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 | 811-03940 | |||||
|
| |||||
| Strategic Funds, Inc. |
| ||||
| (Exact name of Registrant as specified in charter) |
| ||||
|
|
| ||||
|
c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 |
| ||||
| (Address of principal executive offices) (Zip code) |
| ||||
|
|
| ||||
| Bennett A. MacDougall, Esq. 200 Park Avenue New York, New York 10166 |
| ||||
| (Name and address of agent for service) |
| ||||
| ||||||
Registrant's telephone number, including area code: | (212) 922-6400 | |||||
|
| |||||
Date of fiscal year end:
| 11/30 |
| ||||
Date of reporting period: | 05/31/2018 |
| ||||
The following N-CSR relates only to the Registrant's series listed below and does not relate to any series of the Registrant with a different fiscal year end and, therefore, different N-CSR reporting requirements. A separate N-CSR will be filed for any series with a different fiscal year end, as appropriate.
Dreyfus Select Managers Small Cap Value Fund
Dreyfus U.S. Equity Fund
Global Stock Fund
International Stock Fund
FORM N-CSR
Item 1. Reports to Stockholders.
Dreyfus Select Managers Small Cap Value Fund
SEMIANNUAL REPORT May 31, 2018 |
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(s) only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Select Managers Small Cap Value Fund, covering the six-month period from December 1, 2017 through May 31, 2018. 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.
After a period of unusually mild price swings in 2017, inflation concerns, geopolitical tensions and potential trade disputes have caused volatility to increase substantially during 2018. As a result, U.S. stocks generally have produced mildly positive returns while bonds have lost a degree of value over the first five months of the year.
Stocks set a series of new record highs through January 2018 before market volatility took its toll, enabling stocks across all capitalization ranges to produce solidly positive returns for the full six-month reporting period. Stocks gained value amid growing corporate earnings, improving global economic conditions and the enactment of tax reform legislation and other government policy reforms. In contrast, most sectors of the U.S. bond market produced roughly flat total returns or lost a degree of value when short-term interest rates climbed and inflation expectations increased.
Despite the return of heightened market volatility, we believe that underlying market fundamentals remain strong. Continued economic growth, a robust labor market, rising corporate earnings and strong consumer and business confidence seem likely to support stock and corporate bond prices over the months ahead. As always, we encourage you to discuss the risks and opportunities of today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
June 15, 2018
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from December 1, 2017 through May 31, 2018, as provided by portfolio allocation managers Keith L. Stransky and Robert B. Mayerick of EACM Advisors LLC
Market and Fund Performance Overview
For the six-month period ended May 31, 2018, Dreyfus Select Managers Small Cap Value Fund’s Class A, Class C, Class I, and Class Y shares at NAV produced total returns of 0.76%, 0.40%, 0.91%, and 0.94%, respectively.1 In comparison, the Russell 2000® Value Index (the “Index”), the fund’s benchmark, returned 3.81% for the same period.2
Small-cap stocks produced moderate gains over the reporting period amid rising corporate earnings, lower corporate tax rates, and concerns regarding U.S. trade policies. The fund lagged the Index, mainly due to security selection shortfalls in the health care and consumer discretionary sectors.
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 currently considers small-cap companies to be those companies with market capitalizations that fall within the range of companies in the Index, the fund’s benchmark index. The fund's portfolio is constructed so as to have a value tilt. The fund uses a “multi-manager” approach by selecting various subadvisers to manage its assets. We may hire, terminate, or replace subadvisers and modify material terms and conditions of subadvisory arrangements without shareholder approval.
The fund’s assets are currently allocated to six subadvisers, each acting independently and using its own methodology to select portfolio investments. As of the end of the reporting period, approximately 2% of the fund’s assets were under the management of Thompson, Siegel, and Walmsley LLC, which employs a combination of quantitative and qualitative security selection methods based on a proprietary four-factor valuation model; approximately 23% of the fund’s assets were 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 16% of the fund’s assets were under the management of Neuberger Berman Investment Advisers 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 18% of the fund’s assets were under the management of Kayne Anderson Rudnick Investment Management, LLC, which employs a fundamental, bottom-up, research-driven investment process in seeking to identify high-quality companies whose securities are trading at attractive valuations; approximately 24% of the fund’s assets were under the management of Channing Capital Management, LLC, which employs intensive, fundamental, bottom-up research to identify high-quality companies that represent value opportunities; and approximately 17% of the fund’s assets were allocated to Eastern Shore Capital Management, which focuses on identifying companies with quality fundamentals that are trading at attractive valuations. The percentages of the fund’s assets allocated to the various subadvisers can change over time, within ranges described in the prospectus.
Positive Economic Trends in the Face of Rising Volatility
A positive economic backdrop supported U.S. equity markets in late 2017, including sustained GDP growth, robust labor markets, and higher growth forecasts from the Federal Reserve Board. Passage of tax reform legislation in December sparked additional market gains, driving the Index to new all-time highs in January 2018.
Economic data in January indicated robust levels of consumer spending during the critical year-end shopping season, and long-awaited signs of wage growth began to appear. However, concerns about rising inflationary pressures and prospects for more aggressive interest-rate hikes began to weigh on
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
market sentiment in February. In March, political rhetoric regarding potentially protectionist U.S. trade policies took a toll on stocks of U.S. companies with substantial overseas exposure, including exporters. Markets remained volatile through the remainder of the reporting period.
In this environment, small-cap stocks produced higher returns than their large- and mid-cap counterparts.
Security Selections Constrained Fund Performance
The fund’s lagging performance compared to the Index was mainly the result of disappointing stock selections by the fund’s underlying portfolio managers. Results from the health care sector proved especially weak, as dental and veterinary products producer Patterson Companies experienced sluggish sales in its dental business, and medical technology company Anika Therapeutics missed quarterly earnings targets due to weak sales of orthobiologic products. In the consumer discretionary sector, recreational vehicle makers Winnebago Industries and Thor Industries struggled with an industrywide sales slowdown and higher steel and aluminum costs.
The fund fared better in other areas. Stock selections within the information technology sector, which was overweighted, were beneficial. These include networking specialist Mellanox Technologies, which achieved better-than-expected quarterly earnings due to strong Ethernet product growth, and chipmaker Microsemi, which was acquired by a former rival. Underweighted positions in the lagging telecommunication services, utilities, and real estate sectors further supported relative performance.
A Constructive Outlook
Despite potential headwinds such as rising interest rates and richer equity valuations, we remain cautiously optimistic regarding the prospects for small-cap stocks. Escalating trade disputes seem likely to cause investors to turn away from multinational companies with a strong overseas presence and toward smaller businesses with a focus on domestic markets. The fund made no changes to its roster of subadvisers during the reporting period.
June 15, 2018
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 March 29, 2019, at which time it may be extended, terminated, or modified. Had these expenses not been absorbed, the fund’s returns would have been lower.
2 Source: Lipper Inc. — The Russell 2000® Value Index measures the performance of the small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies that are considered more value-oriented relative to the overall market as defined by Russell’s leading style methodology. The Russell 2000® Value Index is constructed to provide a comprehensive and unbiased barometer for the small-cap value segment. The index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set and that the represented companies continue to reflect value characteristics. Investors cannot invest directly in any index.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Equities 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.
4
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Select Managers Small Cap Value Fund from December 1, 2017 to May 31, 2018. 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, 2018 | ||||||||
Class A | Class C | Class I | Class Y | |||||
Expenses paid per $1,000† | $6.51 | $10.24 | $4.86 | $4.71 | ||||
Ending value (after expenses) | $1,007.60 | $1,004.00 | $1,009.10 | $1,009.40 |
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, 2018 | ||||||||||
Class A | Class C | Class I | Class Y | |||||||
Expenses paid per $1,000† | $6.54 | $10.30 | $4.89 | $4.73 | ||||||
Ending value (after expenses) | $1,018.45 | 1$,014.71 | $1,020.09 | $1,020.24 |
† Expenses are equal to the fund’s annualized expense ratio of 1.30% for Class A, 2.05% for Class C, .97% for Class I and .94% for Class Y, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
May 31, 2018 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% | |||||||
Automobiles & Components - 2.0% | |||||||
Dorman Products | 22,640 | a,b | 1,460,733 | ||||
Gentherm | 3,900 | a,b | 138,060 | ||||
Goodyear Tire & Rubber | 64,800 | 1,583,064 | |||||
LCI Industries | 17,980 | 1,576,846 | |||||
Motorcar Parts of America | 9,400 | a,b | 201,630 | ||||
Stoneridge | 99,440 | b | 3,135,343 | ||||
Thor Industries | 62,300 | 5,768,980 | |||||
Visteon | 14,550 | b | 1,818,168 | ||||
Winnebago Industries | 91,570 | a | 3,319,412 | ||||
19,002,236 | |||||||
Banks - 12.8% | |||||||
Bancorp | 28,400 | b | 321,488 | ||||
Bank of Hawaii | 97,160 | a | 8,251,799 | ||||
BankUnited | 39,670 | 1,672,884 | |||||
Banner | 108,284 | 6,491,626 | |||||
BofI Holding | 6,800 | b | 280,228 | ||||
Boston Private Financial Holdings | 17,600 | 299,200 | |||||
Brookline Bancorp | 180,780 | 3,290,196 | |||||
Bryn Mawr Bank | 50,990 | 2,393,980 | |||||
Camden National | 21,980 | a | 1,004,926 | ||||
CenterState Banks | 353,325 | 10,864,744 | |||||
City Holding | 27,340 | a | 2,031,089 | ||||
CoBiz Financial | 71,250 | 1,590,300 | |||||
Columbia Banking System | 70,505 | a | 2,997,873 | ||||
Commerce Bancshares | 30,473 | 1,967,946 | |||||
Community Bank System | 32,535 | a | 1,948,196 | ||||
Customers Bancorp | 10,890 | a,b | 330,076 | ||||
CVB Financial | 75,170 | 1,743,192 | |||||
Eagle Bancorp | 52,070 | b | 3,152,838 | ||||
First Bancorp | 6,675 | 277,747 | |||||
First Busey | 9,450 | 303,440 | |||||
First Financial Bancorp | 69,160 | 2,175,082 | |||||
First Financial Bankshares | 89,480 | a | 4,706,648 | ||||
First Foundation | 14,800 | a,b | 286,972 | ||||
Great Southern Bancorp | 35,810 | 2,059,075 | |||||
Heartland Financial USA | 44,060 | a | 2,416,691 | ||||
HomeStreet | 8,100 | b | 217,080 | ||||
Huntington Bancshares | 90,580 | 1,346,925 | |||||
Independent Bank | 37,840 | 2,964,764 | |||||
Investors Bancorp | 17,500 | a | 233,450 | ||||
Lakeland Financial | 43,820 | 2,137,978 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Banks - 12.8% (continued) | |||||||
Nationstar Mortgage Holdings | 11,900 | a,b | 213,248 | ||||
OceanFirst Financial | 66,090 | 1,937,759 | |||||
Pacific Premier Bancorp | 151,996 | b | 6,277,435 | ||||
Pinnacle Financial Partners | 16,422 | a | 1,101,095 | ||||
Popular | 4,300 | 194,532 | |||||
Provident Financial Services | 70,500 | 1,969,770 | |||||
Radian Group | 11,400 | 181,260 | |||||
Renasant | 134,806 | 6,459,904 | |||||
Republic First Bancorp | 20,000 | a,b | 172,000 | ||||
Simmons First National, Cl. A | 9,800 | 313,600 | |||||
South State | 72,819 | 6,519,121 | |||||
Southside Bancshares | 60,823 | a | 2,077,105 | ||||
Stock Yards Bancorp | 48,325 | 1,918,502 | |||||
TCF Financial | 98,850 | 2,600,743 | |||||
Texas Capital Bancshares | 85,561 | b | 8,243,802 | ||||
TriCo Bancshares | 61,440 | 2,391,245 | |||||
Triumph Bancorp | 77,199 | b | 3,169,019 | ||||
Union Bankshares | 38,595 | 1,586,255 | |||||
Wintrust Financial | 34,885 | 3,213,257 | |||||
120,298,085 | |||||||
Capital Goods - 15.3% | |||||||
Actuant, Cl. A | 56,585 | a | 1,321,260 | ||||
Aerojet Rocketdyne Holdings | 90,710 | a,b | 2,625,147 | ||||
Aerovironment | 2,050 | a,b | 118,613 | ||||
Albany International, Cl. A | 36,870 | 2,267,505 | |||||
Allied Motion Technologies | 41,408 | 2,002,491 | |||||
American Woodmark | 18,641 | a,b | 1,921,887 | ||||
Apogee Enterprises | 6,900 | a | 301,185 | ||||
Atkore International Group | 89,595 | b | 1,935,252 | ||||
Babcock & Wilcox Enterprises | 430,919 | a,b | 1,064,370 | ||||
Columbus McKinnon | 56,720 | 2,349,910 | |||||
Comfort Systems USA | 5,400 | 252,990 | |||||
Dycom Industries | 2,900 | a,b | 270,164 | ||||
EMCOR Group | 26,090 | 1,981,014 | |||||
EnerSys | 3,500 | 279,685 | |||||
Esterline Technologies | 29,660 | b | 2,163,697 | ||||
Franklin Electric | 147,159 | 6,806,104 | |||||
FreightCar America | 86,250 | a | 1,476,600 | ||||
GATX | 26,780 | a | 1,925,482 | ||||
Global Brass & Copper Holdings | 65,510 | 2,057,014 | |||||
Graco | 120,450 | 5,468,430 | |||||
Granite Construction | 27,970 | 1,590,654 | |||||
Great Lakes Dredge & Dock | 375,460 | a,b | 1,886,686 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Capital Goods - 15.3% (continued) | |||||||
Harsco | 72,600 | b | 1,778,700 | ||||
Hexcel | 97,108 | 6,878,160 | |||||
Hillenbrand | 164,013 | 7,651,206 | |||||
Houston Wire & Cable | 82,830 | b | 683,348 | ||||
ITT | 66,600 | 3,437,892 | |||||
John Bean Technologies | 13,035 | a | 1,150,991 | ||||
KBR | 112,340 | 2,069,303 | |||||
Kennametal | 47,865 | 1,782,014 | |||||
KEYW Holding | 189,930 | a,b | 1,794,838 | ||||
Lincoln Electric Holdings | 38,820 | 3,478,272 | |||||
Manitowoc Company | 30,912 | b | 757,035 | ||||
Masonite International | 38,000 | b | 2,511,800 | ||||
Mercury Systems | 32,890 | a,b | 1,214,628 | ||||
Milacron Holdings | 441,039 | b | 8,692,879 | ||||
Miller Industries | 38,120 | 1,015,898 | |||||
Moog, Cl. A | 22,270 | 1,815,673 | |||||
Mueller Industries | 58,690 | a | 1,772,438 | ||||
NCI Building Systems | 11,800 | b | 225,970 | ||||
Nexeo Solutions | 222,390 | b | 2,152,735 | ||||
Proto Labs | 6,765 | b | 815,859 | ||||
RBC Bearings | 55,800 | a,b | 7,014,618 | ||||
Regal Beloit | 28,500 | 2,264,325 | |||||
Rexnord | 261,759 | b | 7,638,128 | ||||
Simpson Manufacturing | 33,790 | 2,139,245 | |||||
SiteOne Landscape Supply | 101,356 | a,b | 7,667,581 | ||||
Spirit AeroSystems Holdings, Cl. A | 31,710 | 2,686,154 | |||||
Standex International | 23,285 | 2,322,679 | |||||
Teledyne Technologies | 7,640 | b | 1,539,154 | ||||
Textainer Group Holdings | 9,300 | a,b | 157,635 | ||||
Triumph Group | 135,110 | a | 2,864,332 | ||||
Tutor Perini | 118,400 | a,b | 2,344,320 | ||||
Twin Disc | 31,920 | b | 884,822 | ||||
Valmont Industries | 7,600 | 1,110,740 | |||||
Wabash National | 104,840 | a | 2,097,848 | ||||
Watsco | 32,630 | a | 6,004,573 | ||||
Welbilt | 78,845 | b | 1,535,112 | ||||
144,017,045 | |||||||
Commercial & Professional Services - 3.5% | |||||||
ABM Industries | 37,646 | 1,071,405 | |||||
ASGN | 18,140 | b | 1,396,780 | ||||
Casella Waste Systems, Cl. A | 13,100 | b | 308,898 | ||||
Clean Harbors | 33,000 | b | 1,749,000 | ||||
Covanta Holding | 118,640 | a | 1,933,832 |
8
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Commercial & Professional Services - 3.5% (continued) | |||||||
Heritage-Crystal Clean | 116,170 | b | 2,358,251 | ||||
Interface | 110,890 | 2,517,203 | |||||
Kelly Services, Cl. A | 26,600 | a | 596,106 | ||||
Kimball International, Cl. B | 78,550 | 1,276,438 | |||||
Korn/Ferry International | 28,765 | 1,572,870 | |||||
McGrath RentCorp | 63,760 | 4,149,501 | |||||
MSA Safety | 88,259 | a | 8,208,087 | ||||
