized gain on investments...... (1.05) (1.70) (1.87) --
------ ------ ------ ------
Total Distributions.................................. (1.09) (1.73) (1.92) (.04)
------ ------ ------ ------
Net asset value, end of period....................... $23.87 $20.45 $26.40 $20.08
====== ====== ====== ======
TOTAL INVESTMENT RETURN................................. 22.08%(2) (17.02%) 43.57% 61.00%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets.... .64%(2) 1.27% 1.24% 1.17%(2)
Ratio of interest expense to average net assets...... .00%(2,3) .01% -- --
Ratio of net investment income to average net assets. .12%(2) .16% .18% .55%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager................ -- -- .14% .63%(2)
Portfolio Turnover Rate.............................. 111.84%(2) 170.46% 120.71% 260.98%(2)
Net Assets, end of period (000's Omitted)............ $88,018 $91,909 $159,529 $9,711
<FN>
- ---------------------
(1) From September 29, 1995 (commencement of operations) to August 31, 1996.
(2) Not annualized.
(3) Amount represents less than .01%.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Aggressive Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Aggressive Value Fund (the "Fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering eight series, including the Fund. The Fund's investment objective is
capital appreciation. The Dreyfus Corporation (the "Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. ("Mellon"). Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a sales
charge.
The Company accounts separately for the assets, liabilities and operations
of each fund. Expenses directly attributable to each fund are charged to that
fund's operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency gains
or losses realized on securities transactions and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities, resulting
from changes in exchange rates. Such gains and losses are included with net
realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments is recognized on the accrual
basis. Under the terms of the custody agreement, the Fund received net
earnings credits of $518 during the period ended February 28, 1999 based on
available cash balances left on deposit. Income earned under this arrangement
is included in interest income.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue
<PAGE>
Dreyfus Aggressive Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Code of 1986, as amended (the "Code"). To the extent that net realized capital
gain can be offset by capital loss carryovers, if any, it is the policy of the
Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The Fund may borrow up to $5 million for leveraging purposes under a
short-term unsecured line of credit and participates with other Dreyfus-managed
funds in a $100 million unsecured line of credit primarily to be utilized for
temporary or emergency purposes, including the financing of redemptions.
Interest is charged to the Fund at rates which are related to the Federal Funds
rate in effect at the time of borrowings.
The average daily amount of borrowings outstanding under both arrangements
during the period ended February 28, 1999 was approximately $118,000, with a
related weighted average annualized interest rate of 5.16%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .75 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
(b) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the Fund's average daily net assets
for the provision of certain services. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
During the period ended February 28, 1999, the Fund was charged $132,133
pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended February 28, 1999, the Fund was charged $49,660 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement for providing
custodial services for the Fund. During the period ended February 28, 1999, the
Fund was charged $7,179 pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged and retained by the Fund on shares
redeemed within fifteen days following the date of issuance, including
redemptions made through use of the Fund Exchange privilege.
<PAGE>
Dreyfus Aggressive Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended February 28, 1999,
amounted to $113,229,253 and $134,546,840, respectively.
The Fund enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings. When executing forward currency exchange contracts, the Fund
is obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract increases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
decreases between those dates. With respect to purchases of forward currency
exchange contracts, the Fund would incur a loss if the value of the contract
decreases between the date the forward contract is opened and the date the
forward contract is closed. The Fund realizes a gain if the value of the
contract increases between those dates. The Fund is also exposed to credit risk
associated with counter party nonperformance on these forward currency exchange
contracts which is typically limited to the unrealized gain on each open
contract. At February 28, 1999, there were no open forward currency exchange
contracts.
(b) At February 28, 1999, accumulated net unrealized appreciation on
investments was $7,057,324, consisting of $11,772,191 gross unrealized
appreciation and $4,714,867 gross unrealized depreciation.
At February 28, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting purposes
(see the Statement of Investments).
<PAGE>
[LOGO]
Dreyfus Aggressive Value Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 257SA992
YEAR 2000 ISSUES (UNAUDITED)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund' s other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other 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.
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this semiannual report for the Dreyfus
Emerging Leaders Fund for the six-month period ended February 28, 1999. Over
this period, your fund produced a total return of 25.64% ,* handsomely
outperforming the 16.78% total return for the fund's benchmark, the Russell 2000
Index.**
In your fund, we have assembled what we believe are some of the
better-positioned small-capitalization companies in the country, but the
investing public generally has seemed uninterested in small caps. For five
straight years, the investing herd has chosen to plow their hard-earned money
into the same nifty fifty stocks, with little regard to traditional valuation
methods. What do we do? What we always do. To paraphrase Warren Buffett, if one
buys undervalued assets, we believe that sooner or later something good will
happen to them. As investors continue to neglect smaller, well-managed
companies, our menu of investment opportunities continues to expand, and we
believe the future payoff potential should be worthwhile for the long-term
investor.
Economic Review
Stresses in the financial system combined with slowing economic growth
convinced the Federal Reserve Board to lower short-term interest rates three
times during the fall of 1998: at the end of September, in mid-October, and in
mid-November. As the calendar year ended, the Fed's official stance toward rates
was neutral, since they believed that they had successfully stabilized the
financial system and overall economic growth.
February of 1999 saw the bond market send interest rates higher, however, as
investors worried about an acceleration in economic strength and the possibility
that the Fed might have to reverse itself and raise rates to slow economic
growth. During February, Fed Chairman Greenspan publicly worried that the Board
had gone too far with its mid-November action, which in retrospect may not have
been needed to stimulate the economy and may have actually caused some
overstimulation. The problem with too much growth is that it can become
uncontrollable, and result in price inflation--and ultimately in a recession.
Inflation, the Fed' s other worry, remained well contained throughout the
period. The decline in inflation and the lower interest rates benefited
companies that sell to the consumer, as more income was left over after price
increases to buy goods and services, and the cost of debt was reduced. Home
mortgages could be refinanced at lower rates, thus putting more discretionary
income in consumers' pockets. As consumers spent more, consumer-oriented
companies benefited.
The industrial sector has not been as fortunate. Weak Asian economies have
continued to put a damper on demand in a number of sectors such as world-traded
commodities (paper producers, for example) and exporters of goods (some computer
equipment manufacturers, for example).
Stock Market Overview
The six-month period ended February 28, 1999 was highlighted in the U.S.
stock market by a panic drop in security prices during the summer months, and a
massive rebound in prices during the fall. Stocks declined over the summer due
to the implosion of the Russian financial system and the collapse of a major
U.S. hedge fund, causing the Federal Reserve Board to take its first action
lowering interest rates during the period, which generally stabilized equity
prices. The two subsequent interest rate reductions by the Fed during the fall
were probably more directly related to worries about economic growth, and helped
send stock prices skyward.
Over the six-month period, large-cap growth stocks (the largest and most
expensively priced securities) turned in the highest returns, followed by
large-cap stocks in general, then large-cap value stocks (the largest companies
selling at value prices) , midcap stocks (midsized companies) and finally
small-cap stocks. For example, the total return for the period on the Russell
1000 Growth Index((+) )was 37.89%, with the Russell 1000 Index((+)) (1,000 of
the largest companies) returning 30.45%, and the Russell 1000 Value Index((+))
returning 22.53%. The return on the Russell Midcap Index((+)) was 21.70%, while
the small-cap Russell 2000 Index return was 16.78%.**
Expectations for slower profit growth at corporations have contributed to the
significant outperformance by a select few megacap growth stocks. Investors have
had more confidence in the consistent earnings growth from this small group of
stocks than for the broader stock market.
Portfolio Focus
The fund' s performance during this period was generated largely by its
investments in the technology sector. Two themes which worked well for us were
the Internet and the recovery in the semiconductor stocks. The biggest winner by
far for your fund was CMGI. With its stakes in both private and publicly traded
Internet companies, CMGI has benefited as investors sought to invest in what is
essentially an Internet mutual fund. Additionally, after hitting bottom in
August, the stocks of semiconductor device manufacturers and semiconductor
capital equipment manufacturers started to recover as industry participants
recognized that the rate of decline in new orders was lessening. Your fund
invested in both types of semiconductor companies through its holdings in
Novellus Systems, a leading semiconductor equipment manufacturer, and Applied
Micro Circuits, which produces chips used in high-speed communications
applications.
Although the material and processing sector was one of the worst performing
components of the Russell 2000 Index during the past six months, it was one of
the most rewarding for your fund. Subsequent to last year's annual letter, we
have become more sanguine about opportunities in this sector. This segment,
which includes companies in the process industries such as metals, papers and
chemicals, has borne the brunt of the Asian crisis. Much of the demand for these
essentially commodity products comes from this region. Industry participants
have reacted to global overcapacity by merging with their major competitors and
taking high cost capacity out of the system. A better supply/demand balance
could enable industry pricing to improve if the global economic picture merely
stabilizes. Our best performing stock in this sector, Smurfit-Stone Container,
illustrates this theme. In the fall, Jefferson Smurfit and Stone Container
merged to become the largest producer of containerboard in the U.S. Another
example is Getchell Gold, a fast-growing gold producer, which Placer Dome has
announced its intentions to acquire at a substantial premium.
Another rewarding segment for your fund was financial services. The biggest
contributor, Knight/Trimark Group, Cl.A, a leading market maker for NASDAQ
securities, rebounded in price with the performance of the stock market.
Consolidation within the insurance industry has helped propel the stocks of
Executive Risk and NAC Re. Executive Risk, a specialty insurance underwriter,
has an announced offer by Chubb, while XL Capital, Cl.A made an offer for NAC
Re. Both of these deals were announced at premiums.
Healthcare was another sector where your fund benefited from fortuitous stock
choices. The clear standout was Andrx, a generic drug delivery company with a
publicly traded Internet healthcare subsidiary. Alkermes is a drug delivery
company working with Genentech on a sustained-release pediatric growth hormone.
SEQUUS Pharmaceuticals, another drug delivery company, was acquired by ALZA
Corporation.
The consumer sector provided the second-best returns for the Russell 2000
Index, and although our stock picks produced good results for your fund, our
selections did not outperform that segment of the Index. The largest contributor
to the consumer category was SFX Entertainment, Cl.A, a company which is
creating the nation' s first integrated live entertainment network. Not to be
outclassed, Tiffany & Co. brought home the silver in this category, as its Asian
sales held up better than many expected in view of the Asian crisis, and its
holiday-season sales in the U.S. were better than expected. In addition, Lamar
Advertising, Cl.A, a billboard company mentioned in last year' s letter,
continued to post outsized results.
The energy segment was the only sector in the Russell 2000 Index to produce
negative returns during this six-month period, and our investments continued to
experience dry holes. The worst stock in this group was one of our winners from
1997, Global Industries, an offshore construction company. Two oilfield services
companies, Varco International and BJ Services, continued to see reductions in
earnings estimates due to weak industry fundamentals. Our only other holding,
the exploration and production company Devon Energy, fell under the selling
pressure from a major shareholder who was exiting the stock and the energy
sector in general. What a difference a month makes! It now appears that the
supply-and-demand fundamentals in this sector are finally turning, given the
decline in non-OPEC production due to the sharp drop in upstream spending,
bottoming Asian demand and the recently proposed OPEC production cuts. We remain
overweighted in this sector, which has declined to only two percent of the
Russell 2000 Index.
The producer segment contributed positively to the returns for the fund;
however, this sector was one of the weaker ones in the Index. Your fund had
little exposure in capital goods during this period, because we felt that
declining worldwide industrial production would result in declining earnings
expectations. There is value in the industrial world, however, and we are
starting to see nondilutive acquisitions by industry participants. An example of
this phenomenon occurred in your fund during this period when Aeroquip-Vickers,
a fluid power company, announced its intention to be acquired by Eaton at a
substantial premium. Another position we held during this period, aerospace
supplier Coltec Industries, agreed to be acquired by B.F. Goodrich, albeit not
at much of a premium. Cordant Technologies, the former Thiokol, continued to
provide rocket-booster performance during this period on top of what it has
produced for the past two-and-a-half years for your fund. Fortunately, our good
investments more than offset our problem investments. Our biggest disappointment
continues to be Titan International, a manufacturer of wheels and tires for
agricultural and industrial markets. Titan International continues to be plagued
by capacity constraints, labor strikes and the downturn in the farm-equipment
industry.
