Dreyfus
Large Company
Value Fund
SEMIANNUAL REPORT
April 30, 1999
(R) [Dreyfus Logo]
<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>
Contents
THE FUND
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2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statement
FOR MORE INFORMATION
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Back Cover
<PAGE>
Dreyfus Large Company The Fund
Value Fund
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Large Company
Value Fund, covering the six-month period from November 1, 1998 through April
30, 1999. Inside, you'll find valuable information about how the Fund was
managed during the reporting period, including a discussion with the Fund's
portfolio manager, Timothy M. Ghriskey.
The past six months have been rewarding for many equity investors. Strong
economic growth, low inflation and high levels of consumer spending supported
continued strength in the stocks of many large companies. The Federal Reserve
Board's lowering of short-term interest rates in the fall of 1998 appears to
have helped U.S. businesses withstand the effects of economic weakness in Japan,
Asia and Latin America. As a result, several major market indices set new
records, including the Dow Jones Industrial Average's first-ever close above the
10,000 level. The broader S&P 500 Index and the technology-laden NASDAQ Index
also recorded new highs.
Yet, until near the end of the six-month period, the stock market's advance
remained relatively narrow, confined to a handful of highly valued growth and
technology stocks. In April, however, some previously out-of-favor market
sectors rallied strongly, including large-cap cyclical companies as well as some
small- and midcap stocks.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Large Company Value Fund.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
Timothy M. Ghriskey, Senior Portfolio Manager
How did Dreyfus Large Company Value Fund perform relative to its benchmark?
The Fund performed well during the six-month period, providing a total return of
16.60%,1 compared to the Wilshire Large Company Value Index's return of 15.04%.2
We attribute this strong performance partly to the surprisingly rapid recovery
of global capital markets in the wake of last summer's decline, which drove the
overall market higher in the last few months of 1998, and partly to the power
ful shift in market sentiment in favor of value-oriented stocks toward the end
of the period.
What is the Fund's investment approach?
Dreyfus Large Company Value Fund invests primarily in large-capitalization,
value-oriented companies. We select investments one stock and one company at a
time. Our investment process starts with computerized, quantitative analysis of
the universe of stocks, first to identify those that appear underpriced in
relation to each company's intrinsic value, and then to focus on those value
stocks we believe are best positioned to grow in the current market environment.
Our team of experienced analysts examines the fundamentals of each top-ranked
candidate to decide which to purchase, and to decide if any current holdings
should be sold.
In addition to identifying attractive investment opportunities, our approach is
designed to limit the risks associated with sector exposure. Instead of
attempting to predict which industries or economic sectors are likely to perform
best in the near future, we allocate the Fund's resources among sectors in the
same proportions as our benchmark. Accordingly, if 25% of the benchmark is made
up of financial stocks, then the Fund invests approximately 25% of its resources
in financial stocks as well.
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
The result of our approach during the recent six-month period was a diversified
portfolio of stocks, many of which showed notable strength throughout the
period. Our best performers included well-known companies in some of the
market's strongest industries, such as Citigroup in the financial industry,
International Business Machines in technology, Allergan in health care, General
Motors in consumer durables and Wendy's International in consumer staples.
However, two of our technology holdings, Compaq Computer and Storage Technology,
proved particularly disappointing as a result of the companies' struggles with
strong competitive pressures.
What other factors influenced the Fund's performance?
During the last few weeks of the period, a powerful shift in market sentiment
appeared to take place. This shift was precipitated by unexpected strength in
the U.S. and global economies. Historically, the market has rewarded
value-oriented stocks during periods of increasing economic growth. For the
first time in approximately 18 months, investment dollars began flowing out of
growth stocks and into traditional value sectors such as energy, basic materials
and capital goods.
Our disciplined strategy positioned the Fund to benefit from the market's sharp
move toward value. In the energy sector, holdings in companies such as Mobil and
BP Amoco, A.D.S., rose rapidly in response to industry mergers and production
limits instituted by the Organization of Petroleum Exporting Countries (OPEC),
as well as growing global industrial activity. Our holdings of basic materials
stocks, such as Alcoa and International Paper, profited from growing global
demand for industrial resources.
Our investment discipline also enabled us to identify stocks that performed well
within relatively weak-performing sectors. For example, despite the recent move
toward value, the market generally has not favored utility companies.
Nevertheless, our holdings of Niagra Mohawk
4
<PAGE>
Power rose rapidly during the first few months of the recent period. In the
telecommunications services industry, the Fund achieved above-average results
from companies such as MCI WorldCom and AT&T, despite the sector's mixed
overall performance.