SP Plus | 4,600 | b | 165,600 | ||||
UniFirst | 18,760 | 3,331,776 | |||||
US Ecology | 32,017 | a | 1,940,230 | ||||
32,575,977 | |||||||
Consumer Durables & Apparel - 2.5% | |||||||
Bassett Furniture Industries | 33,290 | a | 920,469 | ||||
Crocs | 43,770 | b | 780,857 | ||||
CSS Industries | 60,270 | 973,361 | |||||
G-III Apparel Group | 149,361 | b | 6,258,226 | ||||
LGI Homes | 26,515 | a,b | 1,615,029 | ||||
M.D.C. Holdings | 64,632 | 2,041,079 | |||||
M/I Homes | 84,990 | b | 2,361,022 | ||||
Malibu Boats, Cl. A | 37,275 | b | 1,598,352 | ||||
Oxford Industries | 2,500 | a | 206,300 | ||||
Steven Madden | 61,870 | 3,269,829 | |||||
Tempur Sealy International | 11,400 | a,b | 525,882 | ||||
TRI Pointe Group | 15,200 | a,b | 262,352 | ||||
Unifi | 76,020 | b | 2,395,390 | ||||
ZAGG | 11,300 | a,b | 171,760 | ||||
23,379,908 | |||||||
Consumer Services - 1.5% | |||||||
Bloomin' Brands | 7,600 | 161,272 | |||||
Cheesecake Factory | 157,100 | a | 8,139,351 | ||||
Dave & Buster's Entertainment | 2,000 | b | 83,280 | ||||
Red Robin Gourmet Burgers | 3,200 | a,b | 161,120 | ||||
SeaWorld Entertainment | 312,200 | a,b | 5,541,550 | ||||
The Stars Group | 5,700 | b | 193,800 | ||||
14,280,373 | |||||||
Diversified Financials - 3.9% | |||||||
Artisan Partners Asset Management, Cl. A | 332,721 | a | 10,746,888 | ||||
BrightSphere Investment Group | 77,155 | 1,196,674 | |||||
Cannae Holdings | 121,460 | b | 2,427,985 | ||||
Cowen Group, Cl. A | 17,650 | a,b | 263,868 | ||||
Evercore, Cl. A | 68,280 | 7,128,432 | |||||
FirstCash | 2,700 | 245,025 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Diversified Financials - 3.9% (continued) | |||||||
Green Dot, Cl. A | 2,900 | b | 206,683 | ||||
Houlihan Lokey | 109,150 | 5,336,343 | |||||
Stifel Financial | 149,989 | 8,819,353 | |||||
36,371,251 | |||||||
Energy - 5.3% | |||||||
Basic Energy Services | 13,500 | a,b | 178,335 | ||||
Callon Petroleum | 612,887 | a,b | 7,256,582 | ||||
Core Laboratories | 58,330 | a | 7,243,419 | ||||
Delek US Holdings | 4,400 | 245,432 | |||||
Dril-Quip | 17,900 | a,b | 860,095 | ||||
Energen | 32,250 | b | 2,187,840 | ||||
Forum Energy Technologies | 132,680 | a,b | 1,877,422 | ||||
Halcon Resources | 304,520 | a,b | 1,473,877 | ||||
ION Geophysical | 13,524 | b | 331,338 | ||||
Keane Group | 128,520 | a,b | 1,882,818 | ||||
Laredo Petroleum | 301,666 | a,b | 2,799,460 | ||||
McDermott International | 47,507 | a,b | 1,032,319 | ||||
MRC Global | 14,238 | a,b | 294,015 | ||||
Oasis Petroleum | 169,615 | a,b | 2,210,083 | ||||
Oil States International | 199,547 | a,b | 7,063,964 | ||||
Patterson-UTI Energy | 37,700 | 779,636 | |||||
PDC Energy | 14,230 | a,b | 860,773 | ||||
QEP Resources | 94,810 | b | 1,146,253 | ||||
Ring Energy | 20,500 | a,b | 283,105 | ||||
RPC | 74,060 | a | 1,216,065 | ||||
SEACOR Holdings | 41,050 | a,b | 2,144,041 | ||||
SilverBow Resources | 34,180 | b | 983,017 | ||||
SM Energy | 52,130 | 1,365,806 | |||||
Solaris Oilfield Infrastructure, Cl. A | 60,045 | a,b | 927,095 | ||||
Superior Energy Services | 80,300 | b | 877,679 | ||||
TETRA Technologies | 168,290 | a,b | 710,184 | ||||
Whiting Petroleum | 29,270 | a,b | 1,534,333 | ||||
49,764,986 | |||||||
Exchange-Traded Funds - .4% | |||||||
iShares Russell 2000 ETF | 25,716 | 4,185,793 | |||||
Food & Staples Retailing - .4% | |||||||
Andersons | 58,200 | 1,879,860 | |||||
Casey's General Stores | 2,200 | a | 212,960 | ||||
Chefs' Warehouse | 8,500 | a,b | 231,200 | ||||
United Natural Foods | 36,740 | a,b | 1,674,609 | ||||
3,998,629 | |||||||
Food, Beverage & Tobacco - 2.9% | |||||||
B&G Foods | 1,200 | 33,780 |
10
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Food, Beverage & Tobacco - 2.9% (continued) | |||||||
Calavo Growers | 17,890 | 1,574,320 | |||||
Darling Ingredients | 241,400 | b | 4,535,906 | ||||
Hain Celestial Group | 39,400 | b | 1,005,488 | ||||
Hostess Brands | 428,995 | a,b | 5,847,202 | ||||
Landec | 147,480 | a,b | 2,079,468 | ||||
MGP Ingredients | 22,060 | a | 1,953,413 | ||||
National Beverage | 69,493 | a | 6,551,800 | ||||
TreeHouse Foods | 76,304 | a,b | 3,655,725 | ||||
Turning Point Brands | 7,600 | 205,808 | |||||
27,442,910 | |||||||
Health Care Equipment & Services - 4.1% | |||||||
Acadia Healthcare | 42,300 | a,b | 1,700,037 | ||||
Accuray | 258,790 | a,b | 1,138,676 | ||||
Allscripts Healthcare Solutions | 188,560 | b | 2,385,284 | ||||
Amedisys | 38,019 | b | 2,902,751 | ||||
AMN Healthcare Services | 43,735 | a,b | 2,471,027 | ||||
Analogic | 7,700 | 644,105 | |||||
Anika Therapeutics | 103,094 | a,b | 4,191,802 | ||||
AtriCure | 44,800 | b | 1,062,208 | ||||
BioTelemetry | 7,800 | a,b | 329,550 | ||||
CONMED | 11,535 | 791,878 | |||||
Encompass Health | 34,260 | 2,218,335 | |||||
Envision Healthcare | 41,500 | b | 1,779,520 | ||||
Globus Medical, Cl. A | 45,040 | b | 2,501,972 | ||||
Halyard Health | 159,020 | b | 8,730,198 | ||||
Masimo | 16,195 | b | 1,604,115 | ||||
Molina Healthcare | 18,500 | a,b | 1,571,205 | ||||
Natus Medical | 38,490 | a,b | 1,420,281 | ||||
OraSure Technologies | 6,100 | b | 103,761 | ||||
Patterson | 28,800 | a | 602,496 | ||||
Tivity Health | 4,000 | a,b | 140,200 | ||||
38,289,401 | |||||||
Household & Personal Products - .6% | |||||||
Inter Parfums | 33,455 | 1,783,152 | |||||
Orchids Paper Products | 50,410 | a,b | 200,632 | ||||
WD-40 | 26,380 | a | 3,628,569 | ||||
5,612,353 | |||||||
Insurance - 3.6% | |||||||
American Financial Group | 17,700 | 1,944,876 | |||||
AMERISAFE | 31,770 | 1,895,080 | |||||
Argo Group International Holdings | 4,657 | 282,913 | |||||
Federated National Holding | 875 | a | 19,915 | ||||
Genworth Financial, Cl. A | 26,700 | b | 91,848 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Insurance - 3.6% (continued) | |||||||
Greenlight Capital Re, Cl. A | 12,700 | a,b | 181,610 | ||||
Horace Mann Educators | 142,323 | 6,290,677 | |||||
James River Group Holdings | 4,300 | 163,099 | |||||
Kemper | 72,380 | a | 5,605,831 | ||||
MBIA | 21,100 | a,b | 172,598 | ||||
Navigators Group | 42,580 | 2,503,704 | |||||
Primerica | 101,846 | 10,016,554 | |||||
RLI | 62,200 | 4,085,296 | |||||
Stewart Information Services | 5,900 | 248,921 | |||||
33,502,922 | |||||||
Materials - 7.0% | |||||||
American Vanguard | 123,480 | 2,660,994 | |||||
Ampco-Pittsburgh | 66,000 | b | 719,400 | ||||
AptarGroup | 20,650 | 1,906,408 | |||||
Avery Dennison | 48,350 | 5,078,200 | |||||
Cleveland-Cliffs | 195,030 | a,b | 1,649,954 | ||||
Compass Minerals International | 2,700 | a | 176,580 | ||||
Crown Holdings | 65,800 | b | 2,851,772 | ||||
Ferro | 66,295 | b | 1,356,396 | ||||
Ferroglobe | 19,650 | b | 201,020 | ||||
H.B. Fuller | 110,990 | a | 5,721,534 | ||||
Ingevity | 117,735 | b | 8,964,343 | ||||
Kaiser Aluminum | 38,187 | a | 4,210,499 | ||||
KMG Chemicals | 33,310 | 2,226,773 | |||||
Materion | 47,360 | 2,583,488 | |||||
Mercer International | 145,297 | 2,332,017 | |||||
PolyOne | 172,413 | 7,227,553 | |||||
Rayonier Advanced Materials | 134,020 | a | 2,400,298 | ||||
Scotts Miracle-Gro | 84,690 | a | 7,209,660 | ||||
Stepan | 26,377 | 1,917,608 | |||||
Summit Materials, Cl. A | 51,807 | a,b | 1,472,355 | ||||
Valvoline | 82,510 | a | 1,686,504 | ||||
Westlake Chemical | 9,910 | 1,146,884 | |||||
65,700,240 | |||||||
Media - 1.7% | |||||||
AMC Entertainment Holdings, Cl. A | 8,900 | a | 131,720 | ||||
Cinemark Holdings | 157,200 | a | 5,308,644 | ||||
John Wiley & Sons, Cl. A | 33,230 | 2,252,994 | |||||
Loral Space & Communications | 38,890 | b | 1,493,376 | ||||
Meredith | 113,265 | a | 5,702,893 | ||||
MSG Networks, Cl. A | 39,200 | b | 756,560 | ||||
New Media Investment Group | 10,641 | a | 177,705 | ||||
15,823,892 |
12
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Pharmaceuticals, Biotechnology & Life Sciences - 3.2% | |||||||
Aerie Pharmaceuticals | 29,150 | a,b | 1,495,395 | ||||
Agios Phamaceuticals | 10,470 | a,b | 978,945 | ||||
Amneal Pharmaceuticals | 103,800 | b | 2,049,012 | ||||
Array BioPharma | 37,160 | b | 607,566 | ||||
Charles River Laboratories International | 95,049 | b | 10,219,668 | ||||
Clovis Oncology | 12,640 | a,b | 593,574 | ||||
Esperion Therapeutics | 11,045 | a,b | 425,122 | ||||
Fate Therapeutics | 48,890 | a,b | 535,346 | ||||
FibroGen | 16,165 | b | 871,294 | ||||
Fluidigm | 256,525 | a,b | 1,428,844 | ||||
Intersect ENT | 17,100 | b | 729,315 | ||||
Ligand Pharmaceuticals | 10,415 | b | 2,002,075 | ||||
Loxo Oncology | 13,585 | a,b | 2,409,028 | ||||
Luminex | 67,900 | 1,922,928 | |||||
Mallinckrodt | 29,900 | a,b | 503,815 | ||||
NanoString Technologies | 60,100 | b | 774,689 | ||||
Spectrum Pharmaceuticals | 26,485 | b | 510,896 | ||||
Syneos Health | 4,700 | a,b | 202,100 | ||||
Xencor | 39,775 | b | 1,591,398 | ||||
29,851,010 | |||||||
Real Estate - 4.5% | |||||||
Columbia Property Trust | 11,600 | c | 256,592 | ||||
CoreCivic | 6,800 | c | 146,336 | ||||
Corporate Office Properties Trust | 214,196 | c | 5,976,068 | ||||
Education Realty Trust | 99,613 | a,c | 3,639,859 | ||||
Equity Commonwealth | 10,000 | b,c | 311,100 | ||||
Healthcare Realty Trust | 158,240 | c | 4,310,458 | ||||
HFF, Cl. A | 125,500 | a | 4,231,860 | ||||
InfraREIT | 46,000 | c | 982,560 | ||||
MGM Growth Properties, Cl. A | 275,290 | a,c | 8,170,607 | ||||
RE/MAX Holdings, Cl. A | 111,850 | 5,827,385 | |||||
Retail Opportunity Investments | 13,900 | a,c | 251,868 | ||||
Rexford Industrial Realty | 99,285 | a,c | 3,104,642 | ||||
RLJ Lodging Trust | 14,263 | c | 333,754 | ||||
Spirit Realty Capital | 33,400 | c | 292,584 | ||||
Terreno Realty | 93,145 | c | 3,549,756 | ||||
Uniti Group | 59,800 | a,c | 1,254,006 | ||||
42,639,435 | |||||||
Retailing - 1.0% | |||||||
Boot Barn Holdings | 9,850 | a,b | 233,248 | ||||
Express | 89,970 | a,b | 765,645 | ||||
New York & Co. | 66,180 | b | 275,309 | ||||
Office Depot | 349,788 | 825,500 |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Retailing - 1.0% (continued) | |||||||
Party City Holdco | 51,400 | a,b | 755,580 | ||||
Sally Beauty Holdings | 283,717 | a,b | 4,295,475 | ||||
The Children's Place | 1,500 | a | 193,125 | ||||
The Michaels Companies | 11,500 | a,b | 211,140 | ||||
Triton International | 61,060 | a | 2,125,499 | ||||
9,680,521 | |||||||
Semiconductors & Semiconductor Equipment - 4.1% | |||||||
Advanced Energy Industries | 21,025 | b | 1,377,768 | ||||
Amkor Technology | 398,590 | b | 3,627,169 | ||||
Brooks Automation | 161,360 | a | 5,273,245 | ||||
Cabot Microelectronics | 13,785 | 1,560,048 | |||||
CEVA | 25,230 | b | 850,251 | ||||
Cypress Semiconductor | 140,965 | a | 2,320,284 | ||||
Entegris | 91,275 | 3,203,752 | |||||
Impinj | 28,200 | a,b | 504,780 | ||||
Integrated Device Technology | 56,270 | b | 1,870,415 | ||||
MACOM Technology Solutions Holdings | 92,555 | a,b | 2,087,115 | ||||
Mellanox Technologies | 41,990 | a,b | 3,585,946 | ||||
Monolithic Power Systems | 17,915 | 2,361,376 | |||||
Rambus | 205,680 | b | 2,768,453 | ||||
Semtech | 6,500 | b | 314,600 | ||||
Silicon Laboratories | 36,795 | b | 3,885,552 | ||||
Veeco Instruments | 69,800 | a,b | 1,190,090 | ||||
Versum Materials | 46,575 | 1,861,603 | |||||
38,642,447 | |||||||
Software & Services - 6.7% | |||||||
8x8 | 54,410 | b | 1,017,467 | ||||
ACI Worldwide | 11,000 | b | 265,650 | ||||
Acxiom | 93,900 | b | 2,750,331 | ||||
American Software, Cl. A | 191,300 | 2,519,421 | |||||
Booz Allen Hamilton Holdings | 164,300 | 7,408,287 | |||||
Bottomline Technologies | 43,610 | b | 2,074,092 | ||||
Box, Cl. A | 56,160 | b | 1,442,189 | ||||
CACI International, Cl. A | 1,900 | b | 316,635 | ||||
Cass Information Systems | 86,319 | 5,366,452 | |||||
Conduent | 115,800 | b | 2,229,150 | ||||
CoreLogic | 56,630 | b | 2,969,111 | ||||
Fair Isaac | 12,935 | a,b | 2,380,428 | ||||
FireEye | 133,800 | a,b | 2,233,122 | ||||
Imperva | 3,500 | b | 169,750 | ||||
InterXion Holding | 28,140 | b | 1,797,020 | ||||
Jack Henry & Associates | 38,770 | 4,848,576 | |||||
Net 1 UEPS Technologies | 21,500 | a,b | 209,840 |
14
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Software & Services - 6.7% (continued) | |||||||
Nuance Communications | 191,250 | b | 2,583,787 | ||||
Okta | 39,780 | b | 2,236,034 | ||||
Pegasystems | 41,400 | 2,560,590 | |||||
Quotient Technology | 87,685 | b | 1,174,979 | ||||
RealPage | 23,245 | b | 1,365,644 | ||||
Seachange International | 139,120 | b | 389,536 | ||||
Stamps.com | 6,280 | a,b | 1,575,024 | ||||
TiVo | 141,229 | 2,033,698 | |||||
Unisys | 73,500 | a,b | 885,675 | ||||
VASCO Data Security International | 53,900 | b | 1,166,935 | ||||
Verint Systems | 88,568 | b | 3,737,576 | ||||
Zendesk | 66,265 | b | 3,703,551 | ||||
63,410,550 | |||||||
Technology Hardware & Equipment - 5.7% | |||||||
ARRIS International | 173,880 | b | 4,395,686 | ||||
Badger Meter | 127,350 | a | 5,571,562 | ||||
Belden | 106,543 | a | 5,887,566 | ||||
Ciena | 204,230 | b | 4,707,501 | ||||
Diebold Nixdorf | 61,900 | a | 711,850 | ||||
Electronics For Imaging | 135,610 | a,b | 4,533,442 | ||||
Finisar | 12,500 | a,b | 202,625 | ||||
II-VI | 20,830 | b | 915,479 | ||||
Infinera | 227,920 | b | 2,005,696 | ||||
Itron | 28,530 | a,b | 1,629,063 | ||||
Kimball Electronics | 50,970 | b | 953,139 | ||||
Littelfuse | 26,658 | a | 5,786,119 | ||||
Maxwell Technologies | 110,900 | a,b | 571,135 | ||||
Methode Electronics | 4,400 | 176,660 | |||||
Mitel Networks | 76,200 | b | 841,248 | ||||
NCR | 51,490 | a,b | 1,549,849 | ||||
Novanta | 33,955 | b | 2,201,982 | ||||
OSI Systems | 19,610 | b | 1,344,854 | ||||
Quantum | 40,503 | b | 122,319 | ||||
Ribbon Communications | 129,300 | b | 783,558 | ||||
Rogers | 9,690 | b | 1,104,272 | ||||
VeriFone Systems | 43,060 | b | 979,184 | ||||
Viavi Solutions | 117,200 | b | 1,114,572 | ||||
Vishay Intertechnology | 238,710 | 5,060,652 | |||||
53,150,013 | |||||||
Telecommunication Services - .2% | |||||||
Vonage Holdings | 129,545 | a,b | 1,483,290 | ||||
Transportation - 1.9% | |||||||
Air Transport Services Group | 14,100 | b | 296,100 |
15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 96.7% (continued) | |||||||
Transportation - 1.9% (continued) | |||||||
Avis Budget Group | 36,500 | b | 1,423,135 | ||||
Danaos | 117,501 | b | 170,376 | ||||
Forward Air | 25,875 | 1,534,905 | |||||
Heartland Express | 101,550 | a | 1,896,954 | ||||
Hertz Global Holdings | 76,400 | a,b | 1,152,876 | ||||
Hub Group, Cl. A | 42,720 | b | 2,133,864 | ||||
Landstar System | 51,340 | 5,821,956 | |||||
Ryder System | 24,670 | 1,654,864 | |||||
Saia | 20,470 | b | 1,686,728 | ||||
YRC Worldwide | 15,900 | a,b | 170,448 | ||||
17,942,206 | |||||||
Utilities - 1.9% | |||||||
ALLETE | 56,082 | a | 4,308,219 | ||||
American States Water | 34,650 | a | 1,950,102 | ||||
Atlantic Power | 416,300 | a,b | 853,415 | ||||
Black Hills | 20,375 | a | 1,185,010 | ||||
NorthWestern | 2,100 | 114,408 | |||||
Ormat Technologies | 31,950 | a | 1,655,649 | ||||
Portland General Electric | 7,300 | 311,418 | |||||
SJW Group | 24,480 | 1,545,422 | |||||
Spire | 55,250 | 3,936,562 | |||||
Vistra Energy | 70,494 | b | 1,729,218 | ||||
17,589,423 | |||||||
Total Common Stocks (cost $731,903,754) | 908,634,896 | ||||||
Preferred Dividend | |||||||
Preferred Stocks - .1% | |||||||
Utilities - .1% | |||||||
Vistra Energy | 7.00 | 8,100 | 799,794 |
16
Description | 7-Day | Shares | Value ($) | ||||
Investment of Cash Collateral for Securities Loaned - 6.4% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 1.68 | 60,268,237 | d | 60,268,237 | |||
Total Investments (cost $793,000,159) | 103.2% | 969,702,927 | |||||
Liabilities, Less Cash and Receivables | (3.2%) | (29,895,844) | |||||
Net Assets | 100.0% | 939,807,083 |
ETF—Exchange-Traded Fund
a Security, or portion thereof, on loan. At May 31, 2018, the value of the fund’s securities on loan was $222,749,852 and the value of the collateral held by the fund was $230,388,406, consisting of cash collateral of $60,268,237 and U.S. Government & Agency securities valued at $170,120,169.
b Non-income producing security.
c Investment in real estate investment trust.
d Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the respective investment company’s prospectus.
17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Portfolio Summary (Unaudited) † | Value (%) |
Capital Goods | 15.3 |
Banks | 12.8 |
Materials | 7.0 |
Software & Services | 6.7 |
Money Market Investment | 6.4 |
Technology Hardware & Equipment | 5.7 |
Energy | 5.3 |
Real Estate | 4.5 |
Semiconductors & Semiconductor Equipment | 4.1 |
Health Care Equipment & Services | 4.1 |
Diversified Financials | 3.9 |
Insurance | 3.6 |
Commercial & Professional Services | 3.5 |
Pharmaceuticals, Biotechnology & Life Sciences | 3.2 |
Food, Beverage & Tobacco | 2.9 |
Consumer Durables & Apparel | 2.5 |
Automobiles & Components | 2.0 |
Utilities | 2.0 |
Transportation | 1.9 |
Media | 1.7 |
Consumer Services | 1.5 |
Retailing | 1.0 |
Household & Personal Products | .6 |
Exchange-Traded Funds | .4 |
Food & Staples Retailing | .4 |
Telecommunication Services | .2 |
Commercial Services | .0 |
103.2 |
† Based on net assets.
