We are pleased to present this semiannual report for Dreyfus Yield Enhancement Strategy Fund, covering the six-month period from November 1, 2015 through April 30, 2016. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
A choppy U.S. economic recovery remained intact over the reporting period. Steady job growth, declining unemployment claims, improved consumer confidence, and higher housing prices supported an economic expansion that so far has lasted nearly seven years. These factors, along with low inflation, prompted the Federal Reserve Board in December 2015 to raise short-term interest rates for the first time in nearly a decade.
On the other hand, the global economy continued to stagnate despite historically aggressive monetary policies, including negative short-term interest rates in Europe and Japan. Global growth has been hampered by weak demand, volatile commodity prices, the lingering effects of various financial crises, unfavorable demographic trends, and low productivity growth. These developments proved especially challenging for financial markets in early 2016, but stocks and riskier sectors of the bond market later rallied strongly to post positive total returns, on average, for the reporting period overall.
While we are encouraged by the recent resilience of the financial markets, we expect volatility to persist over the foreseeable future until global economic uncertainty abates. In addition, wide differences in underlying fundamental and technical influences across various asset classes, economic sectors, and regional markets suggest that selectivity may be an important determinant of investment success over the months ahead. We encourage you to discuss the implications of our observations with your financial advisor.
Thank you for your continued confidence and support.
DISCUSSION OF FUND PERFORMANCE
For the period of November 1, 2015 through April 30, 2016, as provided by Jeffrey M. Mortimer, CFA, and Caroline Lee-Tsao, Portfolio Managers
Fund and Market Performance Overview
For the six-month period ended April 30, 2016, Dreyfus Yield Enhancement Strategy Fund’s Class A shares produced a total return of 1.64%, Class C shares returned 1.30%, Class I shares returned 1.68%, and Class Y shares returned 1.85%.1 In comparison, the Barclays U.S. Aggregate Bond Index (the “Barclay’s Agg Index”), produced a total return of 2.82% for the same period and the Lipper Alternative Credit Focus Funds Index (the “Lipper Index”), produced a total return of -1.00% for the same period.2
Fixed income securities gained in value during the reporting period as long-term interest rates moderated. The fund lagged Barclay’s Agg Index due to its exposure to lower-rated credits early in the reporting period, but it outperformedthe Lipper Index.
Effective November 2015, Caroline Lee-Tsao became a Portfolio Manager for the fund.
The Fund’s Investment Approach
The fund seeks high current income. The fund is designed to complement and diversify traditional bond portfolios.
To pursue its goal, the fund normally allocates its assets across fixed-income investment strategies using a “fund of funds” approach that apportions assets among other investment companies (underlying funds) employing various fixed income investment strategies, including those focusing on domestic and foreign corporate bonds, high yield securities (“junk” bonds), senior loans, emerging markets debt, municipal securities, and Treasury Inflation-Protected Securities (TIPS).
Dreyfus determines the fund’s asset allocation to the fixed income investment strategies and sets the investment ranges using fundamental and quantitative analysis, and its economic and financial markets outlook. Underlying funds are selected based on their investment objectives and management policies, investment strategies and portfolio holdings, risk/reward profiles, historical performance, and other factors. As of April 30, 2016, the fund held investments in: BNY Mellon Corporate Bond Fund, BNY Mellon Municipal Opportunities Fund, Dreyfus Floating Rate Income Fund, Dreyfus High Yield Fund, Dreyfus Opportunistic Fixed Income Fund, Dreyfus Global Dynamic Bond Fund, and Dreyfus Emerging Markets Debt U.S. Dollar Fund.
Higher-Quality Bonds Benefited from Flight to Safety
U.S. fixed income markets proved volatile over the reporting period amid concerns about the potential impact of global economic conditions on the domestic economic recovery. A slowdown in China and falling commodity prices triggered a flight to traditional safe havens during the fall of 2015, hurting riskier corporate bonds while supporting prices of high-quality U.S. government securities. Expectations that the Federal Reserve Board (the “Fed”) would begin to raise short-term interest rates, as indeed it did in December, also contributed to market turbulence.
Higher-quality bonds continued to rally and riskier securities lost additional value in January 2016 in response to more disappointing economic data from China, further declines in oil prices, and renewed worries that international weakness and higher short-term interest rates in the United States might derail the domestic recovery. The Bank of Japan surprised investors later in the month by adopting negative short-term interest rates in an attempt to stimulate its economy. Demand from global investors for high-quality U.S. investments intensified, putting additional downward pressure on yields of U.S. government securities.