What is the Fund's current strategy?
During the last few weeks of April, investors appear to have turned from "growth
at any price" toward favoring more reasonably priced stocks. We are encouraged
by the market's recent rediscovery of value-oriented stocks, and believe that
our disciplined, quantitatively driven investment strategy has positioned the
Fund to share in the market's gains. Of course, we cannot be certain that these
trends will continue, but we do believe that the past six months illustrate the
importance of maintaining our disciplined investment style and our commitment to
value.
May 13, 1999
1 Total return includes reinvestment of dividends and any capital gains paid.
2 SOURCE: WILSHIRE ASSOCIATES, INC. -- The Wilshire Large Company Value Index is
an unmanaged index reflecting the performance of the largest 750 stocks
composing the Wilshire 5000 Index that meet statistical criteria for being a
"value" stock.
The Fund 5
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
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Common Stocks--98.6% Shares Value ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Durables--6.6%
Ford Motor 45,700 2,921,944
General Motors 29,000 2,579,187
Newell Rubbermaid 57,000 2,703,938
Shaw Industries 104,500 a 1,894,063
10,099,132
Consumer Services--5.2%
Cendant 142,400 a 2,563,200
McDonald's 62,000 2,627,250
Wendy's International 106,000 2,868,625
8,059,075
Electronic Technology--7.5%
Boeing 61,000 2,478,125
Compaq Computer 64,000 1,428,000
Hewlett-Packard 10,000 788,750
Intel 40,000 2,447,500
International Business Machines 14,700 3,075,056
Storage Technology 67,500 a 1,303,594
11,521,025
Energy Minerals--9.6%
BP Amoco, A.D.S. 23,000 2,603,312
Exxon 31,700 2,633,081
Mobil 29,500 3,090,125
Royal Dutch Petroleum, A.D.R. 47,000 2,758,312
Texaco 41,300 2,591,575
USX-Marathon Group 32,000 1,000,000
14,676,405
Finance--23.3%
BankAmerica 36,200 2,606,400
Bank of New York 70,000 2,800,000
Bank One 45,400 2,678,600
Chase Manhattan 32,000 2,648,000
Citigroup 43,200 3,250,800
First Tennessee National 65,000 2,803,125
First Union 42,500 2,353,437
Fleet Financial Group 67,600 2,911,025
KeyCorp 73,200 2,264,625
Merrill Lynch 32,400 2,719,575
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
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Common Stocks (continued) Shares Value ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Finance (continued)
Morgan Stanley Dean Witter 27,400 2,717,737
PNC Bank 50,000 2,893,750
Wells Fargo 73,300 3,165,644
35,812,718
Health Services--2.7%
CIGNA 9,900 863,156
Columbia/HCA Healthcare 133,000 3,283,438
4,146,594
Health Technology--3.2%
Allergan 28,400 2,552,450
Pharmacia & Upjohn 43,000 2,408,000
4,960,450
Insurance--6.6%
American General 35,000 2,590,000
American International Group 22,600 2,654,088
Everest Reinsurance Holdings 47,500 1,439,843
Torchmark 56,200 1,921,338
XL Capital, Cl. A 24,700 1,498,981
10,104,250
Non-Energy Minerals--2.4%
Alcoa 58,600 3,647,850
Process Industries--5.6%
duPont (E.I.) de Nemours 46,700 3,298,188
Goodrich (B.F.) 75,000 2,981,250
International Paper 45,000 2,399,062
8,678,500
Producer Manufacturing--4.8%
General Electric 38,000 4,009,000
Honeywell 35,000 3,316,250
7,325,250
Retail Trade--1.4%
American Stores 70,000 2,209,375
Transportation--3.4%
CNF Transportation 59,400 2,595,037
Union Pacific 43,100 2,586,000
5,181,037
</TABLE>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Utilities--16.3%
AT&T 46,500 2,348,250
Ameritech 42,000 2,874,375
Bell Atlantic 44,400 2,558,550
Cincinnati Bell 114,700 2,595,088
Coastal 73,700 2,819,025
GTE 38,200 2,557,013
MCI WorldCom 33,200 a 2,728,625
Niagara Mohawk Power 154,000 a 2,059,750
Texas Utilities 60,000 2,385,000
U S West 39,500 2,066,344
24,992,020
Total Common Stocks
(cost $124,440,448) 151,413,681
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Principal
Short-Term Investments--1.1% Amount ($) Value ($)
- -------------------------------------------------------------------------------------------
U.S. Treasury Bills:
4.37%, 7/22/99 1,322,000 1,308,721
4.39%, 7/29/99 418,000 413,523
Total Short-Term Investments
(cost $1,722,532) 1,722,244
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Total Investments (cost $126,162,980) 99.7% 153,135,925
Cash and Receivables (Net) .3% 400,246
Net Assets 100.0% 153,536,171
</TABLE>
a Non-income producing.
