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 811-5883
DREYFUS INDEX 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)
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 922-6855
Date of fiscal year end: October 31st
Date of reporting period: April 30, 2003
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
Dreyfus
Smallcap
Stock Index Fund
SEMIANNUAL REPORT April 30, 2003
YOU, YOUR ADVISOR AND
DREYFUS
A MELLON FINANCIAL COMPANY
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
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2 Letter from the Chairman
3 Discussion of Fund Performance
6 Statement of Investments
24 Statement of Financial Futures
25 Statement of Assets and Liabilities
26 Statement of Operations
27 Statement of Changes in Net Assets
28 Financial Highlights
29 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus
Smallcap Stock Index Fund
LETTER FROM THE CHAIRMAN
Dear Shareholder:
This semiannual report for Dreyfus Smallcap Stock Index Fund covers the
six-month period from November 1, 2002, through April 30, 2003. Inside, you'll
find valuable information about how the fund was managed during the reporting
period, including a discussion with the fund's portfolio managers, Steve Falci
and Tom Durante. We have recently seen what we believe are encouraging signs of
stability in the U.S. financial markets. Perhaps most important, the war in Iraq
ended quickly, without disruptions in oil supplies or major incidents of
terrorism. Many major stock market indices have posted modest gains since the
start of 2003, suggesting greater investor optimism. At the same time, yield
differences between U.S. Treasury securities and corporate bonds have moved
closer to historical norms as many companies have strengthened their balance
sheets. Of course, problems and concerns remain. In the U.S. economy,
unemployment has risen to multiyear highs and corporations remain reluctant to
spend. Positive factors appear to outweigh negative ones, however, and we
believe that the U.S. economy is on the path to recovery. What are the
implications for your investments? We are generally optimistic about the stock
market, although security selection should remain a key factor. We continue to
favor areas of the bond market that are more credit-sensitive and believe
municipal bonds may benefit if state and local tax rates rise. Your financial
advisor can help you to ensure that your portfolio reflects your investment
needs, long-term goals and attitudes toward risk. Thank you for your continued
confidence and support. Sincerely,
Stephen E. Canter
Chairman and Chief Executive Officer
The Dreyfus Corporation
May 15, 2003
DISCUSSION OF FUND PERFORMANCE
Steve Falci and Tom Durante, Portfolio Managers
How did Dreyfus Smallcap Stock Index Fund perform relative to its benchmark?
For the six-month period ended April 30, 2003, Dreyfus Smallcap Stock Index Fund
produced a total return of 3.34%.1 The Standard & Poor's SmallCap 600 Index (the
"S&P 600 Index"), produced a 3.54% return for the same period.2,3 We attribute
the fund's performance to an improvement in investor sentiment as the war with
Iraq came to an end. The fund's strongest returns during the reporting period
stemmed from banks and thrifts, homebuilders and technology companies. The
difference in returns was primarily the result of transaction costs and other
fund operating expenses. What is the fund's investment approach?
The fund seeks to match the total return of the S&P 600 Index. To reach this
goal, the fund generally invests in approximately 575 to 600 of the stocks
listed in the S&P 600 Index, in proportion to their weighting in the S&P 600
Index. While the portfolio managers strive to own the vast majority of the
stocks in the S&P 600 Index, they may avoid some very small, less liquid names.
Often considered a barometer for the small-cap stock market in general, the S&P
600 Index is composed of 600 domestic stocks across 10 economic sectors. Each
stock is weighted by its market capitalization; that is, larger companies have
greater representation in the S&P 600 Index than smaller ones. The fund may also
use stock index futures as a substitute for the sale or purchase of stocks. As
an index fund, the fund uses a passive management approach: all investment
decisions are made based on the composition of the S&P 600 Index. The fund does
not attempt to manage market volatility. Small-cap stocks are often those of new
and entrepreneurial companies and tend to grow faster than large-cap companies.
They also typically use any profits for expansion rather than for paying
dividends. Compared to larger, more established companies, small companies are
subject to more erratic market movements and may carry additional risks because,
among other things, their revenues and earnings also tend to be less
predictable. As a result, their stocks may be less liquid and more volatile.
What other factors influenced the fund's performance?
The fund and small-cap stock market were influenced primarily by a generally
weak economy, uncertainties surrounding the impending war with Iraq during most
of the reporting period and, eventually, the war's successful resolution. Many
investors had limited their investments in stocks, choosing instead to invest in
bonds or real estate, which they perceived as more stable investment
alternatives when the reporting period began. In addition, many investors kept
relatively large amounts of cash in money market funds, despite yields that
hovered near historical lows. It appeared that investors began to put some of
their cash to work in the stock market later in the reporting period, when the
successful and rapid conclusion to the Iraq war cleared up some of the
uncertainties that previously had hindered the markets. As investors turned
their attention from the war to business fundamentals and economic trends,
homebuilding stocks gained value. While mortgage rates were reaching historical
lows, demand for new homes remained high. Smaller banks and thrifts also
benefited from low short-term interest rates as a record number of homeowners
refinanced existing mortgages and established new ones. While large-cap banks
have diversified businesses that include asset management and insurance
products, smaller banks and thrifts tend to be focused on traditional commercial
and retail banking in their local markets, and they benefited accordingly from
heightened demand for mortgages. In the technology sector, electronic equipment
companies posted attractive returns during the reporting period, primarily due
to greater consumer demand for products such as flat screen televisions and
wireless networking equipment. On the other hand, small health care stocks
posted mixed returns. While hospitals suffered due to concerns regarding
reimbursements from the state and federal governments, medical products
companies posted strong returns as demand for home-care devices strengthened.
Finally, defense stocks generally posted disappointing returns after the war's
quick resolution and amid delays in the space shuttle program.
What is the fund's current strategy?
As an index fund, our strategy remains the same: to attempt to replicate the
return of the S&P 600 Index by investing in most of the S&P 600 Index's 600
small-cap stocks in proportion to their weight in the Index. We must continue to
be mindful of the heightened volatility that has affected the U.S. stock market
for some time now. We believe it is especially important during volatile times
to diversify across many industry groups and stocks to mitigate losses in any
particular group or holding. In our view, broadly diversified index funds
continue to represent a prudent choice for some investors' equity portfolios.
May 15, 2003
1 Total return includes reinvestment of dividends and any capital gains paid.
Past performance is no guarantee of future results. Share price and
investment return fluctuate such that upon redemption, fund shares may be
worth more or less than their original cost.
2 SOURCE: LIPPER INC. - Reflects the reinvestment of dividends and, where
applicable, capital gain distributions. The Standard & Poor's SmallCap 600
Index is a broad-based index and a widely accepted, unmanaged index of
overall small-cap stock market performance.
3 "Standard & Poor's," "S&P," and "Standard & Poor's SmallCap 600 Index" are
trademarks of The McGraw-Hill Companies, Inc., and have been licensed for
use by the fund. The fund is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation regarding
the advisability of investing in the fund.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
COMMON STOCKS--99.7% Shares Value ($)
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ALCOHOL & TOBACCO--.1%
DIMON 24,600 161,376
CONSUMER CYCLICAL--18.1%
A. T. Cross , Cl. A 7,000 (a) 35,840
AFC Enterprises 16,600 (a) 262,280
Action Performance Cos. 10,000 184,900
Advanced Marketing Services 10,000 (a) 117,800
Albany International, Cl. A 17,500 415,450
Angelica 6,400 107,456
AnnTaylor Stores 25,500 (a) 603,330
Applica 14,000 73,500
Arctic Cat 14,500 264,190
Argosy Gaming 16,700 (a) 340,179