3
DISCUSSION OF FUND PERFORMANCE (continued)
The market’s trajectory changed dramatically in mid-February, when comments from the Fed suggested that U.S. policymakers would delay additional rate hikes. In addition, energy-related commodity prices began to recover, and China and the European Central Bank announced new stimulus measures. Investors regained confidence, and riskier corporate bonds rebounded from previous weakness.
Underlying Strategies Produced Mixed Results
Although the fund continued to provide highly competitive levels of current income over the reporting period, its total return compared to the Lipper Index was primarily constrained by Dreyfus Opportunistic Fixed Income Fund. This underlying mutual fund was hurt by its holdings of lower-rated corporate bonds early in the reporting period, and reduced exposure to riskier credits prevented it from participating fully in the subsequent rally.
The fund achieved better relative results from BNY Mellon Municipal Opportunities Fund and BNY Mellon Corporate Bond Fund, which maintained their positions in lower-rated securities and fared relatively well during the rally over the reporting period’s second half. The fund’s other underlying mutual funds produced returns that were roughly in line with their respective asset class benchmarks.
Adjusting to a Changing Market Environment
While we expect long-term interest rates to remain low over the foreseeable future, we expect them to trend gradually higher. Furthermore, lower-rated corporate bonds have become more richly valued in the wake of their recent rally.
Therefore, we have adopted a slightly more cautious investment posture. During the reporting period, we eliminated the fund’s position in TCW Emerging Markets Income Fund and established a new position in Dreyfus Emerging Markets Debt U.S. Dollar Fund. We also adjusted allocations among the fund’s underlying strategies by reducing exposure to Dreyfus Opportunistic Fixed Income Fund and adding to Dreyfus Global Dynamic Bond Fund. In our view, these changes help enhance the fund’s role as a valuable complement to investors’ overall fixed income portfolios.
May 16, 2016
Bond funds are subject generally to interest-rate, credit, liquidity, and market risks, to varying degrees, all of which are more fully described in the fund’s prospectus. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes, and rate increases can cause price declines.
High yield bonds are subject to increased credit risk and are considered speculative in terms of the issuer’s perceived ability to continue making interest payments on a timely basis and to repay principal upon maturity.
Foreign bonds are subject to special risks including exposure to currency fluctuations, changing political and economic conditions, and potentially less liquidity. These risks are generally greater with emerging market countries than with more economically and politically established foreign countries.
Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time. A decline in the value of foreign currencies relative to the U.S. dollar will reduce the value of securities held by the fund and denominated in those currencies. The use of leverage may magnify the fund’s gains or losses. For derivatives with a leveraging component, adverse changes in the value or level of the underlying asset can result in a loss that is much greater than the original investment in the derivative.
The fund’s underlying strategies may use derivative instruments, such as options, futures, options on futures, forward contracts, swaps (including credit default swaps on corporate bonds and asset-backed securities), options on swaps, and other credit derivatives. A small investment in derivatives could have a potentially large impact on the fund’s performance. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets.
The ability of the fund to achieve its investment goal depends, in part, on the ability of Dreyfus to allocate effectively the fund’s assets among the investment strategies and the underlying funds.
1 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Class I and Class Y shares are not subject to any initial or deferred sales charges. Share price, yield, and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. Past performance is no guarantee of future results.
² SOURCE: Lipper Inc. — Reflects reinvestment of dividends and, where applicable, capital gain distributions. The Barclays U.S. Aggregate Bond Index is a widely accepted, unmanaged total return index of corporate, U.S. government and U.S. government-agency debt instruments, mortgage-backed securities, and asset-backed securities with an average maturity of 1-10 years. Investors cannot invest directly in any index. The Lipper Alternative Credit Focus Funds Index reflects the returns of mutual funds to show how the fund's performance compares with the returns of mutual funds that, by prospectus language, invest in a wide range of credit-structured vehicles by using either fundamental credit research analysis or quantitative credit portfolio modeling in seeking to benefit from any changes in credit quality, credit spreads, and market liquidity.