See notes to financial statements.
18
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Registered Investment Company | Value | Purchases($) | Sales($) | Value | Net | Dividend/ |
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | - | 266,829,901 | 206,561,664 | 60,268,237 | 6.4 | - |
See notes to financial statements.
19
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 732,731,922 |
| 909,434,690 |
| ||
Affiliated issuers |
| 60,268,237 |
| 60,268,237 |
| |
Cash |
|
|
|
| 32,468,584 |
|
Receivable for investment securities sold |
| 2,273,290 |
| |||
Dividends and securities lending income receivable |
| 627,820 |
| |||
Receivable for shares of Common Stock subscribed |
| 600,858 |
| |||
Prepaid expenses |
|
|
|
| 38,789 |
|
|
|
|
|
| 1,005,712,268 |
|
Liabilities ($): |
|
|
|
| ||
Due to The Dreyfus Corporation and affiliates—Note 3(c) |
|
|
| 724,938 |
| |
Liability for securities on loan—Note 1(b) |
| 60,268,237 |
| |||
Payable for investment securities purchased |
| 4,589,943 |
| |||
Payable for shares of Common Stock redeemed |
| 318,842 |
| |||
Accrued expenses |
|
|
|
| 3,225 |
|
|
|
|
|
| 65,905,185 |
|
Net Assets ($) |
|
| 939,807,083 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 719,075,337 |
|
Accumulated undistributed investment income—net |
| 1,818,945 |
| |||
Accumulated net realized gain (loss) on investments |
|
|
|
| 42,210,033 |
|
Accumulated net unrealized appreciation (depreciation) |
| 176,702,768 |
| |||
Net Assets ($) |
|
| 939,807,083 |
|
Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
|
Net Assets ($) | 1,131,494 | 483,524 | 22,173,151 | 916,018,914 |
|
Shares Outstanding | 45,056 | 20,947 | 867,336 | 35,862,808 |
|
Net Asset Value Per Share ($) | 25.11 | 23.08 | 25.56 | 25.54 |
|
See notes to financial statements. |
20
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $9,650 foreign taxes |
|
| 5,806,938 |
| ||
Income from securities lending—Note 1(b) |
|
| 191,670 |
| ||
Interest |
|
| 185,316 |
| ||
Total Income |
|
| 6,183,924 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 4,176,277 |
| ||
Professional fees |
|
| 53,082 |
| ||
Directors’ fees and expenses—Note 3(d) |
|
| 52,970 |
| ||
Registration fees |
|
| 32,618 |
| ||
Custodian fees—Note 3(c) |
|
| 13,368 |
| ||
Prospectus and shareholders’ reports |
|
| 8,376 |
| ||
Loan commitment fees—Note 2 |
|
| 8,341 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 6,740 |
| ||
Distribution fees—Note 3(b) |
|
| 721 |
| ||
Miscellaneous |
|
| 24,685 |
| ||
Total Expenses |
|
| 4,377,178 |
| ||
Less—reduction in expenses due to undertaking—Note 3(a) |
|
| (379) |
| ||
Less—reduction in fees due to earnings credits—Note 3(c) |
|
| (13,368) |
| ||
Net Expenses |
|
| 4,363,431 |
| ||
Investment Income—Net |
|
| 1,820,493 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 48,174,576 |
| ||||
Net unrealized appreciation (depreciation) on investments |
|
| (41,752,847) |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 6,421,729 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 8,242,222 |
| |||
See notes to financial statements. |
21
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 1,820,493 |
|
|
| 3,022,170 |
| |
Net realized gain (loss) on investments |
| 48,174,576 |
|
|
| 58,246,633 |
| ||
Net unrealized appreciation (depreciation) |
| (41,752,847) |
|
|
| 79,302,411 |
| ||
Net Increase (Decrease) in Net Assets | 8,242,222 |
|
|
| 140,571,214 |
| |||
Distributions to Shareholders from ($): |
| ||||||||
Investment income—net: |
|
|
|
|
|
|
|
| |
Class A |
|
| - |
|
|
| (7,955) |
| |
Class I |
|
| (38,471) |
|
|
| (90,920) |
| |
Class Y |
|
| (2,061,842) |
|
|
| (4,801,162) |
| |
Net realized gain on investments: |
|
|
|
|
|
|
|
| |
Class A |
|
| (64,787) |
|
|
| - |
| |
Class C |
|
| (7,868) |
|
|
| - |
| |
Class I |
|
| (1,189,814) |
|
|
| - |
| |
Class Y |
|
| (52,548,251) |
|
|
| - |
| |
Total Distributions |
|
| (55,911,033) |
|
|
| (4,900,037) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 92,055 |
|
|
| 308,464 |
| |
Class C |
|
| 373,446 |
|
|
| 144,349 |
| |
Class I |
|
| 7,266,704 |
|
|
| 33,684,999 |
| |
Class Y |
|
| 51,430,379 |
|
|
| 121,035,115 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 63,405 |
|
|
| 7,904 |
| |
Class C |
|
| 7,868 |
|
|
| - |
| |
Class I |
|
| 964,379 |
|
|
| 66,130 |
| |
Class Y |
|
| 23,821,651 |
|
|
| 1,003,913 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (44,393) |
|
|
| (2,287,934) |
| |
Class C |
|
| (72,895) |
|
|
| (129,509) |
| |
Class I |
|
| (5,593,078) |
|
|
| (32,585,103) |
| |
Class Y |
|
| (55,267,973) |
|
|
| (109,058,287) |
| |
Increase (Decrease) in Net Assets | 23,041,548 |
|
|
| 12,190,041 |
| |||
Total Increase (Decrease) in Net Assets | (24,627,263) |
|
|
| 147,861,218 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 964,434,346 |
|
|
| 816,573,128 |
| |
End of Period |
|
| 939,807,083 |
|
|
| 964,434,346 |
| |
Undistributed investment income—net | 1,818,945 |
|
|
| 2,098,765 |
|
22
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 3,589 |
|
|
| 12,963 |
| |
Shares issued for distributions reinvested |
|
| 2,567 |
|
|
| 338 |
| |
Shares redeemed |
|
| (1,807) |
|
|
| (98,557) |
| |
Net Increase (Decrease) in Shares Outstanding | 4,349 |
|
|
| (85,256) |
| |||
Class Ca |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 16,345 |
|
|
| 6,343 |
| |
Shares issued for distributions reinvested |
|
| 345 |
|
|
| - |
| |
Shares redeemed |
|
| (3,048) |
|
|
| (5,932) |
| |
Net Increase (Decrease) in Shares Outstanding | 13,642 |
|
|
| 411 |
| |||
Class Ia |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 285,105 |
|
|
| 1,411,692 |
| |
Shares issued for distributions reinvested |
|
| 38,402 |
|
|
| 2,791 |
| |
Shares redeemed |
|
| (220,739) |
|
|
| (1,363,437) |
| |
Net Increase (Decrease) in Shares Outstanding | 102,768 |
|
|
| 51,046 |
| |||
Class Ya |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 2,039,930 |
|
|
| 5,007,689 |
| |
Shares issued for distributions reinvested |
|
| 949,722 |
|
|
| 42,413 |
| |
Shares redeemed |
|
| (2,191,880) |
|
|
| (4,515,176) |
| |
Net Increase (Decrease) in Shares Outstanding | 797,772 |
|
|
| 534,926 |
| |||
a | During the period ended May 31,2018, 131 Class C shares representing $3,145 were automatically exchanged for 121 Class A shares, 258,056 Class Y shares representing $7,214,848 were exchanged for 257,820 Class I shares and during the period ended November 30, 2017, 2,341 Class A shares representing $54,700 were exchanged for 2,309 Class Y shares, 12,660 Class A shares representing $292,138 were exchanged for 12,475 Class I shares and 430,253 Class Y shares representing $10,473,715 were exchanged for 429,977 Class I shares. | ||||||||
See notes to financial statements. |
23
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class A Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 26.44 | 22.72 | 22.02 | 24.89 | 26.25 | 19.62 |
Investment Operations: | ||||||
Investment income—neta | .00b | .00b | .09 | .07 | .01 | .06 |
Net realized and unrealized | .18 | 3.79 | 2.02 | (.02) | .84 | 7.57 |
Total from Investment Operations | .18 | 3.79 | 2.11 | .05 | .85 | 7.63 |
Distributions: | ||||||
Dividends from investment income—net | - | (.07) | (.11) | (.00)b | (.08) | (.00)b |
Dividends from net realized | (1.51) | - | (1.30) | (2.92) | (2.13) | (1.00) |
Total Distributions | (1.51) | (.07) | (1.41) | (2.92) | (2.21) | (1.00) |
Net asset value, end of period | 25.11 | 26.44 | 22.72 | 22.02 | 24.89 | 26.25 |
Total Return (%)c | .76d | 16.74 | 10.72 | .01 | 3.35 | 40.73 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.34e | 1.30 | 1.30 | 1.29 | 1.31 | 1.33 |
Ratio of net expenses | 1.30e | 1.28 | 1.30 | 1.29 | 1.30 | 1.30 |
Ratio of net investment income | .03e | .01 | .44 | .31 | .02 | .25 |
Portfolio Turnover Rate | 29.45d | 67.90 | 66.57 | 65.39 | 104.22 | 68.30 |
Net Assets, end of period ($ x 1,000) | 1,131 | 1,076 | 2,862 | 2,250 | 2,015 | 1,516 |
a Based on average shares outstanding.
b Amount represents less than $.01 per share.
c Exclusive of sales charge.
d Not annualized.
e Annualized.
See notes to financial statements.
24
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class C Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 24.51 | 21.15 | 20.68 | 23.70 | 25.19 | 19.00 |
Investment Operations: | ||||||
Investment (loss)—neta | (.07) | (.16) | (.07) | (.09) | (.20) | (.10) |
Net realized and unrealized | .15 | 3.52 | 1.90 | (.01) | .84 | 7.29 |
Total from Investment Operations | .08 | 3.36 | 1.83 | (.10) | .64 | 7.19 |
Distributions: | ||||||
Dividends from investment income—net | - | - | (.06) | – | – | – |
Dividends from net realized | (1.51) | - | (1.30) | (2.92) | (2.13) | (1.00) |
Total Distributions | (1.51) | - | (1.36) | (2.92) | (2.13) | (1.00) |
Net asset value, end of period | 23.08 | 24.51 | 21.15 | 20.68 | 23.70 | 25.19 |
Total Return (%)b | .40c | 15.89 | 9.94 | (.72) | 2.60 | 39.69 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 2.23d | 2.31 | 2.33 | 2.42 | 2.22 | 2.16 |
Ratio of net expenses | 2.05d | 2.04 | 2.05 | 2.04 | 2.05 | 2.06 |
Ratio of net investment (loss) | (.68)d | (.74) | (.39) | (.47) | (.83) | (.48) |
Portfolio Turnover Rate | 29.45c | 67.90 | 66.57 | 65.39 | 104.22 | 68.30 |
Net Assets, end of period ($ x 1,000) | 484 | 179 | 146 | 154 | 55 | 231 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
25
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class I Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 26.90 | 23.09 | 22.36 | 25.22 | 26.55 | 19.84 |
Investment Operations: | ||||||
Investment income—neta | .05 | .07 | .15 | .14 | .08 | .14 |
Net realized and unrealized | .17 | 3.87 | 2.06 | (.03) | .87 | 7.65 |
Total from Investment Operations | .22 | 3.94 | 2.21 | .11 | .95 | 7.79 |
Distributions: | ||||||
Dividends from | (.05) | (.13) | (.18) | (.05) | (.15) | (.08) |
Dividends from net realized | (1.51) | - | (1.30) | (2.92) | (2.13) | (1.00) |
Total Distributions | (1.56) | (.13) | (1.48) | (2.97) | (2.28) | (1.08) |
Net asset value, end of period | 25.56 | 26.90 | 23.09 | 22.36 | 25.22 | 26.55 |
Total Return (%) | .91b | 17.14 | 11.09 | .26 | 3.72 | 41.27 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .97c | 1.00 | .99 | .97 | .95 | .95 |
Ratio of net expenses | .97c | .98 | .99 | .97 | .95 | .95 |
Ratio of net investment income | .36c | .29 | .75 | .62 | .31 | .60 |
Portfolio Turnover Rate | 29.45b | 67.90 | 66.57 | 65.39 | 104.22 | 68.30 |
Net Assets, end of period ($ x 1,000) | 22,173 | 20,566 | 16,478 | 20,731 | 20,403 | 706,606 |
a Based on average shares outstanding..
b Not annualized.
c Annualized.
See notes to financial statements.
26
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class Y Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013a |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 26.88 | 23.08 | 22.35 | 25.21 | 26.54 | 22.76 |
Investment Operations: | ||||||
Investment income—netb | .05 | .08 | .16 | .15 | .12 | .02 |
Net realized and unrealized | .18 | 3.86 | 2.06 | (.03) | .83 | 3.76 |
Total from Investment Operations | .23 | 3.94 | 2.22 | .12 | .95 | 3.78 |
Distributions: | ||||||
Dividends | (.06) | (.14) | (.19) | (.06) | (.15) | - |
Dividends from net realized | (1.51) | - | (1.30) | (2.92) | (2.13) | - |
Total Distributions | (1.57) | (.14) | (1.49) | (2.98) | (2.28) | - |
Net asset value, end of period | 25.54 | 26.88 | 23.08 | 22.35 | 25.21 | 26.54 |
Total Return (%) | .94c | 17.15 | 11.13 | .31 | 3.71 | 16.61c |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .94d | .94 | .95 | .95 | .95 | 1.01d |
Ratio of net expenses | .94d | .93 | .95 | .95 | .95 | .99d |
Ratio of net investment income | .39d | .35 | .79 | .65 | .45 | .07d |
Portfolio Turnover Rate | 29.45c | 67.90 | 66.57 | 65.39 | 104.22 | 68.30 |
Net Assets, end of period ($ x 1,000) | 916,019 | 942,613 | 797,087 | 770,763 | 747,120 | 1 |
a From July 1, 2013 (commencement of initial offering) to November 30, 2013.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.
27
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Select Managers Small Cap Value 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 six 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. Thompson, Siegel and Walmsley, LLC (“TS&W”), Walthausen & Co., LLC (“Walthausen”), Neuberger Berman Investment Advisers LLC (“Neuberger Berman”), Kayne Anderson Rudnick Investment Management, LLC (“Kayne”), Channing Capital Management, LLC (“Channing”) and Eastern Shore Capital Management (“Eastern Shore”) 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, Class I, Class T and Class Y. Class A and Class T 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 C shares automatically convert to Class A shares ten years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. As of the date of this report, the fund did not offer Class T shares for purchase. 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
28
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 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).
29
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.
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. For open short positions, asked prices are 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 generally categorized within Level 1 of the fair value hierarchy.
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. These securities are generally categorized within Level 2 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 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 accurately reflect 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. 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.
30
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of May 31, 2018 in valuing the fund’s investments:
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 -Significant Unobservable Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities - Domestic Common Stocks† | 902,070,847 | - | - | 902,070,847 |
Equity Securities - Domestic Preferred Stocks† | 799,794 | - | - | 799,794 |
Equity Securities - Foreign | 2,378,256 | - | - | 2,378,256 |
Exchange-Traded Funds | 4,185,793 | - | - | 4,185,793 |
Registered Investment Company | 60,268,237 | - | - | 60,268,237 |
† See Statement of Investments for additional detailed categorizations.
At May 31, 2018, there were no transfers between levels of the fair value hierarchy. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(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.
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
31
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended May 31, 2018, The Bank of New York Mellon earned $43,028 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.
(d) Dividends and distributions to shareholders: Dividends and distributions 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.
As of and during the period ended May 31, 2018, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended May 31, 2018, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended November 30, 2017 remains subject to examination by the Internal Revenue Service and state taxing authorities.
32
The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2017 was as follows: ordinary income $4,900,037. 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 an $830 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. 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, 2018, 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, from December 1, 2017 through March 29, 2019, to waive receipt of its fees and/or assume the direct 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) exceed 1.05% of the value of the fund’s average daily net assets. On or after March 29, 2019, Dreyfus may terminate this expense limitation at any time. The reduction in expenses, pursuant to the undertakings, amounted to $379 during the period ended May 31, 2018.
Pursuant to a Portfolio Allocation Agreement between Dreyfus and EACM, Dreyfus pays EACM a monthly fee at an annual rate of .10% of the value of the fund’s average daily net assets.
Pursuant to separate sub-investment advisory agreements between Dreyfus and TS&W, Walthausen, Neuberger Berman, Kayne, Channing and Eastern Shore, each serves as the fund’s sub-investment adviser responsible for the day-to-day management of a portion of the fund’s portfolio. Dreyfus pays each sub-investment adviser a monthly fee at an annual percentage of the value of the fund’s average daily net assets. Dreyfus has obtained an exemptive order from the SEC (the “Order”), upon which the fund may rely, to use a manager of managers approach
33
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
that permits Dreyfus, subject to certain conditions and approval by the Board, to enter into and materially amend sub-investment advisory agreements with one or more sub-investment advisers who are either unaffiliated with Dreyfus or are wholly-owned subsidiaries (as defined under the Act) of Dreyfus’ ultimate parent company, BNY Mellon, without obtaining shareholder approval. The Order also allows the fund to disclose the sub-investment advisory fee paid by Dreyfus to any unaffiliated sub-investment adviser in the aggregate with other unaffiliated sub-investment advisers in documents filed with the SEC and provided to shareholders. In addition, pursuant to the Order, it is not necessary to disclose the sub-investment advisory fee payable by Dreyfus separately to a sub-investment adviser that is a wholly-owned subsidiary of BNY Mellon in documents filed with the SEC and provided to shareholders; such fees are to be aggregated with fees payable to Dreyfus. Dreyfus has ultimate responsibility (subject to oversight by the Board) to supervise any sub-investment adviser and recommend the hiring, termination, and replacement of any sub-investment adviser to the Board.
During the period ended May 31, 2018, the Distributor retained $1 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, 2018, Class C shares were charged $721 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, 2018, Class A and Class C shares were charged $1,405 and $240, 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.
34
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended May 31, 2018, the fund was charged $2,074 for transfer agency services and $94 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were offset by earnings credits of $94.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended May 31, 2018, the fund was charged $13,368 pursuant to the custody agreement. These fees were partially offset by earnings credits of $13,274.
During the period ended May 31, 2018, the fund was charged $12,641 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $712,895, Distribution Plan fees $286, Shareholder Services Plan fees $333, Chief Compliance Officer fees $10,534 and transfer agency fees $954, which are offset against an expense reimbursement currently in effect in the amount of $64.
(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, 2018, amounted to $266,914,285 and $304,107,463, respectively.
At May 31, 2018, accumulated net unrealized appreciation on investments was $176,702,768, consisting of $201,742,088 gross unrealized appreciation and $25,039,320 gross unrealized depreciation.
At May 31, 2018, 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).
35
NOTES
36
NOTES
37
Dreyfus Select Managers Small Cap Value Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Portfolio Allocation Manager
EACM Advisors LLC
200 Connecticut Avenue
Norwalk, CT 06854-1958
Sub-Investment Advisers
Thompson, Siegel and Walmsley, LLC
6806 Paragon Place, Suite 300
Richmond, VA 23230
Walthausen & Co., LLC
9 Executive Park Drive, Suite B
Clifton Park, NY 12065
Neuberger Berman Investment Advisers, LLC
605 Third Avenue
New York, NY 10158
Kayne Anderson Rudnick Investment
Management, LLC
1800 Avenue of the Stars, Second Floor
Los Angeles, CA 90067
Channing Capital Management, LLC
10 South LaSalle Street
Suite 2401
Chicago, IL 60633
Eastern Shore Capital Management
18 Sewall Street
Marblehead, MA 01945
Custodian
The Bank of New York Mellon
225 Liberty Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Ticker Symbols: | Class A: DMVAX Class C: DMECX Class I: DMVIX Class Y: DMVYX |
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (phone 1-800-SEC-0330 for information).
