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 | |||||
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| Strategic Funds, Inc |
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| (Exact name of Registrant as specified in charter) |
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c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 |
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| (Address of principal executive offices) (Zip code) |
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| Michael A. Rosenberg, Esq. 200 Park Avenue New York, New York 10166 |
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| (Name and address of agent for service) |
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Registrant's telephone number, including area code: | (212) 922-6000 | |||||
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Date of fiscal year end:
| 11/30 |
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Date of reporting period: | 5/31/11 |
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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.
Dreyfus Select Managers Small Cap Value Fund
Dreyfus U.S. Equity Fund
Global Stock Fund
International Stock Fund
1 |
Dreyfus |
Select Managers |
Small Cap Value Fund |
SEMIANNUAL REPORT May 31, 2011
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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.
Contents | |
THE FUND | |
2 | A Letter from the Chairman and 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 |
18 | Statement of Assets and Liabilities |
19 | Statement of Operations |
20 | Statement of Changes in Net Assets |
22 | Financial Highlights |
25 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
Dreyfus
Select Managers
Small Cap Value Fund
The Fund
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Select Managers Small CapValue Fund, covering the six-month period from December 1, 2010, through May 31, 2011. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
The U.S. economy appears to have hit a soft patch in the spring of 2011 after accelerating over the final months of 2010. Disappointing labor, housing and manufacturing data have come at a time of higher energy prices and some tightening of monetary policy in global markets. In our view, the current slowdown should be relatively brief as the world recovers from the supply shocks created by weather impacts on food production, the decline in Libyan oil exports and supply-chain disruptions stemming from Japan’s natural and nuclear disasters.The U.S. stock market produced mostly positive results in this choppy economic environment due to better-than-expected corporate earnings and robust ongoing industrial demand from the emerging markets.
We remain optimistic as the U.S. economy moves through the middle stages of its cycle. Indeed, global macroeconomic policy generally has remained stimulative despite the recent efforts of some central banks to forestall inflationary pressures. We continue to expect sustainable economic growth, a rising but volatile uptrend in inflation and an improving U.S. labor market in the months ahead.As always, to determine how these forces may affect your investments, we urge you to talk regularly with your financial advisor.
Thank you for your continued confidence and support.
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
June 15, 2011
2
DISCUSSION OF FUND PERFORMANCE
For the period of December 1, 2010, through May 31, 2011, as provided by Keith L. Stransky and Robert B. Mayerick, Portfolio Allocation Managers, EACM Advisors LLC
Market and Fund Performance Overview
For the six-month period ended May 31, 2011, Dreyfus Select Managers Small CapValue Fund’s Class A shares produced a total return of 15.87%, Class C shares returned 15.47% and Class I shares returned 16.12%.1 In comparison, the total return of the Russell 2000 Value Index (the “Index”), the fund’s benchmark, was 15.23% for the same period.2
U.S. stocks generally rallied over the reporting period as an economic recovery appeared to gain momentum.The fund’s returns were modestly higher than its benchmark, primarily due to overweight exposure to, and strong stock selections in, the industrials sector.
The Fund’s Investment Approach
The fund seeks capital appreciation.To pursue its goal, the fund normally invests at least 80% of its net assets in the stocks of small-cap companies. The fund uses a “multi-manager” approach by selecting one or more sub-advisers to manage its assets. As the fund’s portfolio allocation managers, we seek sub-advisers that complement one another’s style of investing, consistent with the fund’s investment goal. We monitor and evaluate the performance of the sub-advisers and will recommend to Dreyfus and the fund’s board any changes based on our evaluations.
The fund’s assets are currently under the management of five sub-advisers, each acting independently of one another and using its own methodology to select portfolio investments. Currently, 23% of the fund’s assets are under the management of Thompson, Siegel and Walmsley, LLC, which employs a combination of quantitative and qualitative security selection methods based on a four-factor valuation model. Approximately 26% of the fund’s assets are under the management of Walthausen & Co., LLC, which uses a proprietary valuation model to identify companies that are trading at a discount to their intrinsic values. Approximately 24% of the fund’s assets are under the management of
The Fund | 3 |
DISCUSSION OF FUND PERFORMANCE (continued)
Neuberger Berman Management LLC, which uses fundamental analysis and a bottom-up stock selection process to identify publicly traded small-cap companies selling at a material discount to their intrinsic value.Approximately 24% of the fund’s assets are under the management of Lombardia Capital Partners, which uses fundamental analysis and a bottom-up value-oriented approach in seeking stocks trading below their intrinsic values. Finally, 3% of the fund’s assets are under the management of Riverbridge Partners, LLC, which focuses on companies that are building their earnings power and intrinsic value over long periods of time.These percentages can change over time.
Greater Economic Confidence Fueled a Market Rally
The reporting period began in the midst of an upturn in investor sentiment, after a new round of quantitative easing of U.S. monetary policy convinced many investors that a double-dip recession was unlikely. A more optimistic outlook was reinforced by improvements in employment and consumer spending, better-than-expected corporate earnings and the passage of fiscally stimulative tax legislation.
However, the stock market rally was interrupted in February when political unrest in the Middle East led to sharply higher energy prices, and again in March when natural and nuclear disasters in Japan threatened one of the world’s largest economies. While stocks recovered quickly from these unexpected setbacks, disappointing U.S. financial data in the spring caused investors to revise their economic expectations downward, and stocks gave back a portion of their previous gains.
Stock Selection Strategies Fueled Relative Performance
The fund’s relative performance was particularly robust in the industrials sector. Overweighted exposure helped the fund participate more fully in the sector’s gains; and strong performers included battery components maker Polypore International, which encountered rising demand for the batteries that power electric cars and forklifts. In addition, ceramic body armor maker Ceradyne exceeded analysts’ earnings expectations and raised its 2011 profit forecast. Underweighted exposure to financial stocks also helped the fund. For example, successes in the sector included pawn shop operators such as First Cash Financial Services and Cash America International, which benefited from rising gold prices.
4
The fund’s investments in the consumer discretionary sector lagged market averages due to weakness encountered by retailer OfficeMax, which reduced its sales forecast and was downgraded by securities analysts. Vending machines operator Coinstar pre-announced a quarterly earnings shortfall due to competitive pressures in its DVD rental business.
Balancing Risks and Potential Rewards
As of the reporting period’s end, the U.S. economy appears to have hit a soft patch. Moreover, global macroeconomic developments have captured investors’ attention, distracting them from the business fundamentals that historically have driven equity markets over the long term.Therefore, we expect heightened market volatility to persist until the direction of the global economy and corporate earnings becomes clearer.
We remain optimistic over the longer term, particularly with regard to small-cap stocks. In our analysis, valuations currently appear reasonable and small companies should benefit from intensifying mergers-and-acquisitions activity as larger companies put some of their massive cash reserves to work. As always, we intend to adjust the fund’s allocations among its underlying investment managers as market conditions develop and opportunities arise.
June 15, 2011
Equity funds are subject generally to market, market sector, market liquidity, issuer and investment | |
style risks, among other factors, to varying degrees, all of which are more fully described in the | |
fund’s prospectus. | |
The prices of small company stocks tend to be more volatile than the prices of large company | |
stocks, mainly because these companies have less established and more volatile earnings histories. | |
They also tend to be less liquid than larger company stocks. | |
1 | Total return includes reinvestment of dividends and any capital gains paid, and does not take into |
consideration the maximum initial sales charge in the case of Class A shares, or the applicable | |
contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these | |
charges been reflected, returns would have been lower. Past performance is no guarantee of future | |
results. Share price and investment return fluctuate such that upon redemption, fund shares may be | |
worth more or less than their original cost. | |
2 | SOURCE: LIPPER INC. — Reflects the reinvestment of dividends and, where applicable, |
capital gain distributions.The Russell 2000 Value Index is an unmanaged index, which measures | |
the performance of those Russell 2000 companies with lower price-to-book ratios and lower | |
forecasted growth values. Investors cannot invest directly in any index. |
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 Dreyfus Select Managers Small CapValue Fund from December 1, 2010 to May 31, 2011. 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, 2011
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 6.73 | $ 10.80 | $ 5.33 |
Ending value (after expenses) | $1,158.70 | $1,154.70 | $1,161.20 |
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, 2011
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 6.29 | $ 10.10 | $ 4.99 |
Ending value (after expenses) | $1,018.70 | $1,014,91 | $1,020.00 |
† Expenses are equal to the fund’s annualized expense ratio of 1.25% for Class A, 2.01% for Class C and .99% |
for Class I, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half |
year period). |
6
STATEMENT OF INVESTMENTS
May 31, 2011 (Unaudited)
Common Stocks—98.1% | Shares | Value ($) |
Consumer Discretionary—15.5% | ||
Advance Auto Parts | 19,800 | 1,229,580 |
Asbury Automotive Group | 46,700 a | 784,560 |
Ascena Retail Group | 53,147 a | 1,778,299 |
Avery Dennison | 34,400 | 1,456,496 |
Barrett Business Services | 40,484 | 618,596 |
Cabela’s | 50,730 a | 1,245,929 |
Capella Education | 1,973 a | 95,375 |
Carter’s | 17,800 a | 564,260 |
CEC Entertainment | 16,189 | 658,730 |
Cheesecake Factory | 7,650 a | 243,040 |
Chico’s FAS | 48,900 | 737,412 |
Coinstar | 16,200 a | 860,706 |
Convergys | 57,700 a | 737,406 |
Corinthian Colleges | 137,500 a | 530,750 |
Cracker Barrel Old Country Store | 28,252 | 1,338,580 |
CSS Industries | 44,100 | 812,763 |
Destination Maternity | 36,530 | 753,249 |
Digital River | 29,200 a | 950,460 |
Drew Industries | 41,950 | 1,107,480 |
FTI Consulting | 48,717 a | 1,859,528 |
G-III Apparel Group | 14,400 a | 618,048 |
Genesco | 27,589 a | 1,241,229 |
Gentex | 13,675 | 401,361 |
Grand Canyon Education | 6,687 a | 86,262 |
Helen of Troy | 46,380 a | 1,502,248 |
Interval Leisure Group | 77,660 a | 1,053,070 |
JOS. A. Bank Clothiers | 14,436 a | 824,296 |
Kirkland’s | 36,350 a | 474,731 |
Korn/Ferry International | 39,073 a | 834,599 |
Lifetime Brands | 61,645 | 707,068 |
LKQ | 10,700 a | 284,513 |
M/I Homes | 99,950 a | 1,256,371 |
Meredith | 33,825 | 1,069,208 |
Nobel Learning Communities | 50,080 a | 576,421 |
Nu Skin Enterprises, Cl. A | 28,770 | 1,124,619 |
The Fund | 7 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Consumer Discretionary (continued) | ||
OfficeMax | 172,500 a | 1,442,100 |
Pantry | 41,050 a | 758,193 |
PEP Boys-Manny Moe & Jack | 180,135 | 2,557,917 |
Quiksilver | 133,800 a | 623,508 |
RadioShack | 68,400 | 1,077,984 |
Red Robin Gourmet Burgers | 22,400 a | 822,080 |
Rent-A-Center | 115,310 | 3,742,963 |
Ruth’s Hospitality Group | 107,748 a | 576,452 |
Sally Beauty Holdings | 81,600 a | 1,367,616 |
Shuffle Master | 73,300 a | 798,237 |
Shutterfly | 12,900 a | 781,998 |
Talbots | 71,700 a | 342,009 |
TNS | 29,734 a | 488,530 |
Universal Technical Institute | 72,580 | 1,316,601 |
Valassis Communications | 25,900 a | 751,877 |
ValueClick | 63,200 a | 1,140,760 |
Wendy’s/Arby’s Group, Cl. A | 151,200 | 760,536 |
49,766,604 | ||
Consumer Staples—1.9% | ||
Andersons | 26,550 | 1,150,411 |
Constellation Brands, Cl. A | 70,200 a | 1,541,592 |
Flowers Foods | 39,400 | 1,313,202 |
Nash Finch | 29,782 | 1,118,910 |
Overhill Farms | 41,025 a | 252,714 |
United Natural Foods | 6,750 a | 293,693 |
Zhongpin | 36,150 a | 551,287 |
6,221,809 | ||
Energy—6.6% | ||
Atmos Energy | 28,800 | 960,480 |
Basic Energy Services | 30,300 a | 824,160 |
Berry Petroleum, Cl. A | 20,267 | 1,062,193 |
Brigham Exploration | 37,830 a | 1,178,026 |
Cal Dive International | 46,074 a | 299,942 |
Callon Petroleum | 89,555 a | 638,527 |
Covanta Holding | 55,800 | 946,926 |
Dresser-Rand Group | 21,800 a | 1,146,244 |
8
Common Stocks (continued) | Shares | Value ($) |
Energy (continued) | ||
Georesources | 19,280 a | 477,566 |
Global Industries | 125,700 a | 788,139 |
GMX Resources | 39,463 a | 207,970 |
GT Solar International | 129,380 a | 1,650,889 |
Gulfport Energy | 39,140 a | 1,158,153 |
ION Geophysical | 89,800 a | 906,082 |
Newpark Resources | 143,250 a | 1,390,957 |
Northern Oil and Gas | 61,990 a | 1,245,999 |
Parker Drilling | 71,880 a | 458,594 |
Southern Union | 36,700 | 1,113,111 |
Tetra Technologies | 106,400 a | 1,451,296 |
TransGlobe Energy | 50,700 a | 790,920 |
USEC | 125,600 a | 525,008 |
Venoco | 58,900 a | 865,830 |
Whiting Petroleum | 16,900 a | 1,133,990 |
21,221,002 | ||
Exchange Traded Funds—.3% | ||
iShares Russell 2000 Index Fund | 11,024 | 935,276 |
Financial—22.5% | ||
Alterra Capital Holdings | 36,200 | 823,550 |
Altisource Portfolio Solutions | 37,233 a | 1,329,963 |
American Equity Investment Life Holding | 134,294 | 1,744,479 |
Ares Capital | 67,176 | 1,129,900 |
Asta Funding | 60,630 | 468,064 |
Baldwin & Lyons, Cl. B | 8,875 | 201,374 |
BancorpSouth | 24,819 | 318,676 |
Bank of Hawaii | 27,625 | 1,309,425 |
BioMed Realty Trust | 45,700 b | 936,393 |
Brandywine Realty Trust | 50,300 b | 641,828 |
Broadridge Financial Solutions | 47,600 | 1,089,088 |
Bryn Mawr Bank | 53,520 | 1,123,385 |
Capstead Mortgage | 52,400 b | 695,348 |
Cash America International | 20,100 | 1,046,406 |
CBIZ | 119,604 a | 914,971 |
Center Financial | 52,233 a | 341,604 |
City Holding | 18,300 | 590,541 |