4
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Yield Enhancement Strategy Fund from November 1, 2015 to April 30, 2016. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
| | | | | | | | | | | | |
Expenses and Value of a $1,000 Investment | | |
assuming actual returns for the six months ended April 30, 2016 |
| | | | | | | | |
| | | | Class A | Class C | Class I | Class Y |
Expenses paid per $1,000† | | $ 1.50 | | $ 5.56 | | $ .95 | | $ .20 |
Ending value (after expenses) | | $ 1,016.40 | | $ 1,013.00 | | $ 1,016.80 | | $ 1,018.50 |
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
| | | | | | | | | | | | |
Expenses and Value of a $1,000 Investment | | |
assuming a hypothetical 5% annualized return for the six months ended April 30, 2016 |
| | | | | | | | |
| | | | Class A | Class C | Class I | Class Y |
Expenses paid per $1,000† | | $ 1.51 | | $ 5.57 | | $ .96 | | $ .20 |
Ending value (after expenses) | | $ 1,023.37 | | $ 1,019.34 | | $ 1,023.92 | | $ 1,024.66 |
† Expenses are equal to the fund’s annualized expense ratio of .30% for Class A, 1.11% for Class C, .19% for Class I and .04% for Class Y, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
April 30, 2016 (Unaudited)
| | | | | | |
| |
Registered Investment Companies - 99.5% | | Shares | | Value ($) | |
Domestic Fixed Income - 92.4% | | | | | |
BNY Mellon Corporate Bond Fund, Cl. M | | 5,076,724 | a | 65,032,834 | |
BNY Mellon Municipal Opportunities Fund, Cl. M | | 8,418,627 | a,b | 111,715,168 | |
Dreyfus Floating Rate Income Fund, Cl. Y | | 4,871,510 | a | 57,922,252 | |
Dreyfus High Yield Fund, Cl. I | | 17,426,219 | a,b | 104,731,575 | |
Dreyfus Opportunistic Fixed Income Fund, Cl. Y | | 1,022,409 | a | 11,348,738 | |
| | | | | 350,750,567 | |
Foreign Fixed Income - 7.1% | | | | | |
Dreyfus Emerging Markets Debt U.S. Dollar Fund, Cl. Y | | 851,771 | a | 10,204,221 | |
Dreyfus Global Dynamic Bond Fund, Cl. Y | | 1,397,174 | a | 16,891,838 | |
| | | | | 27,096,059 | |
| | | | | | |
Total Investments (cost $387,786,212) | | 99.5% | | 377,846,626 | |
Cash and Receivables (Net) | | .5% | | 1,717,303 | |
Net Assets | | 100.0% | | 379,563,929 | |
a Investment in affiliated mutual fund.
b The fund's investment in the BNY Mellon Municipal Opportunities Fund and Dreyfus High Yield Fund represents 29.4% and 27.6%, respectively, of the fund's total investments. BNY Mellon Municipal Opportunities Fund seeks to provide total return (consisting of capital appreciation and current income) and Dreyfus High Yield Fund seeks to maximize total return consisting of current income exempt from federal income tax and capital appreciation.
| | |
Portfolio Summary (Unaudited) † | Value (%) |
Mutual Funds: Domestic | 92.4 |
Mutual Funds: Foreign | 7.1 |
| | 99.5 |
† Based on net assets.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2016 (Unaudited)
| | | | | | | |
| | | | | | |
| | | Cost | | Value | |
Assets ($): | | | | |
Investments in affliated issuers—See Statement of Investments | | 387,786,212 | | 377,846,626 | |
Cash | | | | | 1,685,639 | |
Receivable for shares of Common Stock subscribed | | | | | 165,726 | |
Prepaid expenses | | | | | 40,882 | |
| | | | | 379,738,873 | |
Liabilities ($): | | | | |
Due to The Dreyfus Corporation—Note 3(c) | | | | | 5,241 | |
Payable for shares of Common Stock redeemed | | | | | 135,925 | |
Accrued expenses | | | | | 33,778 | |
| | | | | 174,944 | |
Net Assets ($) | | | 379,563,929 | |
Composition of Net Assets ($): | | | | |
Paid-in capital | | | | | 394,535,503 | |
Accumulated undistributed investment income—net | | | | | 1,059,985 | |
Accumulated net realized gain (loss) on investments | | | | | (6,091,973) | |
Accumulated net unrealized appreciation (depreciation)
on investments | | | | | (9,939,586) | |
Net Assets ($) | | | 379,563,929 | |
| | | | | | |
Net Asset Value Per Share | Class A | Class C | Class I | Class Y | |
Net Assets ($) | 551,830 | 24,263 | 275,058 | 378,712,778 | |
Shares Outstanding | 45,438 | 2,000 | 22,626 | 31,176,666 | |
Net Asset Value Per Share ($) | 12.14 | 12.13 | 12.16 | 12.15 | |
See notes to financial statements.