Utilities were a strong group for the Russell 2000; however, your fund did
not participate to any degree, because we were underweighted in this group and
our selections were uninspired. We remain hopeful that the industry
consolidation will continue, but unless it does so on a stock-by-stock basis, we
are skeptical of this sector's ability to outperform the Index, since we feel
that interest rates have reached a low for now.
In conclusion, small companies generally should, in our opinion, continue to
grow their businesses in the current market environment. Therefore, we remain
very positive on small equities. We believe there is opportunity for growth in
the industries in which we invest and the niche markets in which these companies
are positioned. We want to assure our investors, both old and new, that we will
direct our resources into those companies and industries that we believe will
propel your fund into the next millennium.
We thank you for your interest. You may be sure we will continue to exert our
best efforts on your behalf.
Sincerely, Sincerely,
[Hilary R. Woods signature] [Paul Kandel signature]
Hilary R. Woods Paul Kandel
Portfolio Manager Portfolio Manager
March 18, 1999
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
**SOURCE: LIPPER ANALAYTICAL SERVICES, INC. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The Russell
2000 Index is a widely accepted unmanaged index of small-cap stock performance,
and is composed of the 2,000 smallest companies in the Russell 3000 Index. The
Russell 3000 Index is composed of 3,000 of the largest U.S. companies by market
capitilization.
((+))SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Russell 1000 Index
measures the performance of the 1,000 largest companies in the Russell 3000
Index, which represent approximately 89% of the total market capitalization of
the Russell 3000 Index. The Russell 1000 Growth Index measures the performance
of those Russell 1000 companies with higher price-to-book ratios and higher
forecasted growth values. The Russell 1000 Value Index measures the performance
of those Russell 1000 companies with lower price-to-book ratios and lower
forecasted growth values. The Russell Midcap Index consists of the bottom 800
securities in the Russell 1000 Index as ranked by total market capitalization,
and is a widely accepted measure of medium-cap stock market performance. All
indices are unmanaged and include reinvested dividends.
<TABLE>
<CAPTION>
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS FEBRUARY 28, 1999 (UNAUDITED)
Common Stocks--90.7% Shares Value
- -------------------------------------------------------------------------------- ________________ ______________
<S> <C> <C> <C>
Consumer--13.0% Cinar Films, Cl. B . . . . . . . . . . . . . . . . . . 110,000 (a) $ 2,282,500
Emmis Communications, Cl. A . . . . . . . . . . . . . 60,000 (a) 2,778,750
Entercom Communications, Cl. A . . . . . . . . . . . . 44,100 (a) 1,383,638
Harte-Hanks . . . . . . . . . . . . . . . . . . . . . 100,000 2,587,500
Helen of Troy . . . . . . . . . . . . . . . . . . . . 122,500 (a) 1,707,344
Lamar Advertising, Cl. A . . . . . . . . . . . . . . . 80,000 (a) 3,090,000
Mohawk Industries . . . . . . . . . . . . . . . . . . 55,000 (a) 1,787,500
Movado Group . . . . . . . . . . . . . . . . . . . . . 92,500 1,977,188
SFX Entertainment, Cl. A . . . . . . . . . . . . . . . 55,000 (a) 3,361,875
_____________
20,956,295
_____________
Electronic Technology--15.9% Applied Micro Circuits . . . . . . . . . . . . . . . . 50,000 (a) 1,962,500
Atmel . . . . . . . . . . . . . . . . . . . . . . . . 135,000 (a) 2,320,313
CMGI . . . . . . . . . . . . . . . . . . . . . . . . . 21,300 (a) 2,611,913
Concord Communications . . . . . . . . . . . . . . . . 43,000 (a) 2,434,875
Cordant Technologies . . . . . . . . . . . . . . . . . 72,500 2,822,969
Esterline Technologies . . . . . . . . . . . . . . . . 107,500 (a) 1,840,938
Gerber Scientific . . . . . . . . . . . . . . . . . . 105,000 1,955,625
Lattice Semiconductor . . . . . . . . . . . . . . . . 50,000 (a) 1,993,750
Newport News Shipbuilding . . . . . . . . . . . . . . 100,000 2,893,750
Novellus Systems . . . . . . . . . . . . . . . . . . . 39,000 (a) 2,303,438
TranSwitch . . . . . . . . . . . . . . . . . . . . . . 73,000 (a) 2,536,750
_____________
25,676,821
_____________
Energy--.9% Devon Energy . . . . . . . . . . . . . . . . . . . . . 65,300 1,530,469
_____________
Finance--16.0% Annuity & Life Re . . . . . . . . . . . . . . . . . . 45,000 (a) 998,438
Bank United, Cl. A . . . . . . . . . . . . . . . . . . 55,000 2,172,500
Commerce Bancorp . . . . . . . . . . . . . . . . . . . 46,000 2,047,000
Doral Financial . . . . . . . . . . . . . . . . . . . 125,000 2,367,188
Executive Risk . . . . . . . . . . . . . . . . . . . . 40,000 2,810,000
Fremont General . . . . . . . . . . . . . . . . . . . 105,000 2,073,750
Horace Mann Educators . . . . . . . . . . . . . . . . 80,000 1,875,000
Knight/Trimark Group, Cl. A . . . . . . . . . . . . . 66,500 (a) 2,310,875
NAC Re . . . . . . . . . . . . . . . . . . . . . . . . 50,000 2,703,125
RenaissanceRe Holdings . . . . . . . . . . . . . . . . 66,500 2,261,000
Terra Nova Holdings, Cl. A . . . . . . . . . . . . . . 85,000 2,029,375
Webster Financial . . . . . . . . . . . . . . . . . . 70,000 2,139,375
_____________
25,787,626
_____________
Health Care--8.4% Andrx . . . . . . . . . . . . . . . . . . . . . . . . 42,000 (a) 2,850,750
IDEC Pharmaceuticals . . . . . . . . . . . . . . . . . 53,000 (a) 2,295,563
IDX Systems . . . . . . . . . . . . . . . . . . . . . 55,000 (a) 1,306,250
JONES PHARMA . . . . . . . . . . . . . . . . . . . . . 75,000 2,109,375
Mentor . . . . . . . . . . . . . . . . . . . . . . . . 115,000 1,768,125
PSS World Medical . . . . . . . . . . . . . . . . . . 100,000 (a) 1,137,500
Rexall Sundown . . . . . . . . . . . . . . . . . . . . 140,000 (a) 2,003,750
_____________
13,471,313
_____________
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1999 (UNAUDITED)
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- ________________ ______________
Industrial Services--3.9% BJ Services . . . . . . . . . . . . . . . . . . . . . 115,000 (a) $ 1,617,188
Global Industries . . . . . . . . . . . . . . . . . . 250,000 (a) 1,265,625
Granite Construction . . . . . . . . . . . . . . . . . 85,000 2,087,813
Varco International . . . . . . . . . . . . . . . . . 175,000 (a) 1,356,250
_____________
6,326,876
_____________
Non-Energy Minerals--2.0% Bethlehem Steel . . . . . . . . . . . . . . . . . . . 195,000 (a) 1,718,438
Getchell Gold . . . . . . . . . . . . . . . . . . . . 60,000 (a) 1,556,250
_____________
. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,274,688
_____________
Process Industries--6.5% Casella Waste Systems, Cl. A . . . . . . . . . . . . . 85,000 (a) 1,785,000
Crompton & Knowles . . . . . . . . . . . . . . . . . . 108,000 1,998,000
Ivex Packaging . . . . . . . . . . . . . . . . . . . . 125,000 (a) 1,890,625
MacDermid . . . . . . . . . . . . . . . . . . . . . . 60,000 2,250,000
Smurfit-Stone Container . . . . . . . . . . . . . . . 145,000 (a) 2,619,053
_____________
10,542,678
_____________
Producer Manufacturing--7.6% Aeroquip-Vickers . . . . . . . . . . . . . . . . . . . 60,000 3,397,500
Gentex . . . . . . . . . . . . . . . . . . . . . . . . 85,000 (a) 1,843,438
MagneTek . . . . . . . . . . . . . . . . . . . . . . . 185,000 (a) 2,011,875
Reliance Steel & Aluminum . . . . . . . . . . . . . . 80,000 2,045,000
Titan International . . . . . . . . . . . . . . . . . 175,000 1,301,563
Triumph Group . . . . . . . . . . . . . . . . . . . . 65,000 (a) 1,665,625
_____________
12,265,001
_____________
Retail--4.5% Neiman-Marcus Group . . . . . . . . . . . . . . . . . 95,000 (a) 2,458,125
Tiffany & Co. . . . . . . . . . . . . . . . . . . . . 50,000 2,859,375
Whitehall Jewellers . . . . . . . . . . . . . . . . . 110,000 (a) 1,870,000
_____________
7,187,500
_____________
Technology Services--7.6% Legato Systems . . . . . . . . . . . . . . . . . . . . 55,000 (a) 2,708,750
National Data . . . . . . . . . . . . . . . . . . . . 55,000 2,657,188
New Era Of Networks . . . . . . . . . . . . . . . . . 37,500 (a) 2,339,063
PMC-Sierra . . . . . . . . . . . . . . . . . . . . . . 32,000 (a) 2,268,000
Security Dynamics Technologies . . . . . . . . . . . . 120,000 (a) 2,220,000
_____________
12,193,001
_____________
Transportation--1.2% Expeditors International of Washington . . . . . . . . 42,500 1,978,906
_____________
Utilities--3.2% AGL Resources . . . . . . . . . . . . . . . . . . . . 10,300 196,344
Eastern Enterprises . . . . . . . . . . . . . . . . . 35,000 1,345,313
Indiana Energy . . . . . . . . . . . . . . . . . . . . 61,666 1,233,320
Questar . . . . . . . . . . . . . . . . . . . . . . . 55,000 983,125
Sierra Pacific Resources . . . . . . . . . . . . . . . 39,500 1,355,344
_____________
5,113,446
_____________
TOTAL COMMON STOCKS
(cost $124,318,458) . . . . . . . . . . . . . . . . $146,304,620
_____________
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1999 (UNAUDITED)
Principal
Short-Term Investments--9.4% Amount Value
- -------------------------------------------------------------------------------- ________________ ______________
U.S. Treasury Bills: 4.65%, 4/22/1999 . . . . . . . . . . . . . . . . . . . $ 257,000 $ 255,169
4.33%, 4/29/1999 . . . . . . . . . . . . . . . . . . . 1,164,000 1,154,986
4.37%, 5/6/1999 . . . . . . . . . . . . . . . . . . . 7,874,000 7,806,472
4.38%, 5/13/1999 . . . . . . . . . . . . . . . . . . . 2,022,000 2,003,377
4.46%, 5/20/1999 . . . . . . . . . . . . . . . . . . . 283,000 280,080
4.47%, 5/27/1999 . . . . . . . . . . . . . . . . . . . 3,632,000 3,591,053
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $15,099,011) . . . . . . . . . . . . . . . . . $ 15,091,137
_____________
TOTAL INVESTMENTS (cost $139,417,469). . . . . . . . . . . . . . . . . . . . . . . . . . . 100.1% $161,395,757
_______ _____________
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . (.1%) $ (73,822)
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $161,321,935
_______ _____________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1999 (UNAUDITED)
Cost Value
_____________ _____________
ASSETS: Investments in securities--See Statement of Investments . . . . $139,417,469 $161,395,757
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443,946
Receivable for investment securities sold . . . . . . . . . . . 4,686,706
Receivable for shares of Common Stock subscribed . . . . . . . 439,892
Dividends receivable . . . . . . . . . . . . . . . . . . . . . 66,982
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 31,243
______________
167,064,526
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . . . . 124,500
Due to Distributor . . . . . . . . . . . . . . . . . . . . . . 31,008
Payable for investment securities purchased . . . . . . . . . . 5,406,201
Payable for shares of Common Stock redeemed . . . . . . . . . . 130,818
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . 50,064
______________
5,742,591
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $161,321,935
______________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . $134,334,256
Accumulated investment (loss) . . . . . . . . . . . . . . . . . (311,052)
Accumulated net realized gain (loss) on investments . . . . . . 5,320,443
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,978,288
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $161,321,935
______________
SHARES OUTSTANDING
(100 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 6,367,789
NET ASSET VALUE, offering and redemption price per share--Note 3(d). . . . . . . . . . . . $25.33
_______
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)
INVESTMENT INCOME
INCOME: Cash dividends (net of $1,500 foreign taxes
withheld at source) . . . . . . . . . . . . . . . . . . . . $ 435,349
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 228,894
_____________
Total Income . . . . . . . . . . . . . . . . . . . . . . $ 664,243
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . . . . . . . . 604,433
Shareholder servicing costs--Note 3(b) . . . . . . . . . . . . 279,194
Registration fees . . . . . . . . . . . . . . . . . . . . . . . 26,552
Professional fees . . . . . . . . . . . . . . . . . . . . . . . 26,157
Prospectus and shareholders' reports . . . . . . . . . . . . 24,361
Custodian fees--Note 3(b) . . . . . . . . . . . . . . . . . . . 8,392
Directors' fees and expenses--Note 3(c) . . . . . . . . . . . 4,697
Loan commitment fees--Note 2 . . . . . . . . . . . . . . . . . 313
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 1,196
_____________
Total Expenses . . . . . . . . . . . . . . . . . . . . . 975,295
_____________
INVESTMENT (LOSS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (311,052)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments . . . . . . . . . . . . $ 5,322,011
Net unrealized appreciation (depreciation) on investments . . . 22,329,750
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . 27,651,761
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . $27,340,709
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 28, 1999 Year Ended
(Unaudited) August 31, 1998
__________________ __________________
OPERATIONS:
Investment (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (311,052) $ (852,258)
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . 5,322,011 6,365,294
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . 22,329,750 (21,012,854)
______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . 27,340,709 (15,499,818)
______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . (274,921) (12,996,733)
______________ ______________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . 69,327,695 120,019,743
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264,081 12,657,352
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . (40,885,979) (103,111,271)
______________ ______________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 28,705,797 29,565,824
______________ ______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 55,771,585 1,069,273
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,550,350 104,481,077
______________ ______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 161,321,935 $ 105,550,350
______________ ______________
Shares Shares
______________ ______________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,816,950 4,551,838
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . 11,045 528,270
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,684,650) (4,007,309)
______________ ______________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . 1,143,345 1,072,799
______________ ______________
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Six Months Ended
February 28, 1999 Year Ended August 31,
_________________________________
PER SHARE DATA: (Unaudited) 1998 1997 1996(1)
______________ _______ _______ _______
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . $20.20 $25.17 $18.67 $12.50
_______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . . (.05) (.16)(2) (.11) .03
Net realized and unrealized gain (loss) on investments . . . 5.23 (2.14) 8.02 6.17
_______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . 5.18 (2.30) 7.91 6.20
_______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . -- -- -- (.03)
Dividends from net realized gain on investments . . . . . . . (.05) (2.67) (1.41) --
_______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . . . (.05) (2.67) (1.41) (.03)
_______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . $25.33 $20.20 $25.17 $18.67
_______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . . 25.64%(3) (10.82%) 44.45% 46.09%(3,4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . .72%(3) 1.39% 1.39% 1.16%(3)
Ratio of net investment income (loss) to average net assets . . (.23%)(3) (.63%) (.62%) .09%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . . . . . . . -- -- .09% .36%(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . 66.32%(3) 199.08% 197.99% 203.66%(3)
Net Assets, end of period (000's Omitted) . . . . . . . . . . $161,322 $105,550 $104,481 $37,206
- ---------
(1) From September 28, 1995 (commencement of operations) to August 31, 1996.