The Fund | 9 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) | |
Financial (continued) | |||
Columbia Banking System | 102,485 | 1,843,705 | |
Community Bank System | 78,723 | 1,974,373 | |
CoreLogic | 72,900 a | 1,320,219 | |
Cullen/Frost Bankers | 19,130 | 1,114,131 | |
CVB Financial | 125,100 | 1,122,147 | |
Delphi Financial Group, Cl. A | 68,473 | 1,997,357 | |
Deluxe | 58,076 | 1,494,876 | |
Donegal Group, Cl. A | 33,343 | 467,135 | |
EastGroup Properties | 6,909 b | 324,101 | |
F.N.B | 84,547 | 891,971 | |
FBL Financial Group, Cl. A | 23,162 | 735,857 | |
Financial Engines | 3,904 a | 97,210 | |
First Bancorp | 20,700 | 247,158 | |
First Cash Financial Services | 22,300 a | 931,025 | |
First Financial Bankshares | 23,080 | 1,220,009 | |
First Niagara Financial Group | 53,300 | 756,860 | |
First Potomac Realty Trust | 39,401 b | 661,149 | |
Glimcher Realty Trust | 107,534 b | 1,101,148 | |
Hancock Holding | 38,350 | 1,239,088 | |
Harleysville Group | 22,934 | 734,576 | |
HCC Insurance Holdings | 50,610 | 1,674,685 | |
Horace Mann Educators | 31,500 | 514,080 | |
Huntington Bancshares | 109,900 | 725,340 | |
IBERIABANK | 21,300 | 1,251,375 | |
Investment Technology Group | 38,928 a | 589,370 | |
Knight Capital Group, Cl. A | 80,236 a | 990,112 | |
LaSalle Hotel Properties | 37,700 b | 1,054,846 | |
Lender Processing Services | 47,000 | 1,249,260 | |
Medical Properties Trust | 90,890 b | 1,123,400 | |
MGIC Investment | 83,900 a | 676,234 | |
Nara Bancorp | 16,244 a | 137,912 | |
National Western Life Insurance | 6,100 | 930,250 | |
Net 1 UEPS Technologies | 43,300 a | 358,957 | |
Ocwen Financial | 329,950 a | 3,965,999 | |
Omega Healthcare Investors | 116,817 b | 2,487,034 | |
Park National | 14,625 | 986,164 |
10
Common Stocks (continued) | Shares | Value ($) |
Financial (continued) | ||
Parkway Properties | 59,148 b | 1,085,957 |
Platinum Underwriters Holdings | 23,710 | 809,459 |
Portfolio Recovery Associates | 3,373 a | 292,169 |
Primerica | 39,650 | 851,285 |
PS Business Parks | 13,000 b | 747,370 |
RLI | 16,800 | 1,012,200 |
Sterling Bancorp | 39,000 | 372,060 |
Sterling Bancshares | 110,900 | 941,541 |
Suffolk Bancorp | 13,500 | 207,225 |
SVB Financial Group | 33,963 a | 2,016,723 |
TCF Financial | 56,400 | 848,820 |
Texas Capital Bancshares | 34,600 a | 866,038 |
Tower Group | 97,284 | 2,364,001 |
Trustmark | 38,374 | 914,836 |
Umpqua Holdings | 71,300 | 854,174 |
Universal American Financial | 39,100 | 363,630 |
Waddell & Reed Financial, Cl. A | 16,132 | 622,695 |
Wintrust Financial | 31,000 | 1,006,570 |
World Acceptance | 30,292 a | 2,019,871 |
71,890,732 | ||
Health Care—6.7% | ||
Abaxis | 5,948 a | 185,161 |
Affymetrix | 100,600 a | 612,654 |
Allscripts Healthcare Solutions | 10,325 a | 207,636 |
Amedisys | 24,200 a | 757,460 |
AmSurg | 64,751 a | 1,677,698 |
AngioDynamics | 11,750 a | 184,475 |
Bio-Reference Labs | 5,825 a | 145,217 |
Cambrex | 154,682 a | 756,395 |
Cepheid | 17,340 a | 556,961 |
Charles River Laboratories International | 25,900 a | 1,001,812 |
Chemed | 15,975 | 1,079,431 |
Gentiva Health Services | 33,807 a | 827,595 |
Health Management Associates, Cl. A | 103,000 a | 1,174,200 |
HealthSpring | 24,100 a | 1,056,785 |
Hill-Rom Holdings | 28,325 | 1,292,753 |
The Fund | 11 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Health Care (continued) | ||
IPC The Hospitalist | 3,875 a | 196,773 |
Kindred Healthcare | 53,043 a | 1,301,675 |
Magellan Health Services | 32,900 a | 1,741,726 |
Medical Action Industries | 22,448 a | 218,644 |
Medicis Pharmaceutical, Cl. A | 24,100 | 903,027 |
Mednax | 4,100 a | 308,115 |
Medtox Scientific | 3,275 | 55,315 |
Neogen | 6,800 a | 304,912 |
Quality Systems | 1,775 | 152,792 |
Questcor Pharmaceuticals | 33,700 a | 777,459 |
SXC Health Solutions | 17,700 a | 1,043,238 |
Symmetry Medical | 165,216 a | 1,688,508 |
Techne | 2,675 | 218,013 |
West Pharmaceutical Services | 20,050 | 931,924 |
21,358,354 | ||
Industrial—15.4% | ||
AAON | 24,675 | 831,547 |
Aerovironment | 26,800 a | 809,092 |
Allegiant Travel | 15,270 a | 696,465 |
American Reprographics | 197,313 a | 1,850,796 |
Apogee Enterprises | 82,250 | 1,088,990 |
Beacon Roofing Supply | 10,100 a | 221,291 |
Briggs & Stratton | 23,900 | 498,315 |
CAI International | 39,540 a | 923,654 |
Ceradyne | 39,580 a | 1,771,601 |
CoStar Group | 2,300 a | 145,130 |
Crown Holdings | 44,200 a | 1,794,962 |
CTS | 127,475 | 1,305,344 |
Danaos | 128,400 a | 828,180 |
Echo Global Logistics | 8,267 a | 123,178 |
EnerNOC | 3,803 a | 68,644 |
ESCO Technologies | 23,300 | 875,381 |
Forward Air | 3,625 | 127,238 |
Franklin Electric | 15,107 | 672,262 |
Global Power Equipment Group | 35,960 a | 1,011,195 |
Granite Construction | 31,189 | 857,386 |
12
Common Stocks (continued) | Shares | Value ($) |
Industrial (continued) | ||
Heartland Payment Systems | 36,900 | 701,838 |
Hexcel | 55,975 a | 1,157,003 |
Hubbell, Cl. B | 14,400 | 952,704 |
Innerworkings | 14,850 a | 125,780 |
Insituform Technologies, Cl. A | 21,866 a | 564,361 |
iRobot | 18,800 a | 631,680 |
John Bean Technologies | 42,400 | 832,736 |
KBR | 35,000 | 1,306,200 |
Kelly Services, Cl. A | 28,000 a | 493,640 |
Knoll | 63,745 | 1,223,267 |
LeCroy | 33,300 a | 430,902 |
Lydall | 92,790 a | 1,109,768 |
Manitowoc | 46,000 | 828,920 |
MAXIMUS | 3,150 | 263,970 |
McGrath Rentcorp | 51,200 | 1,435,648 |
Miller Industries | 24,950 | 429,140 |
Mobile Mini | 4,750 a | 106,875 |
Navistar International | 23,500 a | 1,547,945 |
Pall | 19,990 | 1,121,439 |
Park Electrochemical | 39,159 | 1,179,077 |
Polypore International | 12,550 a | 822,652 |
Resources Connection | 9,950 | 140,395 |
Ritchie Brothers Auctioneers | 11,494 | 318,614 |
Rollins | 19,312 | 388,557 |
Ryder System | 22,400 | 1,232,000 |
Schawk | 31,460 | 546,775 |
School Specialty | 77,660 a | 1,194,411 |
Seaspan | 26,300 | 456,568 |
SkyWest | 41,045 | 633,324 |
Sonoco Products | 33,111 | 1,172,792 |
Standex International | 55,410 | 1,840,720 |
Teledyne Technologies | 19,500 a | 957,450 |
Textainer Group Holdings | 12,705 | 409,990 |
Textron | 54,600 | 1,249,248 |
Thomas & Betts | 32,780 a | 1,794,706 |
Tutor Perini | 71,299 | 1,447,370 |
The Fund | 13 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Industrial (continued) | ||
Twin Disc | 18,200 | 607,152 |
Xerium Technologies | 56,975 a | 1,183,939 |
49,340,207 | ||
Information Technology—12.6% | ||
Acacia Research | 27,900 a | 1,081,404 |
Accelrys | 88,100 a | 636,963 |
Acxiom | 28,700 a | 394,625 |
American Software, Cl. A | 92,677 | 711,759 |
ANSYS | 2,319 a | 133,041 |
athenahealth | 3,462 a | 154,994 |
AXT | 80,900 a | 658,526 |
Benchmark Electronics | 52,929 a | 914,613 |
Brocade Communications Systems | 204,600 a | 1,364,682 |
Cabot Microelectronics | 4,662 a | 234,265 |
CACI International, Cl. A | 17,984 a | 1,147,919 |
Cadence Design Systems | 102,700 a | 1,097,863 |
Cardtronics | 44,900 a | 994,086 |
Cass Information Systems | 3,450 | 137,482 |
Concur Technologies | 2,150 a | 107,435 |
Constant Contact | 3,736 a | 89,851 |
DDI | 120,340 | 1,097,501 |
DealerTrack Holdings | 7,050 a | 163,349 |
Diebold | 29,700 | 981,585 |
Digi International | 16,450 a | 193,946 |
DST Systems | 25,500 | 1,281,885 |
Echelon | 13,579 a | 129,815 |
Electronics for Imaging | 85,645 a | 1,545,892 |
Fair Isaac | 32,700 | 956,475 |
Fairchild Semiconductor International | 63,505 a | 1,145,630 |
FARO Technologies | 3,600 a | 161,136 |
FormFactor | 36,000 a | 356,760 |
Forrester Research | 4,750 | 180,215 |
Guidance Software | 7,850 a | 63,036 |
IEC Electronics | 34,739 a | 235,878 |
Ikanos Communications | 96,000 a | 146,880 |
Integrated Silicon Solution | 49,815 a | 460,291 |
International Rectifier | 11,700 a | 336,726 |
14
Common Stocks (continued) | Shares | Value ($) |
Information Technology (continued) | ||
Intersil, Cl. A | 69,900 | 1,003,065 |
Itron | 11,140 a | 570,925 |
Keynote Systems | 42,200 | 895,906 |
MEMC Electronic Materials | 87,200 a | 917,344 |
Mercury Computer Systems | 33,400 a | 638,608 |
Multi-Fineline Electronix | 16,900 a | 358,111 |
Napco Security Technologies | 5,850 a | 12,929 |
National Instruments | 12,975 | 378,870 |
NetScout Systems | 13,500 a | 313,200 |
Ormat Technologies | 14,500 | 319,145 |
Plexus | 12,274 a | 457,575 |
Power Integrations | 5,450 | 200,669 |
Power-One | 237,560 a | 1,993,128 |
Scientific Games, Cl. A | 112,800 a | 1,112,208 |
SeaChange International | 74,100 a | 834,366 |
Semtech | 11,825 a | 338,432 |
Silicon Image | 95,500 a | 723,890 |
Spansion, Cl. A | 21,200 a | 424,636 |
Standard Microsystems | 65,350 a | 1,752,687 |
Stratasys | 3,684 a | 129,677 |
SYNNEX | 25,690 a | 841,091 |
TeleCommunication Systems, Cl. A | 82,600 a | 412,174 |
Telvent GIT | 3,700 a | 127,465 |
Ultimate Software Group | 6,775 a | 381,975 |
Ultratech | 34,300 a | 1,089,711 |
Verint Systems | 52,000 a | 1,764,880 |
Vishay Intertechnology | 150,280 a | 2,384,944 |
Zoran | 85,700 a | 705,311 |
40,379,430 | ||
Materials—6.9% | ||
Arch Chemicals | 40,760 | 1,473,474 |
Boise | 112,700 | 951,188 |
Chemtura | 58,700 a | 1,118,235 |
Cytec Industries | 11,000 | 618,090 |
Glatfelter | 102,148 | 1,574,101 |
Horsehead Holding | 59,100 a | 788,394 |
Innophos Holdings | 23,650 | 1,061,648 |
The Fund | 15 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) | |
Materials (continued) | |||
KapStone Paper and Packaging | 68,210 a | 1,122,054 | |
Landec | 128,200 a | 735,868 | |
LSB Industries | 18,379 a | 870,062 | |
Mercer International | 67,730 a | 929,933 | |
Omnova Solutions | 171,220 a | 1,611,180 | |
PolyOne | 85,610 | 1,303,840 | |
Royal Gold | 7,000 | 434,140 | |
RPM International | 45,902 | 1,078,697 | |
RTI International Metals | 41,710 a | 1,590,402 | |
Schulman (A.) | 36,800 | 938,032 | |
Schweitzer-Mauduit International | 13,204 | 695,587 | |
Sensient Technologies | 29,168 | 1,109,842 | |
Solutia | 88,400 a | 2,207,348 | |
22,212,115 | |||
Producer Durables—4.6% | |||
Actuant, Cl. A | 38,850 | 976,689 | |
Atlas Air Worldwide Holdings | 17,600 a | 1,113,904 | |
Bristow Group | 48,920 | 2,247,874 | |
Curtiss-Wright | 23,000 | 784,530 | |
EnerSys | 39,692 a | 1,420,974 | |
Ennis | 31,678 | 604,733 | |
Greif, Cl. A | 13,337 | 881,842 | |
Hawaiian Holdings | 101,800 a | 563,972 | |
Intermec | 64,900 a | 783,992 | |
Old Dominion Freight Line | 33,750 a | 1,259,887 | |
Orbital Sciences | 57,584 a | 1,083,155 | |
RSC Holdings | 52,900 a | 707,273 | |
Sealed Air | 51,600 | 1,325,088 | |
Tennant | 22,400 | 865,312 | |
14,619,225 | |||
Telecommunications—3.1% | |||
Arris Group | 85,700 a | 967,553 | |
Black Box | 41,580 | 1,370,477 | |
Ciena | 38,900 a | 1,040,575 | |
Comtech Telecommunications | 6,700 | 186,193 | |
Comverse Technology | 71,300 a | 529,759 | |
DigitalGlobe | 11,050 a | 272,051 |
16
Common Stocks (continued) | Shares | Value ($) | |
Telecommunications (continued) | |||
Infinera | 98,800 a | 701,480 | |
Oplink Communications | 2,115 a | 39,085 | |
Plantronics | 27,368 | 1,001,121 | |
Powerwave Technologies | 213,500 a | 807,030 | |
Premiere Global Services | 69,688 a | 586,773 | |
RF Micro Devices | 119,700 a | 754,110 | |
Sierra Wireless | 54,000 a | 661,500 | |
Tekelec | 113,100 a | 1,029,210 | |
9,946,917 | |||
Utilities—2.0% | |||
Cleco | 34,100 | 1,196,569 | |
GenOn Energy | 183,600 a | 732,564 | |
Hawaiian Electric Industries | 57,394 | 1,425,093 | |
Portland General Electric | 39,642 | 1,029,503 | |
Southwest Gas | 20,800 | 812,448 | |
UniSource Energy | 34,200 | 1,295,838 | |
6,492,015 | |||
Total Investments (cost $261,019,322) | 98.1% | 314,383,686 | |
Cash and Receivables (Net) | 1.9% | 5,961,703 | |
Net Assets | 100.0% | 320,345,389 |
a | Non-income producing security. |
b | Investment in real estate investment trust. |
Portfolio Summary (Unaudited)† | |||
Value (%) | Value (%) | ||
Financial | 22.5 | Producer Durables | 4.6 |
Consumer Discretionary | 15.5 | Telecommunications | 3.1 |
Industrial | 15.4 | Utilities | 2.0 |
Information Technology | 12.6 | Consumer Staples | 1.9 |
Materials | 6.9 | Exchange Traded Funds | .3 |
Health Care | 6.7 | ||
Energy | 6.6 | 98.1 | |
† Based on net assets. | |||
See notes to financial statements. |
The Fund | 17 |
STATEMENT OF ASSETS AND LIABILITIES |
May 31, 2011 (Unaudited) |
Cost | Value | ||
Assets ($): | |||
Investments in securities—See Statement of Investments | 261,019,322 | 314,383,686 | |
Cash | 5,715,319 | ||
Receivable for investment securities sold | 1,023,260 | ||
Receivable for shares of Common Stock subscribed | 259,850 | ||
Dividends receivable | 257,843 | ||
Prepaid expenses | 21,748 | ||
321,661,706 | |||
Liabilities ($): | |||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 303,399 | ||
Payable for investment securities purchased | 800,780 | ||
Payable for shares of Common Stock redeemed | 160,921 | ||
Accrued expenses | 51,217 | ||
1,316,317 | |||
Net Assets ($) | 320,345,389 | ||
Composition of Net Assets ($): | |||
Paid-in capital | 249,910,962 | ||
Accumulated undistributed investment income—net | 269,455 | ||
Accumulated net realized gain (loss) on investments | 16,800,608 | ||
Accumulated net unrealized appreciation | |||
(depreciation) on investments | 53,364,364 | ||
Net Assets ($) | 320,345,389 | ||
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 1,203,889 | 246,083 | 318,895,417 |
Shares Outstanding | 56,030 | 11,670 | 14,735,816 |
Net Asset Value Per Share ($) | 21.49 | 21.09 | 21.64 |
See notes to financial statements. |
18
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2011 (Unaudited)
Investment Income ($): | |
Income: | |
Cash dividends (net of $516 foreign taxes withheld at source) | 1,724,752 |
Expenses: | |
Management fee—Note 3(a) | 1,340,516 |
Custodian fees—Note 3(c) | 56,753 |
Registration fees | 26,306 |
Professional fees | 26,091 |
Shareholder servicing costs—Note 3(c) | 12,285 |
Prospectus and shareholders’ reports | 8,654 |
Directors’ fees and expenses—Note 3(d) | 8,573 |
Distribution fees—Note 3(b) | 3,650 |
Loan commitment fees—Note 2 | 2,240 |
Miscellaneous | 6,090 |
Total Expenses | 1,491,158 |
Less—reduction in fees due to earnings credits—Note 3(c) | (6) |
Net Expenses | 1,491,152 |
Investment Income—Net | 233,600 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments | 17,250,789 |
Net unrealized appreciation (depreciation) on investments | 24,315,376 |
Net Realized and Unrealized Gain (Loss) on Investments | 41,566,165 |
Net Increase in Net Assets Resulting from Operations | 41,799,765 |
See notes to financial statements. |
The Fund | 19 |
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
May 31, 2011 | Year Ended | |
(Unaudited) | November 30, 2010 | |
Operations ($): | ||
Investment income—net | 233,600 | (861) |
Net realized gain (loss) on investments | 17,250,789 | 14,989,457 |
Net unrealized appreciation | ||
(depreciation) on investments | 24,315,376 | 26,294,770 |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 41,799,765 | 41,283,366 |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Class I Shares | — | (30,748) |
Net realized gain on investments: | ||
Class A Shares | (443,790) | (12,873) |
Class C Shares | (61,614) | (1,273) |
Class I Shares | (14,742,480) | (185,975) |
Total Dividends | (15,247,884) | (230,869) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 729,006 | 315,680 |
Class C Shares | 146,383 | 328,152 |
Class I Shares | 66,260,326 | 169,243,747 |
Dividends reinvested: | ||
Class A Shares | 43,161 | 393 |
Class C Shares | 15,022 | 24 |
Class I Shares | 6,759,296 | 93,789 |
Cost of shares redeemed: | ||
Class A Shares | (7,488,707) | (1,016,298) |
Class C Shares | (905,639) | (215,052) |
Class I Shares | (23,293,372) | (28,560,012) |
Increase (Decrease) in Net Assets | ||
from Capital Stock Transactions | 42,265,476 | 140,190,423 |
Total Increase (Decrease) in Net Assets | 68,817,357 | 181,242,920 |