See notes to financial statements.
8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Cost Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 126,162,980 153,135,925
Cash 67,965
Receivable for investment securities sold 2,008,431
Receivable for shares of Common Stock subscribed 330,645
Dividends receivable 127,569
Prepaid expenses 32,273
155,702,808
- ---------------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 117,395
Due to Distributor 31,342
Payable for investment securities purchased 1,666,405
Payable for shares of Common Stock redeemed 311,204
Interest payable 173
Accrued expenses 40,118
2,166,637
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Net Assets ($) 153,536,171
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Composition of Net Assets ($):
Paid-in capital 115,608,591
Accumulated undistributed investment income--net 239,057
Accumulated net realized gain (loss) on investments 10,715,578
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 26,972,945
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Net Assets 153,536,171
- ---------------------------------------------------------------------------------------------
Shares Outstanding
(100 million shares of $.001 par value Common Stock authorized) 6,229,765
Net Asset Value, offering and redemption price per share--Note 3(d) ($) 24.65
</TABLE>
See notes to financial statements.
The Fund 9
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
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Investment Income ($)
- --------------------------------------------------------------------------------------------
<S> <C>
Income:
Cash dividends (net of $7,816 foreign taxes withheld at source) 1,255,094
Interest 42,534
Total Income 1,297,628
Expenses:
Management fee--Note 3(a) 556,035
Shareholder servicing costs--Note 3(b) 282,293
Professional fees 33,224
Prospectus and shareholders' reports 27,156
Registration fees 20,080
Custodian fees--Note 3(b) 7,534
Directors' fees and expenses--Note 3(c) 6,821
Interest expense--Note 2 1,940
Miscellaneous 1,072
Total Expenses 936,155
Investment Income--Net 361,473
- --------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 11,072,648
Net unrealized appreciation (depreciation) on investments 10,976,587
Net Realized and Unrealized Gain (Loss) on Investments 22,049,235
Net Increase in Net Assets Resulting From Operations 22,410,708
</TABLE>
See notes to financial statements.
10
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1999 Year Ended
(Unaudited) October 31, 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 361,473 581,832
Net realized gain (loss) on investments 11,072,648 (285,972)
Net unrealized appreciation (depreciation)
on investments 10,976,587 8,199,995
Net Increase (Decrease) in Net Assets
Resulting from Operatons 22,410,708 8,495,855
- --------------------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net (575,757) (419,872)
Net realized gain on investments -- (8,053,887)
Total Dividends (575,757) (8,473,759)
- --------------------------------------------------------------------------------------------
Capital Stock Transactions ($):
Net proceeds from shares sold 35,312,453 53,216,392
Dividends reinvested 548,869 8,047,136
Cost of shares redeemed (39,971,956) (87,433,544)
Increase (Decrease) in Net Assets from
Capital Stock Transactions (4,110,634) (26,170,016)
Total Increase (Decrease) in Net Assets 17,724,317 (26,147,920)
- --------------------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 135,811,854 161,959,774
End of Period 153,536,171 135,811,854
Undistributed investment income--net 239,056 453,341
Capital Share Transactions:
Shares sold 1,538,409 2,507,151
Shares issued for dividends reinvested 25,040 393,504
Shares redeemed (1,731,416) (4,087,272)
Net Increase (Decrease) in Shares Outstanding (167,967) (1,186,617)
</TABLE>
See notes to financial statements.