(2) Based on average shares outstanding at each month end.
(3) Not annualized.
(4) Calculated based on net asset value on the close of business on September
29, 1995 (commencement of initial offering) to August 31, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Emerging Leaders Fund (the "Fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering eight series, including the Fund. The Fund's investment objective is
capital growth. The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
(" Mellon" ). Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a sales
charge.
The Company accounts separately for the assets, liabilities and operations of
each fund. Expenses directly attributable to each fund are charged to that
fund' s operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the Fund received net
earnings credits of $328 during the period ended February 28, 1999 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
February 28, 1999, the Fund did not borrow under the Facility.
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .90 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
(B) Under the Shareholder Services Plan, the Fund pays the Distributor at an
annual rate of .25 of 1% of the value of the Fund's average daily net assets for
the provision of certain services. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. The Distributor may
make payments to Service Agents (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
February 28, 1999, the Fund was charged $167,898 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended February 28, 1999, the Fund was charged $52,900 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement for providing custodial
services for the Fund. During the period ended February 28, 1999, the Fund was
charged $8,392 pursuant to the custody agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
DREYFUS EMERGING LEADERS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(D) A 1% redemption fee is charged and retained by the Fund on shares
redeemed within fifteen days following the date of issuance, including
redemptions made through the use of the Fund Exchange privilege.
NOTE 4--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended February 28,1999,
amounted to $115,683,684 and 83,167,971, respectively.
At February 28, 1999, accumulated net unrealized appreciation on investments
was $21,978,288, consisting of $30,006,129 gross unrealized appreciation and
$8,027,841 gross unrealized depreciation.
At February 28, 1999, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
[reg.tm logo]
(reg.tm)
DREYFUS EMERGING LEADERS FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 259SA992
Emerging Leaders
Fund
Semi-Annual
Report
February 28, 1999
YEAR 2000 ISSUES (UNAUDITED)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund' s other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other 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.
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
For the six months ended February 28, 1999 the Dreyfus International Value
Fund generated a total return of 7.19%,* which lagged the 13.84% total return
for The Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE((reg.tm))) Index.**
As in the second half of the prior year, value investing proved difficult
during the past six months. Globally, with the exception of Japan, value stocks
generally did not keep up with the indices, as the markets favored
large-capitalization growth stocks. In the past, we seldom had such convergence
in investment styles being in favor across all markets.
In terms of stock market returns, the U.K., the largest market outside the
U.S., generated an 18% return, while Germany and France were up 4% and 10.9%
respectively. The best returns for the period were generated by the deeply
oversold markets in Asia, as Singapore bounced back over 50% and Hong Kong 43%.
The strategy followed by your fund was to remain well diversified by country and
industry sectors. The focus was on stocks that we believe were undervalued
relative to their home markets. Our exposure in Japan was heavily weighted
toward global companies able, in our opinion, to compete successfully in the
world marketplace. These firms have been less affected by slow recovery in Japan
and have benefited from the robust economic conditions in the U.S. In terms of
country weightings, the fund was slightly overweighted in continental Europe and
underweighted in the U.K.
ECONOMIC AND MARKET ENVIRONMENT
Industrialized nations, with the exception of Japan, continued to grow at
moderate and sustainable rates, and inflation was under control. Emerging
countries in Asia began to show signs of some recovery, and their stock markets
also rebounded from extremely depressed levels.
Interest rates remained low, and in general there was a favorable environment
for stock prices worldwide. In Europe, the convergence toward the Euro (unified
currency) pushed down both real and absolute interest rates to levels not seen
in recent years. Even in Italy and Spain, where interest rates tend to be high
historically, rates declined to levels below those in the U.S. Currencies
relative to the U.S. dollar were fairly stable, with the exception of the
Japanese yen, which increased nearly 17% in value. Euro currencies appreciated
in the range of 5%-6%, while the British pound was basically unchanged. Overall,
currency movements had a net benefit on the returns generated for U.S.-based
investors
Japan continued to suffer through its most severe economic downturn since
World War II, and its stock market languished near a 7-year low and more than
60% below its 1989 high. The unemployment rate hit a postwar high of 4.4%. Other
indicators such as housing starts, capital spending and new vehicle
registrations have been falling at double-digit levels. Bankruptcies continued
to increase and were running well ahead of last year's levels. In addition, two
major banks (Long Term Credit Bank and Nippon Credit Bank) and a major brokerage
house, Yamaichi, became insolvent.
On the positive side, we have begun to see signs that Japan's worst problems
may be past. The seriousness of the financial crisis finally expedited
long-needed legislation to stimulate the economy. A lingering problem for Japan
was the inability of banks to lend money in the face of the staggering volume of
problem loans. The new government package provides 60 trillion yen ($510
billion) in public funds to enable the banks to write off bad loans and move
forward with a clean slate. All the major banks requested public moneys, with
the exception of Bank of Tokyo Mitsubishi, which is in a much stronger position
than its peers. The recapitalization of the major banks should ease the
financial crisis and enable banks to lend for productive endeavors. We have also
begun to see some signs of benefits from earlier stimulus packages. Public works
expenditures are rising and money is flowing into the system. In the last three
months of the calendar year expenditures for household appliances and consumer
electronics rose by 7.5%. In January, we saw an increase in car registrations
and, for the first time in several years, country club membership prices rose.
We are also optimistic regarding positive developments in corporate
governance. An increasing number of Japanese companies have announced plans to
restructure and shed unprofitable operations. After several years, managements
are realizing that they need to take more drastic measures to bring
profitability measures closer to those of their peers in other industrialized
countries.
Although the Japanese economic outlook is less than robust, near term its
stock market more than adequately reflects the situation. The worldwide stock
market boom has bypassed Japan, and the Nikkei closed at 14,367 on February 26,
compared with just under 40,000 in December 1989. Today Japan is one of the
cheapest markets in the industrialized world, with a price-to-book value ratio
of only 1.7, compared to 5.1 for the U.S. and 4.0 for the U.K. Another way to
illustrate the low level of stock prices in Japan is that the Japanese market
capitalization is less than that of the U.K., even though its GDP is more than
three times larger.
PORTFOLIO FOCUS
Our strategy remains value oriented, and the investment theme is to seek
undervalued securities. As of the end of the reporting period, the average
price-earnings ratio of the portfolio was 17.8, compared with 30.1 for the EAFE
index. The ratio of price to cash flow was also lower at 6.8, compared to 12.0
for the index. We intend to be well diversified both in terms of country
exposure and economic sectors. As of fiscal year-end the portfolio was invested
in 21 different countries, including a small commitment (2%) to emerging
markets.
Emerging-markets exposure has been kept low due to the turmoil and volatility
in those markets. In the past two years we have seen increased volatility, first
in Asia and more recently in Latin America and Russia. However, as conditions
improve, we will look for selected opportunities in Asia and Latin America,
though the primary emphasis will remain on the established markets, and over 90%
of the portfolio will still be invested in major industrialized countries.
Although value investing did not pay off in the first half of the fiscal year,
we remain optimistic over the longer term. The valuation premium of
large-capitalization growth stocks is now toward the high end of the historical
range, and we believe that many attractive opportunities now exist in the value
universe.