Net Assets ($): | ||
Beginning of Period | 251,528,032 | 70,285,112 |
End of Period | 320,345,389 | 251,528,032 |
Undistributed investment income—net | 269,455 | 35,855 |
20
Six Months Ended | ||
May 31, 2011 | Year Ended | |
(Unaudited) | November 30, 2010 | |
Capital Share Transactions: | ||
Class A | ||
Shares sold | 35,019 | 17,720 |
Shares issued for dividends reinvested | 2,167 | 23 |
Shares redeemed | (353,367) | (58,129) |
Net Increase (Decrease) in Shares Outstanding | (316,181) | (40,386) |
Class C | ||
Shares sold | 7,198 | 18,361 |
Shares issued for dividends reinvested | 766 | 1 |
Shares redeemed | (43,648) | (11,799) |
Net Increase (Decrease) in Shares Outstanding | (35,684) | 6,563 |
Class I | ||
Shares sold | 3,171,197 | 9,763,895 |
Shares issued for dividends reinvested | 337,627 | 5,573 |
Shares redeemed | (1,109,607) | (1,581,931) |
Net Increase (Decrease) in Shares Outstanding | 2,399,217 | 8,187,537 |
See notes to financial statements. |
The Fund | 21 |
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, 2011 | Year Ended November 30, | ||
Class A Shares | (Unaudited) | 2010 | 2009a |
Per Share Data ($): | |||
Net asset value, beginning of period | 19.63 | 15.24 | 12.50 |
Investment Operations: | |||
Investment (loss)—netb | (.01) | (.05) | (.00)c |
Net realized and unrealized | |||
gain (loss) on investments | 3.03 | 4.47 | 2.74 |
Total from Investment Operations | 3.02 | 4.42 | 2.74 |
Distributions: | |||
Dividends from net realized gain on investments | (1.16) | (.03) | — |
Net asset value, end of period | 21.49 | 19.63 | 15.24 |
Total Return (%)d | 15.87e | 29.05 | 21.92e |
Ratios/Supplemental Data (%): | |||
Ratio of total expenses | |||
to average net assets | 1.25f | 1.34 | 2.94f |
Ratio of net expenses | |||
to average net assets | 1.25f | 1.32 | 1.40f |
Ratio of net investment (loss) | |||
to average net assets | (.12)f | (.27) | (.02)f |
Portfolio Turnover Rate | 31.92e | 56.03 | 48.43e |
Net Assets, end of period ($ x 1,000) | 1,204 | 7,308 | 6,289 |
a | From December 17, 2008 (commencement of operations) to November 30, 2009. |
b | Based on average shares outstanding at each month end. |
c | Amount represents less than $.01 per share. |
d | Exclusive of sales charge. |
e | Not annualized. |
f | Annualized. |
See notes to financial statements.
22
Six Months Ended | |||
May 31, 2011 | Year Ended November 30, | ||
Class C Shares | (Unaudited) | 2010 | 2009a |
Per Share Data ($): | |||
Net asset value, beginning of period | 19.34 | 15.13 | 12.50 |
Investment Operations: | |||
Investment (loss)—netb | (.09) | (.18) | (.10) |
Net realized and unrealized | |||
gain (loss) on investments | 3.00 | 4.42 | 2.73 |
Total from Investment Operations | 2.91 | 4.24 | 2.63 |
Distributions: | |||
Dividends from net realized gain on investments | (1.16) | (.03) | — |
Net asset value, end of period | 21.09 | 19.34 | 15.13 |
Total Return (%)c | 15.47d | 28.07 | 21.04d |
Ratios/Supplemental Data (%): | |||
Ratio of total expenses | |||
to average net assets | 2.01e | 2.10 | 3.70e |
Ratio of net expenses | |||
to average net assets | 2.01e | 2.08 | 2.15e |
Ratio of net investment (loss) | |||
to average net assets | (.86)e | (1.02) | (.77)e |
Portfolio Turnover Rate | 31.92d | 56.03 | 48.43d |
Net Assets, end of period ($ x 1,000) | 246 | 916 | 617 |
a | From December 17, 2008 (commencement of operations) to November 30, 2009. |
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 | 23 |
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | |||
May 31, 2011 | Year Ended November 30, | ||
Class I Shares | (Unaudited) | 2010 | 2009a |
Per Share Data ($): | |||
Net asset value, beginning of period | 19.72 | 15.28 | 12.50 |
Investment Operations: | |||
Investment income—netb | .02 | .00c | .03 |
Net realized and unrealized | |||
gain (loss) on investments | 3.06 | 4.47 | 2.75 |
Total from Investment Operations | 3.08 | 4.47 | 2.78 |
Distributions: | |||
Dividends from investment income—net | — | (.00)c | — |
Dividends from net realized gain on investments | (1.16) | (.03) | — |
Total Distributions | (1.16) | (.03) | — |
Net asset value, end of period | 21.64 | 19.72 | 15.28 |
Total Return (%) | 16.12d | 29.32 | 22.24d |
Ratios/Supplemental Data (%): | |||
Ratio of total expenses | |||
to average net assets | .99e | 1.07 | 1.91e |
Ratio of net expenses | |||
to average net assets | .99e | 1.06 | 1.15e |
Ratio of net investment income | |||
to average net assets | .17e | .02 | .26e |
Portfolio Turnover Rate | 31.92d | 56.03 | 48.43d |
Net Assets, end of period ($ x 1,000) | 318,895 | 243,304 | 63,379 |
a | From December 17, 2008 (commencement of operations) to November 30, 2009. |
b | Based on average shares outstanding at each month end. |
c | Amount represents less than $.01 per share. |
d | Not annualized. |
e | Annualized. |
See notes to financial statements.
24
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Select Managers Small CapValue 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 an open-end management investment company and operates as a series company currently offering ten series, including the fund.The fund’s investment objective is to seek capital appreciation.The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary ofThe Bank of NewYork Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. EACM Advisors LLC (“EACM”), a subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s portfolio allocation manager. Thompson, Seigel and Walmsley, LLC (“TS&W”), Walthausen & Co., LLC (“Walthausen”), Riverbridge Partners, LLC (“Riverbridge”), Neuberger Berman Management LLC (“Neuberger Berman”) and Lombardia Capital Partners, LLC (“Lombardia”) serve as the fund’s sub-investment advisers, each managing an allocated portion of the fund’s portfolio.
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 and Class I. Class A 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”) imposed 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.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are
The Fund | 25 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
The Company 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 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
26
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 American Depository Receipts 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.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The Fund | 27 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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, 2011, in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Unadjusted | Observable | Unobservable | ||
Quoted Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities— | ||||
Domestic† | 309,906,206 | — | — | 309,906,206 |
Equity Securities— | ||||
Foreign† | 3,542,204 | — | — | 3,542,204 |
Exchange Traded | ||||
Funds | 935,276 | — | — | 935,276 |
† See Statement of Investments for additional detailed categorizations. |
In January 2010, FASB issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about FairValue Measurements”. The portions of ASU No. 2010-06 which require reporting entities to prepare new disclosures surrounding amounts and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements as well as inputs and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3 have been adopted by the fund. No significant transfers between Level 1 or Level 2 fair value measurements occurred at May 31, 2011.
In May 2011, FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)”. ASU No. 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU No. 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used
28
by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU No. 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-04 and its impact on the financial statements.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” 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, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
The Fund | 29 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
As of and during the period ended May 31, 2011, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the two-year period ended November 30, 2010 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2010 was as follows: ordinary income $230,864 and long-term capital gains $5, respectively.The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2011, the fund did not borrow under the Facilities.
NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .90% of the value of the fund’s average daily net assets and is payable monthly. Dreyfus has contractually agreed, until April 1, 2012, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of none of
30
the classes (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed 1.15% of the value of the fund’s average daily net assets. During the period ended May 31, 2011, there was no reduction in management fee, pursuant to the undertaking.
Pursuant to separate Sub-Investment Advisory Agreements (each, a “Sub-Investment Advisory Agreement”) between Dreyfus and each of TS&W,Walthausen, Riverbridge, Neuberger Berman and Lombardia, each Sub-Investment Advisory Agreement will continue for successive annual periods ended November 30, 2011. Dreyfus pays TS&W, Walthausen, Riverbridge, Neuberger Berman and Lombardia separate monthly fees at an annual percentage rate based on the average daily net assets of the fund under the Sub-Adviser’s Management.
During the period ended May 31, 2011, the Distributor retained $226 from commissions earned on sales of the fund’s Class A shares.
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of the average daily net assets of Class C shares. During the period ended May 31, 2011, Class C shares were charged $3,650 pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding Class A and Class C 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, 2011, Class A and Class C shares were charged $9,008 and $1,216, respectively, pursuant to the Shareholder Services Plan.
The Fund | 31 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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, 2011, the fund was charged $1,344 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.
The fund has arrangements with the custodian and cash management bank 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.
The fund compensates The Bank of New York Mellon under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2011, the fund was charged $112 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $6.
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2011, the fund was charged $56,753 pursuant to the custody agreement.
During the period ended May 31, 2011, the fund was charged $3,146 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 $241,943, Rule 12b-1 distribution plan fees $291, shareholder services plan fees $749, custodian fees $57,180, chief compliance officer fees $3,006 and transfer agency per account fees $230.
(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.
32
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended May 31, 2011, amounted to $120,633,038 and $92,593,080, respectively.
At May 31, 2011, accumulated net unrealized appreciation on investments was $53,364,364, consisting of $62,462,073 gross unrealized appreciation and $9,097,709 gross unrealized depreciation.
At May 31, 2011, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
NOTE 5—Subsequent Event:
The Board of Directors approved on July 18, 2011, to be effective on or about July 29, 2011, a new sub-investment advisory agreement between the fund and Iridian Asset Management LLC (“Iridian”), pursuant to which Iridian will serve as an additional sub-investment adviser for the fund. At the July 18, 2011 Board meeting, the Board also terminated the fund’s sub-investment advisory agreement with Riverbridge, also to be effective on or about July 29, 2011.
The Fund | 33 |
For More Information
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus 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 1-800-SEC-0330.
Dreyfus |
U.S. Equity Fund |
SEMIANNUAL REPORT May 31, 2011
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.
Contents | |
THE FUND | |
2 | A Letter from the Chairman and 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 |
17 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
Dreyfus
U.S. Equity Fund
The Fund
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus U.S. Equity Fund, covering the six-month period from December 1, 2010, through May 31, 2011. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
The U.S. economy appears to have hit a soft patch in the spring of 2011 after accelerating over the final months of 2010. Disappointing labor, housing and manufacturing data have come at a time of higher energy prices and some tightening of monetary policy in global markets. In our view, the current slowdown should be relatively brief as the world recovers from the supply shocks created by weather impacts on food production, the decline in Libyan oil exports and supply-chain disruptions stemming from Japan’s natural and nuclear disasters.The U.S. stock market produced mostly positive results in this choppy economic environment due to better-than-expected corporate earnings and robust ongoing industrial demand from the emerging markets.
We remain optimistic as the U.S. economy moves through the middle stages of its cycle. Indeed, global macroeconomic policy generally has remained stimulative despite the recent efforts of some central banks to forestall inflationary pressures. We continue to expect sustainable economic growth, a rising but volatile uptrend in inflation and an improving U.S. labor market in the months ahead.As always, to determine how these forces may affect your investments, we urge you to talk regularly with your financial advisor.
Thank you for your continued confidence and support.
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
June 15, 2011
2
DISCUSSION OF FUND PERFORMANCE
For the period of December 1, 2010, through May 31, 2011, as provided by Charlie Macquaker and Roy Leckie of Walter Scott & Partners Limited (Walter Scott), Sub-investment adviser
Market and Fund Performance Overview
For the six-month period ended May 31, 2011, Dreyfus U.S. Equity Fund’s Class A shares achieved a return of 13.99%, Class C shares returned 13.47% and Class I shares returned 14.04%.1 In comparison, the fund’s benchmark, the Morgan Stanley Capital International USA Index (“MSCI USA Index”), achieved a 14.91% return over the same period.2
The U.S. stock market rallied early in the reporting period as an economic recovery gained momentum, but the upward trend later was dampened by a number of unexpected headwinds.The fund is structured solely on a “bottom-up” basis, without the benchmark’s sector weights or holdings being given any weight in the investment decision-making process. For purposes of comparison, though, the fund’s lower-than-benchmark returns can be explained by an overweight exposure to information technology and the poor performance over the reporting period of a number of information technology stocks held in the fund.
The Fund’s Investment Approach
The fund seeks long-term real returns by investing in stocks of companies that are located in the United States.When selecting stocks,Walter Scott seeks companies with fundamental strengths that indicate the potential for sustainable growth. The firm focuses on individual stock selection through extensive fundamental research. Candidates are initially selected for research if they meet certain broad absolute and trend criteria. Financial statements are analyzed in an effort to identify the nature of their cash generation 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.
