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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| John Pak, 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:
| 5/31 |
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Date of reporting period: | 5/31/13 |
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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 Growth Fund
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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.
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Contents | |
THE FUND | |
2 | A Letter from the President |
3 | Discussion of Fund Performance |
6 | Fund Performance |
8 | UnderstandingYour Fund’s Expenses |
8 | ComparingYour Fund’s Expenses With Those of Other Funds |
9 | Statement of Investments |
22 | Statement of Assets and Liabilities |
23 | Statement of Operations |
24 | Statement of Changes in Net Assets |
26 | Financial Highlights |
29 | Notes to Financial Statements |
40 | Report of Independent Registered Public Accounting Firm |
41 | Board Members Information |
44 | Officers of the Fund |
FOR MORE INFORMATION | |
Back Cover |
Dreyfus
Select Managers
Small Cap Growth Fund
The Fund
A LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Select Managers Small Cap Growth Fund, covering the 12-month period from June 1, 2012, through May 31, 2013. 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. economic recovery gained traction over the reporting period, but remained slower than historical norms. On one hand, the expansion has been fueled by gradually falling unemployment, recovering housing markets, rapid growth in domestic oil and gas production, and, perhaps most significant, the aggressively stimulative monetary policy of the Federal Reserve Board (the “Fed”). On the other hand, several factors have weighed on the nation’s economic growth rate, including relatively sluggish demand for exports to Europe and the emerging markets, higher tax rates for some Americans, and more restrictive fiscal policies stemming from sequestration. Investors appear to have adopted a more optimistic outlook, as several major stock market indices reached new record highs by the reporting period’s end.
In our analysis, real GDP growth seems poised to accelerate modestly over the remainder of 2013. In fact, we expect the relatively mild economic expansion to remain intact domestically and globally over the next several years. The moderate pace of the recovery implies that the risks of consumer price inflation are limited, making it unlikely that the Fed will adopt expansion-threatening, restrictive policies anytime soon. As always, we encourage you to discuss our observations with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
![](https://capedge.com/proxy/N-CSR/0000737520-13-000088/smscgncsrx4x1.jpg)
J. Charles Cardona
President
The Dreyfus Corporation
June 17, 2013
2
DISCUSSION OF FUND PERFORMANCE
For the period of June 1, 2012, through May 31, 2013, as provided by Keith L. Stransky and Robert B. Mayerick, Portfolio Allocation Managers, EACM Advisors LLC
Fund and Market Performance Overview
For the 12-month period ended May 31, 2013, Dreyfus Select Managers Small Cap Growth Fund’s Class A shares produced a total return of 29.36%, Class C shares returned 28.48%, and Class I shares returned 29.79%.1 In comparison, the total return of the Russell 2000 Growth Index (the “Index”), the fund’s benchmark, was 30.86% for the same period.2
Improving U.S. economic trends generally drove small-cap growth stocks higher during the reporting period.The fund’s returns modestly trailed the Index, primarily due to relative weakness in the consumer staples and information technology sectors.
The Fund’s Investment Approach
The fund seeks long-term capital appreciation.To pursue its goal, the fund normally invests at least 80% of its 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. We seek sub-advisers that complement one another’s style of investing. We monitor and evaluate the performance of the sub-advisers and will make corresponding recommendations to Dreyfus and the fund’s Board.
The fund’s assets are currently under the day-to-day portfolio management of six sub-advisers, each of whom acts independently and uses their own methodology to select investments. At the end of the reporting period, 21% of the fund’s assets are under the management of Riverbridge Partners, LLC, which employs a bottom-up approach to stock selection and focuses on companies that are building their earnings power and intrinsic value over long periods of time.Approximately 25% of the fund’s assets are under the management of Geneva Capital Management Ltd., which employs bottom-up fundamental analysis supplemented by top-down considerations to identify companies that perform well over long periods of time. Approximately 13% of the fund’s assets are under the management of Cupps Capital Management, LLC, which employs a proprietary investment framework to evaluate the attractiveness
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
of stocks. King Investment Advisors, Inc., which uses a bottom-up approach seeking stocks trading at a discount to private market value that possess a growth catalyst, and Nicholas Investment Partners, L.P., which employs quantitative/qualitative analysis to identify companies experiencing positive change in seeking above-expected growth, manage 10% and 17% of the fund’s assets, respectively. At the end of the reporting period, EAM Investors, LLC, was added as an additional sub-adviser to the fund and manages less than 14% of the fund’s assets. EAM chooses investments through bottom-up fundamental analysis, using a blend of a quantitative discovery process and a qualitative analysis process.These percentages can change over time, within ranges described in the prospectus.
Recovering Economy Fueled Market Gains
A sustained market rally began soon after the start of the reporting period when investors responded positively to improved U.S. employment and housing market trends, a stated commitment to the euro by the European Central Bank, and expectations that new economic policies in China might boost global growth. Investor optimism later faltered amid uncertainty surrounding automatic U.S. tax hikes and spending cuts scheduled for the start of 2013, but last-minute legislation to address the increases helped alleviate investors’ worries. Continued corporate earnings strength and encouraging economic data supported stock prices over the first five months of 2013, enabling some broad measure of stock market performance to reach record highs by the reporting period’s end. Small-cap stocks produced higher returns than their large-cap counterparts, and small-cap growth stocks outperformed small-cap value stocks, on average.
Stock Selections Buoyed Fund Results
Although the fund participated substantially in the small-cap growth market’s gains over the reporting period, its results compared to the benchmark were undermined to a degree by the consumer staples sector, where specialty retailer The Fresh Market and organic food distributor United Natural Foods struggled with intensifying competition from large-cap grocery chains. In the information technology sector, online surplus goods auctioneer Liquidity Services reduced its profit forecast due to economic concerns, and cloud computing specialist Rackspace Hosting missed a quarterly earnings target as a result of sluggish demand.
4
The fund achieved better relative results in other areas. Among energy companies, oil-and-gas property developer Gulfport Energy achieved better-than-expected production volumes from its wells in the Utica Shale formation, and drilling equipment provider Dril-Quip benefited from a surge in the issuance of permits for offshore drilling in 2012. In the financials sector, investment adviser Financial Engines advanced along with the strong rise in the capital markets during the reporting period.
A Constructive Outlook
The fund’s sub-advisers generally have been encouraged by recent trends among small-cap companies. It is expected that these companies will continue to benefit from increasing mergers-and-acquisitions activity, a strong domestic economy and reasonably attractive valuations. Recent growth-oriented opportunities have been found in the information technology sector, while allocations to other market sectors were roughly in line with their respective benchmark components.
June 17, 2013
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. Return figures provided reflect the absorption of certain |
fund expenses by The Dreyfus Corporation pursuant to an undertaking in effect through October 1, 2013, at which |
time it may be extended, terminated or modified. Had these expenses not been absorbed, the fund’s Class C returns |
would have been lower. |
2 SOURCE: LIPPER INC. — The Russell 2000 Growth Index is an unmanaged index, which measures the |
performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. |
The total return figure cited for this index assumes change in security prices and reinvestment of dividends, but does |
not reflect the costs of managing a mutual fund. Investors cannot invest directly in any index. |
The Fund 5
FUND PERFORMANCE
![](https://capedge.com/proxy/N-CSR/0000737520-13-000088/smscgncsrx8x1.jpg)
† Source: Lipper Inc.
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A, Class C and Class I shares of Dreyfus Select Managers Small Cap Growth Fund on 7/1/10 (inception date) to a $10,000 investment made in the Russell 2000 Growth Index (the “Index”) on that date.All dividends and capital gain distributions are reinvested.
The fund’s performance shown in the line graph above takes into account the maximum initial sales charge on Class A shares and all other applicable fees and expenses on all classes.The Index is an unmanaged index, which measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. Unlike a mutual fund, the Index is not subject to charges, fees and other expenses. Investors cannot invest directly in any index. Further information relating to fund performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the prospectus and elsewhere in this report.
