UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM N-CSR |
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT |
INVESTMENT COMPANIES |
Investment Company Act file number 811-3940 |
Strategic Funds, Inc. |
(Exact name of Registrant as specified in charter) |
c/o The Dreyfus Corporation |
200 Park Avenue |
New York, New York 10166 |
(Address of principal executive offices) (Zip code) |
Michael A. Rosenberg, Esq. |
200 Park Avenue |
New York, New York 10166 |
(Name and address of agent for service) |
Registrant's telephone number, including area code: (212) 922-6000 |
Date of fiscal year end: | 11/30 | |
Date of reporting period: | 5/31/08 |
The following N-CSR relates only to the Registrant’s series listed below and does not affect the other series of the Registrant, which have different fiscal year ends and, therefore, different N-CSR reporting requirements. Separate N-CSR Forms will be filed for these series, as appropriate.
Global Stock Fund International Stock Fund Dreyfus Premier U.S. Equity Fund |
FORM N-CSR
Item 1. Reports to Stockholders.
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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value
The Fund
Global Stock Fund
A LETTER FROM THE CEO
Dear Shareholder:
We are pleased to present this semiannual report for Global Stock Fund, covering the six-month period from December 1, 2007, through May 31, 2008.
Although the international equity markets generally have declined this year due to concerns that the downturn in the U.S. economy might dampen global economic growth, we recently have seen signs of potential improvement.The Federal Reserve Board and other central banks have reduced short-term interest rates and injected liquidity into their banking systems, helping to reassure investors.
At Dreyfus, we believe that the current period of economic uncertainty is likely to be relatively brief by historical standards, but the ensuing recovery may be gradual as financial deleveraging and housing price deflation continue to weigh on economic activity in the United States and other nations that depend on exports to U.S. businesses and con-sumers.The implications of our economic outlook for the international stock markets generally are positive, especially since some of the world’s largest multinational companies are now selling at attractive valuations compared to historical norms.Your financial advisor can help you assess current risks and take advantage of these longer-term opportunities within the context of your overall investment portfolio.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Manager.
Thank you for your continued confidence and support.
2
DISCUSSION OF FUND PERFORMANCE
For the period of December 1, 2007, through May 31, 2008, as provided by Walter Scott & Partners Limited (WSPL), Sub-adviser
For the six-month period ended May 31, 2008, Global Stock Fund’s Class A shares produced a return of 1.57%, Class C shares produced a return of 1.20%, Class I shares produced a return of 1.79% and Class T shares produced a return of 0.92% .1 In comparison,the fund’s benchmark index, the Morgan Stanley Capital International World Index (the “MSCI World Index”),produced a –4.07% return over the same period.2
Global equity markets generally struggled during the reporting period, as investors reacted negatively to a persistent credit crisis in financial markets and slowing economic growth in many regions of the world. The fund produced higher returns than its benchmark, due mainly to the success of our stock selection strategy and, to a lesser extent, our currency allocation strategy.
The Fund’s Investment Approach
The fund seeks long-term total return by normally investing at least 80% of its assets in stocks of companies with any market capitalization that are located in the world’s developed markets. When selecting stocks, WSPL seeks companies with fundamental strengths that indicate the potential for sustainable growth. The firm focuses on individual stock selection through extensive fundamental research. WSPL first selects candidates for investment that meet certain broad absolute and trend criteria. Financial statements are restated in an effort to identify the nature of their operating margins and to understand the variables that add value to their businesses. Companies meeting the financial criteria are subjected to a detailed investigation of their products, costs and pricing, competition, industry position and outlook. Stocks are then selected whose expected growth rate is available at a reasonable valuation.
Credit and Economic Woes Undermined Global Equities
Stocks in many of the world’s developed markets declined over the first three months of the reporting period due to slowing economic growth in the United States and Europe. Investor sentiment also was
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
damaged by a credit crisis that began in the U.S. sub-prime mortgage market and spread to global fixed-income markets. Later in the reporting period, inflationary pressures intensified as food and energy prices soared to record levels. These factors produced particularly severe declines in the financials sector, where a number of commercial and investment banks suffered massive sub-prime related losses. However, global stock markets staged a rally over the reporting period’s second half, after the U.S. Federal Reserve Board demonstrated its willingness to shore up a troubled financial system by providing liquidity and facilitating the rescue of a major investment bank.
Stock Selections Supported Relative Performance
In this volatile environment, we maintained our disciplined investment approach, which led us to invest in financially strong companies that proved relatively resistant to deteriorating investor sentiment.The fund particularly benefited from its investments in the better-performing energy sector, where a number of holdings prospered amid surging oil and gas prices. In fact, all of the five top contributors to the fund’s relative performance were energy companies: Woodside Petroleum, Australia’s largest publicly traded oil and gas exploration and production company; Suncor Energy, a major North American energy producer and marketer; EOG Resources, an independent U.S. oil and natural gas company; BG Group, a U.K.-based natural gas producer and distributor; and CLP Holdings, a leading power producer based in Hong Kong.
In addition, the fund benefited from a substantially underweighted position in the troubled financials sector, enabling it to avoid the brunt of weakness affecting the MSCI World Index’s financials component.
As is to be expected in a challenging market environment, the fund also encountered some disappointments during the reporting period. Our country allocation strategy detracted mildly from relative performance, primarily due to overweighted exposure to Japan’s equity market, which generally lagged those of Europe and the United States. In addition, the fund’s underweighted exposure to the materials area prevented it from participating fully in the sector’s gains, while relatively heavy exposure
4
to the health care and consumer discretionary sectors fared poorly in the sluggish global economy.Among individual holdings, HOYA Corp., the Japanese specialty manufacturer of optical glass; GlaxoSmithKline, the British pharmaceutical developer; and Inditex, the Spanish fashion distributor, ranked among the fund’s greater laggards.
Maintaining a Disciplined Approach
We believe that our disciplined, research-intensive investment approach is particularly suited to uncertain times such as these. In our view, an unwavering focus on financially healthy companies with competitive products, strong market positions and growing profits may be the key to investment success in challenging economic and market environments. While global equity markets have stabilized over the past few months, the economic outlook is uncertain as deleveraging among financial institutions continues and consumers remain under pressure.
Compared to the benchmark, we have found a greater number of opportunities meeting our criteria in Japan and Hong Kong and fewer in the United States. From a sector allocation perspective, the fund ended the reporting period with relatively heavy positions in the health care and information technology areas, and we have continued to maintain significantly light exposure to the financials sector.
June 16, 2008
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 case of Class A and Class T 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. 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 certain fund expenses by The Dreyfus Corporation in effect through March 31, | ||
2009, 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 | SOURCES: LIPPER INC. — Reflects reinvestment of net dividends and, where applicable, | |
capital gain distributions.The Morgan Stanley Capital International (MSCI) World Index is an | ||
unmanaged index of global stock market performance, including the United States, Canada, | ||
Europe,Australia, New Zealand and the Far East. |
The Fund 5
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 Global Stock Fund from December 1, 2007 to May 31, 2008. 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 May 31, 2008 | ||||||||
Class A | Class C | Class I | Class T | |||||
Expenses paid per $1,000 † | $ 7.56 | $ 11.32 | $ 6.31 | $ 8.79 | ||||
Ending value (after expenses) | $1,015.70 | $1,012.00 | $1,017.90 | $1,009.20 |
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 May 31, 2008 | ||||||||
Class A | Class C | Class I | Class T | |||||
Expenses paid per $1,000 † | $ 7.57 | $ 11.33 | $ 6.31 | $ 8.82 | ||||
Ending value (after expenses) | $1,017.50 | $1,013.75 | $1,018.75 | $1,016.25 |
† Expenses are equal to the fund’s annualized expense ratio of 1.50% for Class A, 2.25% for Class C, 1.25% for |