7
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2016 (Unaudited)
| | | | | | | |
| | | | | | |
| | | | | | |
Investment Income ($): | | | | |
Income: | | | | |
Cash dividends: | | | | |
Unaffiliated issuers | | | 8,622,627 | |
Affiliated issuers | | | 94,181 | |
Total Income | | | 8,716,808 | |
Expenses: | | | | |
Registration fees | | | 27,086 | |
Professional fees | | | 23,004 | |
Directors’ fees and expenses—Note 3(d) | | | 13,174 | |
Prospectus and shareholders’ reports | | | 3,917 | |
Loan commitment fees—Note 2 | | | 2,064 | |
Shareholder servicing costs—Note 3(c) | | | 1,098 | |
Custodian fees—Note 3(c) | | | 1,065 | |
Distribution fees—Note 3(b) | | | 89 | |
Miscellaneous | | | 6,919 | |
Total Expenses | | | 78,416 | |
Less—reduction in fees due to earnings credits—Note 3(c) | | | (6) | |
Net Expenses | | | 78,410 | |
Investment Income—Net | | | 8,638,398 | |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | | |
Net realized gain (loss) on investments: | | |
Unaffiliated issuers | | | (2,029,933) | |
Affiliated issuers | | | (1,565,747) | |
Capital gain distributions from affiliated issuers | | | 18,997 | |
Net Realized Gain (Loss) | | | (3,576,683) | |
Net unrealized appreciation (depreciation) on investments: | | | | |
Unaffiliated issuers | | | 1,492,475 | |
Affiliated issuers | | | (416,518) | |
Net Unrealized Appreciation (Depreciation) | | | 1,075,957 | |
Net Realized and Unrealized Gain (Loss) on Investments | | | (2,500,726) | |
Net Increase in Net Assets Resulting from Operations | | 6,137,672 | |
See notes to financial statements.
8
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | Six Months Ended
April 30, 2016 (Unaudited) | | | | Year Ended
October 31, 2015 | |
Operations ($): | | | | | | | | |
Investment income—net | | | 8,638,398 | | | | 15,396,721 | |
Net realized gain (loss) on investments | | (3,576,683) | | | | (1,811,234) | |
Net unrealized appreciation (depreciation)
on investments | | 1,075,957 | | | | (12,274,519) | |
Net Increase (Decrease) in Net Assets
Resulting from Operations | 6,137,672 | | | | 1,310,968 | |
Dividends to Shareholders from ($): | | | | | | | | |
Investment income—net: | | | | | | | | |
Class A | | | (11,793) | | | | (9,722) | |
Class C | | | (426) | | | | (718) | |
Class I | | | (7,330) | | | | (13,090) | |
Class Y | | | (8,908,713) | | | | (14,951,061) | |
Total Dividends | | | (8,928,262) | | | | (14,974,591) | |
Capital Stock Transactions ($): | | | | | | | | |
Net proceeds from shares sold: | | | | | | | | |
Class A | | | - | | | | 525,000 | |
Class I | | | 497,073 | | | | 1,030,666 | |
Class Y | | | 54,754,035 | | | | 157,807,930 | |
Dividends reinvested: | | | | | | | | |
Class A | | | 10,737 | | | | 8,575 | |
Class I | | | 4,347 | | | | 5,666 | |
Class Y | | | 1,093,861 | | | | 1,606,608 | |
Cost of shares redeemed: | | | | | | | | |
Class A | | | - | | | | (2,012) | |
Class I | | | (482,919) | | | | (964,774) | |
Class Y | | | (83,417,940) | | | | (68,230,098) | |
Increase (Decrease) in Net Assets
from Capital Stock Transactions | (27,540,806) | | | | 91,787,561 | |
Total Increase (Decrease) in Net Assets | (30,331,396) | | | | 78,123,938 | |
Net Assets ($): | | | | | | | | |
Beginning of Period | | | 409,895,325 | | | | 331,771,387 | |
End of Period | | | 379,563,929 | | | | 409,895,325 | |
Undistributed investment income—net | 1,059,985 | | | | 1,349,849 | |
9
STATEMENT OF CHANGES IN NET ASSETS (continued)
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | Six Months Ended
April 30, 2016 (Unaudited) | | | | Year Ended
October 31, 2015 | |
Capital Share Transactions (Shares): | | | | | | | | |
Class A | | | | | | | | |
Shares sold | | | - | | | | 41,844 | |
Shares issued for dividends reinvested | | | 900 | | | | 696 | |
Shares redeemed | | | - | | | | (160) | |
Net Increase (Decrease) in Shares Outstanding | 900 | | | | 42,380 | |
Class I | | | | | | | | |
Shares sold | | | 41,847 | | | | 83,157 | |
Shares issued for dividends reinvested | | | 363 | | | | 455 | |
Shares redeemed | | | (40,052) | | | | (78,370) | |
Net Increase (Decrease) in Shares Outstanding | 2,158 | | | | 5,242 | |
Class Y | | | | | | | | |
Shares sold | | | 4,586,609 | | | | 12,659,959 | |
Shares issued for dividends reinvested | | | 91,646 | | | | 129,262 | |
Shares redeemed | | | (7,002,498) | | | | (5,490,173) | |
Net Increase (Decrease) in Shares Outstanding | (2,324,243) | | | | 7,299,048 | |
| | | | | | | | | | |
See notes to financial statements.