6
Average Annual Total Returns as of 5/31/13 | |||||
Inception | From | ||||
Date | 1 | Year | Inception | ||
Class A shares | |||||
with maximum sales charge (5.75%) | 7/1/10 | 21.89 | % | 19.35 | % |
without sales charge | 7/1/10 | 29.36 | % | 21.79 | % |
Class C shares | |||||
with applicable redemption charge † | 7/1/10 | 27.48 | % | 20.91 | % |
without redemption | 7/1/10 | 28.48 | % | 20.91 | % |
Class I shares | 7/1/10 | 29.79 | % | 22.14 | % |
Russell 2000 Growth Index | 6/30/10 | 30.86 | % | 20.85 | %†† |
Past performance is not predictive of future performance.The fund’s performance shown in the graph and table does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
† | The maximum contingent deferred sales charge for Class C shares is 1% for shares redeemed within one year of the |
date of purchase. | |
†† | For comparative purposes, the value of the Index as of 6/30/10 is used as the beginning value on 7/1/10. |
The Fund 7
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 Cap Growth Fund from December 1, 2012 to May 31, 2013. 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, 2013
Class A | Class C | Class I | ||||
Expenses paid per $1,000† | $ | 7.25 | $ | 11.23 | $ | 5.39 |
Ending value (after expenses) | $ | 1,202.40 | $ | 1,198.20 | $ | 1,204.20 |
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, 2013
Class A | Class C | Class I | ||||
Expenses paid per $1,000† | $ | 6.64 | $ | 10.30 | $ | 4.94 |
Ending value (after expenses) | $ | 1,018.35 | $ | 1,014.71 | $ | 1,020.04 |
† Expenses are equal to the fund’s annualized expense ratio of 1.32% for Class A, 2.05% for Class C and .98% |
for Class I, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half |
year period). |
8
STATEMENT OF INVESTMENTS
May 31, 2013
Common Stocks—97.9% | Shares | Value ($) | |
Automobiles & Components—1.0% | |||
Dorman Products | 8,979 | 399,835 | |
Gentex | 49,773 | 1,138,308 | |
Tesla Motors | 15,665 | a,b | 1,531,410 |
Thor Industries | 9,420 | 402,328 | |
3,471,881 | |||
Banks—1.9% | |||
BancorpSouth | 27,829 | a | 477,546 |
Bank of the Ozarks | 43,747 | 1,909,557 | |
MetroCorp Bancshares | 103,000 | b | 1,007,340 |
Nationstar Mortgage Holdings | 21,580 | a,b | 878,522 |
PrivateBancorp | 1,650 | 31,944 | |
Radian Group | 46,616 | a | 599,948 |
Texas Capital Bancshares | 32,139 | b | 1,419,258 |
Western Alliance Bancorp | 31,937 | b | 469,474 |
6,793,589 | |||
Capital Goods—10.4% | |||
A.O. Smith | 11,195 | 438,844 | |
Acuity Brands | 30,231 | 2,269,441 | |
Air Lease | 22,166 | 620,648 | |
Apogee Enterprises | 12,135 | 323,762 | |
Barnes Group | 55,571 | 1,679,356 | |
Beacon Roofing Supply | 77,448 | b | 3,192,406 |
Belden | 6,355 | 339,675 | |
Builders FirstSource | 93,817 | b | 632,327 |
Chart Industries | 39,125 | b | 3,806,080 |
CIRCOR International | 6,527 | 333,530 | |
DigitalGlobe | 27,597 | b | 834,257 |
Donaldson | 29,075 | 1,090,603 | |
EMCOR Group | 8,620 | 342,645 | |
Enphase Energy | 38,322 | b | 295,846 |
ExOne | 16,195 | a | 803,596 |
GenCorp | 47,581 | a,b | 650,908 |
Generac Holdings | 22,472 | b | 910,116 |
Graham | 13,267 | 371,476 |
The Fund 9
STATEMENT OF INVESTMENTS (continued)
Common Stocks (continued) | Shares | Value ($) | |
Capital Goods (continued) | |||
Great Lakes Dredge and Dock | 58,092 | 482,164 | |
Hexcel | 14,217 | b | 494,325 |
Manitowoc | 15,893 | 333,912 | |
MasTec | 11,367 | b | 361,471 |
Middleby | 15,711 | b | 2,568,592 |
Mueller Water Products, Cl. A | 62,427 | 475,069 | |
Orbital Sciences | 100,637 | b | 1,829,581 |
Polypore International | 19,812 | a,b | 745,328 |
PowerSecure International | 23,266 | b | 313,626 |
Primoris Services | 51,766 | 1,103,133 | |
Proto Labs | 60,697 | a,b | 3,352,903 |
RBC Bearings | 34,503 | b | 1,689,267 |
The KEYW Holding Corp., | 37,114 | a,b | 547,431 |
Titan International | 49,200 | a | 1,147,836 |
TriMas | 9,940 | b | 320,565 |
Triumph Group | 4,009 | 311,299 | |
United Rentals | 18,364 | b | 1,043,810 |
Valmont Industries | 1,938 | 295,216 | |
Westport Innovations | 42,655 | a,b | 1,292,873 |
37,643,917 | |||
Commercial & Professional Services—4.9% | |||
Advisory Board | 39,060 | b | 2,062,759 |
Casella Waste Systems, Cl. A | 265,757 | b | 1,065,686 |
Healthcare Services Group | 89,057 | 2,020,703 | |
InnerWorkings | 81,800 | a,b | 886,712 |
Mobile Mini | 75,369 | b | 2,536,166 |
On Assignment | 16,171 | b | 421,093 |
Ritchie Brothers Auctioneers | 63,445 | a | 1,313,311 |
Rollins | 105,910 | 2,675,287 | |
Team | 38,480 | b | 1,387,974 |
Tetra Tech | 37,400 | b | 1,031,118 |
The Brink’s Company | 40,500 | 1,086,615 | |
UniFirst | 3,853 | 365,650 | |
WageWorks | 31,295 | 906,616 | |
17,759,690 |
10
Common Stocks (continued) | Shares | Value ($) | |
Consumer Durables & Apparel—2.4% | |||
Callaway Golf | 256,100 | a | 1,754,285 |
Carter’s | 5,281 | 380,602 | |
Fifth & Pacific | 37,395 | b | 803,619 |
G-III Apparel Group | 13,927 | b | 586,466 |
Hanesbrands | 7,444 | 371,158 | |
KB Home | 15,747 | 348,953 | |
La-Z-Boy | 33,634 | 621,220 | |
Quiksilver | 53,155 | b | 418,330 |
Ryland Group | 8,469 | 383,476 | |
SodaStream International | 37,535 | a,b | 2,394,733 |
Steven Madden | 8,848 | b | 429,128 |
Tumi Holdings | 11,259 | b | 273,031 |
8,765,001 | |||
Consumer Services—7.3% | |||
AFC Enterprises | 7,482 | b | 272,794 |
BJ’s Restaurants | 29,263 | b | 1,098,533 |
Bloomin’ Brands | 41,109 | 956,196 | |
Boyd Gaming | 37,589 | a,b | 489,785 |
Bravo Brio Restaurant Group | 78,350 | b | 1,410,300 |
Bright Horizons Family Solutions | 17,915 | 645,836 | |
Capella Education | 7,699 | b | 335,368 |
Cheesecake Factory | 42,395 | 1,692,408 | |
Chuy’s Holdings | 58,101 | 2,024,820 | |
Coinstar | 26,575 | a,b | 1,547,728 |
Del Frisco’s Restaurant Group | 20,716 | 385,110 | |
Domino’s Pizza | 17,338 | 1,027,623 | |
Fiesta Restaurant Group | 36,368 | b | 1,293,610 |
Grand Canyon Education | 107,340 | b | 3,447,761 |
Jack in the Box | 9,440 | b | 344,466 |
K12 | 56,535 | a,b | 1,680,220 |
Krispy Kreme Doughnuts | 96,461 | b | 1,670,704 |
