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 811-6490
Dreyfus Premier Investment Funds, Inc. (Exact name of Registrant as specified in charter) |
c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 (Address of principal executive offices) (Zip code) |
Michael A. Rosenberg, Esq. 200 Park Avenue New York, New York 10166 (Name and address of agent for service) |
Registrant's telephone number, including area code: | (212) 922-6000 | |
Date of fiscal year end: | 12/31 | |
Date of reporting period: | 6/30/09 |
The following N-CSR relates only to the Registrant’s series listed below and does not affect the other series of the Registrant, which has a different fiscal year end and, therefore, different N-CSR reporting requirements. A separate N-CSR Form will be filed for this series, as appropriate.
DREYFUS PREMIER INVESTMENT FUNDS, INC.
- | Dreyfus Enhanced Income Fund |
- | Dreyfus Global Real Estate Securities Fund |
- | Dreyfus Large Cap Equity Fund |
- | Dreyfus Large Cap Growth Fund |
- | Dreyfus Large Cap Value Fund |
FORM N-CSR |
Item 1. Reports to Stockholders.
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 managers only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value
Contents | |
THE FUND | |
2 | A Letter from the Chairman and CEO |
3 | Discussion of Fund Performance |
4 | Understanding Your Fund’s Expenses |
4 | Comparing Your Fund’s Expenses With Those of Other Funds |
5 | Statement of Investments |
7 | Statement of Assets and Liabilities |
8 | Statement of Operations |
9 | Statement of Changes in Net Assets |
11 | Financial Highlights |
13 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
The Fund |
Dreyfus Enhanced Income Fund |
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We present this last semiannual report for Dreyfus Enhanced Income Fund, covering the six-month period from January 1, 2009, through June 30, 2009.
The severe recession and banking crisis that dominated the financial markets at the start of 2009 appear to have moderated as of mid-year. Previously frozen credit markets have thawed, giving businesses access to the capital they need to grow. After reaching multi-year lows early in the year, higher-yielding segments of the bond market staged an impressive rally, while U.S.Treasury securities gave back some of their 2008 gains. While the U.S. economy remains weak overall, we have seen encouraging evidence of potential recovery, including a recovering housing market and improvements within certain manufacturing sectors. Meanwhile, inflation has remained tame in the face of high unemployment and unused manufacturing capacity.
Although these developments give us reasons for optimism, we remain cautious due to the speed and magnitude of the corporate bond market’s 2009 rebound. Indeed, the market’s advance was fueled more by investors’ renewed appetites for risk than improving business fundamen-tals.We would prefer to see a steadier rise in asset prices supported by more concrete economic data, as the rapid rise increases the possibility that profit-taking could move the market lower. In uncertain markets such as this one, even the most seasoned investors can benefit from professional counsel. To determine how your investments should be positioned for the challenges and opportunities that lie ahead, we continue to stress that you talk regularly with your financial advisor. For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the Portfolio Managers.
Thank you for your continued confidence and support.
Jonathan R. Baum Chairman and Chief Executive Officer The Dreyfus Corporation |
2 |
July 15, 2009 |
DISCUSSION OF FUND PERFORMANCE
For the period of January 1, 2009, through June 30, 2009, as provided by Laurie Carroll and Theodore Bair, Jr., Portfolio Managers
Fund and Market Performance Overview
For the six-month period ended June 30, 2009, Dreyfus Enhanced Income Fund’s Institutional Class shares achieved a total return of –3.28% and the fund’s Investor shares achieved a total return of –2.80%.1 In comparison, the Merrill Lynch U.S. Dollar LIBOR 3-Month Constant Maturity Index, the fund’s benchmark, achieved a total return of 0.73%.2
During the reporting report, the U.S. bond market remained volatile due to the lingering effects of the global financial crisis and recession. However, continued declines among higher-yielding bonds early in the reporting period were offset by a springtime rally as investors grew more comfortable with credit risk. As a result, the fund produced returns that were lower than its benchmark.
Lastly, on August 12, 2009, the fund was liquidated and subsequently ceased operations.
August 13, 2009
1 | Total return includes reinvestment of dividends and any capital gains paid, and, for the fund’s Investor shares for periods prior to September 12, 2008, do not take into consideration the maximum initial sales charge imposed on the predecessor fund’s Class A 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. Return figures provided reflect the absorption of certain fund expenses by The Dreyfus Corporation pursuant to an agreement in effect through the fund’s liquidation. Had these expenses not been absorbed, the fund’s returns would have been lower. | |
2 | SOURCE: BLOOMBERG — Reflects reinvestment of dividends and, where applicable, capital gain distributions.The Merrill Lynch U.S. Dollar LIBOR 3-Month Constant Maturity Index is an unmanaged index that measures current interest rates on 3-month constant maturity dollar- denominated deposits.The index does not reflect fees and expenses to which the fund is subject. |
The Fund 3
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 Enhanced Income Fund from January 1, 2009 to June 30, 2009. 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 June 30, 2009 | ||
Institutional | Investor | |
Expenses paid per $1,000† | $ 1.80 | $ 3.18 |
Ending value (after expenses) | $967.20 | $972.00 |
COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment | ||
assuming a hypothetical 5% annualized return for the six months ended June 30, 2009 | ||
Institutional | Investor | |
Expenses paid per $1,000† | $ 1.86 | $ 3.26 |
Ending value (after expenses) | $1,022.96 | $1,021.57 |
† Expenses are equal to the fund’s annualized expense ratio of .37% for Institutional Shares and ..65% for Investor shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
4
STATEMENT OF INVESTMENTS | ||||
June 30, 2009 (Unaudited) | ||||
Coupon | Maturity | Principal | ||
Bonds and Notes—3.0% | Rate (%) | Date | Amount ($) | Value ($) |
U.S. Government Agencies | ||||
Federal National Mortgage | ||||
Association, Notes | ||||
(cost $149,756) | 2.00 | 1/9/12 | 150,000 a | 151,590 |
Short-Term Investments—90.4% | ||||
Commerical Paper—1.9% | ||||
San Paolo IMI US Financial | ||||
0.53%, 7/20/09 | 100,000 | 99,972 | ||
U.S. Government Agencies—88.5% | ||||
Federal Home Loan Banks, Discount | ||||
Notes, 0.16%, 7/8/09 | 2,300,000 | 2,299,926 | ||
Federal Home Loan Banks, Discount | ||||
Notes, 0.73%, 4/19/10 | 1,500,000 | 1,491,118 | ||
Federal National Mortgage | ||||
Association, Discount Notes, 1.25%, 7/1/09 | 450,000 a | 450,000 | ||
Federal Natonal Mortgage | ||||
Association, Discount Notes, 1.15%, 12/1/09 | 280,000 a | 278,632 | ||
4,519,676 | ||||
Total Short-Term Investments | ||||
(cost $4,619,648) | 4,619,648 |
The Fund 5
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Other Investments—6.5% | Shares | Value ($) |
Registered Investment Company; | ||
Dreyfus Institutional Preferred | ||
Plus Money Market Fund | ||
(cost $330,000) | 330,000 b | 330,000 |
Total Investments (cost $5,099,404) | 99.9% | 5,101,238 |
Cash and Receivables (Net) | .1% | 7,167 |
Net Assets | 100.0% | 5,108,405 |
a On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Federal National Mortgage |
Association and Federal Home Loan Mortgage Corporation into conservatorship with FHFA as the conservator. |
As such, the FHFA will oversee the continuing affairs of these companies. |
b Investment in affiliated money market mutual fund. |
Portfolio Summary (Unaudited)† | |||
Value (%) | Value (%) | ||
Short-Term/ | U.S. Government & Agencies | 3.0 | |
Money Market Investments | 96.9 | 99.9 | |
† Based on net assets. | |||
See notes to financial statements. |
6
STATEMENT OF ASSETS AND LIABILITIES June 30, 2009 (Unaudited) |
Cost | Value | |
Assets ($): | ||
Investments in securities—See Statement of Investments: | ||
Unaffiliated issuers | 4,769,404 | 4,771,238 |
Affiliated issuers | 330,000 | 330,000 |
Cash | 20,231 | |
Dividends and Interest receivable | 1,441 | |
Prepaid expenses | 17,791 | |
Due from The Dreyfus Corporation and affiliates—Note 3(b) | 5,509 | |
5,146,210 | ||
Liabilities ($): | ||
Payable for shares of Common Stock redeemed | 6 | |
Accrued expenses | 37,799 | |
37,805 | ||
Net Assets ($) | 5,108,405 | |
Composition of Net Assets ($): | ||
Paid-in capital | 14,870,014 | |
Accumulated distributions in excess of | ||
investment income—net | (406) | |
Accumulated net realized gain (loss) on investments | (9,763,037) | |
Accumulated gross unrealized appreciation on investments | 1,834 | |
Net Assets ($) | 5,108,405 | |
Net Asset Value Per Share | ||
Institutional Shares | Investor Shares | |
Net Assets ($) | 5,082,856 | 25,549 |
Shares Outstanding | 3,152,800 | 15,789 |
Net Asset Value Per Share ($) | 1.61 | 1.62 |
See notes to financial statements. |
The Fund 7
STATEMENT OF OPERATIONS | |
Six Months Ended June 30, 2009 (Unaudited) | |
Investment Income ($): | |
Income: | |
Interest | 36,091 |
Cash dividends; | |
Affiliated issuers | 739 |
Total Income | 36,830 |
Expenses: | |
Management fee—Note 3(a) | 5,828 |
Auditing fees | 21,272 |
Registration fees | 7,800 |
Prospectus and shareholders’ reports | 5,170 |
Directors’ fees and expenses—Note 3(c) | 815 |
Loan commitment fees—Note 2 | 57 |
Shareholder servicing costs—Note 3(b) | 32 |
Miscellaneous | 5,032 |
Total Expenses | 46,006 |
Less—expense reimbursement from The Dreyfus | |
Corporation due to undertaking—Note 3(a) | (33,146) |
Less—reduction in fees due to earnings credits—Note 1(b) | (61) |
Net Expenses | 12,799 |
Investment Income—Net | 24,031 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments | (1,494,998) |
Net unrealized appreciation (depreciation) on investments | 1,281,098 |
Net Realized and Unrealized Gain (Loss) on Investments | (213,900) |
Net (Decrease) in Net Assets Resulting from Operations | (189,869) |
See notes to financial statements. |
8
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited) | December 31, 2008a,b | |
Operations ($): | ||
Investment income—net | 24,031 | 785,375 |
Net realized gain (loss) on investments | (1,494,998) | (2,434,358) |
Net unrealized appreciation | ||
(depreciation) on investments | 1,281,098 | (479,951) |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | (189,869) | (2,128,934) |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Institutional Shares | (24,385) | (804,662) |
Investor Shares | (52) | (43,561) |
Total Dividends | (24,437) | (848,223) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Institutional Shares | 172,590 | 14,845,975 |
Investor Shares | — | 34,806 |
Dividends reinvested: | ||
Institutional Shares | 15,401 | 516,643 |
Investor Shares | 33 | 37,400 |
Cost of shares redeemed: | ||
Institutional Shares | (3,587,345) | (40,946,772) |
Investor Shares | (1,450) | (1,739,439) |
Increase (Decrease) in Net Assets from | ||
Capital Stock Transactions | (3,400,771) | (27,251,387) |
Total Increase (Decrease) in Net Assets | (3,615,077) | (30,228,544) |
Net Assets ($): | ||
Beginning of Period | 8,723,482 | 38,952,026 |
End of Period | 5,108,405 | 8,723,482 |
Accumulated distributions in | ||
excess of investment income—net | (406) | — |
The Fund 9
STATEMENT OF CHANGES IN NET ASSETS (continued)
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited) | December 31, 2008a,b | |
Capital Share Transactions: | ||
Institutional Shares | ||
Shares sold | 104,484 | 8,200,191 |
Shares issued for dividends reinvested | 33,955 | 288,194 |
Shares redeemed | (2,199,084) | (22,756,542) |
Net Increase (Decrease) in Shares Outstanding | (2,060,645) | (14,268,157) |
Investor Shares | ||
Shares sold | — | 21,497 |
Shares issued for dividends reinvested | 865 | 20,637 |
Shares redeemed | (843) | (1,001,452) |
Net Increase (Decrease) in Shares Outstanding | 22 | (959,318) |
a | The fund commenced offering two classes of shares on the close of business September 12, 2008.The existing shares were redesignated. |
b | Represents information for the funds’s predecessor, BNY Hamilton Enhanced Income Fund through September 12, 2008. |
See notes to financial statements. |
10
FINANCIAL HIGHLIGHTS
Please note that the financial highlights information in the following tables for the fund’s Institutional and Investor shares represents the financial highlights of the Institutional and Class A shares, respectively, of the fund’s predecessor, BNY Hamilton Enhanced Income Fund (“Enhanced Income Fund”), before the fund commenced operations as of the close of business on September 12, 2008, and represents the performance of the fund’s Institutional and Investor shares thereafter. Before the fund commenced operations, all of the assets of the Enhanced Income Fund were transferred to the fund in exchange for Institutional and Investor shares of the fund in a tax-free reorganization. Total return shows how much an investment in the fund would have increased (or decreased), assuming all dividends and distributions were reinvested.These figures have been derived from the fund’s and the fund’s predecessor’s financial statements.
Six Months Ended | ||||||
June 30, 2009 | Year Ended December 31, | |||||
Institutional Shares† | (Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 1.67 | 1.90 | 1.98 | 1.98 | 1.98 | 2.00 |
Investment Operations: | ||||||
Investment income—neta | .01 | .07 | .10 | .09 | .05 | .03 |
Net realized and unrealized | ||||||
gain (loss) on investments | (.06) | (.23) | (.08) | — | .01 | (.02) |
Total from Investment Operations | (.05) | (.16) | .02 | .09 | .06 | .01 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | (.01) | (.07) | (.10) | (.09) | (.06) | (.03) |
Net asset value, end of period | 1.61 | 1.67 | 1.90 | 1.98 | 1.98 | 1.98 |
Total Return (%) | (3.28)b | (8.69) | 1.09 | 4.77 | 2.88 | .76 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | 1.34c | .80 | .33 | .34 | .29 | .27 |
Ratio of net expenses | ||||||
to average net assets | .37c | .33 | .25 | .25 | .25 | .25 |
Ratio of net investment income | ||||||
to average net assets | .70c | 3.63 | 5.24 | 4.67 | 2.90 | 1.51 |
Portfolio Turnover Rate | 34.04b | 72 | 104 | 126 | 51 | 105 |
Net Assets, end of period | ||||||
($ x 1,000) | 5,083 | 8,697 | 37,092 | 65,511 | 87,151 | 324,670 |
† Represents information for Institutional Shares of the fund’s predecessor, Enhanced Income Fund through |
September 12, 2008. |
a Based on average shares outstanding at each month end. |
b Not annualized. |
c Annualized. |
See notes to financial statements. |
The Fund 11
FINANCIAL HIGHLIGHTS (continued) |
Six Months Ended | ||||||
June 30, 2009 | Year Ended December 31, | |||||
Investor Shares† | (Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 1.67 | 1.91 | 1.98 | 1.98 | 1.99 | 2.00 |
Investment Operations: | ||||||
Investment income—neta | .00b | .06 | .10 | .09 | .05 | .03 |
Net realized and unrealized | ||||||
gain (loss) on investments | (.05) | (.24) | (.07) | — | (.01) | (.01) |
Total from Investment Operations | (.05) | (.18) | .03 | .09 | .04 | .02 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | — | (.06) | (.10) | (.09) | (.05) | (.03) |
Net asset value, end of period | 1.62 | 1.67 | 1.91 | 1.98 | 1.98 | 1.99 |
Total Return (%)c | (2.80)d | (9.49) | 1.36 | 4.50 | 2.10 | 1.02 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | 1.16e | .62 | .58 | .59 | .54 | .52 |
Ratio of net expenses | ||||||
to average net assets | .65e | .59 | .50 | .50 | .50 | .50 |
Ratio of net investment income | ||||||
to average net assets | .36e | 3.32 | 4.97 | 4.43 | 2.92 | 1.30 |
Portfolio Turnover Rate | 34.04d | 72 | 104 | 126 | 51 | 105 |
Net Assets, | ||||||
end of period ($ x 1,000) | 26 | 26 | 1,860 | 2,860 | 2,473 | 7,966 |
† Represents information for Class A Shares of the fund’s predecessor, Enhanced Income Fund through September 12, 2008. |
a Based on average shares outstanding at each month end. |
b Amount represents less than $.01 per share. |
c Exclusive of sales charge. |
d Not annualized. |
e Annualized. |
See notes to financial statements. |
12
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Enhanced Income Fund (the “fund”) is a separate diversified series of Dreyfus Premier Investment Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is high current income with preservation of capital and maintenance of liquidity.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.
As of the close of business on September 12, 2008, pursuant to an Agreement and Plan of Reorganization previously approved by the fund’s Board of Directors, all of the assets, subject to the liabilities, of BNY Hamilton Enhanced Income Fund (“Enhanced Income Fund”), a series of BNY Hamilton Funds, were transferred to the fund in exchange for corresponding class of shares of Common Stock of the fund of equal value. Shareholders of Institutional shares and Class A of Hamilton Enhanced Income Fund received Institutional shares and Investor shares of the fund, respectively, in each case in an amount equal to the aggregate net asset value of their investment in Enhanced Income Fund at the time of the exchange.The net asset value of the fund’s shares on the close of business September 12, 2008, after the reorganization was $1.74 for Institutional shares and $1.75 for Investor shares, and a total of 7,358,435 Institutional shares and 787,846 Investor shares, representing net assets of $14,198,125 (including $787,393 net unrealized depreciation on investments) were issued to shareholders of Hamilton Enhanced Income Fund shareholders in the exchange. The exchange was a tax-free event to shareholders. Enhanced Income Fund is the Accounting Survivor and its historical performance is presented for periods through September 12, 2008.
The Fund 13
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the funds’ shares, which are sold to the public without a sales charge.The fund is authorized to issue 50 million shares of $.001 Common Stock in each of the following classes of shares:Institutional and Investor.Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
As of June 30, 2009, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held 5,714 Investor shares of the fund.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations: expenses which are applicable to all series are allocated among them on a pro rata basis.
The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities excluding short-term investments (other than U.S.Treasury Bills), are valued each business day by an independent pricing service (the “Service”) approved by the Board of Directors. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in
14
the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are valued as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Restricted securities, as well as securities or other assets for which recent market quotations are not readily available,that are not valued by a pricing service approved by the Board of Directors, or are determined by the fund not to reflect accurately fair value, are valued at fair value as determined in good faith under the direction of the Board of Directors. The factors that may be considered when fair valuing a security include 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. Short-term investments, excluding U.S.Treasury Bills, are carried at amortized cost, which approximates value. Registered investment companies that are not traded on an exchange are valued at their net asset value. Financial futures and options, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. Options traded over-the-counter are priced at the mean between the bid and the asked price.