Greater Economic Confidence Fueled Stock Market Rally
Liquidity in U.S. financial markets courtesy of the unprecedented program of quantitative easing has supported equity markets around the
The Fund | 3 |
DISCUSSION OF FUND PERFORMANCE (continued)
world for some time. In addition, investor sentiment improved in late 2010 with growing confidence that a return to recession was unlikely.A more optimistic outlook subsequently was reinforced by improvements in employment and consumer spending, as well as better-than-expected corporate earnings across a variety of market sectors. The passage of fiscally stimulative tax legislation toward the end of 2010 lent further support to stock prices.
Improving global economic conditions also supported U.S. stock prices. Better-than-expected economic data in Europe buoyed investor confidence, and robust ongoing demand for industrial commodities and equipment from the emerging markets helped drive several market sectors higher.
However, the market rally was interrupted in February, when political unrest in the Middle East led to sharply higher crude oil prices, and again in March when a devastating earthquake, tsunami and nuclear disaster in Japan threatened one of the world’s largest economies. In addition, disappointing U.S. employment, housing, and GDP data weighed on the market near the reporting period’s end.
Technology Stocks Undermined Relative Performance
Although the fund participated in the market rally to a substantial degree, its relative performance was constrained by an overweight exposure to the information technology sector, which lagged market averages. Information technology stocks held in the fund lagged on a relative basis. In each case the investment rationale remains intact.
The fund’s top performers for the reporting period included U.S. energy services company CARBO Ceramics, which encountered robust demand for products used in the production of natural gas. Retailer Tractor Supply Company also reported strong growth as it expanded its presence into new markets and improved its merchandising efforts. Thermal imaging specialist FLIR Systems posted robust revenue growth confirming the market leading positions of its key products. In the health care sector, U.S. medical devices manufacturer C.R. Bard advanced on the back of better than expected results and upbeat comments on new products from its high margin surgery division. Software developer Oracle has benefited from evidence of the early success of its new suite of products launched following the successful integration of recent acquisition Sun Microsystems.
4
Disappointments during the reporting period were concentrated primarily in the information technology sector. Software giant Microsoft and networking company Cisco Systems have been weak performers over the period and internet media company Google also lagged. Audio specialist Dolby Laboratories suffered as shipments of personal computers declined in favor of tablet computers and smart-phones, hurting licensing revenues. In the consumer discretionary sector, footwear maker NIKE saw profit margins impacted by higher costs for raw materials. However, the company stated that it would offset further gross margin pressure through productivity gains and cost increases which are testament to the strength of its brands.
Maintaining a Cautious Investment Posture
Despite the modest step back in markets toward the end of the reporting period, we are concerned that investors’ expectations may still be too optimistic in an uncertain and volatile investment environment.Although the U.S. and global economic recoveries continue, consumers remain under pressure, and federal, state and local governments are struggling with unmanageable budget deficits. However, companies on a sound financial footing with market-leading positions and often geographically diverse income streams continue to show that they can prosper in any environment. The focus at Walter Scott has always been the search for companies in control of their own destiny.We believe it is in times like these where such strength, combined with sound growth prospects, offers the opportunity to generate a long term real rate of return.
June 15, 2011
Equity funds are subject generally to market, market sector, market liquidity, issuer and investment | |
style risks, among other factors, to varying degrees, all of which are more fully described in the | |
fund’s prospectus. | |
1 | Total return includes reinvestment of dividends and any capital gains paid, and does not take into |
consideration the maximum initial sales charge in the case of Class A shares, or the applicable | |
contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these | |
charges been reflected, returns would have been lower. Past performance is no guarantee of future | |
results. Share price and investment return fluctuate such that upon redemption, fund shares may be | |
worth more or less than their original cost. | |
2 | SOURCE: LIPPER INC. – Reflects reinvestment of net dividends and, where applicable, |
capital gain distributions.The Morgan Stanley Capital International USA (MSCI USA) Index | |
is an unmanaged, market capitalization weighted index that is designed to measure the | |
performance of publicly traded stocks issued by companies in the United States. Investors cannot | |
invest directly in any index. |
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 Dreyfus U.S. Equity Fund from December 1, 2010 to May 31, 2011. 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, 2011
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 5.98 | $ 10.01 | $ 4.38 |
Ending value (after expenses) | $1,139.90 | $1,134.70 | $1,140.40 |
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, 2011
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 5.64 | $ 9.45 | $ 4.13 |
Ending value (after expenses) | $1,019.35 | $1,015.56 | $1,020.84 |
† Expenses are equal to the fund’s annualized expense ratio of 1.12% for Class A, 1.88% for Class C and .82% |
for Class I, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half |
year period). |
6
STATEMENT OF INVESTMENTS
May 31, 2011 (Unaudited)
Common Stocks—96.1% | Shares | Value ($) | |
Consumer Discretionary—14.4% | |||
Family Dollar Stores | 114,400 | 6,376,656 | |
McDonald’s | 74,400 | 6,066,576 | |
NIKE, Cl. B | 69,900 | 5,903,055 | |
Panera Bread, Cl. A | 33,500 | a | 4,188,505 |
Starbucks | 164,500 | 6,051,955 | |
TJX | 102,100 | 5,413,342 | |
Tractor Supply | 65,600 | 4,143,296 | |
Urban Outfitters | 182,000 | a | 5,543,720 |
43,687,105 | |||
Consumer Staples—7.8% | |||
Colgate-Palmolive | 69,900 | 6,118,347 | |
PepsiCo | 79,000 | 5,618,480 | |
Wal-Mart Stores | 105,300 | 5,814,666 | |
Walgreen | 139,200 | 6,073,296 | |
23,624,789 | |||
Energy—10.5% | |||
Apache | 54,900 | 6,840,540 | |
CARBO Ceramics | 49,200 | 7,393,284 | |
EOG Resources | 56,360 | 6,151,130 | |
Occidental Petroleum | 57,500 | 6,201,375 | |
Schlumberger | 62,850 | 5,387,502 | |
31,973,831 | |||
Health Care—18.1% | |||
Abbott Laboratories | 101,900 | 5,324,275 | |
C.R. Bard | 32,450 | 3,627,261 | |
Celgene | 100,100 a | 6,097,091 | |
Gilead Sciences | 145,600 a | 6,077,344 | |
Johnson & Johnson | 90,000 | 6,056,100 | |
Medtronic | 138,000 | 5,616,600 | |
Meridian Bioscience | 250,700 | 5,981,702 | |
Resmed | 175,100 a | 5,638,220 | |
Stryker | 88,400 | 5,516,160 | |
Varian Medical Systems | 74,600 a | 5,038,484 | |
54,973,237 |
The Fund | 7 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) | |
Industrial—15.2% | |||
Boeing | 70,100 | 5,469,903 | |
C.H. Robinson Worldwide | 78,000 | 6,257,160 | |
Donaldson | 97,900 | 5,845,609 | |
Emerson Electric | 111,000 | 6,055,050 | |
Fastenal | 163,600 | 5,428,248 | |
MSC Industrial Direct, Cl. A | 84,200 | 5,852,742 | |
Precision Castparts | 36,460 | 5,727,866 | |
Rockwell Collins | 92,800 | 5,672,864 | |
46,309,442 | |||
Information Technology—24.3% | |||
Adobe Systems | 157,500 a | 5,454,225 | |
Amphenol, Cl. A | 106,600 | 5,762,796 | |
Automatic Data Processing | 106,500 | 5,869,215 | |
Cisco Systems | 222,400 | 3,736,320 | |
Dolby Laboratories, Cl. A | 113,800 | a | 5,319,012 |
FLIR Systems | 154,900 | 5,599,635 | |
Google, Cl. A | 11,360 | a | 6,009,667 |
Intel | 280,100 | 6,305,051 | |
MasterCard, Cl. A | 22,070 | 6,335,194 | |
Microsoft | 211,800 | 5,297,118 | |
Oracle | 175,200 | 5,995,344 | |
Paychex | 185,800 | 6,001,340 | |
QUALCOMM | 104,200 | 6,105,078 | |
73,789,995 | |||
Materials—5.8% | |||
Ecolab | 105,100 | 5,767,888 | |
Monsanto | 86,300 | 6,130,752 | |
Praxair | 53,100 | 5,620,104 | |
17,518,744 | |||
Total Common Stocks | |||
(cost $256,168,983) | 291,877,143 |
8
Other Investment—3.6% | Shares | Value ($) |
Registered Investment Company; | ||
Dreyfus Institutional Preferred | ||
Plus Money Market Fund | ||
(cost $10,869,000) | 10,869,000 b | 10,869,000 |
Total Investments (cost $267,037,983) | 99.7% | 302,746,143 |
Cash and Receivables (Net) | .3% | 922,068 |
Net Assets | 100.0% | 303,668,211 |
a | Non-income producing security. |
b | Investment in affiliated money market mutual fund. |
Portfolio Summary (Unaudited)† | |||
Value (%) | Value (%) | ||
Information Technology | 24.3 | Consumer Staples | 7.8 |
Health Care | 18.1 | Materials | 5.8 |
Industrial | 15.2 | Money Market Investment | 3.6 |
Consumer Discretionary | 14.4 | ||
Energy | 10.5 | 99.7 |
† Based on net assets. |
See notes to financial statements. |
The Fund | 9 |
STATEMENT OF ASSETS AND LIABILITIES |
May 31, 2011 (Unaudited) |
Cost | Value | ||
Assets ($): | |||
Investments in securities—See Statement of Investments: | |||
Unaffiliated issuers | 256,168,983 | 291,877,143 | |
Affiliated issuers | 10,869,000 | 10,869,000 | |
Cash | 450,258 | ||
Receivable for shares of Common Stock subscribed | 417,603 | ||
Dividends and interest receivable | 399,825 | ||
Prepaid expenses | 28,645 | ||
304,042,474 | |||
Liabilities ($): | |||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 205,025 | ||
Payable for shares of Common Stock redeemed | 125,245 | ||
Accrued expenses | 43,993 | ||
374,263 | |||
Net Assets ($) | 303,668,211 | ||
Composition of Net Assets ($): | |||
Paid-in capital | 266,487,220 | ||
Accumulated undistributed investment income—net | 674,421 | ||
Accumulated net realized gain (loss) on investments | 798,410 | ||
Accumulated net unrealized appreciation | |||
(depreciation) on investments | 35,708,160 | ||
Net Assets ($) | 303,668,211 | ||
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 1,055,903 | 124,420 | 302,487,888 |
Shares Outstanding | 72,509 | 8,708 | 20,711,803 |
Net Asset Value Per Share ($) | 14.56 | 14.29 | 14.60 |
See notes to financial statements. |
10
STATEMENT OF OPERATIONS |
Six Months Ended May 31, 2011 (Unaudited) |
Investment Income ($): | |
Income: | |
Cash dividends: | |
Unaffiliated issuers | 1,684,554 |
Affiliated issuers | 8,836 |
Total Income | 1,693,390 |
Expenses: | |
Management fee—Note 3(a) | 888,368 |
Registration fees | 32,696 |
Professional fees | 21,878 |
Custodian fees—Note 3(c) | 16,594 |
Shareholder servicing costs—Note 3(c) | 4,196 |
Prospectus and shareholders’ reports | 3,829 |
Directors’ fees and expenses—Note 3(d) | 3,192 |
Loan commitment fees—Note 2 | 1,275 |
Distribution fees—Note 3(b) | 997 |
Miscellaneous | 6,202 |
Total Expenses | 979,227 |
Less—reduction in fees due to earnings credits—Note 3(c) | (3) |
Net Expenses | 979,224 |
Investment Income—Net | 714,166 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments | 799,999 |
Net unrealized appreciation (depreciation) on investments | 27,019,492 |
Net Realized and Unrealized Gain (Loss) on Investments | 27,819,491 |
Net Increase in Net Assets Resulting from Operations | 28,533,657 |
See notes to financial statements. |
The Fund | 11 |
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
May 31, 2011 | Year Ended | |
(Unaudited) | November 30, 2010 | |
Operations ($): | ||
Investment income—net | 714,166 | 235,200 |
Net realized gain (loss) on investments | 799,999 | 950,030 |
Net unrealized appreciation | ||
(depreciation) on investments | 27,019,492 | 8,688,285 |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 28,533,657 | 9,873,515 |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Class A Shares | — | (5,953) |
Class I Shares | (274,865) | (7,080) |
Net realized gain on investments: | ||
Class A Shares | (11,303) | — |
Class C Shares | (1,516) | — |
Class I Shares | (752,726) | — |
Total Dividends | (1,040,410) | (13,033) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 81,565 | 220,658 |
Class C Shares | 58,489 | 27,800 |
Class I Shares | 144,008,152 | 137,915,540 |
Dividends reinvested: | ||
Class A Shares | 1,717 | 183 |
Class C Shares | 322 | — |
Class I Shares | 668,489 | 5,399 |
Cost of shares redeemed: | ||
Class A Shares | (1,712,533) | (1,948,355) |
Class C Shares | (278,307) | (243,105) |
Class I Shares | (14,160,303) | (4,581,770) |
Increase (Decrease) in Net Assets | ||
from Capital Stock Transactions | 128,667,591 | 131,396,350 |
Total Increase (Decrease) in Net Assets | 156,160,838 | 141,256,832 |
Net Assets ($): | ||
Beginning of Period | 147,507,373 | 6,250,541 |
End of Period | 303,668,211 | 147,507,373 |
Undistributed investment income—net | 674,421 | 235,120 |
12
Six Months Ended | ||
May 31, 2011 | Year Ended | |
(Unaudited) | November 30, 2010 | |
Capital Share Transactions: | ||
Class A | ||
Shares sold | 5,902 | 18,541 |
Shares issued for dividends reinvested | 127 | 15 |
Shares redeemed | (122,364) | (162,126) |
Net Increase (Decrease) in Shares Outstanding | (116,335) | (143,570) |
Class C | ||
Shares sold | 4,201 | 2,301 |
Shares issued for dividends reinvested | 24 | — |
Shares redeemed | (20,220) | (20,518) |
Net Increase (Decrease) in Shares Outstanding | (15,995) | (18,217) |
Class I | ||
Shares sold | 10,430,978 | 11,457,984 |
Shares issued for dividends reinvested | 49,481 | 447 |
Shares redeemed | (1,012,676) | (374,153) |
Net Increase (Decrease) in Shares Outstanding | 9,467,783 | 11,084,278 |
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, 2011 | Year Ended November 30, | |||
Class A Shares | (Unaudited) | 2010 | 2009 | 2008a |
Per Share Data ($): | ||||
Net asset value, beginning of period | 12.83 | 11.68 | 9.14 | 12.50 |
Investment Operations: | ||||
Investment income—netb | .02 | .01 | .04 | .02 |
Net realized and unrealized | ||||
gain (loss) on investments | 1.77 | 1.16 | 2.53 | (3.38) |
Total from Investment Operations | 1.79 | 1.17 | 2.57 | (3.36) |
Distributions: | ||||
Dividends from investment income—net | — | (.02) | (.03) | — |
Dividends from net realized | ||||
gain on investments | (.06) | — | — | — |
Total Distributions | (.06) | (.02) | (.03) | — |
Net asset value, end of period | 14.56 | 12.83 | 11.68 | 9.14 |
Total Return (%)c | 13.99d | 10.01 | 28.19 | (26.88)d |
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses | ||||
to average net assets | 1.12e | 1.76 | 4.65 | 5.54e |
Ratio of net expenses | ||||
to average net assets | 1.12e | 1.40 | 1.40 | 1.40e |
Ratio of net investment income | ||||
to average net assets | .29e | .04 | .42 | .33e |
Portfolio Turnover Rate | 2.65d | 13.62 | 31.79 | 7.98d |
Net Assets, end of period ($ x 1,000) | 1,056 | 2,424 | 3,884 | 2,618 |
a | From May 30, 2008 (commencement of operations) to November 30, 2008. |
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, 2011 | Year Ended November 30, | |||
Class C Shares | (Unaudited) | 2010 | 2009 | 2008a |
Per Share Data ($): | ||||
Net asset value, beginning of period | 12.65 | 11.58 | 9.11 | 12.50 |
Investment Operations: | ||||
Investment (loss)—netb | (.03) | (.09) | (.03) | (.02) |
Net realized and unrealized | ||||
gain (loss) on investments | 1.73 | 1.16 | 2.50 | (3.37) |
Total from Investment Operations | 1.70 | 1.07 | 2.47 | (3.39) |
Distributions: | ||||
Dividends from net realized | ||||
gain on investments | (.06) | — | — | — |
Net asset value, end of period | 14.29 | 12.65 | 11.58 | 9.11 |
Total Return (%)c | 13.47d | 9.24 | 27.11 | (27.12)d |
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses | ||||
to average net assets | 1.88e | 2.52 | 5.83 | 6.30e |
Ratio of net expenses | ||||
to average net assets | 1.88e | 2.15 | 2.15 | 2.14e |
Ratio of net investment (loss) | ||||
to average net assets | (.47)e | (.71) | (.27) | (.41)e |
Portfolio Turnover Rate | 2.65d | 13.62 | 31.79 | 7.98d |
Net Assets, end of period ($ x 1,000) | 124 | 312 | 497 | 374 |
a | From May 30, 2008 (commencement of operations) to November 30, 2008. |
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, 2011 | Year Ended November 30, | |||
Class I Shares | (Unaudited) | 2010 | 2009 | 2008a |
Per Share Data ($): | ||||
Net asset value, beginning of period | 12.88 | 11.70 | 9.16 | 12.50 |
Investment Operations: | ||||
Investment income—netb | .04 | .07 | .05 | .03 |
Net realized and unrealized | ||||
gain (loss) on investments | 1.76 | 1.15 | 2.54 | (3.37) |
Total from Investment Operations | 1.80 | 1.22 | 2.59 | (3.34) |
Distributions: | ||||
Dividends from investment income—net | (.02) | (.04) | (.05) | — |
Dividends from net realized | ||||
gain on investments | (.06) | — | — | — |
Total Distributions | (.08) | (.04) | (.05) | — |
Net asset value, end of period | 14.60 | 12.88 | 11.70 | 9.16 |
Total Return (%) | 14.04c | 10.47 | 28.36 | (26.72)c |
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses | ||||
to average net assets | .82d | .94 | 3.77 | 5.25d |
Ratio of net expenses | ||||
to average net assets | .82d | .94 | 1.15 | 1.14d |
Ratio of net investment income | ||||
to average net assets | .61d | .56 | .54 | .59d |
Portfolio Turnover Rate | 2.65c | 13.62 | 31.79 | 7.98c |
Net Assets, end of period ($ x 1,000) | 302,488 | 144,771 | 1,870 | 366 |
a | From May 30, 2008 (commencement of operations) to November 30, 2008. |
b | Based on average shares outstanding at each month end. |
c | Not annualized. |
d | Annualized. |
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus 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 an open-end management investment company and operates as a series company currently offering ten series, including the fund.The fund’s investment objective is to seek long-term total return. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary ofThe Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Walter Scott & Partners Limited (“Walter Scott”), 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 and Class I. Class A 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, 2011, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held 38,489 Class A and 1,975 Class C shares of the fund.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Fund | 17 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
The Company 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 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
18
pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts 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.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The Fund | 19 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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, 2011 in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Unadjusted | Observable | Unobservable | ||
Quoted Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities— | ||||
Domestic† | 291,877,143 | — | — | 291,877,143 |
Mutual Funds | 10,869,000 | — | — | 10,869,000 |
† | See Statement of Investments for additional detailed categorizations. |
In January 2010, FASB issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about FairValue Measurements”. The portions of ASU No. 2010-06 which require reporting entities to prepare new disclosures surrounding amounts and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements as well as inputs and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3 have been adopted by the fund. No significant transfers between Level 1 or Level 2 fair value measurements occurred at May 31, 2011.
