Dreyfus
Aggressive Growth Fund
SEMIANNUAL REPORT February 29, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund 3
Dreyfus Aggressive Growth Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Aggressive Growth
Fund, covering the six-month period from September 1, 1999 through February 29,
2000. 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, Kevin Sonnett, CFA.
The past six months have been both highly volatile and generally rewarding for
investors in midcap U.S. stocks. During the reporting period, midcap stocks
generally outperformed large-cap stocks. This represents a reversal of the
trends established over the past several years, when large-cap stocks were
favored by investors over small- and mid-size companies.
Given the midcap market' s recent strength, valuations continue to look
attractive when compared to those of most large-cap companies. In our view, this
implies that there may be room for additional gains as mid-size companies "catch
up" to the higher valuations of large-cap stocks.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Aggressive Growth Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
March 23, 2000
DISCUSSION OF FUND PERFORMANCE
Kevin Sonnett, CFA, Portfolio Manager
How did Dreyfus Aggressive Growth Fund perform relative to its benchmark?
For the six-month period ended February 29, 2000, Dreyfus Aggressive Growth Fund
produced a total return of 55.44%.(1) This return handily outperformed those
provided by the fund' s benchmark, the Standard & Poor's 500 Composite Stock
Price Index (" S&P 500"), the Russell 2000 Index and the Russell Midcap Index,
which provided total returns of 4.10%, 35.82% and 17.77%, respectively.(2)
We attribute the fund' s performance to strong, "bottom-up" stock picking. In
particular, the fund' s positive performance was aided by our technology
exposure, an area in which the portfolio held some very good stock selections.
In addition, our limited exposure to financial stocks, an area that lagged
during much of the period, served to boost our performance.
What is the fund's investment approach?
The fund seeks capital appreciation by investing in the stocks of growth
companies of any size. Currently, the fund is focusing on midcap companies. In
choosing stocks, the fund uses a "bottom-up" approach that emphasizes individual
stock selection over economic and industry trends. In particular, the fund looks
for companies with strong management, innovative products and services, superior
industry positions and the potential for strong revenue and/or earnings growth
rates. The fund's investments in small- and mid-cap companies carry additional
risks because their earnings are less predictable, their share prices are more
volatile and their securities are less liquid than those of larger companies.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
As "bottom-up," growth-oriented investors we use fundamental research to choose
stocks according to their individual merits rather than according to assessments
of market or economic trends. However, we remain fully cognizant of the overall
economic environment, and we are aware of trends that may affect our
performance.
That said, one factor positively influencing performance during the reporting
period was the strong gains achieved by technology stocks relative to the
overall stock market. To illustrate this point more clearly, during the
six-month reporting period the technology-laden Nasdaq rose 71% while the Dow
Jones Industrial Average, an index that tracks 30 actively traded blue chip
stocks, fell 6.4%.
We believe there are several reasons for the strong gains achieved within the
technology sector. First, individual investors have shown a preference for
technology stocks, most likely because of the compelling returns they previously
earned from investments there. In a momentum-driven market such as the one we've
seen over the reporting period, those stocks that performed best attracted the
most investors, which caused the stocks to perform even better, causing a
cyclical pattern.
Second, media focus on the so-called "new economy" has heightened interest in
technology investing. The new economy is thought to be driven in part by the
revolution in information technology, which has resulted in an even greater
interest in technology stocks. Finally, technology has largely been credited
with increasing productivity in the U.S. by allowing companies to gain access to
information more quickly, which helps to reduce costs and inventories.
Of course, the technology sector has been among the most volatile sectors of the
market and the extraordinary returns recently experienced in that sector should
not be expected in the future. The fund has also recently begun to reap profits
from some of our healthcare hold
ings, particularly within the biotechnology and specialty healthcare areas. Of
particular note are our holdings in Protein Design Labs, Celera Genomics,
Celgene and Maxygen.
What is the fund's current strategy?
We believe that technology is fundamentally changing the world's approach to
business. We further believe the demand for computer and network hardware,
software and services remains very strong. Indeed, many vendors in these
industries are finding their capacity constrained either by their existing
manufacturing facilities or by their need for additional employees.
In response, we have recently begun to position the fund to take advantage of
certain companies within these as well as other areas that, in our view, possess
strong fundamentals and are supported by this demand. We are tilting the fund in
favor of companies that appear to be benefiting from the continued expansion of
communications networks, the growth to come in wireless data networks, advances
in biotechnology research, and the demand from large corporations for the skills
of information technology consultants.
March 23, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS
PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE
AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURN FIGURES
PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH AUGUST 31,
2000, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD
THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN
LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT
OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500") IS A
WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE. THE
RUSSELL 2000 INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF SMALL-CAP
STOCK PERFORMANCE AND IS COMPOSED OF THE 2000 SMALLEST COMPANIES IN
THE RUSSELL 3000 INDEX. THE RUSSELL MIDCAP INDEX IS A WIDELY ACCEPTED,
UNMANAGED INDEX OF MEDIUM-CAP STOCK MARKET PERFORMANCE. THE FUND'S
INVESTMENTS IN SMALL- AND MID-CAP COMPANIES CARRY ADDITIONAL RISKS
BECAUSE THEIR EARNINGS ARE LESS PREDICTABLE, THEIR SHARE PRICES MORE
VOLATILE AND THEIR SECURITIES LESS LIQUID THAN LARGER COMPANIES.
The Fund 4
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS--94.0% Shares Value ($)
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<S> <C> <C>
AEROSPACE--1.1%
L-3 Communications Holdings 13,200 (a) 561,825
BIOTECHNOLOGY--4.9%
Abgenix 850 (a) 273,806
Celera Genomics 4,175 (a) 1,018,700
Gene Logic 2,200 (a) 262,625
Maxygen 2,550 373,894
Protein Design Labs 2,025 (a) 506,630
2,435,655
BUSINESS SERVICES--15.8%
Amdocs 11,050 (a) 819,772
Catalina Marketing 2,825 (a) 240,478
Convergys 19,250 (a) 741,125
Diamond Technology Partners 10,050 (a) 687,169
Digex 5,800 939,600
Exodus Communications 5,350 (a) 761,706
Illuminet Holdings 3,500 259,000
Luminant Worldwide 20,550 503,475
Profit Recovery Group International 20,650 (a) 382,025
Sapient 9,525 (a) 681,037
24/7 Media 3,900 (a) 181,350
USWeb 21,525 (a) 836,784
Verio 10,200 (a) 765,638
7,799,159
COMPUTER SOFTWARE/SERVICES--19.8%
Citrix Systems 7,200 (a) 759,150
Dendrite International 33,600 (a) 827,400
Digital River 8,500 (a) 306,000
eLoyalty 20,175 616,598
Extreme Networks 9,300 1,034,625
ISS Group 5,075 (a) 532,875
Macromedia 10,675 (a) 922,720
Niku 1,525 105,225
Onvia.com 2,970 62,370
Parametric Technology 20,800 (a) 630,500
Peregrine Systems 13,400 (a) 731,975
Radio One 4,400 289,300
Remedy 8,925 (a) 505,936
6
COMMON STOCKS (CONTINUED) Shares Value ($)
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COMPUTER SOFTWARE/SERVICES (CONTINUED)
Symantec 7,950 (a) 567,928
USinternetworking 11,575 772,631
Visual Networks 11,925 (a) 784,069
Xcelera.com 875 (a) 303,188
9,752,490
DISTRIBUTION--1.3%
MSC Industrial Direct, Cl. A 24,250 (a) 378,906
Patterson Dental 7,600 (a) 273,838
652,744
ELECTRONICS--2.2%
Gentex 21,675 (a) 633,316
Titan 11,550 (a) 433,125
1,066,441
FINANCIAL SERVICES--2.2%
Metris Cos. 16,525 427,584
Silicon Valley Bancshares 8,150 (a) 645,888
1,073,472
HEALTHCARE SERVICES--.9%
Healtheon/WebMD 1,975 109,242
Renal Care Group 18,200 (a) 319,638
428,880
MANUFACTURING--1.3%
Astec Industries 7,275 (a) 193,697
Zomax 8,975 (a) 439,214
632,911
MEDICAL SUPPLIES & EQUIPMENT--2.6%
MiniMed 7,925 (a) 791,509
Sybron International 17,375 (a) 486,500
1,278,009
OIL & GAS--.9%
Weatherford International 9,675 (a) 435,375
OIL SERVICES--2.1%
BJ Services 10,150 (a) 579,184
Nabors Industries 12,975 (a) 465,478
1,044,662
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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PHARMACEUTICALS--2.9%
Celgene 3,500 (a) 579,250
Forest Laboratories 5,300 (a) 362,056
IDEC Pharmaceuticals 3,350 (a) 471,931
1,413,237
PUBLISHING & BROADCASTING--.9%
Insight Communications 21,700 452,988
RETAIL--1.9%
Abercrombie and Fitch, Cl. A 20,675 (a) 303,664
Dollar Tree Stores 6,175 (a) 239,667
Focus Affiliates (Warrants) 76,250 (a) --
Men's Wearhouse 16,850 (a) 391,236
934,567
SEMICONDUCTORS & EQUIPMENT--8.7%
ASM Lithography Holding 2,750 (a) 352,344
Brooks Automation 15,200 (a) 1,098,200
Cree 1,975 (a) 371,053
Lam Research 5,100 (a) 796,238
SDL 2,150 (a) 881,500
Teradyne 9,000 (a) 783,000
4,282,335
TELECOMMUNICATION EQUIPMENT--10.2%
ADTRAN 5,950 (a) 437,697
CIENA 7,375 (a) 1,178,617
CommScope 9,625 (a) 374,773
Digital Microwave 20,550 (a) 685,856
Harris 28,925 921,984
Spectrasite Holdings 21,600 (a) 541,350
Tekelec 8,300 (a) 427,450
Terayon Communication Systems 1,775 (a) 456,397
5,024,124
TELECOMMUNICATION SERVICES--10.5%
Allegiance Telecom 7,400 (a) 731,675
Covad Communications Group 5,125 462,531
Crown Castle International 14,150 (a) 456,338
Inet Technologies 8,300 360,013
McLeodUSA, Cl. A 8,550 (a) 752,400
PanAmSat 5,725 (a) 279,452
8
COMMON STOCKS (CONTINUED) Shares Value ($)
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TELECOMMUNICATION SERVICES (CONTINUED)
Partner Communications, ADR 20,900 355,300
Pinnacle Holdings 6,625 387,563
TeleCorp PCS 11,100 509,906
Time Warner Telecom, Cl. A 6,000 462,000
Tritel 13,775 437,356
5,194,534
TRANSPORTATION--1.1%
USFreightways 16,675 554,444
UTILITIES--2.7%
Calpine 3,925 (a) 359,137
Montana Power 14,250 561,094
Plug Power 3,625 425,711
1,345,942
TOTAL COMMON STOCKS
(cost $34,294,820) 46,363,794
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Principal
SHORT-TERM INVESTMENTS--12.2% Amount ($) Value ($)
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AGENCY DISCOUNT NOTES;
Federal Home Loan Mortgage Corporation,
5.70%, 3/1/2000
(cost $6,000,000) 6,000,000 6,000,000
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TOTAL INVESTMENTS (cost $40,294,820) 106.2% 52,363,794
LIABILITIES, LESS CASH AND RECEIVABLES (6.2%) (3,054,264)
NET ASSETS 100.0% 49,309,530
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund 9
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
Cost Value
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ASSETS ($):
Investments in securities--See Statement of Investments 40,294,820 52,363,794
Cash 658,444
Receivable for investment securities sold 819,779
Receivable for shares of Common Stock subscribed 22,500
Prepaid expenses 3,655
53,868,172
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 25,588
Due to Distributor 8,775
Payable for investment securities purchased 4,390,121
Payable for shares of Common Stock redeemed 93,813
Accrued expenses 40,345
4,558,642
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NET ASSETS ($) 49,309,530
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 93,862,039
Accumulated investment (loss) (103,661)
Accumulated net realized gain (loss) on investments (56,517,822)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 12,068,974
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NET ASSETS ($) 49,309,530
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SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 2,926,106
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 16.85
SEE NOTES TO FINANCIAL STATEMENTS.
10
STATEMENT OF OPERATIONS
Six Months Ended February 29, 2000 (Unaudited)
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INVESTMENT INCOME ($):
INCOME:
Interest 92,091
Cash dividends 19,541
TOTAL INCOME 111,632
EXPENSES:
Management fee--Note 3(a) 134,558
Shareholder servicing costs--Note 3(b) 102,025
Registration fees 17,199
Auditing fees 16,580
Prospectus and shareholders' reports 14,032
Custodian fees--Note 3(b) 8,451
Directors' fees and expenses--Note 3(c) 3,567
Legal fees 1,217
Miscellaneous 1,817
TOTAL EXPENSES 299,446
Less--reduction in management fee due to
undertaking--Note 3(a) (84,153)
NET EXPENSES 215,293
INVESTMENT (LOSS) (103,661)
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 7,752,810
Net unrealized appreciation (depreciation) on investments 8,902,124
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 16,654,934
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 16,551,273
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999
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OPERATIONS ($):
Investment (loss) (103,661) (228,429)
Net realized gain (loss) on investments 7,752,810 (22,247,312)
Net unrealized appreciation (depreciation)
on investments 8,902,124 30,125,896
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 16,551,273 7,650,155
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CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 15,002,313 7,769,955
Cost of shares redeemed (12,689,254) (15,943,273)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 2,313,059 (8,173,318)
TOTAL INCREASE (DECREASE) IN NET ASSETS 18,864,332 (523,163)
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NET ASSETS ($):
Beginning of Period 30,445,198 30,968,361
END OF PERIOD 49,309,530 30,445,198
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CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,048,106 805,062
Shares redeemed (931,432) (1,611,151)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 116,674 (806,089)
SEE NOTES TO FINANCIAL STATEMENTS.