LifeLock | 59,699 | 616,093 | |
Marriott Vacations Worldwide | 20,207 | b | 894,160 |
Panera Bread, Cl. A | 11,048 | b | 2,119,338 |
SHFL Entertainment | 28,456 | b | 490,866 |
The Fund 11
STATEMENT OF INVESTMENTS (continued)
Common Stocks (continued) | Shares | Value ($) | |
Consumer Services (continued) | |||
Six Flags Entertainment | 8,375 | 624,524 | |
Sonic | 28,708 | b | 376,936 |
Sotheby’s | 31,625 | 1,178,031 | |
26,623,210 | |||
Diversified Financials—3.4% | |||
Affiliated Managers Group | 6,906 | b | 1,132,584 |
Financial Engines | 89,443 | a | 3,856,782 |
HFF, Cl. A | 30,293 | 569,811 | |
MarketAxess Holdings | 45,010 | 1,951,634 | |
Portfolio Recovery Associates | 21,303 | b | 3,243,808 |
Regional Management | 19,432 | b | 458,595 |
WisdomTree Investments | 96,143 | b | 1,196,019 |
12,409,233 | |||
Energy—5.5% | |||
Bill Barrett | 27,880 | a,b | 629,252 |
Bonanza Creek Energy | 69,082 | b | 2,566,397 |
Cheniere Energy | 15,199 | b | 446,091 |
Dril-Quip | 24,688 | b | 2,233,029 |
Geospace Technologies | 12,635 | b | 1,097,477 |
Gulfport Energy | 68,643 | b | 3,273,585 |
Halcon Resources | 77,057 | a,b | 406,861 |
Hornbeck Offshore Services | 6,333 | b | 329,443 |
MRC Global | 10,090 | b | 286,455 |
Oasis Petroleum | 40,048 | b | 1,488,183 |
Pacific Drilling | 30,220 | b | 300,387 |
PDC Energy | 13,075 | b | 669,309 |
Rosetta Resources | 22,895 | b | 1,072,860 |
Sanchez Energy | 60,304 | a,b | 1,318,848 |
SM Energy | 24,722 | 1,499,142 | |
Solazyme | 31,591 | b | 389,201 |
Superior Energy Services | 59,875 | b | 1,597,465 |
Targa Resources | 4,981 | 320,876 | |
19,924,861 | |||
Exchange-Traded Funds—.6% | |||
iShares Russell 2000 Index Fund | 23,725 | a | 2,320,305 |
12
Common Stocks (continued) | Shares | Value ($) | |
Food & Staples Retailing—1.1% | |||
Fairway Group Holdings | 16,785 | 366,249 | |
Fresh Market | 22,403 | b | 1,109,845 |
Natural Grocers by Vitamin Cottage | 10,335 | a | 292,997 |
Susser Holdings | 9,232 | b | 437,043 |
United Natural Foods | 37,055 | b | 1,960,951 |
4,167,085 | |||
Food, Beverage & Tobacco—.9% | |||
Boulder Brands | 11,235 | b | 117,855 |
J&J Snack Foods | 23,566 | 1,788,659 | |
TreeHouse Foods | 20,557 | b | 1,346,072 |
3,252,586 | |||
Health Care Equipment & Services—14.2% | |||
Abaxis | 58,343 | 2,567,676 | |
Acadia Healthcare | 32,154 | b | 1,073,622 |
Accuray | 194,600 | a,b | 1,045,002 |
Allscripts Healthcare Solutions | 47,145 | b | 652,958 |
AMN Healthcare Services | 21,913 | b | 293,415 |
Analogic | 4,299 | 341,727 | |
athenahealth | 20,325 | a,b | 1,718,479 |
Bio-Reference Labs | 50,555 | a,b | 1,559,622 |
BioScrip | 41,439 | b | 579,317 |
Brookdale Senior Living | 10,686 | b | 302,948 |
Cantel Medical | 65,381 | 2,225,569 | |
Capital Senior Living | 28,606 | b | 750,907 |
Cardiovascular Systems | 11,817 | b | 242,839 |
Chemed | 30,055 | a | 2,104,451 |
Community Health Systems | 8,566 | b | 412,624 |
DexCom | 113,084 | b | 2,355,539 |
Endologix | 20,797 | b | 279,512 |
GenMark Diagnostics | 37,967 | b | 565,708 |
Globus Medical, Cl. A | 41,396 | a | 604,382 |
Greenway Medical Technologies | 46,704 | a,b | 560,448 |
Haemonetics | 33,858 | b | 1,397,658 |
HealthSouth | 12,731 | b | 372,891 |
Healthways | 49,239 | b | 662,265 |
The Fund 13
STATEMENT OF INVESTMENTS (continued)
Common Stocks (continued) | Shares | Value ($) | |
Health Care Equipment & Services (continued) | |||
HMS Holdings | 41,033 | b | 1,021,722 |
Hologic | 75,500 | b | 1,566,625 |
Insulet | 43,180 | b | 1,289,355 |
IPC The Hospitalist | 61,803 | b | 3,013,514 |
Medidata Solutions | 69,530 | b | 4,798,960 |
MEDNAX | 25,691 | a,b | 2,384,895 |
MWI Veterinary Supply | 18,165 | b | 2,207,229 |
Neogen | 58,422 | b | 3,182,246 |
Novadaq Technologies | 73,526 | b | 997,012 |
Omnicell | 98,644 | b | 1,788,416 |
Sirona Dental Systems | 4,170 | b | 295,820 |
Spectranetics | 66,417 | b | 1,241,998 |
STAAR Surgical | 121,200 | b | 1,078,680 |
STERIS | 7,224 | 327,536 | |
Team Health Holdings | 32,366 | b | 1,264,540 |
TearLab | 107,983 | a,b | 1,135,981 |
Thoratec | 34,300 | b | 1,069,131 |
Vanguard Health Systems | 26,374 | b | 351,302 |
51,684,521 | |||
Household & Personal Products—.1% | |||
Nu Skin Enterprises, Cl. A | 5,646 | 331,985 | |
Insurance—.7% | |||
AmTrust Financial Services | 18,766 | a | 619,841 |
Homeowners Choice | 9,865 | 342,907 | |
Meadowbrook Insurance Group | 42,000 | 336,840 | |
RLI | 6,190 | 464,745 | |
Stewart Information Services | 27,900 | 772,551 | |
2,536,884 | |||
Materials—3.3% | |||
Axiall | 12,713 | 548,566 | |
Balchem | 39,152 | 1,879,687 | |
Chemtura | 14,711 | b | 337,323 |
Eagle Materials | 15,150 | 1,117,312 | |
Flotek Industries | 44,585 | b | 775,333 |
Glatfelter | 14,969 | 370,183 |
14
Common Stocks (continued) | Shares | Value ($) | |
Materials (continued) | |||
Headwaters | 80,709 | b | 856,323 |
Horsehead Holding | 84,400 | b | 971,444 |
Minerals Technologies | 7,524 | 320,522 | |
Packaging Corporation of America | 6,672 | 326,928 | |
PolyOne | 19,823 | 509,253 | |
Sealed Air | 21,905 | 526,158 | |
Sensient Technologies | 31,924 | 1,317,503 | |
Texas Industries | 4,870 | b | 347,767 |
US Silica Holdings | 36,499 | a | 806,263 |
Walter Energy | 63,300 | a | 1,079,898 |
12,090,463 | |||
Media—.8% | |||
Cinemark Holdings | 10,085 | 295,894 | |
Hemisphere Media Group | 8,388 | a,b | 119,193 |
Live Nation | 37,019 | b | 503,829 |
MDC Partners, Cl. A | 56,246 | 991,617 | |
Nexstar Broadcasting Group, Cl. A | 16,403 | 459,284 | |
Shutterstock | 8,925 | a | 422,509 |
2,792,326 | |||
Pharmaceuticals, Biotech & | |||
Life Sciences—6.8% | |||
Acadia Pharmaceuticals | 72,730 | a,b | 1,023,311 |
AcelRx Pharmaceuticals | 49,698 | b | 442,809 |
Acorda Therapeutics | 8,797 | b | 294,260 |
Aegerion Pharmaceuticals | 21,810 | a,b | 1,588,423 |
Alkermes | 29,742 | b | 929,438 |
Alnylam Pharmaceuticals | 12,667 | b | 387,990 |
Array BioPharma | 30,745 | b | 179,551 |
Astex Pharmaceuticals | 32,070 | b | 155,539 |