In May 2011, FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)”. ASU No. 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU No. 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of
20
the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU No. 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-04 and its impact on the financial statements.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” in the Act.
The fund may invest in shares of certain affiliated investment companies also advised or managed by Dreyfus. Investments in affiliated investment companies for the period ended May 31, 2011 were as follows:
Affiliated | |||||
Investment | Value | Value | Net | ||
Company | 11/30/2010 ($) | Purchases ($) | Sales ($) | 5/31/2011 ($) | Assets (%) |
Dreyfus | |||||
Institutional | |||||
Preferred | |||||
Plus Money | |||||
Market Fund | 4,612,000 | 109,147,000 | 102,890,000 | 10,869,000 | 3.6 |
(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
The Fund | 21 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended May 31, 2011, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended November 30, 2010 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2010 was as follows: ordinary income $13,033.The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on
22
rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2011, the fund did not borrow under the Facilities.
NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:
(a) Pursuant to a management 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, until April 1, 2012, to waive receipt of its fees and/or assume the expenses of the fund so that annual fund operating expenses (excluding Rule 12b-1 distribution plan fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed 1.15% of the value of the fund’s average daily net assets. During the period ended May 31, 2011, there was no expense reimbursement pursuant to the undertaking.
Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott a monthly fee at an annual percentage of the fund’s average daily net assets.
During the period ended May 31, 2011, the Distributor retained $348 from commissions earned on sales of the fund’s Class A shares.
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of the average daily net assets of Class C shares. During the period ended May 31, 2011, Class C shares were charged $997 pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder
The Fund | 23 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
accounts, such as answering shareholder inquiries regarding Class A and Class C 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, 2011, Class A and Class C shares were charged $2,648 and $332, 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, 2011, the fund was charged $718 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.
The fund has arrangements with the custodian and cash management bank 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.
The fund compensates The Bank of New York Mellon under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2011, the fund was charged $52 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $3.
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2011, the fund was charged $16,594 pursuant to the custody agreement.
24
During the period ended May 31, 2011, the fund was charged $3,146 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 $189,369, Rule 12b-1 distribution plan fees $91, shareholder services plan fees $301, custodian fees $12,128, chief compliance officer fees $3,006 and transfer agency per account fees $130.
(d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended May 31, 2011, amounted to $128,361,817 and $6,014,490, respectively.
At May 31, 2011, accumulated net unrealized appreciation on investments was $35,708,160, consisting of $38,868,836 gross unrealized appreciation and $3,160,676 gross unrealized depreciation.
At May 31, 2011, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
The Fund | 25 |
For More Information
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus 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 1-800-SEC-0330.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at 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-DREYFUS.
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.
Contents | |
THE FUND | |
2 | A Letter from the Chairman and 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 |
17 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
Global Stock Fund |
The Fund |
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Global Stock Fund, covering the six-month period from December 1, 2010, through May 31, 2011. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
The U.S. economy appears to have hit a soft patch in the spring of 2011 after accelerating over the final months of 2010. Disappointing labor, housing and manufacturing data have come at a time of higher energy prices and some tightening of monetary policy in global markets. In our view, the current slowdown should be relatively brief as the world recovers from the supply shocks created by weather impacts on food production, the decline in Libyan oil exports and supply-chain disruptions stemming from Japan’s natural and nuclear disasters.The U.S. stock market produced mostly positive results in this choppy economic environment due to better-than-expected corporate earnings and robust ongoing industrial demand from the emerging markets.
We remain optimistic as the U.S. economy moves through the middle stages of its cycle. Indeed, global macroeconomic policy generally has remained stimulative despite the recent efforts of some central banks to forestall inflationary pressures. We continue to expect sustainable economic growth, a rising but volatile uptrend in inflation and an improving U.S. labor market in the months ahead.As always, to determine how these forces may affect your investments, we urge you to talk regularly with your financial advisor.
Thank you for your continued confidence and support.
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
June 15, 2011
2
DISCUSSION OF FUND PERFORMANCE
For the period of December 1, 2010, through May 31, 2011, as provided by Charlie Macquaker and Roy Leckie of Walter Scott & Partners Limited (Walter Scott), Sub-investment adviser
Market and Fund Performance Overview
For the six-month period ended May 31, 2011, Global Stock Fund’s Class A shares produced a total return of 12.32%, Class C shares returned 11.78% and Class I shares returned 12.45%.1 In comparison, the fund’s benchmark index, the Morgan Stanley Capital International World Index (the “MSCI World Index”), achieved a 14.85% return over the same period.2 The fund is structured solely on a “bottom-up” basis, without the benchmark’s sector or geographical weights being given any weight in the investment decision-making process. For purposes of comparison, though, in looking at fund performance relative to the benchmark over this period, the lower return can be attributed to an underweight exposure to Europe and an overweight position in Japan.
The Fund’s Investment Approach
The fund seeks long-term real returns by investing in high quality companies capable of sustainable growth and wealth creation over a long time horizon. The firm focuses on individual stock selection through extensive fundamental research. Candidates are initially selected for research if they meet certain broad absolute and trend criteria. Financial statements are analyzed in an effort to identify the nature of the cash generation that is looked for in any investment and to understand the variables that demonstrate robust financial health and define long-term competitive advantage. Companies meeting the financial criteria are then subjected to a detailed investigation of products, costs and pricing, competition, industry position and outlook.
Momentum in Major Markets Despite Geo-Political Turmoil
Given the myriad of geo-political and economic uncertainties facing the major global economies, investor sentiment has been remarkably positive over much of the reporting period. Toward the end of 2010, a more optimistic outlook was reinforced by better-than-expected economic
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
data in the U.S. and Europe and robust corporate earnings across a number of geographic regions and industry groups.
The market rally was interrupted in February when a wave of political unrest in the Middle East led to sharply higher energy prices, and again in March when a devastating earthquake, tsunami and nuclear disaster in Japan threatened one of the world’s largest economies. In addition, concerns intensified regarding the sovereign debt crisis in Greece and other peripheral members of the European Union, and the economies of some developed nations appeared to hit a soft patch in the spring. Nonetheless, global equity markets produced double-digit gains, on average, with particularly strong results in Europe, the United States and the United Kingdom.
Focus on High Quality, Well-Established Companies
Although the fund benefited from the global market rally to a substantial degree, its relative performance can be explained by a lower exposure to a strongly performing European region. Conversely, the fund’s exposure to Japan was greater than the benchmark and Japan lagged global averages over the reporting period. However, the fund’s focus on large, well-established companies, was beneficial as higher-quality stocks outperformed their more speculative counterparts during the reporting period.
The fund’s top performers for the reporting period included U.S. thermal imaging specialist FLIR Systems, which posted robust revenue growth confirming the leading market positions of its key products. In the health care sector, U.S. medical devices manufacturer C.R. Bard advanced on the back of better-than-expected results and upbeat comments on new products from its high margin surgery division. French corrective lenses maker Cie Generale d’Optique Essilor International also gained on the announcement of higher earnings through greater penetration of U.S. and emerging markets. U.K. energy producer BG Group gained value noting that expectations of a ramp up in production in 2012 and 2013 remain very much on track despite the challenges of the current year with modest production growth.
U.S. software developer Oracle has benefited from evidence of the early success of its new suite of products launched following the successful integration of recent acquisition Sun Microsystems.
Disappointments during the reporting period were concentrated primarily in the information technology sector. U.S. networking giant Cisco Systems lagged as profits declined in its switching business and
4
weakness in its public sector business. In Japan, optics specialist Hoya reported weaker-than-expected financial results, prompting its sale from the portfolio, and gaming systems maker Nintendo was impacted by question marks over the success of its new 3DS product. Also in Japan, drug developer Chugai Pharmaceutical suffered delays in launching a new arthritis drug. In the emerging markets, wireless service provider China Mobile lagged due to general market weakness stemming from local inflation worries.
An Injection of Moderation
A sense of moderation appears to have been instilled in major equity markets. Markets have begun to price in the risks attached to the continued flow of less than optimistic economic data, the still turbulent geopolitical environment, sustained political gridlock in the U.S. and enduring European sovereign debt woes. Equity market participants have become more discerning and drawn toward quality stocks such as those within the fund. Companies on a sound financial footing with market-leading positions and often geographically diverse income streams continue to show that they can prosper in any environment. The focus at Walter Scott has always been the search for companies in control of their own destiny.We believe it is in times like these where such strength, combined with sound growth prospects, offers the opportunity to generate a long-term real rate of return.
June 15, 2011
Equity funds are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
Investing internationally involves special risks, including changes in currency exchange rates, political, economic and social instability, a lack of comprehensive company information, differing auditing and legal standards and less market liquidity.