The Fund 11
<PAGE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods
indicated. Certain information reflects financial results for a single fund
share. Total return shows how much your investment in the fund would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the fund's
financial statements.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1999 Year Ended October 31,
--------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994a
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 21.23 21.35 18.05 15.46 12.63 12.50
Investment Operations:
Investment income--net .06 .09 .07 .12 .22 .26
Net realized and unrealized
gain (loss) on investments 3.45 .91 4.33 4.68 2.93 (.13)
Total from Investment Operations 3.51 1.00 4.40 4.80 3.15 .13
Distributions:
Dividends from investment
income--net (.09) (.06) (.11) (.21) (.32) --
Dividends from net realized gain
on investments -- (1.06) (.99) (2.00) -- --
Total Distributions (.09) (1.12) (1.10) (2.21) (.32) --
Net asset value, end of period 24.65 21.23 21.35 18.05 15.46 12.63
- ------------------------------------------------------------------------------------------
Total Return (%) 16.60b 4.83 25.29 34.35 25.73 1.04b
- ------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average
net assets .63b 1.24 1.22 1.25 .83 --
Ratio of net investment income
to average net assets .24b .36 .41 .93 1.64 2.08b
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- .06 .32 1.76 2.01b
Portfolio Turnover Rate 64.09b 156.72 110.14 186.39 143.61 48.35b
- ------------------------------------------------------------------------------------------
Net Assets, end of
period ($ x 1000) 153,536 135,812 161,960 34,187 6,687 5,168
</TABLE>
a From December 29, 1993 (commencement of operations) to October 31, 1994.
b Not annualized.
See notes to financial statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Large Company 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 deter mined 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.
The Fund 13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(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 amount 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 $330 during the period ended April 30, 1999 based on
available cash balances left on deposit. Interest 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, it is the policy of the Fund not to distribute such gain.
14
<PAGE>
(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.
The Fund has an unused capital loss carryover of approximately $290,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1998. If not
applied, the carryover expires in fiscal 2006.
NOTE 2--Bank Line of Credit:
The Fund may borrow up to $2 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 April 30, 1999 was approximately $68,000, with a related
weighted average annualized interest rate of 5.79%.
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
The Fund 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 April 30, 1999,
the Fund was charged $185,345 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 April 30, 1999, the Fund was charged $64,108 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 April 30, 1999, the Fund was
charged $7,534 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 by the Fund on shares redeemed within fifteen
days following the date of issuance, including redemption made through the use
of the Fund Exchange privilege. During the period ended April 30, 1999,
redemption fees amounted to $1,731.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 1999, amounted to
$93,094,265 and $93,829,628, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$26,972,945, consisting of $29,584,144 gross unrealized appreciation and
$2,611,199 gross unrealized depreciation.
16
<PAGE>
At April 30, 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).
The Fund 17
<PAGE>
For More Information
Dreyfus Large Company
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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call 1-800-645-6561
By mail Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
By E-mail Send your request to [email protected]
On the Internet Information can be viewed online or downloaded from:
http://www.dreyfus.com
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 251SA994
_______________________________________________________________________________
Dreyfus
Small Company
Value Fund
SEMIANNUAL REPORT
April 30, 1999
(R) Dreyfus Logo
<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>
Contents
THE FUND
- ------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------
Back Cover
<PAGE>
Dreyfus The Fund
Small Company Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Small Company Value
Fund, covering the six-month period from November 1, 1998 through April 30,
1999. Inside, you'll find valuable information about how the Fund was managed
during the reporting period, including a discussion with the Fund's portfolio
manager, Peter Higgins.
The past six months have been rewarding for many equity investors. The Federal
Reserve Board's lowering of short-term interest rates in the fall of 1998
appears to have helped U.S. businesses withstand the effects of economic
weakness in Japan, Asia and Latin America. At the same time, strong U.S.
economic growth, low inflation and high levels of consumer spending supported
continued strength in many broad measures of stock market performance. As a
result, several major U.S. market indices set new records, including the Dow
Jones Industrial Average's first-ever close above the 10,000 level.
However, until near the end of the six-month period, small-cap stocks continued
to lag their larger counterparts substantially. For most of the reporting
period, investors continued to favor large companies with predictable earnings
and tended to avoid smaller companies with shorter track records. In April,
however, many smaller stocks began to rally as investors became increasingly
attracted by their valuation levels. In a global economic environment currently
characterized by fewer concerns, investors appear to have become somewhat more
comfortable with small-cap stocks.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Small Company Value Fund.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
Peter Higgins, Portfolio Manager
How did Dreyfus Small Company Value Fund perform relative to its benchmark?
The Dreyfus Small Company Value Fund performed well during the six-month period
ended April 30, 1999, providing a total return of 19.40%1 compared to a total
return of 15.16% for the Russell 2000 Index.2 We attribute this strong
performance partly to the surprisingly rapid recovery of global capital markets
in the wake of last summer's decline, which drove the overall market higher in
the last few months of 1998, and partly to the powerful shift in market
sentiment in favor of value-oriented stocks toward the end of the period.
What is the Fund's investment approach?