Ashworth 6,000 (a) 34,320
Atlantic Coast Airlines Holdings 26,700 (a) 222,945
Aztar 22,300 (a) 317,552
Bally Total Fitness Holdings 18,500 (a) 117,475
Bassett Furniture 6,600 81,114
Brown Shoe 11,100 324,453
Burlington Coat Factory Warehouse 26,800 475,700
CEC Entertainment 16,550 (a) 498,321
CPI 5,000 66,750
Casey's General Stores 28,000 362,600
Cato, Cl. A 15,600 319,800
Children's Place Retail Stores 13,400 (a) 203,680
Christopher & Banks 14,550 (a) 366,078
Coachmen Industries 8,700 110,055
Concord Camera 8,600 (a) 48,332
Cost Plus 11,600 (a) 356,468
Department 56 8,500 (a) 100,300
Dress Barn 17,500 (a) 262,850
Duane Reade 11,200 (a) 150,640
Enesco Group 6,000 (a) 47,520
Ethan Allen Interiors 22,100 744,328
Fedders 10,670 37,345
Footstar 11,000 (a) 101,750
Fossil 26,250 (a) 479,850
Fred's 15,000 486,750
COMMON STOCKS (CONTINUED) Shares Value ($)
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CONSUMER CYCLICAL (CONTINUED)
Genesco 11,700 (a) 175,500
Goody's Family Clothing 17,000 (a) 83,640
Great Atlantic & Pacific 18,900 (a) 115,290
Group 1 Automotive 12,300 (a) 338,373
Gymboree 17,000 (a) 284,070
Haggar 1,600 16,640
Hancock Fabrics 10,700 166,920
Harman International Industries 18,500 1,231,915
Haverty Furniture 12,200 171,410
Hot Topic 17,700 (a) 432,765
Huffy 2,900 (a) 16,791
IHOP 12,000 315,600
Insight Enterprises 23,400 (a) 176,436
Interface, Cl. A 24,000 86,400
Intermet 13,000 48,360
J. Jill Group 11,000 (a) 157,850
Jack in the Box 20,800 (a) 370,240
Jakks Pacific 13,000 (a) 169,000
Jo-Ann Stores, Cl. A 11,900 (a) 309,400
K-Swiss 10,600 315,138
K2 14,700 (a) 140,091
Kellwood 15,000 444,300
La-Z Boy 31,700 619,101
Landry's Restaurants 16,700 312,290
Linens 'n Things 24,000 (a) 508,560
Lone Star Steakhouse & Saloon 13,000 (a) 272,610
Men's Wearhouse 23,200 (a) 386,280
Mesa Air Group 20,600 (a) 110,828
Midas 6,800 (a) 54,740
Monaco Coach 15,250 (a) 206,180
Movie Gallery 18,500 (a) 342,084
NBTY 38,400 (a) 595,200
National Presto Industries 4,200 124,320
Nautica Enterprises 19,100 (a) 217,358
Nautilus Group 20,000 254,000
O'Charleys 10,900 (a) 220,616
O'Reilly Automotive 29,800 (a) 883,868
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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CONSUMER CYCLICAL (CONTINUED)
OshKosh B'Gosh, Cl. A 7,300 221,774
Oshkosh Truck 9,800 548,800
Oxford Industries 5,000 167,500
P.F. Chang's China Bistro 13,700 (a) 574,030
Pacific Sunwear of California 28,575 (a) 652,367
Panera Bread, Cl. A 16,300 (a) 554,689
Papa John's International 11,800 (a) 280,604
Pep Boys-Manny, Moe & Jack 31,000 265,360
Phillips-Van Heusen 16,100 213,808
Pinnacle Entertainment 12,500 (a) 66,750
Polaris Industries 13,400 708,458
Prime Hospitality 20,300 (a) 135,198
Quicksilver 15,500 (a) 505,300
RARE Hospitality International 12,800 (a) 372,864
Russ Berrie & Co. 13,000 427,440
Russell 19,500 372,840
Ryan's Family Steak Houses 26,100 (a) 323,379
SCP Pool 14,125 (a) 466,266
Salton 6,300 (a) 80,640
School Specialty 10,700 (a) 198,699
ShopKo Stores 16,500 (a) 198,495
Shuffle Master 10,800 (a) 247,320
SkyWest 34,000 434,860
Sonic 22,137 (a) 597,920
Steak n Shake 13,278 (a) 153,626
Stein Mart 23,400 (a) 127,998
Stride Rite 22,300 196,463
Sturm Ruger 16,600 147,740
TBC 12,800 (a) 204,800
Thor Industries 16,700 534,066
Too 19,500 (a) 361,920
Toro 15,000 559,650
Tower Automotive 31,500 (a) 88,200
Tractor Supply 10,800 (a) 457,380
Triarc 10,500 (a) 290,850
Ultimate Electronics 5,500 (a) 46,475
Urban Outfitters 11,000 (a) 328,020
COMMON STOCKS (CONTINUED) Shares Value ($)
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CONSUMER CYCLICAL (CONTINUED)
WMS Industries 15,500 (a) 209,095
Wabash National 13,900 (a) 130,382
Wet Seal, Cl. A 15,900 (a) 162,180
Winnebago Industries 10,500 388,710
Wolverine World Wide 23,900 440,716
Zale 18,700 (a) 653,378
33,493,075
CONSUMER STAPLES--2.9%
American Italian Pasta, Cl. A 9,700 (a) 427,770
Coca-Cola Bottling 5,800 294,106
Corn Products International 20,400 609,552
Delta & Pine Land 21,033 489,228
Flowers Foods 17,900 506,570
Hain Celestial Group 17,500 (a) 302,050
International Multifoods 12,300 (a) 235,545
J & J Snack Foods 5,300 (a) 165,996
Lance 15,200 112,480
Libbey 8,900 200,072
Nash Finch 6,500 81,250
Nature's Sunshine Products 8,800 83,336
Performance Food Group 24,900 (a) 873,492
Ralcorp Holdings 16,800 (a) 418,320
United Natural Foods 10,200 (a) 297,738
WD-40 10,000 264,500
5,362,005
ENERGY--7.8%
American States Water 8,150 210,596
Atmos Energy 26,000 592,280
Atwood Oceanics 7,000 (a) 182,350
Cabot Oil & Gas 18,000 441,000
Cal Dive International 21,100 (a) 339,710
Carbo Ceramics 8,100 304,722
Cascade Natural Gas 6,000 114,420
Cimarex Energy 24,400 (a) 480,680
Dril-Quip 9,600 (a) 147,648
Energen 20,500 672,400
Evergreen Resources 11,000 (a) 523,050
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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ENERGY (CONTINUED)
Frontier Oil 15,400 260,568
Hydril 13,000 (a) 309,530
Laclede Group 10,200 245,820
NUI 10,000 140,700
New Jersey Resources 16,000 548,000
Newfield Exploration 29,000 (a) 997,310
Northwest Natural Gas 14,500 374,535
NorthWestern 19,300 46,706
Nuevo Energy 10,000 (a) 134,000
Oceaneering International 13,700 (a) 309,072
Patina Oil & Gas 16,700 576,651
Piedmont Natural Gas 19,000 709,840
Plains Resources 12,500 (a) 151,500
Prima Energy 7,000 (a) 137,417
Remington Oil & Gas 14,700 (a) 230,349
St. Mary Land & Exploration 16,700 427,854
Southern Union 30,340 (a) 423,243
Southwest Gas 18,600 386,136
Southwestern Energy 21,800 (a) 290,158
Spinnaker Exploration 16,500 (a) 353,100
Stone Energy 15,500 (a) 544,515
Swift Energy 14,500 (a) 120,640
TETRA Technologies 8,300 (a) 220,780
Tom Brown 21,800 (a) 534,536
UGI 24,300 767,880
Unit 25,200 (a) 493,920
Veritas DGC 18,700 (a) 128,095
Vintage Petroleum 34,900 341,322
W-H Energy Services 15,500 (a) 279,000
14,492,033
HEALTH CARE--10.9%
Accredo Health 25,125 (a) 371,096
Advanced Medical Optics 17,700 248,331
Alpharma, Cl. A 30,000 559,500
American Medical Systems Holdings 17,800 (a) 282,486
Amerigroup 12,300 (a) 358,176
AmSurg 12,200 (a) 316,834
COMMON STOCKS (CONTINUED) Shares Value ($)
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HEALTH CARE (CONTINUED)
ArQule 7,500 (a) 29,550
ArthroCare 9,200 (a) 140,576
Bio-Technology General 37,100 (a) 128,366
Biosite 8,500 (a) 362,780
CIMA Labs 7,800 (a) 188,370
CONMED 17,400 (a) 303,108
Centene 6,200 (a) 198,617
Cephalon 30,600 (a) 1,249,704
Cooper Cos. 18,200 507,780
CryoLife 8,550 (a) 64,980
Curative Health Services 7,600 (a) 95,000
Datascope 8,600 245,951
Diagnostic Products 16,500 651,750
Enzo Biochem 17,181 (a) 257,200
Haemonetics 13,700 (a) 242,901
Hologic 11,400 (a) 102,600
Hooper Holmes 32,500 196,625
ICU Medical 9,000 (a) 286,020
IDEXX Laboratories 20,400 (a) 795,600
IMPATH 8,800 (a) 129,360
INAMED 11,700 (a) 436,293
Integra LifeSciences Holdings 14,300 (a) 381,667
Invacare 18,000 575,100
MGI Pharma 12,000 (a) 173,280
Medicis Pharmaceutical, Cl. A 15,000 (a) 864,600
Mentor 27,000 499,770
Mid Atlantic Medical Services 27,500 (a) 1,197,625
Noven Pharmaceuticals 13,000 (a) 125,190
Orthodontic Centers of America 28,500 (a) 165,300
Osteotech 7,800 (a) 81,588
Owens & Minor 20,200 375,720
Pediatrix Medical Group 15,100 (a) 481,237
PolyMedica 7,800 290,550
Possis Medical 8,000 (a) 153,600
Priority Healthcare, Cl. B 24,618 (a) 561,290
Province Healthcare 27,350 (a) 273,500
Regeneron Pharmaceuticals 23,400 (a) 148,122
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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HEALTH CARE (CONTINUED)
RehabCare Group 9,600 (a) 167,808
Renal Care Group 27,000 (a) 874,800
ResMed 17,900 (a) 656,572
Respironics 18,300 (a) 703,086
Sierra Health Services 17,900 (a) 297,140
Sola International 15,000 (a) 210,150
Sunrise Assisted Living 13,500 (a) 364,500
Sybron Dental Specialties 22,699 (a) 461,925
Techne 24,200 (a) 537,482
Theragenics 17,000 (a) 75,990
US Oncology 50,000 (a) 359,000
Viasys Healthcare 14,200 (a) 230,040
Vital Signs 8,000 228,000
20,264,186
INTEREST SENSITIVE--14.9%
Anchor Bancorp Wisconsin 13,100 303,265
BankUnited Financial, Cl. A 14,900 (a) 281,461
Boston Private Financial Holdings 11,000 207,350
Capital Automotive 16,200 419,418
Cash America International 15,200 155,952
Chittenden 20,350 550,468
Colonial Properties Trust 12,900 438,729
Commercial Federal 26,400 568,128
Community First Bankshares 22,800 613,799
Cullen/Frost Bankers 28,000 918,120
Delphi Financial Group, Cl. A 10,978 483,581
Dime Community Bancshares 15,000 345,900
Downey Financial 16,080 705,912
East West Bancorp 14,000 473,900
Essex Property Trust 11,400 626,658
Financial Federal 9,100 (a) 203,840
First Bancorp 23,350 720,814
First Midwest Bancorp 25,675 710,941
First Republic Bank 7,300 (a) 183,230
FirstFed Financial 9,000 (a) 292,410
Flagstar Bancorp 17,600 582,560
Fremont General 44,700 418,392
COMMON STOCKS (CONTINUED) Shares Value ($)
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INTEREST SENSITIVE (CONTINUED)
GBC Bancorp 6,400 175,808
Gables Residential Trust 12,500 354,750
Glenborough Realty Trust 16,200 268,596
Hilb, Rogal & Hamilton 19,500 693,225