The fund adopted Statement of Financial Accounting Standards No. 157 “FairValue Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements.
The Fund 15
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Various inputs are used in determining the value of the fund’s investments relating to FAS 157.These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including 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.
The following is a summary of the inputs used as of June 30, 2009 in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Quoted | Observable | Unobservable | ||
Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Commercial Paper | — | 99,972 | — | 99,972 |
U.S. Government | ||||
Agencies/ | ||||
Mortgage-Backed | — | 4,671,266 | — | 4,671,266 |
Mutual Funds | 330,000 | — | — | 330,000 |
Other Financial | ||||
Instruments† | — | — | — | — |
Liabilities ($) | ||||
Other Financial | ||||
Instruments† | — | — | — | — |
† Other financial instruments include derivative instruments such as futures, forward foreign currency exchange contracts, swap contracts and options contracts. Amounts shown represent unrealized appreciation (depreciation), or in the case of options, market value at period end.
(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.
16
Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
The fund has arrangements with the custodian and cash management bank whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
(c) Affiliated issuers: Investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.
(d) Concentration of risk: The fund invests primarily in debt securities. Failure of an issuer of the debt securities to make timely interest or principal payments, or a decline or the perception of a decline in the credit quality of a debt security, can cause the debt security’s price to fall, potentially lowering the fund’s share price. High yield (“junk”) bonds involve greater credit risk, including the risk of default, than investment grade bonds, and are considered predominantly speculative with respect to the issuer’s continuing ability to make principal and interest payments. In addition, the value of debt securities may decline due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment. They may also decline because of factors that affect a particular industry.
(e) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. 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.
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(f) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended December 31, 2008 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund has an unused capital loss carryover of $8,267,615 available for federal income tax purposes to be applied against future net securities profits, if any, subsequent to December 31, 2008. If not applied $205,618 of the carryover expires in fiscal 2011, $1,689,718 expires in fiscal 2012, $2,085,448 expires in fiscal 2013, $482,656 expires in fiscal 2014, $45,761 expires in fiscal 2015 and $ 3,758,414 expires in fiscal 2016.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2008 was as follows: ordinary income $848,223.
NOTE 2—Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $145 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 Facility fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at
18
the time of the borrowing. During the period ended June 30, 2009, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement (“Agreement”) with the Manager, the management fee is computed at an annual rate of .17% of the value of the fund’s average daily net assets and is payable monthly.
Dreyfus has contractually agreed, through September 30, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of the Institutional shares, excluding taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses and shareholder services fees, do not exceed .37%.
Dreyfus has agreed from January 1, 2009 through August 31, 2009, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of the Investor shares (excluding taxes, interest, brokerage commissions, commitment fees on borrowings, extraordinary expenses and shareholder services fees and do not exceed .65 %.
The expense reimbursement, pursuant to the undertakings, amounted to $33,146 during the period ended June 30, 2009.
(b) Under the Shareholder Services Plan, Investor 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 (a securities dealer, financial institution or other industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended June 30, 2009, Investor shares were charged $32, pursuant to the Shareholder Services Plan.
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The fund compensates DreyfusTransfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund.
The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended June 30, 2009, the fund was charged $61 pursuant to the cash management agreement.These fees were offset by earnings credits pursuant to the cash management agreement.
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund.
During the period ended June 30, 2009, the fund was charged $3,341 for services performed by the Chief Compliance Officer.
The components of “Due from The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: an expense reimbursement of $8,515, which is offset by management fees $734, shareholder services plan fees $5, custodian fees $434, chief compliance officer fees $1,670 and transfer agency per account fees $163.
(c) 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 (including paydowns) of investment securities, excluding short-term securities, during the period ended June 30,2009,amounted to $499,935 and $4,738,301,respectively.
20
The fund adopted Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. Since the fund held no derivatives during the period ended June 30, 2009, FAS 161 disclosures did not impact the notes to the financial statements.
At June 30, 2009, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
NOTE 5—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date of issuance of the financial statements.
On June 8, 2009, the Board of Directors of the Company approved the liquidation of the fund, effective August 12, 2009. Accordingly, effective July 9, 2009, no new or subsequent investments in the fund will be permitted, except that investments may continue to be made by participants in group employer retirement plans, if the fund was established as an investment option under the plans before July 9, 2009.
The Fund 21
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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value
Contents | |
THE FUND | |
2 | A Letter from the Chairman and CEO |
3 | Discussion of Fund Performance |
6 | Understanding Your Fund’s Expenses |
6 | Comparing Your Fund’s Expenses With Those of Other Funds |
7 | Statement of Investments |
11 | Statement of Assets and Liabilities |
12 | Statement of Operations |
13 | Statement of Changes in Net Assets |
15 | Financial Highlights |
18 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
The Fund
Dreyfus |
Global Real Estate |
Securities Fund |
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Global Real Estate Securities Fund, covering the six-month period from January 1, 2009, through June 30, 2009.
The severe global recession and banking crisis that dominated the financial markets at the start of 2009 appear to have eased as of mid-year. Previously frozen credit markets have thawed, giving businesses access to the capital they need to grow.After reaching multi-year lows in early March, equities staged an impressive rally, enabling most major international stock market indices to post gains for the six-month reporting period.While the global economy remains weak overall, we have seen encouraging evidence of potential recovery that could take firmer hold later this year, including signs of healing in the battered financial and manufacturing sectors. Meanwhile, inflation in most developed markets has remained tame in the face of high unemployment and unused manufacturing capacity.
Although these developments give us reasons for optimism, we remain cautious due to the speed and magnitude of the international stock markets’ 2009 rebound. Indeed, the markets’ advance was led mainly by the emerging markets as investors developed renewed appetites for risk. We would prefer to see a steadier rise in stock prices supported by more concrete economic data, as the rapid rise increases the possibility that profit-taking could move the markets lower. In uncertain markets such as these, even the most seasoned investors can benefit from professional counsel.To determine how your investments should be positioned for the challenges and opportunities that lie ahead, we continue to stress that you talk regularly with your financial advisor.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Managers.
Thank you for your continued confidence and support.
Jonathan R. Baum Chairman and Chief Executive Officer The Dreyfus Corporation July 15, 2009 |
2
DISCUSSION OF FUND PERFORMANCE
For the period of January 1, 2009, through June 30, 2009, as provided by Peter Zabierek and Dean Frankel, Portfolio Managers, Urdang Securities Management, Inc., Sub-Investment Adviser
Fund and Market Performance Overview
For the six-month period ended June 30, 2009, Dreyfus Global Real Estate Securities Fund’s Class A shares produced a total return of 5.52%, Class C shares returned 5.27% and Class I shares returned 5.88%.1 In comparison, the FTSE EPRA/NAREIT Global Real Estate Securities Index, the fund’s benchmark, achieved a total return of 5.88% for the same period.2
Heightened risk aversion among global investors early in the reporting period gave way to optimism in the spring, fueling a sustained market rebound. The fund’s results were roughly in line with its benchmark Index, as the fund’s conservative positioning caused it to hold up better than market averages early in the reporting period but lag during the subsequent rally.
The Fund’s Investment Approach
The fund seeks capital appreciation and current income by investing at least 80% of its assets in companies principally engaged in the real estate sector. The fund normally invests at least 40% of its assets in companies located outside the United States, and invests in at least 10 different countries.The fund also may invest in companies located in emerging markets and in companies of any market capitalization. Our proprietary approach quantifies investment opportunity both from a real estate and stock perspective and combines “bottom-up” research with a Relative Value Model that includes direct contact with the companies in the fund’s investable universe.
Real Estate Stocks Staged a Swift Rebound
2009 opened in the midst of a deep and prolonged global recession stemming from rising unemployment, plummeting housing values and depressed consumer sentiment.The economic downturn was intensified
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued) |
by a financial crisis that nearly led to the collapse of the global banking system. The real estate industry was especially damaged as property values plunged and access to capital was nearly frozen.
However, by early March, equity markets staged a quick about-face as investors responded to stabilizing credit markets and beaten-down stock prices.The fear of bankruptcies in the real estate segment also moderated as credit markets recovered and leaner, less leveraged companies regained prudent access to capital.
A Conservative Bias Aided the Fund in the Downturn
The fund’s conservative positioning in the first quarter of 2009 supported its relative performance as anxious investors fled to traditionally defensive stocks.However,this cautious approach limited the fund’s participation in the market rally, when riskier assets came into favor.
An underweighted allocation to weaker U.S. real estate markets early in 2009 supported the fund’s performance, as did an increase in U.S. exposure later in the reporting period when domestic markets rebounded. Strong security selections also enabled the fund to keep pace with its benchmark Index.Winners included National Retail Properties, which produced favorable results over the first quarter of 2009 due to its relatively defensive portfolio of real estate holdings.
Solid stock selections in the United Kingdom, Europe, Canada and Australia benefited the fund’s relative performance. An underweight position in the U.K.’s Land Securities helped protect the fund when the real estate investment trust’s (REIT) stock price fell. Britain’s BigYellow Group benefited from strong brand recognition, a capable management team and sustained demand within the self-storage industry.
On the other hand, the fund’s measured shift away from relatively conservative real estate stocks in Hong King proved to be a drag on performance as nearly $1 trillion of government fiscal stimulus, primarily injected within the banking and real estate areas, allowed economically sensitive stocks in this region to surge higher. Hong Kong’s Link REIT performed well in the earlier defensive environment, but as investors’ risk appetites increased, we reallocated assets into property developer Shimao Property Holdings, a stronger beneficiary of the market rally.Although this move proved advantageous, it was not
4
made quickly enough to fully capture the positive impact of Shimao Property’s gains on the benchmark Index. Singaporean development companies also benefited as investors became more tolerant of risks, but we remained unconvinced of many of these firms’ long-term earnings power, and the fund did not participate in their relative strength. An overweight position in U.S.-based Alexandria Real Estate Equities also produced a drag as the REIT’s efforts to raise capital and its exposure to real estate development weighed on the stock.
Adopting Clear Regional Strategies
We believe we have corrected course appropriately in response to the financial markets’ general change.We have shifted the fund’s focus away from traditionally conservative companies and into more aggressive —yet fundamentally sound — stocks that we believe are positioned to benefit from the market’s upward momentum.We have maintained an overweighted allocation to discounted Hong Kong securities in anticipation of recovering demand as fiscal stimulus lifts the Chinese real estate segment. Conversely, we have maintained an underweighted position in the European real estate industry due to stifled demand and heavy debt. Finally, we have emphasized companies with healthy balance sheets and easier access to financing, as the failures of weaker companies could create opportunities for stronger firms to obtain assets inexpensively.
July 15, 2009
1 | The total return figures presented for Class A and I shares of the fund reflect the performance of BNY Hamilton Global Real Estate Securities Fund’s (the “predecessor fund”) Class A shares and Institutional shares, respectively, prior to 9/13/08. Performance for each share class includes returns for the predecessor fund (Class A and Class I only) and the current maximum sales load, and reflects current distribution and servicing fees in effect only since the reorganization date. |
Investors should consider, when deciding whether to purchase a particular class of shares, the investment amount, anticipated holding period and other relevant factors. 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 for Classes A and C through May 1, 2010, and in effect for Class I through September 30, 2010, at which time it may be extended, terminated or modified. Had these expenses not been absorbed, the fund’s returns would have been lower. | |
2 | SOURCE: LIPPER INC. — Reflects reinvestment of net dividends and, where applicable, capital gain distributions. The FTSE European Public Real Estate Association (EPRA) National Association of Real Estate Investment Trusts (NAREIT) Global Real Estate Securities Index is an unmanaged index designed to track the performance of listed real estate companies and REITs worldwide. |
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Global Real Estate Securities Fund from January 1, 2009 to June 30, 2009. 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 June 30, 2009 | |||
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 8.15 | $ 11.50 | $ 5.82 |
Ending value (after expenses) | $1,055.20 | $1,052.70 | $1,058.80 |
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 June 30, 2009 | |||
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 8.00 | $ 11.28 | $ 5.71 |
Ending value (after expenses) | $1,016.86 | $1,013.59 | $1,019.14 |
† Expenses are equal to the fund’s annualized expense ratio of 1.60% for Class A, 2.26% for Class C and 1.14% for Class I, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS June 30, 2009 (Unaudited) |
Common Stocks—97.1% | Shares | Value ($) |
Australia—8.4% | ||
CFS Retail Property Trust | 408,330 | 542,904 |
Macquarie Office Trust | 1,977,620 | 334,650 |
Mirvac Group | 503,600 | 438,266 |
Stockland | 94,720 | 245,005 |
Westfield Group | 302,990 | 2,778,426 |
4,339,251 | ||
Belgium—.3% | ||
Cofinimmo | 1,220 | 142,053 |
Canada—2.5% | ||
Allied Properties Real Estate Investment Trust | 10,600 | 134,419 |
Boardwalk Real Estate Investment Trust | 16,070 | 451,781 |
RioCan Real Estate Investment Trust | 52,220 | 686,001 |
1,272,201 | ||
Finland—1.0% | ||
Citycon | 193,460 | 504,799 |
France—4.6% | ||
Fonciere des Regions | 540 | 40,593 |
Gecina | 1,060 | 65,578 |
Klepierre | 11,180 | 288,350 |
Unibail-Rodamco | 13,340 | 1,986,693 |
2,381,214 | ||
Germany—.2% | ||
DIC Asset | 15,000 | 106,267 |
Hong Kong—19.3% | ||
China Overseas Land & Investment | 352,600 | 818,937 |
China Resources Land | 417,000 | 924,389 |
Hang Lung Properties | 228,000 | 754,602 |
Henderson Land Development | 172,000 | 986,497 |
Hongkong Land Holdings | 94,000 | 332,760 |
Hysan Development | 82,000 | 210,553 |
Link REIT | 196,500 | 419,366 |
New World Development | 271,000 | 490,245 |
Shenzhen Investment | 610,000 | 254,231 |
Shimao Property Holdings | 447,500 | 869,588 |
Shui On Land | 731,050 | 500,884 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Hong Kong (continued) | ||
Sino Land | 94,000 | 155,736 |
Sun Hung Kai Properties | 260,000 | 3,247,463 |
9,965,251 | ||
Japan—14.2% | ||
AEON Mall | 7,600 | 145,002 |
Japan Real Estate Investment | 26 | 216,183 |
Japan Retail Fund Investment | 72 | 333,337 |
Mitsubishi Estate | 120,000 | 2,006,747 |
Mitsui Fudosan | 114,000 | 1,991,613 |
Nippon Building Fund | 92 | 788,831 |
NTT Urban Development | 297 | 288,260 |
Sumitomo Realty & Development | 51,000 | 937,572 |
Tokyo Tatemono | 61,000 | 341,299 |
United Urban Investment | 73 | 313,718 |
7,362,562 | ||
Netherlands—1.9% | ||
Corio | 14,770 | 718,163 |
Eurocommercial Properties | 9,000 | 277,135 |
995,298 | ||
Singapore—3.6% | ||
Ascendas Real Estate Investment Trust | 247,000 | 271,147 |
CapitaLand | 377,000 | 965,665 |
CapitaMall Trust | 279,300 | 269,967 |
Suntec Real Estate Investment Trust | 325,000 | 192,971 |
Yanlord Land Group | 117,000 | 184,983 |
1,884,733 | ||
Sweden—.5% | ||
Castellum | 18,837 | 119,888 |
Hufvudstaden, Cl. A | 18,410 | 114,307 |
234,195 | ||
Switzerland—1.2% | ||
PSP Swiss Property | 13,210 a | 630,987 |
United Kingdom—5.9% | ||
Big Yellow Group | 57,070 a | 321,109 |
British Land | 109,740 | 689,678 |
Great Portland Estates | 99,024 | 358,411 |
Hammerson | 153,000 | 772,765 |
8
Common Stocks (continued) | Shares | Value ($) |
United Kingdom (continued) | ||
Helical Bar | 64,860 | 350,801 |
Segro | 1,041,810 | 415,641 |
Shaftesbury | 32,680 | 162,236 |
3,070,641 | ||
United States—33.5% | ||
Alexandria Real Estate Equities | 7,400 | 264,846 |
AMB Property | 25,760 | 484,546 |
American Tower, Cl. A | 12,070 a | 380,567 |
AvalonBay Communities | 3,980 | 222,641 |
Boston Properties | 18,250 | 870,525 |
Brandywine Realty Trust | 67,860 | 505,557 |
BRE Properties | 14,110 | 335,254 |
Camden Property Trust | 12,310 | 339,756 |
Digital Realty Trust | 11,710 | 419,803 |
Duke Realty | 35,370 | 310,195 |
Equity Residential Properties Trust | 27,800 | 617,994 |
Essex Property Trust | 8,620 | 536,423 |
Extra Space Storage | 16,230 | 135,520 |
Federal Realty Investment Trust | 8,610 | 443,587 |
HCP | 23,110 | 489,701 |
Healthcare Realty Trust | 21,010 | 353,598 |
Host Hotels & Resorts | 29,080 | 243,981 |
HRPT Properties Trust | 39,690 | 161,141 |
Kilroy Realty | 29,600 | 607,984 |
Kimco Realty | 52,170 | 524,308 |
LaSalle Hotel Properties | 12,800 | 157,952 |
Macerich | 6,570 | 115,698 |
Mack-Cali Realty | 12,770 | 291,156 |
National Retail Properties | 36,770 | 637,959 |
Nationwide Health Properties | 25,940 | 667,696 |
Parkway Properties | 12,710 | 165,230 |
Post Properties | 17,710 | 238,022 |
ProLogis | 56,700 | 457,002 |
Public Storage | 13,620 | 891,838 |
Senior Housing Properties Trust | 41,540 | 677,933 |
Simon Property Group | 37,860 | 1,947,140 |
SL Green Realty | 14,430 | 331,024 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued) | ||||
Common Stocks (continued) | Shares | Value ($) | ||
United States (continued) | ||||
Sunstone Hotel Investors | 34,090 | 182,381 | ||
Taubman Centers | 12,880 | 345,957 | ||
Ventas | 26,720 | 797,859 | ||
Vornado Realty Trust | 18,984 | 854,849 | ||
Weingarten Realty Investors Trust | 22,920 | 332,569 | ||
17,340,192 | ||||
Total Common Stocks | ||||
(cost $61,690,271) | 50,229,644 | |||
Other Investment—.9% | ||||
Registered Investment Company; | ||||
Dreyfus Institutional Preferred Plus Money Market Fund | ||||
(cost $440,000) | 440,000 b | 440,000 | ||
Total Investments (cost $62,130,271) | 98.0% | 50,669,644 | ||