Class I and 1.75% for Class T, multiplied by the average account value over the period, multiplied by 183/366 (to |
reflect the one-half year period). |
6
STATEMENT OF INVESTMENTS |
May 31, 2008 (Unaudited) |
Common Stocks—95.1% | Shares | Value ($) | ||
Australia—2.0% | ||||
Woodside Petroleum | 17,700 | 1,099,652 | ||
Canada—1.8% | ||||
Suncor Energy | 14,800 | 1,010,052 | ||
France—4.3% | ||||
Cie Generale d’Optique | ||||
Essilor International | 15,000 | 943,480 | ||
L’Oreal | 3,900 | 474,592 | ||
LVMH Moet Hennessy Louis Vuitton | 8,200 | 959,460 | ||
2,377,532 | ||||
Germany—1.8% | ||||
Adidas | 14,000 | 987,087 | ||
Hong Kong—8.9% | ||||
China Mobile | 60,000 | 881,867 | ||
CLP Holdings | 133,000 | 1,201,515 | ||
CNOOC | 509,000 | 887,044 | ||
Hong Kong & China Gas | 390,050 | 960,643 | ||
Hutchison Whampoa | 90,000 | 972,783 | ||
4,903,852 | ||||
Japan—29.5% | ||||
Advantest | 9,000 | 235,629 | ||
AEON Mall | 27,000 | 873,364 | ||
Astellas Pharma | 25,500 | 1,078,827 | ||
Canon | 19,500 | 1,052,504 | ||
Chugai Pharmaceutical | 33,000 | 516,192 | ||
Daikin Industries | 19,300 | 995,940 | ||
Daito Trust Construction | 6,400 | 329,653 | ||
Denso | 30,000 | 1,095,618 | ||
Eisai | 13,100 | 474,692 | ||
Fanuc | 10,000 | 1,086,132 | ||
Honda Motor | 19,700 | 659,657 | ||
HOYA | 36,000 | 1,000,569 | ||
Keyence | 3,600 | 859,875 | ||
Millea Holdings | 16,900 | 697,353 | ||
Mitsubishi Estate | 41,000 | 1,104,534 | ||
Mitsubishi UFJ Financial Group | 38,000 | 388,579 | ||
Murata Manufacturing | 10,100 | 530,772 | ||
Nitto Denko | 7,800 | 370,689 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($ | ||
Japan (continued) | ||||
Secom | 14,600 | 709,087 | ||
Shimamura | 1,700 | 135,619 | ||
Shin-Etsu Chemical | 16,500 | 1,039,271 | ||
Takeda Pharmaceutical | 16,600 | 962,113 | ||
16,196,669 | ||||
Singapore—1.3% | ||||
DBS Group Holdings | 48,000 | 687,452 | ||
Spain—1.8% | ||||
Inditex | 19,600 | 964,174 | ||
Sweden—3.2% | ||||
Hennes & Mauritz, Cl. B | 18,000 | 994,417 | ||
Telefonaktiebolaget LM Ericsson, Cl. B | 280,000 | 761,537 | ||
1,755,954 | ||||
Switzerland—5.2% | ||||
Nestle | 1,900 | 934,277 | ||
Nobel Biocare Holding | 24,000 | 946,414 | ||
SGS | 640 | 961,612 | ||
2,842,303 | ||||
United Kingdom—8.6% | ||||
BG Group | 39,500 | 990,591 | ||
GlaxoSmithKline | 33,000 | 727,893 | ||
Kingfisher | 55,000 | 149,479 | ||
Reckitt Benckiser Group | 18,000 | 1,069,688 | ||
Tesco | 120,000 | 984,351 | ||
William Morrison Supermarkets | 135,000 | 782,210 | ||
4,704,212 | ||||
United States—26.7% | ||||
Abbott Laboratories | 14,000 | 788,900 | ||
Anadarko Petroleum | 12,800 | 959,616 | ||
Automatic Data Processing | 15,500 | 667,275 | ||
C.R. Bard | 3,500 | 319,200 | ||
Cisco Systems | 40,000 a | 1,068,800 | ||
EOG Resources | 5,500 | 707,465 | ||
Fastenal | 21,500 | 1,062,960 | ||
Genentech | 13,600 a | 963,832 | ||
Home Depot | 8,000 | 218,880 | ||
Intel | 43,000 | 996,740 |
8
Common Stocks (continued) | Shares | Value ($) | ||
United States (continued) | ||||
Johnson & Johnson | 11,500 | 767,510 | ||
Linear Technology | 11,200 | 411,824 | ||
Medtronic | 14,700 | 744,849 | ||
Microsoft | 36,500 | 1,033,680 | ||
Patterson Cos. | 6,800 a | 231,268 | ||
Schlumberger | 10,000 | 1,011,300 | ||
SYSCO | 34,000 | 1,049,240 | ||
Wal-Mart Stores | 17,500 | 1,010,450 | ||
Walgreen | 17,100 | 615,942 | ||
14,629,731 | ||||
Total Common Stocks | ||||
(cost $49,269,135) | 52,158,670 | |||
Other Investment—2.7% | ||||
Registered Investment Company; | ||||
Dreyfus Institutional Preferred Plus Money Market Fund | ||||
(cost $1,475,000) | 1,475,000 b | 1,475,000 | ||
Total Investments (cost $50,744,135) | 97.8% | 53,633,670 | ||
Cash and Receivables (Net) | 2.2% | 1,229,495 | ||
Net Assets | 100.0% | 54,863,165 |
a | Non-income producing security. | |
b | Investment in affiliated money market mutual fund. |
Portfolio Summary | (Unaudited) † | |||||
Value (%) | Value (%) | |||||
Health Care | 17.3 | Energy | 10.3 | |||
Consumer Services | 15.5 | Energy Services | 5.8 | |||
Consumer Goods | 13.8 | Financial Services | 5.2 | |||
Technology | 13.8 | Money Market Investment | 2.7 | |||
Industrials | 13.4 | 97.8 |
† Based on net assets. |
See notes to financial statements. |
The Fund 9
STATEMENT OF ASSETS AND LIABILITIES |
May 31, 2008 (Unaudited) |
Cost | Value | |||
Assets ($): | ||||
Investments in securities—See Statement of Investments: | ||||
Unaffiliated issuers | 49,269,135 | 52,158,670 | ||
Affiliated issuers | 1,475,000 | 1,475,000 | ||
Cash | 1,107,057 | |||
Cash denominated in foreign currencies | 56,116 | 55,824 | ||
Dividends and interest receivable | 142,969 | |||
Prepaid expenses | 19,339 | |||
54,958,859 | ||||
Liabilities ($): | ||||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 67,910 | |||
Accrued expenses | 27,784 | |||
95,694 | ||||
Net Assets ($) | 54,863,165 | |||
Composition of Net Assets ($): | ||||
Paid-in capital | 51,581,566 | |||
Accumulated undistributed investment income—net | 180,898 | |||
Accumulated net realized gain (loss) on investments | 214,646 | |||
Accumulated net unrealized appreciation (depreciation) | ||||
on investments and foreign currency transactions | 2,886,055 | |||
Net Assets ($) | 54,863,165 |
Net Asset Value Per Share | ||||||||
Class A | Class C | Class I | Class T | |||||
Net Assets ($) | 4,482,540 | 1,106,549 | 49,246,166 | 27,910 | ||||
Shares Outstanding | 325,391 | 80,698 | 3,546,687 | 2,220 | ||||
Net Asset Value Per Share ($) | 13.78 | 13.71 | 13.89 | 12.57 |
See notes to financial statements. |
10 |
STATEMENT OF OPERATIONS |
Six Months Ended May 31, 2008 (Unaudited) |
Investment Income ($): | ||
Income: | ||
Cash dividends (net of $25,136 foreign taxes withheld at source): | ||
Unaffiliated issuers | 371,973 | |
Affiliated issuers | 26,322 | |
Total Income | 398,295 | |
Expenses: | ||
Management fee—Note 3(a) | 141,268 | |
Registration fees | 24,280 | |
Custodian fees—Note 3(c) | 19,446 | |
Auditing fees | 18,496 | |
Shareholder servicing costs—Note 3(c) | 9,562 | |
Prospectus and shareholders’ reports | 6,742 | |
Distribution fees—Note 3(b) | 3,367 | |
Directors’ fees and expenses—Note 3(d) | 699 | |
Loan commitment fees—Note 2 | 6 | |
Miscellaneous | 7,769 | |
Total Expenses | 231,635 | |
Less—reduction in management fee | ||
due to undertaking—Note 3(a) | (14,253) | |
Less—reduction in fees due to | ||
earnings credits—Note 1(c) | (596) | |
Net Expenses | 216,786 | |
Investment Income—Net | 181,509 | |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | ||
Net realized gain (loss) on investments and foreign currency transactions | 251,724 | |
Net realized gain (loss) on forward currency exchange contracts | (10,032) | |
Net Realized Gain (Loss) | 241,692 | |
Net unrealized appreciation (depreciation) on | ||
investments and foreign currency transactions | 1,320,501 | |
Net Realized and Unrealized Gain (Loss) on Investments | 1,562,193 | |
Net Increase in Net Assets Resulting from Operations | 1,743,702 |
See notes to financial statements.
The Fund 11
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
(Unaudited) | November 30, 2007 a,b | |||
Operations ($): | ||||
Investment income—net | 181,509 | 63,207 | ||
Net realized gain (loss) on investments | 241,692 | 151,598 | ||
Net unrealized appreciation | ||||
(depreciation) on investments | 1,320,501 | 1,565,554 | ||
Net Increase (Decrease) in Net Assets | ||||
Resulting from Operations | 1,743,702 | 1,780,359 | ||
Dividends to Shareholders from ($): | ||||
Investment income—net: | ||||
Class A Shares | (27,511) | — | ||
Class I Shares | (28,974) | — | ||
Class T Shares | (3,780) | — | ||
Net realized gain on investments: | ||||
Class A Shares | (32,829) | — | ||
Class C Shares | (6,537) | — | ||
Class I Shares | (141,854) | — | ||
Class T Shares | (977) | — | ||
Total Dividends | (242,462) | — | ||
Capital Stock Transactions ($): | ||||
Net proceeds from shares sold: | ||||
Class A Shares | 1,464,173 | 8,477,307 | ||
Class C Shares | 389,249 | 1,229,372 | ||
Class I Shares | 30,807,603 | 18,244,830 | ||
Class T Shares | 14,577 | 500,000 | ||
Dividends reinvested: | ||||
Class A Shares | 23,834 | — | ||
Class C Shares | 2,391 | — | ||
Class I Shares | 55,509 | — | ||
Class T Shares | 1,091 | — | ||
Cost of shares redeemed: | ||||
Class A Shares | (2,152,183) | (3,914,581) | ||
Class C Shares | (217,831) | (388,773) | ||
Class I Shares | (1,412,361) | (1,010,473) | ||
Class T Shares | (157,168) | (375,000) | ||
Increase (Decrease) in Net Assets | ||||
from Capital Stock Transactions | 28,818,884 | 22,762,682 | ||
Total Increase (Decrease) in Net Assets | 30,320,124 | 24,543,041 | ||
Net Assets ($): | ||||
Beginning of Period | 24,543,041 | — | ||
End of Period | 54,863,165 | 24,543,041 | ||
Undistributed investment income—net | 180,898 | 59,654 |
12
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
(Unaudited) | November 30, 2007 a,b | |||
Capital Share Transactions: | ||||
Class A | ||||
Shares sold | 111,942 | 661,091 | ||
Shares issued for dividends reinvested | 1,764 | — | ||
Shares redeemed | (161,963) | (287,443) | ||
Net Increase (Decrease) in Shares Outstanding | (48,257) | 373,648 | ||
Class C | ||||
Shares sold | 28,924 | 96,321 | ||
Shares issued for dividends reinvested | 179 | — | ||
Shares redeemed | (16,234) | (28,492) | ||
Net Increase (Decrease) in Shares Outstanding | 12,869 | 67,829 | ||
Class I | ||||
Shares sold | 2,321,263 | 1,406,401 | ||
Shares issued for dividends reinvested | 4,168 | — | ||
Shares redeemed | (109,135) | (76,010) | ||
Net Increase (Decrease) in Shares Outstanding | 2,216,296 | 1,330,391 | ||
Class T | ||||
Shares sold | 1,127 | 40,000 | ||
Shares issued for dividends reinvested | 93 | — | ||
Shares redeemed | (11,720) | (27,280) | ||
Net Increase (Decrease) in Shares Outstanding | (10,500) | 12,720 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Effective June 1, 2007, Class R shares were redesignated as Class I 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.