Hudson United Bancorp 25,780 859,505
Irwin Financial 16,900 400,530
Jefferies Group 15,200 590,064
Kilroy Realty 16,500 409,530
LandAmerica Financial Group 10,900 447,663
MAF Bancorp 14,100 476,016
NCO Group 13,600 (a) 227,800
New Century Financial 14,800 545,084
Philadelphia Consolidated Holding 11,600 (a) 452,516
Presidential Life 18,300 147,864
Provident Bankshares 15,124 384,150
RLI 14,500 428,475
Raymond James Financial 26,900 771,492
Republic Bancorp 33,100 429,969
Riggs National 14,000 193,760
SCPIE Holdings 3,000 27,750
SWS Group 9,371 155,277
Seacoast Financial Services 12,000 226,440
Selective Insurance Group 15,500 388,895
Shurgard Storage Centers, Cl. A 20,000 653,400
South Financial Group 27,700 678,650
Southwest Bancorporation of Texas 18,400 (a) 625,232
Staten Island Bancorp 35,000 600,600
Sterling Bancshares 26,100 310,747
Stewart Information Services 10,500 (a) 280,140
Susquehanna Bancshares 22,700 516,425
Trustco Bank 41,844 436,433
UCBH Holdings 23,400 595,296
UICI 28,900 (a) 343,910
United Bankshares 22,700 655,576
Washington Federal 39,640 864,152
Waypoint Financial 19,300 352,225
Whitney Holding 22,550 761,739
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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INTEREST SENSITIVE (CONTINUED)
Wintrust Financial 10,800 328,320
Zenith National Insurance 11,500 296,125
27,558,957
INTERNET--.3%
Netegrity 15,000 (a) 71,100
PC-Tel 10,900 (a) 100,062
Verity 22,000 (a) 363,660
534,822
PRODUCER GOODS & SERVICES--21.2%
A. Schulman 17,600 287,918
A.M. Castle 7,000 (a) 32,340
A.O. Smith 17,450 520,359
AAR 16,550 64,214
Acuity Brands 24,300 370,089
Alliant Techsystems 21,975 (a) 1,180,497
Apogee Enterprises 14,900 154,066
Applied Industrial Technologies 11,800 218,182
AptarGroup 21,400 736,588
Arch Chemicals 13,500 287,955
Arkansas Best 14,000 354,900
Astec Industries 3,000 (a) 24,540
Baldor Electric 19,933 443,310
Barnes Group 11,600 244,064
Belden 13,200 156,948
Brady, Cl. A 13,500 452,385
Briggs & Stratton 12,200 550,708
Brooks Automation 15,700 (a) 132,979
Brush Engineered Materials 8,000 (a) 42,400
Buckeye Technologies 13,200 (a) 69,960
Building Materials Holding 8,000 99,280
Butler Manufacturing 3,800 62,244
C&D Technologies 14,700 195,510
CLARCOR 14,750 551,798
CUNO 9,300 (a) 333,312
Cable Design Technologies 19,625 (a) 135,609
Cambrex 14,200 247,080
Caraustar Industries 12,200 (a) 83,936
COMMON STOCKS (CONTINUED) Shares Value ($)
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PRODUCER GOODS & SERVICES (CONTINUED)
Century Aluminum 10,700 71,155
Champion Enterprises 1,000 (a) 2,420
Chesapeake 8,100 145,476
Cleveland-Cliffs 5,600 (a) 100,800
Commercial Metals 16,700 258,182
Commonwealth Industries 10,000 48,500
Cubic 16,000 310,240
Curtiss-Wright 6,000 361,500
DRS Technologies 13,100 (a) 366,931
Deltic Timber 6,100 149,206
EDO 10,200 192,270
ElkCorp 11,400 230,850
Emcor Group 8,100 (a) 413,667
Engineered Support Systems 9,700 336,881
Fleetwood Enterprises 22,100 (a) 111,384
Florida Rock Industries 16,250 617,500
Forward Air 12,200 (a) 306,952
H.B. Fuller 16,800 412,104
Gardner Denver 9,400 (a) 186,402
GenCorp 23,600 179,360
Georgia Gulf 18,600 420,360
Graco 27,950 858,065
Griffon 19,300 (a) 262,866
Heartland Express 28,871 (a) 664,033
Hughes Supply 13,600 381,752
IDEX 18,000 573,300
IMCO Recycling 7,500 (a) 51,750
Insituform Technologies, Cl. A 13,500 (a) 215,325
Intermagnetics General 9,017 (a) 175,200
Invision Technologies 10,000 (a) 237,600
Ionics 9,500 (a) 180,500
JLG Industries 23,400 127,296
Kaman, Cl. A 13,600 136,136
Kansas City Southern 33,000 (a) 365,310
Kaydon 18,300 408,090
Kirby 13,000 (a) 340,080
Knight Transportation 20,800 (a) 501,280
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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PRODUCER GOODS & SERVICES (CONTINUED)
Landstar System 9,800 (a) 608,874
Lawson Products 5,900 159,300
Lennox International 34,300 509,698
Lindsay Manufacturing 6,700 145,725
Lone Star Technologies 14,600 309,958
Lydall 8,500 (a) 80,750
M.D.C. Holdings 15,514 715,195
MacDermid 17,800 404,594
MagneTek 9,000 (a) 19,440
Manitowoc 13,975 259,935
Massey Energy 40,500 422,415
Material Sciences 7,500 60,375
Maverick Tube 24,000 (a) 426,960
Milacron 14,700 76,734
Mueller Industries 20,000 (a) 511,000
Myers Industries 18,218 182,909
NVR 4,200 (a) 1,502,550
OM Group 13,200 153,912
Offshore Logistics 14,500 (a) 275,500
Omnova Solutions 20,800 (a) 73,840
Penford 3,600 48,564
PolyOne 42,100 194,502
Pope & Talbot 9,100 120,939
Quaker Chemical 5,800 129,630
Quanex 10,300 296,228
RTI International Metals 12,200 (a) 123,220
Regal Beloit 15,000 257,250
Reliance Steel & Aluminum 18,300 311,100
Roadway 11,000 407,660
Robins & Myers 7,100 122,049
Rock-Tenn, Cl. A 20,500 274,700
Rogers 8,600 (a) 284,660
Ryerson Tull 14,200 106,642
Ryland Group 15,300 829,719
SPS Technologies 7,100 (a) 187,298
Schweitzer-Mauduit International 9,400 205,766
Scotts, Cl. A 17,900 (a) 1,019,405
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER GOODS & SERVICES (CONTINUED)
Seacor Smit 10,750 (a) 385,065
Shaw Group 20,500 (a) 238,825
Simpson Manufacturing 13,600 (a) 477,632
Skyline 4,400 130,240
Standard Motor Products 7,600 87,780
Standard Pacific 18,400 556,600
Standex International 7,600 160,436
Steel Dynamics 28,400 (a) 343,640
Steel Technologies 6,400 70,272
Stewart & Stevenson Services 15,200 203,832
Stillwater Mining 23,400 (a) 63,180
SurModics 10,700 (a) 388,838
Technitrol 22,500 355,275
Teledyne Technologies 18,300 (a) 257,664
Texas Industries 10,000 197,400
Thomas Industries 9,350 251,515
Timken 50,000 885,000
Tredegar 21,100 271,346
Triumph Group 8,100 (a) 212,868
URS 15,700 (a) 222,940
USFreightways 14,500 (a) 413,395
United Stationers 19,300 (a) 523,223
Universal Forest Products 10,700 188,320
Valmont Industries 14,200 274,344
Watsco 17,000 263,330
Watts Industries, Cl. A 15,000 245,250
Wellman 19,800 226,512
Wolverine Tube 5,200 (a) 28,080
Woodward Governor 7,100 262,842
Yellow 16,200 (a) 432,540
39,171,074
SERVICES--8.5%
ABM Industries 29,300 405,805
ADVO 11,900 (a) 467,908
Aaron Rents 12,899 288,293
Administaff 12,200 (a) 77,958
American Management Systems 25,750 (a) 316,725
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
SERVICES (CONTINUED)
Arbitron 17,300 (a) 589,238
Armor Holdings 16,000 (a) 192,800
BARRA 11,000 (a) 359,150
Boston Communications Group 10,500 (a) 189,945
Bowne & Co. 19,200 216,576
CACI International, Cl. A 17,000 (a) 593,810
CDI 12,600 (a) 351,918
Central Parking 18,310 183,100
Chemed 5,399 188,209
Ciber 26,500 (a) 143,895
Consolidated Graphics 7,100 (a) 135,610
eFunds 26,100 (a) 238,815
4Kids Entertainment 7,500 (a) 115,500
FactSet Research Systems 20,300 706,440
G & K Services, Cl. A 11,000 300,630
Global Payments 21,420 664,234
Heidrick & Struggles International 8,100 (a) 113,400
ITT Educational Services 26,500 (a) 781,750
Information Holdings 11,400 (a) 198,360
Insurance Auto Auction 7,300 (a) 88,330
John H. Harland 16,800 402,360
Kroll 21,700 (a) 483,910
Labor Ready 25,350 (a) 163,508
MAXIMUS 13,000 (a) 313,300
MICROS Systems 10,200 (a) 255,306
Marcus 17,800 252,760
MemberWorks 6,700 (a) 146,931
Mobile Mini 7,100 (a) 112,606
NDCHealth 19,200 369,600
New England Business Service 8,000 203,600
On Assignment 5,000 (a) 24,000
PAREXEL International 13,000 (a) 167,960
PRG-Schultz International 34,550 (a) 220,429
Paxar 22,325 (a) 230,617
Pegasus Solutions 9,000 (a) 107,100
Pharmaceutical Product Development 32,500 (a) 850,525
Pre-Paid Legal Services 12,200 (a) 281,332
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
SERVICES (CONTINUED)
Regis 24,400 691,252
Sourcecorp 10,600 (a) 167,480
Spherion 30,500 (a) 132,675
Standard Register 16,700 288,576
StarTek 8,900 (a) 246,174
Tetra Tech 31,356 (a) 486,018
Thomas Nelson 8,300 (a) 76,775
Volt Information Sciences 9,900 (a) 130,977
Waste Connections 15,900 (a) 534,876
Watson Wyatt & Company Holdings 19,800 (a) 403,920
15,652,966
TECHNOLOGY--13.6%
ATMI 17,000 (a) 358,683
Actel 13,700 (a) 271,397
Adaptec 55,800 (a) 381,672
Advanced Energy Industries 15,200 (a) 146,072
Aeroflex 32,600 (a) 175,388
Allen Telecom 18,600 (a) 251,658
Alliance Semiconductor 12,000 (a) 45,360
Analogic 8,600 410,650
Anixter International 22,600 (a) 519,348
Ansys 8,800 (a) 232,760
Artesyn Technologies 17,000 (a) 71,230
AstroPower 11,200 (a) 33,152
Audiovox, Cl. A 15,700 (a) 113,040
Avid Technology 16,000 (a) 439,520
Axcelis Technologies 55,000 (a) 312,400
BEI Technologies 9,400 80,464
Bel Fuse, Cl. B 6,100 120,170
Bell Microproducts 13,700 (a) 62,746
Benchmark Electronics 14,500 (a) 376,275
Black Box 12,100 384,175
Brooktrout Technology 2,700 (a) 13,149
C-COR.net 19,300 (a) 65,813
CTS 20,000 167,000
Captaris 16,000 (a) 51,200
Carreker 13,000 (a) 48,880
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Catapult Communications 7,700 (a) 68,145
Cerner 20,800 (a) 415,584
Checkpoint Systems 20,300 (a) 271,005
Cognex 23,400 (a) 512,226
Coherent 16,100 (a) 370,300
Cohu 12,200 219,722
Coinstar 14,000 (a) 256,060
Concerto Software 4,500 (a) 20,475
Concord Communications 9,400 (a) 118,722
Cymer 19,300 (a) 551,015
DSP Group 16,900 (a) 353,210