Cash and Receivables (Net) | 2.0% | 1,048,579 | ||
Net Assets | 100.0% | 51,718,223 | ||
a | Non-income producing security. | |||
b | Investment in affiliated money market mutual fund. | |||
Portfolio Summary (Unaudited)† | ||||
Value (%) | Value (%) | |||
Diversified REITs | 35.5 | Residential | 2.9 | |
Retail | 15.6 | Self Storage | 2.6 | |
Office | 11.7 | Industrial | 1.8 | |
Health Care | 5.8 | Specialty | 1.5 | |
Regional Malls | 4.9 | Freestanding | 1.2 | |
Real Estate Services | 4.5 | Hotels | 1.1 | |
Multifamily | 4.4 | Money Market Investment | .9 | |
Shopping Centers | 3.6 | 98.0 | ||
† | Based on net assets. | |||
See notes to financial statements. |
10
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
Cost | Value | ||
Assets ($): | |||
Investments in securities—See Statement of Investments: | |||
Unaffiliated issuers | 61,690,271 | 50,229,644 | |
Affiliated issuers | 440,000 | 440,000 | |
Cash | 69,916 | ||
Cash denominated in foreign currencies | 1,068,964 | 1,058,674 | |
Receivable for shares of Common Stock subscribed | 312,353 | ||
Receivable for investment securities sold | 292,595 | ||
Dividends and interest receivable | 178,814 | ||
Prepaid expenses | 15,532 | ||
52,597,528 | |||
Liabilities ($): | |||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 38,280 | ||
Payable for investment securities purchased | 771,834 | ||
Payable for shares of Common Stock redeemed | 44,374 | ||
Accrued expenses | 24,817 | ||
879,305 | |||
Net Assets ($) | 51,718,223 | ||
Composition of Net Assets ($): | |||
Paid-in capital | 94,554,085 | ||
Accumulated undistributed investment income—net | 743,420 | ||
Accumulated net realized gain (loss) on investments | (32,106,665) | ||
Accumulated net unrealized appreciation (depreciation) | |||
on investments and foreign currency transactions | (11,472,617) | ||
Net Assets ($) | 51,718,223 | ||
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 75,824 | 8,604 | 51,633,795 |
Shares Outstanding | 14,350 | 1,627 | 9,760,795 |
Net Asset Value Per Share ($) | 5.28 | 5.29 | 5.29 |
See notes to financial statements. |
The Fund 11
STATEMENT OF OPERATIONS | |
Six Months Ended June 30, 2009 (Unaudited) | |
Investment Income ($): | |
Income: | |
Cash dividends (net of $68,530 foreign taxes withheld at source): | |
Unaffiliated issuers | 1,156,595 |
Affiliated issuers | 601 |
Interest | 428 |
Total Income | 1,157,624 |
Expenses: | |
Management fee—Note 3(a) | 205,830 |
Auditing fees | 35,673 |
Custodian fees—Note 3(c) | 32,767 |
Registration fees | 18,416 |
Prospectus and shareholders’ reports | 4,342 |
Shareholder servicing costs—Note 3(c) | 1,310 |
Directors’ fees and expenses—Note 3(d) | 340 |
Loan commitment fees—Note 2 | 295 |
Distribution fees—Note 3(b) | 26 |
Interest expense—Note 2 | 22 |
Miscellaneous | 9,037 |
Total Expenses | 308,058 |
Less—reduction in expenses | |
due to undertakings—Note 3(a) | (60,214) |
Less—reduction in fees | |
due to earnings credits—Note 1(c) | (20) |
Net Expenses | 247,824 |
Investment Income—Net | 909,800 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments and foreign currency transactions | (13,789,360) |
Net realized gain (loss) on forward foreign currency exchange contracts | (978) |
Net Realized Gain (Loss) | (13,790,338) |
Net unrealized appreciation (depreciation) on | |
investments and foreign currency transactions | 15,303,001 |
Net Realized and Unrealized Gain (Loss) on Investments | 1,512,663 |
Net Increase in Net Assets Resulting from Operations | 2,422,463 |
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited) a | December 31, 2008b,c | |
Operations ($): | ||
Investment income—net | 909,800 | 1,307,146 |
Net realized gain (loss) on investments | (13,790,338) | (16,432,723) |
Net unrealized appreciation | ||
(depreciation) on investments | 15,303,001 | (20,323,628) |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 2,422,463 | (35,449,205) |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Class A Shares | (47) | (426) |
Class C Shares | (5) | (41) |
Class I Shares | (180,262) | (1,032,336) |
Class T Shares | — | (51) |
Total Dividends | (180,314) | (1,032,854) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 61,292 | 17,982 |
Class C Shares | 1,600 | 10,000 |
Class I Shares | 6,638,600 | 111,346,944 |
Class T Shares | — | 10,000 |
Dividends reinvested: | ||
Class A Shares | 14 | 371 |
Class I Shares | 43,889 | 242,508 |
Cost of shares redeemed: | ||
Class A Shares | (5,763) | (42,657) |
Class I Shares | (5,537,372) | (78,015,421) |
Class T Shares | (5,553) | — |
Increase (Decrease) in Net Assets | ||
from Capital Stock Transactions | 1,196,707 | 33,569,727 |
Total Increase (Decrease) in Net Assets | 3,438,856 | (2,912,332) |
Net Assets ($): | ||
Beginning of Period | 48,279,367 | 51,191,699 |
End of Period | 51,718,223 | 48,279,367 |
Undistributed investment income—net | 743,420 | 13,934 |
The Fund 13
STATEMENT OF CHANGES IN NET ASSETS (continued)
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited) a | December 31, 2008b,c | |
Capital Share Transactions: | ||
Class Ad | ||
Shares sold | 13,064 | 2,352 |
Shares issued for dividends reinvested | 3 | 50 |
Shares redeemed | (1,077) | (5,757) |
Net Increase (Decrease) in Shares Outstanding | 11,990 | (3,355) |
Class C | ||
Shares sold | 342 | 1,285 |
Class I | ||
Shares sold | 1,399,006 | 14,329,983 |
Shares issued for dividends reinvested | 10,810 | 40,251 |
Shares redeemed | (1,256,958) | (10,418,141) |
Net Increase (Decrease) in Shares Outstanding | 152,858 | 3,952,093 |
Class Td | ||
Shares sold | — | 1,285 |
Shares redeemed | (1,285) | — |
Net Increase (Decrease) in Shares Outstanding | (1,285) | 1,285 |
a | Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares. |
b | The fund commenced offering four classes of shares on the close of business September 12, 2008.The existing shares were redesignated and the fund added Class C and Class T shares. |
c | Represents information for the fund’s predecessor, BNY Hamilton Global Real Estate Securities Fund, through September 12, 2008. |
d | On the close of business on February 4, 2009, 1,285 Class T shares representing $5,553 were automatically converted to 1,285 Class A shares. |
See notes to financial statements. |
14
FINANCIAL HIGHLIGHTS
Please note that the financial highlights information in the following tables for the funds Class A and Class I shares represents the financial highlights of the Class A and Institutional Shares, respectively, of the fund’s predecessor, BNY Hamilton Global Real Estate Securities Fund (“Hamilton Global Real Estate Securities Fund”), before the fund commenced operations as of the close of business on September 12, 2008, and represents the performance of the fund’s Class A and Class I shares thereafter. Before the fund commenced operations, all of the assets of the Hamilton Global Real Estate Securities Fund were transferred to the fund in exchange for Class A and Class I shares of the fund in a tax-free reorganization.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s and the fund’s predecessor’s financial statements.
Six Months Ended | ||||
June 30, 2009 | Year Ended December 31, | |||
Class A Shares† | (Unaudited) | 2008 | 2007 | 2006a |
Per Share Data ($): | ||||
Net asset value, beginning of period | 5.02 | 9.04 | 10.00 | 10.00 |
Investment Operations: | ||||
Investment income—netb | .06 | .16 | .18 | — |
Net realized and unrealized | ||||
gain (loss) on investments | .21 | (4.08) | (.97) | — |
Total from Investment Operations | .27 | (3.92) | (.79) | — |
Distributions: | ||||
Dividends from investment income—net | (.01) | (.10) | (.17) | — |
Net asset value, end of period | 5.28 | 5.02 | 9.04 | 10.00 |
Total Return (%)c | 5.52d | (43.60) | (8.00) | — |
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets | 2.76e | 1.62 | 1.58 | — |
Ratio of net expenses to average net assets | 1.60e | 1.41 | 1.50 | — |
Ratio of net investment income | ||||
to average net assets | 2.41e | 1.83 | 1.87 | — |
Portfolio Turnover Rate | 48d | 79 | 73 | — |
Net Assets, end of period ($ x 1,000) | 76 | 12 | 52 | —f |
† Represents information for Class A shares of the fund’s predecessor, Hamilton Global Real Estate Securities Fund, |
through September 12, 2008. |
a From December 29, 2006 (commencement of operations) to December 31, 2006. |
b Based on average shares outstanding at each month end. |
c Exclusive of sales charge. |
d Not annualized. |
e Annualized. |
f Amount represents less than $1,000. |
See notes to financial statements. |
The Fund 15
FINANCIAL HIGHLIGHTS (continued) |
Six Months Ended | ||
June 30, 2009 | Year Ended | |
Class C Shares | (Unaudited) | December 31, 2008a |
Per Share Data ($): | ||
Net asset value, beginning of period | 5.02 | 7.78 |
Investment Operations: | ||
Investment income—netb | .06 | .01 |
Net realized and unrealized | ||
gain (loss) on investments | .21 | (2.74) |
Total from Investment Operations | .27 | (2.73) |
Distributions: | ||
Dividends from investment income—net | (.00)c | (.03) |
Net asset value, end of period | 5.29 | 5.02 |
Total Return (%)d,e | 5.27 | (34.92) |
Ratios/Supplemental Data (%): | ||
Ratio of total expenses to average net assetsf | 3.49 | 2.46 |
Ratio of net expenses to average net assetsf | 2.26 | 2.35 |
Ratio of net investment income | ||
to average net assetsf | 2.86 | .67 |
Portfolio Turnover Rate | 48e | 79 |
Net Assets, end of period ($ x 1,000) | 9 | 6 |
a | From September 13, 2008 (commencement of initial offering) to December 31, 2008. |
b | Based on average shares outstanding at each month end. |
c | Amount represents less than $.01 per share. |
d | Exclusive of sales charge. |
e | Not annualized. |
f | Annualized. |
See notes to financial statements. |
16
Six Months Ended | ||||
June 30, 2009 | Year Ended December 31, | |||
Class I Shares† | (Unaudited) | 2008 | 2007 | 2006a |
Per Share Data ($): | ||||
Net asset value, beginning of period | 5.02 | 9.04 | 10.00 | 10.00 |
Investment Operations: | ||||
Investment income—netb | .10 | .16 | .20 | — |
Net realized and unrealized | ||||
gain (loss) on investments | .19 | (4.06) | (.98) | — |
Total from Investment Operations | .29 | (3.90) | (.78) | — |
Distributions: | ||||
Dividends from investment income—net | (.02) | (.12) | (.18) | — |
Net asset value, end of period | 5.29 | 5.02 | 9.04 | 10.00 |
Total Return (%) | 5.88c | (43.38) | (7.83) | — |
Ratios/Supplemental Data (%): | ||||
Ratio of total expenses to average net assets | 1.42d | 1.24 | 1.34 | — |
Ratio of net expenses to average net assets | 1.14d | 1.19 | 1.25 | — |
Ratio of net investment income | ||||
to average net assets | 4.20d | 2.24 | 1.97 | — |
Portfolio Turnover Rate | 48c | 79 | 73 | — |
Net Assets, end of period ($ x 1,000) | 51,634 | 48,255 | 51,140 | —e |
† Represents information for Institutional shares of the fund’s predecessor, Hamilton Global Real Estate Securities |
Fund, through September 12, 2008. |
a From December 29, 2006 (commencement of operations) to December 31, 2006. |
b Based on average shares outstanding at each month end. |
c Not annualized. |
d Annualized. |
e Amount represents less than $1,000. |
See notes to financial statements. |
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Global Real Estate Securities Fund (the “fund”) is a separate diversified series of Dreyfus Premier Investment Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund.The fund’s investment objective is to maximize total return consisting of capital appreciation and current income. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Urdang Securities Management, Inc. (“Urdang”) serves as the fund’s sub-investment advisor. Urdang is a wholly-owned subsidiary of BNY Mellon.
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 50 million shares of $.001 par value Common Stock in the following classes of shares: Class A and Class C and 100 million shares of $.001 par value Common Stock of Class I. Class A shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
Effective December 3, 2008, investments for new accounts were no longer permitted in Class T shares of the fund, except that participants in certain group retirement plans were able to open a new account in Class T shares of the fund, provided that the fund was established as an investment option under the plans before December 3, 2008. On February 4, 2009, the fund issued to each holder of its Class T shares,
18
in exchange for said shares, Class A shares of the fund having an aggregate net asset value equal to the aggregate net asset value of the shareholder’s Class T shares. Subsequent investments in the fund’s Class A shares made by prior holders of the fund’s Class T shares who received Class A shares of the fund in exchange for their ClassT shares are subject to the front-end sales load schedule that was in effect for Class T shares at the time of the exchange. Otherwise, all other Class A share attributes will be in effect. Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate.
The fund adopted Statement of Financial Accounting Standards No. 157 “FairValue Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements.
Various inputs are used in determining the value of the fund’s investments relating to FAS 157.These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical investments. |
Level 2—other significant observable inputs (including quoted |
prices for similar securities, interest rates, prepayment speeds, |
credit risk, etc.). |
Level 3—significant unobservable inputs (including the fund’s own |
assumptions in determining the fair value of investments). |
20
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of June 30, 2009 in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Quoted | Observable | Unobservable | ||
Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities— | ||||
Domestic | 17,340,192 | — | — | 17,340,192 |
Equity Securities— | ||||
Foreign | 32,889,452 | — | — | 32,889,452 |
Mutual funds | 440,000 | — | — | 440,000 |
Other Financial | ||||
Instruments† | — | — | — | — |
Liabilities ($) | ||||
Other Financial | ||||
Instruments† | — | — | — | — |
† Other financial instruments include derivative instruments, such as futures, forward foreign currency exchange contracts, swap contracts and options contracts. Amounts shown represent unrealized appreciation (depreciation), or in the case of options, market value at period end.
(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions 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 resulting from changes in
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
exchange rates. Foreign currency gains and losses on investments are included with net realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
The fund has arrangements with the custodian and cash management bank whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
Investing in foreign markets may involve special risks and considerations not typically associated with investing in the U.S. These risks include revaluation of currencies, high rates of inflation, repatriation restrictions on income and capital, and adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls and delayed settlements, and their prices may be more volatile than those of comparable securities in the U.S.
(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” in the Act.
(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distribu-
22
tions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
(f) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended December 31, 2008 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund has an unused capital loss carryover of $9,463,089 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to December 31, 2008. If not applied, $561,698 of the carryover expires in fiscal 2015 and $8,901,391 expires in fiscal 2016.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2008 was as follows: ordinary income $1,032,854. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $145 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
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of Facility 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 the borrowing.
The average amount of borrowings outstanding under the Facilities during the period ended June 30, 2009 was approximately $2,800, with a related weighted average annualized interest rate of 1.62%.
NOTE 3—Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (“Agreement”) with Dreyfus, the management fee is computed at an annual rate of .95% of the value of the fund’s average daily net assets and is payable monthly.
Dreyfus has contractually agreed, until September 30, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of Class I shares (excluding taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed 1.20%.
Dreyfus has also agreed, until May 1, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of Class A and Class C shares (excluding taxes, interest, brokerage commissions, commitment fees on borrowings, extraordinary expenses, shareholder services fees and Rule 12b-1 fees) do not exceed 1.35%.
The reduction in expenses, pursuant to the undertakings, amounted to $60,214 during the period ended June 30, 2009.
Pursuant to a sub-investment advisory agreement between Dreyfus and Urdang, Dreyfus pays Urdang a monthly fee at an annual rate of .46% of the value of the fund’s average daily net assets.
During the period ended June 30, 2009, the Distributor retained $361 from commissions earned on sales of the fund’s Class A shares.
24
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay and Class T shares paid the Distributor for distributing their shares at an annual rate of .75% and .25%, respectively, of the value of their average daily net assets. During the period ended June 30, 2009, Class C and Class T shares were charged $24 and $2, respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay and Class T shares paid 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 (a securities dealer, financial institution or other industry professional) in respect of these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended June 30, 2009, Class A, Class C and Class T shares were charged $45, $8, and $2, respectively, pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended June 30, 2009, the fund was charged $1,783 pursuant to the transfer agency agreement.
The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended June 30, 2009, the fund was charged $20 pursuant to the cash management agreement.These fees were offset by earnings credits pursuant to the cash management agreement.
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended June 30, 2009, the fund was charged $32,767 pursuant to the custody agreement.
During the period ended June 30, 2009, the fund was charged $3,341 for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $40,108, Rule 12b-1 distribution plan fees $5, shareholder services plan fees $17, custodian fees $14,897, chief compliance officer fees $1,670 and transfer agency per account fees $95, which are offset against an expense reimbursement currently in effect in the amount of $18,512.
(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 June 30, 2009, amounted to $22,856,225 and $20,580,599, respectively.
The fund adopted Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. All changes to accounting policies and disclosures have been made in accordance with FAS 161 and are incorporated for the current period as part of the disclosures within this Note.
During the period ended June 30, 2009, the average notional value of foreign exchange contracts was $129,608, which represented .30% of average net assets.
26
Forward Foreign Currency Exchange Contracts:The fund may enter 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 an 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 would incur a loss if the value of the contracts increases between the date the forward contracts are opened and the date the forward contracts are closed.The fund realizes a gain if the value of the contracts decreases between those dates. With respect to purchases of forward contracts, the fund would incur a loss if the value of the contracts decreases between the date the forward contracts are opened and the date the forward contracts are closed. The fund realizes a gain if the value of the contracts increases between those dates.The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract. At June 30, 2009, there were no open forward contracts outstanding.
At June 30, 2009, accumulated net unrealized depreciation on investments was $11,460,627, consisting of $2,320,418 gross unrealized appreciation and $13,781,045 gross unrealized depreciation.
At June 30, 2009, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
NOTE 5—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date of issuance of the financial statements.This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.
The Fund 27
NOTES
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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value
Contents | |
THE FUND | |
2 | A Letter from the Chairman and CEO |
3 | Discussion of Fund Performance |
6 | Understanding Your Fund’s Expenses |
6 | Comparing Your Fund’s Expenses With Those of Other Funds |
7 | Statement of Investments |
11 | Statement of Assets and Liabilities |
12 | Statement of Operations |
13 | Statement of Changes in Net Assets |
15 | Financial Highlights |
18 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
The Fund
Dreyfus |
Large Cap Equity Fund |
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Large Cap Equity Fund, covering the six-month period from January 1, 2009, through June 30, 2009.