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
Class A Shares | (Unaudited) | November 30, 2007 a | ||
Per Share Data ($): | ||||
Net asset value, beginning of period | 13.73 | 12.50 | ||
Investment Operations: | ||||
Investment income—net b | .04 | .04 | ||
Net realized and unrealized | ||||
gain (loss) on investments | .18 | 1.19 | ||
Total from Investment Operations | .22 | 1.23 | ||
Distributions: | ||||
Dividends from investment income—net | (.08) | — | ||
Dividends from net realized gain on investments | (.09) | — | ||
Total Distributions | (.17) | — | ||
Net asset value, end of period | 13.78 | 13.73 | ||
Total Return (%) c,d | 1.57 | 9.92 | ||
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets e | 1.72 | 2.40 | ||
Ratio of net expenses to average net assets e | 1.50 | 1.46 | ||
Ratio of net investment income | ||||
to average net assets e | .60 | .29 | ||
Portfolio Turnover Rate d | 6.87 | 14.53 | ||
Net Assets, end of period ($ x 1,000) | 4,483 | 5,132 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Based on average shares outstanding at each month end. | |
c | Exclusive of sales charge. | |
d | Not annualized. | |
e | Annualized. | |
See notes to financial statements. |
14
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
Class C Shares | (Unaudited) | November 30, 2007 a | ||
Per Share Data ($): | ||||
Net asset value, beginning of period | 13.64 | 12.50 | ||
Investment Operations: | ||||
Investment (loss)—net b | (.01) | (.06) | ||
Net realized and unrealized | ||||
gain (loss) on investments | .17 | 1.20 | ||
Total from Investment Operations | .16 | 1.14 | ||
Distributions: | ||||
Dividends from net realized gain on investments | (.09) | — | ||
Net asset value, end of period | 13.71 | 13.64 | ||
Total Return (%) c,d | 1.20 | 9.12 | ||
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets e | 2.51 | 3.16 | ||
Ratio of net expenses to average net assets e | 2.25 | 2.20 | ||
Ratio of net investment (loss) | ||||
to average net assets e | (.09) | (.46) | ||
Portfolio Turnover Rate d | 6.87 | 14.53 | ||
Net Assets, end of period ($ x 1,000) | 1,107 | 925 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Based on average shares outstanding at each month end. | |
c | Exclusive of sales charge. | |
d | Not annualized. | |
e | Annualized. | |
See notes to financial statements. |
The Fund 15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
Class I Shares | (Unaudited) | November 30, 2007 a,b | ||
Per Share Data ($): | ||||
Net asset value, beginning of period | 13.76 | 12.50 | ||
Investment Operations: | ||||
Investment income—net c | .10 | .07 | ||
Net realized and unrealized | ||||
gain (loss) on investments | .14 | 1.19 | ||
Total from Investment Operations | .24 | 1.26 | ||
Distributions: | ||||
Dividends from investment income—net | (.02) | — | ||
Dividends from net realized gain on investments | (.09) | — | ||
Total Distributions | (.11) | — | ||
Net asset value, end of period | 13.89 | 13.76 | ||
Total Return (%) d | 1.79 | 10.08 | ||
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets e | 1.31 | 2.05 | ||
Ratio of net expenses to average net assets e | 1.25 | 1.18 | ||
Ratio of net investment income | ||||
to average net assets e | 1.20 | .58 | ||
Portfolio Turnover Rate d | 6.87 | 14.53 | ||
Net Assets, end of period ($ x 1,000) | 49,246 | 18,312 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Effective June 1, 2007, Class R shares were redesignated as Class I shares. | |
c | Based on average shares outstanding at each month end. | |
d | Not annualized. | |
e | Annualized. | |
See notes to financial statements. |
16
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
Class T Shares | (Unaudited) | November 30, 2007 a | ||
Per Share Data ($): | ||||
Net asset value, beginning of period | 13.70 | 12.50 | ||
Investment Operations: | ||||
Investment income (loss)—net b | (.01) | .01 | ||
Net realized and unrealized | ||||
gain (loss) on investments | .06 | 1.19 | ||
Total from Investment Operations | .05 | 1.20 | ||
Distributions: | ||||
Dividends from investment income—net | (1.09) | — | ||
Dividends from net realized gain on investments | (.09) | — | ||
Total Distributions | (1.18) | — | ||
Net asset value, end of period | 12.57 | 13.70 | ||
Total Return (%) c,d | .92 | 9.68 | ||
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets e | 2.19 | 2.76 | ||
Ratio of net expenses to average net assets e | 1.75 | 1.73 | ||
Ratio of net investment income (loss) | ||||
to average net assets e | (.24) | .09 | ||
Portfolio Turnover Rate d | 6.87 | 14.53 | ||
Net Assets, end of period ($ x 1,000) | 28 | 174 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Based on average shares outstanding at each month end. | |
c | Exclusive of sales charge. | |
d | Not annualized. | |
e | Annualized. | |
See notes to financial statements. |
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Global Stock Fund (the “fund”) is a separate diversified series of Strategic Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified open-end management investment company and operates as a series company currently offering six series, including the fund. The fund’s investment objective is to pursue long-term total return. 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. Walter Scott & Partners Limited (“WSPL”), a subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s sub-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 T. Class A and Class T shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. 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 May 31, 2008, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held 1,000 Class T shares of the fund.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are
18
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 U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. 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. Registered open-end investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Financial futures are valued at the last sales price. 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 Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements.The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.
Various inputs are used in determining the value of the fund’s investments relating to FAS 157.
These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3—significant unobservable inputs (including 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.
20
The following is a summary of the inputs used as of May 31, 2008 in valuing the fund’s investments carried at fair value:
Investments in | Other Financial | |||
Valuation Inputs | Securities ($) | Instruments ($)† | ||
Level 1—Quoted Prices | 53,633,670 | 0 | ||
Level 2—Other Significant | ||||
Observable Inputs | 0 | 0 | ||
Level 3—Significant | ||||
Unobservable Inputs | 0 | 0 | ||
Total | 53,633,670 | 0 |
† | Other financial instruments include derivative instruments, such as futures, forward currency | |
exchange contracts and swap contracts, which are valued at the unrealized appreciation | ||
(depreciation) on the instrument. |
(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 gains or losses on 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 gains or losses on investments.
(c) 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.
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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.
The fund has arrangements with the custodian and cash management banks whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
Investing in foreign markets may involve special risks and considerations not typically associated with investing in the U.S. These risks include revaluation of currencies, high rates of inflation, repatriation restrictions on income and capital,and adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls,delayed settlements,and their prices may be more volatile than those of comparable securities in the U.S.
(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” in the Act.
(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and 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, if any, it is the policy of the fund not to distribute such gains. Income and capital gains distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
(f) 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.
22
During the current year, the fund adopted FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more likely-than-not threshold would be recorded as a tax expense in the current year. The adoption of FIN 48 had no impact on the operations of the fund for the period ended May 31, 2008.
As of and during the period ended May 31, 2008, the fund did not have any liabilities for any unrecognized tax benefits.The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
The tax period ended November 30, 2007 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $350 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 based on prevailing market rates in effect at the time of borrowings. During the period ended May 31, 2008, the fund did not borrow under the Facility.
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 3—Management Fee, Sub-Investment Advisory Fees and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (“Agreement”) with Dreyfus, the management fee is computed at the annual rate of .85% of the value of the fund’s average daily net assets and is payable monthly. Dreyfus has contractually agreed to waive receipt of its fees and/or assume the expenses of the fund, until March 31, 2009, so that annual fund operating expenses (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed 1.25% of the value of the fund’s average daily net assets.The reduction in management fee, pursuant to the undertaking, amounted to $14,253 during the period ended May 31, 2008.
During the period ended May 31, 2008, the Distributor retained $54 from commissions earned on sales of the fund’s Class A shares.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and WSPL, Dreyfus pays WSPL a monthly fee at an annual percentage of the fund’s average daily net assets.
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C and Class T shares pay the Distributor for distributing their shares at an annual rate of .75% of the value of the average daily net assets of Class C shares and .25% of the value of the average daily net assets of Class T shares. During the period ended May 31, 2008, Class C and Class T shares were charged $3,302 and $65, respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A, Class C and Class T 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 Class A, Class C and Class T shares and providing reports and other information, and services related to the maintenance of shareholder accounts.
24
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 May 31, 2008, Class A, Class C and Class T shares were charged $4,958, $1,101 and $65, respectively, pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended May 31, 2008, the fund was charged $1,155 pursuant to the transfer agency agreement.
The fund compensates The Bank of New York, a subsidiary of BNY Mellon and a Dreyfus affiliate, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2008, the fund was charged $97 pursuant to the cash management agreement.
The fund compensates The Bank of New York under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2008, the fund was charged $19,446 pursuant to the custody agreement.
During the period ended May 31, 2008, the fund was charged $2,820 for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $39,751, Rule 12b-1 distribution plan fees $665, shareholder services plan fees $1,111, custodian fees $22,878, chief compliance officer fees $2,350 and transfer agency per account fees $1,155.
(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.
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward currency exchange contracts, during the period ended May 31, 2008, amounted to $28,581,585 and $2,223,266, respectively.
The fund enters into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings and to settle foreign currency transactions. When executing forward currency exchange contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future.With respect to sales of forward currency exchange contracts, the fund would incur a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates.With respect to purchases of forward currency exchange contracts, the fund would incur a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract increases between those dates.The fund is also exposed to credit risk associated with counterparty nonperformance on these forward currency exchange contracts which is typically limited to the unrealized gain on each open contract.At May 31, 2008, there were no forward currency exchange contracts outstanding.
At May 31, 2008, accumulated net unrealized appreciation on investments was $2,889,535, consisting of $4,160,948 gross unrealized appreciation and $1,271,413 gross unrealized depreciation.
At May 31,2008,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).
26
NOTE 5—Subsequent Event:
Effective July 1, 2008, BNY Mellon has reorganized and consolidated a number of its banking and trust company subsidiaries. As a result of the reorganization, any services previously provided to the fund by Mellon Bank, N.A. or Mellon Trust of New England, N.A. are now provided by The Bank of New York, which has changed its name to The Bank of New York Mellon.
The Fund 27
NOTES
For More Information
Telephone Call your financial representative or 1-800-554-4611
The Dreyfus Premier Family of Funds | ||
144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 |
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 http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-202-551-8090.
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 12-month period ended June 30, 2008, is available at http://www.dreyfus.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-645-6561.
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.
The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value
Contents | ||
THE FUND | ||
2 | A Letter from the CEO | |
3 | Discussion of Fund Performance | |
6 | Understanding Your Fund’s Expenses | |
6 | Comparing Your Fund’s Expenses | |
With Those of Other Funds | ||
7 | Statement of Investments | |
10 | Statement of Assets and Liabilities | |
11 | Statement of Operations | |
12 | Statement of Changes in Net Assets | |
14 | Financial Highlights | |
18 | Notes to Financial Statements | |
FOR MORE INFORMATION | ||
Back Cover |
International |
Stock Fund |
The | Fund |
A LETTER FROM THE CEO
Dear Shareholder:
We are pleased to present this semiannual report for International Stock Fund, covering the six-month period from December 1, 2007, through May 31, 2008.
Although the international equity markets generally have declined this year due to concerns that the downturn in the U.S. economy might dampen global economic growth, we recently have seen signs of potential improvement.The Federal Reserve Board and other central banks have reduced short-term interest rates and injected liquidity into their banking systems, helping to reassure investors.