10
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.
| | | | | | | | | | |
| | | | | | | | |
| | | | Six Months Ended | | |
Class A Shares | | | April 30, 2016 | | Year Ended October 31, |
| | | (Unaudited) | | 2015 | 2014 | a |
Per Share Data ($): | | | | | | | |
Net asset value, beginning of period | | | 12.21 | | 12.65 | 12.50 | |
Investment Operations: | | | | | | | |
Investment income—netb | | | .26 | | .49 | .26 | |
Net realized and unrealized
gain (loss) on investments | | | (.07) | | (.48) | .10 | |
Total from Investment Operations | | | .19 | | .01 | .36 | |
Distributions: | | | | | | | |
Dividends from investment income—net | | | (.26) | | (.45) | (.21) | |
Net asset value, end of period | | | 12.14 | | 12.21 | 12.65 | |
Total Return (%)c | | | 1.64 | d | .10 | 2.89 | d |
Ratios/Supplemental Data (%): | | | | | | | |
Ratio of total expenses
to average net assetse | | | .30 | f | .33 | .91 | f |
Ratio of net expenses
to average net assetse | | | .30 | f | .33 | .43 | f |
Ratio of net investment income
to average net assetse | | | 4.29 | f | 3.88 | 3.18 | f |
Portfolio Turnover Rate | | | 6.86 | d | 17.13 | 14.04 | d |
Net Assets, end of period ($ x 1,000) | | | 552 | | 544 | 27 | |
a From March 7, 2014 (commencement of operations) to October 31, 2014.
b Based on average shares outstanding.
c Exclusive of sales charge.
d Not annualized.
e Amount does not include the expenses of the underlying funds.
f Annualized.
See notes to financial statements.
11
FINANCIAL HIGHLIGHTS (continued)
| | | | | | | | | |
| | | | | | | | | |
| | | | | Six Months Ended | | |
Class C Shares | | | | April 30, 2016 | | Year Ended October 31, |
| | | | (Unaudited) | | 2015 | 2014 | a |
Per Share Data ($): | | | | | | | | |
Net asset value, beginning of period | | | | 12.19 | | 12.63 | 12.50 | |
Investment Operations: | | | | | | | | |
Investment income—netb | | | | .21 | | .37 | .20 | |
Net realized and unrealized
gain (loss) on investments | | | | (.06) | | (.45) | .09 | |
Total from Investment Operations | | | | .15 | | (.08) | .29 | |
Distributions: | | | | | | | | |
Dividends from investment income—net | | | | (.21) | | (.36) | (.16) | |
Net asset value, end of period | | | | 12.13 | | 12.19 | 12.63 | |
Total Return (%)c | | | | 1.30 | d | (.66) | 2.34 | d |
Ratios/Supplemental Data (%): | | | | | | | | |
Ratio of total expenses
to average net assetse | | | | 1.11 | f | 1.13 | 1.65 | f |
Ratio of net expenses
to average net assetse | | | | 1.11 | f | 1.13 | 1.16 | f |
Ratio of net investment income
to average net assetse | | | | 3.49 | f | 2.96 | 2.43 | f |
Portfolio Turnover Rate | | | | 6.86 | d | 17.13 | 14.04 | d |
Net Assets, end of period ($ x 1,000) | | | | 24 | | 24 | 25 | |
a From March 7, 2014 (commencement of operations) to October 31, 2014.
b Based on average shares outstanding.
c Exclusive of sales charge.
d Not annualized.
e Amount does not include the expenses of the underlying funds.
f Annualized.
See notes to financial statements.