Sincerely,
[signature logo, Sandor Cseh]
Sandor Cseh
Portfolio Manager
March 19, 1999
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE((reg.tm) )) Index is an
unmanaged index composed of a sample of companies representative of the market
structure of European and Pacific Basin countries, and includes net dividends
reinvested. The Index is the property of Morgan Stanley & Co. Incorporated.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS FEBRUARY 28, 1999 (UNAUDITED)
Common Stocks--92.6% Shares Value
- -------------------------------------------------------
____________ _______________
<S> <C> <C> <C>
Argentina--.7% YPF Sociedad Anonima, ADS . . . . . . . . . . . . . . 45,000 $ 1,305,000
_____________
Australia--1.9% Australia & New Zealand Banking . . . . . . . . . . . 278,842 1,792,463
Boral . . . . . . . . . . . . . . . . . . . . . . . . 442,330 634,298
Pacific Dunlop . . . . . . . . . . . . . . . . . . . . 675,187 1,172,706
_____________
3,599,467
_____________
Austria--.4% EVN . . . . . . . . . . . . . . . . . . . . . . . . . 4,910 649,181
_____________
Denmark--.8% Jyske Bank . . . . . . . . . . . . . . . . . . . . . . 16,892 1,435,672
_____________
Finland--.8% Kesko Oyj . . . . . . . . . . . . . . . . . . . . . . 104,650 1,487,413
_____________
France 10.4% ALSTOM, ADS . . . . . . . . . . . . . . . . . . . . . 42,770 (a) 1,173,502
Air Liquide . . . . . . . . . . . . . . . . . . . . . 11,388 1,703,923
Bongrain . . . . . . . . . . . . . . . . . . . . . . . 3,126 1,202,035
Compagnie Generale des Establissements Michelin . . . 26,811 1,199,339
Dexia France . . . . . . . . . . . . . . . . . . . . . 11,274 1,521,657
Elf Aquitaine, ADS . . . . . . . . . . . . . . . . . . 51,300 2,648,362
Guyenne et Gascogne . . . . . . . . . . . . . . . . . 3,988 1,669,712
Hachette Filipacchi Medias . . . . . . . . . . . . . . 2,850 722,230
PSA Peugeot Citroen . . . . . . . . . . . . . . . . . 12,400 1,659,972
Pechiney . . . . . . . . . . . . . . . . . . . . . . . 29,000 961,761
Societe Generale . . . . . . . . . . . . . . . . . . . 13,825 2,036,570
Thomson CSF . . . . . . . . . . . . . . . . . . . . . 50,561 1,504,119
Usinor . . . . . . . . . . . . . . . . . . . . . . . . 103,000 1,268,767
_____________
19,271,949
_____________
Germany--11.2% Bayer . . . . . . . . . . . . . . . . . . . . . . . . 66,500 2,362,948
Deutsche Bank . . . . . . . . . . . . . . . . . . . . 31,700 1,660,782
Deutsche Lufthansa . . . . . . . . . . . . . . . . . . 71,000 1,568,467
GEA . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 1,112,818
Hoechst . . . . . . . . . . . . . . . . . . . . . . . 43,500 2,058,520
KM Europa Metal . . . . . . . . . . . . . . . . . . . 10,700 548,201
Merck KGaA . . . . . . . . . . . . . . . . . . . . . . 58,500 2,062,570
Siemens . . . . . . . . . . . . . . . . . . . . . . . 40,000 2,534,140
Tarkett Sommer . . . . . . . . . . . . . . . . . . . . 22,000 215,732
VEBA . . . . . . . . . . . . . . . . . . . . . . . . . 63,300 3,389,555
Viag . . . . . . . . . . . . . . . . . . . . . . . . . 3,300 1,768,158
Volkswagen . . . . . . . . . . . . . . . . . . . . . . 21,670 1,406,297
_____________
20,688,188
_____________
Greece--.5% Hellenic Telecommunication Organization, ADS . . . . . 65,555 876,798
_____________
Hong Kong--1.8% HSBC . . . . . . . . . . . . . . . . . . . . . . . . . 14,805 416,585
Henderson Investment . . . . . . . . . . . . . . . . . 1,743,000 984,269
Hongkong Electric . . . . . . . . . . . . . . . . . . 695,400 1,979,163
_____________
3,380,017
_____________
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1999 (UNAUDITED)
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ _______________
Italy--4.0% Banca Popolare di Bergamo Credito Varesino . . . . . . 36,000 $ 940,849
ENI, ADS . . . . . . . . . . . . . . . . . . . . . . . 43,300 2,554,700
Istituto Bancario San Paolo di Torino, ADS . . . . . . 26,647 925,983
Telecom Italia . . . . . . . . . . . . . . . . . . . . 425,825 2,897,619
_____________
7,319,151
_____________
Japan--23.0% Aiful . . . . . . . . . . . . . . . . . . . . . . . . 6,000 403,696
Canon . . . . . . . . . . . . . . . . . . . . . . . . 99,000 2,112,222
Credit Saison . . . . . . . . . . . . . . . . . . . . 101,200 2,120,907
Dai-Tokyo Fire and Marine Insurance . . . . . . . . . 336,000 1,041,445
Fuji Machine Manufacturing . . . . . . . . . . . . . . 55,000 1,750,945
Honda Motor . . . . . . . . . . . . . . . . . . . . . 49,000 1,880,974
Ito-Yokado . . . . . . . . . . . . . . . . . . . . . . 32,000 1,860,059
Kao . . . . . . . . . . . . . . . . . . . . . . . . . 86,000 1,712,054
Mabuchi Motor . . . . . . . . . . . . . . . . . . . . 34,000 2,279,042
Marubeni . . . . . . . . . . . . . . . . . . . . . . . 595,000 984,586
Matsumotokiyoshi . . . . . . . . . . . . . . . . . . . 40,000 1,622,848
Minebea . . . . . . . . . . . . . . . . . . . . . . . 220,000 2,180,596
Mitsubishi Heavy Industries . . . . . . . . . . . . . 265,000 981,646
Murata Manufacturing . . . . . . . . . . . . . . . . . 67,000 3,005,292
NAMCO . . . . . . . . . . . . . . . . . . . . . . . . 51,500 1,081,478
Nichiei . . . . . . . . . . . . . . . . . . . . . . . 28,760 2,002,691
Nishimatsu Construction . . . . . . . . . . . . . . . 177,000 853,406
Rinnai . . . . . . . . . . . . . . . . . . . . . . . . 95,000 1,763,545
Rohm . . . . . . . . . . . . . . . . . . . . . . . . . 18,000 1,753,885
Sankyo . . . . . . . . . . . . . . . . . . . . . . . . 50,000 1,251,575
Sankyo Company . . . . . . . . . . . . . . . . . . . . 58,000 1,242,335
Sekisui Chemical . . . . . . . . . . . . . . . . . . . 248,000 1,562,369
Sony . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 2,262,915
Toshiba . . . . . . . . . . . . . . . . . . . . . . . 205,000 1,267,367
Toyota Motor . . . . . . . . . . . . . . . . . . . . . 50,000 1,301,974
Yamanouchi Pharmaceutical . . . . . . . . . . . . . . 76,000 2,310,962
_____________
42,590,814
_____________
Netherlands--7.5% ABN AMRO . . . . . . . . . . . . . . . . . . . . . . . 107,925 2,205,813
Akzo Nobel, ADS . . . . . . . . . . . . . . . . . . . 44,000 1,633,500
Buhrmann . . . . . . . . . . . . . . . . . . . . . . . 71,000 1,333,784
Hollandsche Beton Groep . . . . . . . . . . . . . . . 109,853 1,053,014
Hunter Douglas . . . . . . . . . . . . . . . . . . . . 72,050 2,349,787
KPN, ADR . . . . . . . . . . . . . . . . . . . . . . . 41,655 2,166,060
Philips Electronics . . . . . . . . . . . . . . . . . 27,500 1,914,687
Stork . . . . . . . . . . . . . . . . . . . . . . . . 62,500 1,163,776
_____________
13,820,421
_____________
New Zealand--.4% Fletcher Challenge Paper . . . . . . . . . . . . . . . 1,165,685 804,281
_____________
Norway--.7% Fred Olsen Energy . . . . . . . . . . . . . . . . . . 66,500 (a) 459,208
Orkla ASA, Cl. B . . . . . . . . . . . . . . . . . . . 72,000 839,288
_____________
1,298,496
_____________
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1999 (UNAUDITED)
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ _______________
Peru--.3% Telefonica del Peru, ADS . . . . . . . . . . . . . . . 48,000 $ 567,000
_____________
Portugal--.6% Banco Pinto & Sotto Mayor . . . . . . . . . . . . . . 55,040 1,107,949
_____________
Singapore--1.3% Development Bank of Singapore . . . . . . . . . . . . 229,900 1,668,360
Singapore Press . . . . . . . . . . . . . . . . . . . 70,000 796,517
_____________
2,464,877
_____________
Spain--6.0% Argentaria, ADR . . . . . . . . . . . . . . . . . . . 32,800 1,558,000
Banco Popular Espanol . . . . . . . . . . . . . . . . 25,560 1,719,290
Endesa . . . . . . . . . . . . . . . . . . . . . . . . 91,125 2,423,693
Gas y Electricidad . . . . . . . . . . . . . . . . . . 23,445 2,273,190
Repsol, ADS . . . . . . . . . . . . . . . . . . . . . 59,000 3,097,500
_____________
11,071,673
_____________
Sweden--1.6% Autoliv . . . . . . . . . . . . . . . . . . . . . . . 68,700 2,601,189
Scania AB, Cl. A . . . . . . . . . . . . . . . . . . . 17,250 443,879
_____________
3,045,068
_____________
Switzerland--4.4% Barry Callebaut . . . . . . . . . . . . . . . . . . . 5,896 1,182,707
Forbo . . . . . . . . . . . . . . . . . . . . . . . . 4,660 1,901,778
Sulzer . . . . . . . . . . . . . . . . . . . . . . . . 2,960 1,750,571
Swisscom . . . . . . . . . . . . . . . . . . . . . . . 2,670 (a) 1,058,249
UBS . . . . . . . . . . . . . . . . . . . . . . . . . 7,420 2,314,740
_____________
8,208,045
_____________
United Kingdom--14.3% BOC . . . . . . . . . . . . . . . . . . . . . . . . . 170,373 2,301,869
Barclays . . . . . . . . . . . . . . . . . . . . . . . 71,000 1,895,770
British Airways . . . . . . . . . . . . . . . . . . . 139,671 1,031,392
British Airways, ADS . . . . . . . . . . . . . . . . . 8,000 592,000
Bunzl . . . . . . . . . . . . . . . . . . . . . . . . 570,779 2,058,271
Laird . . . . . . . . . . . . . . . . . . . . . . . . 330,000 1,179,427
LucasVarity . . . . . . . . . . . . . . . . . . . . . 69,917 317,679
Medeva . . . . . . . . . . . . . . . . . . . . . . . . 350,000 589,936
Morgan Crucible . . . . . . . . . . . . . . . . . . . 438,741 1,455,562
PowerGen . . . . . . . . . . . . . . . . . . . . . . . 243,223 2,980,124
Rio Tinto . . . . . . . . . . . . . . . . . . . . . . 140,554 1,821,275
Royal & Sun Alliance Insurance . . . . . . . . . . . . 288,471 2,438,804
Royal Bank of Scotland . . . . . . . . . . . . . . . . 93,000 1,815,442
Safeway . . . . . . . . . . . . . . . . . . . . . . . 494,642 2,126,586
Storehouse . . . . . . . . . . . . . . . . . . . . . . 692,510 1,675,928
Tomkins . . . . . . . . . . . . . . . . . . . . . . . 610,386 2,218,217
_____________
26,498,282
_____________
TOTAL COMMON STOCKS
(cost $174,984,565) . . . . . . . . . . . . . . . . $171,489,742
=============
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1999
(UNAUDITED)
Preferred Stocks--.6% Shares Value
- -------------------------------------------------------
____________ _______________
Germany: Hugo Boss . . . . . . . . . . . . . . . . . . . . . . 281 $ 476,793
Rheinmetall . . . . . . . . . . . . . . . . . . . . . 35,200 713,614
_____________
TOTAL PREFERRED STOCKS
(cost $1,078,280) . . . . . . . . . . . . . . . . . $ 1,190,407
=============
Principal
Short-Term Investments--4.4% Amount
- -------------------------------------------------------
____________
U.S. Treasury Bills: 4.27%, 4/15/99 . . . . . . . . . . . . . . . . . . . . $ 879,000 $ 873,836
4.24%, 4/22/99 . . . . . . . . . . . . . . . . . . . . 1,315,000 1,305,631
4.35%, 4/29/99 . . . . . . . . . . . . . . . . . . . . 1,800,000 1,786,061
4.38%, 5/13/99 . . . . . . . . . . . . . . . . . . . . 2,940,000 2,912,922
4.43%, 5/20/99 . . . . . . . . . . . . . . . . . . . . 1,268,000 1,254,915
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $8,137,819) . . . . . . . . . . . . . . . . . $ 8,133,365
=============
TOTAL INVESTMENTS (cost $184,200,664). . . . . . . . . . . . . . . . . . . . . . . . . . . 97.6% $180,813,514
======= =============
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4% $ 4,384,061
======= =============
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $185,197,575
======= =============
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1999 (UNAUDITED)
Cost Value
_____________ _____________
ASSETS: Investments in securities--See Statement of Investments . . $184,200,664 $180,813,514
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 73,400
Cash denominated in foreign currencies . . . . . . . . . 6,650,260 6,311,719
Receivable for investment securities sold . . . . . . . . 1,599,892
Dividends receivable . . . . . . . . . . . . . . . . . . 386,222
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 8,001
______________
189,192,748
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 148,537
Due to Distributor . . . . . . . . . . . . . . . . . . . 35,836
Payable for investment securities purchased . . . . . . . 3,690,973
Payable for shares of Common Stock redeemed . . . . . . . 65,413
Net unrealized depreciation on forward currency
exchange contracts--Note 4(a) . . . . . . . . . . . . . 3,717
Accrued expenses . . . . . . . . . . . . . . . . . . . . 50,697
______________
3,995,173
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $185,197,575
==============
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $188,309,122
Accumulated investment (loss) . . . . . . . . . . . . . . (607,934)
Accumulated net realized gain (loss) on investments
and foreign currency transactions . . . . . . . . . . . 1,218,542
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions . . . (3,722,155)
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $185,197,575
==============
SHARES OUTSTANDING
(100 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 12,646,297
NET ASSET VALUE, offering and redemption price per share--Note 3(d). . . . . . . . . . . . $14.64
========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)
INVESTMENT INCOME
INCOME: Cash dividends (net of $89,092 foreign taxes
withheld at source) . . . . . . . . . . . . . $ 519,215
Interest . . . . . . . . . . . . . . . . . . . 235,718
_____________
Total Income . . . . . . . . . . . . . . . . . $ 754,933
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . 869,027
Shareholder servicing costs--Note 3(b) . . . . . 237,350
Custodian fees . . . . . . . . . . . . . . . . . 67,075
Professional fees . . . . . . . . . . . . . . . . 17,571
Registration fees . . . . . . . . . . . . . . . . 16,694
Prospectus and shareholders' reports . . . . . . 7,034
Directors' fees and expenses--Note 3(c) . . . . . 5,783
Loan commitment fees--Note 2 . . . . . . . . . . 367
Miscellaneous . . . . . . . . . . . . . . . . . . 1,220
_____________
Total Expenses . . . . . . . . . . . . . . . . 1,222,121
_____________
INVESTMENT (LOSS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (467,188)
_____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and
foreign currency transactions . . . . . . . . $ 1,853,998
Net realized gain (loss) on forward currency
exchange contracts . . . . . . . . . . . . . . (10,764)
_____________
Net Realized Gain (Loss) . . . . . . . . . 1,843,234
Net unrealized appreication (depreciation)
on investments and foreign currency
transactions . . . . . . . . . . . . . . . . . 9,658,315
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 11,501,549
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $11,034,361
=============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 28, 1999 Year Ende
(Unaudited) August 31, 1998
_________________
OPERATIONS:
Investment income (loss)--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (467,188) $ 1,586,452
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . 1,843,234 8,994,634
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . 9,658,315 (17,114,291)
______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . 11,034,361 (6,533,205)
______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,669,642) (605,725)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,578,498) (2,990,766)
______________ ______________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,248,140) (3,596,491)
______________ ______________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,320,569 176,161,453
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,975,826 2,744,488
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (38,591,708) (102,965,527)
______________ ______________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . . 21,704,687 75,940,414
______________ ______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . . 22,490,908 65,810,718
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162,706,667 96,895,949
______________ ______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 185,197,575 $ 162,706,667
============== ==============
UNDISTRIBUTED INVESTMENT INCOME (LOSS)--NET. . . . . . . . . . . . . . . . . . . . . $ (607,934) $ 1,528,896
______________ ______________
Shares Shares
______________ ______________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,486,859 11,143,833
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . 539,272 185,941
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,601,484) (6,545,043)
______________ ______________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . 1,424,647 4,784,731
============== ==============
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Six Months Ended
February 28, 1999 Year Ended August 31,
-----------------------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA: (Unaudited) 1998 1997 1996(1)
______________ _______ _______ _______
Net asset value, beginning of period . . . . . . . . . . . . $14.50 $15.05 $13.23 $12.50
_______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . . (.04) .13 .07 .15
Net realized and unrealized gain (loss) on investments . . . 1.08 (.20) 1.98 .65
_______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . 1.04 (.07) 2.05 .80
_______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . (.15) (.08) (.10) (.04)
Dividends from net realized gain on investments . . . . . . . (.75) (.40) (.13) (.03)
_______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . . . (.90) (.48) (.23) (.07)
_______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . $14.64 $14.50 $15.05 $13.23
======= ======= ======= =======
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . . 7.19%(2) (.62%) 15.72% 6.43%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . .70%(2) 1.44% 1.49% 1.39%(2)
Ratio of net investment income (loss) to average net assets . . (.27%)(2) 1.17% 1.09% 1.78%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . . . . . . . -- -- .03% .51%(2)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . 16.23%(2) 34.46% 25.35% 19.14%(2)
Net Assets, end of period (000's Omitted) . . . . . . . . . . $185,198 $162,707 $96,896 $25,638
- ---------
(1) From September 29, 1995 (commencement of operations) to August 31, 1996.
(2) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus International Value Fund (the "Fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering eight series, including the Fund. The Fund's investment objective is
long-term capital growth. The Dreyfus Corporation (the "Manager") serves as the
Fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares, which are sold to the public without a sales charge.
The Company accounts separately for the assets, liabilities and operations of
each fund. Expenses directly attributable to each fund are charged to that
funds' operations; expenses which are applicable to all fund's are allocated
among them on a pro rata basis.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities
of short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Funds' books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains or losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the Fund received net
earnings credits of $3,989 during the period ended February 28, 1999, based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue.
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Code of 1986, as amended (the "Code"). To the extent that net realized capital
gain can be offset by capital loss carryovers, if any, it is the policy of the
Fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of the borrowings. During the period ended
February 28, 1999, the Fund did not borrow under the Facility.
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of 1% of the value of the Fund's average daily net
assets and is payable monthly.
(B) Under the Shareholder Services Plan, the Fund pays the Distributor at an
annual rate of .25 of 1% of the value of the Fund's average daily net assets for
the provision of certain services. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. The Distributor may
make payments to Service Agents (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
February 28, 1999, the Fund was charged $217,257 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended February 28, 1999, the Fund was charged $15,791 pursuant to the transfer
agency agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(D) A 1% redemption fee is charged and retained by the Fund on shares redeemed
within fifteen days following the date of issuance, including redemptions made
through the use of the Fund Exchange privilege.
NOTE 4--SECURITIES TRANSACTIONS:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts, during
the period ended February 28, 1999, amounted to $48,428,914 and $26,182,195,
respectively.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
In addition, the following summarizes open forward currency exchange contracts
at February 28, 1999:
Foreign
Currency Unrealized
<S> <C> <C> <C> <C>
Forward Currency Exchange Contracts Amounts Cost Value (Depreciation)
_________________________________ ________ _________ _________ ____________
Purchases:
_________
Euro Dollars, expiring 3/4/99 841,154 $928,129 $926,783 $(1,346)
Euro Dollars, expiring 3/31/99 451,459 498,366 497,418 (948)
Norwegian Krone, expiring 3/2/99 2,603,231 330,192 329,840 (352)
Swiss Francs, expiring 3/1/99 198,356 138,275 137,204 (1,071)
______
TOTAL . . . . . . . . . . . . . . $(3,717)
=======
</TABLE>
The Fund enters into forward currency exchange contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to settle foreign currency transactions. When executing forward
currency exchange contracts, the Fund is obligated to buy or sell a foreign
currency at a specified rate on a certain date in the future. With respect to
sales of forward currency exchange contracts, the Fund would incur a loss if the
value of the contract increases between the date the forward contract is opened
and the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to purchases
of forward currency exchange contracts, the Fund would incur a loss if the value
of the contract decreases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the value
of the contract increases between those dates. The Fund is also exposed to
credit risk associated with counter party nonperformance on these forward
currency exchange contracts which is typically limited to the unrealized gain on
each open contract.
(B) At February 28, 1999, accumulated net unrealized depreciation on
investments and forward currency exchange contracts was $3,390,867, consisting
of $13,522,408 gross unrealized appreciation and $16,913,275 gross unrealized
depreciation.
At February 28, 1999, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
dreyfus lion 'd' logo (reg.tm)
dreyfus logo (reg.tm)
DREYFUS INTERNATIONAL VALUE FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 254SA992
International Value
Fund
Semi-Annual
Report
February 28, 1999
<PAGE>
[LOGO]
Midcap Value
Fund
Semi-Annual
Report
February 28, 1999
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other 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.
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
For the six months ended February 28, 1999, the Dreyfus Midcap Value Fund
produced a total return of 18.61%.* This was moderately behind the total return
of 21.70% for the Russell Midcap Index, which serves as your fund's benchmark
index.**
Our investment approach for the fund focuses on purchasing undervalued
stocks with positive short-term business trends and solid long-term
fundamentals. We examine many measures to identify cheap stocks:
price/earnings, price/book, price/sales, enterprise value and breakup value
are the most important. We also pay close attention to normalized earnings
for cyclical industries. Our focus is on stocks that are attractive
versus their own historical valuation ranges and against the market as a whole.
Economic Review
Stresses in the financial system, combined with slowing economic growth,
convinced the Federal Reserve Board to lower short-term interest rates three
times during the fall of 1998: at the end of September, in mid-October, and in
mid-November. As the calendar year ended, the Fed's official stance toward rates
was neutral, since they believed that they had successfully stabilized the
financial system and overall economic growth.
February of 1999 saw the bond market send interest rates higher, however,
as investors worried about an acceleration in economic strength and the
possibility that the Fed might have to reverse itself and raise rates to slow
economic growth. During February, Fed Chairman Greenspan publicly worried that
the Board had gone too far with its mid-November action, which in retrospect may
not have been needed to stimulate the economy and may have actually caused some
overstimulation. The problem with too much growth is that it can become
uncontrollable and result in price inflation--and ultimately in a recession.
Inflation, the Fed's other worry, remained well contained throughout the
period. The decline in inflation and the lower interest rates benefited
companies that sell to the consumer, as more income was left over after price
increases to buy goods and services, and the cost of debt was reduced. Home
mortgages could be refinanced at lower rates, thus putting more discretionary
income in consumers' pockets. As consumers spent more, consumer-oriented
companies benefited.
The industrial sector has not been as fortunate. Weak Asian economies
have continued to put a damper on demand in a number of sectors, such as
world-traded commodities (paper producers, for example) and exporters of
goods (some computer equipment manufacturers, for example).
Stock Market Overview
The six-month period ended February 28, 1999 was highlighted in U.S. stock
markets by a drop in security prices during the summer months, and a rebound in
prices during the fall. Stocks declined over the summer due to the implosion of
the Russian financial system and the collapse of a major U.S. hedge fund,
causing the Federal Reserve Board to take its first action lowering interest
rates during the period, which generally stabilized equity prices. The two
subsequent interest-rate reductions by the Fed during the fall were probably
more directly related to worries about economic growth, and helped send stock
prices up.
Over the six-month period, large-cap growth stocks (the largest and most
expensively priced securities) turned in the highest returns, followed by
large-cap stocks in general, then large-cap value stocks (the largest companies
selling at value prices), midcap stocks (midsized companies) and finally
small-cap stocks. For example, the total return for the period on the Russell
1000 Growth Index (574 high-growth companies) was 37.89%, with the Russell 1000
Index (1,000 of the largest companies) returning 30.45%, and the Russell 1000
Value Index (710 value-priced companies) returning 22.53%. The return on the
Russell Midcap Index was 21.70%, while the small-cap Russell 2000 Index return
was 16.78%.+
<PAGE>
Expectations for slower profit growth at corporations have contributed to
the significant outperformance by a select few megacap growth stocks.
Investors have had more confidence in the consistent earnings growth from
this small group of stocks than for the broader stock market.
Portfolio Focus
The fund's dollar-weighted average market cap at the end of the reporting
period was $1.9 billion, compared to the Russell Midcap Index average of $6.9
billion. This emphasis on the lower range of the midcap universe hurt the fund's
performance because during the reporting period smaller-cap stocks generally
underperformed larger-cap stocks. Additionally, the fund's focus on value stocks
during a period when value stocks lagged growth stocks further hurt performance.
We continue to seek attractively valued stocks in many market sectors. As
investors become increasingly focused on the short-term outlook for companies
(i.e., next quarter's earnings sustainability), they may often miss the
long-term picture in the business analysis. With a perspective that is both
short- and long term, value oriented and research driven, we sought to
capitalize on the volatility in the market. We have invested with the belief
that the valuation disparity that has been created by the divergence in
performance between growth and value stocks, as well as large versus small
stocks, will be reversed, and that our style of investing will ultimately be
more rewarding. Because value stocks are generally in more cyclical industries,
this has also hurt performance relative to the Russell Midcap Index, which
includes both growth and value companies. We cannot predict when the turn will
come, but we will not deviate from our disciplined value approach in the
interim.
Our move into technology stocks, which hurt performance initially, made a
major contribution during the period. We had identified a number of very
attractive stocks, and when industry demand turned more favorable, many of these
stocks were up well over 100% in short order. We have sold certain holdings,
such as Teradyne and Quantum, as they reached our price targets. While we
continue to have a large weighting in technology, we have reduced our overall
exposure as the valuation anomalies have been reduced.