12
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Six Months Ended
February 29, 2000 Year Ended August 31,
--------------------------------------------
(Unaudited) 1999 1998 1997 1996(a)
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<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 10.84 8.57 20.07 22.71 12.50
Investment Operations:
Investment (loss) (.04)(b) (.07)(b) (.16)(b) (.26) (.10)
Net realized and unrealized
gain (loss) on investments 6.05 2.34 (11.34) (2.38) 10.31
Total from Investment Operations 6.01 2.27 (11.50) (2.64) 10.21
Net asset value, end of period 16.85 10.84 8.57 20.07 22.71
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TOTAL RETURN (%) 55.44(c) 26.64 (57.30) (11.63) 81.68(c)
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets .60(c) 1.13 1.27 1.34 1.16(c)
Ratio of interest expense and
loan commitment fees to
average net assets -- -- .00(d) .39 .24(c)
Ratio of investment (loss)
to average net assets (.29)(c) (.71) (.95) (1.62) (1.04)(c)
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation .23(c) .58 .29 .09 .17(c)
Portfolio Turnover Rate 108.47(c) 168.00 86.53 76.45 125.17(c)
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Net Assets, end of period ($ x 1,000) 49,310 30,445 30,968 131,604 119,341
(A) FROM SEPTEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
(D) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund 13
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" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. 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 series. Expenses directly attributable to each series are charged to that
series' 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.
14
(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 $1,456 during the period ended February 29, 2000 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, 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 $59,528,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to August 31, 1999. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, $33,000 of the carryover expires in fiscal 2004, $5,794,000
expires in fiscal 2005, $1,778,000 expires in fiscal 2006 and $51,923,000
expires in fiscal 2007.
The Fund 15
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 29, 2000, 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, 1999 through August 31, 2000, 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 reduction in management fee,
pursuant to the undertaking, amounted to $84,153 during the period ended
February 29, 2000.
(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 professionals) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
February 29, 2000, the fund was charged $44,853 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 provid
16
ing personnel and facilities to perform transfer agency services for the fund.
During the period ended February 29, 2000, the fund was charged $38,663 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 29, 2000, the fund was
charged $8,451 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' s 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 29, 2000, amounted to
$39,244,903 and $35,946,454, respectively.
At February 29, 2000, accumulated net unrealized appreciation on investments was
$12,068,974, consisting of $14,325,659 gross unrealized appreciation and
$2,256,685 gross unrealized depreciation.
At February 29, 2000, 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).
NOTE 5-Subsequent Event:
At a meeting of the Company's Board of Directors held on February 1, 2000, the
Board approved the temination of the fund's Distribution Agreement with Premier
Mutual Fund Services, Inc., and approved a new Distribution Agreement with
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager. The new
Distribution Agreement with Dreyfus Service Corporation became effective on
March 22, 2000.
The Fund 17
For More Information
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 256SA002
Dreyfus
Aggressive Value
Fund
SEMIANNUAL REPORT February 29, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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.
Contents
THE FUND
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2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus
Aggressive Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Aggressive Value
Fund, covering the six-month period from September 1, 1999 through February 29,
2000. 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 both highly volatile and generally rewarding for
investors in U.S. stocks. Although the market's advance continued to be led
primarily by technology stocks in a fast-growing economy, other market sectors
also produced good results. As a result, by the end of 1999 most major stock
market indices hit new highs, including the Dow Jones Industrial Average, the S&
P 500 Index of large-cap stocks, the technology-heavy Nasdaq 100 and the Russell
2000 Index of small-capitalization stocks.
During the first two months of the year 2000, however, the large-capitalization
sector of the stock market corrected substantially, and small- and mid-cap
stocks generally outperformed large-capitalization stocks. Retail-, media- and
housing-related companies were particularly hard-hit, primarily because of their
significant exposure to the adverse effects of rising interest rates. On the
other hand, health care and electric utility stocks have gained strength so far
in 2000, although both had suffered declines during 1999.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Aggressive Value Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
March 23, 2000
DISCUSSION OF FUND PERFORMANCE
Timothy M. Ghriskey, Senior Portfolio Manager
How did Dreyfus Aggressive Value Fund perform relative to its benchmark?
For the six-month period ended February 29, 2000, Dreyfus Aggressive Value Fund
produced a total return of 9.12%.(1) This compares favorably with the return
provided by the Russell 1000 Value Index which produced a total return of -8.88%
for the reporting period.(2) In addition, the Russell Midcap Value Index, which
reflects the broad-cap mandate of the fund, produced a total return of -11.25%
for the same period.(3)
We attribute the fund' s positive absolute and relative performance to our
technology exposure, an area in which the portfolio benefited from some very
good stock selections. The fund also realized significant gains from its
holdings within the basic materials and consumer staples areas.
What is the fund's investment approach?
The fund seeks capital appreciation. To pursue this goal, we invest at least 65%
of the fund's total assets in the stocks of value companies of any size. These
investments may include common stocks, preferred stocks and convertible
securities of both U.S. and foreign issuers.
When selecting stocks for the fund, we begin with a proprietary computer model
that identifies suitable candidates. We then reduce that list of names by
conducting fundamental research, and by meeting with the management teams of the
remaining candidates. Specifically, we are looking for factors that could signal
a rise in the stock's price, including new products or markets, opportunities
for gaining greater market share, more effective management teams, or positive
changes in the company' s corporate structure or market perception.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
As "bottom-up" investors, we choose stocks based on their individual merits
rather than according to market or economic trends. However, we remain fully
cognizant of the overall economic environment, and we are aware of trends that
may affect our performance.
That said, the predominant factor positively influencing performance during the
reporting period was the strong gains achieved by technology stocks relative to
the overall stock market. To illustrate this point more clearly, during the past
six months the technology-laden Nasdaq rose 71% while the Dow Jones Industrial
Average, an index that tracks 30 actively traded blue chip stocks and is a
leading barometer of overall stock market performance, fell 6.4%
We believe there are several reasons for the strong gains achieved within the
technology sector during the past year. First, individual investors have shown a
preference for technology stocks, most likely due to the compelling returns they
previously earned from their investments in the sector. In a momentum-driven
market such as the one we've seen this past year, those stocks that performed
best attracted the most investors, which caused the stocks to perform even
better, causing a cyclical pattern.
Second, media focus on the so-called "new economy" has heightened interest in
technology investing. The new economy is thought to be driven in part by the
revolution in information technology, which has resulted in an even greater
interest in investing in technology stocks. Finally, technology has largely been
credited with increasing productivity in the U.S. by allowing companies to gain
access to information more quickly, which helps to reduce costs and inventories
What is the fund's current strategy?
While the fund has recently been primarily a large-cap value fund, we are not
limited to stocks within a specific market capitalization range. As a result, we
have begun to reduce our exposure to the largest stock
in favor of mid- and small-cap securities. In part, this move was made in
recognition of the value and growth characteristics that we believe smaller
capitalization stocks contain.
Because this fund maintains a great deal of flexibility in its stock selection
ability, we are able to quickly adapt to changing market conditions. When we
believed large-cap stocks presented the best investment opportunities, we tilted
the portfolio in that direction. Now that we believe better opportunities exist
in the mid- and small-cap arena, we are steering the portfolio toward those
types of companies. Of course, portfolio composition can change at any time.
Furthermore, we have maintained our exposure to the technology sector, carefully
selecting those stocks that we believe offer the best growth prospects at the
most reasonable valuations. As of February 29, 2000, approximately 40% of the
fund' s total assets were invested in technology stocks.
March 23, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS
PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE
AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT
OF INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS.
THE RUSSELL 1000 VALUE INDEX IS AN UNMANAGED INDEX WHICH MEASURES THE
PERFORMANCE OF THOSE RUSSELL 1000 COMPANIES WITH LOWER PRICE-TO-BOOK
RATIOS AND LOWER FORECASTED GROWTH VALUES.
(3) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT
OF INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS.
THE RUSSELL MIDCAP VALUE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX
OF MEDIUM-CAP STOCK MARKET PERFORMANCE AND MEASURES THE PERFORMANCE OF
THOSE RUSSELL MIDCAP COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND
LOWER FORECASTED GROWTH VALUES THAN THE RUSSELL MIDCAP INDEX.
The Fund 5
STATEMENT OF INVESTMENTS
February 29, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
COMMON STOCKS--99.9% Shares Value ($)
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<S> <C> <C>
COMMERCIAL SERVICES--.4%
Valassis Communications 8,300 (a) 229,806
CONSUMER DURABLES--1.8%
Eastman Kodak 5,200 298,025
Harman International Industries 12,800 792,800
1,090,825
CONSUMER NON-DURABLES--2.7%
Cott 55,500 (a) 346,875
Kenneth Cole Productions, Cl. A 7,500 (a) 382,500
PepsiCo 18,300 590,175
Philip Morris Cos. 13,400 268,837
1,588,387
CONSUMER SERVICES--8.1%
CBS 10,600 (a) 631,362
Disney (Walt) 33,700 1,128,950
MediaOne Group 32,900 (a) 2,582,650
Viacom, Cl. B 8,700 (a) 485,025
4,827,987
ELECTRONIC TECHNOLOGY/COMPONENTS--16.0%
Cypress Semiconductor 22,700 (a) 1,035,687
Flextronics International 17,200 (a) 1,047,050
Gemstar International Group 15,700 (a) 1,191,237
LSI Logic 5,100 (a) 326,719
Lucent Technologies 11,300 672,350
Micron Technology 8,900 (a) 872,756
National Semiconductor 6,300 (a) 473,288
PRI Automation 5,200 (a) 415,350
3Com 17,300 (a) 1,695,400
Teradyne 14,300 (a) 1,244,100
Xircom 14,000 (a) 581,438
9,555,375
ELECTRONIC TECHNOLOGY/HARDWARE--12.7%
Apple Computer 6,300 (a) 722,137
Dell Computer 14,600 (a) 595,863
General Dynamics 4,900 211,925
Hewlett-Packard 4,900 659,050
International Business Machines 4,100 418,200
Motorola 7,300 1,244,650
6
COMMON STOCKS (CONTINUED) Shares Value ($)
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ELECTRONIC TECHNOLOGY/HARDWARE (CONTINUED)
Nokia, ADS 6,100 1,209,706
PE Corp.-Celera Genomics 8,300 2,025,200
Unisys 17,900 (a) 535,881
7,622,612
ENERGY MINERALS--6.3%
BP Amoco, ADS 10,500 493,500
Burlington Resources 7,500 207,187
Conoco, Cl. B 8,500 167,344
Exxon Mobil 30,449 2,293,190
Santa Fe International 20,700 593,831
3,755,052
FINANCE--21.8%
Allstate 10,600 206,700
American Express 3,500 469,656
American General 4,800 250,500
American International Group 13,850 1,224,859
AmeriCredit 22,000 (a) 305,250
Associates First Capital, Cl. A 29,400 584,325
Bank of America 10,800 497,475
Bank of New York 17,100 569,644
Bank One 14,000 361,375
CCB Financial 7,500 278,438
Chase Manhattan 10,100 804,213
Citigroup 41,100 2,124,356
Cullen/Frost Bankers 14,200 305,300
Everest Re Group 25,000 614,062
First Midwest Bancorp 12,150 302,991
First Virginia Banks 7,300 229,950
FleetBoston Financial 12,000 327,000
Goldman Sachs Group 3,800 351,500
Morgan (J.P.) & Co. 3,400 377,400
Morgan Stanley Dean Witter & Co. 14,600 1,028,387
UnionBanCal 17,400 558,975
Wells Fargo & Co. 20,900 691,006
Westamerica Bancorporation 12,900 292,669
XL Capital, Cl. A 7,400 299,237
13,055,268
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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HEALTH SERVICES--1.5%
Columbia/HCA Healthcare 22,700 438,394
Foundation Health Systems, Cl. A 51,500 (a) 428,094
866,488
HEALTH TECHNOLOGY--3.3%
Varian Medical Systems 22,600 (a) 902,587
Watson Pharmaceuticals 27,300 (a) 1,092,000
1,994,587
INDUSTRIAL SERVICES--.5%
Baker Hughes 11,700 302,738
NON-ENERGY MINERALS--2.9%
Alcoa 9,200 630,200
Bethlehem Steel 24,200 (a) 137,638
Louisiana-Pacific 82,000 968,625
1,736,463
PROCESS INDUSTRIES--4.9%
Bowater 24,000 1,180,500
Goodrich (B.F.) 22,500 538,594
Olin 15,100 234,050
Rohm & Haas 23,600 952,850
2,905,994
PRODUCER MANUFACTURING--1.9%
General Electric 4,200 555,188
Honeywell International 6,375 306,797
Ingersoll-Rand 7,100 272,019
1,134,004
RETAIL TRADE--.6%
Whitehall Jewellers 18,250 (a) 357,016
TECHNOLOGY SERVICES--1.4%
Electronic Data Systems 13,000 841,750
UTILITIES--13.1%
AES 6,900 (a) 578,306
AT&T--Liberty Media Group, Cl. A 11,800 (a) 616,550
Bell Atlantic 23,400 1,145,138
BellSouth 23,500 957,625
Dynegy, Cl. A 19,900 932,813
Enron 8,600 593,400
GTE 2,900 171,100
8
COMMON STOCKS (CONTINUED) Shares Value ($)
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UTILITIES (CONTINUED)
MCI WorldCom 9,450 (a) 421,706
SBC Communications 22,401 851,238
Sprint (PCS Group) 5,600 (a) 289,800
U S WEST 18,000 1,307,250
7,864,926
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TOTAL INVESTMENTS (cost $51,977,976) 99.9% 59,729,278
CASH AND RECEIVABLES (NET) .1% 84,691
NET ASSETS 100.0% 59,813,969
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
Cost Value
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ASSETS ($):
Investments in securities--See Statement of Investments 51,977,976 59,729,278
Cash 16,065
Receivable for investment securities sold 2,185,188
Receivable for shares of Common Stock subscribed 123,207
Dividends receivable 66,676
Prepaid expenses 20,633
62,141,047
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 50,921
Due to Distributor 11,765
Payable for investment securities purchased 1,741,035
Payable for shares of Common Stock redeemed 225,691
Bank loan payable--Note 2 250,000
Interest payable--Note 2 43
Accrued expenses 47,623
2,327,078
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NET ASSETS ($) 59,813,969
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 47,211,417
Accumulated undistributed investment income--net 19,300
Accumulated net realized gain (loss) on investments 4,831,950
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 7,751,302
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NET ASSETS ($) 59,813,969
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SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 2,489,856
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($)
24.02
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $2,070 foreign taxes withheld at source) 443,210
Interest 25,186
TOTAL INCOME 468,396
EXPENSES:
Management fee--Note 3(a) 244,622
Shareholder servicing costs--Note 3(b) 157,434
Prospectus and shareholders' reports 12,844
Professional fees 12,223
Registration fees 10,868
Custodian fees--Note 3(b) 3,679
Interest expense--Note 2 2,116
Directors' fees and expenses--Note 3(c) 1,007
Miscellaneous 1,376
TOTAL EXPENSES 446,169
INVESTMENT INCOME--NET 22,227
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 5,352,327
Net unrealized appreciation (depreciation) on investments 429,606
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 5,781,933
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 5,804,160
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999
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OPERATIONS ($):
Investment income--net 22,227 202,674
Net realized gain (loss) on investments 5,352,327 6,127,424
Net unrealized appreciation (depreciation)
on investments 429,606 17,405,513
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 5,804,160 23,735,611
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (200,027) (187,969)
Net realized gain on investments (6,627,196) (4,934,176)
TOTAL DIVIDENDS (6,827,223) (5,122,145)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 4,454,201 27,456,779
Dividends reinvested 6,588,816 4,906,800
Cost of shares redeemed (22,449,940) (70,641,639)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (11,406,923) (38,278,060)
TOTAL INCREASE (DECREASE) IN NET ASSETS (12,429,986) (19,664,594)
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NET ASSETS ($):
Beginning of Period 72,243,955 91,908,549
END OF PERIOD 59,813,969 72,243,955
Undistributed investment income--net 19,300 197,100
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 187,684 1,151,489
Shares issued for dividends reinvested 289,364 206,689
Shares redeemed (933,967) (2,905,607)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (456,919) (1,547,429)
SEE NOTES TO FINANCIAL STATEMENTS.