12
| | | | | | | | | | |
| | | | | | | | |
| | | | | Six Months Ended | | |
Class I Shares | | | | April 30, 2016 | | Year Ended October 31, |
| | | | (Unaudited) | | 2015 | 2014 | a |
Per Share Data ($): | | | | | | | | |
Net asset value, beginning of period | | | | 12.22 | | 12.66 | 12.50 | |
Investment Operations: | | | | | | | | |
Investment income—netb | | | | .26 | | .50 | .23 | |
Net realized and unrealized
gain (loss) on investments | | | | (.05) | | (.46) | .15 | |
Total from Investment Operations | | | | .21 | | .04 | .38 | |
Distributions: | | | | | | | | |
Dividends from investment income—net | | | | (.27) | | (.48) | (.22) | |
Net asset value, end of period | | | | 12.16 | | 12.22 | 12.66 | |
Total Return (%) | | | | 1.68 | c | .33 | 3.08 | c |
Ratios/Supplemental Data (%): | | | | | | | | |
Ratio of total expenses
to average net assetsd | | | | .19 | e | .15 | .54 | e |
Ratio of net expenses
to average net assetsd | | | | .19 | e | .15 | .15 | e |
Ratio of net investment income
to average net assetsd | | | | 4.37 | e | 4.05 | 3.85 | e |
Portfolio Turnover Rate | | | | 6.86 | c | 17.13 | 14.04 | c |
Net Assets, end of period ($ x 1,000) | | | | 275 | | 250 | 193 | |
a From March 7, 2014 (commencement of operations) to October 31, 2014.
b Based on average shares outstanding.
c Not annualized.
d Amount does not include the expenses of the underlying funds.
e Annualized.
See notes to financial statements.
13
FINANCIAL HIGHLIGHTS (continued)
| | | | | | | | | | |
| | | | | | | |
| | | | Six Months Ended | | |
Class Y Shares | | | April 30, 2016 | | Year Ended October 31, |
| | | (Unaudited) | | 2015 | 2014 | a |
Per Share Data ($): | | | | | | | |
Net asset value, beginning of period | | | 12.21 | | 12.65 | 12.50 | |
Investment Operations: | | | | | | | |
Investment income—netb | | | .27 | | .51 | .29 | |
Net realized and unrealized
gain (loss) on investments | | | (.05) | | (.46) | .09 | |
Total from Investment Operations | | | .22 | | .05 | .38 | |
Distributions: | | | | | | | |
Dividends from investment income—net | | | (.28) | | (.49) | (.23) | |
Net asset value, end of period | | | 12.15 | | 12.21 | 12.65 | |
Total Return (%) | | | 1.85 | c | .42 | 3.02 | c |
Ratios/Supplemental Data (%): | | | | | | | |
Ratio of total expenses
to average net assetsd | | | .04 | e | .06 | .13 | e |
Ratio of net expenses
to average net assetsd | | | .04 | e | .06 | .10 | e |
Ratio of net investment income
to average net assetsd | | | 4.56 | e | 4.05 | 3.67 | e |
Portfolio Turnover Rate | | | 6.86 | c | 17.13 | 14.04 | c |
Net Assets, end of period ($ x 1,000) | | | | 378,713 | | 409,077 | 331,526 | |
a From March 7, 2014 (commencement of operations) to October 31, 2014.
b Based on average shares outstanding.
c Not annualized.
d Amount does not include the expenses of the underlying funds.
e Annualized.
See notes to financial statements.
14
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Yield Enhancement Strategy Fund (the “fund”) is a separate diversified series of Dreyfus BNY Mellon 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 five series, including the fund. The fund’s investment objective is to seek high current income. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares. The fund is authorized to issue 100 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A, Class C, Class I and Class Y. Class A and Class C shares are sold primarily to retail investors through financial intermediaries and bear Distribution and/or Shareholder Services Plan fees. Class A shares generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class I shares are sold primarily to bank trust departments and other financial service providers (including The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, and its affiliates), acting on behalf of customers having a qualified trust or an investment account or relationship at such institution, and bear no Distribution or Shareholder Services Plan fees. Class Y shares are sold at net asset value per share generally to institutional investors, and bear no Distribution or Shareholder Services Plan fees. Class I and Class Y shares are offered without a front-end sales charge or CDSC. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
As of April 30, 2016, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held all of the outstanding Class C shares of the fund.
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.
15
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Investments are valued at the net asset value of each underlying fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date and are generally categorized within Level 1 of the fair value hierarchy.
16
The following is a summary of the inputs used as of April 30, 2016 in valuing the fund’s investments:
| | | | | | |
Assets ($) | Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | | Level 3 - Significant Unobservable Inputs | Total |
Investments in Securities: | | | |
Mutual Funds† | 377,846,626 | - | | — | 377,846,626 |
† See Statement of Investments for additional detailed categorizations.