We focus on identifying inexpensive stocks with improving prospects and solid
long-term fundamentals. This includes looking for companies with low stock
prices in relation to expected earnings, otherwise known as a company's
price-earnings ratio. We will compare a company's P/E ratio to other companies
in the same industry as well as its own historical averages. We take into
account a company's historical performance to give us comfort as to whether or
not its objectives in terms of revenue growth and margins are reasonable in the
context of what the company has accomplished in the past. We develop an earnings
estimate, and we're mostly interested in those companies that we think can do
better than the average expectations of Wall Street analysts. Our approach
includes meeting with management, competitors and suppliers of out-of-favor
companies in order to identify positive trends before they become widely
known in the investment community.
For instance, shares of Venator Group (formerly known as F.W. Woolworth), a
large retailer of athletic footwear and apparel, were priced early in the
six-month period as if the company was going out of business. However, after a
rigorous examination of the company,
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
which operates about 6,000 mall-based stores, we believed that those concerns
were not justified. Our research was rewarded, and the stock price increased.
In addition, the environment for sneaker sales has improved in 1999 over 1998,
partly because manufacturers have developed attractive new products and the NBA
lockout came to an end.
The other kind of company that we'll own is one that is considering a sale of
part of its business, or even a breakup into several pieces because the
company's stock price is not reflecting the valuation of the different segments
of the business. Management may indicate a frustration with the stock price and
a willingness to split the company into more than one part, creating value. We
will also look for companies that could close a poorly performing division, cut
costs significantly or buy back their stock.
What other factors influenced the Fund's performance?
Although we do not own Internet stocks, we have emphasized technology in other
areas. For instance, Vishay Intertechnology, a niche semiconductor company, saw
its business improve over the past few months, and earnings estimates were
revised upward. In addition, we have increased our weighting in economically
sensitive areas such as capital goods, energy and basic materials. These stocks
have done well as the U.S. economy has shown surprising strength in the past few
quarters. For instance, Gaylord Container Class A, which makes containerboard, a
grade of paper used to manufacture boxes and other containers, is currently
enjoying price increases due to surging demand.
What is the Fund's current strategy?
Our strategy remains the same, namely to find stocks that are inexpensive on a
number of different measures. We buy shares in good businesses that we think are
getting better and are likely to produce higher earnings. Our portfolio includes
a very broadly diversified selection of
4
<PAGE>
companies that we believe to be inexpensively priced with very attractive
characteristics. Although value did not perform as well as growth during the
past six months, we will continue to adhere to our discipline and not drift
from our style. Indeed, we are encouraged that investors have begun to broaden
their preferences away from large-capitalization growth stocks toward the end
of the six-month reporting period. We're encouraged that we have had no trouble
finding investments that we think will add value to the portfolio. We have
found stocks that are inexpensive compared to the market, as well as compared
to where they have traded in the past.
May 13, 1999
1 Total return includes reinvestment of dividends and any capital gains paid.
2 SOURCE: LIPPER ANALYTICAL SERVICES, INC.--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Russell 2000
Index is a widely accepted unmanaged index 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.
The Fund 5
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Common Stocks--102.5% Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Basic Industries--8.9%
Arch Chemicals 200,800 4,417,600
Bethlehem Steel 320,600 a 2,925,475
Carbide/Graphite Group 43,500 a 565,500