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
February 29, 2000 Year Ended August 31,
--------------------------------------------
(Unaudited) 1999 1998 1997 1996(a)
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PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 24.52 20.45 26.40 20.08 12.50
Investment Operations:
Investment income--net .01(b) .05(b) .05 .02 .09
Net realized and unrealized
gain (loss) on investments 2.09 5.11 (4.27) 8.22 7.53
Total from Investment Operations 2.10 5.16 (4.22) 8.24 7.62
Distributions:
Dividends from investment income--net (.08) (.04) (.03) (.05) (.04)
Dividends from net realized
gain on investments (2.52) (1.05) (1.70) (1.87) --
Total Distributions (2.60) (1.09) (1.73) (1.92) (.04)
Net asset value, end of period 24.02 24.52 20.45 26.40 20.08
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TOTAL RETURN (%) 9.12(c) 25.41 (17.02) 43.57 61.00(c)
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses
to average net assets .68(c) 1.29 1.27 1.24 1.17(c)
Ratio of interest expense
to average net assets .00(c,d) .01 .01 -- --
Ratio of net investment income
to average net assets .03(c) .22 .16 .18 .55(c)
Decrease reflected in above expense
ratios due to undertakings
by The Dreyfus Corporation -- -- -- .14 .63(c)
Portfolio Turnover Rate 84.47(c) 225.12 170.46 120.71 260.98(c)
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Net Assets, end of period ($ x 1,000) 59,814 72,244 91,909 159,529 9,711
(A) FROM SEPTEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
(D) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund 13
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" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. 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 series. Expenses directly attributable to each series are charged to that
series' 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.
14
(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 $833 during the period ended February 29, 2000 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.
The Fund 15
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 Lines 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 29, 2000 was approximately $71,900, with a
related weighted average annualized interest rate of 5.91%.
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 perio
16
ended February 29, 2000, the fund was charged $81,541 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 29, 2000, the fund was charged $39,804 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 29, 2000, the fund was
charged $3,679 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's exchange privilege.
(e) During the period ended February 29, 2000, the fund incurred total brokerage
commissions of $120,481, of which $12,326 was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended February 29, 2000, amounted to
$54,491,829 and $68,745,750, respectively.
At February 29, 2000, accumulated net unrealized appreciation on investments was
$7,751,302, consisting of $10,528,840 gross unrealized appreciation and
$2,777,538 gross unrealized depreciation.
At February 29, 2000, 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
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 5--Subsequent Event
At a meeting of the Company's Board of Directors held on February 1, 2000, the
Board approved the termination of the Company's Distribution Agreement with
Premier Mutual Fund Services, Inc. and approved a new Distribution Agreement
with Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager. The
new Distribution Agreement with Dreyfus Service Corporation became effective on
March 22, 2000.
NOTES
For More Information
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 257SA002
Dreyfus
Emerging Leaders Fund
SEMIANNUAL REPORT February 29, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Emerging Leaders Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Emerging Leaders
Fund, covering the six-month period from September 1, 1999 through February 29,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
managers, Hilary Woods and Paul Kandel.
The past six months have been both highly volatile and generally rewarding for
investors in small-cap U.S. stocks. During the reporting period, small-cap
stocks generally outperformed large-cap stocks. This represents a reversal of
the trends established over the past several years, when large-cap stocks were
favored by investors over smaller companies.
Given the small-cap market' s recent strength, we believe that valuations for
small companies continue to look attractive when compared to those of large
companies. Most small companies are less expensive than their large-cap
counterparts on a price-to-book, price-to-sales and price-to-earnings basis. In
our view, this implies that there may be room for additional gains as smaller
companies "catch up" to the higher valuations of large-cap stocks.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Emerging Leaders Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
March 23, 2000
DISCUSSION OF FUND PERFORMANCE
Hilary Woods and Paul Kandel, Portfolio Managers
How did Dreyfus Emerging Leaders Fund perform relative to its benchmark?
For the six-month period ended February 29, 2000, Dreyfus Emerging Leaders Fund
produced a strong total return of 39.55%.(1) This exceeded the performance of
the fund's benchmark, the Russell 2000 Index, which produced 35.82% total return
for the same period.(2)
We attribute the fund' s performance to a strong rebound in small-cap stocks,
especially in sectors that the fund emphasized. In addition, we succeeded in
identifying attractive individual investment opportunities among a diverse range
of sectors, industries and investment styles. Investors should realize, however,
that the fund' s six-month return was achieved during a period that was highly
favorable to small-cap stocks, and that such returns should not be expected over
the long term.
What is the fund's investment approach?
The fund invests primarily in a diversified portfolio of small-cap companies
with total market values of $1.5 billion or less at the time of purchase. To
create that portfolio, we focus primarily on emerging leaders in their
respective industries. The leaders in which we invest offer products or services
that we believe enhance their prospects for future earnings growth. Using
fundamental research, we seek companies with dominant positions in major product
lines, sustained achievement records and strong financial conditions. We also
base investment decisions on the expected impact of changes in a company's
management or organizational structure.
Our investment approach targets growth-oriented stocks (those of companies with
earnings that are expected to grow faster than the overall market) ,
value-oriented stocks (those that appear underpriced according to a variety of
financial measurements) and stocks that exhibit both The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
growth and value characteristics. We typically sell a stock when the reasons for
buying it no longer apply or when the company begins to show deteriorating
fundamentals or poor relative performance.
What other factors influenced the fund's performance?
The fund was positively influenced by the investment environment that prevailed
during the period. Robust consumer spending, low rates of inflation and
technology-driven productivity gains powered the U.S. economy to its longest
peacetime expansion in history. Equity markets benefited from the economy's
strong growth. Small-cap stocks -- which, in our opinion, had been undervalued
relative to large-company stocks -- showed the greatest gains. The fund's
disciplined focus on small-cap investing positioned us to benefit from these
conditions.
The Federal Reserve Board raised interest rates during the period in an effort
to slow the U.S. economy and forestall a future rise in inflation. As interest
rates rose, investors concentrated their assets in sectors offering the greatest
potential for high earnings growth, and on companies that did not depend on
increasingly costly traditional debt markets to obtain capital. Technology and
biotechnology shares rose sharply in value because they fit the profile sought
by most investors.
We took advantage of these trends by maintaining an overweighted position in
technology, investing primarily in telecommunications-related utilities and
semiconductor companies, and Internet-related software developers. Key
technology holdings include telecommunications-related semiconductor companies,
such as PMC-Sierra, and Internet-related software developers, such as Primus
Knowledge Solutions. Investors should note that the technology sector has been
among the most volatile sectors of the market, and, accordingly, should be
willing to assume the risks associated with such investments. We focused most of
our healthcare sector investments in biotech companies, and largely avoided the
poor-performing, interest-rate-sensitive financial services sector.
Rising energy prices produced yet another investment trend favoring the fund.
With oil prices topping $30 a barrel during the period, th
fund benefited from its large weighting in oil field services companies.
Conversely, we maintained a significantly underweighted position in the
industries most adversely affected, including automobiles, airlines and
trucking.
Of course not every decision we made proved favorable. Despite rising earnings
and other strong fundamentals, investments in the materials and processing
sector underperformed the market due to insufficient investor interest. Several
of our holdings in the consumer sector lost value for a variety of
company-specific reasons, and the market severely punished some stocks in our
portfolio that failed to deliver expected earnings.
What is the fund's current strategy?
As of the end of the reporting period, the fund remained more heavily weighted
than our benchmark in the sectors that provided the strongest performance,
including technology. We have less exposure than our benchmark to the relatively
weak-performing sectors of financial services and transportation. However, as
the reporting period drew to a close, rapidly rising valuations in the
technology and biotech sectors began to outstrip some company fundamentals. We
continue to be watchful of factors that might cause us to reassess our
allocation of assets among these sectors.
Although small-cap stocks outperformed larger cap stocks during the period, we
believe many small companies are still more attractively valued than their
larger counterparts. We remain committed to uncovering investment opportunities
that we believe are well poised to propel the fund going forward.
March 23, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS
PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE
AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. --- REFLECTS THE REINVESTMENT
OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE
RUSSELL 2000 INDEX IS AN UNMANAGED INDEX OF SMALL-CAP STOCK
PERFORMANCE AND IS COMPOSED OF THE 2000 SMALLEST COMPANIES IN THE
RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF THE 3000
LARGEST U.S. COMPANIES BASED ON TOTAL MARKET CAPITALIZATION.