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
© 2018 MBSC Securities Corporation |
Dreyfus U.S. Equity Fund
SEMIANNUAL REPORT May 31, 2018 |
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(s) only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus U.S. Equity Fund, covering the six-month period from December 1, 2017 through May 31, 2018. 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.
After a period of unusually mild price swings in 2017, inflation concerns, geopolitical tensions and potential trade disputes have caused volatility to increase substantially during 2018. As a result, U.S. stocks generally have produced mildly positive returns while bonds have lost a degree of value over the first five months of the year.
Stocks set a series of new record highs through January 2018 before market volatility took its toll, enabling stocks across all capitalization ranges to produce solidly positive returns for the full six-month reporting period. Stocks gained value amid growing corporate earnings, improving global economic conditions and the enactment of tax reform legislation and other government policy reforms. In contrast, most sectors of the U.S. bond market produced roughly flat total returns or lost a degree of value when short-term interest rates climbed and inflation expectations increased.
Despite the return of heightened market volatility, we believe that underlying market fundamentals remain strong. Continued economic growth, a robust labor market, rising corporate earnings and strong consumer and business confidence seem likely to support stock and corporate bond prices over the months ahead. As always, we encourage you to discuss the risks and opportunities of today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
June 15, 2018
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from December 1, 2017 through May 31, 2018, as provided by Charlie Macquaker, Roy Leckie, Jane Henderson, and Rodger Nisbet, the four members of the Investment Executive at Walter Scott & Partners Limited (WS), Sub-Investment Adviser
Market and Fund Performance Overview
For the six-month period ended May 31, 2018, Dreyfus U.S. Equity Fund’s Class A shares achieved a return of 4.51%, Class C shares returned 4.18%, Class I shares returned 4.72%, and Class Y shares returned 4.69%.1 In comparison, the fund’s benchmark, the MSCI USA Index (the “Index”), achieved a return of 3.03% over the same period.2
U.S. equities produced moderate gains during the reporting period amid improving economic prospects, rising corporate earnings, and lower corporate tax rates. Strong performance of the fund’s consumer staples, energy and health care holdings, combined with the absence of financials, were the primary drivers of outperformance over the period.
The Fund’s Investment Approach
The fund seeks long-term total return. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies located in the United States. The fund may invest in the securities of companies of any market capitalization. Walter Scott seeks investment opportunities in companies with fundamental strengths that indicate the potential for sustainable growth. Walter Scott focuses on individual stock selection, building the fund’s portfolio from the bottom up through extensive fundamental research. The investment process begins with the screening of reported company financials. Companies that meet certain broad absolute and trend criteria are candidates for more detailed financial analysis. The fund’s Investment Team collectively reviews and selects those stocks that meet Walter Scott’s criteria and where the expected growth rate is combined with a reasonable valuation for the underlying equity. Market capitalization and sector allocations are results of, not part of, the investment process, because the Investment Team’s sole focus is on the analysis of and investment in individual companies.
Rising Volatility Amid Positive Economic Trends
Early in the reporting period, U.S. stocks remained energized with better-than-expected corporate earnings, strengthening labor markets, and encouraging global economic developments. In addition, investors responded positively to the enactment of tax reform legislation in December 2017. Consequently, the Index reached a series of new highs through January 2018. Inflation fears, proposed increases in U.S. import tariffs, and political turmoil in the European Union sparked heightened stock market volatility from February through April, but a renewed rally in May drove the Index to new record highs.
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
The Index’s performance also was influenced by shifts in monetary policy. The Federal Reserve Board’s (the “Fed”) gradual and well-telegraphed approach to adopting a less accommodative monetary policy generally was received calmly by investors throughout 2017. However, worries that the Fed might raise short-term interest rates more aggressively than previously expected weighed on investor sentiment during the spring of 2018.
Stock Selection and Allocation Effect Buoyed Fund Results
The fund’s positive results compared to the Index stemmed from the success of our security selection and the resultant allocation effect. Individual holdings that supported the fund’s relative results included software developer Adobe Systems, which achieved better-than-expected earnings due to the increasing adoption of new products through its subscription-based distribution model. In its first-quarter results, payments processor Mastercard reported underlying revenue growth of 20%. The trends are not new, but the move from cash to card and the use of cards for cross-border transactions continue to drive meaningful growth. Results from beauty products supplier The Estée Lauder Companies showed that China continues to be a standout success, with online sales particularly strong. Rising oil prices and good results across its business were reflected in the stock performance of energy producer Occidental Petroleum. Apparel and home fashions retailer The TJX Companies continues to report healthy comparable sales growth with higher customer traffic across all age groups, most notably Millennials. In its most recent results, the company noted particular success in attracting new Millennial and Generation Z customers, which bodes well for future growth.
Individual disappointments during the reporting period included two holdings in the health care sector: Johnson & Johnson reported strong overall results, particularly in its pharma division, but continued weakness in its medical devices business negatively impacted market sentiment; and health information technology company Cerner missed revenue targets due to a delay in a major contract, but its stated long-term revenue target remains unchanged. Management of consumer goods producer Colgate-Palmolive noted that the tough conditions experienced in 2017 with higher raw material and logistics costs had continued into 2018. Emerging markets, in particular Latin America, also saw weaker-than-expected sales. With the consumer electronics industry accounting for around 40% of sales, factory automation specialist Cognex was hurt by a downturn in the volatile consumer electronics cycle. However, all other end markets continue to perform well and the company has kept growth targets unchanged. Good results from International Flavors & Fragrances were overshadowed by news of a strategic acquisition which will be dilutive to earnings per share over the short term, but that the company believes will bring long-term growth through greater exposure to small and medium-sized customers.
Maintaining a Company-by-Company Approach
Although we do not manage the fund’s investments in response to macroeconomic trends, it is worth noting that the U.S. economic recovery remains intact, supported by sustained economic growth and stimulative fiscal policies that have helped boost
4
corporate earnings. We do not consider valuations to be overly stretched but recognize that at this stage of the market cycle, unexpected political or economic developments could significantly undermine market confidence. In that context, we continue to believe in the merits of our highly selective approach, identifying financially robust companies with leading market positions and compelling long-term growth prospects.
June 15, 2018
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. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. Return figures for the fund reflect the absorption of certain fund expenses by The Dreyfus Corporation pursuant to an undertaking in effect through March 29, 2019, at which time it may be extended, terminated, or modified. Had these expenses not been absorbed, the fund’s returns would have been lower. Past performance is no guarantee of future results.
2 Source: Lipper Inc. — Reflects reinvestment of net dividends and, where applicable, capital gain distributions. The MSCI USA Index is designed to measure the performance of the large- and mid-cap segments of the U.S. market. Investors cannot invest directly in any index.
Equities 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.
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, 2017 to May 31, 2018. 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, 2018 | ||||||||
Class A | Class C | Class I | Class Y | |||||
Expenses paid per $1,000† | $5.86 | $9.67 | $4.19 | $4.08 | ||||
Ending value (after expenses) | $1,045.10 | $1,041.80 | $1,047.20 | $1,046.90 |
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, 2018 | ||||||||||
Class A | Class C | Class I | Class Y | |||||||
Expenses paid per $1,000† | $5.79 | $9.55 | $4.13 | $4.03 | ||||||
Ending value (after expenses) | $1,019.20 | $1,015.46 | $1,020.84 | $1,020.94 |
† Expenses are equal to the fund’s annualized expense ratio of 1.15% for Class A, 1.90% for Class C, .82% for Class I and .80% for Class Y, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS
May 31, 2018 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 98.6% | |||||||
Capital Goods - 7.4% | |||||||
Donaldson | 114,900 | a | 5,423,280 | ||||
Fastenal | 214,200 | a | 11,401,866 | ||||
Flowserve | 210,500 | a | 8,702,070 | ||||
Hexcel | 80,300 | 5,687,649 | |||||
Toro | 144,200 | 8,363,600 | |||||
39,578,465 | |||||||
Consumer Durables & Apparel - 2.2% | |||||||
NIKE, Cl. B | 165,100 | 11,854,180 | |||||
Consumer Services - 4.0% | |||||||
McDonald's | 65,700 | 10,512,657 | |||||
Starbucks | 197,100 | 11,169,657 | |||||
21,682,314 | |||||||
Energy - 8.3% | |||||||
EOG Resources | 96,020 | 11,312,116 | |||||
Halliburton | 103,800 | 5,163,012 | |||||
Occidental Petroleum | 150,300 | 12,655,260 | |||||
Pioneer Natural Resources | 28,700 | 5,541,970 | |||||
Schlumberger | 147,150 | 10,104,791 | |||||
44,777,149 | |||||||
Health Care Equipment & Services - 12.7% | |||||||
Cerner | 166,200 | b | 9,918,816 | ||||
Edwards Lifesciences | 95,200 | b | 13,071,912 | ||||
Henry Schein | 154,600 | a,b | 10,698,320 | ||||
Intuitive Surgical | 27,100 | b | 12,457,057 | ||||
ResMed | 107,100 | 11,010,951 | |||||
Stryker | 63,200 | 10,998,064 | |||||
68,155,120 | |||||||
Household & Personal Products - 3.7% | |||||||
Colgate-Palmolive | 146,500 | 9,242,685 | |||||
Estee Lauder, Cl. A | 71,200 | 10,640,128 | |||||
19,882,813 | |||||||
Materials - 8.3% | |||||||
Ecolab | 88,100 | 12,563,941 | |||||
FMC | 130,500 | 11,365,245 | |||||
International Flavors & Fragrances | 75,900 | 9,269,667 | |||||
Praxair | 73,600 | 11,500,736 | |||||
44,699,589 | |||||||
Media - 1.8% | |||||||
Walt Disney | 97,200 | 9,668,484 | |||||
Pharmaceuticals Biotechnology & Life Sciences - 9.7% | |||||||
Biogen | 37,300 | b | 10,964,708 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 98.6% (continued) | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 9.7% (continued) | |||||||
Eli Lilly & Co. | 66,800 | 5,680,672 | |||||
Gilead Sciences | 141,500 | 9,537,100 | |||||
Johnson & Johnson | 76,300 | 9,127,006 | |||||
Mettler-Toledo International | 12,100 | b | 6,663,954 | ||||
Waters | 52,200 | b | 10,054,764 | ||||
52,028,204 | |||||||
Retailing - 6.4% | |||||||
O'Reilly Automotive | 38,500 | b | 10,372,285 | ||||
The TJX Companies | 151,200 | 13,656,384 | |||||
Tractor Supply | 139,500 | 10,366,245 | |||||
34,394,914 | |||||||
Software & Services - 21.9% | |||||||
Adobe Systems | 58,700 | b | 14,632,736 | ||||
Alphabet, Cl. C | 9,906 | b | 10,747,911 | ||||
Automatic Data Processing | 94,900 | 12,338,898 | |||||
Cognizant Technology Solutions, Cl. A | 141,200 | 10,639,420 | |||||
Jack Henry & Associates | 90,400 | 11,305,424 | |||||
Manhattan Associates | 247,500 | b | 10,771,200 | ||||
Mastercard, Cl. A | 62,000 | 11,787,440 | |||||
Microsoft | 131,500 | 12,997,460 | |||||
Oracle | 257,000 | 12,007,040 | |||||
Paychex | 159,000 | 10,427,220 | |||||
117,654,749 | |||||||
Technology Hardware & Equipment - 9.8% | |||||||
Amphenol, Cl. A | 125,500 | 10,909,715 | |||||
Cisco Systems | 273,100 | 11,664,101 | |||||
Cognex | 202,000 | a | 9,233,420 | ||||
IPG Photonics | 43,900 | b | 10,591,753 | ||||
Te Connectivity | 110,300 | 10,266,724 | |||||
52,665,713 | |||||||
Transportation - 2.4% | |||||||
Expeditors International of Washington | 173,300 | 12,907,384 | |||||
Total Common Stocks (cost $328,167,308) | 529,949,078 | ||||||
7-Day | |||||||
Investment Companies - 1.4% | |||||||
Registered Investment Companies - 1.4% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1.73 | 7,626,545 | c | 7,626,545 |
8
Description | 7-Day | Shares | Value ($) | ||||
Investment of Cash Collateral for Securities Loaned - .1% | |||||||
Registered Investment Companies - .1% | |||||||
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 1.68 | 537,500 | c | 537,500 | |||
Total Investments (cost $336,331,353) | 100.1% | 538,113,123 | |||||
Liabilities, Less Cash and Receivables | (.1%) | (546,428) | |||||
Net Assets | 100.0% | 537,566,695 |
a Security, or portion thereof, on loan. At May 31, 2018, the value of the fund’s securities on loan was $38,409,405 and the value of the collateral held by the fund was $39,806,084, consisting of cash collateral of $537,500 and U.S. Government & Agency securities valued at $39,268,584.
b Non-income producing security.
c Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the respective investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Information Technology | 31.7 |
Health Care | 22.4 |
Consumer Discretionary | 14.4 |
Industrials | 9.8 |
Energy | 8.3 |
Materials | 8.3 |
Consumer Staples | 3.7 |
Investment Companies | 1.5 |
100.1 |
† Based on net assets.
See notes to financial statements.
9
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Registered Investment Companies | Value | Purchases($) | Sales($) | Value | Net | Dividend/ |
Dreyfus Institutional Preferred Government Plus Money Market Fund | 5,678,551 | 83,286,500 | 81,338,506 | 7,626,545 | 1.4 | 74,456 |
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | - | 5,285,923 | 4,748,423 | 537,500 | .1 | - |
Total | 5,678,551 | 88,572,423 | 86,086,929 | 8,164,045 | 1.5 | 74,456 |
See notes to financial statements.
10
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 328,167,308 |
| 529,949,078 |
| ||
Affiliated issuers |
| 8,164,045 |
| 8,164,045 |
| |
Dividends and securities lending income receivable |
| 516,192 |
| |||
Receivable for shares of Common Stock subscribed |
| 434,801 |
| |||
Prepaid expenses |
|
|
|
| 47,308 |
|
|
|
|
|
| 539,111,424 |
|
Liabilities ($): |
|
|
|
| ||
Due to The Dreyfus Corporation and affiliates—Note 3(c) |
|
|
| 354,373 |
| |
Payable for shares of Common Stock redeemed |
| 605,669 |
| |||
Liability for securities on loan—Note 1(b) |
| 537,500 |
| |||
Accrued expenses |
|
|
|
| 47,187 |
|
|
|
|
|
| 1,544,729 |
|
Net Assets ($) |
|
| 537,566,695 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 299,201,103 |
|
Accumulated undistributed investment income—net |
| 1,371,553 |
| |||
Accumulated net realized gain (loss) on investments |
|
|
|
| 35,212,269 |
|
Accumulated net unrealized appreciation (depreciation) |
| 201,781,770 |
| |||
Net Assets ($) |
|
| 537,566,695 |
|
Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
|
Net Assets ($) | 805,941 | 96,735 | 21,382,811 | 515,281,208 |
|
Shares Outstanding | 41,306 | 5,293 | 1,092,227 | 26,332,212 |
|
Net Asset Value Per Share ($) | 19.51 | 18.28 | 19.58 | 19.57 |
|
See notes to financial statements. |
11
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends: |
| |||||
Unaffiliated issuers |
|
| 3,437,083 |
| ||
Affiliated issuers |
|
| 74,456 |
| ||
Income from securities lending—Note 1(b) |
|
| 11,444 |
| ||
Total Income |
|
| 3,522,983 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 2,012,494 |
| ||
Professional fees |
|
| 45,091 |
| ||
Registration fees |
|
| 29,848 |
| ||
Directors’ fees and expenses—Note 3(d) |
|
| 26,871 |
| ||
Loan commitment fees—Note 2 |
|
| 6,094 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 4,969 |
| ||
Custodian fees—Note 3(c) |
|
| 4,566 |
| ||
Prospectus and shareholders’ reports |
|
| 4,293 |
| ||
Distribution fees—Note 3(b) |
|
| 438 |
| ||
Miscellaneous |
|
| 15,538 |
| ||
Total Expenses |
|
| 2,150,202 |
| ||
Less—reduction in expenses due to undertaking—Note 3(a) |
|
| (901) |
| ||
Less—reduction in fees due to earnings credits—Note 3(c) |
|
| (488) |
| ||
Net Expenses |
|
| 2,148,813 |
| ||
Investment Income—Net |
|
| 1,374,170 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 35,215,644 |
| ||||
Net unrealized appreciation (depreciation) on investments |
|
| (12,029,870) |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 23,185,774 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 24,559,944 |
| |||
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 1,374,170 |
|
|
| 3,293,885 |
| |
Net realized gain (loss) on investments |
| 35,215,644 |
|
|
| 56,604,160 |
| ||
Net unrealized appreciation (depreciation) |
| (12,029,870) |
|
|
| 53,222,292 |
| ||
Net Increase (Decrease) in Net Assets | 24,559,944 |
|
|
| 113,120,337 |
| |||
Distributions to Shareholders from ($): |
| ||||||||
Investment income—net: |
|
|
|
|
|
|
|
| |
Class A |
|
| (1,560) |
|
|
| (9,256) |
| |
Class I |
|
| (130,822) |
|
|
| (123,718) |
| |
Class Y |
|
| (3,127,855) |
|
|
| (3,968,104) |
| |
Net realized gain on investments: |
|
|
|
|
|
|
|
| |
Class A |
|
| (89,209) |
|
|
| (130,194) |
| |
Class C |
|
| (12,898) |
|
|
| (21,301) |
| |
Class I |
|
| (2,343,657) |
|
|
| (1,188,425) |
| |
Class Y |
|
| (54,155,357) |
|
|
| (36,342,626) |
| |
Total Distributions |
|
| (59,861,358) |
|
|
| (41,783,624) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 47,626 |
|
|
| 96,470 |
| |
Class C |
|
| 387 |
|
|
| 2,957 |
| |
Class I |
|
| 8,678,325 |
|
|
| 9,393,371 |
| |
Class Y |
|
| 34,395,647 |
|
|
| 55,483,380 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 85,430 |
|
|
| 133,209 |
| |
Class C |
|
| 12,511 |
|
|
| 18,344 |
| |
Class I |
|
| 1,975,960 |
|
|
| 1,099,360 |
| |
Class Y |
|
| 29,437,437 |
|
|
| 21,766,738 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (114,196) |
|
|
| (1,244,703) |
| |
Class C |
|
| (45,697) |
|
|
| (168,495) |
| |
Class I |
|
| (8,794,368) |
|
|
| (8,993,949) |
| |
Class Y |
|
| (42,017,489) |
|
|
| (104,626,445) |
| |
Increase (Decrease) in Net Assets | 23,661,573 |
|
|
| (27,039,763) |
| |||
Total Increase (Decrease) in Net Assets | (11,639,841) |
|
|
| 44,296,950 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 549,206,536 |
|
|
| 504,909,586 |
| |
End of Period |
|
| 537,566,695 |
|
|
| 549,206,536 |
| |
Undistributed investment income—net | 1,371,553 |
|
|
| 3,257,620 |
|
13
STATEMENT OF CHANGES IN NET ASSETS (continued)
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 2,389 |
|
|
| 5,210 |
| |
Shares issued for distributions reinvested |
|
| 4,525 |
|
|
| 7,864 |
| |
Shares redeemed |
|
| (5,988) |
|
|
| (69,741) |
| |
Net Increase (Decrease) in Shares Outstanding | 926 |
|
|
| (56,667) |
| |||
Class Ca |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 23 |
|
|
| 183 |
| |
Shares issued for distributions reinvested |
|
| 705 |
|
|
| 1,138 |
| |
Shares redeemed |
|
| (2,445) |
|
|
| (9,635) |
| |
Net Increase (Decrease) in Shares Outstanding | (1,717) |
|
|
| (8,314) |
| |||
Class Ib |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 445,321 |
|
|
| 503,259 |
| |
Shares issued for distributions reinvested |
|
| 104,438 |
|
|
| 64,706 |
| |
Shares redeemed |
|
| (457,599) |
|
|
| (483,697) |
| |
Net Increase (Decrease) in Shares Outstanding | 92,160 |
|
|
| 84,268 |
| |||
Class Yb |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 1,766,685 |
|
|
| 2,975,417 |
| |
Shares issued for distributions reinvested |
|
| 1,556,713 |
|
|
| 1,281,905 |
| |
Shares redeemed |
|
| (2,151,022) |
|
|
| (5,555,650) |
| |
Net Increase (Decrease) in Shares Outstanding | 1,172,376 |
|
|
| (1,298,328) |
| |||
aDuring the period ended May 31, 2018, 554 Class C shares representing $10,976 were automatically exchanged for 523 Class A shares. | |||||||||
bDuring the period ended May 31, 2018, 423,478 Class Y shares representing $8,255,658 were exchanged for 423,305 Class I shares and during the period ended November 30, 2017, 3,016 Class A shares representing $55,003 were exchanged for 3,006 Class I shares, 413,794 Class Y shares representing $7,767,526 were exchanged for 413,652 Class I shares. | |||||||||
See notes to financial statements. |
14
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class A Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 20.85 | 18.29 | 19.77 | 20.70 | 19.67 | 15.45 |
Investment Operations: | ||||||
Investment income—neta | .02 | .06 | .08 | .08 | .10 | .08 |
Net realized and unrealized | .85 | 4.00 | 1.18 | .01b | 1.08 | 4.25 |
Total from Investment Operations | .87 | 4.06 | 1.26 | .09 | 1.18 | 4.33 |
Distributions: | ||||||
Dividends from | (.04) | (.10) | (.11) | (.08) | (.07) | (.11) |
Dividends from net realized | (2.17) | (1.40) | (2.63) | (.94) | (.08) | - |
Total Distributions | (2.21) | (1.50) | (2.74) | (1.02) | (.15) | (.11) |
Net asset value, end of period | 19.51 | 20.85 | 18.29 | 19.77 | 20.70 | 19.67 |
Total Return (%)c | 4.51d | 24.07 | 7.85 | .50 | 6.02 | 28.20 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.23e | 1.20 | 1.17 | 1.16 | 1.16 | 1.15 |
Ratio of net expenses | 1.15e | 1.15 | 1.15 | 1.14 | 1.14 | 1.14 |
Ratio of net investment income | .15e | .31 | .46 | .41 | .48 | .48 |
Portfolio Turnover Rate | 9.88d | 13.28 | 5.31 | 13.81 | 12.14 | 7.13 |
Net Assets, end of period ($ x 1,000) | 806 | 842 | 1,775 | 1,449 | 2,071 | 2,446 |
a Based on average shares outstanding.