At Dreyfus, we believe that the current period of economic uncertainty is likely to be relatively brief by historical standards, but the ensuing recovery may be gradual as financial deleveraging and housing price deflation continue to weigh on economic activity in the United States and other nations that depend on exports to U.S. businesses and con-sumers.The implications of our economic outlook for the international stock markets generally are positive, especially since some of the world’s largest multinational companies are now selling at attractive valuations compared to historical norms.Your financial advisor can help you assess current risks and take advantage of these longer-term opportunities within the context of your overall investment portfolio.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Manager.
Thank you for your continued confidence and support.
2
DISCUSSION OF FUND PERFORMANCE
For the period of December 1, 2007, through May 31, 2008, as provided by Walter Scott & Partners Limited (WSPL), Sub-adviser
Fund and Market Performance Overview
For the six-month period ended May 31, 2008, International Stock Fund’s Class A shares produced a return of –1.12%, Class C shares produced a return of –1.52%, Class I shares produced a return of –0.96% and Class T shares produced a return of –1.23% .1 In comparison, the fund’s benchmark index, the Morgan Stanley Capital International Europe, Australasia, Far East Index (the “MSCI EAFE Index”), produced a –5.21% return over the same period.2
International equity markets generally struggled during the reporting period, as investors reacted negatively to a persistent credit crisis in financial markets and slowing economic growth in many regions of the world.The fund produced higher returns than its benchmark, due mainly to the success of our stock selection strategy and, to a lesser extent, our country allocation strategy.
The Fund’s Investment Approach
The fund seeks long-term total return by normally investing at least 80% of its assets in stocks of companies with any market capitalization that are located in the world’s developed markets outside of the United States.When selecting stocks,WSPL seeks companies with fundamental strengths that indicate the potential for sustainable growth.The firm focuses on individual stock selection through extensive fundamental research.WSPL first selects candidates for investment that meet certain broad absolute and trend criteria. Financial statements are restated in an effort to identify the nature of their operating margins and to understand the variables that add value to their businesses. Companies meeting the financial criteria are subjected to a detailed investigation of their products, costs and pricing, competition, industry position and outlook. Stocks are then selected whose expected growth rate is available at a reasonable valuation.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
Credit and Economic Woes Undermined Global Equities
Stocks in many of the world’s developed markets declined over the first three months of the reporting period due to slowing economic growth in the United States and Europe. Investor sentiment also was damaged by a credit crisis that began in the U.S. sub-prime mortgage market and spread to global fixed-income markets. Later in the reporting period, inflationary pressures intensified as food and energy prices soared to record levels. These factors produced particularly severe declines in the financials sector, where a number of commercial and investment banks suffered massive sub-prime related losses. However, international stock markets staged a rally over the reporting period’s second half, after the U.S. Federal Reserve Board demonstrated its willingness to shore up a troubled financial system by providing liquidity and facilitating the rescue of a major investment bank.
Stock Selections Supported Relative Performance
In this volatile environment, we maintained our disciplined investment approach, which led us to invest in financially strong companies that proved relatively resistant to deteriorating investor sentiment. The fund particularly benefited from its investments in the better-performing energy sector, where a number of holdings prospered amid surging oil and gas prices. In fact, four of the five top contributors to the fund’s relative performance were energy companies: Woodside Petroleum, Australia’s largest publicly traded oil and gas exploration and production company;SunCor Energy,a major North American energy producer and marketer;CLP Holdings,a leading power producer based in Hong Kong; and BG Group, a U.K.-based natural gas producer and distributor.
Rounding out the top five performers over the reporting period was Japan’s AEON Mall, a retailing and insurance conglomerate. Finally, the fund benefited from a substantially underweighted position in the troubled financials sector, enabling it to avoid the brunt of weakness affecting the MSCI EAFE Index’s financials component.
As is to be expected in a challenging market environment, the fund also encountered some disappointments during the reporting period. Our currency allocation strategy detracted mildly from relative perfor-
4
mance, primarily due to underweighted exposure to the euro and the Australian dollar, which gained value relative to the U.S. dollar. In addition, the fund’s overweighted exposure to the information technology, health care and consumer discretionary sectors undermined returns in the sluggish global economy. Among individual holdings, U.K. power utility Centrica and semiconductor manufacturer Rohm ranked among the fund’s greater laggards.
Maintaining a Disciplined Approach
We believe that our disciplined, research-intensive investment approach is particularly suited to uncertain times such as these. In our view, an unwavering focus on financially healthy companies with competitive products, strong market positions and growing profits may be the key to investment success in challenging economic and market environments. While international equity markets have stabilized over the past few months, the outlook for the global economy is uncertain as deleveraging among financial institutions continues and consumers remain under pressure.
Compared to the benchmark, we have found a greater number of opportunities meeting our criteria in Japan and Hong Kong and fewer in Europe and Australia. From a sector allocation perspective, the fund ended the reporting period with relatively heavy positions in the health care and information technology areas, and we have continued to maintain significantly underweighted exposure to the financials sector.
June 16, 2008
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 case of Class A and Class T 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. 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 certain fund expenses by The Dreyfus Corporation in effect through March 31, | ||
2009, 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 INC. – Reflects reinvestment of net dividends and, where applicable, capital | |
gain distributions.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. Returns are calculated on a | ||
month-end basis. |
The Fund 5
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 International Stock Fund from December 1, 2007 to May 31, 2008. 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 May 31, 2008 | ||||||||
Class A | Class C | Class I | Class T | |||||
Expenses paid per $1,000 † | $ 7.01 | $ 10.97 | $ 5.08 | $ 8.70 | ||||
Ending value (after expenses) | $988.80 | $984.80 | $990.40 | $987.70 |
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 May 31, 2008 | ||||||||
Class A | Class C | Class I | Class T | |||||
Expenses paid per $1,000 † | $ 7.11 | $ 11.13 | $ 5.15 | $ 8.82 | ||||
Ending value (after expenses) | $1,017.95 | $1,013.95 | $1,019.90 | $1,016.25 |
† Expenses are equal to the fund’s annualized expense ratio of 1.41% for Class A, 2.21% for Class C, 1.02% for Class I and 1.75% for Class T, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS |
May 31, 2008 (Unaudited) |
Common Stocks—95.5% | Shares | Value ($) | ||
Australia—2.6% | ||||
Woodside Petroleum | 53,957 | 3,352,199 | ||
Belgium—1.0% | ||||
Colruyt | 4,900 | 1,241,275 | ||
Canada—2.2% | ||||
Suncor Energy | 42,000 | 2,866,365 | ||
France—5.1% | ||||
Cie Generale d’Optique Essilor International | 41,000 | 2,578,845 | ||
L’Oreal | 12,000 | 1,460,282 | ||
LVMH Moet Hennessy Louis Vuitton | 22,500 | 2,632,666 | ||
6,671,793 | ||||
Germany—3.9% | ||||
Adidas | 35,500 | 2,502,972 | ||
SAP | 46,700 | 2,580,640 | ||
5,083,612 | ||||
Hong Kong—10.3% | ||||
China Mobile | 179,000 | 2,630,903 | ||
CLP Holdings | 335,000 | 3,026,371 | ||
CNOOC | 1,400,000 | 2,439,806 | ||
Hong Kong & China Gas | 1,050,550 | 2,587,369 | ||
Hutchison Whampoa | 250,000 | 2,702,175 | ||
13,386,624 | ||||
Japan—38.6% | ||||
Advantest | 26,000 | 680,706 | ||
AEON Mall | 85,000 | 2,749,478 | ||
Astellas Pharma | 61,000 | 2,580,725 | ||
Canon | 50,000 | 2,698,729 | ||
Chugai Pharmaceutical | 78,000 | 1,220,091 | ||
Daikin Industries | 52,000 | 2,683,362 | ||
Daito Trust Construction | 26,400 | 1,359,818 | ||
Denso | 75,000 | 2,739,044 | ||
Eisai | 34,000 | 1,232,024 | ||
Fanuc | 25,500 | 2,769,636 | ||
Hirose Electric | 20,500 | 2,387,972 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) | ||
Japan (continued) | ||||
Honda Motor | 81,000 | 2,712,294 | ||
HOYA | 97,000 | 2,695,978 | ||
Keyence | 11,000 | 2,627,395 | ||
Millea Holdings | 51,000 | 2,104,439 | ||
Mitsubishi Estate | 96,000 | 2,586,227 | ||
Mitsubishi UFJ Financial Group | 155,000 | 1,584,993 | ||
Murata Manufacturing | 39,000 | 2,049,516 | ||
Nitto Denko | 39,000 | 1,853,443 | ||
Rohm | 11,800 | 773,459 | ||
Secom | 40,000 | 1,942,705 | ||
Shimamura | 11,600 | 925,403 | ||
Shin-Etsu Chemical | 43,000 | 2,708,404 | ||
Takeda Pharmaceutical | 46,000 | 2,666,098 | ||
50,331,939 | ||||
Singapore—1.6% | ||||
DBS Group Holdings | 145,000 | 2,076,677 | ||
Spain—1.9% | ||||
Inditex | 51,000 | 2,508,821 | ||
Sweden—3.5% | ||||
Hennes & Mauritz, Cl. B | 36,000 | 1,988,834 | ||
Telefonaktiebolaget LM Ericsson, Cl. B | 950,000 | 2,583,785 | ||
4,572,619 | ||||
Switzerland—8.9% | ||||
Nestle | 5,300 | 2,606,141 | ||
Nobel Biocare Holding | 65,000 | 2,563,205 | ||
Novartis | 48,000 | 2,521,468 | ||
Roche Holding | 12,900 | 2,549,676 | ||
SGS | 848 | 1,274,136 | ||
11,514,626 | ||||
United Kingdom—15.9% | ||||
BG Group | 99,000 | 2,482,746 | ||
BP | 210,000 | 2,529,218 | ||
Burberry Group | 258,000 | 2,555,366 | ||
Centrica | 450,000 | 2,618,508 | ||
GlaxoSmithKline | 95,000 | 2,095,450 |
8
Common Stocks (continued) | Shares | Value ($) | ||
United Kingdom (continued) | ||||
Kingfisher | 202,000 | 548,996 | ||
Reckitt Benckiser Group | 43,000 | 2,555,366 | ||
Tesco | 310,000 | 2,542,906 | ||
William Morrison Supermarkets | 465,000 | 2,694,277 | ||
20,622,833 | ||||
Total Common Stocks | ||||
(cost $118,191,417) | 124,229,383 | |||
Other Investment—5.3% | ||||
Registered Investment Company; | ||||
Dreyfus Institutional Preferred | ||||
Plus Money Market Fund | ||||
(cost $6,900,000) | 6,900,000 a | 6,900,000 | ||
Total Investments (cost $125,091,417) | 100.8% | 131,129,383 | ||
Liabilities, Less Cash and Receivables | (.8%) | (1,094,185) | ||
Net Assets | 100.0% | 130,035,198 |
a Investment in affiliated money market mutual fund.