1 | Total return includes reinvestment of dividends and any capital gains paid, and does not take into |
consideration the maximum initial sales charge in the case of Class A shares, or the applicable | |
contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these | |
charges been reflected, returns would have been lower. Past performance is no guarantee of future | |
results. Share price and investment return fluctuate such that upon redemption, fund shares may be | |
worth more or less than their original cost. | |
2 | SOURCE: LIPPER 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. Investors cannot invest directly in any index. |
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, 2010 to May 31, 2011. 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, 2011
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 6.78 | $ 10.88 | $ 4.87 |
Ending value (after expenses) | $1,123.20 | $1,117.80 | $1,124.50 |
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended May 31, 2011
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 6.44 | $ 10.35 | $ 4.63 |
Ending value (after expenses) | $1,018.55 | $1,014.66 | $1,020.34 |
† Expenses are equal to the fund’s annualized expense ratio of 1.28% for Class A, 2.06% for Class C and .92% |
for Class I, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half |
year period). |
6
STATEMENT OF INVESTMENTS
May 31, 2011 (Unaudited)
Common Stocks—97.9% | Shares | Value ($) |
Australia—3.5% | ||
CSL | 237,500 | 8,617,593 |
Woodside Petroleum | 204,234 | 10,187,270 |
18,804,863 | ||
Brazil—1.7% | ||
Petroleo Brasileiro, ADR | 282,500 | 8,830,950 |
Canada—1.9% | ||
Suncor Energy | 235,700 | 9,840,600 |
China—.5% | ||
China Shenhua Energy, Cl. H | 516,000 | 2,567,677 |
Denmark—1.9% | ||
Novo Nordisk, Cl. B | 79,000 | 9,905,215 |
France—3.8% | ||
Cie Generale d’Optique Essilor International | 115,000 | 9,312,471 |
L’Oreal | 85,000 | 10,694,724 |
20,007,195 | ||
Hong Kong—6.2% | ||
China Mobile | 1,082,000 | 9,879,493 |
CLP Holdings | 940,500 | 8,033,728 |
CNOOC | 3,993,000 | 10,100,800 |
Hong Kong & China Gas | 2,107,881 | 4,872,007 |
32,886,028 | ||
Japan—15.5% | ||
Canon | 211,100 | 10,180,530 |
Chugai Pharmaceutical | 371,100 | 6,105,943 |
Daikin Industries | 183,200 | 6,121,890 |
Denso | 246,500 | 8,842,521 |
FANUC | 64,400 | 9,899,618 |
Honda Motor | 234,800 | 8,965,007 |
Hoya | 51,500 | 1,070,267 |
Keyence | 20,870 | 5,475,476 |
Mitsubishi Estate | 477,000 | 8,523,049 |
Nintendo | 34,000 | 7,929,861 |
Shin-Etsu Chemical | 169,200 | 8,808,855 |
81,923,017 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Singapore—1.2% | ||
DBS Group Holdings | 531,000 | 6,373,526 |
Spain—2.3% | ||
Inditex | 136,000 | 12,363,458 |
Sweden—2.1% | ||
Hennes & Mauritz, Cl. B | 297,100 | 11,038,740 |
Switzerland—5.2% | ||
Nestle | 172,000 | 11,041,154 |
Novartis | 100,600 | 6,487,279 |
SGS | 5,000 | 9,907,375 |
27,435,808 | ||
United Kingdom—10.7% | ||
BG Group | 455,800 | 10,545,858 |
HSBC Holdings | 861,200 | 8,993,087 |
Reckitt Benckiser Group | 181,000 | 10,233,542 |
Standard Chartered | 379,500 | 10,163,283 |
Tesco | 1,515,000 | 10,443,506 |
WM Morrison Supermarkets | 1,200,500 | 5,995,588 |
56,374,864 | ||
United States—41.4% | ||
Abbott Laboratories | 211,000 | 11,024,750 |
Adobe Systems | 297,500 a | 10,302,425 |
Amphenol, Cl. A | 165,400 | 8,941,524 |
Automatic Data Processing | 194,600 | 10,724,406 |
C.R. Bard | 79,700 | 8,908,866 |
Cisco Systems | 446,300 | 7,497,840 |
EOG Resources | 93,000 | 10,150,020 |
Fastenal | 210,000 | 6,967,800 |
FLIR Systems | 151,500 | 5,476,725 |
Gilead Sciences | 248,500 a | 10,372,390 |
Google, Cl. A | 19,000 a | 10,051,380 |
Intel | 445,300 | 10,023,703 |
Johnson & Johnson | 145,600 | 9,797,424 |
MasterCard, Cl. A | 35,500 | 10,190,275 |
Medtronic | 197,600 | 8,042,320 |
Microsoft | 376,700 | 9,421,267 |
8
Common Stocks (continued) | Shares | Value ($) |
United States (continued) | ||
NIKE, Cl. B | 129,500 | 10,936,275 |
Oracle | 273,300 | 9,352,326 |
Precision Castparts | 67,400 | 10,588,540 |
Schlumberger | 103,200 | 8,846,304 |
TJX | 199,500 | 10,577,490 |
Wal-Mart Stores | 185,200 | 10,226,744 |
Walgreen | 240,600 | 10,497,378 |
218,918,172 | ||
Total Common Stocks | ||
(cost $423,322,578) | 517,270,113 | |
Other Investment—1.5% | ||
Registered Investment Company; | ||
Dreyfus Institutional Preferred | ||
Plus Money Market Fund | ||
(cost $8,000,000) | 8,000,000 b | 8,000,000 |
Total Investments (cost $431,322,578) | 99.4% | 525,270,113 |
Cash and Receivables (Net) | .6% | 3,235,915 |
Net Assets | 100.0% | 528,506,028 |
ADR—American Depository Receipts
a | Non-income producing security. |
b | Investment in affiliated money market mutual fund. |
Portfolio Summary (Unaudited)† | |||
Value (%) | Value (%) | ||
Technology | 22.1 | Financial Services | 6.4 |
Health Care | 16.8 | Utilities | 2.4 |
Energy | 13.4 | Telecommunication Services | 1.9 |
Consumer Staples | 13.1 | Materials | 1.7 |
Consumer Discretionary | 11.9 | Money Market Investment | 1.5 |
Industrials | 8.2 | 99.4 | |
† Based on net assets. | |||
See notes to financial statements. |
The Fund 9
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2011 (Unaudited)
Cost | Value | |
Assets ($): | ||
Investments in securities—See Statement of Investments: | ||
Unaffiliated issuers | 423,322,578 | 517,270,113 |
Affiliated issuers | 8,000,000 | 8,000,000 |
Cash | 960,137 | |
Cash denominated in foreign currencies | 192,834 | 193,535 |
Dividends and interest receivable | 2,560,877 | |
Receivable for shares of Common Stock subscribed | 232,081 | |
Prepaid expenses | 18,198 | |
529,234,941 | ||
Liabilities ($): | ||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 456,395 | |
Payable for shares of Common Stock redeemed | 209,598 | |
Accrued expenses | 62,920 | |
728,913 | ||
Net Assets ($) | 528,506,028 | |
Composition of Net Assets ($): | ||
Paid-in capital | 427,730,151 | |
Accumulated undistributed investment income—net | 3,762,034 | |
Accumulated net realized gain (loss) on investments | 3,002,672 | |
Accumulated net unrealized appreciation (depreciation) | ||
on investments and foreign currency transactions | 94,011,171 | |
Net Assets ($) | 528,506,028 |
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 49,043,612 | 14,323,705 | 465,138,711 |
Shares Outstanding | 3,390,097 | 1,006,471 | 31,772,878 |
Net Asset Value Per Share ($) | 14.47 | 14.23 | 14.64 |
See notes to financial statements. |
10
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2011 (Unaudited)
Investment Income ($): | |
Income: | |
Cash dividends (net of $416,053 foreign taxes withheld at source): | |
Unaffiliated issuers | 6,137,037 |
Affiliated issuers | 9,823 |
Total Income | 6,146,860 |
Expenses: | |
Management fee—Note 3(a) | 2,050,342 |
Shareholder servicing costs—Note 3(c) | 121,490 |
Custodian fees—Note 3(c) | 65,591 |
Distribution fees—Note 3(b) | 47,765 |
Registration fees | 31,747 |
Professional fees | 28,885 |
Directors’ fees and expenses—Note 3(d) | 14,913 |
Prospectus and shareholders’ reports | 7,230 |
Loan commitment fees—Note 2 | 1,647 |
Miscellaneous | 12,943 |
Total Expenses | 2,382,553 |
Less—reduction in fees due to earnings credits—Note 3(c) | (40) |
Net Expenses | 2,382,513 |
Investment Income—Net | 3,764,347 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments and foreign currency transactions | 3,076,484 |
Net realized gain (loss) on forward foreign currency exchange contracts | 147,076 |
Net Realized Gain (Loss) | 3,223,560 |
Net unrealized appreciation (depreciation) | |
on investments and foreign currency transactions | 47,517,026 |
Net unrealized appreciation (depreciation) | |
on forward foreign currency exchange contracts | 35 |
Net Unrealized Appreciation (Depreciation) | 47,517,061 |
Net Realized and Unrealized Gain (Loss) on Investments | 50,740,621 |
Net Increase in Net Assets Resulting from Operations | 54,504,968 |
See notes to financial statements. |
The Fund 11
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
May 31, 2011 | Year Ended | |
(Unaudited) | November 30, 2010 | |
Operations ($): | ||
Investment income—net | 3,764,347 | 3,141,956 |
Net realized gain (loss) on investments | 3,223,560 | 2,691,714 |
Net unrealized appreciation | ||
(depreciation) on investments | 47,517,061 | 18,111,107 |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 54,504,968 | 23,944,777 |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Class A Shares | (217,775) | (42,464) |
Class C Shares | (10,303) | (426) |
Class I Shares | (2,828,840) | (1,883,788) |
Net realized gain on investments: | ||
Class A Shares | (121,894) | — |
Class C Shares | (33,756) | — |
Class I Shares | (1,159,738) | — |
Total Dividends | (4,372,306) | (1,926,678) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 12,405,995 | 34,047,530 |
Class C Shares | 4,237,372 | 9,123,000 |
Class I Shares | 81,731,531 | 131,991,193 |
Dividends reinvested: | ||
Class A Shares | 326,342 | 41,282 |
Class C Shares | 32,739 | 288 |
Class I Shares | 1,452,989 | 533,463 |
Cost of shares redeemed: | ||
Class A Shares | (5,419,091) | (6,678,358) |
Class C Shares | (1,476,664) | (1,069,292) |
Class I Shares | (27,000,845) | (51,703,102) |
Increase (Decrease) in Net Assets | ||
from Capital Stock Transactions | 66,290,368 | 116,286,004 |
Total Increase (Decrease) in Net Assets | 116,423,030 | 138,304,103 |
Net Assets ($): | ||
Beginning of Period | 412,082,998 | 273,778,895 |
End of Period | 528,506,028 | 412,082,998 |
Undistributed investment income—net | 3,762,034 | 3,054,605 |
12
Six Months Ended | ||
May 31, 2011 | Year Ended | |
(Unaudited) | November 30, 2010 | |
Capital Share Transactions: | ||
Class A | ||
Shares sold | 896,568 | 2,722,607 |
Shares issued for dividends reinvested | 24,014 | 3,318 |
Shares redeemed | (390,091) | (537,677) |
Net Increase (Decrease) in Shares Outstanding | 530,491 | 2,188,248 |
Class C | ||
Shares sold | 309,815 | 734,684 |
Shares issued for dividends reinvested | 2,439 | 24 |
Shares redeemed | (107,585) | (88,164) |
Net Increase (Decrease) in Shares Outstanding | 204,669 | 646,544 |
Class I | ||
Shares sold | 5,844,101 | 10,475,370 |
Shares issued for dividends reinvested | 105,749 | 42,507 |
Shares redeemed | (1,914,815) | (4,112,607) |
Net Increase (Decrease) in Shares Outstanding | 4,035,035 | 6,405,270 |
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, 2011 | Year Ended November 30, | ||||
Class A Shares | (Unaudited) | 2010 | 2009 | 2008 | 2007a |
Per Share Data ($): | |||||
Net asset value, beginning of period | 12.99 | 12.23 | 8.91 | 13.73 | 12.50 |
Investment Operations: | |||||
Investment income—netb | .09 | .07 | .06 | .05 | .04 |
Net realized and unrealized | |||||
gain (loss) on investments | 1.50 | .75 | 3.28 | (4.70) | 1.19 |
Total from Investment Operations | 1.59 | .82 | 3.34 | (4.65) | 1.23 |
Distributions: | |||||
Dividends from investment income—net | (.07) | (.06) | (.02) | (.08) | — |
Dividends from net realized | |||||
gain on investments | (.04) | — | — | (.09) | — |
Total Distributions | (.11) | (.06) | (.02) | (.17) | — |
Net asset value, end of period | 14.47 | 12.99 | 12.23 | 8.91 | 13.73 |
Total Return (%)c | 12.32d | 6.70 | 37.57 | (34.32) | 9.92d |
Ratios/Supplemental Data (%): | |||||
Ratio of total expenses | |||||
to average net assets | 1.28e | 1.32 | 1.38 | 1.59 | 2.40e |
Ratio of net expenses | |||||
to average net assets | 1.28e | 1.32 | 1.38 | 1.47 | 1.46e |
Ratio of net investment income | |||||
to average net assets | 1.27e | .56 | .53 | .44 | .29e |
Portfolio Turnover Rate | 2.49d | 7.50 | 12.75 | 15.54 | 14.53d |
Net Assets, end of period ($ x 1,000) | 49,044 | 37,152 | 8,212 | 3,329 | 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, 2011 | Year Ended November 30, | ||||
Class C Shares | (Unaudited) | 2010 | 2009 | 2008 | 2007a |
Per Share Data ($): | |||||
Net asset value, beginning of period | 12.78 | 12.07 | 8.83 | 13.64 | 12.50 |
Investment Operations: | |||||
Investment income (loss)—netb | .04 | (.02) | (.01) | (.04) | (.06) |
Net realized and unrealized | |||||
gain (loss) on investments | 1.46 | .73 | 3.25 | (4.68) | 1.20 |
Total from Investment Operations | 1.50 | .71 | 3.24 | (4.72) | 1.14 |
Distributions: | |||||
Dividends from investment income—net | (.01) | (.00)c | — | — | — |
Dividends from net realized | |||||
gain on investments | (.04) | — | — | (.09) | — |
Total Distributions | (.05) | (.00)c | — | (.09) | — |
Net asset value, end of period | 14.23 | 12.78 | 12.07 | 8.83 | 13.64 |
Total Return (%)d | 11.78e | 5.90 | 36.69 | (34.82) | 9.12e |
Ratios/Supplemental Data (%): | |||||
Ratio of total expenses | |||||
to average net assets | 2.06f | 2.09 | 2.12 | 2.36 | 3.16f |
Ratio of net expenses | |||||
to average net assets | 2.06f | 2.09 | 2.09 | 2.22 | 2.20f |
Ratio of net investment income | |||||
(loss) to average net assets | .53f | (.17) | (.11) | (.29) | (.46)f |
Portfolio Turnover Rate | 2.49e | 7.50 | 12.75 | 15.54 | 14.53e |
Net Assets, end of period ($ x 1,000) | 14,324 | 10,243 | 1,873 | 695 | 925 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. |
b | Based on average shares outstanding at each month end. |
c | Amount represents less than $.01 per share. |
d | Exclusive of sales charge. |
e | Not annualized. |
f | Annualized. |
See notes to financial statements.
The Fund 15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | |||||
May 31, 2011 | Year Ended November 30, | ||||
Class I Shares | (Unaudited) | 2010 | 2009 | 2008 | 2007a,b |
Per Share Data ($): | |||||
Net asset value, beginning of period | 13.15 | 12.36 | 8.99 | 13.76 | 12.50 |
Investment Operations: | |||||
Investment income—netc | .11 | .12 | .11 | .10 | .07 |
Net realized and unrealized | |||||
gain (loss) on investments | 1.52 | .76 | 3.31 | (4.76) | 1.19 |
Total from Investment Operations | 1.63 | .88 | 3.42 | (4.66) | 1.26 |
Distributions: | |||||
Dividends from investment income—net | (.10) | (.09) | (.05) | (.02) | — |
Dividends from net realized | |||||
gain on investments | (.04) | — | — | (.09) | — |
Total Distributions | (.14) | (.09) | (.05) | (.11) | — |
Net asset value, end of period | 14.64 | 13.15 | 12.36 | 8.99 | 13.76 |
Total Return (%) | 12.45d | 7.12 | 38.22 | (34.12) | 10.08d |
Ratios/Supplemental Data (%): | |||||
Ratio of total expenses | |||||
to average net assets | .92e | .96 | .99 | 1.17 | 2.05e |
Ratio of net expenses | |||||
to average net assets | .92e | .96 | .99 | 1.15 | 1.18e |
Ratio of net investment income | |||||
to average net assets | 1.62e | .94 | 1.05 | .83 | .58e |
Portfolio Turnover Rate | 2.49d | 7.50 | 12.75 | 15.54 | 14.53d |
Net Assets, end of period ($ x 1,000) | 465,139 | 364,688 | 263,694 | 72,656 | 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
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 an open-end management investment company and operates as a series company currently offering ten series, including the fund.The fund’s investment objective is to seek long-term total return. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary ofThe Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Walter Scott & Partners Limited (“Walter Scott”), 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 and Class I. Class A 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.
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 17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
The Company 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 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 mar-ket),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,
18
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. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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, 2011 in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Unadjusted | Observable | Unobservable | ||
Quoted Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities— | ||||
Domestic† | 218,918,172 | — | — | 218,918,172 |
Equity Securities— | ||||
Foreign† | 155,796,830 | 142,555,111†† | — | 298,351,941 |
Mutual Funds | 8,000,000 | — | — | 8,000,000 |
† | See Statement of Investments for additional detailed categorizations. |
†† | Securities classified as Level 2 at period end as the values were determined pursuant to the fund’s |
fair valuation procedures. |
In January 2010, FASB issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about FairValue Measurements”. The portions of ASU No. 2010-06 which require reporting entities to prepare new disclosures surrounding amounts and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements as well as inputs and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3 have been adopted by the fund. No significant transfers between Level 1 or Level 2 fair value measurements occurred at May 31, 2011, other than those securities valued pursuant to the fund’s fair valuation policy.
In May 2011, FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)”. ASU No. 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU No. 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the
20
fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU No. 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-04 and its impact on the financial statements.
(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date 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 resulting from changes in exchange rates. Foreign currency gains and losses on investments are included with net realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized 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 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 and 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.
The fund may invest in shares of certain affiliated investment companies also advised or managed by Dreyfus. Investments in affiliated investment companies for the period ended May 31, 2011 were as follows:
Affiliated | |||||
Investment | Value | Value | Net | ||
Company | 11/30/2010 ($) | Purchases ($) | Sales ($) | 5/31/2011 ($) | Assets (%) |
Dreyfus | |||||
Institutional | |||||
Preferred | |||||
Plus Money | |||||
Market | |||||
Fund | 13,140,000 | 64,860,000 | 70,000,000 | 8,000,000 | 1.5 |
(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, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
22
(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.