Gaylord Container, Cl. A 573,800 a 4,805,575
Geon 121,800 3,730,125
IMCO Recycling 97,100 1,650,700
Lubrizol 57,500 1,592,031
Material Sciences 13,700 a 143,850
National Steel, Cl. B 187,500 1,757,812
Safety-Kleen 227,925 a 3,618,309
UCAR International 41,700 a 956,493
26,163,470
Capital Goods--9.6%
AGCO 240,400 2,373,950
Albany International, Cl. A 83,700 a 2,029,725
Belden 84,400 1,624,700
Building Materials Holding 6,000 a 76,500
Chicago Bridge & Iron, N.V. 146,900 1,781,162
DONCASTERS, A.D.S. 180,500 a 3,091,062
Harman International 18,000 826,875
Hawk, Cl. A 11,400 a 98,325
Intermet 156,500 2,308,375
Millipore 76,500 2,347,594
Nordson 30,400 1,831,600
OmniQuip International 122,500 1,546,563
Varian Associates 198,400 1,798,000
Wabash National 258,300 4,052,081
Wolverine Tube 96,100 a 2,426,525
28,213,037
Computer Software/Services--5.9%
GT Interactive Software 186,500 a 652,750
Harbinger 159,900 a 1,748,906
Hyperion Solutions 171,900 a 2,599,987
JDA Software Group 160,600 a 1,274,763
Renaissance Worldwide 344,000 a 2,279,000
Sybase 306,600 a 2,376,150
Technology Solutions 265,000 a 2,103,438
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Computer Software/Services (continued)
Wang Laboratories 166,600 a 4,175,413
17,210,407
Consumer Durables--8.3%
Arvin Industries 55,800 2,043,675
BE Aerospace 106,700 a 1,820,569
Beazer Homes USA 91,500 a 2,110,219
Callaway Golf 185,500 2,794,094
Dal-Tile International 166,400 a 1,872,000
Dura Automotive Systems, Cl. A 96,300 a 2,756,587
Polaris Industries 55,200 2,080,350
Sensormatic Electronics 296,000 a 3,552,000
Toro 89,500 3,115,719
Tristar Aerospace 203,500 2,162,188
24,307,401
Consumer Non-Durables--7.1%
Ashworth 176,700 a 795,150
Crown Crafts 167,700 964,275
Herbalife International, Cl. B 43,900 378,638
Houghton Mifflin 57,700 2,574,862
Maxwell Shoe, Cl. A 217,600 a 1,713,600
Musicland Stores 312,100 a 3,394,088
Phillips-Van Heusen 132,900 1,162,875
Pillowtex 88,800 1,459,650
Rock-Tennessee, Cl. A 113,800 1,422,500
Twinlab 164,100 a 1,394,850
Vans 289,300 a 2,386,725
Vlasic Foods International 90,100 a 737,694
Wolverine World Wide 216,200 2,594,400
20,979,307
Consumer Services--18.5%
Bon-Ton Stores 189,400 a 1,171,912
Boyd Gaming 229,800 a 1,220,812
Brown Group 206,600 3,370,162
Buffets 267,900 a 2,679,000
Burlington Coat Factory 248,300 3,833,131
CKE Restaurants 275,180 4,506,072
</TABLE>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Services (continued)
Cadmus Communication 66,600 907,425
CompUSA 288,200 a 2,017,400
Discount Auto Parts 122,800 a 2,801,375
Elder-Beerman Stores 158,700 a 1,339,031
Finlay Enterprises 165,900 a 1,824,900
General Nutrition 205,300 a 3,400,281
Heilig-Meyers 292,800 1,720,200
Information Resources 214,200 a 1,660,050
Lithia Motors, Cl. A 94,100 a 1,770,256
Miller Industries 184,300 a 933,019
NFO Worldwide 116,100 a 1,313,381
Neiman-Marcus Group 52,600 a 1,265,688
Nu Skin Enterprises, Cl. A 70,800 a 1,314,225
OfficeMax 393,000 a 3,979,125
Paging Network 406,200 a 1,586,719
Paxson Communications, Cl. A 125,300 a 1,339,144
StaffMark 38,200 a 386,775
Stewart Enterprises, Cl. A 92,700 1,842,413
True North Communications 3,400 91,800
Unisource Worldwide 246,300 2,001,188
Venator Group 435,600 a 4,219,875
54,495,359
Energy--8.1%
EEX 142,566 a 926,679
Giant Industries 169,300 1,629,513
Houston Exploration 196,100 a 3,725,900
Newpark Resources 431,500 a 3,964,406
Ocean Energy 423,500 a 3,943,844
Range Resources 482,300 2,471,788
Santa Fe Energy Resources 546,500 a 4,918,500
Tesoro Petroleum 133,400 a 1,509,088
Titan Exploration 140,100 a 788,063
23,877,781
Financial Services--6.7%
ARM Financial Group, Cl. A 167,300 2,321,287
Affiliated Managers Group 45,800 a 1,331,062
Astoria Financial 46,013 2,306,401
Bay View Capital 139,200 2,479,500
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Financial Services (continued)
Freedom Securities 62,000 1,127,625
Guarantee Life Cos. 90,000 1,800,000
Klamath First Bancorp 62,500 1,015,625
MONY Group 96,200 2,549,300
PFF Bancorp 18,100 a 338,809
SCPIE Holdings 73,700 1,768,800
Seacoast Financial Services 141,700 1,425,856
UST 49,200 1,190,025
19,654,290
Health Care--5.2%
AmeriPath 172,800 a 1,620,000
Conmed 86,800 a 2,506,350
ESC Medical Systems 200,300 a 1,289,431
Quest Diagnostics 188,600 a 4,314,225
Spacelabs Medical 161,600 a 2,727,000
West Pharmaceutical Services 86,400 2,856,600
15,313,606
Technology--21.2%
Alternative Resources 254,500 a 1,717,875