Once the Federal Reserve moved to stabilize financial markets last fall,
our holdings in the basic industries and capital goods sectors, which include
some of the most cyclical industries, started to show more favorable results. We
continue to emphasize these areas.
Many financial stocks have benefited from a favorable interest-rate
environment and the consolidation trend in the banking sector in recent years.
Valuation levels for most banks and thrifts are at the high end of their
historical range. During the reporting period, we were underweighted and have
continued to reduce our exposure to this group as stocks reached their price
targets, even though business momentum remained solid. Our underweighted
position helped performance during the reporting period.
We continued to emphasize energy stocks, particularly domestic exploration
and production companies. This hurt performance during the period. Oil prices
have continued to languish, although we have seen recent modest increases as
OPEC attempts to lower production, and global economic activity has started
to show some strength. Many of these companies trade at or near all-time low
valuations on such relevant measures as price-to-cash flow and price-to-book
value. If energy prices recover to more normal levels, these stocks would appear
to be even cheaper. Nonetheless, this commitment has been slightly reduced as
the groups' momentum remains negative and more compelling investment
opportunities have been found elsewhere.
<PAGE>
With consumer confidence still at a high level and with unemployment and
inflation at historic lows, we believe the consumer sectors should continue to
be strong. We have sought high quality, consistent growers in these sectors that
have been severely penalized by the market, due to short-term challenges or a
modest deceleration of growth. We have taken advantage of market overreactions
to add stocks such as Wendy's International and Toys R Us to the fund.
Although we maintain an overweighted position in healthcare, which hurt
performance during the period, we reduced our commitment because of the
uncertain reimbursement environment and several earnings disappointments. This
sector has good long-term potential due to advances in medical technology that
will drive earnings growth for many of the companies. Quest Diagnostics, a
leading clinical laboratory testing company, continues to be one of our largest
portfolio holdings.
Utilities performed relatively well during the period. Falling interest
rates and, more importantly, investors seeking a safe haven from possible
earnings disappointments in other sectors of the market were responsible for
this development. While such defensive tendencies may continue to push utilities
higher, we have a minimal commitment to the sector because growth prospects are
anemic, business momentum is neutral and political risks are high.
We thank you for your interest in this Dreyfus fund. For our part, we
continue to work diligently to bring you rewarding returns.
Sincerely,
/s/ Peter I. Higgins
Peter I. Higgins
Portfolio Manager
March 18, 1999
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** SOURCE: LIPPPER ANALYTICAL SERVICES, INC -- The Russell Midcap Index consists
of the bottom 800 securities in the Russell 1000 Index as ranked by total
market capitalization and is a widely accepted measure of medium-cap stock
market performance.
+ SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Russell 1000 Index measures
the performance of the 1,000 largest companies in the Russell 3000 Index,
which represent approximately 89% of the total market capitalization of the
Russell 3000 Index. The Russell 1000 Growth Index measures the performance
of those Russell 1000 companies with higher price-to-book ratios and higher
forecasted growth values. The Russell 1000 Value Index measures the
performance of those Russell 1000 companies with lower price-to-book ratios
and lower forecasted growth values. The Russell Midcap Index consists of
the bottom 800 securities in the Russell 1000 Index as ranked by total market
capitalization, and is a widely accepted measure of medium-cap stock market
performance. The Russell 2000 Index is composed of the 2,000 smallest
companies in the Russell 3000 Index. The Russell 3000 Index is composed of
3,000 of the largest U.S. companies by market capitalization. All indices
are unmanaged and include reinvested dividends.
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
Statement of Investments February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks--98.8% Shares Value
- -------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C> <C>
Basic Industries--8.4% Fort James..................................... 50,000 $ 1,493,750
Geon........................................... 27,400 625,063
IMC Global..................................... 41,100 819,431
Metro-Goldwyn-Mayer............................ 36,100 (a) 376,794
Safety-Kleen................................... 129,975 (a) 1,811,527
Smurfit-Stone Container........................ 63,447 (a) 1,146,011
-----------
6,272,576
-----------
Capital Goods--9.3% Browning-Ferris Industries..................... 27,500 866,250
Commscope...................................... 60,700 (a) 1,126,744
Federal-Mogul.................................. 24,100 1,185,419
Millipore...................................... 40,700 1,134,513
Thermo Electron................................ 66,900 (a) 924,056
U.S. Filter.................................... 54,500 (a) 1,338,656
Wabash National................................ 27,100 333,669
-----------
6,909,307
-----------
Consumer Durables--5.1% American Standard.............................. 17,200 (a) 577,275
Kaufman & Broad Home........................... 35,900 807,750
Sensormatic Electronics........................ 104,400 (a) 1,096,200
Snap-On........................................ 46,700 1,319,275
-----------
3,800,500
-----------
Consumer Non-Durables--9.2% Ball........................................... 10,700 448,063
Houghton Mifflin............................... 19,600 842,800
International Home Foods....................... 57,400 (a) 896,875
Interstate Bakeries............................ 31,600 758,400
Liz Claiborne.................................. 31,500 1,061,156
Reader's Digest Association, Cl. A............. 23,000 743,188
Rexall Sundown................................. 32,900 (a) 470,881
Tommy Hilfiger................................. 19,100 (a) 1,319,094
Twinlab........................................ 39,200 (a) 334,425
-----------
6,874,882
-----------
Consumer Services--20.9% Borders Group................................. 67,700 (a) 935,106
Burlington Coat Factory........................ 28,800 370,800
CKE Restaurants................................ 35,200 935,000
CompUSA........................................ 60,400 (a) 634,200
Deluxe......................................... 14,100 477,638
Dillard's, Cl. A............................... 31,300 (a) 778,588
General Nutrition.............................. 49,000 (a) 655,375
Great Atlantic & Pacific Tea................... 17,900 564,969
Kmart.......................................... 58,600 (a) 1,025,500
Manpower....................................... 36,200 866,538
OfficeMax...................................... 112,500 (a) 871,875
Paging Network................................. 117,000 (a) 468,000
Payless ShoeSource............................. 16,000 (a) 878,000
Pep Boys-Manny, Moe & Jack..................... 51,800 945,350
</TABLE>
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C> <C>
Consumer Services (continued) Republic Services, Cl. A....................... 9,800 (a) $ 170,888
Toys R Us...................................... 61,400 (a) 867,275
True North Communications...................... 41,400 965,138
Unisource Worldwide............................ 96,400 674,800
Venator Group.................................. 260,600 (a) 1,286,713
Wendy's International.......................... 52,500 1,256,719
-----------
15,628,472
-----------
Energy--8.3% BJ Services.................................... 43,300 (a) 608,906
Burlington Resources........................... 17,100 553,613
EEX............................................ 50,566 (a) 306,556
Enron Oil & Gas................................ 45,900 757,350
Newfield Exploration........................... 13,200 (a) 214,500
R&B Falcon..................................... 125,300 (a) 689,150
Santa Fe Energy Resources...................... 199,300 1,046,325
Santa Fe International......................... 22,600 302,275
Tosco.......................................... 58,500 1,210,211
Weatherford International...................... 30,725 522,325
-----------
6,211,211
-----------
Finance--7.9% Affiliated Managers Group...................... 10,400 (a) 270,400
Allmerica Financial............................ 20,800 1,110,200
Astoria Financial.............................. 23,020 1,043,094
Golden State Bancorp........................... 119,800 (a) 2,133,938
Heller Financial, Cl. A........................ 56,300 1,361,756
-----------
5,919,388
-----------
Health Care--8.3% Beckman Coulter................................ 26,800 1,294,775
ESC Medical Systems............................ 84,400 (a) 424,638
Foundation Health Systems, Cl. A............... 115,100 (a) 920,800
HEALTHSOUTH.................................... 85,900 (a) 998,588
Quest Diagnostics.............................. 81,600 (a) 1,744,200
Total Renal Care Holdings...................... 92,400 (a) 820,050
-----------
6,203,051
-----------
Technology--19.4% AVX............................................ 2,500 34,219
Atmel.......................................... 65,900 (a) 1,132,656
CHS Electronics................................ 41,300 (a) 289,100
Conexant Systems............................... 52,100 885,700
Electroglas.................................... 29,300 (a) 378,153
Hyperion Solutions............................. 48,900 (a) 693,769
Lam Research................................... 35,900 (a) 1,061,294
Learning Company............................... 26,900 (a) 781,781
Maxtor......................................... 78,300 (a) 645,975
National Semiconductor......................... 56,300 (a) 591,150
Parametric Technology.......................... 76,200 (a) 1,171,575
Sybase......................................... 118,700 (a) 964,438
Symantec....................................... 30,800 (a) 556,325
Tech Data...................................... 42,600 (a) 724,200
</TABLE>
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C> <C>
Technology (continued) Varian Associates.............................. 40,000 $ 1,280,000
Vishay Intertechnology......................... 92,700 (a) 1,199,306
Wang Laboratories.............................. 88,000 (a) 2,101,000
-----------
14,490,641
-----------
Transportation--1.7% Yellow......................................... 71,400 (a) 1,276,275
-----------
Utilities--.3% Call-Net Enterprises, Cl. B.................... 31,800 (a) 208,688
-----------
TOTAL COMMON STOCKS
(cost $81,807,817)........................... $73,794,991
===========
Principal
Short-Term Investments--2.2% Amount
- ------------------------------------------------------------------------------- ---------
U.S. Treasury Bills: 4.64%, 4/22/1999............................... $759,000 $ 753,592
4.43%, 5/20/1999............................... 899,000 889,724
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $1,644,065)........................... $ 1,643,316
===========
TOTAL INVESTMENTS (cost $83,451,882)........................................... 101.0% $75,438,307
====== ===========
LIABILITIES, LESS CASH AND RECEIVABLES......................................... (1.0%) $ (738,258)
====== ===========
NET ASSETS..................................................................... 100.0% $74,700,049
====== ===========
<FN>
Notes to Statement of Investments:
- -------------------------------------------------------------------------------------------------------------------
(a) Non-income producing.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
-------------- -----------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $83,451,882 $75,438,307
Cash............................................. 4,210
Receivable for investment securities sold........ 1,076,820
Receivable for shares of Common Stock subscribed. 47,751
Dividends receivable............................. 47,269
Prepaid expenses................................. 21,769
-----------
76,636,126
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 68,191
Due to Distributor............................... 15,015
Payable for investment securities purchased...... 1,533,000
Payable for shares of Common Stock redeemed...... 290,421
Interest payable--Note 2.......................... 4,519
Accrued expenses................................. 24,931
-----------
1,936,077
-----------
NET ASSETS..................................................................... $74,700,049
===========
REPRESENTED BY: Paid-in capital.................................. $95,917,764
Accumulated investment (loss).................... (461,740)
Accumulated net realized gain (loss) on investments (12,742,400)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4......................... (8,013,575)
-----------
NET ASSETS..................................................................... $74,700,049
===========
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized)................ 4,519,838
NET ASSET VALUE, offering and redemption price per share--Note 3(d)............ $16.53
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
Statement of Operations Six Months Ended February 28, 1999 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C>
INCOME: Cash dividends (net of $486 foreign taxes <C> <C>
withheld at source)............................ $ 160,722
Interest......................................... 7,771
------------
Total Income................................. $ 168,493
EXPENSES: Management fee--Note 3(a)........................ 329,065
Shareholder servicing costs--Note 3(b)........... 191,179
Interest expense--Note 2......................... 29,793
Registration fees................................ 24,947
Custodian fees--Note 3(b)........................ 21,494
Professional fees................................ 18,788
Prospectus and shareholders' reports............. 9,311
Directors' fees and expenses--Note 3(c).......... 2,595
Loan commitment fees--Note 2..................... 261
Miscellaneous.................................... 2,800
------------
Total Expenses............................... 630,233
-----------
INVESTMENT (LOSS).............................................................. (461,740)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments.......... $(11,335,154)
Net unrealized appreciation (depreciation) on investments 27,497,658
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 16,162,504
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $15,700,764
===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1999 Year Ended
(Unaudited) August 31, 1998
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment (loss)................................................... $ (461,740) $ (320,040)
Net realized gain (loss) on investments............................. (11,335,154) 9,569,664
Net unrealized appreciation (depreciation) on investments........... 27,497,658 (41,688,800)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations... 15,700,764 (32,439,176)
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net realized gain on investments.................................... (9,344,038) (6,040,421)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold....................................... 17,388,672 126,448,114
Dividends reinvested................................................ 9,051,684 5,763,416
Cost of shares redeemed............................................. (38,397,295) (94,925,810)
------------ ------------
Increase (Decrease) in Net Assets from Capital Stock Transactions. (11,956,939) 37,285,720
------------ ------------
Total Increase (Decrease) in Net Assets......................... (5,600,213) (1,193,877)
NET ASSETS:
Beginning of Period................................................. 80,300,262 81,494,139
------------ ------------
End of Period....................................................... $ 74,700,049 $ 80,300,262
============ ============
Shares Shares
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 985,313 5,669,980
Shares issued for dividends reinvested.............................. 529,959 274,710
Shares redeemed..................................................... (2,212,806) (4,393,602)
------------ ------------
Net Increase (Decrease) in Shares Outstanding..................... (697,534) 1,551,088
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended Year Ended August 31,
February 28, 1999 ----------------------------
PER SHARE DATA: (Unaudited) 1998 1997 1996(1)
------------------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.......................... $15.39 $22.23 $15.80 $12.50
------ ------ ------ ------
Investment Operations:
Investment income (loss)--net................................. (.10) (.06)(2) (.01) .08
Net realized and unrealized gain (loss)
on investments............................................. 3.02 (5.73) 8.23 3.28
------ ------ ------ ------
Total from Investment Operations.............................. 2.92 (5.79) 8.22 3.36
------ ------ ------ ------
Distributions:
Dividends from investment income--net......................... -- -- (.04) (.04)
Dividends from net realized gain on investments............... (1.78) (1.05) (1.75) (.02)
------ ------ ------ ------
Total Distributions........................................... (1.78) (1.05) (1.79) (.06)
------ ------ ------ ------
Net asset value, end of period................................ $16.53 $15.39 $22.23 $15.80
====== ====== ====== ======
TOTAL INVESTMENT RETURN.......................................... 18.61%(3) (27.32%) 55.45% 26.88%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets............. .68%(3) 1.29% 1.25% 1.18%(3)
Ratio of interest expense and loan commitment fees
to average net assets...................................... .03%(3) .01% .01% .01%(3)
Ratio of net investment income (loss) to average net assets... (.52%)(3) (.25%) (.14%) .56%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager......................... -- -- .26% 1.13%(3)
Portfolio Turnover Rate....................................... 124.26%(3) 168.72% 154.92% 266.80%(3)
Net Assets, end of period (000's Omitted)..................... $74,700 $80,300 $81,494 $3,591
<FN>
- ------------------------
(1) From September 29, 1995 (commencement of operations) to August 31, 1996.