Portfolio Summary (Unaudited) † | ||||||
Value (%) | Value (%) | |||||
Consumer Goods | 19.3 | Energy | 10.5 | |||
Health Care | 15.4 | Financial Services | 6.4 | |||
Industrials | 12.8 | Energy Services | 6.3 | |||
Technology | 12.6 | Money Market Investment | 5.3 | |||
Consumer Services | 12.2 | 100.8 |
† Based on net assets. |
See notes to financial statements. |
The Fund 9
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2008 (Unaudited)
Cost | Value | |||||||
Assets ($): | ||||||||
Investments in securities—See Statement of Investments: | ||||||||
Unaffiliated issuers | 118,191,417 | 124,229,383 | ||||||
Affiliated issuers | 6,900,000 | 6,900,000 | ||||||
Cash | 1,334,779 | |||||||
Cash denominated in foreign currencies | 152,250 | 151,641 | ||||||
Receivable for shares of Common Stock subscribed | 1,003,600 | |||||||
Dividends and interest receivable | 584,855 | |||||||
Unrealized appreciation on forward | ||||||||
currency exchange contracts—Note 4 | 1,178 | |||||||
Prepaid expenses | 20,958 | |||||||
134,226,394 | ||||||||
Liabilities ($): | ||||||||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 113,185 | |||||||
Payable for investment securities purchased | 4,046,909 | |||||||
Unrealized depreciation on forward | ||||||||
currency exchange contracts—Note 4 | 5,163 | |||||||
Payable for shares of Common Stock redeemed | 1,882 | |||||||
Accrued expenses | 24,057 | |||||||
4,191,196 | ||||||||
Net Assets ($) | 130,035,198 | |||||||
Composition of Net Assets ($): | ||||||||
Paid-in capital | 122,615,726 | |||||||
Accumulated undistributed investment income—net | 805,425 | |||||||
Accumulated net realized gain (loss) on investments | 567,174 | |||||||
Accumulated net unrealized appreciation (depreciation) | ||||||||
on investments and foreign currency transactions | 6,046,873 | |||||||
Net Assets ($) | 130,035,198 | |||||||
Net Asset Value Per Share | ||||||||
Class A | Class C | Class I | Class T | |||||
Net Assets ($) | 1,493,312 | 443,764 | 128,084,707 | 13,415 | ||||
Shares Outstanding | 110,976 | 33,261 | 9,493,305 | 1,000 | ||||
Net Asset Value Per Share ($) | 13.46 | 13.34 | 13.49 | 13.42 |
See notes to financial statements.
10
STATEMENT OF OPERATIONS |
Six Months Ended May 31, 2008 (Unaudited) |
Investment Income ($): | ||
Income: | ||
Cash dividends (net of $96,021 foreign taxes withheld at source): | ||
Unaffiliated issuers | 1,208,334 | |
Affiliated issuers | 65,513 | |
Total Income | 1,273,847 | |
Expenses: | ||
Management fee—Note 3(a) | 379,197 | |
Custodian fees—Note 3(c) | 27,896 | |
Professional fees | 19,805 | |
Registration fees | 19,087 | |
Directors’ fees and expenses—Note 3(d) | 3,711 | |
Shareholder servicing costs—Note 3(c) | 3,647 | |
Prospectus and shareholders’ reports | 2,602 | |
Distribution fees—Note 3(b) | 1,591 | |
Loan commitment fees—Note 2 | 16 | |
Miscellaneous | 7,499 | |
Total Expenses | 465,051 | |
Less—reduction in management fee due to undertaking—Note 3(a) | (281) | |
Less—reduction in fees due to earnings credits—Note 1(c) | (3,924) | |
Net Expenses | 460,846 | |
Investment Income—Net | 813,001 | |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | ||
Net realized gain (loss) on investments and foreign currency transactions | 511,575 | |
Net realized gain (loss) on forward currency exchange contracts | 66,410 | |
Net Realized Gain (Loss) | 577,985 | |
Net unrealized appreciation (depreciation) on | ||
investments and foreign currency transactions | 797,065 | |
Net Realized and Unrealized Gain (Loss) on Investments | 1,375,050 | |
Net Increase in Net Assets Resulting from Operations | 2,188,051 |
See notes to financial statements.
The Fund 11
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
(Unaudited) | November 30, 2007 a,b | |||
Operations ($): | ||||
Investment income—net | 813,001 | 329,925 | ||
Net realized gain (loss) on investments | 577,985 | 385,844 | ||
Net unrealized appreciation | ||||
(depreciation) on investments | 797,065 | 5,249,808 | ||
Net Increase (Decrease) in Net Assets | ||||
Resulting from Operations | 2,188,051 | 5,965,577 | ||
Dividends to Shareholders from ($): | ||||
Investment income—net: | ||||
Class A Shares | (2,703) | — | ||
Class I Shares | (297,622) | — | ||
Net realized gain on investments: | ||||
Class A Shares | (9,236) | — | ||
Class C Shares | (2,680) | — | ||
Class I Shares | (421,833) | — | ||
Class T Shares | (82) | — | ||
Total Dividends | (734,156) | — | ||
Capital Stock Transactions ($): | ||||
Net proceeds from shares sold: | ||||
Class A Shares | 397,891 | 4,979,283 | ||
Class C Shares | 48,484 | 939,715 | ||
Class I Shares | 60,337,728 | 66,029,114 | ||
Class T Shares | 53,644 | 500,000 | ||
Dividends reinvested: | ||||
Class A Shares | 11,178 | — | ||
Class C Shares | 993 | — | ||
Class I Shares | 383,949 | — | ||
Cost of shares redeemed: | ||||
Class A Shares | (279,135) | (3,800,027) | ||
Class C Shares | (43,202) | (538,351) | ||
Class I Shares | (3,330,980) | (2,514,003) | ||
Class T Shares | (55,160) | (505,395) | ||
Increase (Decrease) in Net Assets | ||||
from Capital Stock Transactions | 57,525,390 | 65,090,336 | ||
Total Increase (Decrease) in Net Assets | 58,979,285 | 71,055,913 | ||
Net Assets ($): | ||||
Beginning of Period | 71,055,913 | — | ||
End of Period | 130,035,198 | 71,055,913 | ||
Undistributed investment income—net | 805,425 | 292,749 |
12
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
(Unaudited) | November 30, 2007 a,b | |||
Capital Share Transactions: | ||||
Class A | ||||
Shares sold | 30,774 | 394,733 | ||
Shares issued for dividends reinvested | 837 | — | ||
Shares redeemed | (22,339) | (293,029) | ||
Net Increase (Decrease) in Shares Outstanding | 9,272 | 101,704 | ||
Class C | ||||
Shares sold | 3,986 | 74,250 | ||
Shares issued for dividends reinvested | 75 | — | ||
Shares redeemed | (3,466) | (41,584) | ||
Net Increase (Decrease) in Shares Outstanding | 595 | 32,666 | ||
Class I | ||||
Shares sold | 4,701,736 | 5,222,437 | ||
Shares issued for dividends reinvested | 28,804 | — | ||
Shares redeemed | (265,309) | (194,363) | ||
Net Increase (Decrease) in Shares Outstanding | 4,465,231 | 5,028,074 | ||
Class T | ||||
Shares sold | 4,525 | 40,000 | ||
Shares redeemed | (4,525) | (39,000) | ||
Net Increase (Decrease) in Shares Outstanding | — | 1,000 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Effective June 1, 2007, Class R shares were redesignated as Class I 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.
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
Class A Shares | (Unaudited) | November 30, 2007 a | ||
Per Share Data ($): | ||||
Net asset value, beginning of period | 13.72 | 12.50 | ||
Investment Operations: | ||||
Investment income—net b | .07 | .07 | ||
Net realized and unrealized gain (loss) on investments | (.23) | 1.15 | ||
Total from Investment Operations | (.16) | 1.22 | ||
Distributions: | ||||
Dividends from investment income—net | (.02) | — | ||
Dividends from net realized gain on investments | (.08) | — | ||
Total Distributions | (.10) | — | ||
Net asset value, end of period | 13.46 | 13.72 | ||
Total Return (%) c,d | (1.12) | 9.76 | ||
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets e | 1.44 | 1.75 | ||
Ratio of net expenses to average net assets e | 1.41 | 1.47 | ||
Ratio of net investment income to average net assets e | 1.17 | .50 | ||
Portfolio Turnover Rate c | 2.63 | 13.34 | ||
Net Assets, end of period ($ x 1,000) | 1,493 | 1,396 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Based on average shares outstanding at each month end. | |
c | Not annualized. | |
d | Exclusive of sales charge. | |
e | Annualized. | |
See notes to financial statements. |
14
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
Class C Shares | (Unaudited) | November 30, 2007 a | ||
Per Share Data ($): | ||||
Net asset value, beginning of period | 13.64 | 12.50 | ||
Investment Operations: | ||||
Investment income (loss)—net b | .03 | (.04) | ||
Net realized and unrealized gain (loss) on investments | (.25) | 1.18 | ||
Total from Investment Operations | (.22) | 1.14 | ||
Distributions: | ||||
Dividends from net realized gain on investments | (.08) | — | ||
Net asset value, end of period | 13.34 | 13.64 | ||
Total Return (%) c,d | (1.52) | 9.04 | ||
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets e | 2.26 | 2.50 | ||
Ratio of net expenses to average net assets e | 2.21 | 2.21 | ||
Ratio of net investment income (loss) to average net assets e | .39 | (.31) | ||
Portfolio Turnover Rate c | 2.63 | 13.34 | ||
Net Assets, end of period ($ x 1,000) | 444 | 445 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Based on average shares outstanding at each month end. | |
c | Not annualized. | |
d | Exclusive of sales charge. | |
e | Annualized. | |
See notes to financial statements. |
The Fund 15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
Class I Shares | (Unaudited) | November 30, 2007 a,b | ||
Per Share Data ($): | ||||
Net asset value, beginning of period | 13.76 | 12.50 | ||
Investment Operations: | ||||
Investment income—net c | .12 | .11 | ||
Net realized and unrealized gain (loss) on investments | (.26) | 1.15 | ||
Total from Investment Operations | (.14) | 1.26 | ||
Distributions: | ||||
Dividends from investment income—net | (.05) | — | ||
Dividends from net realized gain on investments | (.08) | — | ||
Total Distributions | (.13) | — | ||
Net asset value, end of period | 13.49 | 13.76 | ||
Total Return (%) d | (.96) | 10.08 | ||
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets e | 1.03 | 1.38 | ||
Ratio of net expenses to average net assets e | 1.02 | 1.16 | ||
Ratio of net investment income to average net assets e | 1.84 | .81 | ||
Portfolio Turnover Rate d | 2.63 | 13.34 | ||
Net Assets, end of period ($ x 1,000) | 128,085 | 69,201 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. | |
b | Effective June 1, 2007, Class R shares were redesignated as Class I shares. | |
c | Based on average shares outstanding at each month end. | |
d | Not annualized. | |
e | Annualized. | |
See notes to financial statements. |
16
Six Months Ended | ||||
May 31, 2008 | Year Ended | |||
Class T Shares | (Unaudited) | November 30, 2007 a | ||
Per Share Data ($): | ||||
Net asset value, beginning of period | 13.71 | 12.50 | ||
Investment Operations: | ||||
Investment income—net b | .07 | .04 | ||
Net realized and unrealized gain (loss) on investments | (.28) | 1.17 | ||
Total from Investment Operations | (.21) | 1.21 | ||
Distributions: | ||||
Dividends from net realized gain on investments | (.08) | — | ||
Net asset value, end of period | 13.42 | 13.71 | ||
Total Return (%) c,d | (1.23) | 9.36 | ||
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets e | 2.45 | 2.03 | ||
Ratio of net expenses to average net assets e | 1.75 | 1.74 | ||
Ratio of net investment income to average net assets e | .85 | .32 | ||
Portfolio Turnover Rate c | 2.63 | 13.34 | ||
Net Assets, end of period ($ x 1,000) | 13 | 14 |
a From December 29, 2006 (commencement of operations) to November 30, 2007. b Based on average shares outstanding at each month end. c Not annualized. d Exclusive of sales charge. e Annualized.