Amkor Technology 260,300 2,537,925
Ardent Software 107,200 a 2,010,000
CFM Technologies 19,600 a 171,500
Cambridge Technology Partners 90,600 a 1,308,037
Cohu 70,800 2,017,800
Corel 828,600 a 2,537,587
Credence Systems 154,600 a 3,971,287
Cypress Semiconductor 368,000 a 3,772,000
DSP Group 153,500 a 2,782,187
Electroglas 150,200 a 2,055,862
FSI International 141,300 a 980,269
HMT Technology 344,100 a 989,288
Hanna (M.A.) 76,900 1,244,819
Hypercom 236,300 a 1,535,950
In Focus Systems 298,800 a 3,100,050
Integrated Device Technology 85,400 a 629,825
International Rectifier 171,400 a 1,671,150
KEMET 131,600 a 2,031,575
LTX 384,900 a 2,477,794
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Technology (continued)
Lam Research 55,100 a 1,735,650
Mattson Technology 900 a 6,131
Maxtor 580,500 3,283,453
Micro Warehouse 181,500 a 3,074,156
Peak International 204,600 a 664,950
Planar Systems 76,100 a 561,238
Praegitzer Industries 235,500 a 1,295,250
Sequent Computer Systems 201,200 a 2,200,625
Silicon Valley Group 115,700 a 1,533,025
Splash Technology Holdings 207,300 a 1,943,438
Tech Data 79,900 a 1,867,663
Trimble Navigation 31,600 a 366,363
Varian Semiconductor Equipment Associates 116,300 1,511,900
Vishay Intertechnology 108,600 a 1,893,713
Watkins-Johnson 36,900 936,338
62,416,673
Transportation--3.0%
Arkansas Best 369,500 a 3,348,594
Covenant Transport, Cl. A 41,400 a 569,250
Kitty Hawk 183,400 a 1,513,050
Old Dominion Freight Line 23,700 a 266,625
Yellow 181,500 a 3,221,625
8,919,144
- --------------------------------------------------------------------------------------------------
Total Investments (cost $314,758,940) 102.5% 301,550,475
Liabilities, Less Cash and Receivables (2.5%) (7,352,025)
Net Assets 100.0% 294,198,450
</TABLE>
a Non-income producing.
See notes to financial statements.
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Cost Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 314,758,940 301,550,475
Receivable for investment securities sold 9,301,988
Receivable for shares of Common Stock subscribed 95,856
Dividends and interest receivable 77,638
Prepaid expenses 59,961
311,085,918
- -------------------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 223,367
Due to Distributor 57,304
Cash overdraft due to Custodian 310,442
Payable for investment securities purchased 10,039,629
Bank loan payable--Note 2 5,500,000
Payable for shares of Common Stock redeemed 659,082
Interest payable--Note 2 22,722
Accrued expenses 74,922
16,887,468
- -------------------------------------------------------------------------------------------------
Net Assets ($) 294,198,450
- -------------------------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 311,139,538
Accumulated investment (loss) (1,311,769)
Accumulated net realized gain (loss) on investments (2,420,854)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (13,208,465)
- -------------------------------------------------------------------------------------------------
Net Assets ($) 294,198,450
- -------------------------------------------------------------------------------------------------
Shares Outstanding
(100 million shares of $.001 par value Common Stock authorized) 14,440,996
- -------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($)--Note 3(d) 20.37
</TABLE>
See notes to financial statements.
The Fund 11
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Investment Income ($)
- ------------------------------------------------------------------------------------------
<S> <C>
Income:
Cash dividends (net of $5,113 foreign taxes withheld at source) 643,389
Interest 18,848
Total Income 662,237
Expenses:
Management fee--Note 3(a) 1,138,994
- ------------------------------------------------------------------------------------------
Shareholder servicing costs--Note 3(b) 603,336
Interest expense--Note 2 67,361
Registration fees 42,280
Professional fees 40,686
Prospectus and shareholders' reports 37,494
Custodian fees--Note 3(b) 30,400
Directors' fees and expenses--Note 3(c) 9,285
Miscellaneous 4,170
Total Expenses 1,974,006
Investment (Loss) (1,311,769)
- ------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 3,485,263
Net unrealized appreciation (depreciation) on investments 50,831,490
Net Realized and Unrealized Gain (Loss) on Investments 54,316,753
Net Increase in Net Assets Resulting From Operations 53,004,984
</TABLE>
See notes to financial statements.