(2) Based on average shares outstanding at each month end.
(3) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Midcap Value Fund (the "Fund") is a separate diversified series of
Dreyfus Growth and Value Funds, Inc. (the"Company") which is registered under
the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering eight series, including the Fund. The Fund's investment objective is to
provide investment results that exceed the total return performance of publicly
traded common stocks in the aggregate, as represented by a recognized index of
mid cap stocks. The Dreyfus Corporation (the"Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon"). Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a sales
charge.
The Company accounts separately for the assets, liabilities and operations
of each fund. Expenses directly attributable to each fund are charged to that
funds' operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the Fund receives net
earnings credits based on available cash balances left on deposit.
(c) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Bank Lines of Credit:
The Fund may borrow up to $10 million for leveraging purposes under a
short-term unsecured line of credit and participates with other
Dreyfus-managed funds in a $100 million unsecured line of credit primarily to be
utilized for temporary or emergency purposes, including the financing of
redemptions. Interest is charged to the Fund at rates which are related to the
Federal Funds rate in effect at the time of borrowings.
<PAGE>
Dreyfus Midcap Value Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The average daily amount of borrowings outstanding under both arrangements
during the period ended February 28, 1999 was approximately $1,153,300, with a
related weighted average annualized interest rate of 5.21%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .75 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
(b) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the Fund's average daily net assets
for the provision of certain services. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
During the period ended February 28, 1999, the Fund was charged $109,688
pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended February 28, 1999, the Fund was charged $37,315 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement for providing
custodial services for the Fund. During the period ended February 28, 1999, the
Fund was charged $21,494 pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged and retained by the Fund on shares
redeemed within fifteen days following the date of issuance, including
redemptions made through the use of the Fund Exchange privilege.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended February 28, 1999,
amounted to $107,849,646 and $130,193,272, respectively.
At February 28, 1999, accumulated net unrealized depreciation on
investments was $8,013,575, consisting of $4,949,654 gross unrealized
appreciation and $12,963,229 gross unrealized depreciation.
At February 28, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting purposes
(see the Statement of Investments).
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
[LOGO]
Dreyfus Midcap Value Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 258SA992
<PAGE>
Dreyfus
Technology Growth
Fund
Semi-Annual
Report
February 28, 1999
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other 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.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
It is a pleasure to send you this report on Dreyfus Technology Growth Fund
for the semiannual period ended February 28, 1999. The fund's total return for
the six months was 94.72%,* which was more than triple the total return of
30.27% for the Standard & Poor's 500 Composite Stock Price Index (S&P 500).**
The fund benefited from a number of extremely favorable developments
discussed below. Of course, past performance is no guarantee of future results,
and the fund's relatively small asset size, combined with a period of high
performance in the technology sector, helped contribute to the fund's
performance. While we believe that the technology sector has a bright future,
investors should remember that the technology sector has been among the most
volatile sectors of the stock market. Investors should not expect these kinds of
returns in the future.
Economic Review
Stresses in the financial system, combined with slowing economic growth,
convinced the Federal Reserve Board to lower short-term interest rates three
times during the fall of 1998: at the end of September, in mid-October, and in
mid-November. As the calendar year ended, the Fed's official stance toward rates
was neutral, since they believed that they had successfully stabilized the
financial system and overall economic growth.
February of 1999 saw the bond market send interest rates higher, however, as
investors worried about an acceleration in economic strength and the possibility
that the Fed might have to reverse itself and raise rates to slow economic
growth. During February, Fed Chairman Greenspan publicly worried that the Board
had gone too far with its mid-November action, which in retrospect may not have
been needed to stimulate the economy and may have actually caused some
overstimulation. The problem with too much growth is that it can become
uncontrollable and result in price inflation--and ultimately in a recession.
Inflation, the Fed's other worry, remained well contained throughout the
period. The decline in inflation and the lower interest rates benefited
companies that sell to the consumer, as more income was left over after price
increases to buy goods and services, and the cost of debt was reduced. Home
mortgages could be refinanced at lower rates, thus putting more discretionary
income in consumers' pockets. As consumers spent more, consumer-oriented
companies benefited.
The industrial sector has not been as fortunate. Weak Asian economies have
continued to put a damper on demand in a number of sectors, such as world-traded
commodities (paper producers, for example) and exporters of goods (some computer
equipment manufacturers, for example).
Stock Market Overview
The six-month period ended February 28, 1999 was highlighted in U.S. stock
markets by a drop in security prices during the summer months, and a rebound in
prices during the fall. Stocks declined over the summer due to the implosion of
the Russian financial system and the collapse of a major U.S. hedge fund,
causing the Federal Reserve Board to take its first action lowering interest
rates during the period, which generally stabilized equity prices. The two
subsequent interest rate reductions by the Fed during the fall were probably
more directly related to worries about economic growth, and helped send stock
prices up.
Over the six-month period, large-cap growth stocks (the largest and most
expensively priced securities) turned in the highest returns, followed by
large-cap stocks in general, then large-cap value stocks (the largest companies
selling at value prices), midcap stocks (midsized companies) and finally
small-cap stocks. For example, the total return for the period on the Russell
1000 Growth Index (574 high-growth companies) was 37.89%, with the Russell 1000
Index (1,000 of the largest companies) returning 30.45%, and the Russell 1000
Value Index (710 value-priced companies) returning 22.53%. The return on the
Russell Midcap Index was 21.70%, while the small-cap Russell 2000 Index return
was 16.78%.+
<PAGE>
Expectations for slower profit growth at corporations have contributed to the
significant outperformance by a select few megacap growth stocks. Investors have
had more confidence in the consistent earnings growth from this small group of
stocks than for the broader stock market.
Portfolio Focus
The six-month period ending February 28, 1999 was characterized by
extraordinary volatility for the stock market as a whole and especially for
technology stocks. The first six weeks of this period, from August 1998 through
the middle of October, saw sustained weakness in technology stocks as investors
struggled to evaluate the impact of problems in Russia and Asia.
However, investor sentiment shifted quite sharply as it became clear that
foreign problems would have less impact than was initially thought on demand for
high tech products, and tech stocks came back with a vengeance. For the
six-month period ended February 28, 1999, the Morgan Stanley High Technology 35
Index (Tech-35)++ showed a total return of 94.65%, while the S&P was up 30.27%
over the same period. Your fund matched the return of the Tech-35 index with a
total return of 94.72% during the same six-month period.
In achieving these returns, the fund maintained its focus on market-leading
companies in the fastest-growing areas of technology. Your fund continued to
maintain positions across eight segments of the technology world, again
consistent with the original goal of diversification.
One particular theme that has guided many of the investments of your fund has
been the expected strong growth in high-speed broadband communications both to
business and residential users in the United States and throughout the world.
The extraordinary growth in use of the Internet is the most important driver of
this demand.
Investments in leading Internet companies like America Online, Yahoo! and
CMGI all proved highly profitable. However, many other companies in a variety of
industries are also benefiting from the demand for bandwidth, and your fund has
successfully invested in many of them.
Companies like Uniphase and SDL, Inc. supply optical components which are the
core building blocks of advanced communications systems, while Vitesse
Semiconductor and PMC-Sierra supply semiconductor chips that are specialized for
communications. Investments in these companies have proved rewarding.
The fund also owned systems companies like Cisco Systems, Lucent Technologies
and Tellabs. These companies are key suppliers to communications service
providers and these stocks, too, have done quite well.
Finally, a variety of communications service providers is taking advantage of
the newest generation of equipment to lower the cost of providing existing
services and to add new ones. Emerging service providers owned by your fund
included Metromedia Fiber Network, Cl.A, Qwest Communications and NEXTLINK
Communications, Cl.A. The fund also owned established companies like MCI
WorldCom and Bell Atlantic. The value of these shares was up during this period.
There is an unusual factor that grew increasingly visible during the latter
half of 1998 and into 1999: the approach of the year 2000. A tremendous amount
of corrective action has been taken to make sure that existing systems properly
understand this date. The impact on most technology companies has been mixed;
for every company whose business has improved because of Y2K spending, there
seems to be another whose business has been hurt.
One area that suffered clear damage from Y2K is enterprise software. These
are programs whose common characteristics include great complexity and
difficulty in deployment. With companies focusing their limited technology
budgets toward ensuring Y2K compatibility, enterprise software providers
experienced a sharp decline in orders. Enterprise software companies that hurt
the fund's performance included BMC Systems and Informix. These companies
declined in value.
<PAGE>
Computer hardware stocks generally performed well, and the fund had a
substantial gain in Dell Computer. At the same time, investments in
Hewlett-Packard and Apple Computer did not perform well.
Nevertheless, I remain very confident in the long-term outlook for technology
stocks and continue to believe they offer the potential for superior performance
for investors willing to accept the greater risks associated with such
investments.
Sincerely
/s/ Mark Herskovitz
Mark Herskovitz
Portfolio Manager
March 18, 1999
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted,
unmanaged index of U.S. stock market performance.
+ SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Russell 1000 Index measures
the performance of the 1,000 largest companies in the Russell 3000 Index,
which represent approximately 89% of the total market capitalization of the
Russell 3000 Index. The Russell 1000 Growth Index measures the performance of
those Russell 1000 companies with higher price-to-book ratios and higher
forecasted growth values. The Russell 1000 Value Index measures the
performance of those Russell 1000 companies with lower price-to-book ratios
and lower forecasted growth values. The Russell Midcap Index consists of the
bottom 800 securities in the Russell 1000 Index as ranked by total market
capitalization, and is a widely accepted measure of medium-cap stock market
performance. The Russell 2000 Index is composed of the 2,000 smallest
companies in the Russell 3000 Index. The Russell 3000 Index is composed of
3,000 of the largest U.S. companies by market capitalization. All indices are
unmanaged and include reinvested dividends.