b In addition to net realized and unrealized losses on investments, this amount includes an increase in net asset value per share resulting from the timing of issuances and redemptions of shares in relation to fluctuating market values for the fund’s investments.
c Exclusive of sales charge.
d Not annualized.
e Annualized.
See notes to financial statements.
15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class C Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 19.70 | 17.38 | 18.94 | 19.93 | 19.04 | 14.97 |
Investment Operations: | ||||||
Investment (loss)—neta | (.06) | (.08) | (.05) | (.07) | (.05) | (.06) |
Net realized and unrealized | .81 | 3.80 | 1.12 | .02b | 1.03 | 4.13 |
Total from Investment Operations | .75 | 3.72 | 1.07 | (.05) | .98 | 4.07 |
Distributions: | ||||||
Dividends from | - | - | - | - | (.01) | - |
Dividends from net realized | (2.17) | (1.40) | (2.63) | (.94) | (.08) | - |
Total Distributions | (2.17) | (1.40) | (2.63) | (.94) | (.09) | - |
Net asset value, end of period | 18.28 | 19.70 | 17.38 | 18.94 | 19.93 | 19.04 |
Total Return (%)c | 4.18d | 23.11 | 7.03 | (.29) | 5.23 | 27.19 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 2.26e | 2.16 | 2.11 | 2.04 | 1.94 | 2.02 |
Ratio of net expenses | 1.90e | 1.90 | 1.90 | 1.90 | 1.88 | 1.93 |
Ratio of net investment (loss) | (.58)e | (.43) | (.29) | (.35) | (.26) | (.34) |
Portfolio Turnover Rate | 9.88d | 13.28 | 5.31 | 13.81 | 12.14 | 7.13 |
Net Assets, end of period ($ x 1,000) | 97 | 138 | 266 | 348 | 522 | 1,016 |
a Based on average shares outstanding.
b In addition to net realized and unrealized losses on investments, this amount includes an increase in net asset value per share resulting from the timing of issuances and redemptions of shares in relation to fluctuating market values for the fund’s investments.
c Exclusive of sales charge.
d Not annualized.
e Annualized.
See notes to financial statements.
16
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class I Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 20.96 | 18.37 | 19.88 | 20.82 | 19.77 | 15.51 |
Investment Operations: | ||||||
Investment income—neta | 05 | .12 | .14 | .15 | .16 | .14 |
Net realized and unrealized | .86 | 4.02 | 1.17 | .02b | 1.09 | 4.27 |
Total from Investment Operations | .91 | 4.14 | 1.31 | .17 | 1.25 | 4.41 |
Distributions: | ||||||
Dividends from | (.12) | (.15) | (.19) | (.17) | (.12) | (.15) |
Dividends from net realized | (2.17) | (1.40) | (2.63) | (.94) | (.08) | - |
Total Distributions | (2.29) | (1.55) | (2.82) | (1.11) | (.20) | (.15) |
Net asset value, end of period | 19.58 | 20.96 | 18.37 | 19.88 | 20.82 | 19.77 |
Total Return (%) | 4.72c | 24.46 | 8.15 | .88 | 6.37 | 28.75 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .82d | .83 | .83 | .80 | .78 | .79 |
Ratio of net expenses | .82d | .83 | .83 | .80 | .78 | .79 |
Ratio of net investment income | .49d | .61 | .80 | .75 | .77 | .81 |
Portfolio Turnover Rate | 9.88c | 13.28 | 5.31 | 13.81 | 12.14 | 7.13 |
Net Assets, end of period ($ x 1,000) | 21,383 | 20,963 | 16,824 | 30,654 | 34,278 | 817,867 |
a Based on average shares outstanding.
b In addition to net realized and unrealized losses on investments, this amount includes an increase in net asset value per share resulting from the timing of issuances and redemptions of shares in relation to fluctuating market values for the fund’s investments.
c Not annualized.
d Annualized.
See notes to financial statements.
17
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class Y Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013a |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 20.96 | 18.37 | 19.88 | 20.82 | 19.76 | 17.41 |
Investment Operations: | ||||||
Investment income—netb | .05 | .12 | .14 | .15 | .20 | .06 |
Net realized and unrealized | .86 | 4.02 | 1.17 | .02c | 1.06 | 2.29 |
Total from Investment Operations | .91 | 4.14 | 1.31 | .17 | 1.26 | 2.35 |
Distributions: | ||||||
Dividends from | (.13) | (.15) | (.19) | (.17) | (.12) | - |
Dividends from net realized | (2.17) | (1.40) | (2.63) | (.94) | (.08) | - |
Total Distributions | (2.30) | (1.55) | (2.82) | (1.11) | (.20) | - |
Net asset value, end of period | 19.57 | 20.96 | 18.37 | 19.88 | 20.82 | 19.76 |
Total Return (%) | 4.69d | 24.51 | 8.18 | .89 | 6.43 | 13.50d |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .80e | .80 | .80 | .79 | .79 | .76e |
Ratio of net expenses | .80e | .80 | .80 | .79 | .79 | .76e |
Ratio of net investment income | .51e | .64 | .81 | .76 | 1.03 | .78e |
Portfolio Turnover Rate | 9.88d | 13.28 | 5.31 | 13.81 | 12.14 | 7.13 |
Net Assets, end of period ($ x 1,000) | 515,281 | 527,263 | 486,044 | 545,762 | 749,348 | 1 |
a From July 1, 2013 (commencement of initial offering) to November 30, 2013.
b Based on average shares outstanding.
c In addition to net realized and unrealized losses on investments, this amount includes an increase in net asset value per share resulting from the timing of issuances and redemptions of shares in relation to fluctuating market values for the fund’s investments.
d Not annualized.
e Annualized.
See notes to financial statements.
18
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 six 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 of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Walter Scott & Partners Limited (“Walter Scott”), a wholly-owned subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s sub-investment adviser.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares. The fund is authorized to issue 100 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A, Class C, Class I, Class T and Class Y. Class A and Class T 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 C shares automatically convert to Class A shares ten years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. As of the date of this report, the fund did not offer Class T shares for purchase. 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 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
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 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
20
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. For open short positions, asked prices are 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 generally categorized within Level 1 of the fair value hierarchy.
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. These securities are generally categorized within Level 2 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 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 accurately reflect 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 Company’s Board of Directors (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 such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of May 31, 2018 in valuing the fund’s investments:
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 -Significant Unobservable Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities - Domestic Common Stocks† | 529,949,078 | - | - | 529,949,078 |
Registered Investment Company | 8,164,045 | - | - | 8,164,045 |
† See Statement of Investments for additional detailed categorizations.
At May 31, 2018, there were no transfers between levels of the fair value hierarchy. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(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.
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, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended May 31, 2018, The Bank of New York Mellon earned $2,382 from lending portfolio securities, pursuant to the securities lending agreement.
22
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act.
(d) Dividends and distributions to shareholders: Dividends and distributions 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.
As of and during the period ended May 31, 2018, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended May 31, 2018, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended November 30, 2017 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, 2017 was as follows: ordinary income $4,117,265 and long-term capital gains $37,666,359. 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 an $830 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. 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.
23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended May 31, 2018, 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, from December 1, 2017 through March 29, 2019, to waive receipt of its fees and/or assume the direct expenses of the fund, so that 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) do not exceed .90% of the value of the fund’s average daily net assets. The reduction in expenses, pursuant to the undertaking, amounted to $901 during the period ended May 31, 2018.
Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott a monthly fee at an annual rate of .36% of the value of the fund’s average daily net assets.
During the period ended May 31, 2018, the Distributor retained $11 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, 2018, Class C shares were charged $438 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, 2018, Class A and Class C shares were charged $1,037 and $146, 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
24
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 and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended May 31, 2018, the fund was charged $3,706 for transfer agency services and $75 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were offset by earnings credits of $75.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended May 31, 2018, the fund was charged $4,566 pursuant to the custody agreement. These fees were partially offset by earnings credits of $413.
During the period ended May 31, 2018, the fund was charged $6,320 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $342,454, Distribution Plan fees $62, Shareholder Services Plan fees $2,737, custodian fees $4,250, Chief Compliance Officer fees $5,267 and transfer agency fees $85, which are offset against an expense reimbursement currently in effect in the amount of $482.
(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, 2018, amounted to $51,965,557 and $88,145,275, respectively.
At May 31, 2018, accumulated net unrealized appreciation on investments was $201,781,770, consisting of $216,910,895 gross unrealized appreciation and $15,129,125 gross unrealized depreciation.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
At May 31, 2018, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
26
NOTES
27
NOTES
28
NOTES
29
Dreyfus U.S. Equity Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Walter Scott & Partners Limited
(Walter Scott)
One Charlotte Square
Edinburgh, Scotland, UK
Custodian
The Bank of New York Mellon
225 Liberty Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Ticker Symbols: | Class A: DPUAX Class C: DPUCX Class I: DPUIX Class Y: DPUYX |
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (phone 1-800-SEC-0330 for information).
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
© 2018 MBSC Securities Corporation |
Global Stock Fund
SEMIANNUAL REPORT May 31, 2018 |
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(s) only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
Currency Exchange Contracts | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Global Stock Fund, covering the six-month period from December 1, 2017 through May 31, 2018. 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.
After a period of unusually mild price swings in 2017, inflation concerns, geopolitical tensions and potential trade disputes have caused volatility to increase substantially during 2018. As a result, U.S. stocks generally have produced mildly positive returns while bonds have lost a degree of value over the first five months of the year.
Stocks set a series of new record highs through January 2018 before market volatility took its toll, enabling stocks across all capitalization ranges to produce solidly positive returns for the full six-month reporting period. Stocks gained value amid growing corporate earnings, improving global economic conditions and the enactment of tax reform legislation and other government policy reforms. In contrast, most sectors of the U.S. bond market produced roughly flat total returns or lost a degree of value when short-term interest rates climbed and inflation expectations increased.
Despite the return of heightened market volatility, we believe that underlying market fundamentals remain strong. Continued economic growth, a robust labor market, rising corporate earnings and strong consumer and business confidence seem likely to support stock and corporate bond prices over the months ahead. As always, we encourage you to discuss the risks and opportunities of today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
June 15, 2018
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from December 1, 2017 through May 31, 2018, as provided by Charlie Macquaker, Roy Leckie, Jane Henderson, and Rodger Nisbet, the four members of the Investment Executive at Walter Scott & Partners Limited (WS), Sub-Investment Adviser
Market and Fund Performance Overview
For the six-month period ended May 31, 2018, Global Stock Fund’s Class A shares achieved a total return of 3.66%, Class C shares returned 3.26%, Class I shares returned 3.81%, and Class Y shares returned 3.85%.1 For the same period, the fund’s benchmark, the MSCI World Index (the “Index”), achieved a total return of 1.84%.2
Global equities advanced during the reporting period amid improving economic prospects and better-than-expected corporate earnings, particularly in the U.S. Underweighted exposure to financial stocks and favorable security selections in the information technology sector enabled the fund to outperform the Index.
The Fund’s Investment Approach
The fund seeks long-term total return. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks. The fund’s investments will be focused on companies located in the developed markets. The fund ordinarily invests in at least three countries and is not geographically limited in its investment selection but, at times, may invest a substantial portion of its assets in a single country. The fund may invest in the securities of companies of any market capitalization. Walter Scott seeks investment opportunities in companies with fundamental strengths that indicate the potential for sustainable growth. Walter Scott focuses on individual stock selection, building the fund’s portfolio from the bottom up through extensive fundamental research. The investment process begins with the screening of reported company financials. Companies that meet certain broad absolute and trend criteria are candidates for more detailed financial analysis. The fund’s Investment Team collectively reviews and selects those stocks that meet Walter Scott’s criteria and where the expected growth rate is combined with a reasonable valuation for the underlying equity. Geographic and sector allocations are results of, not part of, the investment process, because the Investment Team’s sole focus is on the analysis of and investment in individual companies.
Rising Volatility Amid Positive Economic Trends
Global equity markets were propelled higher early in the reporting period by improving economic conditions and rising corporate earnings, helping the Index reach new record highs in late January 2018. Asian equity markets led the advance at the time, as Japanese equities responded positively to upward revisions of domestic growth forecasts and better-than-expected corporate earnings. U.S. stocks benefited from the passage of tax reform legislation that sharply reduced corporate tax rates. Global growth trends enabled UK equities to climb despite concerns regarding the country’s exit from the European Union. Eurozone markets trailed global market averages in the midst of political turmoil despite improving regional economic fundamentals.
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
February 2018 saw heightened market volatility and declining stock prices sparked by rising interest rates, perceived U.S. inflationary pressures, and the possibility of more protectionist U.S. trade policies. However, some of these concerns subsequently eased, and higher crude oil and industrial metal prices benefited energy and materials stocks toward the reporting period’s end. As a result, the Index ended the overall reporting period with a modest gain.
Stock Selection and Allocation Effect Buoyed Fund Results
The fund’s positive results compared to the Index stemmed from the success of our security selection and the resultant allocation effect. Most notably, relative performance benefited from underweighted exposure to the lagging financials sector, where the fund held only one stock. A relatively heavy position in and strong security selections among information technology stocks further boosted relative results. From a regional perspective, the fund’s U.S.-based holdings generally fared best.
Individual holdings that supported the fund’s relative results included software developer Adobe Systems, which achieved better-than-expected earnings due to the increasing adoption of new products through its subscription-based distribution model. In its first-quarter results, payments processor Mastercard reported underlying revenue growth of 20%. The trends are not new, but the move from cash to card and the use of cards for cross-border transactions continue to drive meaningful growth. Australian life sciences company CSL twice raised guidance during the reporting period amid higher sales volumes. Chinese energy producer CNOOC benefited from rising oil prices, new discoveries of oil reserves, and greater operational efficiencies. Luxury goods seller LVMH Moët Hennessy Louis Vuitton continues to report strong organic revenues. Considered the number one luxury brand globally, it is excellently positioned to benefit from continued market demand driven in particular by traveling luxury consumers and an increasingly wealthy customer base across emerging markets.
Individual disappointments during the reporting period were concentrated mostly in the health care sector. Despite very reasonable results, Novartis’ Sandoz business has remained under pressure and the strategic review of its Alcon business has lasted longer than anticipated. Johnson & Johnson reported sluggish results in its medical device business. Roche Holding encountered competitive pressures from recently approved biosimilar drugs. Health information technology company Cerner missed revenue targets due to a delay in a major contract but its stated long-term revenue target remains unchanged. In the industrials sector, Japanese robotics producer FANUC was hurt by slowing order growth. The long-term market outlook for robotic demand, however, remains undeniably strong and in volume terms FANUC remains the world’s leading supplier of industrial robots.
Maintaining a Company-by-Company Approach
Although we do not manage the fund’s investments in response to macroeconomic trends, it is worth noting that the global economic recovery remains intact, supported by stimulative fiscal policies that have helped boost corporate earnings in the U.S. in particular. However, at this stage in the market cycle, confidence can be quickly
4
undermined by unexpected political and economic developments as geopolitical tensions potentially escalate and central banks move gradually away from the aggressively accommodative policies of the past decade.
In that context, our focus remains very much unchanged. We must continue to identify and invest in market-leading, financially robust companies with the strategic strengths and vision to generate meaningful returns over the long term. Our distinctly long-term lens allows us to focus on the underlying strengths and opportunities of a business. Not only does that approach mean we waste very little time trying to second-guess short-term market moves, but it ensures we are invested in companies that have the attributes to succeed regardless of the external environment in which they operate.
June 15, 2018
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, yield, 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 MSCI World Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets. Investors cannot invest directly in any index.
Equities 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. These risks generally are greater with emerging market countries than with more economically and politically established foreign countries.