The Fund 5
STATEMENT OF INVESTMENTS
February 29, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
COMMON STOCKS--93.3% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL SERVICES--2.3%
Lamar Advertising, Cl. A 170,000 (a) 7,405,625
Metamor Worldwide 190,200 (a) 3,899,100
True North Communications 306,500 11,340,500
22,645,225
CONSUMER NON-DURABLES--.7%
Church & Dwight 380,000 6,483,750
CONSUMER SERVICES--6.3%
Cinar Films, Cl. B 420,000 (a) 8,662,500
Emmis Communications, Cl. A 255,000 (a) 9,307,500
Entercom Communications 185,000 (a) 7,781,563
Harte-Hanks 425,000 9,270,312
Meredith 200,000 5,725,000
SFX Entertainment 340,000 (a) 13,090,000
Spanish Broadcasting System, Cl. A 340,000 6,502,500
60,339,375
ELECTRONIC TECHNOLOGY--22.4%
Advanced Energy Industries 225,000 (a) 16,368,750
Alpha Industries 165,000 (a) 23,955,937
Applied Micro Circuits 140,000 (a) 38,508,750
Atmel 400,000 (a) 19,800,000
C-COR Electronics 400,000 (a) 17,887,500
Integrated Silicon Solution 500,000 (a) 13,906,250
L-3 Communications Holdings 275,000 (a) 11,704,688
Lattice Semiconductor 230,000 (a) 16,157,500
Newport News Shipbuilding 400,000 11,325,000
QuickLogic 400,000 12,500,000
TranSwitch 280,000 (a) 32,900,000
215,014,375
ENERGY MINERALS--3.1%
Devon Energy 300,000 11,175,000
NATCO Group, Cl. A 600,000 7,762,500
Triton Energy 375,000 (a) 10,593,750
6 29,531,250
FINANCE--9.6%
Annuity & Life Re 475,000 10,746,875
CCB Financial 200,000 7,425,000
Commerce Bancorp 290,500 9,768,063
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCE (CONTINUED)
Everest Re Group 465,000 11,421,563
First Midwest Bancorp 447,500 11,159,531
Reckson Service Industries 235,000 (a) 12,645,937
RenaissanceRe Holdings 296,400 11,226,150
Webster Financial 380,000 8,027,500
XL Capital, Cl. A 250,000 10,109,375
92,529,994
HEALTH SERVICES--1.3%
Oxford Health Plans 815,000 (a) 12,581,562
HEALTH TECHNOLOGY--11.5%
Andrx 185,000 (a) 17,771,562
Biovail Corporation International 220,000 (a) 14,520,000
Genzyme Transgenics 405,000 (a) 18,022,500
IDEC Pharmaceuticals 110,000 (a) 15,496,250
JONES PHARMA 205,000 14,708,750
Millennium Pharmaceuticals 115,000 29,914,375
110,433,437
INDUSTRIAL SERVICES--2.9%
BJ Services 200,000 (a) 11,412,500
McDermott International 625,000 5,859,375
Rowan 420,000 (a) 10,552,500
27,824,375
NON-ENERGY MINERALS--3.1%
Bethlehem Steel 1,400,000 (a) 7,962,500
Rayonier 295,000 11,726,250
Steel Dynamics 650,000 (a) 9,993,750
29,682,500
PROCESS INDUSTRIES--5.2%
Abitibi-Consolidated 1,200,000 10,650,000
AptarGroup 445,000 10,652,187
Georgia Gulf 475,000 10,806,250
Millennium Chemicals 375,000 (a) 5,250,000
Wellman 670,000 12,478,750
49,837,187
PRODUCER MANUFACTURING--3.7%
AGCO 1,000,000 11,000,000
Howmet International 600,000 (a) 10,987,500
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
PRODUCER MANUFACTURING (CONTINUED)
IDEX 295,000 7,301,250
Terex 525,000 (a) 6,234,375
35,523,125
RETAIL TRADE--3.4%
Great Atlantic & Pacific Tea 285,000 6,679,688
MSC Industrial Direct 800,000 (a) 12,500,000
Tiffany & Co. 115,000 7,381,563
Whitehall Jewellers 330,000 (a) 6,455,625
33,016,876
TECHNOLOGY SERVICES--11.5%
iBasis 200,000 16,100,000
Legato Systems 105,150 (a) 3,745,969
National Data 350,000 10,850,000
PMC-Sierra 160,000 (a) 30,890,000
Primus Knowledge Solutions 265,000 31,800,000
RSA Security 250,000 (a) 16,734,375
110,120,344
TRANSPORTATION--1.1%
Expeditors International of Washington 280,400 10,585,100
UTILITIES--5.2%
Clarent 160,000 17,480,000
Kinder Morgan 425,000 11,846,875
Questar 150,000 2,090,625
Time Warner Telecom, Cl. A 235,000 18,095,000
49,512,500
TOTAL COMMON STOCKS
(cost $595,440,409) 895,660,975
8
Principal
SHORT-TERM INVESTMENTS--7.1% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS:
5.17%, 3/2/2000 16,440,000 16,437,534
5.10%, 3/9/2000 11,934,000 11,920,753
5.16%, 3/30/2000 11,724,000 11,675,228
5.25%, 4/6/2000 9,191,000 9,141,277
5.68%, 4/27/2000 19,439,000 19,265,604
TOTAL SHORT--TERM INVESTMENTS
(cost $68,440,125) 68,440,396
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $663,880,534) 100.4% 964,101,371
LIABILITIES, LESS CASH AND RECEIVABLES (.4%) (3,740,898)
NET ASSETS 100.0% 960,360,473
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund 9
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 663,880,534 964,101,371
Cash 7,499,266
Receivable for investment securities sold 9,070,900
Receivable for shares of Common Stock subscribed 4,260,179
Dividends receivable 393,635
Prepaid expenses 26,162
985,351,513
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 639,775
Due to Distributor 168,326
Payable for investment securities purchased 23,752,480
Payable for shares of Common Stock redeemed 253,398
Accrued expenses 177,061
24,991,040
- --------------------------------------------------------------------------------
NET ASSETS ($) 960,360,473
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 681,657,369
Accumulated investment (loss) (1,110,915)
Accumulated net realized gain (loss) on investments (20,406,818)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 300,220,837
- --------------------------------------------------------------------------------
NET ASSETS ($) 960,360,473
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 22,719,399
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($)
42.27
SEE NOTES TO FINANCIAL STATEMENTS.
10
STATEMENT OF OPERATIONS
Six Months Ended February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $17,615 foreign taxes withheld at source) 1,483,676
Interest 959,250
TOTAL INCOME 2,442,926
EXPENSES:
Management fee--Note 3(a) 2,498,567
Shareholder servicing costs--Note 3(b) 870,003
Registration fees 119,269
Custodian fees--Note 3(b) 22,234
Professional fees 17,893
Prospectus and shareholders' reports 16,353
Directors' fees and expenses--Note 3(c) 5,766
Loan commitment fees--Note 2 2,825
Miscellaneous 931
TOTAL EXPENSES 3,553,841
INVESTMENT (LOSS) (1,110,915)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (20,206,379)
Net unrealized appreciation (depreciation) on investments 238,697,818
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 218,491,439
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 217,380,524
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (1,110,915) (969,411)
Net realized gain (loss) on investments (20,206,379) 1,833,877
Net unrealized appreciation (depreciation)
on investments 238,697,818 61,874,481
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 217,380,524 62,738,947
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
NET REALIZED GAIN ON INVESTMENTS (1,063,336) (274,922)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 528,834,367 292,925,430
Dividends reinvested 958,679 264,081
Cost of shares redeemed (144,373,789) (102,579,858)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 385,419,257 190,609,653
TOTAL INCREASE (DECREASE) IN NET ASSETS 601,736,445 253,073,678
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 358,624,028 105,550,350
END OF PERIOD 960,360,473 358,624,028
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 14,967,680 10,381,885
Shares issued for dividends reinvested 28,600 11,045
Shares redeemed (4,093,386) (3,800,869)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 10,902,894 6,592,061
SEE NOTES TO FINANCIAL STATEMENTS.
12
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
February 29, 2000 Year Ended August 31,
---------------------------------------------
(Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 30.35 20.20 25.17 18.67 12.50
Investment Operations:
Investment income (loss)--net (.07)(b) (.13)(b) (.16)(b) (.11) .03
Net realized and unrealized
gain (loss) on investments 12.06 10.33 (2.14) 8.02 6.17
Total from Investment Operations 11.99 10.20 (2.30) 7.91 6.20
Distributions:
Dividends from investment income--net -- -- -- -- (.03)
Dividends from net realized gain
on investments (.07) (.05) (2.67) (1.41) --
Total Distributions (.07) (.05) (2.67) (1.41) (.03)
Net asset value, end of period 42.27 30.35 20.20 25.17 18.67
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 39.55(c) 50.54 (10.82) 44.45 46.09(c,d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .64(c) 1.38 1.39 1.39 1.16(c)
Ratio of net investment income (loss)
to average net assets (.20)(c) (.49) (.63) (.62) .09(c)
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation -- -- -- .09 .36(c)
Portfolio Turnover Rate 29.00(c) 100.40 199.08 197.99 203.66(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 960,360 358,624 105,550 104,481 37,206
(A) FROM SEPTEMBER 28, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31,
1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
(D) CALCULATED BASED ON NET ASSET VALUE ON THE CLOSE OF BUSINESS ON
SEPTEMBER 29, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31,
1996.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund 13
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"), which is a wholly-owned subsidiary of Mellon Financial Corporation.
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 series. Expenses directly attributable to each series are charged to that
series' 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.
14
(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 $20,345 during the period ended February 29, 2000 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.
(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 $500 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 the borrowings. During the period ended
February 29, 2000, the fund did not borrow under the Facility.
The Fund 15
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 29, 2000, the fund was charged $694,047 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 29, 2000, the fund was charged $83,810 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 29, 2000, the fund was
charged $22,234 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's exchange privilege.
16
(e) During the period ended February 29, 2000, the fund incurred total brokerage
commissions of $794,788, of which $3,090 was paid to Dreyfus Brokerage Services,
a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended February 29, 2000, amounted to
$501,252,629 and $154,340,629, respectively.
At February 29, 2000, accumulated net unrealized appreciation on investments was
$300,220,837, consisting of $343,684,407 gross unrealized appreciation and
$43,463,570 gross unrealized depreciation.
At February 29, 2000, 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).
NOTE 5--Subsequent Event:
At a meeting of the Company's Board of Directors held on February 1, 2000, the
Board approved the termination of the fund's Distribution Agreement with Premier
Mutual Fund Services, Inc., and approved a new Distribution Agreement with
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager. The new
Distribution Agreement with Dreyfus Service Corporation became effective on
March 22, 2000.
The Fund 17
For More Information
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 259SA002
Dreyfus
International
Value Fund
SEMIANNUAL REPORT February 29, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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.
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
The Fund
Dreyfus
International Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus International Value
Fund, covering the six-month period from September 1, 1999 through February 29,
2000. 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, Sandor Cseh.
Many international markets declined modestly in January, 2000 after rising
sharply during the fourth quarter of 1999. Interest-rate-sensitive markets such
as Singapore, Switzerland and the United Kingdom were particularly hard hit.
Banks and insurance companies are large components of these stock markets, and
rising interest rates tend to affect financial stocks more than other market
sectors. The recent decline was relatively short-lived, however, and many
overseas markets had partially recovered by the end of the reporting period.
International stock market returns have been eroded recently by the strength of
the U.S. dollar, especially versus the euro. Furthermore, small-cap stocks
continued their recent trend of outperforming large-cap stocks, and
growth-oriented stocks have generally continued to outperform value stocks in
international markets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus International Value Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
March 23, 2000
2
DISCUSSION OF FUND PERFORMANCE
Sandor Cseh, Senior Portfolio Manager
How did Dreyfus International Value Fund perform relative to its benchmark?
For the six-month period ended February 29, 2000, Dreyfus International Value
Fund produced a total return of -0.07%.(1) The fund's benchmark, the Morgan
Stanley Capital International Europe, Australasia, Far East ("MSCI EAFE") Index,
produced a total return of 13.63% for the same period.(2) The MSCI EAFE Value
Index, a value index that may more closely represent this fund, produced a total
return of 0.40% for the same period.(3)
We attribute the fund' s relative underperformance to an especially strong
environment for growth investing during the past six months. The period was
particularly good for telecommunications and information technology stocks
within the technology sector. The valuations of many of these types of stocks
have reached very high levels compared to historical norms. As a value fund, our
exposure to these areas was limited, which hindered our overall performance
What is the fund's investment approach?
The fund seeks long-term capital growth. To pursue this goal, the fund
ordinarily invests most of its assets in stocks of foreign issuers that we
consider to be "value" companies. The fund normally invests in companies in at
least 15 countries, and generally limits its investments in any single company
to no more than 5% of its assets at the time of purchase.
The fund' s investment approach is value oriented, research driven and risk
averse. When selecting stocks, we attempt to identify potential investments
through extensive quantitative and fundamental research. Emphasizing individual
stock selection over economic or industry trends, the fund focuses on three key
factors:
* VALUE, or how a stock is priced relative to traditional business
performance measures.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
* BUSINESS HEALTH, or overall efficiency and profitability as measured
by return on assets and return on equity.
* BUSINESS MOMENTUM, or the presence of a catalyst (such as corporate
restructuring, changing management or positive earnings surprise) that
can potentially trigger a price increase near term to midterm.
The fund typically sells a stock when it is no longer considered a value
company, appears less likely to benefit from the current market and economic
environment, shows deteriorating fundamentals or declining momentum, or falls
short of our expectations.
What other factors influenced the fund's performance?
The predominant factor influencing performance during the reporting period was
the fact that the value style of investing was out of favor. In fact, market
gains were concentrated primarily among technology stocks, traditionally
considered a growth industry.
Historically, the major determinant of performance in an international fund such
as ours tends to be the relative strength or weakness of local economies.
However, during the current six-month reporting period, the major determinant of
performance was the industry in which a company operated, with technology
leading the way.
The strength of the technology sector was a worldwide trend. For example, while
Japan continues to experience economic weakness, many of the country' s
technology stocks reported strong gains, while the broader Japanese stock market
produced more moderate returns. Japan, which makes up the largest component of
the fund, has continued its gradual economic recovery, and we are pleased by
signs we' ve seen that the government has begun to take the necessary steps to
resolve its banking crisis.
Most European economies continue to lag the U.S. economy in terms of growth.
With the exception of strong technology gains, the fund's European investments
have made only a modest contribution to the fund's performance. However, many
European companies are begin
4
ning to implement the strategies used by U.S. corporations years ago to improve
their cost structure and increase profit margins, a move we view as very
positive.
What is the fund's current strategy?
We have continued to focus on a diverse group of value investments worldwide.