Dendrite International 24,300 (a) 248,832
Digi Inernational 9,000 (a) 38,160
Dionex 12,450 (a) 428,417
DuPont Photomasks 11,000 (a) 204,490
ESS Technology 29,500 (a) 204,140
Electro Scientific Industries 14,000 (a) 188,020
Esterline Technologies 12,300 (a) 218,325
Exar 22,500 (a) 331,875
FEI 18,900 (a) 345,681
FileNet 20,100 (a) 309,339
Flir Systems 10,600 (a) 552,048
Gerber Scientific 11,000 (a) 90,750
Global Imaging Systems 12,300 (a) 227,550
Harmonic 25,400 (a) 88,138
Helix Technology 12,200 140,544
Hutchinson Technology 15,500 (a) 366,420
Hyperion Solutions 19,875 (a) 562,065
Imagistics International 10,500 (a) 225,960
Input/Output 26,300 (a) 81,793
Inter-Tel 15,400 253,330
Itron 13,500 (a) 270,270
JDA Software Group 17,300 (a) 194,798
Keithley Instruments 9,400 114,680
Kopin 39,600 (a) 190,476
Kronos 11,600 (a) 529,192
Kulicke & Soffa Industries 24,500 (a) 127,155
COMMON STOCKS (CONTINUED) Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
MRO Software 13,200 (a) 113,124
Manhattan Associates 16,200 (a) 391,878
MapInfo 4,700 (a) 23,735
Meade Instruments 9,000 (a) 24,030
Mercury Computer Systems 13,500 (a) 283,500
Methode Electronics, Cl. A 23,500 246,750
Microsemi 15,900 (a) 186,507
Midway Games 18,117 (a) 57,069
NYFIX 14,000 (a) 67,200
Network Equipment Technologies 6,000 (a) 43,020
Park Electrochemical 10,450 186,428
Pericom Semiconductor 13,200 (a) 111,936
Phoenix Technologies 12,000 (a) 54,360
Photon Dynamics 8,000 (a) 175,200
Photronics 18,000 (a) 226,260
Pinnacle Systems 37,550 (a) 354,847
Pioneer-Standard Electronics 19,500 188,955
Planar Systems 8,100 (a) 142,479
Power Integrations 17,800 (a) 393,950
Progress Software 20,000 (a) 389,800
Radiant Systems 16,200 (a) 102,546
RadiSys 9,000 (a) 76,140
Rainbow Technologies 16,800 (a) 150,528
Roper Industries 18,300 559,797
Roxio 9,000 (a) 47,250
Rudolph Technologies 8,500 (a) 128,435
SBS Technologies 7,000 (a) 57,330
SCM Microsystems 7,500 (a) 28,650
SPSS 11,100 (a) 137,418
Serena Software 23,600 (a) 371,936
Skyworks Solutions 75,800 (a) 405,530
Standard Microsystems 10,200 (a) 129,132
Supertex 9,600 (a) 153,120
Symmetricom 17,650 (a) 72,718
Systems & Computer Technology 19,800 (a) 141,966
THQ 21,850 (a) 308,740
Take-Two Interactive Software 24,100 (a) 542,250
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Talx 8,100 103,032
Three-Five Systems 8,349 (a) 42,580
Tollgrade Communications 7,100 (a) 103,021
Trimble Navigation 18,000 (a) 454,500
Ultratech Stepper 10,200 (a) 144,534
Varian Semiconductor Equipment Associates 19,700 (a) 454,085
Veeco Instruments 14,300 (a) 230,087
ViaSat 13,700 (a) 145,768
Vicor 21,800 (a) 146,496
Websense 12,500 (a) 178,375
X-Rite 12,500 127,375
Zebra Technologies, Cl. A 18,200 (a) 1,213,394
Zix 3,000 (a) 14,610
25,253,485
UTILITIES--1.4%
Avista 26,900 318,227
CH Energy Group 9,100 382,655
Central Vermont Public Service 7,300 129,137
Cleco 28,200 423,000
El Paso Electric 27,900 (a) 316,386
General Communication, Cl. A 29,000 (a) 179,539
Green Mountain Power 2,500 52,250
Metro One Telecommunications 12,200 (a) 78,934
UIL Holdings 9,000 324,990
UniSource Energy 19,500 347,685
2,552,803
TOTAL COMMON STOCKS
(cost $198,673,597) 184,496,782
Principal
SHORT-TERM INVESTMENTS--.3% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT--.2%
Greenwich Capital Markets, Tri-Party Repurchase Agreement,
1.28%, dated 4/30/2003, due 5/1/2003 in the
amount of $347,012 (fully collateralized by
$305,000 Federal Farm Credit Bank Bonds,
6%, 6/11/2008 value $354,385) 347,000 347,000
U.S. TREASURY BILLS--.1%
1.06%, 6/5/2003 40,000 39,958
1.09%, 6/26/2003 50,000 (b) 49,916
1.10%, 7/3/2003 50,000 (b) 49,905
139,779
TOTAL SHORT-TERM INVESTMENTS
(cost $486,777) 486,779
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $199,160,374) 100.0% 184,983,561
CASH AND RECEIVABLES (NET) 0.0% 37,585
NET ASSETS 100.0% 185,021,146
(A) NON-INCOME PRODUCING.
(B) PARTIALLY HELD BY THE BROKER IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN
FIANACIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF FINANCIAL FUTURES
April 30, 2003 (Unaudited)
Market Value Unrealized
Covered by Appreciation
Contracts Contracts ($) Expiration at 4/30/2003 ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES LONG
Russell 2000 1 198,325 June 2003 1,325
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2003 (Unaudited)
Cost Value
- -------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments--Note 1(c) 199,160,374 184,983,561
Cash 706,174
Receivable for shares of Common Stock subscribed 357,589
Receivable for futures variation margin--Note 4 1,021
Dividends and interest receivable 84,544
186,132,889
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 72,181
Payable for investment securities purchased 991,709
Payable for shares of Common Stock redeemed 47,853
1,111,743
- --------------------------------------------------------------------------------
NET ASSETS ($) 185,021,146
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 202,126,321
Accumulated undistributed investment income--net 174,021
Accumulated net realized gain (loss) on investments (3,103,708)
Accumulated net unrealized appreciation (depreciation)
on investments (including $1,325 net unrealized
appreciation on financial futures) (14,175,488)
- --------------------------------------------------------------------------------
NET ASSETS ($) 185,021,146
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(200 million shares of $.001 par value Common Stock authorized) 14,574,099
NET ASSET VALUE, offering and redemption price per share--Note 3(c) ($) 12.70
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2003 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $447 foreign taxes withheld at source) 814,415
Interest 4,101
TOTAL INCOME 818,516
EXPENSES:
Management fee--Note 3(a) 210,626
Shareholder servicing costs--Note 3(b) 210,626
Loan commitment fees--Note 2 1,542
Interest expense--Note 2 368
TOTAL EXPENSES 423,162
INVESTMENT INCOME--NET 395,354
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (1,394,973)
Net realized gain (loss) on financial futures 32,518
NET REALIZED GAIN (LOSS) (1,362,455)
Net unrealized appreciation (depreciation) on investments
(including $1,325 net unrealized appreciation on
financial futures) 6,742,601
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 5,380,146
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 5,775,500
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2003 Year Ended
(Unaudited) October 31, 2002
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 395,354 406,906
Net realized gain (loss) on investments (1,362,455) 290,397
Net unrealized appreciation
(depreciation) on investments 6,742,601 (19,086,930)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 5,775,500 (18,389,627)
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (595,185) (282,414)
Net realized gain on investments (385,517) (598,449)
TOTAL DIVIDENDS (980,702) (880,863)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 43,884,895 135,918,872
Dividends reinvested 747,607 735,450
Cost of shares redeemed (26,304,511) (38,736,481)
Redemption fee 9,497 59,946
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 18,337,488 97,977,787
TOTAL INCREASE (DECREASE) IN NET ASSETS 23,132,286 78,707,297
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 161,888,860 83,181,563
END OF PERIOD 185,021,146 161,888,860
Undistributed investment income--net 174,021 373,853
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 3,578,756 9,463,906
Shares issued for dividends reinvested 58,682 50,616
Shares redeemed (2,158,622) (2,827,603)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,478,816 6,686,919
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
Six Months Ended
April 30, 2003 Year Ended October 31,
--------------------------------------------------------------------
(Unaudited) 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.36 12.98 15.49 13.03 12.16 13.90
Investment Operations:
Investment income--net .03(a) .04(a) .04(a) .03(a) .04(a) .04
Net realized and unrealized
gain (loss) on investments .38 (.53) (1.06) 3.06 1.38 (1.60)
Total from Investment Operations .41 (.49) (1.02) 3.09 1.42 (1.56)
Distributions:
Dividends from investment
income--net (.04) (.04) (.03) (.04) (.05) (.02)
Dividends from net realized
gain on investments (.03) (.09) (1.46) (.59) (.50) (.16)
Total Distributions (.07) (.13) (1.49) (.63) (.55) (.18)
Redemption fee reimbursment .00(b) .00(b) .00(b) -- -- --
Net asset value, end of period 12.70 12.36 12.98 15.49 13.03 12.16
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 3.34(c) (3.92) (6.95) 24.64 11.86 (11.38)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses
to average net assets .25(c) .50 .50 .50 .50 .50
Ratio of interest expense
and loan commiment fees
to average net assets .00(c,d) .00(d) .01 .01 .01 --
Ratio of net investment income
to average net assets .23(c) .30 .28 .21 .34 .35
Portfolio Turnover Rate 7.84(c) 12.35 42.01 36.89 41.97 25.14
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 185,021 161,889 83,182 59,628 35,991 24,325
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(C) NOT ANNUALIZED.