See notes to financial statements.
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
International Stock Fund (the “fund”) is a separate diversified series of Strategic Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified open-end management investment company and operates as a series company currently offering six series, including the fund. The fund’s investment objective is to pursue long-term total return. 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. Walter Scott & Partners Limited (“WSPL”), a subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s sub-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 T. Class A and Class T shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. 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 May 31, 2008, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held all of the fund’s Class T shares.
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 U.S. generally accepted accounting principles, which may require the use
18
of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. 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. Registered open-end investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Financial futures are valued at
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
the last sales price. 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 Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.
Various inputs are used in determining the value of the fund’s investments relating to FAS 157.
These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3—significant unobservable inputs (including 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.
The following is a summary of the inputs used as of May 31, 2008 in valuing the fund’s investments carried at fair value:
Investments in | Other Financial | |||
Valuation Inputs | Securities ($) | Instruments ($)† | ||
Level 1—Quoted Prices | 131,129,383 | 0 | ||
Level 2—Other Significant | ||||
Observable Inputs | 0 | (3,985) | ||
Level 3—Significant | ||||
Unobservable Inputs | 0 | 0 | ||
Total | 131,129,383 | (3,985) |
† | Other financial instruments include derivative instruments such as futures, forward currency | |
exchange contracts and swap contracts, which are valued at the unrealized appreciation | ||
(depreciation) on the instrument. |
20
(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 gains or losses on 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 gains or losses on investments.
(c) 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.
The fund has arrangements with the custodian and cash management banks whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
Investing in foreign markets may involve special risks and considerations not typically associated with investing in the U.S. These risks include revaluation of currencies, high rates of inflation, repatriation restrictions on income and capital,and adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls,delayed settlements,and their prices may be more volatile than those of comparable securities in the U.S.
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” in the Act.
(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and 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, if any, it is the policy of the fund not to distribute such gains. Income and capital gains distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
(f) 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.
During the current year, the fund adopted FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. The adoption of FIN 48 had no impact on the operations of the fund for the period ended May 31, 2008.
As of and during the period ended May 31, 2008, the fund did not have any liabilities for any unrecognized tax benefits.The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
22
The tax period ended November 30, 2007 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $350 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 based on prevailing market rates in effect at the time of borrowings. During the period ended May 31, 2008, the fund did not borrow under the Facility.
NOTE 3—Management Fee, Sub-Investment Advisory Fee, and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (“Agreement”) with Dreyfus, the management fee is computed at the annual rate of .85% of the value of the fund’s average daily net assets and is payable monthly. Dreyfus has contractually agreed to waive receipt of its fees and/or assume the expenses of the fund, until March 31, 2009, so that annual fund operating expenses (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed 1.25% of the value of the fund’s average daily net assets.The reduction in management fee,pursuant to the undertaking, amounted to $281 during the period ended May 31, 2008.
During the period ended May 31, 2008, the Distributor retained $43 and $279 from commissions earned on sales of the fund’s Class A and Class T shares, respectively, and $104 from CDSCs on redemptions of the fund’s Class C shares.
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and WSPL, Dreyfus pays WSPL a monthly fee at an annual percentage of the fund’s average daily net assets.
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C and Class T shares pay the Distributor for distributing their shares at an annual rate of .75% of the value of the average daily net assets of Class C shares and .25% of the value of the average daily net assets of Class T shares. During the period ended May 31, 2008, Class C and Class T shares were charged $1,572 and $19, respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A, Class C and Class T 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 Class A, Class C and Class T shares 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 May 31, 2008, Class A, Class C and Class T shares were charged $1,764, $524 and $19, respectively, pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended May 31, 2008, the fund was charged $1,010 pursuant to the transfer agency agreement.
The fund compensates The Bank of New York, a subsidiary of BNY Mellon and a Dreyfus affiliate, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2008, the fund was charged $77 pursuant to the cash management agreement.
24
The fund compensates The Bank of New York under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2008, the fund was charged $27,896 pursuant to the custody agreement.
During the period ended May 31, 2008, the fund was charged $2,820 for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $85,793, Rule 12b-1 distribution plan fees $285, shareholder services plan fees $409, custodian fees $24,975, chief compliance officer fees $2,350 and transfer agency per account fees $266,which are offset against an expense reimbursement currently in effect in the amount of $893.
(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.
(e) A redemption fee of 2% will be assessed on redemptions (including exchanges) of fund shares purchased and held for less than sixty days.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward currency exchange contracts, during the period ended May 31, 2008, amounted to $55,769,279 and $2,292,949, respectively.
The fund enters into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings and to settle foreign currency transactions. When executing forward currency exchange contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future.With respect to sales of forward currency exchange contracts, the fund would incur a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
a gain if the value of the contract decreases between those dates.With respect to purchases of forward currency exchange contracts, the fund would incur a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract increases between those dates.The fund is also exposed to credit risk associated with counterparty nonperformance on these forward currency exchange contracts which is typically limited to the unrealized gain on each open contract.The following summarizes open forward currency exchange contracts at May 31, 2008:
Foreign | Unrealized | |||||||
Forward Currency | Currency | Appreciation | ||||||
Exchange Contracts | Amounts | Cost ($) | Value ($) | (Depreciation) ($) | ||||
Purchases; | ||||||||
British Pound, | ||||||||
expiring 6/2/2008 | 183,952 | 363,231 | 364,391 | 1,160 | ||||
Euro, | ||||||||
expiring 6/2/2008 | 1,070,735 | 1,666,170 | 1,665,787 | (383) | ||||
Hong Kong Dollar, | ||||||||
expiring 6/2/2008 | 2,757,178 | 353,290 | 353,308 | 18 | ||||
Japanese Yen, | ||||||||
expiring 6/3/2008 | 152,070,919 | 1,446,916 | 1,442,524 | (4,392) | ||||
Swedish Krona, | ||||||||
expiring 6/2/2008 | 1,325,499 | 221,285 | 220,897 | (388) | ||||
Total | (3,985) |
At May 31, 2008, accumulated net unrealized appreciation on investments was $6,037,966, consisting of $10,416,493 gross unrealized appreciation and $4,378,527 gross unrealized depreciation.
At May 31, 2008, 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).
26
NOTE 5—Subsequent Event:
Effective July 1, 2008, BNY Mellon has reorganized and consolidated a number of its banking and trust company subsidiaries. As a result of the reorganization, any services previously provided to the fund by Mellon Bank, N.A. or Mellon Trust of New England, N.A. are now provided by The Bank of New York, which has changed its name to The Bank of New York Mellon.
The Fund 27
NOTES
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.