Auxilium Pharmaceuticals | 97,800 | b | 1,459,176 |
Cepheid | 62,450 | b | 2,170,762 |
Chimerix | 12,417 | 266,964 | |
Coronado Biosciences | 26,508 | b | 261,899 |
Covance | 4,675 | b | 348,661 |
Emergent BioSolutions | 64,750 | b | 919,450 |
The Fund 15
STATEMENT OF INVESTMENTS (continued)
Common Stocks (continued) | Shares | Value ($) | |
Pharmaceuticals, Biotech & | |||
Life Sciences (continued) | |||
ICON | 16,675 | b | 572,619 |
Insmed | 26,815 | b | 359,857 |
Isis Pharmaceuticals | 17,169 | a,b | 371,709 |
Keryx Biopharmaceuticals | 42,705 | b | 342,067 |
Ligand Pharmaceuticals, Cl. B | 10,971 | b | 328,143 |
MannKind | 37,830 | a,b | 252,326 |
Medicines | 13,570 | b | 437,090 |
Nektar Therapeutics | 73,575 | b | 696,755 |
Neurocrine Biosciences | 49,730 | b | 643,009 |
NPS Pharmaceuticals | 29,975 | b | 472,106 |
Orexigen Therapeutics | 54,137 | b | 342,687 |
Pacira Pharmaceuticals | 12,001 | b | 351,629 |
PAREXEL International | 58,869 | b | 2,689,725 |
Pharmacyclics | 3,634 | b | 333,020 |
Receptos | 22,031 | 349,632 | |
Repligen | 51,817 | b | 429,045 |
Santarus | 20,159 | b | 448,941 |
Sarepta Therapeutics | 13,531 | a,b | 478,321 |
Techne | 36,430 | 2,422,959 | |
Tesaro | 36,594 | a | 1,251,881 |
Theravance | 12,274 | b | 430,081 |
Trius Therapeutics | 51,980 | b | 398,687 |
24,830,522 | |||
Real Estate—.8% | |||
American Realty Capital Properties | 27,003 | 410,986 | |
Geo Group | 9,215 | 320,866 | |
Howard Hughes | 17,883 | b | 1,781,147 |
Jones Lang LaSalle | 2,994 | 274,939 | |
2,787,938 | |||
Retailing—6.4% | |||
Asbury Automotive Group | 14,696 | b | 605,475 |
Bebe Stores | 89,193 | 486,994 |
16
Common Stocks (continued) | Shares | Value ($) | |
Retailing (continued) | |||
Big 5 Sporting Goods | 16,425 | 328,664 | |
Conn’s | 27,084 | a,b | 1,333,346 |
Five Below | 34,682 | a | 1,326,240 |
Francesca’s Holdings | 21,081 | b | 601,863 |
Haverty Furniture | 14,647 | 360,609 | |
Hibbett Sports | 33,805 | b | 1,927,899 |
HomeAway | 24,686 | b | 754,897 |
Lithia Motors, Cl. A | 8,502 | 442,869 | |
LKQ | 169,742 | b | 4,155,284 |
Lumber Liquidators Holdings | 3,972 | b | 326,141 |
Monro Muffler Brake | 31,041 | a | 1,459,548 |
PEP Boys-Manny Moe & Jack | 75,500 | b | 931,670 |
Pier 1 Imports | 12,693 | 294,351 | |
Restoration Hardware Holdings | 28,568 | a | 1,596,094 |
Shutterfly | 54,258 | b | 2,644,535 |
Tile Shop Holdings | 18,290 | b | 468,224 |
Travelcenters of America | 26,632 | b | 296,414 |
Tuesday Morning | 46,052 | b | 410,323 |
Ulta Salon Cosmetics & Fragrance | 15,954 | b | 1,447,985 |
Vitamin Shoppe | 22,794 | b | 997,010 |
23,196,435 | |||
Semiconductors & Semiconductor | |||
Equipment—2.4% | |||
Advanced Energy Industries | 11,095 | b | 204,148 |
Cabot Microelectronics | 25,230 | b | 901,972 |
Cavium | 6,996 | b | 229,189 |
Diodes | 14,518 | b | 342,625 |
Fairchild Semiconductor International | 33,938 | b | 492,440 |
MEMC Electronic Materials | 47,067 | b | 379,831 |
Monolithic Power Systems | 11,099 | 272,702 | |
Power Integrations | 29,515 | 1,259,995 | |
Semtech | 74,898 | b | 2,736,773 |
Silicon Laboratories | 15,086 | b | 648,095 |
TheFund 17
STATEMENT OF INVESTMENTS (continued)
Common Stocks (continued) | Shares | Value ($) | |
Semiconductors & Semiconductor | |||
Equipment (continued) | |||
Ultratech | 10,313 | b | 376,012 |
Veeco Instruments | 19,525 | a,b | 827,665 |
8,671,447 | |||
Software & Services—16.3% | |||
Active Network | 139,000 | a,b | 929,910 |
Acxiom | 22,386 | b | 492,268 |
Angie’s List | 106,831 | a,b | 2,506,255 |
AOL | 23,895 | b | 828,201 |
Aspen Technology | 10,176 | b | 311,589 |
Bottomline Technologies | 54,818 | b | 1,514,621 |
CACI International, Cl. A | 16,500 | a,b | 1,058,310 |
Cass Information Systems | 23,589 | 1,058,674 | |
CommVault Systems | 9,790 | b | 685,300 |
Concur Technologies | 43,765 | a,b | 3,533,148 |
Cornerstone OnDemand | 50,926 | b | 2,069,633 |
CoStar Group | 19,010 | b | 2,125,508 |
DealerTrack Technologies | 51,575 | b | 1,662,778 |
Demandware | 16,354 | a,b | 500,596 |
Ebix | 45,390 | a | 900,538 |
EPAM Systems | 19,688 | b | 455,974 |
EVERTEC | 28,776 | 576,095 | |
ExlService Holdings | 52,588 | b | 1,542,406 |
FactSet Research Systems | 11,017 | a | 1,081,759 |
FleetCor Technologies | 4,584 | b | 399,175 |
Fleetmatics Group | 7,974 | 237,226 | |
Guidewire Software | 19,293 | b | 790,241 |
Infoblox | 65,138 | b | 1,584,808 |
Interactive Intelligence Group | 38,023 | a,b | 1,908,755 |
Interxion Holding | 18,160 | b | 498,492 |
Liquidity Services | 29,828 | a,b | 1,193,418 |
Manhattan Associates | 4,890 | b | 366,897 |
18
Common Stocks (continued) | Shares | Value ($) | |
Software & Services (continued) | |||
MAXIMUS | 46,463 | 3,467,534 | |
Mentor Graphics | 17,818 | 338,364 | |
Move | 27,093 | b | 308,589 |
NetSuite | 22,209 | b | 1,945,509 |
NIC | 29,720 | 496,918 | |
Pegasystems | 22,947 | 741,876 | |
Proofpoint | 19,701 | b | 397,960 |
PROS Holdings | 9,795 | b | 283,369 |
QLIK Technologies | 11,335 | b | 348,665 |
SciQuest | 52,903 | b | 1,214,124 |
Sourcefire | 26,544 | b | 1,485,402 |
Spark Networks | 76,298 | a,b | 622,592 |
Splunk | 7,948 | b | 371,648 |
SPS Commerce | 34,235 | b | 1,847,663 |
Synchronoss Technologies | 10,525 | b | 329,959 |
Take-Two Interactive Software | 20,539 | b | 341,769 |
Tyler Technologies | 63,384 | b | 4,374,130 |
Ultimate Software Group | 56,429 | b | 6,280,548 |
Verint Systems | 31,280 | b | 1,050,070 |
Web.com Group | 16,036 | b | 336,596 |
WebMD Health | 24,403 | b | 720,377 |
Yelp | 29,497 | a,b | 879,306 |
Zillow, Cl. A | 4,776 | a,b | 268,125 |
59,263,668 | |||
Technology Hardware & | |||
Equipment—3.0% | |||
3D Systems | 7,004 | b | 339,834 |
CalAmp | 27,549 | b | 362,820 |
Ciena | 28,936 | b | 484,389 |
Digi International | 83,025 | b | 796,210 |
FEI | 8,676 | 624,759 | |
Fusion-io | 21,078 | a,b | 304,999 |
The Fund 19
STATEMENT OF INVESTMENTS (continued)
Common Stocks (continued) | Shares | Value ($) | |
Technology Hardware & | |||
Equipment (continued) | |||