(D) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Smallcap Stock Index Fund (the "fund") is a separate non-diversified
series of Dreyfus Index 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 three series including the fund. The fund's investment objective is to
match the performance of the Standard & Poor's Small Cap 600 Index. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary
of Mellon Financial Corporation. Dreyfus Service Corporation (the
"Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of
the fund's shares, which are sold to the public without a sales charge.
The fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which may require
the use of management estimates and assumptions. Actual results could differ
from those estimates.
(a) Portfolio valuation: Investments in securities (including financial futures)
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. Effective April 14, 2003, the fund began pricing securities
traded on the NASDAQ stock market using the NASDAQ official closing 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. Bid price is used when no asked price is
available. Securities for which there are no such valuations are valued at fair
value as determined in good faith under the direction of the Board of Directors
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
Dividend income is recognized on the ex-dividend date and interest income,
including, where applicable, amortization of discount and premium on
investments, is recognized on the accrual basis.
(c) Repurchase agreements: The fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the fund,
through its custodian and sub-custodian, takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the fund's holding
period. The value of the collateral is at least equal, at all times, to the
total amount of the repurchase obligation, including interest. In the event of a
counter party default, the fund has the right to use the collateral to offset
losses incurred. There is potential loss to the fund in the event the fund is
delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the fund seeks to assert its
rights. The Manager, acting under the supervision of the Board of Directors,
reviews the value of the collateral and the creditworthiness of those banks and
dealers with which the fund enters into repurchase agreements to evaluate
potential risks.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain, 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 gain can be offset by capital loss
carryovers, if any, it is the policy of the fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all federal income and excise taxes.
The tax character of distributions paid to shareholders during the fiscal year
ended October 31, 2002, was as follows: ordinary income $282,414 and long-term
capital gains $598,449. The tax character of current year distributions will be
determined at the end of the current fiscal year.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund based on prevailing market rates
in effect at the time of borrowings.
The average daily amount of borrowings outstanding under the Facility during the
period ended April 30, 2003, was approximately $42,500 with a related weighted
average annualized interest rate of 1.74%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to an Investment Management Agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .25 of 1% of the
value of the fund's average daily net assets, and is payable monthly. Under the
terms of the Agreement, the Manager has agreed to pay all the expenses of the
fund, except management fees, brokerage commissions, taxes, interest, commitment
fees, Shareholder Services Plan fees, fees and expenses of non-interested Board
members (including counsel fees) and extraordinary expenses. In addition, the
Manager is required to reduce its fee in an amount equal to the fund's allocable
portion of fees and expenses of the non-interested Board members (including
counsel fees) . Each Board member also serves as a Board member of other funds
within the Dreyfus complex (collectively, the "Fund Group"). Each Board member
receives an annual fee of $25,000 and an attendance fee of $4,000 for each in
person meeting and $500 for telephone meetings. These fees are allocated among
the funds in the Fund Group. The chairman of the Board receives an addi-
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
tional 25% of such compensation (with the exception of reimburseable amounts).
Subject to the Company's Emeritus Program Guidelines, Emeritus Board Members, if
any, receive 50% of the annual retainer fee and per meeting fee paid at the time
the Board member achieves emeritus status. Amounts required to be paid by the
Company directly to the non-interested Board members, that were applied to
offset a portion of the management fee payable to the Manager, were in fact paid
directly by the Manager to the non-interested Board members.
(b) Under the Shareholder Services Plan, the fund pays the Distributor for the
provision of certain services at the annual rate of .25 of 1% of the value of
the fund's average daily net assets. 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, bank or other financial
institution) in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the period ended April 30, 2003,
the fund was charged an aggregate of $210,626 pursuant to the Shareholder
Services Plan.
(c) A 1% redemption fee is charged and retained by the fund on shares redeemed
within six months following the date of issuance, including redemptions made
through the use of the fund's exchange privilege.
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 April 30,
2003, amounted to $31,031,849 and $13,333,325, respectively.
The fund may invest in financial futures contracts in order to gain exposure to
or protect against changes in the market. The fund is exposed to market risk as
a result of changes in the value of the underlying financial instruments.
Investments in financial futures require the fund to "mark to market" on a daily
basis, which reflects the change in the market value of the contract at the
close of each day's trading. Accordingly, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the fund recognizes a realized gain or loss. These investments require
initial margin deposits with a broker, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. Contracts open at April 30 2003, are set
forth in the Statement of Financial Futures.
At April 30, 2003, accumulated net unrealized depreciation on investments was
$14,176,813, consisting of $18,259,384 gross unrealized appreciation and
$32,436,197 gross unrealized depreciation.
At April 30, 2003, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
Dreyfus Smallcap Stock
Index Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02109
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to info@dreyfus.com
ON THE INTERNET Information
can be viewed online or
downloaded from:
http://www.dreyfus.com
(c) 2003 Dreyfus Service Corporation 077SA0403
================================================================================
Dreyfus
S&P 500
Index Fund
SEMIANNUAL REPORT April 30, 2003
YOU, YOUR ADVISOR AND
DREYFUS
A MELLON FINANCIAL COMPANY
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 Letter from the Chairman
3 Discussion of Fund Performance
6 Statement of Investments
22 Statement of Financial Futures
23 Statement of Assets and Liabilities
24 Statement of Operations
25 Statement of Changes in Net Assets
26 Financial Highlights
27 Notes to Financial Statements
32 Proxy Results
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
S&P 500 Index Fund
LETTER FROM THE CHAIRMAN Dear Shareholder: This semiannual report for Dreyfus
S&P 500 Index Fund covers the six-month period from November 1, 2002, through
April 30, 2003. Inside, you'll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio managers, Steve Falci and Tom Durante. We have recently seen what we
believe are encouraging signs of stability in the U.S. financial markets.
Perhaps most important, the war in Iraq ended quickly, without disruptions in
oil supplies or major incidents of terrorism. Many major stock market indices
have posted modest gains since the start of 2003, suggesting greater investor
optimism. At the same time, yield differences between U.S. Treasury securities
and corporate bonds have moved closer to historical norms as many companies have
strengthened their balance sheets. Of course, problems and concerns remain. In
the U.S. economy, unemployment has risen to multiyear highs and corporations
remain reluctant to spend. Positive factors appear to outweigh negative ones,
however, and we believe that the U.S. economy is on the path to recovery. What
are the implications for your investments? We are generally optimistic about the
stock market, although security selection should remain a key factor. We
continue to favor areas of the bond market that are more credit-sensitive and
believe municipal bonds may benefit if state and local tax rates rise. Your
financial advisor can help you to ensure that your portfolio reflects your
investment needs, long-term goals and attitudes toward risk. Thank you for your
continued confidence and support.
Sincerely,
Stephen E. Canter
Chairman and Chief Executive Officer
The Dreyfus Corporation
May 15, 2003
DISCUSSION OF FUND PERFORMANCE
Steve Falci and Tom Durante, Portfolio Managers
How did Dreyfus S&P 500 Index Fund perform relative to its benchmark?
For the six-month period ended April 30, 2003, the fund produced a total return
of 4.27%.1 The Standard & Poor's 500 Composite Stock Price Index (the "S&P 500
Index"), the fund's benchmark, produced a 4.48% return for the same period.2,3
We are pleased to report that the fund and market's performance has shown marked
improvement during the reporting period, due in large part to improvement in
investor sentiment as the war with Iraq came to an end. Stocks within the
financial services, technology and energy areas provided the strongest returns,
while consumer staples, telephone and defense stocks hindered performance. The
difference in returns was primarily the result of transaction costs and other
fund operating expenses. What is the fund's investment approach?
The fund seeks to match the total return of the S&P 500 Index. To pursue this
goal, the fund generally invests in all 500 stocks in the S&P 500 Index in
proportion to their weighting in the S&P 500 Index. Often considered a barometer
for the stock market in general, the S&P 500 Index is made up of 500 widely held
common stocks across 11 economic sectors. The S&P 500 Index is dominated by
large-cap, blue chip stocks that comprise nearly 75% of total U.S. market
capitalization. However, it is important to note that the S&P 500 Index is not
composed of the 500 largest companies; rather, it is designed to capture the
returns of many different sectors of the U.S. economy. Each stock is weighted by
its market capitalization; that is, larger companies have greater representation
in the S&P 500 Index than smaller ones. The fund may also use stock index
futures as a substitute for the sale or purchase of stocks. As an index fund,
the fund uses a passive management approach; all investment decisions are made
based on the composition of the S&P 500 Index. The fund does not attempt to
manage market volatility. What other factors influenced the fund's performance?
The fund's performance was primarily influenced by a generally weak U.S.
economy. During much of the reporting period, economic weakness was intensified
by uncertainty surrounding the impending war with Iraq. These generally negative
factors were offset by positive ones later in the reporting period, including
improvement in the accounting practices and balance sheets of many large-cap
companies, the war's successful resolution and a weakening U.S. dollar.
Financial services companies provided the highest returns within the S&P 500
Index for the reporting period. These companies benefited as they settled legal
matters related to the separation of investment banking and securities research
activities, strengthened their balance sheets by paying down debt and cut their
operating costs. Many large financial services companies saw their stocks rise
when the war ended and investors again turned their attention to business
fundamentals. Technology companies provided the S&P 500 Index's second-highest
returns, with computer hardware and semiconductor stocks leading the way. In
both cases, companies benefited by implementing cost-cutting measures and taking
advantage of favorable currency exchange rates as the U.S. dollar weakened
relative to other major currencies. Energy stocks also performed well,
particularly large oil companies that benefited from the war-related spike in
oil prices. Although consumer staple stocks performed well early in the
reporting period when the overall stock market was sluggish, they generally lost
value later in the reporting period. Consumer-related stocks were hurt by
questions regarding the sustainability of consumer spending and by a shift in
investor sentiment away from value stocks toward growth stocks.
Telecommunication stocks also suffered later in the reporting period due in part
to increased pricing competition from cable television companies in the
high-speed Internet access market. Finally, many defense companies saw their
stocks fall after the short war with Iraq ended.
What is the fund's current strategy?