At April 30, 2016, there were no transfers between levels of the fair value hierarchy.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses 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, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act. Investments in affiliated investment companies during the period ended April 30, 2016 were as follows:
| | | | | | |
Affiliated Investment Company | Value 10/31/2015 ($) | Purchases ($) | † | Sales ($) | Net Realized Gain (Loss) ($) |
BNY Mellon Corporate Bond Fund, Cl. M | 85,393,115 | 1,300,064 | | 22,323,290 | (843,291) |
BNY Mellon Municipal Opportunities Fund, Cl. M | 115,716,405 | 2,039,807 | | 7,757,340 | (89,697) |
Dreyfus Emerging Markets Debt
U.S. Dollar
Fund, Cl. Y | - | 9,661,371 | | - | - |
Dreyfus Floating Rate Income Fund, Cl. Y | 61,473,111 | 1,335,710 | | 3,704,510 | (267,417) |
Dreyfus Global Dynamic Bond Fund, Cl. Y | 12,832,701 | 4,444,396 | | 350,930 | (6,821) |
Dreyfus High Yield Fund, Cl. I | 103,038,054 | 6,632,760 | | 2,456,490 | (317,243) |
17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
| | | | | | |
Affiliated Investment Company | Value 10/31/2015 ($) | Purchases ($) | † | Sales ($) | Net Realized Gain (Loss) ($) |
Dreyfus Opportunistic Fixed Income Fund, Cl. Y | 12,462,255 | 539,800 | | 448,098 | (41,278) |
Total | 390,915,641 | 25,953,908 | | 37,040,658 | (1,565,747) |
| | | | | |
Affiliated Investment Company | Change in Net Unrealized Appreciation (Depreciation) ($) | Value
4/30/2016 ($) | Net Assets (%) | Dividends/ Distributions ($) |
BNY Mellon Corporate Bond Fund, Cl. M | 1,506,236 | 65,032,834 | 17.1 | 1,300,064 |
BNY Mellon Municipal Opportunities Fund, Cl. M | 1,805,993 | 111,715,168 | 29.4 | 2,039,807 |
Dreyfus Emerging Markets Debt
U.S. Dollar
Fund, Cl. Y | 542,850 | 10,204,221 | 2.7 | 109,071 |
Dreyfus Floating Rate Income Fund, Cl. Y | (914,642) | 57,922,252 | 15.3 | 1,335,710 |
Dreyfus Global Dynamic Bond Fund Cl. Y | (27,508) | 16,891,838 | 4.4 | 184,410 |
Dreyfus High Yield Fund, Cl. I | (2,165,506) | 104,731,575 | 27.6 | 3,132,762 |
Dreyfus Opportunistic Fixed Income Fund, Cl. Y | (1,163,941) | 11,348,738 | 3.0 | 539,800 |
Total | (416,518) | 377,846,626 | 99.5 | 8,641,624 |
† Includes reinvested dividends/distributions.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are normally declared and paid on a monthly basis. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(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
18
provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended April 30, 2016, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended April 30, 2016, the fund did not incur any interest or penalties.
Each tax year in the two-year period ended October 31, 2015 remains subject to examination by the Internal Revenue Service and state taxing authorities.
Under the Regulated Investment Company Modernization Act of 2010, the fund is permitted to carry forward capital losses for an unlimited period. Furthermore, capital loss carryovers retain their character as either short-term or long-term capital losses.
The fund has an unused capital loss carryover of $1,932,572 available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to October 31, 2015. These short–term capital losses can be carried forward for an unlimited period.
The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2015 was as follows: ordinary income $11,295,569 and tax–exempt income $3,679,022. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $555 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. Prior to January 11, 2016, the unsecured credit facility with Citibank, N.A. was $480 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended April 30, 2016, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with Dreyfus, there is no management fee paid to Dreyfus. The fund invests in other affiliated
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
mutual funds advised by Dreyfus. All fees and expenses of the underlying funds are reflected in the underlying fund’s net asset value. Dreyfus had contractually agreed, from November 1, 2015 through March 1, 2016, to assume the direct expenses of the fund so that the expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, acquired fund fees and expenses incurred by underlying funds, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceeded .30% of the value of the fund’s average daily net assets. At April 30, 2016, there was no reduction in management fee, pursuant to the undertaking.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended April 30, 2016, Class C shares were charged $89 pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% 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 (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended April 30, 2016, Class A and Class C shares were charged $668 and $30, respectively, pursuant to the Shareholder Services Plan.