Infinera | 75,193 | a,b | 791,782 |
Ixia | 38,601 | b | 606,808 |
National Instruments | 71,687 | 2,035,911 | |
Plantronics | 6,988 | 322,846 | |
Riverbed Technology | 48,396 | b | 748,202 |
Silicon Graphics International | 12,965 | b | 195,771 |
Sonus Networks | 122,045 | b | 391,765 |
Stratasys | 21,741 | a,b | 1,827,331 |
Synaptics | 25,073 | b | 1,034,512 |
10,867,939 | |||
Telecommunication Services—.1% | |||
inContact | 37,773 | b | 274,232 |
Transportation—3.6% | |||
Allegiant Travel | 18,918 | 1,750,104 | |
AMERCO | 2,346 | 404,450 | |
Avis Budget Group | 28,705 | b | 951,858 |
Echo Global Logistics | 126,642 | b | 2,263,092 |
Forward Air | 20,000 | 775,400 | |
Genesee & Wyoming, Cl. A | 21,038 | b | 1,873,434 |
Marten Transport | 41,785 | 1,002,422 | |
Old Dominion Freight Line | 19,804 | b | 852,760 |
Roadrunner Transportation Systems | 13,300 | b | 368,410 |
Ryder System | 10,130 | 638,595 | |
Saia | 8,819 | b | 421,416 |
Swift Transportation | 33,915 | b | 571,129 |
US Airways Group | 72,448 | b | 1,272,911 |
13,145,981 | |||
Total Common Stocks | |||
cost $277,503,550) | 355,605,699 |
20
Investment of Cash Collateral | ||||
for Securities Loaned—13.5% | Shares | Value ($) | ||
Registered Investment Company; | ||||
Dreyfus Institutional Cash Advantage Fund | ||||
(cost $49,047,750) | 49,047,750 | c | 49,047,750 | |
Total Investments (cost $326,551,300) | 111.4 | % | 404,653,449 | |
Liabilities, Less Cash and Receivables | (11.4 | %) | (41,249,822 | ) |
Net Assets | 100.0 | % | 363,403,627 |
a Security, or portion thereof, on loan.At May 31, 2013, the value of the fund’s securities on loan was $48,321,598 |
and the value of the collateral held by the fund was $51,011,764, consisting of cash collateral of $49,047,750 and |
U.S Government & Agency securities valued at $1,964,014. |
b Non-income producing security. |
c Investment in affiliated money market mutual fund. |
Portfolio Summary (Unaudited)† | |||
Value (%) | Value (%) | ||
Software & Services | 16.3 | Consumer Durables & Apparel | 2.4 |
Health Care Equipment & Services | 14.2 | Semiconductors & Semiconductor | |
Money Market Investment | 13.5 | Equipment | 2.4 |
Capital Goods | 10.4 | Banks | 1.9 |
Consumer Services | 7.3 | Food & Staples Retailing | 1.1 |
Pharmaceuticals, Biotech & | Automobiles & Components | 1.0 | |
Life Sciences | 6.8 | Food, Beverage & Tobacco | .9 |
Retailing | 6.4 | Media | .8 |
Energy | 5.5 | Real Estate | .8 |
Commercial & Professional Services | 4.9 | Insurance | .7 |
Transportation | 3.6 | Exchange-Traded Funds | .6 |
Diversified Financials | 3.4 | Household & Personal Products | .1 |
Materials | 3.3 | Telecommunication Services | .1 |
Technology Hardware & Equipment | 3.0 | 111.4 | |
† Based on net assets. | |||
See notes to financial statements. |
The Fund 21
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2013
Cost | Value | ||
Assets ($): | |||
Investments in securities—See Statement of Investments (including | |||
securities on loan, valued at $48,321,598)—Note 1(b): | |||
Unaffiliated issuers | 277,503,550 | 355,605,699 | |
Affiliated issuers | 49,047,750 | 49,047,750 | |
Cash | 8,054,721 | ||
Receivable for investment securities sold | 6,591,545 | ||
Receivable for shares of Common Stock subscribed | 210,193 | ||
Dividends and securities lending income receivable | 200,108 | ||
Prepaid expenses | 32,679 | ||
419,742,695 | |||
Liabilities ($): | |||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 292,713 | ||
Liability for securities on loan—Note 1(b) | 49,047,750 | ||
Payable for investment securities purchased | 6,791,397 | ||
Payable for shares of Common Stock redeemed | 130,300 | ||
Accrued expenses | 76,908 | ||
56,339,068 | |||
Net Assets ($) | 363,403,627 | ||
Composition of Net Assets ($): | |||
Paid-in capital | 284,367,214 | ||
Accumulated investment (loss)—net | (561,103 | ) | |
Accumulated net realized gain (loss) on investments | 1,495,367 | ||
Accumulated net unrealized appreciation | |||
(depreciation) on investments | 78,102,149 | ||
Net Assets ($) | 363,403,627 |
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 668,297 | 31,618 | 362,703,712 |
Shares Outstanding | 30,152 | 1,457 | 16,225,626 |
Net Asset Value Per Share ($) | 22.16 | 21.70 | 22.35 |
See notes to financial statements. |
22
STATEMENT OF OPERATIONS
Year Ended May 31, 2013
Investment Income ($): | ||
Income: | ||
Cash dividends (net of $7,332 foreign taxes withheld at source) | 1,203,240 | |
Income from securities lending—Note 1(b) | 793,317 | |
Total Income | 1,996,557 | |
Expenses: | ||
Management fee—Note 3(a) | 2,404,784 | |
Custodian fees—Note 3(c) | 83,444 | |
Registration fees | 56,899 | |
Professional fees | 53,292 | |
Directors’ fees and expenses—Note 3(d) | 16,995 | |
Prospectus and shareholders’ reports | 7,875 | |
Shareholder servicing costs—Note 3(c) | 4,315 | |
Loan commitment fees—Note 2 | 2,390 | |
Distribution fees—Note 3(b) | 275 | |
Miscellaneous | 26,145 | |
Total Expenses | 2,656,414 | |
Less—reduction in expenses due to undertaking—Note 3(a) | (178 | ) |
Less—reduction in fees due to earnings credits—Note 3(c) | (10 | ) |
Net Expenses | 2,656,226 | |
Investment (Loss)—Net | (659,669 | ) |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | ||
Net realized gain (loss) on investments | 8,775,193 | |
Net unrealized appreciation (depreciation) on investments | 65,403,208 | |
Net Realized and Unrealized Gain (Loss) on Investments | 74,178,401 | |
Net Increase in Net Assets Resulting from Operations | 73,518,732 | |
See notes to financial statements. |
The Fund 23
STATEMENT OF CHANGES IN NET ASSETS
Year Ended May 31, | ||||
2013 | 2012 | |||
Operations ($): | ||||
Investment (loss)—net | (659,669 | ) | (493,964 | ) |
Net realized gain (loss) on investments | 8,775,193 | (6,229,127 | ) | |
Net unrealized appreciation | ||||
(depreciation) on investments | 65,403,208 | (2,036,149 | ) | |
Net Increase (Decrease) in Net Assets | ||||
Resulting from Operations | 73,518,732 | (8,759,240 | ) | |