The severe recession and banking crisis that dominated the financial markets at the start of 2009 appear to have moderated as of mid-year. Previously frozen credit markets have thawed, giving businesses access to the capital they need to grow. After reaching multi-year lows in early March, equities staged an impressive rally, enabling most major stock market indices to end the six-month reporting period close to where they began.While the U.S. economy remains weak overall, we have seen encouraging evidence of potential recovery, including a recovering housing market and improvements within certain manufacturing sectors. Meanwhile, inflation has remained tame in the face of high unemployment and unused manufacturing capacity. Although these developments give us reasons for optimism, we remain cautious due to the speed and magnitude of the stock market’s 2009 rebound. Indeed, the market’s advance was led mainly by lower-quality stocks when investors developed renewed appetites for risk. We would prefer to see a steadier rise in stock prices supported by more concrete economic data, as the rapid rise increases the possibility that profit-taking could move the market lower. In uncertain markets such as this one, even the most seasoned investors can benefit from professional counsel. To determine how your investments should be positioned for the challenges and opportunities that lie ahead, we continue to stress that you talk regularly with your financial advisor.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the Portfolio Manager.
Thank you for your continued confidence and support.
Jonathan R. Baum Chairman and Chief Executive Officer The Dreyfus Corporation July 15, 2009 |
2
DISCUSSION OF FUND PERFORMANCE
For the reporting period of January 1, 2009, through June 30, 2009, as provided by Irene O’Neill, Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended June 30, 2009, Dreyfus Large Cap Equity Fund’s Class A shares produced a total return of 4.32%, Class C shares returned 4.47% and Class I shares returned 5.14%.1 In comparison, the Standard and Poor’s 500 Composite Stock Price Index (“S&P 500 Index”), the fund’s benchmark, achieved a total return of 3.19%.2
Despite a deep recession and severe banking crisis, stocks rallied in the spring of 2009, more than offsetting losses incurred earlier in the year. The fund produced higher returns than its benchmark, primarily due to an early shift to a less defensive investment posture in anticipation of the beginning stages of a cyclical recovery.
The Fund’s Investment Approach
The fund seeks long-term capital appreciation.To pursue this goal, the fund normally invests at least 80% of its assets in equity securities of large-capitalization companies with market capitalizations of $5 billion or more at the time of purchase.
The fund invests primarily in large, established companies that we believe have proven track records and the potential for superior relative earnings growth. The investment process begins with a “top-down” assessment of broad economic, political and social trends and their implications for different market and industry sectors. Fundamental research is used to identify companies with the potential for above-average earnings and revenue growth; sustainable competitive advantage; strong or improving financial condition; and/or earnings power that is either unrecognized or underestimated by the market.
A Sustained Market Rally Lifted Stock Prices
The U.S. stock market continued to decline early in 2009 amid rising unemployment, plunging housing prices and depressed consumer confidence. At the same time, a global banking crisis had reduced
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued) |
credit availability and damaged a number of major financial institu-tions.These influences fueled a bear market that drove the benchmark to multi-year lows.
Market sentiment began to improve in early March, as aggressive remedial measures adopted by government and monetary authorities appeared to avert a collapse of the banking system, and investors looked forward to better economic times. As investors became more tolerant of risk, a sustained rally enabled the market to recover the ground it had lost earlier in the reporting period.
A More Constructive Investment Posture
Early in the year, we began to shift the fund’s investment posture to a less defensive position as the rate of economic deterioration appeared to slow and investors looked forward to a recovery.We trimmed the fund’s exposure to the traditionally defensive consumer staples, health care, telecommunications services and utilities sectors. Instead, we placed greater emphasis on consumer discretionary stocks, especially retailers that historically have been among the first to rally in the early stages of recovery.We boosted the fund’s exposure to the energy sector, where we expected oil prices to rise in response to heavier demand from emerging markets.We also established modestly overweighted positions in the financials sector, where we believed massive intervention by government and monetary authorities would prove effective, and the information technology sector, where companies generally exhibited strong balance sheets and faced few regulatory or overcapacity issues.
The fund’s more aggressive tilt helped it participate more fully in the springtime rally. In addition, our stock selection strategy produced above-average results in the information technology sector during the reporting period, as electronics seller Apple bounced back from earlier weakness, glass producer Corning saw better-than-expected demand for flat-panel television screens, and chip makers Broadcom and Taiwan Semiconductor rallied in anticipation of stronger demand and pricing. In the energy sector, winners included natural gas producer Southwestern Energy, drilling rig operator Nabors Industries and exploration-and-production supplier Smith International. The fund’s energy investments also benefited from underweighted exposure to industry
4
bellwether Exxon Mobil as investors turned away from traditionally defensive stocks. Among financial stocks, positive contributors included Morgan Stanley, State Street and Invesco, which are relatively sensitive to improving capital markets but depend less than their peers on lending.
On the other hand, the industrials and health care sectors generally weighed on the fund’s relative performance. Industrial conglomerate Textron was hurt by weakness in its credit subsidiary, and heavy equipment manufacturer Caterpillar suffered amid weak global capital spending.The health care sector was generally hurt by slower drug sales and uncertainty regarding government reform efforts, which forced declines in pharmaceutical developer Abbott Laboratories and biotechnology companies Cephalon and Gilead Sciences.
Positioned for a Mild Economic Recovery
We expect that an eventual economic recovery will prove relatively mild as a resumption of previous borrowing and spending behavior by consumers and businesses appears unlikely anytime soon. Indeed, the recent market rally may currently reflect a misplaced degree of optimism among investors over the near term.Therefore, we recently have shifted to a more neutral investment posture. However, we are prepared to return to a more constructive positioning should economic conditions show greater signs of improvement later this year.
July 15, 2009
1 | The total return figures presented for Class A and I shares of the fund reflect the performance of BNY Hamilton Large Cap Equity Fund (the “predecessor fund”) Class A shares and Institutional shares, respectively, prior to 9/13/08. Performance for each share class includes returns for the predecessor fund (Class A and Class I only) and the current maximum sales load, and reflects current distribution and servicing fees in effect only since the reorganization date. |
Investors should consider, when deciding whether to purchase a particular class of shares, the investment amount, anticipated holding period and other relevant factors. 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 for Classes A and C through May 1, 2010, and in effect for Class I through September 30, 2010, at which time it may be extended, terminated or modified. Had these expenses not been absorbed, the fund’s returns would have been lower. | |
2 | SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital gain distributions.The Standard & Poor’s 500 Composite Stock Price Index is a widely accepted, unmanaged index of U.S. stock market performance. |
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Large Cap Equity Fund from January 1, 2009 to June 30, 2009. 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 June 30, 2009 | |||
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 7.60 | $ 10.14 | $ 4.02 |
Ending value (after expenses) | $1,043.20 | $1,044.70 | $1,051.40 |
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 June 30, 2009 | |||
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 7.50 | $ 9.99 | $ 3.96 |
Ending value (after expenses) | $1,017.36 | $1,014.88 | $1,020.88 |
† Expenses are equal to the fund’s annualized expense ratio of 1.50% for Class A, 2.00% for Class C and .79% for Class I, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS June 30, 2009 (Unaudited) |
Common Stocks—97.8% | Shares | Value ($) |
Consumer Discretionary—9.3% | ||
Comcast, Cl. A | 58,870 | 853,026 |
Johnson Controls | 105,300 | 2,287,116 |
Kohl’s | 64,640 a | 2,763,360 |
Lowe’s Cos. | 86,330 | 1,675,665 |
Target | 51,310 | 2,025,206 |
Walt Disney | 83,900 | 1,957,387 |
Yum! Brands | 69,470 | 2,316,130 |
13,877,890 | ||
Consumer Staples—11.5% | ||
Avon Products | 76,590 | 1,974,490 |
Colgate-Palmolive | 27,520 | 1,946,765 |
Kellogg | 31,900 | 1,485,583 |
Kraft Foods, Cl. A | 84,240 | 2,134,642 |
PepsiCo | 43,050 | 2,366,028 |
Philip Morris International | 59,330 | 2,587,975 |
Procter & Gamble | 45,595 | 2,329,905 |
Wal-Mart Stores | 48,150 | 2,332,386 |
17,157,774 | ||
Energy—14.5% | ||
Chevron | 38,500 | 2,550,625 |
Exxon Mobil | 60,090 | 4,200,892 |
Marathon Oil | 54,590 | 1,644,797 |
Nabors Industries | 99,350 a | 1,547,873 |
Occidental Petroleum | 23,660 | 1,557,065 |
Plains Exploration & Production | 88,590 a | 2,423,822 |
Schlumberger | 31,430 | 1,700,677 |
Smith International | 63,800 | 1,642,850 |
Southwestern Energy | 48,390 a | 1,879,952 |
Williams Cos. | 162,480 | 2,536,313 |
21,684,866 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Financial—13.2% | ||
ACE | 13,480 | 596,220 |
Aflac | 54,210 | 1,685,389 |
American Express | 75,395 | 1,752,180 |
Hudson City Bancorp | 124,460 | 1,654,073 |
Invesco | 116,246 | 2,071,503 |
JPMorgan Chase & Co. | 74,610 | 2,544,947 |
Morgan Stanley | 92,940 | 2,649,719 |
PartnerRe | 19,410 | 1,260,679 |
PNC Financial Services Group | 36,260 | 1,407,251 |
State Street | 52,670 | 2,486,024 |
U.S. Bancorp | 88,550 | 1,586,816 |
19,694,801 | ||
Health Care—13.0% | ||
Abbott Laboratories | 44,980 | 2,115,859 |
Cardinal Health | 37,380 | 1,141,959 |
Cephalon | 18,560 a | 1,051,424 |
Covidien | 42,130 | 1,577,347 |
Gilead Sciences | 48,680 a | 2,280,171 |
Johnson & Johnson | 37,200 | 2,112,960 |
Medtronic | 40,320 | 1,406,765 |
Merck & Co. | 56,090 | 1,568,276 |
Pfizer | 115,100 | 1,726,500 |
Schering-Plough | 29,380 | 738,026 |
Teva Pharmaceutical Industries, ADR | 44,930 | 2,216,846 |
Thermo Fisher Scientific | 36,540 a | 1,489,736 |
19,425,869 | ||
Industrial—8.5% | ||
Caterpillar | 40,300 | 1,331,512 |
Eaton | 50,360 | 2,246,559 |
General Electric | 144,610 | 1,694,829 |
Honeywell International | 71,710 | 2,251,694 |
Union Pacific | 47,800 | 2,488,468 |
8
Common Stocks (continued) | Shares | Value ($) |
Industrial (continued) | ||
United Technologies | 50,540 | 2,626,058 |
12,639,120 | ||
Information Technology—20.0% | ||
Accenture, Cl. A | 53,050 | 1,775,053 |
Akamai Technologies | 82,910 a | 1,590,214 |
Apple | 30,440 a | 4,335,569 |
Cisco Systems | 74,280 a | 1,384,579 |
Google, Cl. A | 7,820 a | 3,296,834 |
Hewlett-Packard | 69,930 | 2,702,795 |
Intel | 168,350 | 2,786,193 |
Marvell Technology Group | 138,770 a | 1,615,283 |
MasterCard, Cl. A | 9,830 | 1,644,657 |
Microsoft | 93,870 | 2,231,290 |
Oracle | 75,960 | 1,627,063 |
QUALCOMM | 64,170 | 2,900,484 |
Texas Instruments | 91,430 | 1,947,459 |
29,837,473 | ||
Materials—3.2% | ||
Air Products & Chemicals | 30,500 | 1,969,995 |
Freeport-McMoRan Copper & Gold | 27,940 | 1,400,073 |
Monsanto | 18,500 | 1,375,290 |
4,745,358 | ||
Telecommunication Services—2.3% | ||
AT & T | 50,280 | 1,248,955 |
Verizon Communications | 68,700 | 2,111,151 |
3,360,106 | ||
Utilities—2.3% | ||
Questar | 43,210 | 1,342,103 |
Sempra Energy | 42,050 | 2,086,942 |
3,429,045 | ||
Total Common Stocks | ||
(cost $173,848,230) | 145,852,302 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Other Investment—2.1% | Shares | Value ($) |
Registered Investment Company; | ||
Dreyfus Institutional Preferred | ||
Plus Money Market Fund | ||
(cost $3,056,000) | 3,056,000 b | 3,056,000 |
Total Investments (cost $176,904,230) | 99.9% | 148,908,302 |
Cash and Receivables (Net) | .1% | 209,823 |
Net Assets | 100.0% | 149,118,125 |
ADR—American Depository Receipts |
a | Non-income producing security. |
b | Investment in affiliated money market mutual fund. |
Portfolio Summary (Unaudited)† | |||
Value (%) | Value (%) | ||
Information Technology | 20.0 | Industrial | 8.5 |
Energy | 14.5 | Materials | 3.2 |
Financial | 13.2 | Telecommunication Services | 2.3 |
Health Care | 13.0 | Utilities | 2.3 |
Consumer Staples | 11.5 | Money Market Investment | 2.1 |
Consumer Discretionary | 9.3 | 99.9 | |
† Based on net assets. | |||
See notes to financial statements. |
10
STATEMENT OF ASSETS AND LIABILITIES June 30, 2009 (Unaudited) |
Cost | Value | ||
Assets ($): | |||
Investments in securities—See Statement of Investments: | |||
Unaffiliated issuers | 173,848,230 | 145,852,302 | |
Affiliated issuers | 3,056,000 | 3,056,000 | |
Cash | 26,967 | ||
Receivable for investment securities sold | 1,551,465 | ||
Receivable for shares of Common Stock subscribed | 500,000 | ||
Dividends and interest receivable | 196,149 | ||
Prepaid expenses | 99,776 | ||
151,282,659 | |||
Liabilities ($): | |||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 86,037 | ||
Payable for investment securities purchased | 1,473,049 | ||
Payable for shares of Common Stock redeemed | 532,101 | ||
Accrued expenses | 73,347 | ||
2,164,534 | |||
Net Assets ($) | 149,118,125 | ||
Composition of Net Assets ($): | |||
Paid-in capital | 252,546,050 | ||
Accumulated undistributed investment income—net | 1,365,037 | ||
Accumulated net realized gain (loss) on investments | (76,797,034) | ||
Accumulated net unrealized appreciation | |||
(depreciation) on investments | (27,995,928) | ||
Net Assets ($) | 149,118,125 | ||
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 191,879 | 6,977 | 148,919,269 |
Shares Outstanding | 25,668 | 905 | 19,146,689 |
Net Asset Value Per Share ($) | 7.48 | 7.71 | 7.78 |
See notes to financial statements. |
The Fund 11
STATEMENT OF OPERATIONS | |
Six Months Ended June 30, 2009 (Unaudited) | |
Investment Income ($): | |
Income: | |
Cash dividends (net of $3,537 foreign taxes withheld at source): | |
Unaffiliated issuers | 2,026,331 |
Affiliated issuers | 2,266 |
Total Income | 2,028,597 |
Expenses: | |
Management fee—Note 3(a) | 585,856 |
Registration fees | 47,671 |
Professional fees | 25,623 |
Shareholder servicing costs—Note 3(c) | 25,127 |
Custodian fees—Note 3(c) | 10,347 |
Prospectus and shareholders’ reports | 6,562 |
Directors’ fees and expenses—Note 3(d) | 6,069 |
Loan commitment fees—Note 2 | 1,663 |
Interest expense—Note 2 | 93 |
Distribution fees—Note 3(b) | 26 |
Miscellaneous | 15,078 |
Total Expenses | 724,115 |
Less—reduction in expenses | |
due to undertaking—Note 3(a) | (59,265) |
Less—reduction in fees due to | |
earnings credits—Note 1(b) | (1,290) |
Net Expenses | 663,560 |
Investment Income—Net | 1,365,037 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments | (30,815,178) |
Net realized gain (loss) on financial futures | (764,210) |
Net Realized Gain (Loss) | (31,579,388) |
Net unrealized appreciation (depreciation) on investments | 33,811,970 |
Net Realized and Unrealized Gain (Loss) on Investments | 2,232,582 |
Net Increase in Net Assets Resulting from Operations | 3,597,619 |
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited) a | December 31, 2008b,c | |
Operations ($): | ||
Investment income—net | 1,365,037 | 4,583,440 |
Net realized gain (loss) on investments | (31,579,388) | (45,098,196) |
Net unrealized appreciation | ||
(depreciation) on investments | 33,811,970 | (148,473,373) |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 3,597,619 | (188,988,129) |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Class A Shares | — | (165,423) |
Class I Shares | — | (3,036,281) |
Net realized gain on investments: | ||
Class A Shares | — | (1,010,825) |
Class C Shares | — | (14,820,734) |
Class I Shares | — | (211,405) |
Class T Shares | — | (3,099,625) |
Total Dividends | — | (22,344,293) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 17,067 | 760,408 |
Class C Shares | — | 10,000 |
Class I Shares | 15,164,516 | 274,286,932 |
Class T Shares | — | 10,000 |
Dividends reinvested: | ||
Class A Shares | — | 1,310,915 |
Class I Shares | — | 18,400,380 |
Cost of shares redeemed: | ||
Class A Shares | (4,583) | (21,373,546) |
Class I Shares | (73,884,504) | (286,231,457) |
Class T Shares | (6,163) | — |
Increase (Decrease) in Net Assets | ||
from Capital Stock Transactions | (58,713,667) | (12,826,368) |
Total Increase (Decrease) in Net Assets | (55,116,048) | (224,158,790) |
Net Assets ($): | ||
Beginning of Period | 204,234,173 | 428,392,963 |
End of Period | 149,118,125 | 204,234,173 |
Undistributed investment income—net | 1,365,037 | — |
The Fund 13
STATEMENT OF CHANGES IN NET ASSETS (continued) |
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited) a | December 31, 2008b,c | |
Capital Share Transactions: | ||
Class Ad | ||
Shares sold | 2,540 | 70,535 |
Shares issued for dividends reinvested | — | 118,080 |
Shares redeemed | (562) | (2,039,111) |
Net Increase (Decrease) in Shares Outstanding | 1,978 | (1,850,496) |
Class C | ||
Shares sold | — | 905 |
Class I | ||
Shares sold | 2,186,801 | 22,840,412 |
Shares issued for dividends reinvested | — | 1,662,506 |
Shares redeemed | (10,620,651) | (24,274,378) |
Net Increase (Decrease) in Shares Outstanding | (8,433,850) | 228,540 |
Class Td | ||
Shares sold | — | 905 |
Shares redeemed | (905) | — |
Net Increase (Decrease) in Shares Outstanding | (905) | 905 |
a Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares. |
b The fund commenced offering four classes of shares after the close of business September 12, 2008.The existing |
shares were redesignated and the fund added Class C and Class T shares. |
c Represents information for the fund’s predecessor, BNY Hamilton Large Cap Equity Fund through September 12, 2008. |
d On the close of business on February 4, 2009, 905 Class T shares representing $6,163 were automatically converted |
to 912 Class A shares. |
See notes to financial statements. |
14
FINANCIAL HIGHLIGHTS
Please note that the financial highlights information in the following tables for the fund’s Class A and Class I shares represents the financial highlights of the Class A and Institutional shares, respectively of the fund’s predecessor, BNY Hamilton Large Cap Equity Fund (“Hamilton Large Cap Equity Fund”), before the fund commenced operations as of the close of business on September 12, 2008, and represents the performance of the fund’s Class A and Institutional shares thereafter. Before the fund commenced operations, all of the assets of the Hamilton Large Cap Equity Fund were transferred to the fund in exchange for Class A and Class I shares of the fund in a tax-free reorganization.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s and the fund’s predecessors financial statements.