While the difference in returns achieved by growth and value investments has
widened, we do not believe that this is the time to alter our long-term
investment strategy. Instead, we plan to continue to maintain a well-diversified
portfolio across many industries that will allow us to participate in some of
the more dynamic sectors, such as technology, along with temporarily
out-of-favor sectors that contain stocks of sound businesses selling at
attractive valuations.
March 23, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS
PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE
AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INVESTMENTS IN
FOREIGN SECURITIES INVOLVE SPECIAL RISKS. PLEASE READ THE PROSPECTUS
FOR FURTHER DISCUSSION OF THESE RISKS.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- THE MORGAN STANLEY CAPITAL
INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST (MSCI EAFE) 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.
(3) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- THE MORGAN STANLEY CAPITAL
INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST (MSCI EAFE ) VALUE INDEX
IS AN UNMANAGED INDEX COMPOSED OF A SAMPLE OF VALUE COMPANIES
REPRESENTATIVE OF THE MARKET STRUCTURE OF EUROPEAN AND PACIFIC BASIN
COUNTRIES AND INCLUDES NET DIVIDENDS REINVESTED.
The Fund 5
STATEMENT OF INVESTMENTS
February 29, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
COMMON STOCKS--88.6% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA--1.4%
<S> <C> <C>
Australia & New Zealand Banking 527,603 3,266,488
Goodman Fielder 1,528,217 1,105,886
Pacific Dunlop 745,187 742,046
5,114,420
AUSTRIA--.5%
Bank Austria 42,891 1,874,309
BELGIUM--.8%
Dexia 20,100 (a) 2,749,724
Dexia--Strip 12,785 (a) 124
2,749,848
BRAZIL--.9%
Petroleo Brasileiro, ADR 47,600 1,246,525
Telecomunicacoes Brasileiras, ADS 14,298 2,105,380
3,351,905
DENMARK--.5%
Jyske Bank 106,360 1,837,557
FINLAND--.6%
Kesko Oyj, Cl. B 169,966 2,259,443
FRANCE--9.3%
Air Liquide 26,370 3,574,331
Alstom 71,159 1,650,429
Assurances Generales de France 64,888 3,149,233
Aventis 11,590 593,876
Banque Nationale de Paris 52,545 4,165,642
Bongrain 4,542 1,269,058
Compagnie Generale des Establissements
Michelin, Cl. B 89,935 2,819,761
PSA Peugeot Citroen 6,700 1,386,846
Societe Generale 7,105 1,478,920
Suez Lyonnaise des Eaux 7,600 1,256,453
Thomson CSF 105,055 4,164,254
Total Fina, ADR 85,244 5,722,004
Usinor 110,600 1,619,960
32,850,767
GERMANY--8.9%
Bayer 104,958 4,388,724
Celanese 1,545 (a) 30,770
6
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
GERMANY (CONTINUED)
Deutsche Bank 55,844 4,718,724
Deutsche Lufthansa 157,106 3,519,293
Merck KGaA 131,985 3,432,523
Metallgesellschaft 53,500 1,011,200
Siemens 30,169 5,410,551
Veba 86,820 3,894,704
Viag 108,394 1,933,474
Volkswagen 74,054 2,985,529
31,325,492
GREECE--1.5%
Hellenic Telecommunications Organization, ADS 350,128 5,251,920
HONG KONG--1.3%
CDL Hotels International 1,710,000 450,416
Hongkong Electric 1,309,688 3,996,645
4,447,061
ITALY--3.6%
Banca Popolare di Bergamo Credito Varesino 73,700 1,474,940
ENI 514,200 2,422,010
ENI , ADS 47,400 2,248,538
San Paulo--IMI 144,369 2,277,740
Telecom Italia 567,621 4,488,988
12,912,216
JAPAN--24.5%
AIFUL 12,800 2,687,453
CANON 132,000 5,480,512
Credit Saison 224,300 3,507,044
Dai-Tokyo Fire and Marine Insurance 492,000 1,443,772
FUJI MACHINE MANUFACTURING 81,900 5,409,403
HONDA MOTOR 71,000 2,322,159
MABUCHI MOTOR 39,100 4,816,898
MINEBEA 288,000 3,309,894
Marubeni 1,134,000 4,605,233
Matsumotokiyoshi 61,600 4,544,308
Mitsubishi Heavy Industries 354,000 968,057
NAMCO 76,700 5,755,810
Nichiei 56,460 1,138,741
Nippon Express 797,000 5,314,782
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
Nippon Telegraph & Telephone 95 1,311,892
Nishimatsu Construction 357,000 1,083,292
RINNAI 138,600 2,304,334
ROHM 17,700 5,732,761
SANKYO COMPANY 112,000 2,314,891
SONY 22,000 6,495,866
Sankyo 14,000 922,140
Sekisui Chemical 260,000 812,574
Seventy Seven Bank 345,000 2,545,108
Shin-Estu Chemical 73,000 3,946,125
TDK 14,000 1,336,786
Toyota Motor 67,000 2,672,209
Yamanouchi Pharmaceutical 80,000 3,815,753
86,597,797
MEXICO--.3%
Telefonos de Mexico, Cl. L, ADR 16,306 1,072,120
NETHERLANDS--6.0%
ABN AMRO 186,703 3,880,846
Akzo Nobel, ADS 58,200 2,328,000
Buhrmann 125,520 3,318,997
Hollandsche Beton Groep 122,129 1,700,270
Hunter Douglas Groep 118,850 2,872,605
ING Groep 67,339 3,419,228
Stork 179,685 2,214,923
Vedior 162,174 1,536,540
21,271,409
NEW ZEALAND--.9%
Fletcher Challenge Paper 1,825,972 1,287,617
Telecom Corporation of New Zealand 493,120 2,052,587
3,340,204
NORWAY--.9%
Norsk Hydro 44,982 1,681,163
Orkla 94,500 1,446,648
3,127,811
PERU--.2%
Telefonica del Peru, ADS 42,200 828,175
PHILIPPINES--.3%
Manila Electric, Cl. B 493,000 908,056
8
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PORTUGAL--2.0%
Electricidade de Portugal 135,994 2,725,560
Portugal Telecom 299,908 4,282,577
7,008,137
SINGAPORE--1.8%
Creative Technology 108,150 2,379,300
Oversea-Chinese Banking 257,000 1,624,601
United Overseas Bank 359,400 2,271,913
6,275,814
SOUTH KOREA--.7%
Korea Electric Power, ADR 121,300 1,667,875
Pohang Iron & Steel, ADR 28,300 711,038
2,378,913
SPAIN--4.0%
Banco Bilbao Vizcaya Argentaria 121,000 1,766,440
Banco Popular Espanol 104,720 2,925,931
Endesa 270,418 5,743,840
Repsol-YPF, ADR 193,570 3,702,026
14,138,237
SWEDEN--1.2%
Autoliv 121,922 3,265,245
Investor, Cl. B 63,600 935,325
4,200,570
SWITZERLAND--4.5%
Barry Callebaut 20,297 2,933,446
Forbo 3,145 1,299,211
Novartis 2,584 3,305,080
Sulzer 3,566 (a) 2,334,242
Swisscom 6,174 2,022,556
UBS 16,634 4,061,837
15,956,372
UNITED KINGDOM--12.0%
BOC 116,665 2,357,291
Barclays 96,970 2,337,728
British Aerospace 700,655 3,470,115
British Airways 275,735 1,302,462
Bunzl 824,999 3,747,084
Laird 390,565 1,193,923
Morgan Crucible 813,628 3,187,398
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
PowerGen 338,043 2,332,421
Rexam 784,690 2,271,665
Rio Tinto 166,890 2,473,063
Royal & Sun Alliance Insurance 641,288 3,505,349
Royal Bank of Scotland 214,882 2,827,790
Safeway 733,114 1,792,274
Scottish and Southern Energy 256,700 2,150,348
Tomkins 683,869 1,893,359
Unilever 506,900 3,089,088
Wolseley 485,316 2,348,026
42,279,384
TOTAL COMMON STOCKS
(cost $302,030,814) 313,357,937
- ------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--.5%
- ------------------------------------------------------------------------------------------------------------------------------------
GERMANY:
Hugo Boss 13,601 1,663,405
Rheinmetall 35,200 292,670
TOTAL PREFERRED STOCKS
(cost $2,406,803) 1,956,075
- ------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--5.2% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S TREASURY BILLS:
5.68%, 4/27/2000
(cost $18,307,757) 18,474,000 18,309,212
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $322,745,374) 94.3% 333,623,224
CASH AND RECEIVABLES (NET) 5.7% 20,140,473
NET ASSETS 100.0% 353,763,697
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
10
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 322,745,374 333,623,224
Cash 11,263,693
Cash denominated in foreign currencies 7,872,062 7,674,333
Receivable for shares of Common Stock subscribed 6,229,104
Receivable for investment securities sold 920,513
Dividends receivable 626,021
Prepaid expenses 34,595
360,371,483
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 270,899
Due to Distributor 65,812
Payable for investment securities purchased 5,578,945
Payable for shares of Common Stock redeemed 553,125
Net unrealized (depreciation) on forward
currency exchange contracts--Note 4(a) 10,680
Accrued expenses 128,325
6,607,786
- --------------------------------------------------------------------------------
NET ASSETS ($) 353,763,697
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 332,378,136
Accumulated investment (loss) (615,405)
Accumulated net realized gain (loss) on investments
and foreign currency transactions 11,310,945
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 10,690,021
- --------------------------------------------------------------------------------
NET ASSETS ($) 353,763,697
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 21,283,270
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($)
16.62
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
STATEMENT OF OPERATIONS
Six Months Ended February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $151,815 foreign taxes withheld at source) 1,189,463
Interest 324,214
TOTAL INCOME 1,513,677
EXPENSES:
Management fee--Note 3(a) 1,486,947
Shareholder servicing costs--Note 3(b) 399,787
Custodian fees 145,141
Registration fees 42,376
Professional fees 16,151
Prospectus and shareholders' reports 11,183
Directors' fees and expenses--Note 3(c) 3,910
Loan commitment fees-Note 2 2,007
Miscellaneous 1,767
TOTAL EXPENSES 2,109,269
INVESTMENT (LOSS) (595,592)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments and foreign currency transactions
17,486,851
Net realized gain (loss) on forward currency exchange contracts 87,801
NET REALIZED GAIN (LOSS) 17,574,652
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (17,514,763)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 59,889
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (535,703)
SEE NOTES TO FINANCIAL STATEMENTS.
12
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income (loss)--net (595,592) 2,000,064
Net realized gain (loss) on investments 17,574,652 7,416,018
Net unrealized appreciation (depreciation)
on investments (17,514,763) 41,585,254
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (535,703) 51,001,336
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (1,879,133) (1,669,640)
Net realized gain on investments (13,055,032) (8,578,499)
TOTAL DIVIDENDS (14,934,165) (10,248,139)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 459,773,816 272,816,276
Dividends reinvested 11,642,447 7,975,826
Cost of shares redeemed (362,850,100) (223,584,564)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 108,566,163 57,207,538
TOTAL INCREASE (DECREASE) IN NET ASSETS 93,096,295 97,960,735
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 260,667,402 162,706,667
END OF PERIOD 353,763,697 260,667,402
Undistributed investment income (loss)--net (615,405) 1,859,320
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 26,559,737 17,014,785
Shares issued for dividends reinvested 686,870 539,272
Shares redeemed (20,841,606) (13,897,438)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 6,405,001 3,656,619
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 13
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
February 29, 2000 Year Ended August 31,
---------------------------------------------
(Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 17.52 14.50 15.05 13.23 12.50
Investment Operations:
Investment income (loss)--net (.03)(b) .16(b) .13 .07 .15
Net realized and unrealized
gain (loss) on investments .03 3.76 (.20) 1.98 .65
Total from Investment Operations -- 3.92 (.07) 2.05 .80
Distributions:
Dividends from investment income--net (.11) (.15) (.08) (.10) (.04)
Dividends from net realized gain
on investments (.79) (.75) (.40) (.13) (.03)
Total Distributions (.90) (.90) (.48) (.23) (.07)
Net asset value, end of period 16.62 17.52 14.50 15.05 13.23
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (.07)(c) 28.19 (.62) 15.72 6.43(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets .71(c) 1.40 1.44 1.49 1.39(c)
Ratio of net investment income (loss)
to average net assets (.20)(c) 1.00 1.17 1.09 1.78(c)
Decrease reflected in above expense ratios
due to undertakings
by The Dreyfus Corporation -- -- -- .03 .51(c)
Portfolio Turnover Rate 19.41(c) 30.68 34.46 25.35 19.14(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 353,764 260,667 162,707 96,896 25,638
(A) FROM SEPTEMBER 28, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
14
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., which is a wholly-owned subsidiary of Mellon Financial Corporation.
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 series. Expenses directly attributable to each series are charged to that
series' 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
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 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 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
(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 $500 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 the borrowings. During the period ended
February 29, 2000, 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 29, 2000, the fund was charged $371,737 pursuant to the Shareholder
Services Plan.
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 29, 2000, the fund was charged $17,422 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's 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 29, 2000, amounted to $112,538,892 and $54,141,643,
respectively.