++ SOURCE: MORGAN STANLEY & CO., INCORPORATED -- The Morgan Stanley High
Technology 35 Index (Tech 35) is an unmanaged equal-weighted index composed
of electronics-based technology companies. The 35 bellwether stocks include
many of the most highly capitalized companies, both large and small, in the
diverse technology industry with market capitalizations ranging from about $1
billion to more than $100 billion. The Index is the property of Morgan
Stanley & Co., Incorporated and includes gross dividends reinvested.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
Statement of Investments February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks--92.5% Shares Value
- ----------------------------------------------------------------------- ------------- ---------------
<S> <C> <C> <C>
Commercial Services--1.7% Automatic Data Processing.............. 80,000 $ 3,180,000
-------------
Computer Hardware--14.3% Apple Computer......................... 100,000 (a) 3,481,250
Dell Computer.......................... 75,000 (a) 6,009,375
EMC.................................... 35,000 (a) 3,583,125
Hewlett-Packard........................ 55,000 3,654,062
Lexmark International Group, Cl. A..... 50,000 (a) 5,159,375
Quantum................................ 150,000 (a) 2,465,625
Seagate Technology..................... 70,000 (a) 2,025,625
-------------
26,378,437
-------------
Computer Software--12.1% Informix............................... 275,000 (a) 2,406,250
Intuit................................. 20,000 (a) 1,978,750
Legato Systems......................... 30,000 (a) 1,477,500
Microsoft.............................. 40,000 (a) 6,005,000
Parametric Technology.................. 230,000 (a) 3,536,250
Rational Software...................... 150,000 (a) 4,453,125
Security Dynamics Technologies......... 130,000 (a) 2,405,000
-------------
22,261,875
-------------
Internet--14.6% Amazon.com............................. 35,000 (a) 4,484,375
America Online......................... 40,000 (a) 3,557,500
CMGI................................... 50,000 (a) 6,131,250
DoubleClick............................ 45,000 (a) 4,044,375
Excite................................. 40,000 (a) 4,100,000
Yahoo!................................. 30,000 (a) 4,605,000
-------------
26,922,500
-------------
Networking--4.1% Cisco Systems.......................... 50,000 (a) 4,890,625
FORE Systems........................... 180,000 (a) 2,610,000
-------------
7,500,625
-------------
Semiconductors--18.3% Applied Materials...................... 60,000 (a) 3,337,500
Etec Systems........................... 55,000 (a) 2,437,188
Intel.................................. 40,000 4,797,500
KLA-Tencor............................. 70,000 (a) 3,626,875
Level One Communications............... 105,000 (a) 3,517,500
PMC-Sierra............................. 45,000 (a) 3,189,375
Rambus................................. 75,000 (a) 5,451,562
Taiwan Semiconductor Manufacturing, A.D.R. 220,000 (a) 4,276,250
Vitesse Semiconductor.................. 70,000 (a) 3,215,625
-------------
33,849,375
-------------
Telecommunications--12.3% Bell Atlantic.......................... 80,000 4,595,000
MCI WorldCom........................... 80,000 (a) 6,600,000
Metromedia Fiber Network, Cl. A........ 100,000 (a) 4,350,000
NEXTLINK Communications, Cl. A......... 70,000 (a) 3,202,500
Qwest Communications................... 65,000 (a) 3,993,438
-------------
22,740,938
-------------
</TABLE>
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------- ------------- ---------------
<S> <C> <C> <C>
Telecommunications
Equipment--15.1% AVT.................................... 100,000 (a) $ 2,587,500
Aware.................................. 100,000 (a) 3,462,500
Lucent Technologies.................... 60,000 6,093,750
Newbridge Networks..................... 125,000 (a) 3,046,875
SDL.................................... 85,000 (a) 4,632,500
Tellabs................................ 50,000 (a) 4,003,125
Uniphase............................... 45,000 (a) 3,965,625
-------------
27,791,875
-------------
TOTAL COMMON STOCKS
(cost $158,976,207).................. $170,625,625
=============
Principal
Short-Term Investments--5.5% Amount
- ----------------------------------------------------------------------- -------------
U.S. Treasury Bills: 4.65%, 4/22/1999....................... $ 2,467,000 $ 2,449,422
4.35%, 4/29/1999....................... 3,528,000 3,500,679
4.36%, 5/6/1999........................ 353,000 349,973
4.40%, 5/13/1999....................... 2,249,000 2,228,287
4.46%, 5/20/1999....................... 1,718,000 1,700,272
-------------
TOTAL SHORT-TERM INVESTMENTS
(cost $10,233,363)................. $ 10,228,633
=============
TOTAL INVESTMENTS (cost $169,209,570)................................. 98.0% $180,854,258
======= =============
CASH AND RECEIVABLES (NET)............................................ 2.0% $ 3,718,041
======= =============
NET ASSETS............................................................ 100.0% $184,572,299
======= =============
</TABLE>
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
(a) Non-income producing.
See notes to financial statements.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $169,209,570 $180,854,258
Cash................................................... 1,968,211
Receivable for investment securities sold.............. 1,999,432
Receivable for shares of Common Stock subscribed....... 1,449,168
Dividends receivable................................... 3,966
Prepaid expenses....................................... 34,859
-------------
186,309,894
-------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates........ 84,468
Due to Distributor................................... 32,738
Payable for investment securities purchased.......... 1,401,125
Payable for shares of Common Stock redeemed.......... 157,613
Accrued expenses..................................... 61,651
-------------
1,737,595
-------------
NET ASSETS......................................................................... $184,572,299
=============
REPRESENTED BY: Paid-in capital...................................... $167,285,947
Accumulated investment (loss)........................ (196,964)
Accumulated net realized gain (loss) on investments.. 5,838,628
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4............................ 11,644,688
-------------
NET ASSETS......................................................................... $184,572,299
=============
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized).................... 7,865,776
NET ASSET VALUE, offering and redemption price per share--Note 3(d)................ $23.47
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
Statement of Operations Six Months Ended February 28, 1999 (Unaudited)
INVESTMENT INCOME
<TABLE>
<S> <C> <C>
INCOME: Interest......................................... $ 170,961
Cash dividends................................... 5,048
-----------
Total Income.................................. $ 176,009
EXPENSES: Management fee--Note 3(a)......................... 225,448
Shareholder servicing costs--Note 3(b)............ 95,229
Registration fees................................ 57,165
Auditing fees.................................... 20,500
Custodian fees--Note 3(b)......................... 9,041
Prospectus and shareholders' reports............. 5,737
Directors' fees and expenses--Note 3(c)........... 2,318
Legal fees....................................... 1,301
Miscellaneous.................................... 2,587
-----------
Total Expenses................................. 419,326
Less--reduction in management fee due to
undertaking--Note 3(a).......................... (46,353)
-----------
Net Expenses.................................... 372,973
------------
INVESTMENT (LOSS)............................................................... (196,964)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments........... $ 6,093,089
Net unrealized appreciation (depreciation) on
investments..................................... 12,391,672
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 18,484,761
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $18,287,797
============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1999 Year Ended
(Unaudited) August 31, 1998*
----------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment (loss)....................................................... $ (196,964) $ (71,278)
Net realized gain (loss) on investments................................. 6,093,089 (37,885)
Net unrealized appreciation (depreciation) on investments............... 12,391,672 (746,984)
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations....... 18,287,797 (856,147)
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net realized gain on investments........................................ (145,298) --
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 191,857,611 24,327,585
Dividends reinvested.................................................... 140,315 --
Cost of shares redeemed................................................. (37,938,114) (11,101,450)
------------- -------------
Increase (Decrease) in Net Assets from Capital Stock Transactions..... 154,059,812 13,226,135
------------- -------------
Total Increase (Decrease) in Net Assets............................. 172,202,311 12,369,988
NET ASSETS:
Beginning of Period..................................................... 12,369,988 --
------------- -------------
End of Period........................................................... $184,572,299 $ 12,369,988
============= =============
Shares Shares
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 8,594,946 1,821,033
Shares issued for dividends reinvested.................................. 8,046 --
Shares redeemed......................................................... (1,758,515) (799,734)
------------- -------------
Net Increase (Decrease) in Shares Outstanding......................... 6,844,477 1,021,299
============= =============
</TABLE>
- ------------------
* From October 13, 1997 (commencement of operations) to August 31, 1998.
See notes to financial statements.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1999 Year Ended
PER SHARE DATA: (Unaudited) August 31, 1998(1)
---------- ----------------
<S> <C> <C>
Net asset value, beginning of period................................ $12.11 $12.50
------ ------
Investment Operations:
Investment (loss) (2)............................................... (.06) (.10)
Net realized and unrealized gain (loss) on investments.............. 11.50 (.29)
------ ------
Total from Investment Operations.................................... 11.44 (.39)
------ ------
Distributions:
Dividends from net realized gain on investments..................... (.08) --
------ ------
Net asset value, end of period...................................... $23.47 $12.11
====== ======
TOTAL INVESTMENT RETURN (3)............................................ 94.72% (3.12%)(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets (3)............... .62% 1.12%
Ratio of interest expense to average net assets (3)................. -- .01%
Ratio of net investment (loss) to average net assets (3)............ (.32%) (.77%)
Decrease reflected in above expense ratios
due to undertakings by the Manager (3)........................... .08% .81%
Portfolio Turnover Rate (3)......................................... 69.49% 291.12%
Net Assets, end of period (000's Omitted)........................... $184,572 $12,370
</TABLE>
- --------------------
(1) From October 13, 1997 (commencement of operations) to August 31, 1998.
(2) Based on average shares outstanding at each month end.
(3) Not annualized.
(4) Calculated based on net asset value on the close of business on October 14,
1997 (commencement of initial offering) to August 31, 1998.
See notes to financial statements.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Technology Growth Fund (the "Fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering eight series, including the Fund. The Fund's investment objective is
capital appreciation. The Dreyfus Corporation (the "Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. ("Mellon"). Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a sales
charge.
The Company accounts separately for the assets, liabilities and operations of
each fund. Expenses directly attributable to each fund are charged to that
fund's operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities
of short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the Fund received net
earnings credits of $3,075 during the period ended February 28, 1999 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(e) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The Fund may borrow up to $5 million for leveraging purposes under a
short-term unsecured line of credit and participates with other Dreyfus-managed
funds in a $100 million unsecured line of credit primarily to be utilized for
temporary or emergency purposes, including the financing of redemptions.
Interest is charged to the Fund at rates which are related to the Federal Funds
rate in effect at the time of borrowings. During the period ended February 28,
1999, the Fund did not borrow under these arrangements.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .75 of 1% of the value of the Fund's average
daily net assets and is payable monthly. The Manager had undertaken from
September 1, 1998 through February 28, 1999 to reduce the management fee paid by
or reimburse such excess expenses of the Fund, to the extent that the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings (which
in the view of Stroock & Stroock & Lavan LLP, counsel to the Fund, also
contemplates loan commitment fees and dividends and interest accrued on
securities sold short) and extraordinary expenses, exceeded an annual rate of
1.25% of the value of the Fund's average daily net assets. The reduction in
management fee, pursuant to the undertaking, amounted to $46,353 during the
period ended February 28, 1999.
(b) Under the Shareholder Services Plan, the Fund pays the Distributor at an
annual rate of .25 of 1% of the value of the Fund's average daily net assets for
the provision of certain services. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. The Distributor may
make payments to Service Agents (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
February 28, 1999, the Fund was charged $75,149 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended February 28, 1999, the Fund was charged $12,515 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement for providing custodial
services for the Fund. During the period ended February 28, 1999, the Fund
was charged $9,041 pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged and retained by the Fund on shares
redeemed within fifteen days following the date of issuance, including
redemptions made through the use of the Fund Exchange privilege.
<PAGE>
Dreyfus Technology Growth Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended February 28, 1999
amounted to $185,299,853 and $41,819,906, respectively.
At February 28, 1999, accumulated net unrealized appreciation on investments
was $11,644,688, consisting of $16,917,482 gross unrealized appreciation and
$5,272,794 gross unrealized depreciation.
At February 28, 1999, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
<PAGE>
[This page intentionally left blank.]
<PAGE>
Dreyfus Technology Growth Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 255SA992