Capital Stock Transactions ($): | ||||
Net proceeds from shares sold: | ||||
Class A Shares | 676,781 | 581,804 | ||
Class C Shares | 25,490 | 16,201 | ||
Class I Shares | 134,063,168 | 112,376,547 | ||
Cost of shares redeemed: | ||||
Class A Shares | (613,082 | ) | (876,833 | ) |
Class C Shares | (51,050 | ) | (157,340 | ) |
Class I Shares | (33,883,374 | ) | (25,966,135 | ) |
Increase (Decrease) in Net Assets | ||||
from Capital Stock Transactions | 100,217,933 | 85,974,244 | ||
Total Increase (Decrease) in Net Assets | 173,736,665 | 77,215,004 | ||
Net Assets ($): | ||||
Beginning of Period | 189,666,962 | 112,451,958 | ||
End of Period | 363,403,627 | 189,666,962 | ||
Accumulated investment (loss)—net | (561,103 | ) | — |
24
Year Ended May 31, | ||||
2013 | 2012 | |||
Capital Share Transactions: | ||||
Class Aa | ||||
Shares sold | 36,749 | 32,886 | ||
Shares redeemed | (31,680 | ) | (49,064 | ) |
Net Increase (Decrease) in Shares Outstanding | 5,069 | (16,178 | ) | |
Class Ca | ||||
Shares sold | 1,398 | 901 | ||
Shares redeemed | (2,698 | ) | (9,913 | ) |
Net Increase (Decrease) in Shares Outstanding | (1,300 | ) | (9,012 | ) |
Class I | ||||
Shares sold | 6,979,448 | 6,484,576 | ||
Shares redeemed | (1,738,932 | ) | (1,557,111 | ) |
Net Increase (Decrease) in Shares Outstanding | 5,240,516 | 4,927,465 |
a During the period ended May 31, 2013, 865 Class C shares representing $18,835 were exchanged for 847 |
Class A shares. |
See notes to financial statements.
The Fund 25
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated.All information (except portfolio turnover rate) reflects financial results for a single fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.
Year Ended May 31, | ||||||
Class A Shares | 2013 | 2012 | 2011 | a | ||
Per Share Data ($): | ||||||
Net asset value, beginning of period | 17.13 | 18.36 | 12.50 | |||
Investment Operations: | ||||||
Investment (loss)—netb | (.11 | ) | (.13 | ) | (.15 | ) |
Net realized and unrealized gain | ||||||
(loss) on investments | 5.14 | (1.10 | ) | 6.06 | ||
Total from Investment Operations | 5.03 | (1.23 | ) | 5.91 | ||
Distributions: | ||||||
Return of capital | — | — | (.05 | ) | ||
Net asset value, end of period | 22.16 | 17.13 | 18.36 | |||
Total Return (%)c | 29.36 | (6.70 | ) | 47.31 | d | |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | 1.34 | 1.43 | 2.95 | e | ||
Ratio of net expenses | ||||||
to average net assets | 1.33 | 1.34 | 1.40 | e | ||
Ratio of net investment (loss) | ||||||
to average net assets | (.56 | ) | (.78 | ) | (1.03 | )e |
Portfolio Turnover Rate | 111.48 | 107.62 | 70.41 | d | ||
Net Assets, end of period ($ x 1,000) | 668 | 430 | 758 |
a | From July 1, 2010 (commencement of operations) to May 31, 2011. |
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.
26
Year Ended May 31, | ||||||
Class C Shares | 2013 | 2012 | 2011 | a | ||
Per Share Data ($): | ||||||
Net asset value, beginning of period | 16.89 | 18.22 | 12.50 | |||
Investment Operations: | ||||||
Investment (loss)—netb | (.23 | ) | (.26 | ) | (.26 | ) |
Net realized and unrealized | ||||||
gain (loss) on investments | 5.04 | (1.07 | ) | 6.03 | ||
Total from Investment Operations | 4.81 | (1.33 | ) | 5.77 | ||
Distributions: | ||||||
Return of capital | — | — | (.05 | ) | ||
Net asset value, end of period | 21.70 | 16.89 | 18.22 | |||
Total Return (%)c | 28.48 | (7.30 | ) | 46.19 | d | |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | 2.25 | 2.16 | 3.73 | e | ||
Ratio of net expenses | ||||||
to average net assets | 2.02 | 2.07 | 2.15 | e | ||
Ratio of net investment (loss) | ||||||
to average net assets | (1.28 | ) | (1.56 | ) | (1.77 | )e |
Portfolio Turnover Rate | 111.48 | 107.62 | 70.41 | d | ||
Net Assets, end of period ($ x 1,000) | 32 | 47 | 214 |
a | From July 1, 2010 (commencement of operations) to May 31, 2011. |
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 27
FINANCIAL HIGHLIGHTS (continued)
Year Ended May 31, | ||||||
Class I Shares | 2013 | 2012 | 2011 | a | ||
Per Share Data ($): | ||||||
Net asset value, beginning of period | 17.22 | 18.40 | 12.50 | |||
Investment Operations: | ||||||
Investment (loss)—netb | (.05 | ) | (.06 | ) | (.13 | ) |
Net realized and unrealized | ||||||
gain (loss) on investments | 5.18 | (1.12 | ) | 6.08 | ||
Total from Investment Operations | 5.13 | (1.18 | ) | 5.95 | ||
Distributions: | ||||||
Return of capital | — | — | (.05 | ) | ||
Net asset value, end of period | 22.35 | 17.22 | 18.40 | |||
Total Return (%) | 29.79 | (6.41 | ) | 47.63 | c | |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | .99 | 1.03 | 1.77 | d | ||
Ratio of net expenses | ||||||
to average net assets | .99 | 1.02 | 1.15 | d | ||
Ratio of net investment (loss) | ||||||
to average net assets | (.25 | ) | (.34 | ) | (.84 | )d |
Portfolio Turnover Rate | 111.48 | 107.62 | 70.41 | c | ||
Net Assets, end of period ($ x 1,000) | 362,704 | 189,191 | 111,480 |
a | From July 1, 2010 (commencement of operations) to May 31, 2011. |
b | Based on average shares outstanding at each month end. |
c | Not annualized. |
d | Annualized. |
See notes to financial statements.
28
NOTES TO FINANCIAL STATEMENTS
NOTE 1—Significant Accounting Policies:
Dreyfus Select Managers Small Cap Growth Fund (the “fund”) is a separate non-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 nine 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 of The Bank of New York 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. Riverbridge Partners, LLC (“Riverbridge”), Geneva Capital Management Ltd. (“Geneva”), Cupps Capital Management, LLC (“CCM”), King Investment Advisors, Inc. (“King”) and Nicholas Investment Partners, L.P. (“Nicholas”), serve as the fund’s sub-investment advisers, each managing an allocated portion of the fund’s portfolio.The Company’s Board of Directors (the “Board”) approved, effective November 27, 2012 a new sub-investment advisory agreement with EAM Investors, LLC (“EAM”).