In addition, the following summarizes open forward currency exchange contracts
at February 29, 2000:
<TABLE>
<CAPTION>
FOREIGN
FORWARD CURRENCY CURRENCY UNREALIZED
EXCHANGE CONTRACTS AMOUNTS COST ($) VALUE ($) (DEPRECIATION) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PURCHASES:
<S> <C> <C> <C> <C>
British Pounds,
expiring 3/2/2000 114,745 183,051 181,274 (1,777)
Japanese Yen,
expiring 3/12/2000 87,437,250 803,282 794,379 (8,903)
TOTAL (10,680)
</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 con
18
tract 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 29, 2000, accumulated net unrealized appreciation on investments
and forward currency exchange contracts was $10,867,170, consisting of
$51,581,571 gross unrealized appreciation and $40,714,401 gross unrealized
depreciation.
At February 29, 2000, 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).
NOTE 5--Subsequent Event
At a meeting of the Company's Board of Directors held on February 1, 2000, the
Board approved the termination of the Company's Distribution Agreement with
Premier Mutual Services, Inc. and approved a new Distribution Agreement with
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager. The new
Distribution Agreement with Dreyfus Service Corporation became effective on
March 22, 2000.
The Fund 19
NOTES
For More Information
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
100 Church Street
New York, N.Y. 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 254SA002
Dreyfus
Midcap Value Fund
SEMIANNUAL REPORT February 29, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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.
Contents
THE FUND
- --------------------------------------------------
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 Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Midcap
Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Midcap Value Fund,
covering the six-month period from September 1, 1999 through February 29, 2000.
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 I. Higgins.
The past six months have been both highly volatile and generally rewarding for
investors in midcap U.S. stocks. During the reporting period, midcap stocks
generally outperformed large-cap stocks. This represents a reversal of the
trends established over the past several years, when large-cap stocks were
favored by investors over small and mid-sized companies.
Given the midcap market' s recent strength, valuations continue to look
attractive when compared to those of most large-cap companies. In our view, this
implies that there may be room for additional gains as mid-sized companies
"catch up" to the higher valuations of large-cap stocks.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Midcap Value Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
March 23, 2000
2
DISCUSSION OF FUND PERFORMANCE
Peter I. Higgins, Portfolio Manager
How did Dreyfus Midcap Value Fund perform relative to its benchmark?
For the six-month period ended February 29, 2000, Dreyfus Midcap Value Fund
produced a total return of -2.64%.(1) This compares favorably with the return
provided by the fund's benchmark, the Russell Midcap Value Index, which produced
a total return of -11.25% for the same period.(2)
We attribute the fund' s performance to the fact that the value style of
investing was out of favor. However, our positive relative performance can be
attributed to our technology exposure, an area in which the portfolio made some
good individual stock selections.
What is the fund's investment approach?
The fund's goal is to surpass the performance of the Russell Midcap Value Index
by investing in midcap companies that appear to us to be inexpensive relative to
certain financial measurements of their intrinsic worth or business prospects.
When selecting stocks for the fund, we emphasize three key factors: value, or
how the stock is priced relative to its intrinsic worth based on a variety of
traditional measures; business health, as defined by the company's overall
efficiency and profitability; and business momentum, or the presence of a
catalyst -- such as corporate restructuring, change in management or a spin-off
- -- that could trigger an increase in the stock's price in the near term
We typically sell a stock when we no longer consider it attractively valued,
when it appears less likely to benefit from the current market and economic
environment, when it shows deteriorating fundamentals or declining momentum, or
when its performance falls short of our expectations.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
As "bottom-up" investors, we choose stocks based on their individual merits
rather than according to market trends. However, we remain fully cognizant of
the overall economic environment, and we are aware of trends that may affect our
performance.
That said, the most dominant factor positively influencing performance during
the reporting period was the strong gains achieved by technology stocks relative
to the overall stock market.
Contrary to popular belief, not every technology stock is considered a growth
stock. By making very careful stock selections, we were able to find a number
of inexpensively priced, value-oriented stocks within the technology sector.
These stocks typically also exhibited strong growth characteristics. As a
result, we were able to participate to some degree in the positive returns
provided by the technology sector. Of course, the technology sector has been
among the most volatile sectors of the market, and investors should be aware of
the greater risks associated with this sector.
Finally, with oil prices steadily rising during the period, the fund's
performance benefited from investments in the energy services area. When oil
prices fell to $10 a barrel last summer, we believed that those prices were
unsustainably low. At the time, many energy stocks were depressed and we
believed that they presented excellent value investment opportunities. When oil
prices rose, energy services stock prices followed, boosting the fund's overall
returns.
What is the fund's current strategy?
We have continued to emphasize individual stocks that we believe are undervalued
relative to their true intrinsic worth. Accordingly, we recently began to
increase our holdings of financial stocks. We believe the stock prices of many
of these companies have been driven down to inexpensive levels, making them
compelling investments in our view. For example, we've initiated a fairly large
investment in Everest Re Group, a reinsurance company, and U.S. Bancorp, a
Minnesota-
4
based bank whose stock price was hit hard due to disappointing earnings. In both
cases, we believe the companies' fundamentals remain intact and that these are
solid companies that happen to be "on sale."
Furthermore, we intend to continue to maintain our exposure to those stocks
within the technology and energy sectors that fit our value-oriented investment
discipline. We have also begun to uncover what we believe to be several positive
investment opportunities within the retail and capital goods sectors. As other
investors continue to be distracted by risky speculation in high-flying growth
stocks, we have continued to focus on sound companies that have been largely
neglected by investors. We believe that when these stocks return to favor,
value investors will be rewarded for their patience.
March 23, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL MIDCAP
VALUE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF MEDIUM-CAP STOCK MARKET
PERFORMANCE AND MEASURES THE PERFORMANCE OF THOSE RUSSELL MIDCAP COMPANIES WITH
LOWER PRICE-TO BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES THAN THE RUSSELL
MIDCAP INDEX. ON AUGUST 1, 1999, THE FUND CHANGED ITS BENCHMARK FROM THE RUSSELL
MIDCAP INDEX, WHICH IS STYLE NEUTRAL, TO THE RUSSELL MIDCAP VALUE INDEX, WHICH
MEASURES THE PERFORMANCE OF THOSE RUSSELL MIDCAP COMPANIES WITH LOWER
PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES.
The Fund 5
February 29, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
COMMON STOCKS--101.2% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BASIC INDUSTRIES--8.6%
AK Steel Holding 92,718 770,717
Eastman Chemical 21,300 765,469
Fort James 55,200 1,038,450
Geon 37,300 778,637
Hercules 43,400 716,100
IMC Global 109,100 1,472,850
Jefferson Smurfit Group, ADR 34,600 789,313
Wellman 25,300 471,213
6,802,749
CAPITAL GOODS--8.4%
Deere & Co. 20,800 743,600
Fluor 56,300 1,601,031
Republic Services, Cl. A 82,300 895,013
Thermo Electron 123,300 (a) 1,926,563
Waste Management 100,600 1,509,000
6,675,207
COMPUTER EQUIPMENT--11.1%
Advanced Micro Devices 54,700 (a) 2,140,137
Maxtor 232,000 (a) 1,856,000
Micron Technology 13,700 (a) 1,343,456
NCR 26,200 (a) 993,963
Quantum--DLT & Storage Systems 108,900 (a) 1,129,837
Quantum--Hard Disk Drive 160,500 (a) 1,263,937
Silicon Graphics 4,400 (a) 43,175
8,770,505
COMPUTER SERVICES--2.0%
Keane 65,400 (a) 1,569,600
COMPUTER SOFTWARE/SERVICES--7.8%
ARDENT Software 38,700 (a) 2,152,687
Informix 59,600 (a) 953,600
Sterling Software 40,000 (a) 1,435,000
Synopsys 40,900 (a) 1,633,444
6,174,731
CONSUMER NON-DURABLES--5.9%
Harcourt General 11,100 382,256
Jones Apparel Group 71,500 (a) 1,617,687
6
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES (CONTINUED)
NIKE, Cl. B 47,100 1,339,406
Polaroid 51,200 1,283,200
4,622,549
CONSUMER SERVICES--17.4%
Abercrombie & Fitch, Cl. A 109,900 (a) 1,614,156
ACNielsen 9,900 (a) 167,681
American Greetings, Cl. A 17,700 305,325
Burlington Coat Factory Warehouse 56,700 648,506
Consolidated Stores 106,900 (a) 1,202,625
Manpower 40,100 1,310,769
OfficeMax 134,200 (a) 947,787
Saks 78,700 (a) 905,050
ShopKo Stores 44,200 (a) 734,825
Toys R Us 108,900 (a) 1,347,637
Tricon Global Restaurants 46,400 (a) 1,235,400
Venator Group 265,300 (a) 1,508,894
Ziff-Davis 96,900 (a) 1,841,100
13,769,755
ENERGY--10.6%
Baker Hughes 56,400 1,459,350
Burlington Resources 32,500 897,813
EOG Resources 60,100 916,525
Noble Affiliates 47,500 1,068,750
Ocean Energy 73,900 (a) 789,806
Santa Fe Snyder 192,700 (a) 1,445,250
Tidewater 25,400 719,137
Union Pacific Resources Group 119,600 1,068,925
8,365,556
FINANCIAL SERVICES--13.4%
Ace 82,900 1,481,837
Associates First Capital, Cl. A 56,900 1,130,888
Bear Stearns Cos. 15,600 612,300
Chubb 23,400 1,150,988
Everest Re Group 62,100 1,525,331
Heller Financial 65,000 1,222,813
Nationwide Financial Services, Cl. A 55,900 1,289,194
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES (CONTINUED)
U.S. Bancorp 70,600 1,292,863
Washington Mutual 39,500 873,938
10,580,152
HEALTH CARE--5.9%
Aetna 36,700 1,509,288
Bergen Brunswig, Cl. A 118,300 584,106
Mckesson HBOC 54,300 1,052,063
Quest Diagnostics 30,100 (a) 1,032,806
Tenet Healthcare 27,400 (a) 479,500
4,657,763
TECHNOLOGY SERVICES--9.2%
Arrow Electronics 83,100 (a) 2,513,775
Avnet 28,500 1,905,938
Ingram Micro, Cl. A 130,200 (a) 1,407,788
Tech Data 66,900 (a) 1,450,894
7,278,395
TRANSPORTATION--.9%
Yellow 42,600 (a) 681,600
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $84,841,320) 101.2% 79,948,562
LIABILITIES, LESS CASH AND RECEIVABLES (1.2%) (974,969)
NET ASSETS 100.0% 78,973,593
(A) NON-INCOME PRODUCING.
</TABLE>
8
SEE NOTES TO STATEMENT OF INVESTMENTS.
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 84,841,320 79,948,562
Cash 909,520
Receivable for investment securities sold 2,198,009
Dividends receivable 47,911
Receivable for shares of Common Stock subscribed 1,600
Prepaid expenses 22,627
83,128,229
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 70,965
Due to Distributor 15,886
Bank loan payable--Note 2 1,950,000
Payable for investment securities purchased 1,943,738
Payable for shares of Common Stock redeemed 146,776
Interest payable-Note 2 1,469
Accrued expenses 25,802
4,154,636
- --------------------------------------------------------------------------------
NET ASSETS ($) 78,973,593
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 85,974,173
Accumulated investment (loss) (236,751)
Accumulated net realized gain (loss) on investments (1,871,071)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (4,892,758)
- --------------------------------------------------------------------------------
NET ASSETS ($) 78,973,593
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 3,970,738
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 19.89
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 9
STATEMENT OF OPERATIONS
Six Months Ended February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends 332,119
Interest 8,474
TOTAL INCOME 340,593
EXPENSES:
Management fee--Note 3(a) 324,418
Shareholder servicing costs--Note 3(b) 172,739
Interest expense--Note 2 20,549
Professional fees 17,129
Custodian fees--Note 3(b) 16,844
Prospectus and shareholders' reports 15,368
Registration fees 8,482
Directors' fees and expenses--Note 3(c) 1,050
Miscellaneous 765
TOTAL EXPENSES 577,344
INVESTMENT (LOSS) (236,751)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 4,438,165
Net unrealized appreciation (depreciation) on investments (6,821,113)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (2,382,948)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (2,619,699)
SEE NOTES TO FINANCIAL STATEMENTS.
10
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (236,751) (819,834)
Net realized gain (loss) on investments 4,438,165 785,434
Net unrealized appreciation (depreciation)
on investments (6,821,113) 37,439,588
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (2,619,699) 37,405,188
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
NET REALIZED GAIN ON INVESTMENTS (4,867,590) (9,344,038)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 33,157,336 72,861,853
Dividends reinvested 4,649,363 9,051,684
Cost of shares redeemed (49,513,871) (92,106,895)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (11,707,172) (10,193,358)
TOTAL INCREASE (DECREASE) IN NET ASSETS (19,194,461) 17,867,792
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 98,168,054 80,300,262
END OF PERIOD 78,973,593 98,168,054
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,602,761 3,574,897
Shares issued for dividends reinvested 233,167 529,959
Shares redeemed (2,388,643) (4,798,775)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (552,715) (693,919)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
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
February 29, 2000 Year Ended August 31,
----------------------------------------------
(Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 21.70 15.39 22.23 15.80 12.50
Investment Operations:
Investment income (loss)--net (.06)(b) (.17)(b) (.06)(b) (.01) .08
Net realized and unrealized
gain (loss) on investments (.51) 8.26 (5.73) 8.23 3.28
Total from Investment Operations (.57) 8.09 (5.79) 8.22 3.36
Distributions:
Dividends from investment income--net -- -- -- (.04) (.04)
Dividends from net realized gain
on investments (1.24) (1.78) (1.05) (1.75) (.02)
Total Distributions (1.24) (1.78) (1.05) (1.79) (.06)
Net asset value, end of period 19.89 21.70 15.39 22.23 15.80
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (2.64)(c) 55.71 (27.32) 55.45 26.88(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses
to average net assets .64(c) 1.34 1.29 1.25 1.18(c)
Ratio of interest expense
to average net assets .02(c) .06 .01 .01 .01(c)
Ratio of net investment income (loss)
to average net assets (.27)(c) (.89) (.25) (.14) .56(c)
Decrease reflected in above
expense ratios due to undertakings
by The Dreyfus Corporation -- -- -- .26 1.13(c)
Portfolio Turnover Rate 100.40(c) 257.23 168.72 154.92 266.80(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 78,974 98,168 80,300 81,494 3,591
A FROM SEPTEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996.
B BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
12
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
surpass the performance of the Russell Midcap Value Index. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. ("Mellon"), which is a wholly-owned
subsidiary of Mellon Financial Corporation. 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 series. Expenses directly attributable to each series are charged to that
series' 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.
The Fund 13
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(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.
The average daily amount of borrowings outstanding under both arrangements
during the period ended February 29, 2000 was approximately $701,110 with a
related weighted average annualized interest rate of 5.88%.
14
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 29, 2000, the fund was charged $108,139 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 29, 2000, the fund was charged $36,553 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 29, 2000, the fund was
charged $16,844 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's exchange privilege.
The Fund 15
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 29, 2000, amounted to
$88,266,928 and $104,414,696, respectively.
At February 29, 2000, accumulated net unrealized depreciation on investments was
$4,892,758, consisting of $6,256,141 gross unrealized appreciation and
$11,148,899 gross unrealized depreciation.
At February 29, 2000, 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).
Note 5--Subsequent Event:
At a meeting of the Company's Board of Directors held on February 1, 2000, the
Board approved the termination of the fund's Distribution Agreement with Premier
Mutual Fund Services, Inc., and approved a new Distribution Agreement with
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager. The new
Distribution Agreement with Dreyfus Service Corporation became effective on
March 22, 2000.
16
For More Information
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 258SA002
Dreyfus
Premier Technology Growth Fund
SEMIANNUAL REPORT February 29, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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.
Contents
THE FUND
- --------------------------------------------------
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
14 Financial Highlights
19 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier Technology Growth Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Technology
Growth Fund, covering the six-month period from September 1, 1999 through
February 29, 2000. Inside, you'll find valuable information about how the fund
was managed during the reporting period, including a discussion with its
portfolio manager, Mark Herskovitz.
The reporting period has been highly rewarding for investors in technology
stocks. During the six-month period, the Nasdaq Composite Index rose more than
70% . Investors have evidently believed that the Internet, biotechnology and
other leading-edge technologies are transforming the ways we communicate and do
businesses, and they have been flocking to these fast-growing companies to
participate in the "information revolution."
However, we hasten to add that investors should not expect such stellar
performance over the next six months. Indeed, because many technology companies
are relatively young and, at current price levels, very highly valued, we
believe that heightened short-term volatility is likely.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Technology Growth Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
March 23, 2000
DISCUSSION OF FUND PERFORMANCE
Mark Herskovitz, Primary Portfolio Manager
How did Dreyfus Premier Technology Growth Fund perform relative to its
benchmark?
For the six-month period ended February 29, 2000, Dreyfus Premier Technology
Growth Fund produced a total return of 111.87% for Class A shares, 111.06% for
Class B shares, 111.06% for Class C shares, 112.09% for Class R shares, and
111.46% for Class T shares.(1) In comparison, the Morgan Stanley High Technology
35 Index provided a 73.78%(2) return and the Standard & Poor's 500 Composite
Stock Price Index (" S&P 500 Index") provided a 4.10%(3) return over the same
period.
We attribute the fund's good absolute performance to the remarkable strength of
the technology sector. Our strong relative performance is primarily the result
of our investment strategy, which emphasized diversification amongst a variety
of technology companies that have enjoyed growing demand for their products and
services. Investors should note, however, that returns such as these should not
be expected over the long term. Valuations of technology companies are very
high, suggesting that these stocks are likely to experience heightened levels of
risk and volatility.
What is the fund's investment approach?
The fund seeks capital appreciation by investing in growth companies of any size
that we believe are leading producers or beneficiaries of technological
innovation. When choosing stocks, we look for sectors within the technology area
that we expect to outperform other sectors. We emphasize the most attractive
sectors, and de-emphasize the less appealing sectors. Among the sectors
evaluated are those that develop, produce or distribute products or services in
the computer, semiconductor, electronics, communications, health care,
biotechnology, computer software and hardware, electronic components and
systems, networking and cable broadcasting, telecommunications, defense and
aerospace, and environmental industries.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Typically, we look for companies that are leaders in their market segments,
characterized by rapid earnings growth and dominant market shares. We conduct
extensive fundamental research to understand these companies' competitive
advantages and to evaluate their ability to maintain leadership positions over
time. Although we look for companies with the potential for strong earnings
growth rates, some of our investments may currently be experiencing losses.
Moreover, we may invest in small-, mid- and large-cap securities in all
available trading markets, including initial public offerings and the
aftermarket.
What other factors influenced the fund's performance?
The fund' s returns were positively influenced by continued investor enthusiasm
for technology companies in a robust economic environment. Of course, this
environment could change at any time and pursuit of such returns in the future
involves accepting the risk of increased volatility.
By September 1, 1999, it had become clear that the U.S. economy was growing
strongly. This caused the Federal Reserve Board to raise interest rates twice
more during the reporting period, in addition to the two rate hikes implemented
last summer, before the reporting period began. While higher interest rates
affected some stocks negatively because of their adverse effects on borrowing
costs, technology stocks rallied strongly, benefiting from greater demand for
their products and services. Growth has been particularly rapid for
communications-related companies in such areas as local and long-distance
telephone networks, Internet services and cable television. Moreover, the
technology rally spanned virtually all market capitalization ranges over the
past six months, benefiting small-, mid- and large-cap stocks.
As a result of these factors, both the technology-laden Nasdaq 100 Index and the
S& P 500 Index ended calendar year 1999 at record levels. During the first two
months of 2000, however, the broad U.S. stock market declined 7.00%, as measured
by the S&P 500 Index. This sell-off was primarily the result of renewed concerns
over rising interest rates. Stocks of technology companies, which historically
have been
adversely affected by higher interest rates, seemed to shrug off these concerns.
By February 29, 2000 the Nasdaq 100 had gained an additional 15.42% over its
year-end 1999 close.
What is the fund's current strategy?
We have continued to conduct extensive research to identify technology sectors
and companies that have strong or improving business fundamentals and rising
demand for their products and services. This strategy led us to successful
investments in such areas as telecommunications equipment manufacturers, fiber
channel optics companies and manufacturers of capital equipment for
semiconductors. We have also recently begun to focus on existing and new
companies that we believe will benefit from advances in technologies for
wireless Internet access. On the other hand, our research caused us to avoid
certain technology sectors, such as computer hardware manufacturers, over the
past six months.
Because of the very high valuations that characterize the stock prices of
today' s technology leaders, we again caution that technology stocks are likely
to experience high levels of volatility, and investors should not be surprised
to see periodic and significant declines. Our risk management strategy is to
maintain a broadly diversified portfolio and to focus on fundamentally sound
companies.
March 23, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS
PAID, AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES
CHARGES IN THE CASES OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE
CONTINGENT DEFERRED SALES CHARGE IMPOSED ON REDEMPTIONS IN THE CASES
OF CLASS B AND CLASS C SHARES. HAD THESE CHARGES BEEN REFLECTED,
RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH THAT
UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. RETURNS PROVIDED REFLECT THE ABSORPTION OF FUND
EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN UNDERTAKING IN
EFFECT THAT MAY BE EXTENDED, TERMINATED OR MODIFIED AT ANY TIME. HAD
THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN
LOWER.
(2) SOURCE: BLOOMBERG L.P. -- REFLECTS THE REINVESTMENT OF DIVIDENDS AND,
WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY HIGH
TECHNOLOGY 35 INDEX IS AN UNMANAGED EQUAL DOLLAR-WEIGHTED INDEX OF 35
STOCKS FROM THE ELECTRONICS-BASED SUBSECTORS.
(3) 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 (S&P 500 INDEX)
IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET
PERFORMANCE.
The Fund 5
STATEMENT OF INVESTMENTS
February 29, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
COMMON STOCKS--92.7% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SERVICES--1.0%
Automatic Data Processing 650,000 28,315,625
Inforte 1,900 (a) 152,831
28,468,456
DATA STORAGE--7.2%
Brocade Communications Systems 270,000 (a) 78,063,750
EMC 354,700 (a) 42,209,300
Network Appliance 442,500 (a) 83,521,875
203,794,925
HARDWARE--7.2%
Apple Computer 407,300 (a) 46,686,762
Flextronics International 658,900 (a) 40,110,538
Jabil Circuit 300,000 (a) 20,831,250
Lexmark International Group, Cl. A 406,900 (a) 48,522,825
Sun Microsystems 500,000 (a) 47,625,000
203,776,375
INTERNET--8.9%
Ariba 240,000 (a) 63,480,000
CMGI 354,700 (a) 45,955,819
eBay 260,000 (a) 37,277,500
Matrixone 14,300 (a) 357,500
VeriSign 275,000 (a) 69,575,000
Yahoo! 225,000 (a) 35,929,687
252,575,506
NETWORKING--6.6%
Cisco Systems 383,500 (a) 50,693,906
Finisar 559,300 (a) 79,001,125
Sycamore Networks 400,000 (a) 59,200,000
188,895,031
SEMICONDUCTORS--17.8%
Cree Research 304,800 (a) 57,264,300
Intel 407,400 46,036,200
Micrel 622,500 (a) 71,743,125
PMC-Sierra 475,000 (a) 91,704,687
RF Micro Devices 490,000 (a) 67,773,125
Sawtek 555,000 (a) 26,640,000
Taiwan Semiconductor, ADR 775,000 (a) 46,354,688
Vitesse Semiconductor 950,000 (a) 98,621,875
506,138,000
6
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT--8.4%
Applied Materials 336,200 (a) 61,503,588
KLA-Tencor 800,000 (a) 62,350,000
PRI Automation 700,000 (a) 55,912,500
Teradyne 675,000 (a) 58,725,000
238,491,088
SOFTWARE--13.6%
BroadVision 280,000 (a) 70,717,500
Clarify 380,000 (a) 54,838,750
Microsoft 400,000 (a) 35,750,000
Oracle 700,000 (a) 51,975,000
Rational Software 610,000 (a) 43,386,250
Siebel Systems 500,000 (a) 69,343,750
Veritas Software 300,000 (a) 59,362,500
385,373,750
TELECOMMUNICATION EQUIPMENT--12.2%
Avanex 154,500 (a) 32,193,938
Internap Network Services 500,000 (a) 48,500,000
JDS Uniphase 275,500 (a) 72,628,688
Lucent Technologies 659,500 39,240,250
Nokia, ADR 254,100 50,391,206
SDL 180,000 (a) 73,800,000
Tellabs 650,000 (a) 31,200,000
347,954,082
TELECOMMUNICATION SERVICES--9.8%
Level 3 Communications 400,000 (a) 45,550,000
MCI WorldCom 1,500,000 (a) 66,937,500
Metromedia Fiber Network, Cl. A 775,000 (a) 55,715,234
NEXTLINK Communications, Cl. A 525,000 (a) 57,848,438
Qwest Communications International 1,160,000 (a) 53,795,000
279,846,172
TOTAL COMMON STOCKS
(cost $1,420,776,946) 2,635,313,385
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM INVESTMENTS-9.3% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS:
5.13%, 3/2/2000 8,243,000 8,241,764
5.10%, 3/9/2000 13,386,000 13,371,142
5.20%, 3/23/2000 2,167,000 2,160,412
5.10%, 3/30/2000 115,347,000 114,867,156
5.60%, 4/27/2000 125,893,000 124,770,034
TOTAL SHORT-TERM INVESTMENTS
(cost $263,397,891) 263,410,508
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $1,684,174,837) 102.0% 2,898,723,893
LIABILITIES, LESS CASH AND RECEIVABLES (2.0%) (54,948,745)
NET ASSETS 100.0% 2,843,775,148
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 1,684,174,837 2,898,723,89
Cash 28,938,954
Receivable for shares of Common Stock subscribed 37,881,103
Dividends receivable 24,400
Prepaid expenses 153,482
2,965,721,832
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 1,584,898
Due to Distributor 1,089,076
Payable for investment securities purchased 116,160,897
Payable for shares of Common Stock redeemed 2,717,693
Accrued expenses 394,120
121,946,684
- --------------------------------------------------------------------------------
NET ASSETS ($) 2,843,775,148
- --------------------------------------------------------------------------------
COMPOSITON OF NET ASSETS ($):
Paid-in capital 1,635,368,51
Accumulated investment (loss) (7,656,272)
Accumulated net realized gain (loss) on investments 1,513,853
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4 1,214,549,056
- --------------------------------------------------------------------------------
NET ASSETS ($) 2,843,775,148
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets ($) 1,482,635,122 814,396,564 450,754,723 84,287,619 11,701,120
Shares Outstanding 21,841,081 12,073,599 6,688,758 1,240,149 172,708
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE ($) 67.88 67.45 67.39 67.97 67.75
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund 9
STATEMENT OF OPERATIONS
Six Months Ended February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 1,671,029
Cash dividends 196,709
TOTAL INCOME 1,867,738
EXPENSES:
Management fee--Note 3(a) 4,969,132
Shareholder servicing costs--Note 3(c) 2,239,228
Distribution fees--Note 3(b) 1,821,258
Registration fees 378,974
Prospectus and shareholders' reports 42,973
Custodian fees-Note 3(c) 35,466
Professional fees 19,768
Directors' fees and expenses--Note 3(d) 11,042
Miscellaneous 6,169
TOTAL EXPENSES 9,524,010
INVESTMENT (LOSS) (7,656,272)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments:
Long transactions 4,274,556
Short sale transactions (379,106)
NET REALIZED GAIN (LOSS) 3,895,450
Net unrealized appreciation (depreciation) on investments 1,107,471,823
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 1,111,367,273
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,103,711,001
SEE NOTES TO FINANCIAL STATEMENTS.