As an index fund, our strategy remains the same: to attempt to replicate the
returns of the S&P 500 Index. We are pleased that large-cap stocks have recently
outperformed mid- and small-cap stocks; however, we must continue to be mindful
of the heightened volatility that has affected the U.S. stock market for some
time now. We believe it is especially important during volatile times to
diversify across many industry groups and stocks to mitigate losses in any
particular group or holding. In our view, broadly diversified index funds
continue to represent a prudent choice for the core of most investors' equity
portfolios.
May 15, 2003
1 Total return includes reinvestment of dividends and any capital gains paid.
Past performance is no guarantee of future results. Share price and
investment return fluctuate such that upon redemption, fund shares may be
worth more or less than their original cost.
2 SOURCE: LIPPER INC. - Reflects reinvestment of dividends daily 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.
3 "Standard & Poor's," "S&P," "Standard & Poor's 500" and "S&P 500" are
trademarks of The McGraw-Hill Companies, Inc., and have been licensed for
use by the fund. The fund is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation regarding
the advisability of investing in the fund.
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
COMMON STOCKS--95.2% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
ALCOHOL & TOBACCO--1.4%
Adolph Coors, Cl. B 9,500 508,535
Altria Group 542,200 16,678,072
Anheuser-Busch Cos 224,300 11,188,084
Brown-Forman, Cl. B 15,800 1,209,332
R.J. Reynolds Tobacco Holdings 22,200 625,374
UST 44,000 1,378,520
31,587,917
CONSUMER CYCLICAL--9.7%
Albertson's 99,372 1,973,528
AutoNation 75,900 (a) 1,051,215
AutoZone 25,500 (a) 2,060,655
Bed Bath & Beyond 77,100 (a) 3,046,221
Best Buy 84,350 (a) 2,916,823
Big Lots 30,400 (a) 380,608
Brunswick 23,600 515,188
CVS 103,000 2,493,630
Cendant 269,970 (a) 3,855,172
Circuit City Stores-Circuit City Group 55,200 316,296
Cooper Tire & Rubber 19,300 271,744
Costco Wholesale 119,500 (a) 4,138,285
Dana 38,859 361,000
Darden Restaurants 44,750 783,572
Delphi 146,669 1,232,020
Delta Air Lines 32,300 413,117
Dillard's, Cl. A 22,200 310,356
Dollar General 87,308 1,269,458
Eastman Kodak 76,500 2,288,115
Eaton 18,500 1,518,295
Family Dollar Stores 45,100 1,541,969
Federated Department Stores 49,900 1,527,938
Ford Motor 480,992 4,954,218
Gap 231,725 3,853,587
General Motors 146,900 5,295,745
Genuine Parts 45,800 1,464,226
Harley-Davidson 79,300 3,524,092
Harrah's Entertainment 29,300 (a) 1,154,127
Hasbro 45,300 724,800
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICAL (CONTINUED)
Hilton Hotels 98,500 1,312,020
Home Depot 609,603 17,148,132
International Game Technology 22,300 (a) 1,924,490
J.C. Penney 70,300 1,199,318
Johnson Controls 23,300 1,916,192
Jones Apparel Group 33,800 (a) 963,976
Kohl's 88,400 (a) 5,021,120
Kroger 200,000 (a) 2,860,000
Leggett & Platt 51,000 1,053,150
Limited Brands 137,100 1,993,434
Liz Claiborne 28,000 910,840
Lowe's Cos. 204,700 8,984,283
Marriott International, Cl. A 61,300 2,201,283
Mattel 114,600 2,491,404
May Department Stores 75,550 1,633,391
Maytag 20,400 425,136
McDonald's 332,700 5,689,170
NIKE, Cl. B 69,300 3,709,629
Navistar International 17,900 (a) 499,410
Nordstrom 35,500 615,215
Office Depot 80,800 (a) 1,022,928
PACCAR 30,400 1,775,664
RadioShack 44,100 1,045,611
Reebok International 15,700 (a) 487,642
Safeway 115,500 (a) 1,919,610
Sears, Roebuck & Co. 82,900 2,349,386
Southwest Airlines 203,018 3,240,167
Staples 124,050 (a) 2,361,912
Starbucks 101,700 (a) 2,388,933
Starwood Hotels & Resorts Worldwide 52,400 1,406,416
TJX Cos. 137,700 2,650,725
Target 238,200 7,965,408
Tiffany & Co. 38,100 1,056,894
Toys R Us 55,500 (a) 568,875
V. F. 28,500 1,121,190
Visteon 34,015 238,445
Wal-Mart Stores 1,157,000 65,162,240
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICAL (CONTINUED)
Walgreen 268,600 8,288,996
Wendy's International 30,200 877,008
Whirlpool 17,900 957,471
Winn-Dixie Stores 36,900 462,357
Yum! Brands 77,420 (a) 1,912,274
227,047,745
CONSUMER STAPLES--6.4%
Alberto-Culver, Cl. B 15,300 753,984
Archer-Daniels-Midland 169,360 1,876,509
Avon Products 61,636 3,585,366
Campbell Soup 107,600 2,370,428
Clorox 57,700 2,609,194
Coca-Cola 649,800 26,251,920
Coca-Cola Enterprises 117,700 2,293,973
Colgate-Palmolive 141,100 8,066,687
ConAgra Foods 140,700 2,954,700
Fortune Brands 39,100 1,892,440
General Mills 96,700 4,362,137
Gillette 273,700 8,334,165
H.J. Heinz 92,100 2,751,948
Hershey Foods 35,700 2,329,425
International Flavors & Fragrances 24,700 784,966
Kellogg 107,000 3,503,180
Kimberly-Clark 134,800 6,708,996
McCormick & Co. 37,000 917,230
Newell Rubbermaid 70,062 2,135,490
Pactiv 41,500 (a) 851,580
Pepsi Bottling Group 73,400 1,507,636
PepsiCo 452,700 19,592,856
Procter & Gamble 338,900 30,450,165
SUPERVALU 35,000 576,450
Sara Lee 205,200 3,443,256
Sysco 171,300 4,921,449
Tupperware 15,300 212,058
Wm. Wrigley Jr. 59,000 3,345,890
149,384,078
COMMON STOCKS (CONTINUED) Shares Value ($)
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ENERGY--6.1%
Amerada Hess 23,400 1,056,510
Anadarko Petroleum 65,132 2,891,861
Apache 41,875 2,397,344
BJ Services 41,400 (a) 1,511,514
Baker Hughes 88,290 2,472,120
Burlington Resources 52,745 2,442,621
CMS Energy 37,700 234,871
ChevronTexaco 279,968 17,584,790
ConocoPhillips 177,420 8,924,226
Devon Energy 60,800 2,872,800
Dominion Resources 80,508 4,764,463
EOG Resources 30,300 1,132,614
El Paso 156,875 1,176,563
Exxon Mobil 1,763,776 62,084,915
Halliburton 114,400 2,449,304
Kerr-McGee 26,265 1,106,019
KeySpan 41,000 1,388,670
Kinder Morgan 32,000 1,504,640
Marathon Oil 81,800 1,862,586
McDermott International 16,500 (a) 53,625
Nabors Industries 37,900 (a) 1,485,680
Nicor 11,500 345,690
NiSource 65,200 1,232,280
Noble 35,100 (a) 1,086,345
Occidental Petroleum 99,100 2,958,135
Peoples Energy 9,400 365,190
Rowan Cos. 24,500 502,250
Schlumberger 152,600 6,398,518
Sempra Energy 53,966 1,448,447
Sunoco 20,000 744,200
Transocean 83,700 1,594,485
Unocal 67,600 1,872,520
Williams Cos. 135,300 940,335
140,886,131
HEALTH CARE--14.0%
Abbott Laboratories 409,800 16,650,174
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (CONTINUED)
Allergan 33,900 2,381,475
AmerisourceBergen 28,900 1,671,865
Amgen 337,312 (a) 20,680,599
Anthem 37,100 (a) 2,546,544
Applera--Applied Biosystems Group 54,800 960,644
Bausch & Lomb 14,100 495,756
Baxter International 155,500 3,576,500
Becton, Dickinson & Co. 66,800 2,364,720
Biogen 39,100 (a) 1,485,409
Biomet 67,975 2,070,519
Boston Scientific 106,900 (a) 4,602,045
Bristol-Myers Squibb 507,700 12,966,658
C.R. Bard 13,500 855,630
Cardinal Health 118,525 6,552,062
Chiron 49,000 (a) 2,000,670
Eli Lilly & Co. 294,500 18,794,990
Forest Laboratories 95,100 (a) 4,918,572
Genzyme 56,200 (a) 2,263,736
Guidant 80,400 3,134,796
HCA 134,550 4,319,055
Health Management Associates, Cl. A 62,600 1,067,956
Humana 42,400 (a) 468,520
Johnson & Johnson 778,618 43,882,910
King Pharmaceuticals 63,066 (a) 795,262
Manor Care 25,200 (a) 490,140
McKesson 76,277 2,115,924
MedImmune 65,900 (a) 2,324,293
Medtronic 319,700 15,262,478
Merck & Co. 588,600 34,244,748
Millipore 12,700 (a) 433,705
Pfizer 2,089,709 64,258,552
Quest Diagnostics 27,600 (a) 1,649,100
Schering-Plough 384,400 6,957,640
St. Jude Medical 46,500 (a) 2,439,390
Stryker 51,900 3,477,819
Tenet Healthcare 124,150 (a) 1,842,386
Thermo Electron 42,800 (a) 777,676
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (CONTINUED)
UnitedHealth Group 79,800 7,351,974
Waters 33,900 (a) 813,939
Watson Pharmaceuticals 28,000 (a) 813,960
WellPoint Health Networks 39,000 (a) 2,961,660
Wyeth 347,500 15,126,675
Zimmer Holdings 51,120 (a) 2,397,528
327,246,654
INTEREST SENSITIVE--23.1%
ACE 68,800 2,275,904
AFLAC 135,300 4,425,663
Aetna 39,479 1,966,054
Allstate 184,300 6,964,697
Ambac Financial Group 27,750 1,619,213
American Express 344,500 13,042,770
American International Group 683,779 39,624,993
AmSouth Bancorporation 93,200 1,961,860
Aon 81,075 1,796,622
Apartment Investment & Management, Cl. A 24,600 928,896
BB&T 123,400 4,022,840
Bank of America 393,752 29,157,336
Bank of New York 200,900 5,313,805
Bank One 305,104 10,998,999
Bear Stearns Cos. 25,972 1,735,968
CIGNA 36,600 1,914,180
Capital One Financial 58,200 2,436,834
Charles Schwab 352,200 3,039,486
Charter One Financial 59,268 1,721,735
Chubb 44,800 2,369,472