The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value
Contents | ||
THE FUND | ||
2 | Understanding Your Fund’s Expenses | |
2 | Comparing Your Fund’s Expenses | |
With Those of Other Funds | ||
3 | Statement of Investments | |
6 | Statement of Assets and Liabilities | |
7 | Statement of Operations | |
8 | Statement of Changes in Net Assets | |
9 | Financial Highlights | |
10 | Notes to Financial Statements | |
18 | Information About the Review and Approval | |
of the Fund’s Management Agreement | ||
FOR MORE INFORMATION | ||
Back Cover |
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 Premier U.S. Equity Fund from May 30, 2008 to May 31, 2008. 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 May 31, 2008 † | ||||||||||||
Class A | Class C | Class I | Class T | |||||||||
Expenses paid per $1,000 †† | $ .08 | $ .12 | $ | .06 | $ | .09 | ||||||
Ending value (after expenses) | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
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 May 31, 2008 ††† | ||||||||
Class A | Class C | Class I | Class T | |||||
Expenses paid per $1,000 †††† | $ 7.06 | $ 10.83 | $ 5.81 | $ 8.32 | ||||
Ending value (after expenses) | $1,018.00 | $1,014.25 | $1,019.25 | $1,016.75 |
† | From May 30, 2008 (commencement of operations) to May 31, 2008. | |
†† | Expenses are equal to the fund’s annualized expense ratio of 1.40% for Class A, 2.15% for Class C, 1.15% for | |
Class I and 1.65% for Class T, multiplied by the average account value over the period, multiplied by 2/366 (to | ||
reflect the one-half year period). | ||
††† | Please note that while the fund commenced operations on May 30, 2008, the Hypothetical expenses paid during the | |
period reflect projected activity for the full six month period for purposes of comparability.This projection assumes that | ||
annualized expense ratios were in effect during the period December 1, 2007 to May 31, 2008. | ||
†††† | Expenses are equal to the fund’s annualized expense ratio of 1.40% for Class A, 2.15% for Class C, 1.15% for | |
Class I and 1.65% for Class T, multiplied by the average account value over the period, multiplied by 183/366 (to | ||
reflect the one-half year period). |
2
STATEMENT OF INVESTMENTS |
May 31, 2008 (Unaudited) |
Common Stocks—93.2% | Shares | Value ($) | ||
Consumer Discretionary—20.0% | ||||
Home Depot | 3,600 | 98,496 | ||
Kohl’s | 2,220 a | 99,456 | ||
PepsiCo | 1,460 | 99,718 | ||
Philip Morris International | 1,930 a | 101,634 | ||
Procter & Gamble | 1,530 | 101,057 | ||
Starbucks | 5,450 a | 99,136 | ||
SYSCO | 3,250 | 100,295 | ||
TJX Cos. | 3,100 | 99,386 | ||
Wal-Mart Stores | 1,730 | 99,890 | ||
Walgreen | 2,780 | 100,136 | ||
999,204 | ||||
Energy—15.6% | ||||
Anadarko Petroleum | 1,680 | 125,950 | ||
CARBO Ceramics | 2,100 | 100,149 | ||
Cimarex Energy | 1,480 | 100,847 | ||
EOG Resources | 780 | 100,331 | ||
Exxon Mobil | 1,400 | 124,264 | ||
Helmerich & Payne | 1,640 | 102,746 | ||
Schlumberger | 1,240 | 125,401 | ||
779,688 | ||||
Health Care—21.9% | ||||
Abbott Laboratories | 1,800 | 101,430 | ||
C.R. Bard | 1,080 | 98,496 | ||
Eli Lilly & Co. | 2,060 | 99,168 | ||
Genentech | 1,410 a | 99,927 | ||
Johnson & Johnson | 1,510 | 100,777 | ||
Medtronic | 1,970 | 99,820 | ||
Merck & Co. | 2,570 | 100,127 | ||
Pharmaceutical Product Development | 2,270 | 100,357 |
The Fund 3
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) | ||
Health Care (continued) | ||||
Resmed | 2,540 | 100,051 | ||
Varian Medical Systems | 2,110 a | 100,309 | ||
Wyeth | 2,250 | 100,058 | ||
1,100,520 | ||||
Industrial—12.1% | ||||
Boeing | 1,220 | 100,979 | ||
C.H. Robinson Worldwide | 1,540 | 99,330 | ||
Donaldson | 1,980 | 101,930 | ||
Dover | 1,860 | 100,588 | ||
Emerson Electric | 1,730 | 100,651 | ||
Fastenal | 2,070 | 102,341 | ||
605,819 | ||||
Information Technology—21.6% | ||||
Automatic Data Processing | 2,330 | 100,307 | ||
Cisco Systems | 4,760 a | 127,187 | ||
FLIR Systems | 2,560 a | 100,915 | ||
Intel | 5,400 | 125,172 | ||
Linear Technology | 2,750 | 101,118 | ||
Microsoft | 4,420 | 125,174 | ||
Oracle | 4,400 a | 100,496 | ||
Patterson Cos. | 2,950 a | 100,330 | ||
QUALCOMM | 2,030 | 98,536 | ||
United Technologies | 1,420 | 100,877 | ||
1,080,112 | ||||
Materials—2.0% | ||||
Ecolab | 2,230 | 99,971 | ||
Total Common Stocks | ||||
(cost $4,659,317) | 4,665,314 |
4
Other Investment—97.9% | Shares | Value ($) | ||
Registered Investment Company; | ||||
Dreyfus Institutional Preferred | ||||
Plus Money Market Fund | ||||
(cost $4,900,000) | 4,900,000 b | 4,900,000 | ||
Total Investments (cost $9,559,317) | 191.1% | 9,565,314 | ||
Liabilities, Less Cash and Receivables | (91.1%) | (4,559,004) | ||
Net Assets | 100.0% | 5,006,310 |
a | Non-income producing security. | |
b | Investment in affiliated money market mutual fund. |
Portfolio Summary (Unaudited) † | ||||||
Value (%) | Value (%) | |||||
Money Market Investment | 97.9 | Energy | 15.6 | |||
Health Care | 21.9 | Industrial | 12.1 | |||
Information Technology | 21.6 | Materials | 2.0 | |||
Consumer Discretionary | 20.0 | 191.1 |
† Based on net assets. |
See notes to financial statements. |
The Fund 5
STATEMENT OF ASSETS AND LIABILITIES |
May 31, 2008 (Unaudited) |
Cost | Value | |||||||
Assets ($): | ||||||||
Investments in securities—See Statement of Investments: | ||||||||
Unaffiliated issuers | 4,659,317 | 4,665,314 | ||||||
Affiliated issuers | 4,900,000 | 4,900,000 | ||||||
Cash | 100,000 | |||||||
Dividends and interest receivable | 716 | |||||||
9,666,030 | ||||||||
Liabilities ($): | ||||||||
Due to The Dreyfus Corporation and affiliates—Note 2(c) | 294 | |||||||
Payable for investment securities purchased | 4,659,316 | |||||||
Accrued expenses | 110 | |||||||
4,659,720 | ||||||||
Net Assets ($) | 5,006,310 | |||||||
Composition of Net Assets ($): | ||||||||
Paid-in capital | 5,000,000 | |||||||
Accumulated undistributed investment income—net | 313 | |||||||
Accumulated net unrealized appreciation | ||||||||
(depreciation) on investments | 5,997 | |||||||
Net Assets ($) | 5,006,310 | |||||||
Net Asset Value Per Share | ||||||||
Class A | Class C | Class I | Class T | |||||
Net Assets ($) | 3,504,431 | 500,613 | 500,640 | 500,626 | ||||
Shares Outstanding | 280,000 | 40,000 | 40,000 | 40,000 | ||||
Net Asset Value Per Share ($) | 12.52 | 12.52 | 12.52 | 12.52 |
See notes to financial statements.
6
STATEMENT OF OPERATIONS |
From May 30, 2008 (commencement |
of operations) to May 31, 2008 (Unaudited) |
Investment Income ($): | ||
Income: | ||
Cash dividends from affiliated issuers | 716 | |
Total Income | 716 | |
Expenses: | ||
Management fee—Note 2(a) | 205 | |
Shareholder servicing costs—Note 2(c) | 62 | |
Distribution fees—Note 2(b) | 27 | |
Miscellaneous | 110 | |
Total Expenses | 404 | |
Less—reduction in fees due to earnings credits—Note 1(b) | (1) | |
Net Expenses | 403 | |
Investment Income—Net | 313 | |
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($): | ||
Net unrealized appreciation (depreciation) on investment from affiliated issuers | 5,997 | |
Net Increase in Net Assets Resulting from Operations | 6,310 |
See notes to financial statements.
The Fund 7
STATEMENT OF CHANGES IN NET ASSETS |
From May 30, 2008 (commencement |
of operations) to May 31, 2008 (Unaudited) |
Operations ($): | ||
Investment income—net | 313 | |
Net unrealized appreciation (depreciation) on investments | 5,997 | |
Net Increase (Decrease) in Net Assets Resulting from Operations | 6,310 | |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 3,500,000 | |
Class C Shares | 500,000 | |
Class I Shares | 500,000 | |
Class T Shares | 500,000 | |
Increase (Decrease) in Net Assets from Capital Stock Transactions | 5,000,000 | |
Total Increase (Decrease) in Net Assets | 5,006,310 | |
Net Assets ($): | ||
End of Period | 5,006,310 | |
Undistributed investment income—net | 313 | |
Capital Share Transactions (Shares): | ||
Class A | ||
Shares sold | 280,000 | |
Class C | ||
Shares sold | 40,000 | |
Class I | ||
Shares sold | 40,000 | |
Class T | ||
Shares sold | 40,000 |
See notes to financial statements.
8
FINANCIAL HIGHLIGHTS ( U n a u d i t e d )
The following table describes the performance for each share class for the period from May 30, 2008 (commencement of operations) to May 31, 2008. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.
Class A | Class C | Class I | Class T | |||||
Shares | Shares | Shares | Shares | |||||
Per Share Data ($): | ||||||||
Net asset value, beginning of period | 12.50 | 12.50 | 12.50 | 12.50 | ||||
Investment Operations: | ||||||||
Investment income—net a,b | .00 | .00 | .00 | .00 | ||||
Net realized and unrealized | ||||||||
gain (loss) on investments | .02 | .02 | .02 | .02 | ||||
Net asset value, end of period | 12.52 | 12.52 | 12.52 | 12.52 | ||||
Total Return (%) c | .16d | .16d | .16 | .16d | ||||
Ratios/Supplemental Data (%): | ||||||||
Ratio of total expenses | ||||||||
to average net assets e | 1.40 | 2.15 | 1.15 | 1.65 | ||||
Ratio of net expenses | ||||||||
to average net assets e,f | 1.40 | 2.15 | 1.15 | 1.65 | ||||
Ratio of net investment income | ||||||||
to average net assets e | 1.22 | .47 | 1.47 | .97 | ||||
Portfolio Turnover Rate c | — | — | — | — | ||||
Net Assets, end of period ($ x 1,000) | 3,504 | 501 | 501 | 501 |
a | Based on average shares outstanding. | |
b | Amount represents less than $.01 per share. | |
c | Not annualized. | |
d | Exclusive of sales charge. | |
e | Annualized. | |
f | Expense waivers and/or reimbursements amounted to less than .01%. | |
See notes to financial statements. |
The Fund 9
NOTES TO FINANCIAL STATEMENTS ( U n a u d i t e d )
NOTE 1—Significant Accounting Policies:
Dreyfus Premier U.S. Equity Fund (the “fund”) is a separate diversified series of Strategic Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified open-end management investment company and operates as a series company currently offering six series, including the fund, which commenced operations on May 30, 2008.The fund’s investment objective seeks long-term total return. 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.Walter Scott & Partners Limited (“WSPL”) is a subsidiary of BNY Mellon and an affiliate of Dreyfus serves as the fund’s sub-investment adviser.The fiscal year end of the fund is November 30.
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 T. Class A and Class T shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency cost 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 May 31, 2008, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held all of the Class A, Class C, Class I and Class T shares.
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.
10
The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. 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. Registered open-end investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restric-
The Fund 11
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
tions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Financial futures are valued at the last sales price.
The Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.
Various inputs are used in determining the value of the fund’s investments relating to FAS 157.
These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3—significant unobservable inputs (including 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.
The following is a summary of the inputs used as of May 31, 2008 in valuing the fund’s investments carried at fair value:
Investments in | Other Financial | |||
Valuation Inputs | Securities ($) | Instruments ($) † | ||
Level 1—Quoted Prices | 9,565,314 | 0 | ||
Level 2—Other Significant | ||||
Observable Inputs | 0 | 0 | ||
Level 3—Significant | ||||
Unobservable Inputs | 0 | 0 | ||
Total | 9,565,314 | 0 |
† | Other financial instruments include derivative instruments, such as futures, forward currency | |
exchange contracts and swap contracts, which are valued at the unrealized appreciation | ||
(depreciation) on the instrument. |
12
(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.