10
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999(a)
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (7,656,272) (1,590,565)
Net realized gain (loss) on investments 3,895,450 6,529,961
Net unrealized appreciation (depreciation)
on investments 1,107,471,823 107,824,217
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,103,711,001 112,763,613
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
From investment income--net:
Class A shares - (145,298)
From net realized gain on investments:
Class A shares (4,549,709) -
Class B shares (1,631,989) -
Class C shares (835,498) -
Class R shares (35,716) -
Class T shares (13,620) -
TOTAL DIVIDENDS (7,066,532) (145,298)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 769,319,387 478,537,215
Class B shares 483,635,584 71,857,010
Class C shares 299,196,389 30,684,800
Class R shares 73,478,817 1,322,691
Class T shares 8,788,363 1,000
Dividends reinvested:
Class A shares 4,072,845 140,315
Class B shares 1,232,502 -
Class C shares 620,241 -
Class R shares 26,207 -
Class T shares 13,470 -
(A) EFFECTIVE APRIL 15, 1999, SHARES OF THE FUND WERE REDESIGNATED AS
CLASS A SHARES, AND THE FUND COMMENCED SELLING CLASS B, CLASS C AND
CLASS R SHARES. EFFECTIVE AUGUST 31, 1999, THE FUND COMMENCED SELLING
CLASS T SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999(a)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($) (continued):
Cost of shares redeemed:
Class A shares (415,648,810) (140,362,213)
Class B shares (18,245,735) (1,071,648)
Class C shares (22,360,418) (1,474,017)
Class R shares (1,384,702) (112,958)
Class T shares (123,959) -
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 1,182,620,181 439,522,195
TOTAL INCREASE (DECREASE) IN NET ASSETS 2,279,264,650 552,140,510
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 564,510,498 12,369,988
END OF PERIOD 2,843,775,148 564,510,498
(A) EFFECTIVE APRIL 15, 1999, SHARES OF THE FUND WERE REDESIGNATED AS
CLASS A SHARES, AND THE FUND COMMENCED SELLING CLASS B, CLASS C AND
CLASS R SHARES. EFFECTIVE AUGUST 31, 1999, THE FUND COMMENCED SELLING
CLASS T SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
12
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999(a)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (B)
Shares sold 15,927,823 18,489,923
Shares issued for dividends reinvested 86,693 8,046
Shares redeemed (8,439,308) (5,253,395)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 7,575,208 13,244,574
- --------------------------------------------------------------------------------
CLASS B (B)
Shares sold 10,121,028 2,324,739
Shares issued for dividends reinvested 26,358 -
Shares redeemed (363,796) (34,730)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 9,783,590 2,290,009
- --------------------------------------------------------------------------------
CLASS C
Shares sold 6,154,784 988,394
Shares issued for dividends reinvested 13,276 -
Shares redeemed (420,233) (47,463)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 5,747,827 940,931
- --------------------------------------------------------------------------------
CLASS R
Shares sold 1,223,164 42,515
Shares issued for dividends reinvested 557 -
Shares redeemed (22,587) (3,500)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,201,134 39,015
- --------------------------------------------------------------------------------
CLASS T
Shares sold 174,531 31
Shares issued for dividends reinvested 287 -
Shares redeemed (2,141) -
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 172,677 31
(A) EFFECTIVE APRIL 15, 1999, SHARES OF THE FUND WERE REDESIGNATED AS
CLASS A SHARES, AND THE FUND COMMENCED SELLING CLASS B, CLASS C AND
CLASS R SHARES. EFFECTIVE AUGUST 31, 1999, THE FUND COMMENCED SELLING
CLASS T SHARES.
(B) DURING THE PERIOD ENDED FEBRUARY 29, 2000, 7,912 CLASS B SHARES
REPRESENTING $543,400 WERE AUTOMATICALLY CONVERTED TO 7,862 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 13
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended
February 29, 2000 Year Ended August 31,
--------------------------
CLASS A (Unaudited) 1999 1998(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 32.21 12.11 12.50
Investment Operations:
Investment (loss) (.20)(b) (.18)(b) (.10)(b)
Net realized and unrealized gain (loss)
on investments 36.12 20.36 (.29)
Total from Investment Operations 35.92 20.18 (.39)
Distributions:
Dividends from net realized gain on investments (.25) (.08) -
Net asset value, end of period 67.88 32.21 12.11
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 111.87(c,d) 167.23(c) (3.12)(d,e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets .56(d) 1.20 1.12(d)
Ratio of interest expense to average net assets -- -- .01(d)
Ratio of net investment (loss)
to average net assets (.43)(d) (.64) (.77)(d)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation -- .02 .81(d)
Portfolio Turnover Rate 25.36(d) 78.93 291.12(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 1,482,635 459,457 12,370
(A) FROM OCTOBER 13, 1997 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
(E) 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.
</TABLE>
14
- --------------------------------------------------------------------------------
Six Months Ended
February 29, 2000 Year Ended
CLASS B (Unaudited) August 31,
1999(a)
- --------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 32.13 28.25
Investment Operations:
Investment (loss) (.41)(b) (.16)(b)
Net realized and unrealized gain (loss)
on investments 35.98 4.04
Total from Investment Operations 35.57 3.88
Distributions:
Dividends from net realized gain on investments (.25) -
Net asset value, end of period 67.45 32.13
- --------------------------------------------------------------------------------
TOTAL RETURN (%) 111.06(c,d) 13.73(c,d)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%)
Ratio of expenses to average net assets .98(c) .81(c)
Ratio of net investment income (loss)
to average net assets (.83)(c) (.61)(c)
Portfolio Turnover Rate 25.36(c) 78.93
- --------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 814,397 73,588
(A) FROM APRIL 15, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
(D) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 15
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Six Months Ended
February 29, 2000 Year Ended
CLASS C (Unaudited) August 31,
1999(a)
- --------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 32.10 28.25
Investment Operations:
Investment (loss) (.41)(b) (.16)(b)
Net realized and unrealized gain (loss)
on investments 35.95 4.01
Total from Investment Operations 35.54 3.85
Distributions:
Dividends from net realized gain on investments (.25) -
Net asset value, end of period 67.39 32.10
- --------------------------------------------------------------------------------
TOTAL RETURN (%) 111.06(c,d) 13.63(c,d)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%)
Ratio of expenses to average net assets .97(c) .82(c)
Ratio of net investment income (loss)
to average net assets (.83)(c) (.62)(c)
Portfolio Turnover Rate 25.36(c) 78.93
- --------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 450,755 30,207
(A) FROM APRIL 15, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
(D) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
16
- --------------------------------------------------------------------------------
Six Months Ended
February 29, 2000 Year Ended
CLASS R (Unaudited) August 31,
1999(a)
- --------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 32.22 28.25
Investment Operations:
Investment (loss) (.18)(b) (.07)(b)
Net realized and unrealized gain (loss)
on investments 36.18 4.04
Total from Investment Operations 36.00 3.97
Distributions:
Dividends from net realized gain on investments (.25) -
Net asset value, end of period 67.97 32.22
- --------------------------------------------------------------------------------
TOTAL RETURN (%) 112.09(c) 14.05(c)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .60(c) .44(c)
Ratio of net investment income (loss)
to average net assets (.41)(c) (.24)(c)
Portfolio Turnover Rate 25.36(c) 78.93
- --------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 84,288 1,257
(A) FROM APRIL 15, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 17
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Six Months Ended
February 29, 2000 Year Ended
CLASS T (Unaudited) August 31,
1999(a)
- --------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 32.21 32.21
Investment Operations:
Investment (loss) (.32)(b) --
Net realized and unrealized gain (loss)
on investments 36.11 --
Total from Investment Operations 35.79 --
Distributions:
Dividends from net realized gain on investments (.25) --
Net asset value, end of period 67.75 32.21
- --------------------------------------------------------------------------------
TOTAL RETURN (%) 111.46(c,d) --
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .79(c) --
Ratio of net investment income (loss)
to average net assets (.63)(c) --
Portfolio Turnover Rate 25.36(c) 78.93
- --------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 11,701 1
(A) COMMENCED OFFERING SHARES ON AUGUST 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED
(D) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
18
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier 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" ), which is a wholly-owned subsidiary of Mellon
Financial Corporation. Premier Mutual Fund Services, Inc. (the "Distributor") is
the distributor of the fund's shares.
The fund is authorized to issue 500 million of $.001 par value Capital Stock.
The fund currently offers five classes of shares: Class A (100 million shares
authorized) , Class B (100 million shares authorized), Class C (100 million
shares authorized) , Class R (100 million shares authorized) and Class T (100
million shares authorized) . Class A and Class T shares are subject to a sales
charge imposed at the time of purchase, Class B shares are subject to a
contingent deferred sales charge ("CDSC") imposed on Class B share redemptions
made within six years of purchase, Class C shares are subject to a CDSC imposed
on Class C shares redeemed within one year of purchase and Class R shares are
sold at net asset value per share only to institutional investors. Other
differences between the classes include the service offered to and the expenses
borne by each class and certain voting rights.
The Company accounts separately for the assets, liabilities and operations of
each series. Expenses directly attributable to each series are charged to that
series' 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.
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(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
20
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 $16,680 during the period ended February
29, 2000 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.
(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 Lines of Credit:
The fund may borrow up to $5 million for leverage 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 29, 2000, the fund did
not borrow under either line of credit.
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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. However, the Manager had undertaken
from September 1, 1999 through February 29, 2000 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, Distribution Plan fees, Shareholder Service Plan fees and
extraordinary expenses, exceeded an annual rate of 1.00% of the value of the
fund' s average daily net assets. There was no reduction in management fee,
pursuant to the undertaking, during the period ended February 29, 2000.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$362,481 during the period ended February 29, 2000 from commissions earned on
sales of fund shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B, Class C and Class T shares pay the Distributor for
distributing their shares at an annual rate of .75 of 1%, .75 of 1% and .25 of
1% of the value of the average daily net assets of Class B, Class C and Class T
shares, respectively. During the period ended February 29, 2000, Class B, Class
C and Class T shares were charged $1,197,631, $619,546 and $4,081, respectively,
pursuant to the Distribution Plan.
(C) Under the Shareholder Service Plan, Class A, Class B, Class C and Class T
shares pay the Distributor at an annual rate of .25 of 1% of the value of their
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
22
institution or industry professional) in respect of these services. The
Distributor determines the amounts to be paid to Service Agents. During the
period ended February 29, 2000, Class A, Class B, Class C and Class T shares
were charged $1,032,651, $399,210, $206,515 and $4,081, respectively, 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 29, 2000, the fund was charged $352,247 pursuant to the transfer
agent agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended February 29, 2000, the fund was
charged $35,466 pursuant to the custody agreement.
(D) 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.
(E) During the period ended February 29, 2000, the fund incurred total
brokerage commissions of $315,765, of which $4,782 was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, during the period ended February 29, 2000:
<TABLE>
<CAPTION>
PURCHASES ($) SALES ($)
----------------------------------------------------------
<S> <C> <C>
Long transactions. . . . . . . . . . . . . . . . . . . 1,328,057,171 331,846,197
Short sale transactions. . . . . . . . . . . . . . . . 4,487,720 4,108,614
TOTAL 1,332,544,891 335,954,811
</TABLE>
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund is engaged in short-selling which obligates the fund to replace the
security borrowed by purchasing the security at current market value. The fund
would incur a loss if the price of the security increases between the date of
the short sale and date on which the fund replaces the borrowed security. The
fund would realize a gain if the price of the security declines between those
dates. Until the fund replaces the borrowed security, the fund will maintain
daily, a segregated account with a broker and custodian, of permissable liquid
assets sufficient to cover its short position. At February 29, 2000, there were
no securities sold short outstanding.
At February 29, 2000, accumulated net unrealized appreciation on investments was
$1,214,549,056, consisting of $1,231,893,548 gross unrealized appreciation and
$17,344,492 gross unrealized depreciation.
At February 29, 2000, 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).
NOTE 5-Subsequent Event:
At a meeting of the Company's Board of Directors held on February 1, 2000, the
Board approved the termination of the fund's Distribution Agreement with Premier
Mutual Fund Services, Inc., and approved a new Distribution Agreement with
Dreyfus Service Corporation. The new Distribution Agreement with Dreyfus Service
Corporation became effective on March 22, 2000.
25
For More Information
Dreyfus Premier 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 255SA002