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, 2017 to May 31, 2018. 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, 2018 | ||||||||
Class A | Class C | Class I | Class Y | |||||
Expenses paid per $1,000† | $6.09 | $9.93 | $4.73 | $4.52 | ||||
Ending value (after expenses) | $1,036.60 | $1,032.60 | $1,038.10 | $1,038.50 |
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, 2018 | ||||||||
Class A | Class C | Class I | Class Y | |||||
Expenses paid per $1,000† | $6.04 | $9.85 | $4.68 | $4.48 | ||||
Ending value (after expenses) | $1,018.95 | $1,015.16 | 1,020.29 | $1,020.49 |
† Expenses are equal to the fund’s annualized expense ratio of 1.20% for Class A, 1.96% for Class C, .93% for Class I and .89% for Class Y, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS
May 31, 2018 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 98.0% | |||||||
Australia - 2.3% | |||||||
CSL | 205,500 | 28,782,870 | |||||
Canada - .9% | |||||||
Alimentation Couche Tard, Cl. B | 258,900 | 10,810,463 | |||||
China - 2.1% | |||||||
CNOOC | 15,260,000 | 25,858,761 | |||||
Denmark - 1.9% | |||||||
Novo Nordisk, Cl. B | 491,500 | 23,376,109 | |||||
Finland - .9% | |||||||
Kone, Cl. B | 235,400 | 11,669,978 | |||||
France - 6.3% | |||||||
Essilor International | 186,700 | 25,516,077 | |||||
L'Oreal | 102,400 | 24,614,262 | |||||
LVMH Moet Hennessy Louis Vuitton | 76,800 | 26,672,816 | |||||
76,803,155 | |||||||
Hong Kong - 6.3% | |||||||
AIA Group | 3,621,800 | 33,048,737 | |||||
China Mobile | 1,764,000 | 15,813,586 | |||||
CLP Holdings | 1,301,000 | 13,655,595 | |||||
Hong Kong & China Gas | 6,687,989 | 14,450,133 | |||||
76,968,051 | |||||||
Japan - 8.0% | |||||||
Denso | 338,700 | 16,417,163 | |||||
FANUC | 96,300 | 20,487,481 | |||||
Keyence | 63,214 | 38,641,858 | |||||
Shin-Etsu Chemical | 222,300 | 22,085,085 | |||||
97,631,587 | |||||||
Spain - 2.0% | |||||||
Industria de Diseno Textil | 801,500 | 25,260,760 | |||||
Switzerland - 7.4% | |||||||
Nestle | 295,000 | 22,234,253 | |||||
Novartis | 305,500 | 22,666,158 | |||||
Roche Holding | 107,500 | 23,056,875 | |||||
SGS | 8,700 | 22,545,890 | |||||
90,503,176 | |||||||
Taiwan - 2.2% | |||||||
Taiwan Semiconductor Manufacturing, ADR | 692,000 | 26,780,400 | |||||
United Kingdom - 5.1% | |||||||
Compass Group | 1,127,884 | 24,254,561 | |||||
Experian | 698,400 | 17,101,374 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 98.0% (continued) | |||||||
United Kingdom - 5.1% (continued) | |||||||
Reckitt Benckiser Group | 271,700 | 20,810,839 | |||||
62,166,774 | |||||||
United States - 52.6% | |||||||
Adobe Systems | 136,500 | a | 34,026,720 | ||||
Alphabet, Cl. C | 26,297 | a | 28,531,982 | ||||
Amphenol, Cl. A | 277,500 | 24,123,075 | |||||
Automatic Data Processing | 174,900 | 22,740,498 | |||||
Cerner | 419,400 | a | 25,029,792 | ||||
Cisco Systems | 578,400 | 24,703,464 | |||||
Cognizant Technology Solutions, Cl. A | 371,700 | 28,007,595 | |||||
Colgate-Palmolive | 358,100 | 22,592,529 | |||||
Edwards Lifesciences | 172,500 | a | 23,685,975 | ||||
EOG Resources | 292,500 | 34,459,425 | |||||
Fastenal | 381,900 | 20,328,537 | |||||
Gilead Sciences | 262,000 | 17,658,800 | |||||
Intuitive Surgical | 59,900 | a | 27,534,233 | ||||
Johnson & Johnson | 186,200 | 22,273,244 | |||||
Mastercard, Cl. A | 173,600 | 33,004,832 | |||||
Microsoft | 258,000 | 25,500,720 | |||||
NIKE, Cl. B | 374,900 | 26,917,820 | |||||
Oracle | 545,400 | 25,481,088 | |||||
Praxair | 162,900 | 25,454,754 | |||||
Schlumberger | 351,600 | 24,144,372 | |||||
Starbucks | 468,116 | 26,528,134 | |||||
Stryker | 164,600 | 28,643,692 | |||||
The TJX Companies | 338,400 | 30,564,288 | |||||
Tractor Supply | 264,100 | 19,625,271 | |||||
Walt Disney | 240,500 | 23,922,535 | |||||
645,483,375 | |||||||
Total Common Stocks (cost $678,026,238) | 1,202,095,459 |
8
Description | 7-Day | Shares | Value ($) | ||||
Other Investment - 1.5% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1.73 | 18,768,627 | b | 18,768,627 | |||
Total Investments (cost $696,794,865) | 99.5% | 1,220,864,086 | |||||
Cash and Receivables (Net) | .5% | 5,687,677 | |||||
Net Assets | 100.0% | 1,226,551,763 |
ADR—American Depository Receipt
a Non-income producing security.
b Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the respective investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Information Technology | 25.4 |
Health Care | 21.9 |
Consumer Discretionary | 17.9 |
Consumer Staples | 8.2 |
Industrials | 7.5 |
Energy | 6.9 |
Materials | 3.9 |
Financials | 2.7 |
Utilities | 2.3 |
Money Market Investment | 1.5 |
Telecommunication Services | 1.3 |
99.5 |
† Based on net assets.
See notes to financial statements.
9
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Registered Investment Company | Value | Purchases($) | Sales($) | Value | Net | Dividends/ |
Dreyfus Institutional Preferred Government Plus Money Market Fund | 17,085,359 | 129,643,163 | 127,959,895 | 18,768,627 | 1.5 | 112,039 |
See notes to financial statements.
10
STATEMENT OF FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS May 31, 2018 (Unaudited)
Counterparty/ Purchased | Purchased Currency | Currency | Sold | Settlement Date | Unrealized (Depreciation)($) |
National Australia Bank | |||||
United States Dollar | 693,203 | Hong Kong Dollars | 5,438,874 | 6/1/18 | (248) |
United States Dollar | 770,623 | Hong Kong Dollars | 6,048,389 | 6/4/18 | (540) |
Gross Unrealized Depreciation | (788) |
See notes to financial statements.
11
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments: |
|
|
| |||
Unaffiliated issuers | 678,026,238 |
| 1,202,095,459 |
| ||
Affiliated issuers |
| 18,768,627 |
| 18,768,627 |
| |
Cash |
|
|
|
| 898,834 |
|
Tax reclaim receivable |
| 2,646,327 |
| |||
Dividends and interest receivable |
| 1,693,854 |
| |||
Receivable for investment securities sold |
| 1,464,615 |
| |||
Receivable for shares of Common Stock subscribed |
| 150,184 |
| |||
Prepaid expenses |
|
|
|
| 70,754 |
|
|
|
|
|
| 1,227,788,654 |
|
Liabilities ($): |
|
|
|
| ||
Due to The Dreyfus Corporation and affiliates—Note 3(c) |
|
|
| 942,562 |
| |
Payable for shares of Common Stock redeemed |
| 243,471 |
| |||
Unrealized depreciation on forward foreign |
| 788 |
| |||
Accrued expenses |
|
|
|
| 50,070 |
|
|
|
|
|
| 1,236,891 |
|
Net Assets ($) |
|
| 1,226,551,763 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 651,278,103 |
|
Accumulated undistributed investment income—net |
| 6,463,283 |
| |||
Accumulated net realized gain (loss) on investments |
|
|
|
| 44,773,526 |
|
Accumulated net unrealized appreciation (depreciation) |
| 524,036,851 |
| |||
Net Assets ($) |
|
| 1,226,551,763 |
|
Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
|
Net Assets ($) | 26,780,476 | 11,529,651 | 838,589,763 | 349,651,873 |
|
Shares Outstanding | 1,294,492 | 573,504 | 39,977,061 | 16,693,479 |
|
Net Asset Value Per Share ($) | 20.69 | 20.10 | 20.98 | 20.95 |
|
See notes to financial statements. |
12
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $947,884 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 12,222,832 |
| ||
Affiliated issuers |
|
| 112,039 |
| ||
Total Income |
|
| 12,334,871 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 5,338,826 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 248,787 |
| ||
Directors’ fees and expenses—Note 3(d) |
|
| 66,485 |
| ||
Professional fees |
|
| 48,039 |
| ||
Distribution fees—Note 3(b) |
|
| 44,604 |
| ||
Custodian fees—Note 3(c) |
|
| 33,056 |
| ||
Registration fees |
|
| 32,813 |
| ||
Loan commitment fees—Note 2 |
|
| 13,760 |
| ||
Prospectus and shareholders’ reports |
|
| 7,826 |
| ||
Interest expense—Note 2 |
|
| 1,097 |
| ||
Miscellaneous |
|
| 31,272 |
| ||
Total Expenses |
|
| 5,866,565 |
| ||
Less—reduction in fees due to earnings credits—Note 3(c) |
|
| (359) |
| ||
Net Expenses |
|
| 5,866,206 |
| ||
Investment Income—Net |
|
| 6,468,665 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments and foreign currency transactions | 44,934,189 |
| ||||
Net realized gain (loss) on forward foreign currency exchange contracts | (103,187) |
| ||||
Net Realized Gain (Loss) |
|
| 44,831,002 |
| ||
Net unrealized appreciation (depreciation) on investments |
|
| (2,545,606) |
| ||
Net unrealized appreciation (depreciation) on |
|
| (788) |
| ||
Net Unrealized Appreciation (Depreciation) |
|
| (2,546,394) |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 42,284,608 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 48,753,273 |
| |||
See notes to financial statements. |
13
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 6,468,665 |
|
|
| 11,865,053 |
| |
Net realized gain (loss) on investments |
| 44,831,002 |
|
|
| 90,046,999 |
| ||
Net unrealized appreciation (depreciation) |
| (2,546,394) |
|
|
| 179,230,679 |
| ||
Net Increase (Decrease) in Net Assets | 48,753,273 |
|
|
| 281,142,731 |
| |||
Distributions to Shareholders from ($): |
| ||||||||
Investment income—net: |
|
|
|
|
|
|
|
| |
Class A |
|
| (182,266) |
|
|
| (172,872) |
| |
Class I |
|
| (8,122,766) |
|
|
| (7,719,465) |
| |
Class Y |
|
| (3,497,491) |
|
|
| (2,610,134) |
| |
Net realized gain on investments: |
|
|
|
|
|
|
|
| |
Class A |
|
| (1,773,692) |
|
|
| (118,731) |
| |
Class C |
|
| (813,025) |
|
|
| (47,239) |
| |
Class I |
|
| (58,964,047) |
|
|
| (3,193,028) |
| |
Class Y |
|
| (23,323,114) |
|
|
| (1,041,055) |
| |
Total Distributions |
|
| (96,676,401) |
|
|
| (14,902,524) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 3,063,927 |
|
|
| 2,508,326 |
| |
Class C |
|
| 550,585 |
|
|
| 721,880 |
| |
Class I |
|
| 36,724,849 |
|
|
| 98,970,461 |
| |
Class Y |
|
| 6,282,195 |
|
|
| 27,899,949 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 1,751,194 |
|
|
| 265,488 |
| |
Class C |
|
| 677,592 |
|
|
| 37,478 |
| |
Class I |
|
| 65,070,305 |
|
|
| 10,622,378 |
| |
Class Y |
|
| 14,346,019 |
|
|
| 1,510,206 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (2,507,367) |
|
|
| (17,551,420) |
| |
Class C |
|
| (2,391,408) |
|
|
| (3,531,924) |
| |
Class I |
|
| (131,993,070) |
|
|
| (313,783,808) |
| |
Class Y |
|
| (12,994,610) |
|
|
| (45,711,611) |
| |
Increase (Decrease) in Net Assets | (21,419,789) |
|
|
| (238,042,597) |
| |||
Total Increase (Decrease) in Net Assets | (69,342,917) |
|
|
| 28,197,610 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 1,295,894,680 |
|
|
| 1,267,697,070 |
| |
End of Period |
|
| 1,226,551,763 |
|
|
| 1,295,894,680 |
| |
Undistributed investment income—net | 6,463,283 |
|
|
| 11,797,141 |
|
14
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa,b |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 146,190 |
|
|
| 129,043 |
| |
Shares issued for distributions reinvested |
|
| 87,081 |
|
|
| 15,162 |
| |
Shares redeemed |
|
| (122,172) |
|
|
| (951,258) |
| |
Net Increase (Decrease) in Shares Outstanding | 111,099 |
|
|
| (807,053) |
| |||
Class Ca |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 27,585 |
|
|
| 38,565 |
| |
Shares issued for distributions reinvested |
|
| 34,553 |
|
|
| 2,190 |
| |
Shares redeemed |
|
| (117,191) |
|
|
| (190,687) |
| |
Net Increase (Decrease) in Shares Outstanding | (55,053) |
|
|
| (149,932) |
| |||
Class Ib |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 1,759,527 |
|
|
| 5,128,996 |
| |
Shares issued for distributions reinvested |
|
| 3,194,419 |
|
|
| 599,796 |
| |
Shares redeemed |
|
| (6,276,930) |
|
|
| (15,943,871) |
| |
Net Increase (Decrease) in Shares Outstanding | (1,322,984) |
|
|
| (10,215,079) |
| |||
Class Yb |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 299,184 |
|
|
| 1,437,815 |
| |
Shares issued for distributions reinvested |
|
| 705,311 |
|
|
| 85,419 |
| |
Shares redeemed |
|
| (619,872) |
|
|
| (2,381,066) |
| |
Net Increase (Decrease) in Shares Outstanding | 384,623 |
|
|
| (857,832) |
| |||
aDuring the period ended May 31, 2018, 304 Class C shares representing $6,331 were automatically exchanged for 295 Class A shares. | |||||||||
bDuring the period ended May 31, 2018, 2,769 Class A shares representing $55,424 were exchanged for 2,734 Class I shares, 119,307 Class Y shares representing $2,488,218 were exchanged for 119,124 Class I shares and during the period ended November 30, 2017, 41,874 Class A shares representing $802,238 were exchanged for 41,358 Class I shares, 1,688 Class C shares representing $28,962 were exchanged for 1,631 Class I shares and 133,262 Class Y shares representing $2,579,219 were exchanged for 133,120 Class I shares. | |||||||||
See notes to financial statements. |
15
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class A Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 21.53 | 17.51 | 18.66 | 18.89 | 18.02 | 15.02 |
Investment Operations: | ||||||
Investment income—neta | .08 | .11 | .11 | .13 | .14 | .13 |
Net realized and unrealized | .66 | 4.06 | .42 | (.14) | .83 | 2.95 |
Total from Investment Operations | .74 | 4.17 | .53 | (.01) | .97 | 3.08 |
Distributions: | ||||||
Dividends from | (.15) | (.09) | (.19) | (.13) | (.10) | (.08) |
Dividends from net realized | (1.43) | (.06) | (1.49) | (.09) | - | - |
Total Distributions | (1.58) | (.15) | (1.68) | (.22) | (.10) | (.08) |
Net asset value, end of period | 20.69 | 21.53 | 17.51 | 18.66 | 18.89 | 18.02 |
Total Return (%)b | 3.66c | 24.04 | 3.19 | (.13) | 5.49 | 20.60 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.20d | 1.22 | 1.22 | 1.23 | 1.23 | 1.24 |
Ratio of net expenses | 1.20d | 1.22 | 1.22 | 1.23 | 1.23 | 1.24 |
Ratio of net investment income | .78d | .60 | .63 | .71 | .76 | .76 |
Portfolio Turnover Rate | 1.08c | 6.50 | 11.79 | 10.82 | 7.05 | 6.39 |
Net Assets, end of period ($ x 1,000) | 26,780 | 25,477 | 34,844 | 43,698 | 55,682 | 89,024 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
16
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class C Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 20.89 | 17.03 | 18.18 | 18.42 | 17.61 | 14.71 |
Investment Operations: | ||||||
Investment income (loss)—neta | - | (.02) | (.02) | (.01) | (.01) | .00b |
Net realized and unrealized | .64 | 3.94 | .40 | (.14) | .82 | 2.90 |
Total from Investment Operations | .64 | 3.92 | .38 | (.15) | .81 | 2.90 |
Distributions: | ||||||
Dividends from | - | - | (.04) | - | - | - |
Dividends from net realized | (1.43) | (.06) | (1.49) | (.09) | - | - |
Total Distributions | (1.43) | (.06) | (1.53) | (.09) | - | - |
Net asset value, end of period | 20.10 | 20.89 | 17.03 | 18.18 | 18.42 | 17.61 |
Total Return (%)c | 3.26d | 23.11 | 2.36 | (.83) | 4.60 | 19.72 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.96e | 1.99 | 1.99 | 1.99 | 2.00 | 2.01 |
Ratio of net expenses | 1.96e | 1.99 | 1.99 | 1.99 | 2.00 | 2.01 |
Ratio of net investment income | .02e | (.10) | (.13) | (.07) | (.05) | .00f |
Portfolio Turnover Rate | 1.08d | 6.50 | 11.79 | 10.82 | 7.05 | 6.39 |
Net Assets, end of period ($ x 1,000) | 11,530 | 13,132 | 13,258 | 16,303 | 21,221 | 23,543 |
a Based on average shares outstanding.
b Amount represents less than $.01 per share.
c Exclusive of sales charge.
d Not annualized.
e Annualized.
f Amount represents less than .01%.
See notes to financial statements.
17
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class I Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 21.83 | 17.76 | 18.92 | 19.18 | 18.28 | 15.24 |
Investment Operations: | ||||||
Investment income—neta | .11 | .18 | .16 | .20 | .20 | .19 |
Net realized and unrealized | .67 | 4.10 | .43 | (.16) | .85 | 2.98 |
Total from Investment Operations | .78 | 4.28 | .59 | .04 | 1.05 | 3.17 |
Distributions: | ||||||
Dividends from | (.20) | (.15) | (.26) | (.21) | (.15) | (.13) |
Dividends from net realized | (1.43) | (.06) | (1.49) | (.09) | - | - |
Total Distributions | (1.63) | (.21) | (1.75) | (.30) | (.15) | (.13) |
Net asset value, end of period | 20.98 | 21.83 | 17.76 | 18.92 | 19.18 | 18.28 |
Total Return (%) | 3.81b | 24.40 | 3.50 | .20 | 5.80 | 20.93 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .93c | .98 | .91 | .91 | .91 | .91 |
Ratio of net expenses | .93c | .98 | .91 | .91 | .91 | .91 |
Ratio of net investment income | 1.03c | .92 | .93 | 1.05 | 1.06 | 1.12 |
Portfolio Turnover Rate | 1.08b | 6.50 | 11.79 | 10.82 | 7.05 | 6.39 |
Net Assets, end of period ($ x 1,000) | 838,590 | 901,556 | 915,049 | 809,432 | 1,470,169 | 1,567,608 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
18
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class Y Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013a |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 21.81 | 17.74 | 18.90 | 19.16 | 18.27 | 16.40 |
Investment Operations: | ||||||
Investment income—netb | .11 | .19 | .17 | .19 | .14 | .01 |
Net realized and unrealized | .68 | 4.10 | .42 | (.15) | .90 | 1.86 |
Total from Investment Operations | .79 | 4.29 | .59 | .04 | 1.04 | 1.87 |
Distributions: | ||||||
Dividends from | (.22) | (.16) | (.26) | (.21) | (.15) | - |
Dividends from net realized | (1.43) | (.06) | (1.49) | (.09) | - | - |
Total Distributions | (1.65) | (.22) | (1.75) | (.30) | (.15) | - |
Net asset value, end of period | 20.95 | 21.81 | 17.74 | 18.90 | 19.16 | 18.27 |
Total Return (%) | 3.85c | 24.47 | 3.51 | .21 | 5.75 | 11.40c |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .89d | .90 | .89 | .90 | .90 | .90d |
Ratio of net expenses | .89d | .90 | .89 | .90 | .90 | .90d |
Ratio of net investment income | 1.09d | .99 | .95 | 1.03 | .74 | .83d |
Portfolio Turnover Rate | 1.08c | 6.50 | 11.79 | 10.82 | 7.05 | 6.39 |
Net Assets, end of period ($ x 1,000) | 349,652 | 355,729 | 304,547 | 341,823 | 469,801 | 23,149 |
a From July 1, 2013 (commencement of initial offering) to November 30, 2013.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.
19
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 six 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 of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Walter Scott & Partners Limited (“Walter Scott”), a wholly-owned 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 600 million shares of $.001 par value Common Stock. The fund currently has authorized five classes of shares: Class A (100 million shares authorized), Class C (100 million shares authorized), Class I (200 million shares authorized), Class T (100 million shares authorized) and Class Y (100 million shares authorized). Class A and Class T 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 C shares automatically convert to Class A shares ten years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. As of the date of this report, the fund did not offer Class T shares for purchase. 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 is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the
20
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: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
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:
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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. For open short positions, asked prices are 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 generally categorized within Level 1 of the fair value hierarchy.