Six Months Ended | ||||||
June 30, 2009 | Year Ended December 31, | |||||
Class A Shares† | (Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 7.16 | 14.61 | 14.42 | 13.35 | 13.22 | 12.33 |
Investment Operations: | ||||||
Investment income—neta | .03 | .12 | .10 | .10 | .10 | .25 |
Net realized and unrealized | ||||||
gain (loss) on investments | .29 | (6.80) | 1.48 | 2.03 | .73 | .86 |
Total from Investment Operations | .32 | (6.68) | 1.58 | 2.13 | .83 | 1.11 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | — | (.09) | (.10) | (.08) | (.15) | (.22) |
Dividends from net realized | ||||||
gain on investments | — | (.56) | (1.29) | (.98) | (.55) | — |
Return of capital | — | (.12) | — | — | — | — |
Total Distributions | — | (.77) | (1.39) | (1.06) | (.70) | (.22) |
Net asset value, end of period | 7.48 | 7.16 | 14.61 | 14.42 | 13.35 | 13.22 |
Total Return (%)b | 4.32c | (47.50) | 10.94 | 16.11 | 6.25 | 9.11 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | 2.74d | 1.11 | 1.04 | 1.03 | 1.04 | 1.10 |
Ratio of net expenses | ||||||
to average net assets | 1.50d | 1.03 | 1.04 | 1.03 | 1.04 | 1.10 |
Ratio of net investment income | ||||||
to average net assets | .90d | .99 | .69 | .69 | .75 | 1.99 |
Portfolio Turnover Rate | 36.25c | 77 | 66 | 53 | 52 | 40 |
Net Assets, end of period | ||||||
($ x 1,000) | 192 | 170 | 27,391 | 28,389 | 28,980 | 33,720 |
† Represents information for Class A shares of the fund’s predecessor, BNY Hamilton Large Cap Equity Fund, |
through September 12, 2008. |
a Based on average shares outstanding at each month end. |
b Exclusive of sales charge. |
c Not annualized. |
d Annualized. |
See notes to financial statements. |
The Fund 15
FINANCIAL HIGHLIGHTS (continued) |
Six Months Ended | ||
June 30, 2009 | Year Ended | |
Class C Shares | (Unaudited) | December 31, 2008a |
Per Share Data ($): | ||
Net asset value, beginning of period | 7.38 | 11.05 |
Investment Operations: | ||
Investment income—netb | .01 | .02 |
Net realized and unrealized | ||
gain (loss) on investments | .32 | (3.69) |
Total from Investment Operations | .33 | (3.67) |
Net asset value, end of period | 7.71 | 7.38 |
Total Return (%)c,d | 4.47 | (33.21) |
Ratios/Supplemental Data (%): | ||
Ratio of total expenses to average net assetse | 2.71 | 1.88 |
Ratio of net expenses to average net assetse | 2.00 | 1.86 |
Ratio of net investment income | ||
to average net assetse | .39 | .85 |
Portfolio Turnover Rate | 36.25d | 77 |
Net Assets, end of period ($ x 1,000) | 7 | 7 |
a | From September 13, 2008 (commencement of initial offering) to December 31, 2008. |
b | Based on average shares outstanding at each month end. |
c | Exclusive of sales charge. |
d | Not annualized. |
e | Annualized. |
See notes to financial statements. |
16
Six Months Ended | ||||||
June 30, 2009 | Year Ended December 31, | |||||
Class I Shares† | (Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 7.40 | 14.66 | 14.46 | 13.38 | 13.26 | 12.37 |
Investment Operations: | ||||||
Investment income—neta | .06 | .16 | .14 | .13 | .13 | .28 |
Net realized and unrealized | ||||||
gain (loss) on investments | .32 | (6.63) | 1.49 | 2.05 | .72 | .86 |
Total from Investment Operations | .38 | (6.47) | 1.63 | 2.18 | .85 | 1.14 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | — | (.11) | (.14) | (.12) | (.18) | (.25) |
Dividends from net realized | ||||||
gain on investments | — | (.56) | (1.29) | (.98) | (.55) | — |
Return of capital | — | (.12) | — | — | — | — |
Total Distributions | — | (.79) | (1.43) | (1.10) | (.73) | (.25) |
Net asset value, end of period | 7.78 | 7.40 | 14.66 | 14.46 | 13.38 | 13.26 |
Total Return (%) | 5.14b | (45.91) | 11.27 | 16.43 | 6.42 | 9.35 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | .86c | .80 | .79 | .78 | .79 | .85 |
Ratio of net expenses | ||||||
to average net assets | .79c | .79 | .79 | .78 | .79 | .85 |
Ratio of net investment income | ||||||
to average net assets | 1.63c | 1.41 | .94 | .93 | .99 | 2.24 |
Portfolio Turnover Rate | 36.25b | 77 | 66 | 53 | 52 | 40 |
Net Assets, end of period | ||||||
($ x 1,000) | 148,919 | 204,051 | 401,002 | 385,132 | 360,168 | 343,346 |
† Represents information for Institutional shares of the fund’s predecessor, BNY Hamilton Large Cap Equity Fund, |
through September 12, 2008. |
a Based on average shares outstanding at each month end. |
b Not annualized. |
c Annualized. |
See notes to financial statements. |
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Large Cap Equity Fund (the “fund”) is a separate diversified series of Dreyfus Premier Investment Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is long-term 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.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager is the distributor of the fund’s shares.The fund is authorized to issue 50 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A and Class C and 100 million shares of $.001 par value Common Stock of Class I. Class A shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase and Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
Effective December 3, 2008, investments for new accounts were no longer permitted in Class T shares of the fund, except that participants in certain group retirement plans were able to open a new account in Class T shares of the fund, provided that the fund was established as an investment option under the plans before December 3, 2008. On February 4, 2009, the fund issued to each holder of its Class T shares, in exchange for said shares, Class A shares of the fund having an aggregate net asset value equal to the aggregate net asset value of the
18
shareholder’s Class T shares. Subsequent investments in the fund’s Class A shares made by prior holders of the fund’s Class T shares who received Class A shares of the fund in exchange for their Class T shares are subject to the front-end sales load schedule that was in effect for Class T shares at the time of the exchange. Otherwise, all other Class A share attributes will be in effect. Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value.When market quotations
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. Financial futures are valued at the last sales price.
The fund adopted Statement of Financial Accounting Standards No. 157 “FairValue Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements.
Various inputs are used in determining the value of the fund’s investments relating to FAS 157.These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical investments. |
Level 2—other significant observable inputs (including quoted |
prices for similar securities, interest rates, prepayment speeds, |
credit risk, etc.). |
Level 3—significant unobservable inputs (including 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.
20
The following is a summary of the inputs used as of June 30, 2009 in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Quoted | Observable | Unobservable | ||
Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities— | ||||
Domestic | 143,635,456 | — | — | 143,635,456 |
Equity Securities— | ||||
Foreign | 2,216,846 | — | — | 2,216,846 |
Mutual Funds | 3,056,000 | — | — | 3,056,000 |
Other Financial | ||||
Instruments† | — | — | — | — |
Liabilities ($) | ||||
Other Financial | ||||
Instruments† | — | — | — | — |
† Other financial instruments include derivative instruments, such as futures, forward foreign currency exchange contracts, swap contracts and options contracts. Amounts shown represent unrealized appreciation (depreciation), or in the case of options, market value at period end.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
The fund has arrangements with the custodian and cash management bank whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
(c) Affiliated issuers: Investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
(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 June 30, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended December 31, 2008 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund has an unused capital loss carryover of $6,041,050 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to December 31, 2008. If not applied, the carryover expires in fiscal 2016.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2008 was as follows: ordinary income $4,819,925, long-term capital gains $14,213,338 and return of capital $3,311,030.The tax character of current year distributions, if any, will be determined at the end of the current fiscal year.
22
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $145 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 Facility 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 the borrowing.
The average amount of borrowings outstanding under the Facilities during the period ended June 30, 2009, was approximately $12,600 with a related weighted average annualized interest rate of 1.49%.
NOTE 3—Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (“Agreement”) with the Manager, the management fee is computed at an annual rate of .70% of the value of the fund’s average daily net assets and is payable monthly.
The Manager has contractually agreed, until September 30, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of Class I shares (excluding taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed .79%.
The Manager has agreed, until May 1, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of Class A and Class C shares (excluding taxes, interest, brokerage commissions, commitment fees on borrowings, extraordinary expenses, shareholder services fees and Rule 12b-1 fees) do not exceed 1.25%.
The reduction in expenses, pursuant to the undertakings, amounted to $59,265 during the period ended June 30, 2009.
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended June 30, 2009, the Distributor retained $52 from commissions earned on sales of the fund’s Class A shares.
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay and Class T shares paid the Distributor for distributing their shares at an annual rate of .75% and .25% of the value of their respective average daily net assets. During the period ended June 30, 2009, Class C and Class T shares were charged $24 and $2, respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay and Class T shares paid 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 (a securities dealer, financial institution or other industry professional) in respect of these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended June 30, 2009, Class A, Class C and Class T shares were charged $218, $8 and $2, respectively, pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended June 30, 2009, the fund was charged $4,005 pursuant to the transfer agency agreement.
The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended June 30, 2009, the fund was charged $1,290 pursuant to the cash management agreement.These fees were offset by earnings credits pursuant to the cash management agreement.
24
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended June 30, 2009, the fund was charged $10,347 pursuant to the custody agreement.
During the period ended June 30, 2009, the fund was charged $3,341 for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $87,029, Rule 12b-1 distribution plan fees $4, shareholder services plan fees $41, custodian fees $6,584, chief compliance officer fees $1,670 and transfer agency per account fees $2,363, which are offset against an expense reimbursement currently in effect in the amount of $11,654.
(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 financial futures, during the period ended June 30, 2009, amounted to $58,395,316 and $114,922,302, respectively.
The fund adopted Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. All changes to accounting policies and disclosures have been made in accordance with FAS 161 and are incorporated for the current period as part of the disclosures within this Note.
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Futures Contracts: In the normal course of pursuing its investment objectives, the fund is exposed to market risk (including equity price risk, interest rate risk and foreign currency exchange risk) as a result of changes in value of underlying financial instruments. The fund may invest in financial futures contracts in order to manage its exposure to or protect against changes in the market. A futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a broker, which consist of cash or cash equivalents. The amount of these deposits is determined by the exchange or Board ofTrade on which the contract is traded and is subject to change.Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. Futures contracts are valued daily at the settlement price established by the Board of Trade or exchange upon which they are traded. When the contracts are closed, the fund recognizes a realized gain or loss. There is minimal counterparty credit risk to the fund with futures, since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. At June 30, 2009, there were no open financial futures contracts outstanding.
At June 30, 2009, accumulated net unrealized depreciation on investments was $27,995,928, consisting of $8,574,945 gross unrealized appreciation and $36,570,873 gross unrealized depreciation.
At June 30, 2009, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
NOTE 5—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date of issuance of the financial statements.This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.
26
NOTES
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.
The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value
Contents | |
THE FUND | |
2 | A Letter from the Chairman and CEO |
3 | Discussion of Fund Performance |
6 | Understanding Your Fund’s Expenses |
6 | Comparing Your Fund’s Expenses With Those of Other Funds |
7 | Statement of Investments |
11 | Statement of Assets and Liabilities |
12 | Statement of Operations |
13 | Statement of Changes in Net Assets |
15 | Financial Highlights |
18 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
The Fund
Dreyfus |
Large Cap Growth Fund |
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Large Cap Growth Fund, covering the six-month period from January 1, 2009, through June 30, 2009.
The severe recession and banking crisis that dominated the financial markets at the start of 2009 appear to have moderated as of mid-year. Previously frozen credit markets have thawed, giving businesses access to the capital they need to grow. After reaching multi-year lows in early March, equities staged an impressive rally, enabling most major stock market indices to end the six-month reporting period close to where they began.While the U.S. economy remains weak overall, we have seen encouraging evidence of potential recovery, including a recovering housing market and improvements within certain manufacturing sectors. Meanwhile, inflation has remained tame in the face of high unemployment and unused manufacturing capacity. Although these developments give us reasons for optimism, we remain cautious due to the speed and magnitude of the stock market’s 2009 rebound. Indeed, the market’s advance was led mainly by lower-quality stocks when investors developed renewed appetites for risk. We would prefer to see a steadier rise in stock prices supported by more concrete economic data, as the rapid rise increases the possibility that profit-taking could move the market lower. In uncertain markets such as this one, even the most seasoned investors can benefit from professional counsel. To determine how your investments should be positioned for the challenges and opportunities that lie ahead, we continue to stress that you talk regularly with your financial advisor.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the Portfolio Manager.
Thank you for your continued confidence and support.
Jonathan R. Baum Chairman and Chief Executive Officer The Dreyfus Corporation July 15, 2009 |
2
DISCUSSION OF FUND PERFORMANCE
For the reporting period of January 1, 2009, through June 30, 2009, as provided by Irene O’Neill, Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended June 30, 2009, Dreyfus Large Cap Growth Fund’s Class A shares produced a total return of 7.96%, Class C shares returned 7.68% and Class I shares returned 8.33%.1 In comparison, the Russell 1000 Growth Index (the “Index”), the fund’s benchmark, achieved a total return of 11.53%.2
Despite a deep recession and severe banking crisis, stocks rallied in the spring of 2009, more than offsetting losses incurred earlier in the year. Although the fund participated substantially in the rally, it produced lower returns than its benchmark, primarily due to relative weakness in the health care, producer durables and consumer discretionary sectors.
The Fund’s Investment Approach
The fund seeks long-term capital appreciation.To pursue this goal, the fund normally invests at least 80% of its assets in equity securities of large-capitalization companies with market capitalizations of $5 billion or more at the time of purchase.
The fund invests primarily in large, established companies that we believe have proven track records and the potential for superior relative earnings growth. The investment process begins with a “top-down” assessment of broad economic, political and social trends and their implications for different market and industry sectors. Fundamental research is used to identify companies with the potential for accelerating earnings and revenue growth, favorable market positions, improving operating efficiencies, and/or increasing earnings per share.
A Sustained Market Rally Lifted Stock Prices
The U.S. stock market continued to decline early in 2009 amid rising unemployment, plunging housing prices and depressed consumer confidence. At the same time, a global banking crisis had reduced credit availability and damaged a number of major financial institu-tions.These influences fueled a bear market that drove the benchmark to multi-year lows.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued) |
Market sentiment began to improve in early March, as aggressive remedial measures adopted by government and monetary authorities appeared to avert a collapse of the banking system, and investors looked forward to better economic times. As investor sentiment improved, a sustained rally enabled the market to recover the ground it had lost earlier in the reporting period. Growth stocks substantially outperformed their value-oriented counterparts in this environment.
A More Constructive Investment Posture
Early in the year, we began to shift the fund to a more constructive positioning as the rate of economic deterioration slowed and investors looked forward to a recovery.We trimmed the fund’s exposure to the traditionally defensive consumer staples and health care sectors, and we placed greater emphasis on consumer discretionary stocks, especially retailers that historically have been among the first to rally in the early stages of recovery.We boosted the fund’s exposure to the integrated oils and other energy sectors, as we expected energy prices to rise in response to heavier demand from emerging markets.We also established modestly overweighted positions in the financial services sector, where we believed massive government intervention would prove effective in repairing credit markets, and the technology sector, where companies generally exhibited strong balance sheets and faced few regulatory or overcapacity issues.
The fund’s more aggressive tilt helped it participate to a significant degree in the springtime rally. However, our security selection strategies in the health care, consumer discretionary and producer durables sectors prevented the fund from matching its benchmark’s performance. The health care sector was generally hurt by slower drug sales and uncertainty regarding government reform efforts, which adversely affected biotech-nology companies Celgene, Cephalon and Gilead Sciences. Contract research provider Pharmaceutical Product Development faltered due to concerns regarding consolidation in the health care sector. The fund’s results in the consumer discretionary sector were undermined by weakness in retail chain Lowe’s Companies.Producer durables companies Emerson Electric and Caterpillar suffered amid expectations of weak global capital spending.
4
On the other hand, our stock selection strategy produced above-average results in the technology sector during the reporting period, as consumer electronics seller Apple bounced back from earlier weakness, glass producer Corning saw better-than-expected demand for flat-panel television screens, chip maker Broadcom rallied in anticipation of stronger demand and pricing, and online media company Google benefited from a shift in advertising spending to the Internet. In the other energy sector, winners included oil services provider Weatherford International, natural gas producer Southwestern Energy, and exploration-and-production supplier Smith International. Among financial stocks, positive contributors included Goldman Sachs, Invesco and American Express.
Positioned for a Mild Economic Recovery
We expect that an eventual economic recovery will prove relatively mild as a resumption of previous borrowing and spending behavior by consumers and businesses appears unlikely anytime soon. Indeed, the recent market rally may currently reflect a misplaced degree of optimism among investors over the near term.Therefore, we recently have shifted to a more neutral investment posture. However, we are prepared to return to a more constructive positioning should economic conditions show greater signs of improvement later this year.