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 75 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 generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class I shares are sold 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 Fund 29
NOTES TO FINANCIAL STATEMENTS (continued)
The sales charge may be reduced or waived for certain purchases of Class A shares. Effective April 1, 2013, pursuant to new/modified front-end sales charge waivers, Class A shares of the fund may be purchased at net asset value without payment of a sales charge by (a) investors who participate in a self-directed investment brokerage account program offered by financial intermediaries that have entered into an agreement with the fund’s Distributor (financial intermediaries offering self-directed investment brokerage accounts may or may not charge their customers a transaction fee) and (b) investors who purchase Class A shares directly through the fund’s Distributor, and either (i) have, or whose spouse or minor children have, beneficially owned shares and continuously maintained an open account with the Distributor in a Dreyfus-managed fund since on or before February 28, 2006, or (ii) such purchase is for a self-directed investment account that may or may not be subject to a transaction fee.
On April 29, 2013, the Company’s Board of Directors (the “Board”) authorized the fund to offer Class Y shares, as a new class of shares, to certain investors, including certain institutional investors. Effective on or about July 1, 2013, Class Y shares will be offered at net asset value and will not be subject to certain fees, including Distribution Plan and Shareholder Services Plan fees.The Board approved an increase in the authorized shares of the fund from 225 million to 325 million and authorized 100 million ClassY shares.
As of May 31, 2013, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held 133 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 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
30
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: 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 31
NOTES TO FINANCIAL STATEMENTS (continued)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
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. All of the preceding securities are categorized within Level 1 of the fair value hierarchy.
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 American Depository Receipts and financial futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
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 proce-
32
dures approved by the Board. Certain factors may be considered when fair valuing investments 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.These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of May 31, 2013 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 | ||||
Common Stocks† | 344,987,511 | — | — | 344,987,511 |
Equity Securities— | ||||
Foreign | ||||
Common Stocks† | 8,297,883 | — | — | 8,297,883 |
Exchange-Traded | ||||
Funds | 2,320,305 | — | — | 2,320,305 |
Mutual Funds | 49,047,750 | — | — | 49,047,750 |
† See Statement of Investments for additional detailed categorizations. |
At May 31, 2013, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis.
The Fund 33
NOTES TO FINANCIAL STATEMENTS (continued)
Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by Dreyfus, U.S. Government and Agency securities or letters of credit.The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner. During the period ended May 31, 2013, The Bank of New York Mellon earned $264,439 from lending portfolio securities, pursuant to the securities lending agreement.
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act. Investments in affiliated investment companies during the period ended May 31, 2013 were as follows:
Affiliated | |||||
Investment | Value | Value | Net | ||
Company | 5/31/2012($) | Purchases ($) | Sales ($) | 5/31/2013 ($) | Assets (%) |
Dreyfus | |||||
Institutional | |||||
Cash | |||||
Advantage | |||||
Fund | 24,229,303 | 169,220,760 | 144,402,313 | 49,047,750 | 13.5 |
(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,
34
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.
As of and during the period ended May 31, 2013, 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 tax year in the three-year period ended May 31, 2013 remains subject to examination by the Internal Revenue Service and state taxing authorities.
At May 31, 2013, the components of accumulated earnings on a tax basis were as follows: undistributed capital gains $3,737,162 and unrealized appreciation $75,860,354. In addition, the fund deferred for tax purposes late year ordinary losses of $561,103 to the first day of the following fiscal year.
During the period ended May 31, 2013, as a result of permanent book to tax differences, primarily due to the tax treatment for net operating losses, the fund increased accumulated undistributed investment income-net by $98,566 and decreased paid-in capital by the same amount. Net assets and net asset value per share were not affected by this reclassification.
The Fund 35
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $210 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. Prior to October 10, 2012, the unsecured credit facility with Citibank, N.A. was $225 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2013, 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 had contractually agreed, from June 1, 2012 through February 12, 2013, 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 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceeded 1.15% of the value of the fund’s average daily net assets.Thereafter, Dreyfus has contractually agreed, from February 13, 2013 through July 1, 2014, to waive receipt of its fees and/or assume the direct expenses of the fund, so that the expenses of none of the classes (excluding certain expenses as described above) exceed 1.05% of the value of the fund’s average daily net assets. The reduction in expenses, pursuant to the undertaking, amounted to $178 during the period ended May 31, 2013.
Pursuant to a Portfolio Allocation Agreement between Dreyfus and EACM, Dreyfus pays EACM a monthly fee at an annual percentage of the value of the fund’s average daily net assets.
36
Pursuant to separate Sub-Investment Advisory Agreements between Dreyfus and Riverbridge, Geneva, CCM, King, Nicholas and EAM, Dreyfus pays each sub-investment adviser separate monthly fees at an annual percentage of the value of the fund’s average daily net assets managed by such investment adviser.
During the period ended May 31, 2013, the Distributor retained $3,252 from commissions earned on sales of the fund’s Class A shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended May 31, 2013, Class C shares were charged $275 pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts.The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended May 31, 2013, Class A and Class C shares were charged $1,786 and $92, respectively, pursuant to the Shareholder Services Plan.
The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency services for the fund and cash management services
The Fund 37
NOTES TO FINANCIAL STATEMENTS (continued)
related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $1,909 for transfer agency services and $65 for cash management services. Cash management fees were partially offset by earnings credits of $9.These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensatesThe Bank of NewYork Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2013, the fund was charged $83,444 pursuant to the custody agreement.
The fund compensates The Bank of New York Mellon under a cash management agreement for performing certain cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $40 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 $1.
During the period ended May 31, 2013, the fund was charged $8,527 for services performed by the Chief Compliance Officer and his staff.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $271,608, Distribution Plan fees $26, Shareholder Services Plan fees $147, custodian fees $16,800, Chief Compliance Officer fees $3,830 and transfer agency fees $350, which are offset against an expense reimbursement currently in effect in the amount of $48.
(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.
38
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended May 31, 2013, amounted to $389,735,906 and $291,419,311, respectively.
At May 31, 2013, the cost of investments for federal income tax purposes was $328,793,095; accordingly, accumulated net unrealized appreciation on investments was $75,860,354, consisting of $81,002,556 gross unrealized appreciation and $5,142,202 gross unrealized depreciation.