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1999 Year Ended
(Unaudited) October 31, 1998
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment (loss) (1,311,769) (1,825,266)
Net realized gain (loss) on investments 3,485,263 (4,363,524)
Net unrealized appreciation (depreciation) on investments 50,831,490 (82,191,499)
Net Increase (Decrease) in Net Assets Resulting
from Operations 53,004,984 (88,380,289)
- -----------------------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net -- (275,563)
Net realized gain on investments -- (7,072,792)
Total Dividends -- (7,348,355)
- -----------------------------------------------------------------------------------------------
Capital Stock Transactions ($):
Net proceeds from shares sold 47,207,237 296,824,006
Dividends reinvested -- 6,869,046
Cost of shares redeemed (106,922,181) (283,794,090)
Increase (Decrease) in Net Assets from Capital Stock
Transactions (59,714,944) 19,898,962
Total Increase (Decrease) in Net Assets (6,709,960) (75,829,682)
- -----------------------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 300,908,410 376,738,092
End of Period 294,198,450 300,908,410
- -----------------------------------------------------------------------------------------------
Capital Share Transactions (Shares):
Shares sold 2,460,661 13,797,646
Shares issued for dividends reinvested -- 320,684
Shares redeemed (5,661,114) (13,638,948)
Net Increase (Decrease) in Shares Outstanding (3,200,453) 479,382
</TABLE>
See notes to financial statements.
The Fund 13
<PAGE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
"Total return" shows how much your investment in the Fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Six Months
Ended
April 30,
1999 Year Ended October 31,
- -----------------------------------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994a
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Per Share Data ($):
Net asset value,
beginning of period 17.06 21.95 17.66 14.00 12.43 12.50
Investment Operations:
Investment income (loss)--net (.09) (.09)b -- .07 .10 .30
Net realized and unrealized gain
(loss) on investments 3.40 (4.39) 6.43 4.69 2.33 (.37)
Total from Investment Operations 3.31 (4.48) 6.43 4.76 2.43 (.07)
Distributions:
Dividends from investment
income--net -- (.02) (.04) (.09) (.33) --
Dividends from net realized
gain on investments -- (.39) (2.10) (1.01) (.53) --
Total Distributions -- (.41) (2.14) (1.10) (.86) --
Net asset value, end of period 20.37 17.06 21.95 17.66 14.00 12.43
- -----------------------------------------------------------------------------------------
Total Return (%) 19.40c (20.83) 40.22 35.99 21.30 (.56)c
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of operating expenses to
average net assets .62c 1.21 1.23 1.27 .84 --
Ratio of interest expense and
dividends on securities sold short
to average net assets .02c .01 .02 .02 .07 .01c
Ratio of net investment income
(loss) to average net assets (.43)c (.44) .22 .62 .79 2.39c
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- .05 .41 1.80 2.07c
Portfolio Turnover Rate 97.14c 132.38 76.11 183.58 161.01 219.63c
- -----------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 294,198 300,908 376,738 16,852 6,404 5,166
</TABLE>
a From December 29, 1993 (commencement of operations) to October 31, 1994.
b Based on average shares outstanding at each month end.
c Not annualized.
See notes to financial statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Small Company 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 series 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.
The Fund 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(b) Foreign currency transactions: The Fund does not isolate that portion of the
results of the 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 amount 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 receives net
earnings credits based on available cash balances left on deposit.
(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.
16
<PAGE>
(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 $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.
The average daily amount of borrowings outstanding under both arrangements
during the period ended April 30, 1999 was approximately $2,598,900, with a
related weighted average annualized interest rate of 5.23%.
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
The Fund 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
April 30, 1999, the Fund was charged $379,665 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended April 30, 1999, the Fund was charged $110,221 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 April 30, 1999, the Fund was
charged $30,400 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 April 30, 1999, amounted to
$298,099,876 and $343,165,715, respectively.
At April 30, 1999, accumulated net unrealized depreciation on investments was
$13,208,465, consisting of $27,727,329 gross unrealized appreciation and
$40,935,794 gross unrealized depreciation.
At April 30, 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).
18
<PAGE>
The Fund 19
<PAGE>
NOTES
<PAGE>
The Fund 21
<PAGE>
For More Information
Dreyfus
Small Company 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call 1-800-645-6561
By mail Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
By E-mail Send your request to [email protected]
On the Internet Information can be viewed online or downloaded from:
http://www.dreyfus.com
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 253AR994