Under its terms, the Distribution Plan and Shareholder Services Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of a majority of those Directors who are not “interested persons” of the Company and who have no direct or indirect financial interest in the operation of or in any agreement related to the Distribution Plan or Shareholder Services Plan.
The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer
20
agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended April 30, 2016, the fund was charged $355 for transfer agency services and $14 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were partially offset by earnings credits of $6.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended April 30, 2016, the fund was charged $1,065 pursuant to the custody agreement.
During the period ended April 30, 2016, the fund was charged $4,997 for services performed by the Chief Compliance Officer and his staff.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: Distribution Plan fees $15, Shareholder Services Plan fees $112, custodian fees $1,772, Chief Compliance Officer fees $3,208 and transfer agency fees $134.
(d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended April 30, 2016, amounted to $26,048,092 and $51,564,943, respectively.
At April 30, 2016, accumulated net unrealized depreciation on investments was $9,939,586, consisting of $3,791,241 gross unrealized appreciation and $13,730,827 gross unrealized depreciation.
At April 30, 2016, 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).
21
INFORMATION ABOUT THE RENEWAL OF THE FUND'S MANAGEMENT AGREEMENT (Unaudited)
At a meeting of the fund’s Board of Directors held on February 24-25, 2016, the Board considered the renewal of the fund’s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”). The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from Dreyfus representatives. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to them at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. Dreyfus provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or Dreyfus) and Dreyfus’ corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund.
The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered Dreyfus’ extensive administrative, accounting and compliance infrastructures.
Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), for the one-year period ended December 31, 2015, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense
22
Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Broadridge as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Broadridge used to select the Performance Group and Performance Universe and the Expense Group and Expense Universe.
Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds. The Board discussed the results of the comparisons and noted that the fund’s total return performance was above the Performance Group and Performance Universe medians for the period (ranked first in the Performance Group and was in the first quartile of the Performance Universe). Dreyfus also provided a comparison of the fund’s calendar year total return to the returns of the fund’s benchmark index and Lipper category average.
The Board also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons. The Board noted that the fund does not pay a management fee. The Board also noted that the fund’s total expense ratio was below the Expense Group and Expense Universe medians.
Dreyfus representatives reviewed with the Board the management or investment advisory fees (1) paid by funds advised or administered by Dreyfus that are in the same Broadridge category as the fund and (2) paid to Dreyfus or the Dreyfus-affiliated primary employer of the fund’s primary portfolio manager(s) for advising any separate accounts and/or other types of client portfolios that are considered to have similar investment strategies and policies as the fund (the “Similar Clients”), and explained the nature of the Similar Clients. The Board considered the relevance of the fee information provided for the Similar Clients to evaluate the fund’s expenses.
Analysis of Profitability and Economies of Scale. Although Dreyfus does not receive a management fee from the fund, Dreyfus representatives reviewed the expenses allocated and profit received by Dreyfus and its affiliates and the resulting profitability percentage in connection with managing the fund, including custody, transfer agency, securities lending and cash management fees, and the aggregate profitability percentage to Dreyfus and its affiliates for managing the funds in the Dreyfus fund complex, and the method used to determine the expenses and profit. The Board also had been provided with information prepared by an
23
INFORMATION ABOUT THE RENEWAL OF THE FUND'S MANAGEMENT AGREEMENT (Unaudited) (continued)
independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex. However, the Board did not believe that profitability or economies of scale were relevant for the fund since it does not pay a management fee to Dreyfus directly.
The Board also considered potential benefits to Dreyfus from acting as investment adviser and noted that there were no soft dollar arrangements in effect for trading the fund’s investments.
At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Agreement. Based on the discussions and considerations as described above, the Board concluded and determined as follows.
· The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
· The Board was satisfied with the fund’s performance.
The Board determined that economies of scale considerations were not relevant to the fund since it does not pay a management fee to Dreyfus directly. In evaluating the Agreement, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with Dreyfus and its affiliates, of the fund and the services provided to the fund by Dreyfus. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of the fund and the investment management and other services provided under the Agreement, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of prior or similar agreements during which lengthy discussions took place between the Board and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the same or similar arrangements in prior years. The Board determined to renew the Agreement.
24
NOTES
25
Dreyfus Yield Enhancement Strategy 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 Mellon
225 Liberty Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
| | |
Ticker Symbols: | Class A: DABMX Class C: DABLX Class I: DABKX Class Y: DABJX |
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. (phone 1-800-SEC-0330 for information).
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
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© 2016 MBSC Securities Corporation
6327SA0416 | 
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