The Fund 39
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Dreyfus Select Managers Small Cap Growth Fund
We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Select Managers Small Cap Growth Fund (one of the series comprising Strategic Funds, Inc.) as of May 31, 2013, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of May 31, 2013 by correspondence with the custodian and others.We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Select Managers Small Cap Growth Fund at May 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated periods, in conformity with U.S. generally accepted accounting principles
NewYork, NewYork
July 26, 2013
40
BOARD MEMBERS INFORMATION (Unaudited)
Joseph S. DiMartino (69) |
Chairman of the Board (1995) |
Principal Occupation During Past 5Years: |
• Corporate Director and Trustee |
Other Public Company Board Memberships During Past 5Years: |
• CBIZ (formerly, Century Business Services, Inc.), a provider of outsourcing functions for small |
and medium size companies, Director (1997-present) |
• Sunair Services Corporation, a provider of certain outdoor-related services to homes and |
businesses, Director (2005-2009) |
• The Newark Group, a provider of a national market of paper recovery facilities, paperboard |
mills and paperboard converting plants, Director (2000-2010) |
No. of Portfolios for which Board Member Serves: 139 |
——————— |
William Hodding Carter III (78) |
Board Member (1988) |
Principal Occupation During Past 5Years: |
• Professor of Leadership & Public Policy, University of North Carolina, Chapel Hill (2006-present) |
No. of Portfolios for which Board Member Serves: 24 |
——————— |
Gordon J. Davis (71) |
Board Member (2006) |
Principal Occupation During Past 5Years: |
• Partner in the law firm ofVenable LLP (2012-present) |
• Partner in the law firm of Dewey & LeBoeuf LLP (1994-2012) |
Other Public Company Board Memberships During Past 5Years: |
• Consolidated Edison, Inc., a utility company, Director (1997-present) |
• The Phoenix Companies, Inc., a life insurance company, Director (2000-present) |
No. of Portfolios for which Board Member Serves: 47 |
——————— |
Joni Evans (71) |
Board Member (2006) |
Principal Occupation During Past 5Years: |
• Chief Executive Officer, www.wowOwow.com an online community dedicated to women’s |
conversations and publications (2007-present) |
• Principal, Joni Evans Ltd. (publishing) (2006-present) |
No. of Portfolios for which Board Member Serves: 24 |
The Fund 41
BOARD MEMBERS INFORMATION (Unaudited) (continued)
Ehud Houminer (72) |
Board Member (1994) |
Principal Occupation During Past 5Years: |
• Executive-in-Residence at the Columbia Business School, Columbia University (1992-present) |
Other Public Company Board Memberships During Past 5Years: |
• Avnet Inc., an electronics distributor, Director (1993-2012) |
No. of Portfolios for which Board Member Serves: 66 |
——————— |
Richard C. Leone (73) |
Board Member (1984) |
Principal Occupation During Past 5Years: |
• Senior Fellow and former President of The Century Foundation (formerly, The Twentieth |
Century Fund, Inc.), a tax exempt research foundation engaged in the study of economic, foreign |
policy and domestic issues |
Other Public Company Board Memberships During Past 5Years: |
• Partnership for a Secure America, Director |
No. of Portfolios for which Board Member Serves: 24 |
——————— |
Hans C. Mautner (75) |
Board Member (1984) |
Principal Occupation During Past 5Years: |
• President—International Division and an Advisory Director of Simon Property Group, a real |
estate investment company (1998-2010) |
• Chairman and Chief Executive Officer of Simon Global Limited (1999-2010) |
No. of Portfolios for which Board Member Serves: 24 |
——————— |
Robin A. Melvin (49) |
Board Member (1995) |
Principal Occupation During Past 5Years: |
• Director, Boisi Family Foundation, a private family foundation that supports youth-serving orga- |
nizations that promote the self sufficiency of youth from disadvantaged circumstances (1995-2012) |
• Board Member, Illinois Mentoring Partnership, non-profit organization dedicated to increasing |
the quantity and quality of mentoring service in Illinois (2013-present) |
No. of Portfolios for which Board Member Serves: 90 |
42
Burton N. Wallack (62) |
Board Member (2006) |
Principal Occupation During Past 5Years: |
• President and Co-owner of Wallack Management Company, a real estate management company |
No. of Portfolios for which Board Member Serves: 24 |
——————— |
John E. Zuccotti (75) |
Board Member (1984) |
Principal Occupation During Past 5Years: |
• Chairman of Brookfield Properties, Inc. |
• Senior Counsel of Weil, Gotshal & Manges, LLP |
• Emeritus Chairman of the Real Estate Board of NewYork |
Other Public Company Board Memberships During Past 5Years: |
• Emigrant Savings Bank, Director (2004-present) |
• Doris Duke Charitable Foundation,Trustee (2006-present) |
• NewYork Private Bank & Trust, Director |
No. of Portfolios for which Board Member Serves: 24 |
——————— |
Once elected all Board Members serve for an indefinite term, but achieve Emeritus status upon reaching age 80.The |
address of the Board Members and Officers is c/o The Dreyfus Corporation, 200 Park Avenue, NewYork, NewYork |
10166.Additional information about the Board Members is available in the fund’s Statement of Additional Information |
which can be obtained from Dreyfus free of charge by calling this toll free number: 1-800-DREYFUS. |
David W. Burke, Emeritus Board Member |
Arnold S. Hiatt, Emeritus Board Member |
The Fund 43
OFFICERS OF THE FUND (Unaudited)
![](https://capedge.com/proxy/N-CSR/0000737520-13-000088/smscgncsrx46x1.jpg)
44
![](https://capedge.com/proxy/N-CSR/0000737520-13-000088/smscgncsrx47x1.jpg)
The Fund 45
![](https://capedge.com/proxy/N-CSR/0000737520-13-000088/smscgncsrx48x1.jpg)
Item 2. Code of Ethics.
The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There have been no amendments to, or waivers in connection with, the Code of Ethics during the period covered by this Report.
Item 3. Audit Committee Financial Expert.
The Registrant's Board has determined that Ehud Houminer, a member of the Audit Committee of the Board, is an audit committee financial expert as defined by the Securities and Exchange Commission (the "SEC"). Ehud Houminer is "independent" as defined by the SEC for purposes of audit committee financial expert determinations.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were and $30,857 in 2012 and $31,594 in 2013.
(b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this Item 4 were $12,000 in 2012 and $6,000 in 2013. These services consisted of one or more of the following: (i) agreed upon procedures related to compliance with Internal Revenue Code section 817(h), (ii) security counts required by Rule 17f-2 under the Investment Company Act of 1940, as amended, (iii) advisory services as to the accounting or disclosure treatment of Registrant transactions or events and (iv) advisory services to the accounting or disclosure treatment of the actual or potential impact to the Registrant of final or proposed rules, standards or interpretations by the Securities and Exchange Commission, the Financial Accounting Standards Boards or other regulatory or standard-setting bodies.
The aggregate fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor to the Registrant's investment adviser (not including any sub-investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant ("Service Affiliates"), that were reasonably related to the performance of the annual audit of the Service Affiliate, which required pre-approval by the Audit Committee were $0 in 2012 and $0 in 2013.
(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice, and tax planning ("Tax Services") were $3,478 in 2012 and $3,040 in 2013. These services consisted of: (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments; (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held, and (iv) determination of Passive Foreign Investment Companies. The aggregate fees billed in the Reporting Periods for Tax Services by the Auditor to Service Affiliates, which required pre-approval by the Audit Committee were $0 in 2012 and $0 in 2013.
(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, were $8 in 2012 and $0 in 2013. [These services consisted of a review of the Registrant's anti-money laundering program].
The aggregate fees billed in the Reporting Periods for Non-Audit Services by the Auditor to Service Affiliates, other than the services reported in paragraphs (b) through (c) of this Item, which required pre-approval by the Audit Committee, were $0 in 2012 and $200,000 in 2013.
(e)(1) Audit Committee Pre-Approval Policies and Procedures. The Registrant's Audit Committee has established policies and procedures (the "Policy") for pre-approval (within specified fee limits) of the Auditor's engagements for non-audit services to the Registrant and Service Affiliates without specific case-by-case consideration. The pre-approved services in the Policy can include pre-approved audit services, pre-approved audit-related services, pre-approved tax services and pre-approved all other services. Pre-approval considerations include whether the proposed services are compatible with maintaining the Auditor's independence. Pre-approvals pursuant to the Policy are considered annually.
(e)(2) Note: None of the services described in paragraphs (b) through (d) of this Item 4 were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) None of the hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal account's full-time, permanent employees.
Non-Audit Fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered to Service Affiliates, for the Reporting Periods were $35,054,975 in 2012 and $49,714,645 in 2013.
Auditor Independence. The Registrant's Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable. [CLOSED-END FUNDS ONLY]
Item 6. Investments.
(a) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies.
Not applicable. [CLOSED-END FUNDS ONLY]
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable. [CLOSED-END FUNDS ONLY, beginning with reports for periods ended on and after December 31, 2005]
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.
Item 12. Exhibits.
(a)(1) Code of ethics referred to in Item 2.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Strategic Funds, Inc.
By: /s/ Bradley J. Skapyak | |
Bradley J. Skapyak, President
| |
Date: | July 24, 2013 |
| |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. | |
| |
By: /s/ Bradley J. Skapyak | |
Bradley J. Skapyak, President
| |
Date: | July 24, 2013 |
| |
By: /s/ James Windels | |
James Windels, Treasurer
| |
Date: | July 24, 2013 |
|
EXHIBIT INDEX
(a)(1) Code of ethics referred to in Item 2.
(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)