Cincinnati Financial 42,300 1,558,755
Citigroup 1,347,417 52,886,117
Comerica 45,800 1,992,758
Concord EFS 133,200 (a) 1,842,156
Countrywide Financial 33,100 2,237,560
Equity Office Properties Trust 107,900 2,802,163
Equity Residential 71,000 1,839,610
Fannie Mae 260,800 18,879,312
Federated Investors, Cl. B 28,900 788,681
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
Fifth Third Bancorp 151,467 7,465,808
First Tennessee National 32,900 1,441,020
FleetBoston Financial 275,107 7,295,838
Franklin Resources 67,500 2,354,400
Freddie Mac 182,400 10,560,960
General Electric 2,608,300 76,814,435
Golden West Financial 40,200 3,031,884
Goldman Sachs Group 123,700 9,388,830
H&R Block 46,800 1,807,416
Hartford Financial Services Group 66,900 2,726,844
Huntington Bancshares 61,674 1,200,176
J.P. Morgan Chase & Co. 523,360 15,360,616
Janus Capital Group 58,200 808,980
Jefferson-Pilot 37,625 1,508,386
John Hancock Financial Services 75,500 2,191,010
Keycorp 111,400 2,685,854
Lehman Brothers Holdings 63,600 4,004,892
Lincoln National 46,400 1,482,944
Loews 48,600 2,005,722
MBIA 38,000 1,698,600
MBNA 334,937 6,330,309
MGIC Investment 26,300 1,195,598
Marsh & McLennan Cos. 140,800 6,713,344
Marshall & Ilsley 57,200 1,682,824
Mellon Financial 113,000 2,988,850
Merrill Lynch 226,600 9,301,930
MetLife 183,600 5,274,828
Morgan Stanley 283,960 12,707,210
National City 160,300 4,802,588
North Fork Bancorporation 42,300 1,368,828
Northern Trust 57,900 2,032,290
PNC Financial Services Group 74,400 3,266,160
Principal Financial Group 83,900 2,441,490
Progressive 57,100 3,882,800
Providian Financial 75,600 (a) 557,172
Prudential Financial 148,400 4,744,348
Regions Financial 58,000 1,955,180
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
SLM 40,200 4,502,400
Safeco 36,200 1,394,062
Simon Property Group 48,300 1,773,576
SouthTrust 90,500 2,430,921
St. Paul Cos. 59,394 2,039,590
State Street 87,100 3,051,113
SunTrust Banks 74,000 4,234,280
Synovus Financial 79,850 1,554,680
T. Rowe Price Group 32,100 979,692
Torchmark 31,000 1,201,250
Travelers Property Casualty, Cl. B 263,713 4,285,336
U.S. Bancorp 502,053 11,120,474
Union Planters 51,900 1,481,226
UnumProvident 63,195 726,743
Wachovia 356,590 13,625,304
Washington Mutual 248,090 9,799,555
Wells Fargo 443,500 21,403,310
XL Capital, Cl. A 35,600 2,929,880
Zions Bancorporation 23,800 1,172,626
538,930,821
INTERNET--.5%
eBay 80,900 (a) 7,505,093
Yahoo! 154,900 (a) 3,838,422
11,343,515
PRODUCER GOODS & SERVICES--8.4%
Air Products & Chemicals 59,600 2,566,972
Alcoa 221,448 5,077,803
Allegheny Technologies 20,977 87,055
American Power Conversion 51,300 (a) 799,254
American Standard Cos. 19,000 (a) 1,352,610
Ashland 17,900 530,735
Avery Dennison 28,800 1,526,688
Ball 14,900 836,784
Bemis 13,900 634,674
Black & Decker 20,600 849,750
Boeing 220,298 6,009,729
Boise Cascade 15,300 351,441
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER GOODS & SERVICES (CONTINUED)
Burlington Northern Santa Fe 98,300 2,768,128
CSX 56,300 1,800,474
Caterpillar 90,200 4,744,520
Centex 16,200 1,069,524
Cooper Industries, Cl. A 24,400 905,240
Crane 15,625 305,156
Cummins 10,900 295,499
Deere & Co. 62,700 2,760,681
Dow Chemical 238,863 7,796,488
E. I. du Pont de Nemours 260,712 11,088,081
Eastman Chemical 20,300 619,759
Ecolab 34,100 1,742,169
Emerson Electric 110,300 5,592,210
Engelhard 33,500 822,425
FedEx 78,220 4,683,814
Fluor 21,100 729,427
Freeport-McMoRan Copper & Gold, Cl. B 37,900 656,049
General Dynamics 52,700 3,271,089
Georgia-Pacific 65,467 1,010,810
Goodrich 30,800 433,356
Goodyear Tire & Rubber 45,900 262,548
Great Lakes Chemical 13,200 324,192
Hercules 28,500 (a) 289,275
Honeywell International 224,225 5,291,710
ITT Industries 24,100 1,405,030
Illinois Tool Works 80,600 5,156,788
Ingersoll-Rand, Cl. A 44,400 1,957,152
International Paper 125,553 4,488,520
KB HOME 12,600 620,802
Lockheed Martin 119,400 5,975,970
Louisiana-Pacific 27,300 (a) 220,584
Masco 129,000 2,718,030
MeadWestvaco 52,511 1,238,734
Molex 50,300 1,174,002
Monsanto 68,464 1,191,274
Newmont Mining 105,325 2,845,882
Norfolk Southern 102,000 2,163,420
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER GOODS & SERVICES (CONTINUED)
Northrop Grumman 47,845 4,207,968
Nucor 20,500 837,425
PPG Industries 44,400 2,153,844
Pall 32,200 680,064
Parker-Hannifin 30,950 1,259,046
Phelps Dodge 23,295 (a) 726,571
Plum Creek Timber 48,500 1,128,110
Praxair 42,400 2,462,592
Pulte Homes 16,000 927,840
Raytheon 106,400 3,184,552
Rockwell Automation 48,700 1,110,360
Rockwell Collins 47,100 1,006,998
Rohm & Haas 57,915 1,917,566
Sealed Air 22,032 (a) 944,071
Sherwin-Williams 39,300 1,095,684
Sigma-Aldrich 18,800 936,616
Snap-On 15,300 449,055
Stanley Works 23,113 555,405
3M 102,300 12,893,892
Temple-Inland 14,100 638,730
Textron 35,600 1,049,844
Thomas & Betts 15,300 (a) 241,893
Tyco International 523,171 8,161,468
Union Pacific 66,500 3,958,080
United Parcel Service, Cl. B 294,600 18,300,552
United States Steel 26,700 382,344
United Technologies 123,300 7,621,173
Vulcan Materials 26,600 930,202
W.W. Grainger 24,000 1,107,600
Weyerhaeuser 57,400 2,846,466
Worthington Industries 22,400 300,832
195,059,150
SERVICES--6.5%
ALLTEL 81,500 3,819,090
AOL Time Warner 1,171,650 (a) 16,028,172
AT&T Wireless Services 710,117 (a) 4,587,356
Allied Waste Industries 54,600 (a) 453,180
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
SERVICES (CONTINUED)
American Greetings, Cl. A 17,200 (a) 250,432
Apollo Group, Cl. A 45,700 (a) 2,476,894
Automatic Data Processing 157,200 5,286,636
Carnival 164,800 4,546,832
Cintas 44,600 1,601,140
Clear Channel Communications 160,600 (a) 6,281,066
Comcast, CI. A 604,918 (a) 19,302,933
Computer Sciences 49,100 (a) 1,617,845
Convergys 45,400 (a) 736,388
Deluxe 15,000 660,150
Dow Jones & Co. 21,600 855,360
Electronic Data Systems 124,900 2,266,935
Equifax 37,300 864,987
First Data 197,100 7,732,233
Fiserv 50,150 (a) 1,476,416
Gannett 70,100 5,307,972
IMS Health 64,000 985,600
Interpublic Group of Companies 101,000 1,151,400
Knight-Ridder 21,400 1,381,370
McGraw-Hill Cos. 50,800 2,966,212
Meredith 13,000 561,860
Moody's 39,600 1,912,284
NEXTEL Communications, Cl. A 269,200 (a) 3,981,468
New York Times, Cl. A 39,700 1,841,286
Omnicom Group 49,300 3,051,670
Paychex 98,675 3,072,740
Quintiles Transnational 30,800 (a) 432,740
R. R. Donnelley & Sons 29,700 598,752
Robert Half International 45,400 (a) 739,112
Ryder System 16,400 407,376
Sprint (PCS Group) 261,600 (a) 915,600
SunGard Data Systems 74,200 (a) 1,595,300
TMP Worldwide 29,000 (a) 486,330
Tribune 79,900 3,913,502
Univision Communications, Cl. A 60,100 (a) 1,819,828
Viacom, Cl. B 461,624 (a) 20,039,098
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
SERVICES (CONTINUED)
Walt Disney 535,300 9,988,698
Waste Management 155,900 3,386,148
151,380,391
TECHNOLOGY--14.0%
ADC Telecommunications 210,100 (a) 501,719
Adobe Systems 60,600 2,094,336
Advanced Micro Devices 89,800 (a) 668,112
Agilent Technologies 122,416 (a) 1,961,104
Altera 100,200 (a) 1,584,162
Analog Devices 95,500 (a) 3,162,960
Andrew 25,650 (a) 196,736
Apple Computer 94,500 (a) 1,341,900
Applied Materials 432,600 (a) 6,315,960
Applied Micro Circuits 79,600 (a) 356,608
Autodesk 29,700 462,132
Avaya 97,680 (a) 380,952
BMC Software 61,100 (a) 911,612
Broadcom, Cl. A 72,200 (a) 1,291,658
CIENA 113,600 (a) 553,232
Cisco Systems 1,864,100 (a) 28,036,064
Citrix Systems 44,800 (a) 849,408
Computer Associates International 150,650 2,446,556
Compuware 98,800 (a) 433,732
Comverse Technology 49,200 (a) 643,044
Corning 314,200 (a) 1,702,964
Danaher 39,900 2,752,302
Dell Computer 676,000 (a) 19,543,160
Dover 53,000 1,523,220
EMC 576,600 (a) 5,241,294
Electronic Arts 37,500 (a) 2,222,625
Gateway 84,800 (a) 244,224
Hewlett-Packard 800,066 13,041,076
Intel 1,736,500 31,951,600
International Business Machines 443,000 37,610,700
Intuit 53,900 (a) 2,090,242
JDS Uniphase 370,400 (a) 1,196,392
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Jabil Circuit 51,900 (a) 970,530
KLA-Tencor 49,900 (a) 2,045,900
LSI Logic 97,200 (a) 520,992
Lexmark International 33,000 (a) 2,458,830
Linear Technology 82,000 2,826,540
Lucent Technologies 1,025,170 (a) 1,845,306
Maxim Integrated Products 84,700 3,327,863
Mercury Interactive 22,100 (a) 750,074
Micron Technology 159,300 (a) 1,354,050
Microsoft 2,805,000 71,723,850
Motorola 603,095 4,770,481
NCR 25,500 (a) 558,960
NVIDIA 41,300 (a) 589,351
National Semiconductor 47,600 (a) 891,548
Network Appliance 88,900 (a) 1,180,592