The fund has arrangements with the custodian and cash management banks whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” in the Act.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and 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, if any, it is the policy of the fund not to distribute such gains. Income and capital gains distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
(e) Federal income taxes: It is the policy of the fund 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.
During the current year, the fund adopted FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements.
The Fund 13
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more likely-than-not threshold would be recorded as a tax expense in the current year. The adoption of FIN 48 had no impact on the operations of the fund for the period ended May 31, 2008.
As of and during the period ended May 31, 2008, the fund did not have any liabilities for any unrecognized tax benefits.The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
NOTE 2—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (“Agreement”) with Dreyfus, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly. Dreyfus has contractually agreed to waive receipt of its fees and/or assume the expenses of the fund, until March 31, 2009, so that annual fund operating expenses (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed 1.15% of the fund’s average daily net assets.At May 31, 2008, there is no reduction in management fee, pursuant to the undertaking.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and WSPL, Dreyfus pays WSPL a monthly fee at an annual percentage of the fund’s average daily net assets.
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C and Class T shares pay the Distributor for distributing their shares at an annual rate of .75% of the value of the average daily net assets of Class C shares and .25% of the
14
value of the average daily net assets of Class T shares. During the period ended May 31, 2008, Class C and Class T shares were charged $20 and $7, respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A, Class C and Class T 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 Class A, Class C and Class T shares 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 May 31, 2008, Class A, Class C and Class T shares were charged $48, $7 and $7, respectively, pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended May 31, 2008, the fund was not charged pursuant to the transfer agency agreement.
The fund compensates The Bank of New York, a subsidiary of BNY Mellon and a Dreyfus affiliate, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2008, the fund was charged $1 pursuant to the cash management agreement.
The fund compensates The Bank of New York under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2008, the fund was not charged pursuant to the custody agreement.
The Fund 15
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended May 31, 2008, the fund was not charged for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $205, Rule 12b-1 distribution plan fees $27 and shareholder services plan fees $62.
(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 3—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended May 31, 2008, amounted to $4,659,317 and $0, respectively.
At May 31, 2008, accumulated net unrealized appreciation on investments was $5,997, consisting of $17,293 gross unrealized appreciation and $11,296 gross unrealized depreciation.
At May 31, 2008, 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).
In March 2008, the FASB released Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements.The application of FAS 161 is required for fiscal years beginning after November 15, 2008 and interim periods
16
within those fiscal years. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements and the accompanying notes has not yet been determined.
NOTE 4—Subsequent Event:
Effective July 1, 2008, BNY Mellon has reorganized and consolidated a number of its banking and trust company subsidiaries. As a result of the reorganization, any services previously provided to the fund by Mellon Bank, N.A. or Mellon Trust of New England, N.A. are now provided by The Bank of New York, which has changed its name to The Bank of New York Mellon.
The Fund 17
INFORMATION ABOUT THE REVIEW AND APPROVAL |
OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) |
At a meeting of the fund’s Board of Directors held on May 5, 2008, the Board considered the approval, through the renewal date of November 30 2009, of the fund’s Management Agreement, pursuant to which the Manager would provide the fund with investment advisory and administrative services, and of the Manager’s Sub-Investment Advisory Agreement with Walter Scott & Partners Limited (“WSPL”), pursuant to which WSPL would serve as sub-investment adviser and would provide day-to-day management of the Fund’s portfolio. 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 representatives of the Manager.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board members received a presentation from representatives of the Manager regarding services to be provided to the fund, and discussed the nature, extent, and quality of the services to be provided to the fund by the Manager pursuant to the Management Agreement, and by WSPL pursuant to the Sub-Investment Advisory Agreement. The Manager’s representatives noted the relationships the Manager has with various intermediaries and the different needs of each.The Manager’s representatives noted the diversity of distribution among the funds in the Dreyfus fund complex, and the Manager’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each of the fund’s intended distribution channels.The Board noted that, as a new fund, the fund did not have any assets or open accounts.
The Board members also considered the Manager’s and WSPL’s research and portfolio management capabilities and that the Manager also will provide oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements.The Board members also considered the Manager’s extensive administrative, accounting, and compliance infrastructure, as well as the Manager’s supervisory activities over WSPL.
18
Comparative Analysis of the Fund’s Proposed Management Fee and Expenses. As the fund has not yet commenced operations, the Board members were not able to review the fund’s performance or actual expense ratio. The Board discussed with representatives of the Manager the investment strategies to be employed by WSPL in the management of the fund’s assets. The Board members noted WSPL’s reputation and experience with respect to global equity investing, the individual portfolio managers’ experience in investing in the domestic and foreign markets, and WSPL’s service as sub-advisor to other Dreyfus managed funds.
The Board members also discussed the fund’s management fee (and sub-advisory fee) and anticipated expense ratio and compared them to the range of management fees and expense ratios for the funds in the Lipper Multi-Cap Core Funds category. The Board members noted that the fund’s proposed management fee for the fund was higher than the average management fee for the Lipper category. The Board also noted the Manager’s agreement to limit the fund’s total expense ratio at least through March 31, 2009.
Representatives of the Manager reviewed with the Board members the fees paid to affiliates of the Manager that manage funds reported in the same Lipper category as the fund (the “Similar Funds”).The Manager’s representatives also reviewed the fees charged to institutional separate accounts managed by WSPL (the “Separate Accounts” and, collectively with the Similar Fund, the “Similar Accounts”) that have similar investment objectives and policies as the fund.The Manager’s representatives explained the nature of each Separate Account and the differences, from WSPL’s perspective (as applicable), in providing services to the Separate Accounts as compared to the fund.The Board members considered the relevance of the fee information provided for the Similar Accounts to evaluate the appropriateness and reasonableness of the fund’s proposed management fee and sub-advisory fee.
The Fund 19
INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued)
Analysis of Profitability and Economies of Scale. As the fund had not yet commenced operations, the Manager’s representatives were not able to review the dollar amount of expenses allocated and profit received by the Manager.The Board members also considered potential benefits to the Manger or WSPL from acting as investment adviser and sub-investment adviser, respectively, and noted the possibility of soft dollar arrangements in the future with respect to trading the fund’s portfolio. The Board also considered whether the fund would be able to participate in any economies of scale that the Manager may experience in the event that the fund attracts a large amount of assets.The Board members noted the uncertainty of the estimated asset levels and discussed the renewal requirements for advisory agreements and their ability to review the management fee annually after an initial term of the Management Agreement. Since the Manager, and not the fund, will pay WSPL pursuant to the Sub-Investment Advisory Agreement, the Board did not consider WSPL’s profitability to be relevant.
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 fund’s Management Agreement and the Sub-Investment Advisory Agreement with WSPL. Based on their discussions and considerations as described above, the Board members made the following conclusions and determinations.
- The Board concluded that the nature, extent, and quality of the ser- vices to be provided by the Manager and WSPL are adequate and appropriate.The Board considered the Manager’s and WSPL’s expe- rience and reputation with respect to domestic and international equity investing and the portfolio managers’ experience in investing in foreign markets.
- The Board noted that since the Fund had not commenced opera- tions, it had no performance to measure and thus performance was not a factor.
20
- The Board concluded that the fee to be paid to the Manager by the Fund was reasonable in light of the services to be provided, com- parative expense and management fee information, and benefits anticipated to be derived by the Manager or WSPL from its rela- tionship with the fund, and that, the fee to be paid by the Manager or WSPL is reasonable and appropriate.
The Board members considered these conclusions and determinations, and without any one factor being dispositive, the Board determined that approval of the fund’s Management Agreement, and Sub-Advisory Agreement with WSPL, was in the best interests of the fund and its prospective shareholders.
The Fund 21
Item 2. | Code of Ethics. | |
Not applicable. | ||
Item 3. | Audit Committee Financial Expert. | |
Not applicable. | ||
Item 4. | Principal Accountant Fees and Services. | |
Not applicable. | ||
Item 5. | Audit Committee of Listed Registrants. | |
Not applicable. | ||
Item 6. | Schedule of Investments. | |
(a) | Not applicable. | |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management | |
Investment Companies. | ||
Not applicable. | ||
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. | |
Not applicable. | ||
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Companies | |
Affiliated Purchasers. | ||
Not applicable. | ||
Item 10. | Submission of Matters to a Vote of Security Holders. |
The Registrant has a Nominating Committee (the "Committee"), which is responsible for selecting and nominating persons for election or appointment by the Registrant's Board as Board members. The Committee has adopted a Nominating Committee Charter (the "Charter"). Pursuant to the Charter, the Committee will consider recommendations for nominees from shareholders submitted to the Secretary of the Registrant, c/o The Dreyfus Corporation Legal Department, 200 Park Avenue, 8th Floor East, New York, New York 10166. A nomination submission must include information regarding the recommended nominee as specified in the Charter. This information includes all information relating to a recommended nominee that is required to be disclosed in solicitations or proxy statements for the election of Board members, as well as information sufficient to evaluate the factors to be considered by the Committee, including character and integrity, business and professional experience, and whether the person has the ability to apply sound and independent business judgment and would act in the interests of the Registrant and its shareholders.
Nomination submissions are required to be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders, and such additional information must be provided regarding the recommended nominee as reasonably requested by the Committee.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) | Not applicable. | |
(a)(2) | Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) | |
under the Investment Company Act of 1940. | ||
(a)(3) | Not applicable. | |
(b) | Certification of principal executive and principal financial officers as required by Rule 30a-2(b) | |
under the Investment Company Act of 1940. |
SIGNATURES |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Strategic Funds, Inc. | ||
By: | /s/ J. David Officer | |
J. David Officer | ||
President | ||
Date: | July 23, 2008 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of | ||
1940, this Report has been signed below by the following persons on behalf of the Registrant and in the | ||
capacities and on the dates indicated. | ||
By: | /s/ J. David Officer | |
J. David Officer | ||
President | ||
Date: | July 23, 2008 | |
By: | /s/ James Windels | |
James Windels | ||
Treasurer | ||
Date: | July 23, 2008 | |
EXHIBIT INDEX | ||
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a- | ||
2(a) under the Investment Company Act of 1940. (EX-99.CERT) | ||
(b) Certification of principal executive and principal financial officers as required by Rule 30a- | ||
2(b) under the Investment Company Act of 1940. (EX-99.906CERT) |