July 15, 2009
1 | The total return figures presented for Class A and I shares of the fund reflect the performance of BNY Hamilton Large Cap Growth Fund’s (the “predecessor fund”) Class A shares and Institutional shares, respectively, prior to 9/13/08. Performance for each share class includes returns for the predecessor fund (Class A and Class I only) and the current maximum sales load, and reflects current distribution and servicing fees in effect only since the reorganization date. |
Investors should consider, when deciding whether to purchase a particular class of shares, the investment amount, anticipated holding period and other relevant factors. 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 for Classes A and C through May 1, 2010, and in effect for Class I through September 30, 2010, at which time it may be extended, terminated or modified. Had these expenses not been absorbed, the fund’s returns would have been lower. | |
2 | SOURCE: LIPPER INC. — Reflects reinvestment of net dividends and, where applicable, capital gain distributions.The Russell 1000 Growth Index is an unmanaged index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. Index return does not reflect fees and expenses associated with operating a mutual fund. |
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Large Cap Growth Fund from January 1, 2009 to June 30, 2009. 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 June 30, 2009 | |||
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 7.12 | $ 10.87 | $ 4.49 |
Ending value (after expenses) | $1,079.60 | $1,076.80 | $1,083.30 |
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 June 30, 2009 | |||
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 6.90 | $ 10.54 | $ 4.36 |
Ending value (after expenses) | $1,017.95 | $1,014.33 | $1,020.48 |
† Expenses are equal to the fund’s annualized expense ratio of 1.38% for Class A, 2.11% for Class C and .87% for Class I, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS June 30, 2009 (Unaudited) |
Common Stocks—99.5% | Shares | Value ($) |
Autos & Transports—2.3% | ||
Union Pacific | 26,940 | 1,402,496 |
United Parcel Service, Cl. B | 7,940 | 396,921 |
1,799,417 | ||
Consumer Discretionary—14.9% | ||
Accenture, Cl. A | 26,320 | 880,667 |
Avon Products | 46,330 | 1,194,387 |
GameStop, Cl. A | 46,050 a | 1,013,560 |
Kohl’s | 33,710 a | 1,441,103 |
Lowe’s Cos. | 53,240 | 1,033,388 |
McDonald’s | 16,810 | 966,407 |
Target | 29,290 | 1,156,076 |
Wal-Mart Stores | 35,700 | 1,729,308 |
Walt Disney | 54,000 | 1,259,820 |
Yum! Brands | 29,160 | 972,194 |
11,646,910 | ||
Consumer Staples—10.0% | ||
Coca-Cola | 24,800 | 1,190,152 |
Colgate-Palmolive | 16,070 | 1,136,792 |
Kellogg | 23,900 | 1,113,023 |
PepsiCo | 26,260 | 1,443,250 |
Philip Morris International | 45,700 | 1,993,434 |
Procter & Gamble | 18,520 | 946,372 |
7,823,023 | ||
Energy—4.2% | ||
Plains Exploration & Production | 36,800 a | 1,006,848 |
Schlumberger | 15,560 | 841,952 |
Southwestern Energy | 17,790 a | 691,141 |
Williams Cos. | 48,970 | 764,422 |
3,304,363 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Financial Services—5.8% | ||
American Express | 26,275 | 610,631 |
Ameriprise Financial | 36,780 | 892,651 |
Digital Realty Trust | 28,930 | 1,037,140 |
Goldman Sachs Group | 5,840 | 861,050 |
Invesco | 62,248 | 1,109,259 |
4,510,731 | ||
Health Care—14.1% | ||
Abbott Laboratories | 24,070 | 1,132,253 |
Amgen | 18,600 a | 984,684 |
C.R. Bard | 12,780 | 951,471 |
Cardinal Health | 24,770 | 756,724 |
Cephalon | 11,050 a | 625,983 |
Gilead Sciences | 31,810 a | 1,489,980 |
Johnson & Johnson | 28,430 | 1,614,824 |
Medco Health Solutions | 16,800 a | 766,248 |
Medtronic | 19,240 | 671,284 |
Teva Pharmaceutical Industries, ADR | 22,140 | 1,092,388 |
Thermo Fisher Scientific | 24,040 a | 980,111 |
11,065,950 | ||
Materials & Processing—4.3% | ||
Monsanto | 13,970 | 1,038,530 |
Praxair | 18,840 | 1,338,959 |
URS | 20,660 a | 1,023,083 |
3,400,572 | ||
Oil Comp-Intergrated—2.5% | ||
Marathon Oil | 25,000 | 753,250 |
Occidental Petroleum | 18,760 | 1,234,596 |
1,987,846 | ||
Producer Durables—7.3% | ||
Caterpillar | 31,640 | 1,045,386 |
Danaher | 15,800 | 975,492 |
8
Common Stocks (continued) | Shares | Value ($) |
Producer Durables (continued) | ||
Honeywell International | 44,110 | 1,385,054 |
Parker Hannifin | 25,530 | 1,096,769 |
United Technologies | 23,320 | 1,211,707 |
5,714,408 | ||
Semiconductors—4.1% | ||
Broadcom, Cl. A | 27,160 a | 673,296 |
Intel | 100,180 | 1,657,979 |
Marvell Technology Group | 73,660 a | 857,402 |
3,188,677 | ||
Technology—24.8% | ||
Akamai Technologies | 50,880 a | 975,878 |
Apple | 22,910 a | 3,263,071 |
Cognizant Technology Solutions, Cl. A | 45,610 a | 1,217,787 |
Google, Cl. A | 6,230 a | 2,626,506 |
Hewlett-Packard | 47,530 | 1,837,034 |
International Business Machines | 13,690 | 1,429,510 |
Microsoft | 76,380 | 1,815,553 |
Oracle | 68,260 | 1,462,129 |
Research In Motion | 19,880 a | 1,412,474 |
Salesforce.com | 28,360 a | 1,082,501 |
Western Digital | 40,580 a | 1,075,370 |
Yahoo! | 77,200 a | 1,208,952 |
19,406,765 | ||
Telecommunications—4.0% | ||
Cisco Systems | 58,880 a | 1,097,523 |
QUALCOMM | 45,510 | 2,057,052 |
3,154,575 | ||
Utilities—1.2% | ||
Questar | 29,640 | 920,618 |
Total Common Stocks | ||
(cost $83,496,167) | 77,923,855 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued) | ||||
Other Investment—.7% | Shares | Value ($) | ||
Registered Investment Company; | ||||
Dreyfus Institutional Preferred | ||||
Plus Money Market Fund | ||||
(cost $585,000) | 585,000 b | 585,000 | ||
Total Investments (cost $84,081,167) | 100.2% | 78,508,855 | ||
Liabilities, Less Cash and Receivables | (.2%) | (182,318) | ||
Net Assets | 100.0% | 78,326,537 | ||
ADR—American Depository Receipts | ||||
a | Non-income producing security. | |||
b | Investment in affiliated money market mutual fund. | |||
Portfolio Summary (Unaudited)† | ||||
Value (%) | Value (%) | |||
Technology | 24.8 | Semiconductors | 4.1 | |
Consumer Discretionary | 14.9 | Telecommunications | 4.0 | |
Health Care | 14.1 | Oil Comp-Intergrated | 2.5 | |
Consumer Staples | 10.0 | Autos & Transports | 2.3 | |
Producer Durables | 7.3 | Utilities | 1.2 | |
Financial Services | 5.8 | Money Market Investments | .7 | |
Materials & Processing | 4.3 | |||
Energy | 4.2 | 100.2 | ||
† | Based on net assets. | |||
See notes to financial statements. |
10
STATEMENT OF ASSETS AND LIABILITIES June 30, 2009 (Unaudited) |
Cost | Value | ||
Assets ($): | |||
Investments in securities—See Statement of Investments: | |||
Unaffiliated issuers | 83,496,167 | 77,923,855 | |
Affiliated issuers | 585,000 | 585,000 | |
Cash | 61,134 | ||
Dividends and interest receivable | 71,180 | ||
Prepaid expenses | 15,510 | ||
78,656,679 | |||
Liabilities ($): | |||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 50,326 | ||
Payable for shares of Common Stock redeemed | 244,993 | ||
Interest payable—Note 2 | 23 | ||
Accrued expenses | 34,800 | ||
330,142 | |||
Net Assets ($) | 78,326,537 | ||
Composition of Net Assets ($): | |||
Paid-in capital | 106,489,304 | ||
Accumulated undistributed investment income—net | 308,720 | ||
Accumulated net realized gain (loss) on investments | (22,899,175) | ||
Accumulated net unrealized appreciation | |||
(depreciation) on investments | (5,572,312) | ||
Net Assets ($) | 78,326,537 | ||
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 122,433 | 33,500 | 78,170,604 |
Shares Outstanding | 25,786 | 7,023 | 16,257,397 |
Net Asset Value Per Share ($) | 4.75 | 4.77 | 4.81 |
See notes to financial statements. |
The Fund 11
STATEMENT OF OPERATIONS | |
Six Months Ended June 30, 2009 (Unaudited) | |
Investment Income ($): | |
Income: | |
Cash dividends (net of $1,302 foreign taxes withheld at source): | |
Unaffiliated issuers | 624,166 |
Affiliated issuers | 1,275 |
Total Income | 625,441 |
Expenses: | |
Management fee—Note 3(a) | 254,244 |
Registration fees | 24,266 |
Auditing fees | 18,722 |
Prospectus and shareholders’ reports | 7,945 |
Custodian fees—Note 3(c) | 6,260 |
Shareholder servicing costs—Note 3(c) | 3,194 |
Directors’ fees and expenses—Note 3(d) | 2,985 |
Legal fees | 790 |
Loan commitment fees—Note 2 | 574 |
Interest expense—Note 2 | 572 |
Distribution fees—Note 3(b) | 49 |
Miscellaneous | 12,259 |
Total Expenses | 331,860 |
Less—reduction in expenses | |
due to undertakings—Note 3(a) | (13,995) |
Less—reduction in fees due to | |
earnings credits—Note 1(b) | (1,144) |
Net Expenses | 316,721 |
Investment Income—Net | 308,720 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments | (11,121,125) |
Net unrealized appreciation (depreciation) on investments | 16,519,669 |
Net Realized and Unrealized Gain (Loss) on Investments | 5,398,544 |
Net Increase in Net Assets Resulting from Operations | 5,707,264 |
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited)a | December 31, 2008b,c | |
Operations ($): | ||
Investment income—net | 308,720 | 706,814 |
Net realized gain (loss) on investments | (11,121,125) | (11,630,739) |
Net unrealized appreciation | ||
(depreciation) on investments | 16,519,669 | (48,045,034) |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 5,707,264 | (58,968,959) |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Class A Shares | — | (6,011) |
Class I Shares | — | (416,756) |
Net realized gain on investments: | ||
Class A Shares | — | (166,865) |
Class I Shares | — | (5,656,873) |
Return of capital: | ||
Class A Shares | — | (40,721) |
Class I Shares | — | (1,382,054) |
Total Dividends | — | (7,669,280) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 101,922 | 272,273 |
Class C Shares | 20,000 | 15,000 |
Class I Shares | 9,705,970 | 120,594,149 |
Class T Shares | — | 10,000 |
Dividends reinvested: | ||
Class A Shares | — | 205,312 |
Class I Shares | — | 6,753,059 |
Cost of shares redeemed: | ||
Class A Shares | — | (3,512,087) |
Class I Shares | (12,520,133) | (125,236,889) |
Class T Shares | (6,620) | — |
Increase (Decrease) in Net Assets | ||
from Capital Stock Transactions | (2,698,861) | (899,183) |
Total Increase (Decrease) in Net Assets | 3,008,403 | (67,537,422) |
Net Assets ($): | ||
Beginning of Period | 75,318,134 | 142,855,556 |
End of Period | 78,326,537 | 75,318,134 |
Undistributed investment income—net | 308,720 | — |
The Fund 13
STATEMENT OF CHANGES IN NET ASSETS (continued) |
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited)a | December 31, 2008b,c | |
Capital Share Transactions: | ||
Class Ad | ||
Shares sold | 24,209 | 34,544 |
Shares issued for dividends reinvested | — | 32,538 |
Shares redeemed | — | (574,751) |
Net Increase (Decrease) in Shares Outstanding | 24,209 | (507,669) |
Class C | ||
Shares sold | 4,311 | 2,712 |
Class I | ||
Shares sold | 2,122,522 | 17,019,698 |
Shares issued for dividends reinvested | — | 1,056,817 |
Shares redeemed | (2,805,760) | (18,061,289) |
Net Increase (Decrease) in Shares Outstanding | (683,238) | 15,226 |
Class Td | ||
Shares sold | — | 1,558 |
Shares redeemed | (1,558) | — |
Net Increase (Decrease) in Shares Outstanding | (1,558) | 1,558 |
a Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares. |
b The fund commenced offering four classes of shares on the close of business September 12, 2008.The existing |
shares were redesignated and the fund added Class C and Class T shares. |
c Represents information for the fund’s predecessor, BNY Hamilton Large Cap Growth Fund, through |
September 12, 2008. |
d On the close of business on February 4, 2009, 1,558 Class T shares representing $6,620 were automatically |
converted to 1,572 Class A shares. |
See notes to financial statements. |
14
FINANCIAL HIGHLIGHTS
Please note that the financial highlights information in the following tables for the funds Class A and Class I shares represents the financial highlights of the Class A and Institutional Shares, respectively, of the fund’s predecessor, BNY Hamilton Large Cap Growth Fund (“Hamilton Large Cap Growth Fund”), before the fund commenced operations as of the close of business on September 12, 2008, and represents the performanceof the fund’s Class A and Class I shares thereafter. Before the fund commenced operations, all of the assets of the Hamilton Large Cap Growth Fund were transferred to the fund in exchange for Class A and Class I shares of the fund in a tax-free reorganization.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s and the fund’s predecessors financial statements.
Six Months Ended | ||||||
June 30, 2009 | Year Ended December 31, | |||||
Class A Shares† | (Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 4.40 | 8.10 | 7.64 | 7.65 | 9.52 | 9.43 |
Investment Operations: | ||||||
Investment income (loss)—neta | .01 | .02 | .01 | .00b | (.01) | .06 |
Net realized and unrealized | ||||||
gain (loss) on investments | .34 | (3.28) | 1.35 | .44 | (.01) | .24 |
Total from Investment Operations | .35 | (3.26) | 1.36 | .44 | (.02) | .30 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | — | (.01) | (.01) | (.00)b | — | (.06) |
Dividends from net realized | ||||||
gain on investments | — | (.35) | (.89) | (.45) | (1.85) | (.15) |
Return of Capital | — | (.08) | — | — | — | — |
Total Distributions | — | (.44) | (.90) | (.45) | (1.85) | (.21) |
Net asset value, end of period | 4.75 | 4.40 | 8.10 | 7.64 | 7.65 | 9.52 |
Total Return (%)c | 7.96d | (41.90) | 17.79 | 6.04 | (.13) | 3.31 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | 2.91e | 1.10 | 1.10 | 1.09 | 1.08 | 1.11 |
Ratio of net expenses | ||||||
to average net assets | 1.38e | 1.10f | 1.10 | 1.09 | 1.08 | 1.11 |
Ratio of net investment income | ||||||
(loss) to average net assets | .33e | .20 | .10 | .06 | (.06) | .60 |
Portfolio Turnover Rate | 50d | 78 | 52 | 51 | 101 | 90 |
Net Assets, end of period | ||||||
($ x 1,000) | 122 | 7 | 4,127 | 5,487 | 8,126 | 10,758 |
† Represents information for Class A shares of the fund’s predecessor, Hamilton Large Cap Growth Fund, through |
September 12, 2008. |
a Based on average shares outstanding at each month end. |
b Amount represents less than $.01 per share. |
c Exclusive of sales charge. |
d Not annualized. |
e Annualized. |
f Expense waivers and/or reimbursements amounted to less than .01%. |
See notes to financial statements. |
The Fund 15
FINANCIAL HIGHLIGHTS (continued) |
Six Months Ended | ||
June 30, 2009 | Year Ended | |
Class C Shares | (Unaudited) | December 31, 2008a |
Per Share Data ($): | ||
Net asset value, beginning of period | 4.43 | 6.42 |
Investment Operations: | ||
Investment income (loss)—netb | (.01) | .00c |
Net realized and unrealized | ||
gain (loss) on investments | .35 | (1.99) |
Total from Investment Operations | .34 | (1.99) |
Net asset value, end of period | 4.77 | 4.43 |
Total Return (%)d,e | 7.68 | (31.00) |
Ratios/Supplemental Data (%): | ||
Ratio of total expenses to average net assets | 2.87f | 2.01f |
Ratio of net expenses to average net assets | 2.11f | 1.91f |
Ratio of net investment income | ||
(loss) to average net assets | (.45)f | .04f |
Portfolio Turnover Rate | 50e | 78 |
Net Assets, end of period ($ x 1,000) | 34 | 12 |
a | From September 13, 2008 (commencement of initial offering) to December 31, 2008. |
b | Based on average shares outstanding at each month end. |
c | Amount represents less than $.01 per share. |
d | Exclusive of sales charge. |
e | Not annualized. |
f | Annualized. |
See notes to financial statements. |
16
Six Months Ended | ||||||
June 30, 2009 | Year Ended December 31, | |||||
Class I Shares† | (Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 4.44 | 8.20 | 7.72 | 7.73 | 9.60 | 9.50 |
Investment Operations: | ||||||
Investment income—neta | .02 | .04 | .03 | .02 | .02 | .09 |
Net realized and unrealized | ||||||
gain (loss) on investments | .35 | (3.34) | 1.37 | .45 | (.02) | .25 |
Total from Investment Operations | .37 | (3.30) | 1.40 | .47 | — | .34 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | — | (.03) | (.03) | (.03) | (.02) | (.09) |
Dividends from net realized | ||||||
gain on investments | — | (.35) | (.89) | (.45) | (1.85) | (.15) |
Return of Capital | — | (.08) | — | — | — | — |
Total Distributions | — | (.46) | (.92) | (.48) | (1.87) | (.24) |
Net asset value, end of period | 4.81 | 4.44 | 8.20 | 7.72 | 7.73 | 9.60 |
Total Return (%) | 8.33b | (42.03) | 18.18 | 6.29 | .07 | 3.63 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | .91c | .86 | .85 | .84 | .82 | .85 |
Ratio of net expenses | ||||||
to average net assets | .87c | .84 | .85 | .84 | .82 | .85 |
Ratio of net investment income | ||||||
to average net assets | .85c | .61 | .34 | .30 | .19 | .91 |
Portfolio Turnover Rate | 50b | 78 | 52 | 51 | 101 | 90 |
Net Assets, end of period | ||||||
($ x 1,000) | 78,171 | 75,292 | 138,729 | 143,479 | 205,786 | 336,716 |
† Represents information for Institutional shares of the fund’s predecessor, Hamilton Large Cap Growth Fund through |
September 12, 2008. |
a Based on average shares outstanding at each month end. |
b Not annualized. |
c Annualized. |
See notes to financial statements. |
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Large Cap Growth Fund (the “fund”) is a separate diversified series of Dreyfus Premier Investment Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is long-term 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.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund’s shares. The fund is authorized to issue 50 million shares of $.001 par value Common Stock in the following classes of shares: Class A and Class C and 100 million share of $.001 par value Common Stock of Class I. Class A shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
Effective December 3, 2008, investments for new accounts were no longer permitted in ClassT of the fund, except that participants in certain group retirement plans were able to open a new account in Class T of the fund, provided that the fund was established as an investment option under the plans before December 3, 2008. On February 4, 2009, the fund issued to each holder of its Class T shares, in exchange for said shares, Class A shares of the fund having an aggregate net asset value equal to the aggregate net asset value of the shareholder’s Class
18
T shares. Subsequent investments in the fund’s Class A shares made by prior holders of the fund’s Class T shares who received Class A shares of the fund in exchange for their Class T shares are subject to the front-end sales load schedule that was in effect for Class T shares at the time of the exchange. Otherwise, all other Class A share attributes will be in effect. Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased a nd sold, and public trading in similar securities of the issuer or comparable issuers.