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. These securities are generally categorized within Level 2 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 ADRs and 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 accurately reflect 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 Company’s Board of Directors (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 such securities are generally categorized within Level 3 of the fair value hierarchy.
Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.
22
Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate and are generally categorized within Level 2 of the fair value hierarchy.
The following is a summary of the inputs used as of May 31, 2018 in valuing the fund’s investments:
Level 1- Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3- Significant Unobservable Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities - Domestic Common Stocks | 645,483,375 | - | - | 645,483,375 |
Equity Securities - Foreign Common Stocks | 26,780,400 | 529,831,684† | - | 556,612,084 |
Registered Investment Company | 18,768,627 | - | - | 18,768,627 |
Liabilities ($) | ||||
Other Financial Instrumets: | ||||
Forward Foreign Currency Exchange Contracts†† | - | (788) | - | (788) |
† Securities classified within Level 2 at period end as the values were determined pursuant to the fund’s fair valuation procedures.
†† Amount shown represents unrealized (depreciation) at period end.
At May 31, 2018, the amount of securities transferred between levels equals fair value of exchange traded equity securities reported as Level 2 in the table above. At November 30, 2017, $582,941,725 of exchange traded foreign equity securities were classified within Level 2 of the fair value hierarchy pursuant to the fund’s fair valuation procedures. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(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 the 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
23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also 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.
(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act.
(e) Risk: 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.
(f) Dividends and distributions to shareholders: Dividends and distributions 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.
(g) 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, 2018, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest
24
and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended May 31, 2018, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended November 30, 2017 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, 2017 was as follows: ordinary income $10,502,471 and long-term capital gains $4,400,053. 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 an $830 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.
The average amount of borrowings outstanding under the Facilities during the period ended May 31, 2018 was approximately $87,900 with a related weighted average annualized interest rate of 2.50%.
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.
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 value of the fund’s average daily net assets.
Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott a monthly fee at an annual rate of .41% of the value of the fund’s average daily net assets.
During the period ended May 31, 2018, the Distributor retained $1,240 from commissions earned on sales of the fund’s Class A shares and $11 from CDSC fees on redemptions of the fund’s Class C shares.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(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, 2018, Class C shares were charged $44,604 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, 2018, Class A and Class C shares were charged $33,213 and $14,868, 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 and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended May 31, 2018, the fund was charged $3,943 for transfer agency services and $319 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were offset by earnings credits of $319.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended May 31, 2018, the fund was charged $33,056 pursuant to the custody agreement. These fees were partially offset by earnings credits of $40.
During the period ended May 31, 2018, the fund was charged $6,320 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
26
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $886,489, Distribution Plan fees $7,415, Shareholder Services Plan fees $8,164, custodian fees $33,510, Chief Compliance Officer fees $5,267 and transfer agency fees $1,717.
(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, 2018, amounted to $13,421,421 and $44,823,369, respectively.
Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. The fund enters into International Swaps and Derivatives Association, Inc. Master Agreements or similar agreements (collectively, “Master Agreements”) with its over-the-counter (“OTC”) derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under a Master Agreement, the fund may offset with the counterparty certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment in the event of default or termination.
Each type of derivative instrument that was held by the fund during the period ended May 31, 2018 is discussed below.
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 or unrealized gains or
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
losses which occurred during the period are 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 generally limited to the unrealized gain on each open contract. This risk may be mitigated by Master Agreements, if any, between the fund and the counterparty and the posting of collateral, if any, by the counterparty to the fund to cover the fund’s exposure to the counterparty. Forward contracts open at May 31, 2018 are set forth in the Statement of Forward Foreign Currency Exchange Contracts.
The provisions of ASC Topic 210 “Disclosures about Offsetting Assets and Liabilities” require disclosure on the offsetting of financial assets and liabilities. These disclosures are required for certain investments, including derivative financial instruments subject to Master Agreements which are eligible for offsetting in the Statement of Assets and Liabilities and require the fund to disclose both gross and net information with respect to such investments. For financial reporting purposes, the fund does not offset derivative assets and derivative liabilities that are subject to Master Agreements in the Statement of Assets and Liabilities.
At May 31, 2018, derivative assets and liabilities (by type) on a gross basis are as follows:
Derivative Financial Instruments: |
| Assets ($) |
| Liabilities ($) |
|
Forward contracts | - | (788) | |||
Total gross amount of derivative | |||||
assets and liabilities in the | |||||
Statement of Assets and Liabilities | - | (788) | |||
Derivatives not subject to | |||||
Master Agreements | - | - | |||
Total gross amount of assets | |||||
and liabilities subject to | |||||
Master Agreements | - | (788) |
The following table presents derivative liabilities net of amounts available for offsetting under Master Agreements and net of related collateral received or pledged, if any, as of May 31, 2018:
28
Financial | ||||||
Instruments | ||||||
and Derivatives | ||||||
Gross Amount of | Available | Collateral | Net Amount of | |||
Counterparty | Liabilities ($) | 1 | for Offset ($) | Pledged ($) |
| Liabilities ($) |
National | (788) | - | - | (788) | ||
1 Absent a default event or early termination, OTC derivative assets and liabilities are presented at gross amounts |
The following summarizes the average market value of derivatives outstanding during the period ended May 31, 2018:
|
| Average Market Value ($) |
Forward contracts | 2,184,724 | |
At May 31, 2018, accumulated net unrealized appreciation on investments inclusive of derivative contracts was $524,068,433, consisting of $541,293,724 gross unrealized appreciation and $17,257,813 gross unrealized depreciation.
At May 31, 2018, the cost of investments inclusive of derivative contracts for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
29
Global Stock Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Walter Scott & Partners Limited
(Walter Scott)
One Charlotte Square
Edinburgh, Scotland, UK
Custodian
The Bank of New York Mellon
225 Liberty Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Ticker Symbols: | Class A: DGLAX Class C: DGLCX Class I: DGLRX Class Y: DGLYX |
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (phone 1-800-SEC-0330 for information).
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
© 2018 MBSC Securities Corporation |
International Stock Fund
SEMIANNUAL REPORT May 31, 2018 |
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(s) only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
Currency Exchange Contracts | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for International Stock Fund, covering the six-month period from December 1, 2017 through May 31, 2018. 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.
After a period of unusually mild price swings in 2017, inflation concerns, geopolitical tensions and potential trade disputes have caused volatility to increase substantially during 2018. As a result, U.S. stocks generally have produced mildly positive returns while bonds have lost a degree of value over the first five months of the year.
Stocks set a series of new record highs through January 2018 before market volatility took its toll, enabling stocks across all capitalization ranges to produce solidly positive returns for the full six-month reporting period. Stocks gained value amid growing corporate earnings, improving global economic conditions and the enactment of tax reform legislation and other government policy reforms. In contrast, most sectors of the U.S. bond market produced roughly flat total returns or lost a degree of value when short-term interest rates climbed and inflation expectations increased.
Despite the return of heightened market volatility, we believe that underlying market fundamentals remain strong. Continued economic growth, a robust labor market, rising corporate earnings and strong consumer and business confidence seem likely to support stock and corporate bond prices over the months ahead. As always, we encourage you to discuss the risks and opportunities of today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
June 15, 2018
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from December 1, 2017 through May 31, 2018, as provided by Charlie Macquaker, Roy Leckie, Jane Henderson, and Rodger Nisbet, the four members of the Investment Executive at Walter Scott & Partners Limited (WS), Sub-Investment Adviser
Market and Fund Performance Overview
For the six-month period ended May 31, 2018, International Stock Fund’s Class A shares achieved a total return of 1.24%, Class C shares returned 0.88%, Class I shares returned 1.43%, and Class Y shares returned 1.47%.1 In comparison, the fund’s benchmark index, the MSCI EAFE Index (the “Index”), achieved a return of 0.03% for the same period.2
International equities produced roughly flat returns during the reporting period. Underweighted exposure to financial stocks and favorable security selection in the health care sector enabled the fund to outperform the Index.
The Fund’s Investment Approach
The fund seeks long-term total return. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks. The fund normally invests primarily in foreign companies located in the developed markets. The fund ordinarily invests in at least three countries and is not geographically limited in its investment selection but, at times, may invest a substantial portion of its assets in a single country. The fund may invest in the securities of companies of any market capitalization. Walter Scott seeks investment opportunities in companies with fundamental strengths that indicate the potential for sustainable growth. Walter Scott focuses on individual stock selection, building the fund’s portfolio from the bottom up through extensive fundamental research. The investment process begins with the screening of reported company financials. Companies that meet certain broad absolute and trend criteria are candidates for more detailed financial analysis. The fund’s Investment Team collectively reviews and selects those stocks that meet Walter Scott’s criteria and where the expected growth rate is combined with a reasonable valuation for the underlying equity. Geographic and sector allocations are results of, not part of, the investment process, because the Investment Team’s sole focus is on the analysis of and investment in individual companies.
Rising Volatility Amid Positive Economic Trends
International equity markets were propelled higher early in the reporting period. Asian equity markets led the advance at the time, as Japanese equities responded positively to upward revisions of domestic growth forecasts and better-than-expected corporate earnings. Global growth trends enabled UK equities to climb despite concerns regarding the country’s exit from the European Union. Eurozone markets trailed global market averages in the midst of political turmoil despite improving regional economic fundamentals.
February 2018 saw heightened market volatility and declining stock prices sparked by rising interest rates and perceived inflationary pressures in the U.S., as well as the possibility of more protectionist U.S. trade policies. These negative developments were exacerbated by political uncertainty in the European Union. However, some of these concerns subsequently eased, and higher crude oil prices benefited energy stocks toward the reporting period’s end. As a result, the Index ended the overall reporting period with a roughly flat return.
Stock Selection and Attribution Effect Buoyed Fund Results
The fund’s positive results compared to the Index stemmed from the success of our security selection and the resultant attribution effect. Most notably, relative performance benefited from underweighted exposure to the lagging financials sector, where the fund held only one stock. Strong security selection
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
among health care stocks further boosted relative results. From a regional perspective, the fund’s holdings in the Asia Pacific ex-Japan region and the United Kingdom generally fared best.
Individual holdings that supported the fund’s relative results included Australian life sciences company CSL, which twice raised guidance during the reporting period amid rising sales volumes. Chinese energy producer CNOOC benefited from higher oil prices, new discoveries of oil reserves, and greater operational efficiencies. Luxury goods seller LVMH Moët Hennessy Louis Vuitton continues to report strong organic revenues. Considered the number one luxury brand globally, it is excellently positioned to benefit from continued market demand driven in particular by traveling luxury consumers and an increasingly wealthy customer base across emerging markets. Danish health care company Coloplast reported higher sales volumes across its various business segments and regional markets. Full-year results from Hong Kong-based insurer AIA Group showed robust growth as it continues to benefit from significant and ongoing urbanization as well as rising wealth and disposable income across Asia, and in China in particular.
Individual disappointments during the reporting period were concentrated mostly in consumer-oriented sectors. Japanese automotive technology producer Denso reduced the guidance it provides to analysts due to the short-term impact of higher research-and-development costs and unfavorable currency exchange rates. Canadian convenience store chain Alimentation Couche-Tard experienced lower profit margins on fuel sales and disappointing same-store sales growth in a sluggish retail environment. Japanese Internet retailer Rakuten encountered intensifying competitive pressures and concerns regarding its entry into the telecommunications industry. In other areas, pharmaceutical developer Roche Holding struggled with competition from recently approved biosimilar drugs, and Japanese robotics producer FANUC was hurt by declining order growth. The long-term market outlook for robotic demand, however, remains undeniably strong and in volume terms FANUC remains the world’s leading supplier of industrial robots.
Maintaining a Company-by-Company Approach
We do not manage the fund’s investments in response to macroeconomic trends, but the positive economic backdrop across much of the world is worthy of note. In general terms, corporate earnings announcements have shown the benefit of this more accommodative economic picture. With interest rates still very low by historical standards, merger-and-acquisition activity has also picked up. Such activity is characteristic of the later stages of the economic cycle. In that context, we remain comfortable with our consistently applied approach: to identify financially robust, market-leading, growth companies irrespective of sector or international geography. In short, these are companies with the ability to deliver growth — and financial returns — over the long term regardless of the broader market or economic context.
June 15, 2018
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 MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. Investors cannot invest directly in any index.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Equities 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.
4
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in International Stock Fund from December 1, 2017 to May 31, 2018. 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, 2018 | ||||||||||
Class A | Class C | Class I | Class Y | |||||||
Expenses paid per $1,000† | $6.17 | $9.82 | $4.57 | $4.42 | ||||||
Ending value (after expenses) | $1,012.40 | $1,008.80 | $1,014.30 | $1,014.70 |
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment | ||||||||
assuming a hypothetical 5% annualized return for the six months ended May 31, 2018 | ||||||||
Class A | Class C | Class I | Class Y | |||||
Expenses paid per $1,000† | $6.19 | $9.85 | $4.58 | $4.43 | ||||
Ending value (after expenses) | $1,018.80 | $1,015.16 | $1,020.39 | $1,020.54 |
† Expenses are equal to the fund’s annualized expense ratio of 1.23% for Class A, 1.96% for Class C, .91% for Class I and .88% for Class Y, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
May 31, 2018 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 96.4% | |||||||
Australia - 4.0% | |||||||
Cochlear | 431,100 | 63,763,764 | |||||
CSL | 733,200 | 102,693,919 | |||||
166,457,683 | |||||||
Canada - 1.6% | |||||||
Alimentation Couche-Tard, Cl. B | 1,629,700 | 68,048,711 | |||||
China - 2.6% | |||||||
CNOOC | 63,804,000 | 108,118,768 | |||||
Denmark - 6.6% | |||||||
Coloplast, Cl. B | 1,008,251 | 95,786,958 | |||||
Novo Nordisk, Cl. B | 1,920,600 | 91,345,179 | |||||
Novozymes, Cl. B | 1,719,212 | 87,563,281 | |||||
274,695,418 | |||||||
Finland - 1.9% | |||||||
Kone, Cl. B | 1,552,000 | 76,940,549 | |||||
France - 12.5% | |||||||
Air Liquide | 809,200 | 99,497,979 | |||||
Dassault Systemes | 314,000 | 44,108,466 | |||||
Essilor International | 578,500 | 79,062,938 | |||||
L'Oreal | 391,900 | 94,202,436 | |||||
LVMH Moet Hennessy Louis Vuitton | 302,059 | 104,905,782 | |||||
Total | 1,609,316 | 97,804,380 | |||||
519,581,981 | |||||||
Germany - 5.0% | |||||||
adidas | 471,500 | 106,742,569 | |||||
SAP | 902,200 | 101,637,808 | |||||
208,380,377 | |||||||
Hong Kong - 9.2% | |||||||
AIA Group | 13,613,400 | 124,221,567 | |||||
China Mobile | 5,729,500 | 51,362,777 | |||||
CLP Holdings | 6,249,000 | 65,590,938 | |||||
Hang Lung Properties | 25,615,000 | 58,049,996 | |||||
Hong Kong & China Gas | 38,961,201 | 84,179,943 | |||||
383,405,221 | |||||||
Japan - 23.1% | |||||||
Daito Trust Construction | 554,500 | 90,341,288 | |||||
Denso | 1,474,600 | 71,475,492 | |||||
FANUC | 409,400 | 87,098,389 | |||||
Inpex | 3,190,700 | 35,382,661 | |||||
Kao | 1,351,600 | 104,538,203 | |||||
Keyence | 280,040 | 171,184,642 | |||||
Makita | 34,200 | 1,520,464 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 96.4% (continued) | |||||||
Japan - 23.1% (continued) | |||||||
MISUMI Group | 581,900 | 16,757,158 | |||||
Murata Manufacturing | 497,600 | 73,726,655 | |||||
Shimano | 479,200 | 67,612,846 | |||||
Shin-Etsu Chemical | 850,400 | 84,485,635 | |||||
SMC | 264,200 | 100,017,208 | |||||
Sysmex | 620,900 | 55,667,587 | |||||
959,808,228 | |||||||
Netherlands - 1.3% | |||||||
ASML Holding | 285,400 | 55,681,558 | |||||
Spain - 2.3% | |||||||
Industria de Diseno Textil | 3,054,100 | 96,255,629 | |||||
Switzerland - 10.6% | |||||||
Givaudan | 37,900 | 84,260,261 | |||||
Kuehne + Nagel International | 489,100 | 73,541,863 | |||||
Nestle | 879,000 | 66,250,537 | |||||
Novartis | 996,500 | 73,933,965 | |||||
Roche Holding | 353,450 | 75,808,861 | |||||
SGS | 26,500 | 68,674,263 | |||||
442,469,750 | |||||||
Taiwan - 2.8% | |||||||
Taiwan Semiconductor Manufacturing, ADR | 2,982,300 | 115,415,010 | |||||
United Kingdom - 12.9% | |||||||
Compass Group | 3,911,346 | 84,111,471 | |||||
Diageo | 2,429,000 | 89,220,189 | |||||
Experian | 3,928,700 | 96,200,125 | |||||
Intertek Group | 678,100 | 49,283,050 | |||||
Reckitt Benckiser Group | 895,900 | 68,621,386 | |||||
Smith & Nephew | 4,500,000 | 81,881,188 | |||||
Whitbread | 1,153,800 | 64,657,692 | |||||
533,975,101 | |||||||
Total Common Stocks (cost $2,819,247,247) | 4,009,233,984 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | 7-Day | Shares | Value ($) | ||||
Other Investment - 2.9% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1.73 | 117,703,145 | a | 117,703,145 | |||
Total Investments (cost $2,936,950,392) | 99.3% | 4,126,937,129 | |||||
Cash and Receivables (Net) | .7% | 30,761,722 | |||||
Net Assets | 100.0% | 4,157,698,851 |
ADR—American Depository Receipt
a Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the respective investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Health Care | 17.2 |
Consumer Discretionary | 14.3 |
Industrials | 13.7 |
Information Technology | 13.5 |
Consumer Staples | 11.8 |
Materials | 8.6 |
Energy | 5.8 |
Utilities | 3.6 |
Real Estate | 3.6 |
Financials | 3.0 |
Money Market Investment | 2.9 |
Telecommunication Services | 1.3 |
99.3 |
† Based on net assets.
See notes to financial statements.
8
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Registered Investment Company | Value | Purchases ($) | Sales ($) | Value | Net | Dividends/ |
Dreyfus Institutional Preferred Government Plus Money Market Fund | 90,621,850 | 182,470,602 | 155,389,307 | 117,703,145 | 2.9 | 666,865 |
See notes to financial statements.
9
STATEMENT OF FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS May 31, 2018 (Unaudited)
Counterparty/ Purchased | Purchased Currency | Currency | Sold | Settlement Date | Unrealized (Depreciation)($) |
National Australia Bank | |||||
United States Dollar | 1,750,052 | Euro | 1,501,066 | 6/1/18 | (4,760) |
United States Dollar | 2,258,502 | Hong Kong Dollars | 17,720,205 | 6/1/18 | (806) |
United States Dollar | 2,498,956 | Hong Kong Dollars | 19,613,560 | 6/4/18 | (1,753) |
United States Dollar | 2,279,975 | Japanese Yen | 248,241,979 | 6/1/18 | (1,975) |
United States Dollar | 1,592,964 | Japanese Yen | 173,398,737 | 6/4/18 | (994) |
United States Dollar | 3,484,636 | Japanese Yen | 379,563,586 | 6/5/18 | (4,481) |
Gross Unrealized Depreciation | (14,769) |
See notes to financial statements.