As of and during the period ended May 31, 2011, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended November 30, 2010 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2010 was as follows: ordinary income $1,926,678. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2011, the fund did not borrow under the Facilities.
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:
(a) Pursuant to a management 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, until April 1, 2012, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of none of the classes (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed 1.25% of the value of the fund’s average daily net assets. During the period ended May 31, 2011, there was no reduction in management fee pursuant to the undertaking.
During the period ended May 31, 2011, the Distributor retained $13,495 from commissions earned on sales of the fund’s Class A shares and $1,554 from CDSCs on redemptions of the fund’s Class C shares.
Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott 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 shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of the average daily net assets of Class C shares. During the period ended May 31, 2011, Class C shares were charged $47,765, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding Class A and Class C shares and providing reports and other information, and services related to the maintenance of shareholder accounts. The
24
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, 2011, Class A and Class C shares were charged $56,164 and $15,922, 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, 2011, the fund was charged $7,569 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.
The fund has arrangements with the custodian and cash management bank 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.
The fund compensates The Bank of New York Mellon under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2011, the fund was charged $732 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $40.
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2011, the fund was charged $65,591 pursuant to the custody agreement.
During the period ended May 31, 2011, the fund was charged $3,146 for services performed by the Chief Compliance Officer.
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $376,948, Rule 12b-1 distribution plan fees $8,953, shareholder services plan fees $13,252, custodian fees $51,936, chief compliance officer fees $3,006 and transfer agency per account fees $2,300.
(d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward contracts, during the period ended May 31, 2011, amounted to $82,239,155 and $11,742,458, respectively.
Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates.With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes
26
a gain if the value of the contract increases between those dates. Any realized gain or loss which occurred during the period is reflected in the Statement of Operations.The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract. At May 31, 2011, there were no forward contracts outstanding.
The following summarizes the average market value of derivatives outstanding during the period ended May 31, 2011:
Average Market Value ($) | |
Forward contracts | 164,938 |
At May 31, 2011, accumulated net unrealized appreciation on investments was $93,947,535, consisting of $100,399,286 gross unrealized appreciation and $6,451,751 gross unrealized depreciation.
At May 31, 2011, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
The Fund 27
NOTES
International |
Stock Fund |
SEMIANNUAL REPORT May 31, 2011
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.
Contents | |
THE FUND | |
2 | A Letter from the Chairman and 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 |
11 | Statement of Assets and Liabilities |
12 | Statement of Operations |
13 | Statement of Changes in Net Assets |
15 | Financial Highlights |
18 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
International |
Stock Fund |
The Fund
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for International Stock Fund, covering the six-month period from December 1, 2010, through May 31, 2011. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
The global economy appears to have hit a soft patch during the spring of 2011 after accelerating over the final months of 2010. Disappointing labor, housing and manufacturing data in certain key markets have come at a time of higher energy prices and some tightening of monetary policy. In our view, the current slowdown should be relatively brief as the world recovers from the supply shocks created by weather impacts on food production, the decline in Libyan oil exports and supply-chain disruptions stemming from Japan’s natural and nuclear disasters. International stock markets produced mostly positive results in this choppy economic environment, as equities in both developed and emerging markets were buoyed by rising corporate earnings, better-than-expected business conditions in Europe and robust ongoing industrial demand from developing nations such as China.
We remain optimistic as the global economy moves through the middle stages of its cycle. Indeed, global macroeconomic policy generally has remained stimulative despite the recent efforts of some central banks to forestall inflationary pressures. We continue to expect sustainable economic growth in most regions outside of peripheral Europe, as well as a rising but volatile uptrend in inflation.As always, to determine how these forces may affect your investments, we urge you to talk regularly with your financial advisor.
Thank you for your continued confidence and support.
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
June 15, 2011
2
DISCUSSION OF FUND PERFORMANCE
For the period of December 1, 2010, through May 31, 2011, as provided by Charlie Macquaker and Roy Leckie of Walter Scott & Partners Limited (Walter Scott), Sub-investment adviser
Market and Fund Performance Overview
For the six-month period ended May 31, 2011, International Stock Fund’s Class A shares achieved a return of 13.35%, Class C shares returned 12.93% and Class I shares returned 13.49%.1 In comparison, the fund’s benchmark index, the Morgan Stanley Capital International Europe, Australasia, Far East Index (the “MSCI EAFE Index”), achieved a 14.92% return over the same period.2 International stock markets generally rallied as a worldwide economic recovery gained momentum. The fund is structured solely on a “bottom-up” basis, without the benchmark’s sector or geographical weights being given any weight in the investment decision-making process. For purposes of comparison, though, in looking at fund performance relative to the benchmark over this period, the lower return can be attributed to relative overweight exposure to Japan and an underweight position in Europe.
The Fund’s Investment Approach
The fund seeks long-term real return by investing in high quality companies capable of sustainable growth and wealth creation over a long time horizon.The fund invests in stocks of foreign companies that are predominantly located in the world’s developed markets outside of the United States.When selecting stocks,Walter Scott seeks companies with fundamental strengths that indicate the potential for sustainable growth. The firm focuses on individual stock selection through extensive fundamental research. Candidates are initially selected for research if they meet certain broad absolute and trend criteria. Financial statements are analyzed in an effort to identify the nature of their cash generation and to understand the variables that add value to their businesses. Companies meeting the financial criteria are subjected to a detailed investigation of products, costs and pricing, competition, industry position and outlook.
Momentum in Major Markets Despite Geo-Political Turmoil
Given the myriad of geo-political and economic uncertainties facing the major global economies, investor sentiment has been remarkably
The Fund | 3 |
DISCUSSION OF FUND PERFORMANCE (continued)
positive over much of the reporting period.Toward the end of 2010, a more optimistic outlook was reinforced by better-than-expected economic data in several major economies and robust corporate earnings across a number of geographic regions and industry groups.
The market rally was interrupted in February when a wave of political unrest in the Middle East led to sharply higher energy prices, and again in March when a devastating earthquake, tsunami and nuclear disaster in Japan threatened one of the world’s largest economies. In addition, concerns intensified regarding the sovereign debt crisis in Greece and other peripheral members of the European Union, and the economies of some developed nations appeared to hit a soft patch in the spring. Nonetheless, international equity markets produced double-digit gains, on average, with particularly strong results in Europe and the United Kingdom.
Focus on High Quality, Well-Established Companies
Although the fund benefited from the global market rally to a substantial degree, its relative performance can be explained by a lower exposure to a strongly performing European region. Conversely, the fund’s overweight exposure to Japan impacted relative performance as Japan lagged global averages. However, the fund’s focus on large, well-established companies was beneficial as many such stocks outperformed their more speculative counterparts during the reporting period.
The fund’s top performers for the reporting period included Swiss medical device company Synthes, which is to be acquired by U.S. health care giant Johnson & Johnson. In Japan, energy producer INPEX gained value as demand for natural gas intensified after the country’s nuclear disaster, and Daito Trust Construction rose on expectations of higher earnings as Japan rebuilds damaged infrastructure. U.K. apparel maker Burberry encountered robust demand for its products from Chinese consumers. In Germany, software developer SAP showed notable strength.The fund also fared well with investments in Japanese robotics producer FANUC and factory automation specialist Keyence, which saw stronger production trends in part due to higher wages in China prompting a move to increased automation.
Disappointments during the reporting period were scattered across several regions and market sectors. In Japan, optics specialist Hoya reported weaker-than-expected financial results, prompting its sale from the portfolio, and gaming systems maker Nintendo was impacted by question marks over the success of its new 3DS product. Also in
4
Japan, drug developer Chugai Pharmaceutical suffered delays in launching a new arthritis drug. In the emerging markets, wireless service provider China Mobile lagged due to general market weakness stemming from local inflation worries, and Hong Kong-based retailer Esprit struggled with its operations in Germany.
An Injection of Moderation
A sense of moderation appears to have been instilled in major equity markets. Markets have begun to price in the risks attached to the continued flow of less than optimistic economic data, the still turbulent geopolitical environment, sustained political gridlock in the US and enduring European sovereign debt woes. Equity market participants have become more discerning and drawn toward quality stocks such as those within the fund. Companies on a sound financial footing with market-leading positions and often geographically diverse income streams continue to show that they can prosper in any environment. The focus at Walter Scott has always been the search for companies in control of their own destiny.We believe it is in times like these where such strength, combined with sound growth prospects, offers the opportunity to generate a long-term real rate of return.
June 15, 2011
Equity funds are subject generally to market, market sector, market liquidity, issuer and investment | |
style risks, among other factors, to varying degrees, all of which are more fully described in the | |
fund’s prospectus. | |
Investing internationally involves special risks, including changes in currency exchange rates, | |
political, economic and social instability, a lack of comprehensive company information, differing | |
auditing and legal standards and less market liquidity. | |
1 | Total return includes reinvestment of dividends and any capital gains paid, and does not take into |
consideration the maximum initial sales charge in the case of Class A shares, or the applicable | |
contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these | |
charges been reflected, returns would have been lower. Past performance is no guarantee of future | |
results. Share price and investment return fluctuate such that upon redemption, fund shares may be | |
worth more or less than their original cost. | |
2 | SOURCE: LIPPER 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. Investors cannot invest directly in any index. |
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, 2010 to May 31, 2011. 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, 2011
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 6.76 | $ 10.83 | $ 4.90 |
Ending value (after expenses) | $1,133.50 | $1,129.30 | $1,134.90 |
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, 2011
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 6.39 | $ 10.25 | $ 4.63 |
Ending value (after expenses) | $1,018.60 | $1,014.76 | $1,020.34 |
† Expenses are equal to the fund’s annualized expense ratio of 1.27% for Class A, 2.04% for Class C and .92% |
for Class I , multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half |
year period). |
6
STATEMENT OF INVESTMENTS |
May 31, 2011 (Unaudited) |
Common Stocks—96.6% | Shares | Value ($) |
Australia—5.7% | ||
Cochlear | 280,800 | 23,987,023 |
CSL | 672,000 | 24,383,252 |
Woodside Petroleum | 523,262 | 26,100,509 |
74,470,784 | ||
Belgium—2.1% | ||
Colruyt | 463,000 | 26,592,116 |
Brazil—2.0% | ||
Petroleo Brasileiro, ADR | 835,500 | 26,117,730 |
Canada—2.0% | ||
Suncor Energy | 611,500 | 25,530,448 |
China—.5% | ||
China Shenhua Energy, Cl. H | 1,178,500 | 5,864,356 |
Denmark—1.9% | ||
Novo Nordisk, Cl. B | 193,200 | 24,223,893 |
France—6.8% | ||
Cie Generale d’Optique | ||
Essilor International | 286,000 | 23,159,711 |
Danone | 343,800 | 25,208,108 |
L’Oreal | 204,000 | 25,667,338 |
Vallourec | 116,000 | 14,518,363 |
88,553,520 | ||
Germany—4.1% | ||
Adidas | 370,000 | 27,895,895 |
SAP | 397,000 | 24,663,956 |
52,559,851 | ||
Hong Kong—7.5% | ||
China Mobile | 2,518,500 | 22,995,845 |
CLP Holdings | 2,137,500 | 18,258,472 |
CNOOC | 10,954,000 | 27,709,533 |
Esprit Holdings | 5,813,834 | 21,891,194 |
The Fund | 7 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Hong Kong (continued) | ||
Hong Kong & China Gas | 2,813,916 | 6,503,887 |
97,358,931 | ||
Japan—28.3% | ||
AEON Mall | 521,600 | 12,457,862 |
Canon | 564,500 | 27,223,635 |
Chugai Pharmaceutical | 628,000 | 10,332,882 |
Daikin Industries | 361,800 | 12,090,063 |
Daito Trust Construction | 289,900 | 24,001,362 |
Denso | 782,500 | 28,070,072 |
FANUC | 152,000 | 23,365,558 |
Hirose Electric | 93,000 | 9,553,591 |
Honda Motor | 684,500 | 26,135,209 |
Hoya | 588,300 | 12,225,988 |
INPEX | 3,590 | 25,993,606 |
Keyence | 76,200 | 19,991,914 |
Komatsu | 726,500 | 21,743,047 |
Mitsubishi Estate | 1,477,000 | 26,391,076 |
Nintendo | 84,200 | 19,638,068 |
Shimamura | 159,900 | 15,100,477 |
Shin-Etsu Chemical | 509,400 | 26,520,277 |
Tokio Marine Holdings | 899,000 | 24,810,853 |
365,645,540 | ||
Luxembourg—1.0% | ||
Tenaris, ADR | 267,000 | 13,000,230 |
Singapore—1.9% | ||
DBS Group Holdings | 1,139,512 | 13,677,419 |
Oversea-Chinese Banking | 1,488,000 | 11,462,441 |
25,139,860 |
8
Common Stocks (continued) | Shares | Value ($) |
Spain—2.2% | ||
Inditex | 308,700 | 28,063,232 |
Sweden—1.9% | ||
Hennes & Mauritz, Cl. B | 668,300 | 24,830,662 |
Switzerland—7.1% | ||
Nestle | 416,900 | 26,761,959 |
Novartis | 409,500 | 26,406,964 |
Roche Holding | 19,000 | 3,559,855 |
SGS | 8,290 | 16,426,427 |
Synthes | 107,200 a | 18,664,791 |
91,819,996 | ||
Taiwan—2.1% | ||
Taiwan Semiconductor | ||
Manufacturing, ADR | 1,957,800 | 26,743,548 |
United Kingdom—19.5% | ||
BG Group | 1,136,000 | 26,283,665 |
Burberry Group | 529,000 | 11,478,056 |
Cairn Energy | 3,695,000 b | 26,817,470 |
Centrica | 4,716,600 | 24,680,876 |
HSBC Holdings | 2,424,000 | 25,312,637 |
Reckitt Benckiser Group | 448,100 | 25,335,083 |
SABMiller | 708,800 | 26,228,748 |
Smith & Nephew | 2,328,900 | 25,936,261 |
Standard Chartered | 939,800 | 25,168,521 |
Tesco | 3,736,700 | 25,758,581 |
WM Morrison Supermarkets | 1,945,000 | 9,713,802 |
252,713,700 | ||
Total Common Stocks | ||
(cost $1,070,217,815) | 1,249,228,397 |
The Fund | 9 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Other Investment—2.6% | Shares | Value ($) |
Registered Investment Company; | ||
Dreyfus Institutional Preferred | ||
Plus Money Market Fund | ||
(cost $34,100,000) | 34,100,000 c | 34,100,000 |
Total Investments (cost $1,104,317,815) | 99.2% | 1,283,328,397 |
Cash and Receivables (Net) | .8% | 9,883,997 |
Net Assets | 100.0% | 1,293,212,394 |
ADR—American Depository Receipts
a Security exempt from registration under Rule 144A of the Securities Act of 1933.This security may be resold in |
transactions exempt from registration, normally to qualified institutional buyers.At May 31, 2011, this security |
amounted to $18,664,791 or 1.4% of net assets. |
b Non-income producing security. |
c Investment in affiliated money market mutual fund. |
Portfolio Summary (Unaudited)† | |||
Value (%) | Value (%) | ||
Energy | 15.7 | Industrials | 6.8 |
Consumer Staples | 14.8 | Utilities | 3.8 |
Consumer Discretionary | 14.2 | Money Market Investment | 2.6 |
Health Care | 14.0 | Materials | 2.1 |
Financial Services | 12.6 | Telecommunication Services | 1.8 |
Technology | 10.8 | 99.2 | |
† Based on net assets. | |||
See notes to financial statements. |
10
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2011 (Unaudited)
Cost | Value | ||
Assets ($): | |||
Investments in securities—See Statement of Investments: | |||
Unaffiliated issuers | 1,070,217,815 | 1,249,228,397 | |
Affiliated issuers | 34,100,000 | 34,100,000 | |
Cash | 2,269,029 | ||
Cash denominated in foreign currencies | 682,168 | 688,210 | |
Dividends and interest receivable | 6,910,310 | ||
Receivable for shares of Common Stock subscribed | 2,375,814 | ||
Prepaid expenses | 40,117 | ||
1,295,611,877 | |||
Liabilities ($): | |||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 1,105,484 | ||