The fund adopted Statement of Financial Accounting Standards No. 157 “FairValue Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements.
Various inputs are used in determining the value of the fund’s investments relating to FAS 157.These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical investments |
Level 2—other significant observable inputs (including quoted |
prices for similar securities, interest rates, prepayment speeds, |
credit risk, etc.). |
Level 3—significant unobservable inputs (including the fund’s |
assumptions in determining the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
20
The following is a summary of the inputs used as of June 30, 2009 in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Quoted | Observable | Unobservable | ||
Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities— | ||||
Domestic | 76,831,467 | — | — | 76,831,467 |
Equity Securities— | ||||
Foreign | 1,092,388 | — | — | 1,092,388 |
Mutual Funds | 585,000 | — | — | 585,000 |
Other Financial | ||||
Instruments† | — | — | — | — |
Liabilities ($) | ||||
Other Financial | ||||
Instruments† | — | — | — | — |
† Other financial instruments include derivative instruments, such as futures, forward foreign currency exchange contracts, swap contracts and options contracts. Amounts shown represent unrealized appreciation (depreciation), or in the case of options, market value at period end.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
The fund has arrangements with the custodian and cash management bank whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Affiliated issuers: Investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
(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 June 30, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended December 31, 2008 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund has an unused capital loss carryover of $5,003,788 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to December 31, 2008. If not applied, the carryover expires in fiscal 2016.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2008 was as follows: ordinary income $693,564, long-term capital gains $5,552,941 and return of capital
22
$1,422,775.The tax character of current year distributions, if any, will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $145 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 Facility 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 June 30, 2009 was approximately $75,500, with a related weighted average annualized interest rate of 1.52%.
NOTE 3—Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (“Agreement”) with the Manager, the management fee is computed at an annual rate of .70% of the value of the fund’s average daily net assets and is payable monthly.
The Manager has contractually agreed, until September 30, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of Class I shares (excluding taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed .87%.
The Manager has also agreed, until May 1, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of Class A and Class C (excluding taxes, interest, brokerage commissions, commitment fees on borrowings, extraordinary expenses, shareholder services fees and Rule 12b-1 fees) do not exceed 1.25%.
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The reduction in expenses, pursuant to the undertakings, amounted to $13,995 during the period ended June 30, 2009.
During the period ended June 30, 2009, the Distributor retained $341 from commissions earned on sales of the fund’s Class A shares.
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay and Class T shares paid the Distributor for distributing their shares at an annual rate of .75% and .25% of the value of their respective average daily net assets. During the period ended June 30, 2009, Class C and Class T shares were charged $47 and $2, respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay and Class T shares paid 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 (a securities dealer, financial institution or other industry professional) in respect of these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended June 30, 2009, Class A, Class C and Class T shares were charged $90, $15, and $2, respectively, pursuant to the Shareholder Services Plan.
The fund compensates DreyfusTransfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended June 30, 2009, the fund was charged $6,512 pursuant to the transfer agency agreement.
The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended June 30,
24
2009, the fund was charged $518 pursuant to the cash management agreement.These fees were offset by earnings credits pursuant to the cash management agreement.
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended June 30, 2009, the fund was charged $6,260 pursuant to the custody agreement.
During the period ended June 30, 2009, the fund was charged $3,341 for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $46,285,Rule 12b-1 distribution plan fees $11,shareholder services plan fees $28, custodian fees $6,368, chief compliance officer fees $1,670 and transfer agency per account fees $1,963, which are offset against an expense reimbursement currently in effect in the amount of $5,999.
(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, during the period ended June 30, 2009, amounted to $32,926,327 and $37,838,153, respectively.
The fund adopted Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. Since the fund held no derivatives during the period ended June 30, 2009, FAS 161 disclosures did not impact the notes to the financial statements.
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
At June 30, 2009, accumulated net unrealized depreciation on investments was $5,572,312, consisting of $4,839,617 gross unrealized appreciation and $10,411,929 gross unrealized depreciation.
At June 30, 2009, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
NOTE 5—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date of issuance of the financial statements. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.
26
NOTES
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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value
Contents | |
THE FUND | |
2 | A Letter from the Chairman and CEO |
3 | Discussion of Fund Performance |
6 | Understanding Your Fund’s Expenses |
6 | Comparing Your Fund’s Expenses With Those of Other Funds |
7 | Statement of Investments |
11 | Statement of Assets and Liabilities |
12 | Statement of Operations |
13 | Statement of Changes in Net Assets |
15 | Financial Highlights |
18 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
The Fund
Dreyfus |
Large Cap Value Fund |
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Large CapValue Fund, covering the six-month period from January 1, 2009, through June 30, 2009.
The severe recession and banking crisis that dominated the financial markets at the start of 2009 appear to have moderated as of mid-year. Previously frozen credit markets have thawed, giving businesses access to the capital they need to grow. After reaching multi-year lows in early March, equities staged an impressive rally, enabling most major stock market indices to end the six-month reporting period close to where they began.While the U.S. economy remains weak overall, we have seen encouraging evidence of potential recovery, including a recovering housing market and improvements within certain manufacturing sectors. Meanwhile, inflation has remained tame in the face of high unemployment and unused manufacturing capacity. Although these developments give us reasons for optimism, we remain cautious due to the speed and magnitude of the stock market’s 2009 rebound. Indeed, the market’s advance was led mainly by lower-quality stocks when investors developed renewed appetites for risk. We would prefer to see a steadier rise in stock prices supported by more concrete economic data, as the rapid rise increases the possibility that profit-taking could move the market lower. In uncertain markets such as this one, even the most seasoned investors can benefit from professional counsel. To determine how your investments should be positioned for the challenges and opportunities that lie ahead, we continue to stress that you talk regularly with your financial advisor.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Managers.
Thank you for your continued confidence and support.
Jonathan R. Baum Chairman and Chief Executive Officer The Dreyfus Corporation July 15, 2009 |
2
DISCUSSION OF FUND PERFORMANCE
For the reporting period of January 1, 2009, through June 30, 2009, as provided by Julianne McHugh and Brian Ferguson, Portfolio Managers
Fund and Market Performance Overview
For the six-month period ended June 30, 2009, Dreyfus Large Cap Value Fund’s Class A shares achieved a total return of –1.83%, Class C shares returned –2.00% and Class I shares returned –1.38%.1
Effective May 1, 2009, the fund’s primary benchmark index was changed from the Standard & Poor’s 500 Composite Stock Price Index (“S&P 500 Index”) to the Russell 1000Value Index (the “Index”), which more accurately reflects the fund’s investment approach. The Russell 1000 Value Index achieved a total return of –2.87% for the six-month period.2 The S&P 500 Index returned 3.19% for the same period.3
Despite a deep economic recession and an ongoing banking crisis, stocks rallied in the spring of 2009, offsetting a substantial portion of losses incurred earlier in the year. The fund fared relatively well in this environment, as the success of its security selection strategy in eight of 10 economic sectors enabled it to produce higher returns than its benchmark.
The Fund’s Investment Approach
The fund seeks to provide long-term capital appreciation; its secondary goal is current income.To pursue these goals, the fund normally invests at least 80% of its assets in equity securities of large capitalization companies with market capitalizations of $5 billion or more at the time of purchase.The fund invests primarily in equity securities of U.S. issuers, but may invest up to 20% of its assets in equity securities of foreign issuers, including those in emerging markets.
When choosing stocks, we focus on individual stock selection (a “bottom-up” approach) rather than forecasting stock market trends. We employ a three-step value screening process that seeks to identify the stocks of companies that are underpriced relative to their intrinsic worth or business prospects, and that exhibit sound business fundamentals, positive business momentum or a catalyst that may trigger an improving stock price.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued) |
A Sustained Market Rally Lifted Stock Prices
The U.S. stock market continued to decline early in 2009 amid rising unemployment, plunging housing prices and depressed consumer confidence. At the same time, a global banking crisis continued to roil the world’s credit markets.These influences fueled a severe bear market that drove stock market averages to multi-year lows.
Market sentiment began to improve in early March, as aggressive measures adopted by government and monetary authorities appeared to avert a collapse of the banking system, and investors looked forward to better economic times. Bargain hunters began to bid beaten-down stock prices higher, fueling a sustained market rally that enabled many stocks to recover much of the ground they had lost earlier in the reporting period.
Energy and Financial Stocks Drove Fund Performance
Our value-oriented stock selection strategy proved relatively ineffective when 2009 began, as investors responded indiscriminately to fear of losses rather than the strengths and weaknesses of individual companies. However, our security selection process worked better during the springtime rally when investors refocused on fundamentals. Consequently, the fund ended the reporting period with above-average returns in eight of the benchmark’s 10 economic sectors. The fund’s relative performance was especially robust in the energy, financial services and technology sectors.
In the economically sensitive energy sector, an underweighted position in Exxon Mobil proved advantageous as investors sold the industry bellwether in favor of more aggressive investments. Similarly, the fund benefited from its lack of exposure to another energy giant, ConocoPhillips. Instead, we emphasized smaller oil services and exploration-and-production companies, including Occidental Petroleum and XTO Energy.
The battered financial services sector rebounded after it was reported in the spring that major U.S. banks had passed government-ordered “stress tests.”We also successfully avoided most of the credit crisis’s more severely damaged financial institutions in favor of healthier companies, such as Northern Trust and JPMorgan Chase & Co. The technology
4
sector represented the fund’s largest overweighted position, a stance that proved successful as pent-up demand for technology upgrades drove stock prices higher.
The fund’s performance lagged its benchmark in only two market sectors. Results in the consumer discretionary sector were undermined by the fund’s lack of exposure to Ford Motor Company,which gained when its chief U.S. competitors filed for bankruptcy protection.The fund also did not participate fully in a rebound among retailers,where we preferred relatively defensive investments, such as auto parts seller AutoZone. In the telecommunications area, the fund did not own Sprint Nextel Corp., which rallied strongly due to factors we consider unsustainable.
Positioned for an Economic Recovery
Despite the recent market rally, we have continued to find what we believe to be attractively valued opportunities in companies that appear poised to prosper during an economic rebound, particularly in the financial services and technology sectors.We continue to believe that a highly disciplined and selective approach to security selection is required to produce consistently superior performance over the long term.
July 15, 2009
1 | The total return figures presented for Class A and I shares of the fund reflect the performance of BNY Hamilton Large Cap Value Fund’s (the “predecessor fund”) Class A shares and Institutional shares, respectively, prior to 9/13/08. Performance for each share class includes returns for the predecessor fund (Class A and Class I only) and the current maximum sales load, and reflects current distribution and servicing fees in effect only since the reorganization date. |
Investors should consider, when deciding whether to purchase a particular class of shares, the investment amount, anticipated holding period and other relevant factors. 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 for Classes A and C through May 1, 2010, and in effect for Class I through September 30, 2010, at which time it may be extended, terminated or modified. Had these expenses not been absorbed, the fund’s returns would have been lower. | |
2 | SOURCE: LIPPER INC. — Reflects the reinvestment of dividends and, where applicable, capital gain distributions.The Russell 1000 Value Index is an unmanaged index, which measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. |
3 | SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital gain distributions.The Standard & Poor’s 500 Composite Stock Price Index is a widely accepted, unmanaged index of U.S. stock market performance. |
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Large Cap Value Fund from January 1, 2009 to June 30, 2009. 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 June 30, 2009
Class A Class C Class I
Expenses paid per $1,000† $ 6.68 $ 10.26 $ 3.94 Ending value (after expenses) $981.70 $980.00 $986.20
COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment | |||
assuming a hypothetical 5% annualized return for the six months ended June 30, 2009 | |||
Class A | Class C | Class I | |
Expenses paid per $1,000† | $ 6.80 | $ 10.44 | $ 4.01 |
Ending value (after expenses) | $1,018.05 | $1,014.43 | $1,020.83 |
† Expenses are equal to the fund’s annualized expense ratio of 1.36% for Class A, 2.09% for Class C and .80% for Class I, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS June 30, 2009 (Unaudited) |
Common Stocks—100.6% | Shares | Value ($) |
Consumer Discretionary—9.0% | ||
AutoZone | 2,740 a | 414,041 |
Carnival | 44,080 | 1,135,942 |
Gap | 36,620 | 600,568 |
Home Depot | 95,230 | 2,250,285 |
Johnson Controls | 27,950 | 607,074 |
Lowe’s Cos. | 30,260 | 587,347 |
News, Cl. A | 117,590 | 1,071,245 |
Omnicom Group | 51,000 | 1,610,580 |
Staples | 29,430 | 593,603 |
Time Warner | 48,570 | 1,223,478 |
Toll Brothers | 24,320 a | 412,710 |
10,506,873 | ||
Consumer Staples—9.3% | ||
Cadbury, ADR | 30,532 | 1,050,301 |
CVS Caremark | 65,760 | 2,095,771 |
Kraft Foods, Cl. A | 42,950 | 1,088,353 |
Lorillard | 8,280 | 561,136 |
PepsiCo | 39,930 | 2,194,553 |
Philip Morris International | 27,830 | 1,213,945 |
Procter & Gamble | 20,250 | 1,034,775 |
Wal-Mart Stores | 12,010 | 581,764 |
Walgreen | 38,310 | 1,126,314 |
10,946,912 | ||
Energy—17.2% | ||
Anadarko Petroleum | 11,530 | 523,347 |
Chevron | 71,560 | 4,740,850 |
Devon Energy | 12,550 | 683,975 |
EOG Resources | 7,430 | 504,646 |
Exxon Mobil | 63,300 | 4,425,303 |
Hess | 21,660 | 1,164,225 |
Marathon Oil | 38,630 | 1,163,922 |
Occidental Petroleum | 72,030 | 4,740,294 |
Schlumberger | 11,800 | 638,498 |
XTO Energy | 42,240 | 1,611,034 |
20,196,094 | ||
Financial—25.8% | ||
ACE | 13,600 | 601,528 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks (continued) | Shares | Value ($) |
Financial (continued) | ||
Aflac | 18,410 | 572,367 |
Ameriprise Financial | 35,570 | 863,284 |
AON | 39,130 | 1,481,853 |
Bank of America | 223,710 | 2,952,972 |
Capital One Financial | 11,820 | 258,621 |
Chubb | 20,210 | 805,975 |
Franklin Resources | 12,230 | 880,682 |
Goldman Sachs Group | 12,590 | 1,856,270 |
Invesco | 51,280 | 913,810 |
JPMorgan Chase & Co. | 166,710 | 5,686,478 |
Marsh & McLennan Cos. | 24,250 | 488,152 |
MetLife | 57,020 | 1,711,170 |
Moody’s | 34,400 | 906,440 |
Morgan Stanley | 65,020 | 1,853,720 |
PNC Financial Services Group | 9,960 | 386,548 |
Prudential Financial | 15,200 | 565,744 |
State Street | 28,810 | 1,359,832 |
T. Rowe Price Group | 17,600 | 733,392 |
Travelers Cos. | 26,380 | 1,082,635 |
U.S. Bancorp | 32,980 | 591,002 |
Wells Fargo & Co. | 150,120 | 3,641,911 |
30,194,386 | ||
Health Care—10.8% | ||
AmerisourceBergen | 33,340 | 591,451 |
Amgen | 28,450 a | 1,506,143 |
Boston Scientific | 60,200 a | 610,428 |
Covidien | 33,320 | 1,247,501 |
McKesson | 12,000 | 528,000 |
Merck & Co. | 70,390 | 1,968,104 |
Pfizer | 258,250 | 3,873,750 |
Schering-Plough | 27,130 | 681,506 |
Thermo Fisher Scientific | 12,760 a | 520,225 |
UnitedHealth Group | 21,120 | 527,578 |
WellPoint | 11,780 a | 599,484 |
12,654,170 | ||
Industrial—6.9% | ||
Dover | 18,130 | 599,922 |
8
Common Stocks (continued) | Shares | Value ($) |
Industrial (continued) | ||
Eaton | 19,970 | 890,862 |
General Electric | 188,260 | 2,206,407 |
Honeywell International | 17,600 | 552,640 |
Raytheon | 20,620 | 916,147 |
Tyco International | 22,730 | 590,525 |
Union Pacific | 23,480 | 1,222,369 |
United Parcel Service, Cl. B | 10,670 | 533,393 |
Waste Management | 18,381 | 517,609 |
8,029,874 | ||
Information Technology—7.9% | ||
Cisco Systems | 89,030 a | 1,659,519 |
EMC | 44,200 a | 579,020 |
Hewlett-Packard | 32,030 | 1,237,959 |
Intel | 42,690 | 706,519 |
Microsoft | 85,800 | 2,039,466 |
Nokia, ADR | 143,070 | 2,085,961 |
QUALCOMM | 21,100 | 953,720 |
9,262,164 | ||
Materials—2.9% | ||
Air Products & Chemicals | 13,360 | 862,922 |
Dow Chemical | 30,180 | 487,105 |
E.I. du Pont de Nemours & Co. | 20,610 | 528,028 |
Freeport-McMoRan Copper & Gold | 31,380 | 1,572,452 |
3,450,507 | ||
Telecommunication Services—3.2% | ||
AT & T | 153,100 | 3,803,004 |
Utilities—7.6% | ||
Entergy | 23,190 | 1,797,689 |
Exelon | 27,460 | 1,406,227 |
FPL Group | 32,510 | 1,848,519 |
NRG Energy | 44,940 a | 1,166,642 |
PG & E | 13,270 | 510,099 |
Questar | 36,840 | 1,144,250 |
Southern | 32,060 | 998,990 |
8,872,416 | ||
Total Common Stocks | ||
(cost $151,123,369) | 117,916,400 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued) | ||
Other Investment—.2% | Shares | Value ($) |
Registered Investment Company; | ||
Dreyfus Institutional Preferred | ||
Plus Money Market Fund | ||
(cost $254,000) | 254,000 b | 254,000 |
Total Investments (cost $151,377,369) | 100.8% | 118,170,400 |
Liabilities, Less Cash and Receivables | (.8%) | (934,544) |