10
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments: |
|
|
| |||
Unaffiliated issuers | 2,819,247,247 |
| 4,009,233,984 |
| ||
Affiliated issuers |
| 117,703,145 |
| 117,703,145 |
| |
Cash |
|
|
|
| 860,100 |
|
Cash denominated in foreign currency |
|
| 1,750,616 |
| 1,754,811 |
|
Receivable for investment securities sold |
| 15,022,502 |
| |||
Tax reclaim receivable |
| 10,926,261 |
| |||
Dividends receivable |
| 9,001,079 |
| |||
Receivable for shares of Common Stock subscribed |
| 831,166 |
| |||
Prepaid expenses |
|
|
|
| 63,217 |
|
|
|
|
|
| 4,165,396,265 |
|
Liabilities ($): |
|
|
|
| ||
Due to The Dreyfus Corporation and affiliates—Note 3(c) |
|
|
| 3,232,607 |
| |
Payable for investment securities purchased |
| 2,897,330 |
| |||
Payable for shares of Common Stock redeemed |
| 1,360,238 |
| |||
Unrealized depreciation on forward foreign |
| 14,769 |
| |||
Accrued expenses |
|
|
|
| 192,470 |
|
|
|
|
|
| 7,697,414 |
|
Net Assets ($) |
|
| 4,157,698,851 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 3,012,343,679 |
|
Accumulated undistributed investment income—net |
| 33,641,764 |
| |||
Accumulated net realized gain (loss) on investments |
|
|
|
| (78,084,323) |
|
Accumulated net unrealized appreciation (depreciation) |
| 1,189,797,731 |
| |||
Net Assets ($) |
|
| 4,157,698,851 |
|
Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
|
Net Assets ($) | 29,290,594 | 13,586,193 | 2,010,716,056 | 2,104,106,008 |
|
Shares Outstanding | 1,573,567 | 741,133 | 107,462,616 | 113,739,297 |
|
Net Asset Value Per Share ($) | 18.61 | 18.33 | 18.71 | 18.50 |
|
See notes to financial statements. |
11
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $6,503,297 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 52,742,391 |
| ||
Affiliated issuers |
|
| 666,865 |
| ||
Interest |
|
| 15,682 |
| ||
Total Income |
|
| 53,424,938 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 17,703,960 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 340,278 |
| ||
Custodian fees—Note 3(c) |
|
| 208,900 |
| ||
Directors’ fees and expenses—Note 3(d) |
|
| 188,147 |
| ||
Professional fees |
|
| 54,337 |
| ||
Distribution fees—Note 3(b) |
|
| 52,852 |
| ||
Loan commitment fees—Note 2 |
|
| 45,692 |
| ||
Registration fees |
|
| 41,608 |
| ||
Prospectus and shareholders’ reports |
|
| 33,976 |
| ||
Miscellaneous |
|
| 73,628 |
| ||
Total Expenses |
|
| 18,743,378 |
| ||
Less—reduction in fees due to earnings credits—Note 3(c) |
|
| (640) |
| ||
Net Expenses |
|
| 18,742,738 |
| ||
Investment Income—Net |
|
| 34,682,200 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments and foreign currency transactions | (68,219,777) |
| ||||
Net realized gain (loss) on forward foreign currency exchange contracts | (45,093) |
| ||||
Net Realized Gain (Loss) |
|
| (68,264,870) |
| ||
Net unrealized appreciation (depreciation) on investments |
|
| 91,285,013 |
| ||
Net unrealized appreciation (depreciation) on |
|
| (14,712) |
| ||
Net Unrealized Appreciation (Depreciation) |
|
| 91,270,301 |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 23,005,431 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 57,687,631 |
| |||
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 34,682,200 |
|
|
| 44,099,386 |
| |
Net realized gain (loss) on investments |
| (68,264,870) |
|
|
| 81,617,955 |
| ||
Net unrealized appreciation (depreciation) |
| 91,270,301 |
|
|
| 732,031,088 |
| ||
Net Increase (Decrease) in Net Assets | 57,687,631 |
|
|
| 857,748,429 |
| |||
Distributions to Shareholders from ($): |
| ||||||||
Investment income—net: |
|
|
|
|
|
|
|
| |
Class A |
|
| (208,298) |
|
|
| (490,638) |
| |
Class I |
|
| (20,940,163) |
|
|
| (18,172,219) |
| |
Class Y |
|
| (22,653,914) |
|
|
| (20,844,125) |
| |
Total Distributions |
|
| (43,802,375) |
|
|
| (39,506,982) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 3,312,799 |
|
|
| 9,237,207 |
| |
Class C |
|
| 598,935 |
|
|
| 2,309,283 |
| |
Class I |
|
| 160,471,118 |
|
|
| 260,549,013 |
| |
Class Y |
|
| 104,630,269 |
|
|
| 383,037,695 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 179,438 |
|
|
| 458,846 |
| |
Class I |
|
| 19,468,038 |
|
|
| 16,849,413 |
| |
Class Y |
|
| 11,153,697 |
|
|
| 11,630,754 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (3,765,813) |
|
|
| (46,838,849) |
| |
Class C |
|
| (1,986,837) |
|
|
| (4,035,152) |
| |
Class I |
|
| (143,996,523) |
|
|
| (222,641,336) |
| |
Class Y |
|
| (102,451,747) |
|
|
| (353,027,631) |
| |
Increase (Decrease) in Net Assets | 47,613,374 |
|
|
| 57,529,243 |
| |||
Total Increase (Decrease) in Net Assets | 61,498,630 |
|
|
| 875,770,690 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 4,096,200,221 |
|
|
| 3,220,429,531 |
| |
End of Period |
|
| 4,157,698,851 |
|
|
| 4,096,200,221 |
| |
Undistributed investment income—net | 33,641,764 |
|
|
| 42,761,939 |
|
13
STATEMENT OF CHANGES IN NET ASSETS (continued)
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 177,064 |
|
|
| 548,527 |
| |
Shares issued for distributions reinvested |
|
| 9,637 |
|
|
| 30,961 |
| |
Shares redeemed |
|
| (202,310) |
|
|
| (2,985,380) |
| |
Net Increase (Decrease) in Shares Outstanding | (15,609) |
|
|
| (2,405,892) |
| |||
Class Ca |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 32,093 |
|
|
| 139,978 |
| |
Shares redeemed |
|
| (108,395) |
|
|
| (251,886) |
| |
Net Increase (Decrease) in Shares Outstanding | (76,302) |
|
|
| (111,908) |
| |||
Class Ia |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 8,514,346 |
|
|
| 15,760,725 |
| |
Shares issued for distributions reinvested |
|
| 1,041,628 |
|
|
| 1,133,114 |
| |
Shares redeemed |
|
| (7,686,871) |
|
|
| (13,441,816) |
| |
Net Increase (Decrease) in Shares Outstanding | 1,869,103 |
|
|
| 3,452,023 |
| |||
Class Ya |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 5,628,413 |
|
|
| 23,686,135 |
| |
Shares issued for distributions reinvested |
|
| 603,555 |
|
|
| 790,670 |
| |
Shares redeemed |
|
| (5,517,531) |
|
|
| (22,002,667) |
| |
Net Increase (Decrease) in Shares Outstanding | 714,437 |
|
|
| 2,474,138 |
| |||
aDuring the period ended May 31, 2018, 385,862 Class Y shares representing $7,146,135 were exchanged for 381,512 Class I shares, 1,261 Class C shares representing $22,836 were automatically exchanged for 1,239 Class A shares and during the period ended November 30, 2017, 54,975 Class A shares representing $928,287 were exchanged for 54,686 Class I shares, 3,061,109 Class I shares representing $46,356,004 were exchanged for 3,093,641 Class Y shares. | |||||||||
See notes to financial statements. |
14
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class A Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, | 18.51 | 14.77 | 14.66 | 15.15 | 15.57 | 14.13 |
Investment Operations: | ||||||
Investment income—neta | .12 | .10 | .13 | .16 | .19 | .17 |
Net realized and unrealized | .11 | 3.77 | .10 | (.50) | (.43) | 1.46 |
Total from | .23 | 3.87 | .23 | (.34) | (.24) | 1.63 |
Distributions: | ||||||
Dividends from | (.13) | (.13) | (.12) | (.15) | (.18) | (.19) |
Net asset value, end of period | 18.61 | 18.51 | 14.77 | 14.66 | 15.15 | 15.57 |
Total Return (%)b | 1.24c | 26.39 | 1.62 | (2.27) | (1.57) | 11.65 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.23d | 1.26 | 1.27 | 1.26 | 1.29 | 1.30 |
Ratio of net expenses | 1.23d | 1.26 | 1.27 | 1.26 | 1.29 | 1.30 |
Ratio of net investment income | 1.34d | .64 | .89 | 1.08 | 1.26 | 1.14 |
Portfolio Turnover Rate | 2.60c | 12.49 | 10.65 | 16.52 | 12.49 | 2.58 |
Net Assets, | 29,291 | 29,414 | 59,019 | 85,618 | 142,259 | 284,575 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class C Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, | 18.17 | 14.49 | 14.37 | 14.84 | 15.26 | 13.86 |
Investment Operations: | ||||||
Investment income—neta | .05 | .02 | .02 | .04 | .07 | .06 |
Net realized and unrealized | .11 | 3.66 | .10 | (.48) | (.42) | 1.43 |
Total from | .16 | 3.68 | .12 | (.44) | (.35) | 1.49 |
Distributions: | ||||||
Dividends from | - | - | - | (.03) | (.07) | (.09) |
Net asset value, end of period | 18.33 | 18.17 | 14.49 | 14.37 | 14.84 | 15.26 |
Total Return (%)b | .88c | 25.40 | .83 | (2.97) | (2.28) | 10.78 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.96d | 2.02 | 2.04 | 2.03 | 2.03 | 2.04 |
Ratio of net expenses | 1.96d | 2.02 | 2.04 | 2.03 | 2.03 | 2.04 |
Ratio of net investment income | .58d | .10 | .12 | .30 | .50 | .42 |
Portfolio Turnover Rate | 2.60c | 12.49 | 10.65 | 16.52 | 12.49 | 2.58 |
Net Assets, | 13,586 | 14,852 | 13,465 | 16,952 | 24,805 | 35,905 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
16
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class I Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, | 18.64 | 14.88 | 14.79 | 15.31 | 15.73 | 14.26 |
Investment Operations: | ||||||
Investment income—neta | .16 | .20 | .18 | .20 | .26 | .23 |
Net realized and unrealized | .11 | 3.74 | .10 | (.49) | (.45) | 1.48 |
Total from | .27 | 3.94 | .28 | (.29) | (.19) | 1.71 |
Distributions: | ||||||
Dividends from | (.20) | (.18) | (.19) | (.23) | (.23) | (.24) |
Net asset value, end of period | 18.71 | 18.64 | 14.88 | 14.79 | 15.31 | 15.73 |
Total Return (%) | 1.43b | 26.81 | 1.92 | (1.90) | (1.24) | 12.13 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .91c | .93 | .94 | .94 | .93 | .92 |
Ratio of net expenses | .91c | .93 | .94 | .94 | .93 | .92 |
Ratio of net investment income | ||||||
to average net assets | 1.65c | 1.20 | 1.21 | 1.33 | 1.70 | 1.54 |
Portfolio Turnover Rate | 2.60b | 12.49 | 10.65 | 16.52 | 12.49 | 2.58 |
Net Assets, | 2,010,716 | 1,968,366 | 1,520,360 | 1,560,084 | 2,132,444 | 2,930,169 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
17
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
May 31, 2018 | Year Ended November 30, | |||||
Class Y Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013a |
Per Share Data ($): | ||||||
Net asset value, | 18.43 | 14.72 | 14.63 | 15.15 | 15.72 | 14.49 |
Investment Operations: | ||||||
Investment income—netb | .16 | .20 | .19 | .22 | .14 | .06 |
Net realized and unrealized | .11 | 3.70 | .09 | (.51) | (.48) | 1.17 |
Total from Investment Operations | .27 | 3.90 | .28 | (.29) | (.34) | 1.23 |
Distributions: | ||||||
Dividends from | (.20) | (.19) | (.19) | (.23) | (.23) | - |
Net asset value, end of period | 18.50 | 18.43 | 14.72 | 14.63 | 15.15 | 15.72 |
Total Return (%) | 1.47c | 26.80 | 1.97 | (1.89) | (2.20) | 8.49c |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .88d | .91 | .91 | .91 | .91 | .91d |
Ratio of net expenses | .88d | .91 | .91 | .91 | .91 | .91d |
Ratio of net investment income | 1.69d | 1.22 | 1.27 | 1.44 | .90 | .93d |
Portfolio Turnover Rate | 2.60c | 12.49 | 10.65 | 16.52 | 12.49 | 2.58 |
Net Assets, | 2,104,106 | 2,083,569 | 1,627,586 | 1,625,626 | 1,105,489 | 1 |
a From July 1, 2013 (commencement of initial offering) to November 30, 2013.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.
18
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 six 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 of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Walter Scott & Partners Limited (“Walter Scott”), a wholly-owned 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 700 million shares of $.001 par value Common Stock. The fund currently has authorized five classes of shares: Class A (100 million shares authorized), Class C (100 million shares authorized), Class I (200 million shares authorized), Class T (100 million shares authorized) and Class Y (200 million shares authorized). Class A and Class T 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 C shares automatically convert to Class A shares ten years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. As of the date of this report, the fund did not offer Class T shares for purchase. 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 by the
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
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:
20
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. For open short positions, asked prices are 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 generally categorized within Level 1 of the fair value hierarchy.
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. These securities are generally categorized within Level 2 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 ADRs and 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 accurately reflect 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 Company’s Board of Directors (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 such securities are generally categorized within Level 3 of the fair value hierarchy.
Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate and are generally categorized within Level 2 of the fair value hierarchy.
The following is a summary of the inputs used as of May 31, 2018 in valuing the fund’s investments:
Level 1- | Level 2 - | Level 3- | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities - | 115,415,010 | 3,893,818,974† | - | 4,009,233,984 |
Registered Investment Company | 117,703,145 | - | - | 117,703,145 |
Liabilities ($) | ||||
Other Financial Instruments: | ||||
Forward Foreign Currency | - | (14,769) | - | (14,769) |
† Securities classified within Level 2 at period end as the values were determined pursuant to the fund’s fair valuation procedures.
†† Amount shown represents unrealized (depreciation) at period end.
At May 31, 2018, the amount of securities transferred between levels equals fair value of exchange traded equity securities reported as Level 2 in the table above. At November 30, 2017, $3,810,967,035 of exchange traded foreign equity securities were classified within Level 2 of the fair value hierarchy pursuant to the fund’s fair valuation procedures. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(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 the 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 and losses arise from changes in the value of assets and liabilities other than investments
22
resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also 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.
(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act.
(e) Risk: 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.
(f) Dividends and distributions to shareholders: Dividends and distributions 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.
(g) 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, 2018, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended May 31, 2018, the fund did not incur any interest or penalties.
23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Each tax year in the three-year period ended November 30, 2017 remains subject to examination by the Internal Revenue Service and state taxing authorities.
Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Furthermore, post-enactment capital loss carryovers retain their character as either short-term or long-term capital losses rather than short-term as they were under previous statute. The 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years prior to the effective date of the 2010 Act (“pre-enactment losses”). As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.
The fund has an unused capital loss carryover of $9,649,791 available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to November 30, 2017. If not applied, $9,649,791 of the carryover expires in fiscal year 2019.
The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2017 was as follows: ordinary income $39,506,982. 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 an $830 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, 2018, 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 .85% of the value of the fund’s average daily net assets and is payable monthly.
24
Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott a monthly fee at an annual rate of .41% of the value of the fund’s average daily net assets.
During the period ended May 31, 2018, the Distributor retained $1,196 from commissions earned on sales of the fund’s Class A shares and $533 from CDSC fees on redemptions of the fund’s Class C 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, 2018, Class C shares were charged $52,852 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, 2018, Class A and Class C shares were charged $37,625 and $17,617, 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 and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended May 31, 2018, the fund was charged $7,361 for transfer agency services and $603 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were offset by earnings credits of $603.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended May 31, 2018, the fund was charged $208,900 pursuant to the custody agreement. These fees were partially offset by earnings credits of $37.
During the period ended May 31, 2018, the fund was charged $6,320 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $3,014,981, Distribution Plan fees $8,753, Shareholder Services Plan fees $9,276, custodian fees $190,331, Chief Compliance Officer fees $5,267 and transfer agency fees $3,999.
(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, 2018, amounted to $105,452,737 and $121,538,149, respectively.
Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. The fund enters into International Swaps and Derivatives Association, Inc. Master Agreements or similar agreements (collectively, “Master Agreements”) with its over-the-counter (“OTC”) derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under a Master Agreement, the fund may offset with the counterparty certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment in the event of default or termination.
Each type of derivative instrument that was held by the fund during the period ended May 31, 2018 is discussed below.
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
26
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 or unrealized gains or losses which occurred during the period are 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 generally limited to the unrealized gain on each open contract. This risk may be mitigated by Master Agreements, if any, between the fund and the counterparty and the posting of collateral, if any, by the counterparty to the fund to cover the fund’s exposure to the counterparty. Forward contracts open at May 31, 2018 are set forth in the Statement of Forward Foreign Currency Exchange Contracts.
The provisions of ASC Topic 210 “Disclosures about Offsetting Assets and Liabilities” require disclosure on the offsetting of financial assets and liabilities. These disclosures are required for certain investments, including derivative financial instruments subject to Master Agreements which are eligible for offsetting in the Statement of Assets and Liabilities and require the fund to disclose both gross and net information with respect to such investments. For financial reporting purposes, the fund does not offset derivative assets and derivative liabilities that are subject to Master Agreements in the Statement of Assets and Liabilities.
At May 31, 2018, derivative assets and liabilities (by type) on a gross basis are as follows:
Derivative Financial Instruments: |
| Assets ($) |
| Liabilities ($) |
|
Forward contracts | - | (14,769) | |||
Total gross amount of derivative | |||||
assets and liabilities in the | |||||
Statement of Assets and Liabilities | - | (14,769) | |||
Derivatives not subject to | |||||
Master Agreements | - | - | |||
Total gross amount of assets | |||||
and liabilities subject to | |||||
Master Agreements | - | (14,769) |
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The following table presents derivative liabilities net of amounts available for offsetting under Master Agreements and net of related collateral received or pledged, if any, as of May 31, 2018:
Financial | ||||||
Instruments | ||||||
and Derivatives | ||||||
Gross Amount of | Available | Collateral | Net Amount of | |||
Counterparty | Liabilities ($) | 1 | for Offset ($) | Pledged ($) |
| Liabilities ($) |
National | (14,769) | - | - | (14,769) | ||
1 Absent a default event or early termination, OTC derivative assets and liabilities are presented at gross amounts and are not offset in the Statement of Assets and Liabilities. |
The following summarizes the average market value of derivatives outstanding during the period ended May 31, 2018:
|
| Average Market Value ($) |
Forward contracts | 5,294,464 | |
At May 31, 2018, accumulated net unrealized appreciation on investments inclusive of derivative contracts was $1,189,797,731, consisting of $1,260,574,172 gross unrealized appreciation and $70,776,441 gross unrealized depreciation.
At May 31, 2018, the cost of investments inclusive of derivative contracts for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
28
NOTES
29
International Stock Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Walter Scott & Partners Limited
(Walter Scott)
One Charlotte Square
Edinburgh, Scotland, UK
Custodian
The Bank of New York Mellon
225 Liberty Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Ticker Symbols: | Class A: DISAX Class C: DISCX Class I: DISRX Class Y: DISYX |
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (phone 1-800-SEC-0330 for information).
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
© 2018 MBSC Securities Corporation |
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.
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) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Strategic Funds, Inc.
By: /s/ Bradley J. Skapyak
Bradley J. Skapyak
President
Date: July 27, 2018
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 27, 2018
By: /s/ James Windels
James Windels
Treasurer
Date: July 27, 2018
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)