Payable for shares of Common Stock redeemed | 1,155,569 | ||
Accrued expenses | 138,430 | ||
2,399,483 | |||
Net Assets ($) | 1,293,212,394 | ||
Composition of Net Assets ($): | |||
Paid-in capital | 1,119,196,575 | ||
Accumulated undistributed investment income—net | 8,037,306 | ||
Accumulated net realized gain (loss) on investments | (13,141,621) | ||
Accumulated net unrealized appreciation (depreciation) | |||
on investments and foreign currency transactions | 179,120,134 | ||
Net Assets ($) | 1,293,212,394 | ||
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 206,864,218 | 26,470,229 | 1,059,877,947 |
Shares Outstanding | 14,317,103 | 1,861,823 | 72,810,447 |
Net Asset Value Per Share ($) | 14.45 | 14.22 | 14.56 |
See notes to financial statements. |
The Fund | 11 |
STATEMENT OF OPERATIONS |
Six Months Ended May 31, 2011 (Unaudited) |
Investment Income ($): | |
Income: | |
Cash dividends (net of $1,299,837 foreign taxes withheld at source): | |
Unaffiliated issuers | 15,646,969 |
Affiliated issuers | 27,722 |
Total Income | 15,674,691 |
Expenses: | |
Management fee—Note 3(a) | 4,559,718 |
Shareholder servicing costs—Note 3(c) | 369,754 |
Custodian fees—Note 3(c) | 175,986 |
Distribution fees—Note 3(b) | 77,064 |
Registration fees | 52,619 |
Professional fees | 47,118 |
Directors’ fees and expenses—Note 3(d) | 17,995 |
Prospectus and shareholders’ reports | 16,713 |
Loan commitment fees—Note 2 | 7,204 |
Miscellaneous | 24,109 |
Total Expenses | 5,348,280 |
Less—reduction in fees due to earnings credits—Note 3(c) | (112) |
Net Expenses | 5,348,168 |
Investment Income—Net | 10,326,523 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments and foreign currency transactions | 7,066,440 |
Net realized gain (loss) on forward foreign currency exchange contracts | (504,543) |
Net Realized Gain (Loss) | 6,561,897 |
Net unrealized appreciation (depreciation) | |
on investments and foreign currency transactions | 110,312,243 |
Net unrealized appreciation (depreciation) on | |
forward foreign currency exchange contracts | 9,406 |
Net Unrealized Appreciation (Depreciation) | 110,321,649 |
Net Realized and Unrealized Gain (Loss) on Investments | 116,883,546 |
Net Increase in Net Assets Resulting from Operations | 127,210,069 |
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
May 31, 2011 | Year Ended | |
(Unaudited) | November 30, 2010 | |
Operations ($): | ||
Investment income—net | 10,326,523 | 5,938,209 |
Net realized gain (loss) on investments | 6,561,897 | 1,543,935 |
Net unrealized appreciation | ||
(depreciation) on investments | 110,321,649 | 42,144,376 |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 127,210,069 | 49,626,520 |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Class A Shares | (891,065) | (142,971) |
Class C Shares | (62,687) | (4,254) |
Class I Shares | (5,951,410) | (3,306,609) |
Total Dividends | (6,905,162) | (3,453,834) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 88,497,501 | 115,912,183 |
Class C Shares | 11,258,535 | 13,275,616 |
Class I Shares | 310,152,744 | 354,816,585 |
Dividends reinvested: | ||
Class A Shares | 878,594 | 141,708 |
Class C Shares | 42,711 | 2,713 |
Class I Shares | 2,081,784 | 1,027,427 |
Cost of shares redeemed: | ||
Class A Shares | (24,987,491) | (15,383,858) |
Class C Shares | (959,184) | (974,987) |
Class I Shares | (41,354,902) | (46,510,527) |
Increase (Decrease) in Net Assets | ||
from Capital Stock Transactions | 345,610,292 | 422,306,860 |
Total Increase (Decrease) in Net Assets | 465,915,199 | 468,479,546 |
Net Assets ($): | ||
Beginning of Period | 827,297,195 | 358,817,649 |
End of Period | 1,293,212,394 | 827,297,195 |
Undistributed investment income—net | 8,037,306 | 4,615,945 |
The Fund | 13 |
STATEMENT OF CHANGES IN NET ASSETS (continued)
Six Months Ended | ||
May 31, 2011 | Year Ended | |
(Unaudited) | November 30, 2010 | |
Capital Share Transactions: | ||
Class A | ||
Shares sold | 6,368,896 | 9,443,427 |
Shares issued for dividends reinvested | 64,508 | 11,750 |
Shares redeemed | (1,806,614) | (1,273,189) |
Net Increase (Decrease) in Shares Outstanding | 4,626,790 | 8,181,988 |
Class C | ||
Shares sold | 824,671 | 1,084,430 |
Shares issued for dividends reinvested | 3,178 | 227 |
Shares redeemed | (70,077) | (84,101) |
Net Increase (Decrease) in Shares Outstanding | 757,772 | 1,000,556 |
Class I | ||
Shares sold | 22,326,534 | 28,823,704 |
Shares issued for dividends reinvested | 151,955 | 84,841 |
Shares redeemed | (2,972,762) | (3,809,868) |
Net Increase (Decrease) in Shares Outstanding | 19,505,727 | 25,098,677 |
See notes to financial statements. |
14
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, 2011 | Year Ended November 30, | ||||
Class A Shares | (Unaudited) | 2010 | 2009 | 2008 | 2007a |
Per Share Data ($): | |||||
Net asset value, beginning of period | 12.83 | 11.97 | 8.43 | 13.72 | 12.50 |
Investment Operations: | |||||
Investment income—netb | .12 | .09 | .05 | .09 | .07 |
Net realized and unrealized | |||||
gain (loss) on investments | 1.59 | .86 | 3.58 | (5.28) | 1.15 |
Total from Investment Operations | 1.71 | .95 | 3.63 | (5.19) | 1.22 |
Distributions: | |||||
Dividends from investment income—net | (.09) | (.09) | (.09) | (.02) | — |
Dividends from net realized | |||||
gain on investments | — | — | — | (.08) | — |
Total Distributions | (.09) | (.09) | (.09) | (.10) | — |
Net asset value, end of period | 14.45 | 12.83 | 11.97 | 8.43 | 13.72 |
Total Return (%)c | 13.35d | 7.99 | 43.33 | (38.07) | 9.76d |
Ratios/Supplemental Data (%): | |||||
Ratio of total expenses | |||||
to average net assets | 1.27e | 1.34 | 1.43 | 1.43 | 1.75e |
Ratio of net expenses | |||||
to average net assets | 1.27e | 1.34 | 1.42 | 1.41 | 1.47e |
Ratio of net investment income | |||||
to average net assets | 1.68e | .69 | .50 | .79 | .50e |
Portfolio Turnover Rate | 2.44d | 5.91 | 21.67 | 13.18 | 13.34d |
Net Assets, end of period ($ x 1,000) | 206,864 | 124,347 | 18,059 | 1,126 | 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 | 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, 2011 | Year Ended November 30, | ||||
Class C Shares | (Unaudited) | 2010 | 2009 | 2008 | 2007a |
Per Share Data ($): | |||||
Net asset value, beginning of period | 12.64 | 11.83 | 8.32 | 13.64 | 12.50 |
Investment Operations: | |||||
Investment income (loss)—netb | .07 | (.02) | (.01) | .00c | (.04) |
Net realized and unrealized | |||||
gain (loss) on investments | 1.56 | .87 | 3.53 | (5.24) | 1.18 |
Total from Investment Operations | 1.63 | .85 | 3.52 | (5.24) | 1.14 |
Distributions: | |||||
Dividends from investment income—net | (.05) | (.04) | (.01) | — | — |
Dividends from net realized | |||||
gain on investments | — | — | — | (.08) | — |
Total Distributions | (.05) | (.04) | (.01) | (.08) | — |
Net asset value, end of period | 14.22 | 12.64 | 11.83 | 8.32 | 13.64 |
Total Return (%)d | 12.93e | 7.18 | 42.31 | (38.58) | 9.04e |
Ratios/Supplemental Data (%): | |||||
Ratio of total expenses | |||||
to average net assets | 2.04f | 2.13 | 2.25 | 2.24 | 2.50f |
Ratio of net expenses | |||||
to average net assets | 2.04f | 2.13 | 2.22 | 2.20 | 2.21f |
Ratio of net investment income | |||||
(loss) to average net assets | .97f | (.12) | (.13) | .03 | (.31)f |
Portfolio Turnover Rate | 2.44e | 5.91 | 21.67 | 13.18 | 13.34e |
Net Assets, end of period ($ x 1,000) | 26,470 | 13,959 | 1,224 | 197 | 445 |
a | From December 29, 2006 (commencement of operations) to November 30, 2007. |
b | Based on average shares outstanding at each month end. |
c | Amount represents less than $.01 per share. |
d | Exclusive of sales charge. |
e | Not annualized. |
f | Annualized. |
See notes to financial statements.
16
Six Months Ended | |||||
May 31, 2011 | Year Ended November 30, | ||||
Class I Shares | (Unaudited) | 2010 | 2009 | 2008 | 2007a,b |
Per Share Data ($): | |||||
Net asset value, beginning of period | 12.93 | 12.04 | 8.47 | 13.76 | 12.50 |
Investment Operations: | |||||
Investment income—netc | .14 | .14 | .12 | .14 | .11 |
Net realized and unrealized | |||||
gain (loss) on investments | 1.60 | .86 | 3.57 | (5.30) | 1.15 |
Total from Investment Operations | 1.74 | 1.00 | 3.69 | (5.16) | 1.26 |
Distributions: | |||||
Dividends from investment income—net | (.11) | (.11) | (.12) | (.05) | — |
Dividends from net realized | |||||
gain on investments | — | — | — | (.08) | — |
Total Distributions | (.11) | (.11) | (.12) | (.13) | — |
Net asset value, end of period | 14.56 | 12.93 | 12.04 | 8.47 | 13.76 |
Total Return (%) | 13.49d | 8.38 | 43.98 | (37.82) | 10.08d |
Ratios/Supplemental Data (%): | |||||
Ratio of total expenses | |||||
to average net assets | .92e | .97 | 1.01 | 1.03 | 1.38e |
Ratio of net expenses | |||||
to average net assets | .92e | .97 | 1.01 | 1.02 | 1.16e |
Ratio of net investment income | |||||
to average net assets | 1.99e | 1.11 | 1.18 | 1.19 | .81e |
Portfolio Turnover Rate | 2.44d | 5.91 | 21.67 | 13.18 | 13.34d |
Net Assets, end of period ($ x 1,000) | 1,059,878 | 688,992 | 339,535 | 119,650 | 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.
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 an open-end management investment company and operates as a series company currently offering ten series, including the fund.The fund’s investment objective is to seek long-term total return. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary ofThe Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Walter Scott & Partners Limited (“Walter Scott”), 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 and Class I. Class A 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.
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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized
18
by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
The Company 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 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
The Fund | 19 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
20
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, 2011 in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Unadjusted | Observable | Unobservable | ||
Quoted Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities— | ||||
Foreign† | 680,748,926 | 568,479,471†† | — | 1,249,228,397 |
Mutual Funds | 34,100,000 | — | — | 34,100,000 |
† | See Statement of Investments for additional detailed categorizations. |
†† | Securities classified as Level 2 at period end as the values were determined pursuant to the fund’s |
fair valuation procedures. |
In January 2010, FASB issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about FairValue Measurements”. The portions of ASU No. 2010-06 which require reporting entities to prepare new disclosures surrounding amounts and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements as well as inputs and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3 have been adopted by the fund. No significant transfers between Level 1 or Level 2 fair value measurements occurred at May 31, 2011, other than those securities valued pursuant to the fund’s fair valuation policy.
In May 2011, FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)”. ASU No. 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU No. 2011-04 will require reporting entities to disclose the following infor-
The Fund | 21 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
mation for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU No. 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-04 and its impact on the financial statements.
(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date 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 resulting from changes in exchange rates. Foreign currency gains and losses on investments are included with net realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized 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.
22
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 and 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.
The fund may invest in shares of certain affiliated investment companies also advised or managed by Dreyfus. Investments in affiliated investment companies for the period ended May 31, 2011 were as follows:
Affiliated | |||
Investment | Value | Value | Net |
Company | 11/30/2010 ($) Purchases ($) | Sales ($) 5/31/2011 ($) | Assets (%) |
Dreyfus | |||
Institutional | |||
Preferred | |||
Plus Money | |||
Market | |||
Fund | 19,650,000 280,350,000 | 265,900,000 34,100,000 | 2.6 |
(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, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(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
The Fund | 23 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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.
As of and during the period ended May 31, 2011, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended November 30, 2010 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund has an unused capital loss carryover of $15,713,305 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to November 30, 2010. If not applied, $598,805 of the carryover expires in fiscal 2016 and $15,114,500 expires in fiscal 2017.
The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2010 was as follows: ordinary income $3,453,834. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2011, the fund did not borrow under the Facilities.
24
NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:
(a) Pursuant to a management 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, until April 1, 2012, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of none of the classes (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed 1.25% of the value of the fund’s average daily net assets. During the period ended May 31, 2011, there was no reduction in management fee pursuant to the undertaking.
During the period ended May 31, 2011, the Distributor retained $30,114 from commissions earned on sales of the fund’s Class A shares and $2,285 from CDSCs on redemptions of the fund’s Class C shares.
Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott 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 shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of the average daily net assets of Class C shares. During the period ended May 31, 2011, Class C shares were charged $77,064, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding Class A and Class C 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
The Fund | 25 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
industry professional) in respect of these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended May 31, 2011, Class A and Class C shares were charged $205,446 and $25,688, 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, 2011, the fund was charged $14,320 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.
The fund has arrangements with the custodian and cash management bank 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.
The fund compensates The Bank of New York Mellon under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2011, the fund was charged $2,150 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $112.
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2011, the fund was charged $175,986 pursuant to the custody agreement.
During the period ended May 31, 2011, the fund was charged $3,146 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 $911,977, Rule 12b-1 distribution plan fees $16,217, shareholder ser-
26
vices plan fees $47,688, custodian fees $124,196, chief compliance officer fees $3,006 and transfer agency per account fees $2,400.
(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 2% redemption fee is charged and retained by the fund on certain shares redeemed within sixty days following the date of issuance, including redemptions made through the use of the fund’s exchange privilege. During the period ended May 31, 2011, redemption fees charged and retained by the fund amounted to $7,478.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward contracts, during the period ended May 31, 2011, amounted to $356,311,556 and $25,259,251, respectively.
Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates.With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract increases between those dates. Any realized gain or loss which occurred during the period is reflected in
The Fund | 27 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
the Statement of Operations.The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract. At May 31, 2011, there were no forward contracts outstanding.
The following summarizes the average market value of derivatives outstanding during the period ended May 31, 2011:
Average Market Value ($) | |
Forward contracts | 8,505,813 |
At May 31, 2011, accumulated net unrealized appreciation on investments was $179,010,582, consisting of $200,305,161 gross unrealized appreciation and $21,294,579 gross unrealized depreciation.
At May 31, 2011, 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).
28
For More Information
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus 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 1-800-SEC-0330.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at 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-DREYFUS.
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. 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 and Affiliated Purchasers.
Not applicable. [CLOSED END FUNDS ONLY]
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures applicable to Item 10.
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.
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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.
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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/ Bradley J. Skapyak | |
Bradley J. Skapyak, President
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Date: | July 25, 2011 |
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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. | |
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By: /s/ Bradley J. Skapyak | |
Bradley J. Skapyak, President
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Date: | July 25, 2011 |
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By: /s/ James Windels | |
James Windels, Treasurer
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Date: | July 25, 2011 |
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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)
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