Net Assets | 100.0% | 117,235,856 |
ADR—American Depository Receipts | ||
a Non-income producing security. | ||
b Investment in affiliated money market mutual fund. |
Portfolio Summary (Unaudited)† | |||
Value (%) | Value (%) | ||
Financial | 25.8 | Utilities | 7.6 |
Energy | 17.2 | Industrial | 6.9 |
Health Care | 10.8 | Telecommunication Services | 3.2 |
Consumer Staples | 9.3 | Materials | 2.9 |
Consumer Discretionary | 9.0 | Money Market Investments | .2 |
Information Technology | 7.9 | 100.8 | |
† Based on net assets. | |||
See notes to financial statements. |
10
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
Cost | Value | ||
Assets ($): | |||
Investments in securities—See Statement of Investments: | |||
Unaffiliated issuers | 151,123,369 | 117,916,400 | |
Affiliated issuers | 254,000 | 254,000 | |
Receivable for investment securities sold | 2,624,890 | ||
Dividends and interest receivable | 161,847 | ||
120,957,137 | |||
Liabilities ($): | |||
Due to The Dreyfus Corporation and affiliates—Note 3(c) | 101,292 | ||
Cash overdraft due to Custodian | 17,848 | ||
Payable for investment securities purchased | 2,733,245 | ||
Payable for shares of Common Stock redeemed | 778,968 | ||
Interest payable—Note 2 | 334 | ||
Accrued expenses | 89,594 | ||
3,721,281 | |||
Net Assets ($) | 117,235,856 | ||
Composition of Net Assets ($): | |||
Paid-in capital | 185,898,963 | ||
Accumulated undistributed investment income—net | 1,489,573 | ||
Accumulated net realized gain (loss) on investments | (36,945,711) | ||
Accumulated net unrealized appreciation | |||
(depreciation) on investments | (33,206,969) | ||
Net Assets ($) | 117,235,856 | ||
Net Asset Value Per Share | |||
Class A | Class C | Class I | |
Net Assets ($) | 169,296 | 7,229 | 117,059,331 |
Shares Outstanding | 26,267 | 1,133.787 | 18,173,629 |
Net Asset Value Per Share ($) | 6.45 | 6.38 | 6.44 |
See notes to financial statements. |
The Fund 11
STATEMENT OF OPERATIONS | |
Six Months Ended June 30, 2009 (Unaudited) | |
Investment Income ($): | |
Income: | |
Cash dividends (net of $23,974 foreign taxes withheld at source): | |
Unaffiliated issuers | 2,018,052 |
Affiliated issuers | 357 |
Total Income | 2,018,409 |
Expenses: | |
Management fee—Note 3(a) | 459,964 |
Registration fees | 26,477 |
Professional fees | 24,392 |
Prospectus and shareholders’ reports | 10,878 |
Directors’ fees and expenses—Note 3(d) | 8,189 |
Custodian fees—Note 3(c) | 4,450 |
Shareholder servicing costs—Note 3(c) | 2,468 |
Interest expense—Note 2 | 1,749 |
Loan commitment fees—Note 2 | 1,227 |
Distribution fees—Note 3(b) | 27 |
Miscellaneous | 4,799 |
Total Expenses | 544,620 |
Less—reduction in expenses | |
due to undertaking—Note 3(a) | (15,566) |
Less—reduction in fees due to | |
earnings credits—Note 1(b) | (218) |
Net Expenses | 528,836 |
Investment Income—Net | 1,489,573 |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | |
Net realized gain (loss) on investments | (19,622,746) |
Net unrealized appreciation (depreciation) on investments | 19,962,796 |
Net Realized and Unrealized Gain (Loss) on Investments | 340,050 |
Net Increase in Net Assets Resulting from Operations | 1,829,623 |
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited) a | December 31, 2008b,c | |
Operations ($): | ||
Investment income—net | 1,489,573 | 4,700,586 |
Net realized gain (loss) on investments | (19,622,746) | (10,798,000) |
Net unrealized appreciation | ||
(depreciation) on investments | 19,962,796 | (96,659,901) |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 1,829,623 | (102,757,315) |
Dividends to Shareholders from ($): | ||
Investment income—net: | ||
Class A Shares | — | (10,966) |
Class I Shares | — | (3,308,880) |
Net realized gain on investments: | ||
Class A Shares | — | (54,754) |
Class I Shares | — | (14,549,522) |
Return of capital: | ||
Class A Shares | — | (48,122) |
Class I Shares | — | (12,787,316) |
Total Dividends | — | (30,759,560) |
Capital Stock Transactions ($): | ||
Net proceeds from shares sold: | ||
Class A Shares | 87,120 | 101,767 |
Class C Shares | — | 10,000 |
Class I Shares | 4,138,683 | 227,580,332 |
Class T Shares | — | 10,000 |
Dividends reinvested: | ||
Class A Shares | — | 113,806 |
Class I Shares | — | 25,204,314 |
Cost of shares redeemed: | ||
Class A Shares | (1,809) | (1,024,375) |
Class I Shares | (56,062,309)d | (281,722,399) |
Class T Shares | (6,565) | — |
Increase (Decrease) in Net Assets | ||
from Capital Stock Transactions | (51,844,880) | (29,726,555) |
Total Increase (Decrease) in Net Assets | (50,015,257) | (163,243,430) |
Net Assets ($): | ||
Beginning of Period | 167,251,113 | 330,494,543 |
End of Period | 117,235,856 | 167,251,113 |
Undistributed investment income—net | 1,489,573 | — |
The Fund 13
STATEMENT OF CHANGES IN NET ASSETS (continued) |
Six Months Ended | ||
June 30, 2009 | Year Ended | |
(Unaudited) a | December 31, 2008b,c | |
Capital Share Transactions: | ||
Class Ae | ||
Shares sold | 13,606 | 14,326 |
Shares issued for dividends reinvested | — | 12,702 |
Shares redeemed | (283) | (119,219) |
Net Increase (Decrease) in Shares Outstanding | 13,323 | (92,191) |
Class C | ||
Shares sold | — | 1,134 |
Class I | ||
Shares sold | 730,870 | 22,647,022 |
Shares issued for dividends reinvested | — | 2,852,909 |
Shares redeemed | (8,140,187) | (28,535,382) |
Net Increase (Decrease) in Shares Outstanding | (7,409,317) | (3,035,451) |
Class Te | ||
Shares sold | — | 1,134 |
Shares redeemed | (1,134) | — |
Net Increase (Decrease) in Shares Outstanding | (1,134) | 1,134 |
a Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares. |
b The fund commenced offering four classes of shares on the close of business September 12, 2008.The existing shares |
were redesignated and the fund added Class C and Class T shares. |
c Represents information for the fund’s predecessor, BNY Hamilton Large Cap Value Fund, through September 12, 2008. |
d Includes redemption-in-kind amounting to $19,314,039. |
e On the close of business on February 4, 2009, 1,134 Class T shares representing $6,565 were automatically |
converted to 1,126 Class A shares. |
See notes to financial statements. |
14
FINANCIAL HIGHLIGHTS
Please note that the financial highlights information in the following tables for the fund’s Class A and Class I shares represents the financial highlights of the Class A and Institutional Shares, respectively, of the fund’s predecessor, BNY Hamilton Large Cap Value Fund (“Hamilton Large Cap Value Fund”), before the fund commenced operations as of the close of business on September 12, 2008, and represents the performance of the fund’s Class A and Institutional shares thereafter. Before the fund commenced operations, all of the assets of the Hamilton Large CapValue Fund were transferred to the fund in exchange for Class A and Class I shares of the fund in a tax-free reorganization.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s and the fund’s predecessors financial statements.
Six Months Ended | ||||||
June 30, 2009 | Year Ended December 31, | |||||
Class A Shares† | (Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 6.56 | 11.55 | 11.85 | 11.24 | 10.81 | 10.03 |
Investment Operations: | ||||||
Investment income—neta | .04 | .15 | .25 | .18 | .15 | .15 |
Net realized and unrealized | ||||||
gain (loss) on investments | (.15) | (3.93) | .56 | 1.53 | .76 | .77 |
Total from Investment Operations | (.11) | (3.78) | .81 | 1.71 | .91 | .92 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | — | (.11) | (.26) | (.18) | (.14) | (.14) |
Dividends from net realized | ||||||
gain on investments | — | (.59) | (.85) | (.92) | (.34) | — |
Return of capital | — | (.51) | — | — | — | — |
Total Distributions | — | (1.21) | (1.11) | (1.10) | (.48) | (.14) |
Net asset value, end of period | 6.45 | 6.56 | 11.55 | 11.85 | 11.24 | 10.81 |
Total Return (%)b | (1.83)c | (35.49) | 6.78 | 15.41 | 8.45 | 9.22 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | 2.56d | 1.07 | 1.04 | 1.03 | 1.06 | 1.17 |
Ratio of net expenses | ||||||
to average net assets | 1.36d | 1.05 | 1.04 | 1.03 | 1.05 | 1.05 |
Ratio of net investment income | ||||||
to average net assets | 1.54d | 1.38 | 2.04 | 1.50 | 1.33 | 1.42 |
Portfolio Turnover Rate | 39.95c | 133 | 34 | 59 | 43 | 37 |
Net Assets, end of period | ||||||
($ x 1,000) | 169 | 85 | 1,214 | 1,371 | 1,015 | 860 |
† Represents information for Class A shares of the fund’s predecessor, BNY Hamilton Large Cap Value Fund, through |
September 12, 2008. |
a Based on average shares outstanding at each month end. |
b Exclusive of sales charge. |
c Not annualized. |
d Annualized. |
See notes to financial statements. |
The Fund 15
FINANCIAL HIGHLIGHTS (continued) |
Six Months Ended | ||
June 30, 2009 | Year Ended | |
Class C Shares | (Unaudited) | December 31, 2008a |
Per Share Data ($): | ||
Net asset value, beginning of period | 6.51 | 8.82 |
Investment Operations: | ||
Investment income—netb | .03 | .03 |
Net realized and unrealized | ||
gain (loss) on investments | (.16) | (2.34) |
Total from Investment Operations | (.13) | (2.31) |
Net asset value, end of period | 6.38 | 6.51 |
Total Return (%)c,d | (2.00) | (26.19) |
Ratios/Supplemental Data (%): | ||
Ratio of total expenses to average net assetse | 2.64 | 2.09 |
Ratio of net expenses to average net assetse | 2.09 | 1.98 |
Ratio of net investment income | ||
to average net assetse | .91 | 1.39 |
Portfolio Turnover Rate | 39.95d | 133 |
Net Assets, end of period ($ x 1,000) | 7 | 7 |
a | From September 13, 2008 (commencement of initial offering) to December 31, 2008. |
b | Based on average shares outstanding at each month end. |
c | Exclusive of sales charge. |
d | Not annualized. |
e | Annualized. |
See notes to financial statements. |
16
Six Months Ended | ||||||
June 30, 2009 | Year Ended December 31, | |||||
Class I Shares† | (Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 6.53 | 11.51 | 11.81 | 11.19 | 10.76 | 10.01 |
Investment Operations: | ||||||
Investment income—neta | .07 | .18 | .28 | .21 | .18 | .18 |
Net realized and unrealized | ||||||
gain (loss) on investments | (.16) | (3.93) | .56 | 1.54 | .76 | .73 |
Total from Investment Operations | (.09) | (3.75) | .84 | 1.75 | .94 | .91 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | — | (.13) | (.29) | (.21) | (.17) | (.16) |
Dividends from net realized | ||||||
gain on investments | — | (.59) | (.85) | (.92) | (.34) | — |
Return of capital | — | (.51) | — | — | — | — |
Total Distributions | — | (1.23) | (1.14) | (1.13) | (.51) | (.16) |
Net asset value, end of period | 6.44 | 6.53 | 11.51 | 11.81 | 11.19 | 10.76 |
Total Return (%) | (1.38)b | (35.40) | 7.07 | 15.84 | 8.74 | 9.21 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | .83c | .83 | .79 | .78 | .81 | .91 |
Ratio of net expenses | ||||||
to average net assets | .80c | .80 | .79 | .78 | .80 | .80 |
Ratio of net investment income | ||||||
to average net assets | 2.27c | 1.85 | 2.31 | 1.76 | 1.59 | 1.73 |
Portfolio Turnover Rate | 39.95b | 133 | 34 | 59 | 43 | 37 |
Net Assets, end of period | ||||||
($ x 1,000) | 117,059 | 167,151 | 329,281 | 361,395 | 310,927 | 236,631 |
† Represents information for Institutional shares of the fund’s predecessor, BNY Hamilton Large Cap Value Fund, |
through September 12, 2008. |
a Based on average shares outstanding at each month end. |
b Not annualized. |
c Annualized. |
See notes to financial statements. |
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Large CapValue Fund (the “fund”) is a separate diversified series of Dreyfus Premier Investment Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is long-term 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.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager is the distributor of the fund’s shares.The fund is authorized to issue 50 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A and Class C and 100 million shares of $.001 par value Common Stock of Class I. Class A shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase and Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
Effective December 3, 2008, investments for new accounts were no longer permitted in ClassT shares of the fund, except that participants in certain group retirement plans were able to open a new account in Class T shares of the fund, provided that the fund was established as an investment option under the plans before December 3, 2008. On February 4, 2009, the fund issued to each holder of its Class T shares, in exchange for said shares, Class A shares of the fund having an
18
aggregate net asset value equal to the aggregate net asset value of the shareholder’s Class T shares. Subsequent investments in the fund’s Class A shares made by prior holders of the fund’s Class T shares who received Class A shares of the fund in exchange for their ClassT shares are subject to the front-end sales load schedule that was in effect for Class T shares at the time of the exchange. Otherwise, all other Class A share attributes will be in effect. Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
available. Registered investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as deter mined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers Financial futures are valued at the last sales price.
The fund adopted Statement of Financial Accounting Standards No. 157 “FairValue Measurements” (“FAS 157”). FAS 157 establishes an author itative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements
Various inputs are used in determining the value of the fund’s invest ments relating to FAS 157.These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical investments. |
Level 2—other significant observable inputs (including quoted |
prices for similar securities, interest rates, prepayment speeds, |
credit risk, etc.). |
Level 3—significant unobservable inputs (including the fund’s own |
assumptions in determining the fair value of investments). |
20
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of June 30, 2009 in valuing the fund’s investments:
Level 2—Other | Level 3— | |||
Level 1— | Significant | Significant | ||
Quoted | Observable | Unobservable | ||
Prices | Inputs | Inputs | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities— | ||||
Domestic | 114,780,138 | — | — | 114,780,138 |
Equity Securities— | ||||
Foreign | 3,136,262 | — | — | 3,136,262 |
Mutual Funds | 254,000 | — | — | 254,000 |
Other Financial | ||||
Instruments† | — | — | — | — |
Liabilities ($) | ||||
Other Financial | ||||
Instruments† | — | — | — | — |
† Other financial instruments include derivative instruments, such as futures, forward foreign currency exchange contracts, swap contracts and options contracts. Amounts shown represent unrealized appreciation (depreciation), or in the case of options, market value at period end.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
The fund has arrangements with the custodian and cash management bank whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Affiliated issuers: Investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
(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 June 30, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended December 31, 2008 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 December 31, 2008 was as follows: ordinary income $4,754,214, long-term capital gains $13,169,908 and return of capital $12,835,438.The tax character of current year distributions, if any, will be determined at the end of the current fiscal year.
22
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $145 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 Facility 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 the borrowing.
The average amount of borrowings outstanding under the Facilities during the period ended June 30, 2009, was approximately $235,900 with a related weighted average annualized interest rate of 1.52%.
NOTE 3—Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (“Agreement”) with the Manager, the management fee is computed at an annual rate of .70% of the value of the fund’s average daily net assets and is payable monthly.
The Manager has contractually agreed, until September 30, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of Class I shares (excluding taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed .80%.
The Manager has agreed, until May 1, 2010, to waive receipt of its fees and/or assume the expenses of the fund so that the direct expenses of Class A and Class C shares(excluding taxes, interest, brokerage commissions, commitment fees on borrowings, extraordinary expenses, shareholder services fees and Rule 12b-1 fees) do not exceed 1.25%.
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The reduction in expenses, pursuant to the undertakings, amounted to $15,566 during the period ended June 30, 2009.
(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay and Class T shares paid the Distributor for distributing their shares at an annual rate of .75% and .25% of the value of their respective average daily net assets. During the period ended June 30, 2009, Class C and Class T shares were charged $25 and $2, respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay and Class T shares paid 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 (a securities dealer, financial institution or other industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended June 30, 2009, Class A, Class C and Class T shares were charged $113, $8, and $2, respectively, pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended June 30, 2009, the fund was charged $1,940 pursuant to the transfer agency agreement.
The fund compensates The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended June 30, 2009,
24
the fund was charged $218 pursuant to the cash management agreement. These fees were offset by earnings credits pursuant to the cash management agreement.
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended June 30, 2009, the fund was charged $4,450 pursuant to the custody agreement.
During the period ended June 30, 2009, the fund was charged $3,341 for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $90,707, Rule 12b-1 distribution plan fees $5, shareholder services plan fees $29, custodian fees $8,297, chief compliance officer fees $1,670 and transfer agency per account fees $584.
(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 June 30, 2009, amounted to $52,232,385 and $101,730,754, respectively. Sales of investment securities include securities amounting to $19,314,039 delivered pursuant to a redemption-in-kind.The net realized loss of $9,192,201 on the redemption-in-kind will not be realized for tax purposes.
The fund adopted Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. Since the fund held no derivatives during the period ended June 30, 2009, FAS 161 disclosures did not impact the notes to the financial statements.
At June 30, 2009, accumulated net unrealized depreciation on investments was $33,206,969, consisting of $1,699,160 gross unrealized appreciation and $34,906,129 gross unrealized depreciation.
At June 30, 2009, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
NOTE 5—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date of issuance of the financial statements. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.
26
NOTES
Item 2. | Code of Ethics. |
Not applicable. | |
Item 3. | Audit Committee Financial Expert. |
Not applicable. | |
Item 4. | Principal Accountant Fees and Services. |
Not applicable. | |
Item 5. | Audit Committee of Listed Registrants. |
Not applicable. | |
Item 6. | Investments. |
(a) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management |
Investment Companies. | |
Not applicable. | |
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable. | |
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Companies and |
Affiliated Purchasers. | |
Not applicable. [CLOSED END FUNDS ONLY] | |
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures applicable to Item 10. | |
Item 11. | Controls and Procedures. |
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
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.
Dreyfus Premier Investment Funds, Inc.
By: | /s/ J. David Officer |
J. David Officer, | |
President | |
Date: | August 12, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ J. David Officer |
J. David Officer, | |
President | |
Date: | August 12, 2009 |
By: | /s/ James Windels |
James Windels, | |
Treasurer | |
Date: | August 12, 2009 |
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)