Novell 96,500 (a) 265,375
Novellus Systems 39,200 (a) 1,099,168
Oracle 1,381,100 (a) 16,407,468
PMC-Sierra 43,700 (a) 360,525
Parametric Technology 68,400 (a) 225,720
PeopleSoft 82,000 (a) 1,232,460
PerkinElmer 33,000 327,360
Pitney Bowes 62,000 2,176,820
Power-One 20,800 (a) 121,680
QLogic 24,600 (a) 1,082,154
QUALCOMM 206,800 6,594,852
Sabre Holdings 37,321 780,382
Sanmina-SCI 133,500 (a) 640,800
Scientific-Atlanta 40,400 656,500
Siebel Systems 126,900 (a) 1,100,223
Solectron 216,300 (a) 689,997
Sun Microsystems 837,400 (a) 2,763,420
Symantec 38,900 (a) 1,709,655
Symbol Technologies 60,300 659,079
Tektronix 22,800 (a) 427,956
Tellabs 107,900 (a) 666,822
Teradyne 47,900 (a) 555,640
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Texas Instruments 453,700 8,388,913
Unisys 85,500 (a) 889,200
VERITAS Software 107,782 (a) 2,372,282
Xerox 192,500 (a) 1,898,050
Xilinx 88,400 (a) 2,392,988
325,612,142
UTILITIES--5.1%
AES 142,200 (a) 854,622
AT&T 201,940 3,443,077
Allegheny Energy 32,700 271,410
Ameren 41,700 1,708,866
American Electric Power 101,960 2,689,705
BellSouth 487,800 12,434,022
Calpine 99,000 (a) 531,630
CenterPoint Energy 79,666 629,361
CenturyTel 37,400 1,101,430
Cinergy 44,100 1,505,574
Citizens Communications 74,000 (a) 808,820
Consolidated Edison 56,000 2,176,720
Constellation Energy Group 43,200 1,264,896
DTE Energy 43,900 1,770,048
Duke Energy 233,688 4,110,572
Dynegy, Cl. A 96,800 425,920
Edison International 85,300 (a) 1,244,527
Entergy 58,200 2,712,702
Exelon 84,675 4,491,162
FPL Group 47,800 2,909,586
FirstEnergy 78,002 2,631,008
Mirant 105,526 (a) 349,291
PG&E 106,800 (a) 1,599,864
PPL 43,100 1,560,220
Pinnacle West Capital 23,700 787,314
Progress Energy 62,169 2,597,421
Public Service Enterprise Group 58,300 2,242,801
Qwest Communications International 443,900 1,673,503
SBC Communications 870,298 20,330,161
Southern 187,000 5,439,830
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
Sprint (FON Group) 234,500 2,699,095
TECO Energy 45,900 (b) 495,261
TXU 84,397 1,681,188
Verizon Communications 717,056 26,803,552
Xcel Energy 104,410 1,411,623
119,386,782
TOTAL COMMON STOCKS
(cost $2,058,947,701 ) 2,217,865,326
Principal
SHORT-TERM INVESTMENTS--4.8% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT--4.5%
Greenwich Capital Markets,
Tri-Party Repurchase Agreement, 1.28%,
dated 4/30/2003, due 5/1/2003 in the
amount of $103,934,093 (fully collateralized
by $105,085,000 of various U.S. Government
Agency Obligations, value $106,012,633) 103,930,398 103,930,398
U.S. TREASURY BILLS--.3%
1.15%, 5/22/2003 100,000 (c) 99,936
1.13%, 5/29/2003 250,000 (c) 249,787
1.09%, 6/5/2003 350,000 (c) 349,633
1.12%, 6/12/2003 5,000,000 (c) 4,993,750
1.10%, 7/3/2003 850,000 (c) 848,385
1.12%, 7/10/2003 500,000 (c) 498,945
1.10%, 7/17/2003 200,000 (c) 199,534
1.14%, 7/24/2003 200,000 (c) 199,492
1.09%, 7/31/2003 500,000 (c) 498,610
7,938,072
TOTAL SHORT-TERM INVESTMENTS
(cost $111,868,078) 111,868,470
INVESTMENT OF CASH COLLATERAL
FOR SECURITIES LOANED--.0% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY;
Dreyfus Institutional Preferred Money Market Fund
(cost $502,146) 502,146 502,146
TOTAL INVESTMENTS (cost $2,171,317,925) 100.0% 2,330,235,942
CASH AND RECEIVABLES (NET) 0.0% 255,506
NET ASSETS 100.0% 2,330,491,448
(A) NON-INCOME PRODUCING.
(B) ALL OF THIS SECURITY IS ON LOAN. AT APRIL 30, 2003, THE TOTAL MARKET VALUE
OF THE FUND'S SECURITY ON LOAN IS $495,261 AND THE TOTAL MARKET VALUE OF THE
COLLATERAL HELD BY THE FUND IS $502,146.
(C) PARTIALLY HELD BY THE BROKER IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN
FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF FINANCIAL FUTURES
April 30, 2003 (Unaudited)
Mark t Value Unrealized
Covered by Appreciation
Contracts Contracts ($) Expiration at 4/30/2003 ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES LONG
Standard & Poor's 500 505 115,657,625 June 2003 6,425,275
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2003 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement
of Investments (including securities loaned
valued at $495,261)--Note 1(b,c) 2,171,317,925 2,330,235,942
Cash 1,952,575
Dividends and interest receivable 2,354,717
Receivable for shares of Common Stock subscribed 2,121,081
Receivable for futures variation margin--Note 4 825
Prepaid expenses 340,586
2,337,005,726
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 1,320,734
Payable for shares of Common Stock redeemed 4,691,398
Liability for securities loaned--Note 1(b) 502,146
6,514,278
- --------------------------------------------------------------------------------
NET ASSETS ($) 2,330,491,448
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 2,362,333,364
Accumulated undistributed investment income--net 8,290,356
Accumulated net realized gain (loss) on investments (205,475,564)
Accumulated net unrealized appreciation (depreciation)
on investments (including $6,425,275 net unrealized
appreciation on financial futures) 165,343,292
- --------------------------------------------------------------------------------
NET ASSETS ($) 2,330,491,448
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(200 million shares of $.001 par value Common Stock authorized) 86,932,764
NET ASSET VALUE, offering and redemption price per share--Note 3(c) ($) 26.81
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2003 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends 19,387,428
Interest 443,086
Income from securities lending 24,526
TOTAL INCOME 19,855,040
EXPENSES:
Management fee--Note 3(a) 2,715,858
Shareholder servicing costs--Note 3(b) 2,715,858
Loan commitment fees--Note 2 20,398
Miscellaneous 56,764
TOTAL EXPENSES 5,508,878
INVESTMENT INCOME--NET 14,346,162
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (19,321,605)
Net realized gain (loss) on financial futures (1,650,122)
NET REALIZED GAIN (LOSS) (20,971,727)
Net unrealized appreciation (depreciation) on investments
(including $5,734,387 net unrealized appreciation
on financial futures) 101,800,288
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 80,828,561
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 95,174,723
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2003 Year Ended
(Unaudited) October 31, 2002
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 14,346,162 26,577,770
Net realized gain (loss) on investments (20,971,727) (99,837,347)
Net unrealized appreciation
(depreciation) on investments 101,800,288 (344,839,365)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 95,174,723 (418,098,942)
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (26,194,132) (25,302,387)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 362,257,383 1,065,975,110
Dividends reinvested 25,656,958 24,723,315
Cost of shares redeemed (311,783,203) (976,225,624)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 76,131,138 114,472,801
TOTAL INCREASE (DECREASE) IN NET ASSETS 145,111,729 (328,928,528)
- -------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 2,185,379,719 2,514,308,247
END OF PERIOD 2,330,491,448 2,185,379,719
Undistributed investment income--net 8,290,356 20,138,326
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 14,107,616 34,312,201
Shares issued for dividends reinvested 958,422 741,996
Shares redeemed (12,150,907) (31,933,596)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 2,915,131 3,120,601
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
Six Months Ended
April 30, 2003 Year Ended October 31,
-------------------------------------------------------------------------
(Unaudited) 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 26.01 31.08 41.95 40.55 32.76 27.73
Investment Operations:
Investment income--net .17(a) .32(a) .32(a) .31(a) .35(a) .34
Net realized and
unrealized gain (loss)
on investments .94 (5.08) (10.88) 1.92 7.80 5.46
Total from
Investment Operations 1.11 (4.76) (10.56) 2.23 8.15 5.80
Distributions:
Dividends from investment
income--net (.31) (.31) (.31) (.32) (.36) (.30)
Dividends from net
realized gain on
investments -- -- -- (.51) -- (.47)
Total Distributions (.31) (.31) (.31) (.83) (.36) (.77)
Net asset value,
end of period 26.81 26.01 31.08 41.95 40.55 32.76
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 4.27(b) (15.54) (25.31) 5.50 25.00 21.34
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL
DATA (%):
Ratio of expenses
to average net assets .25(b) .50 .50 .50 .50 .50
Ratio of net investment
income to average
net assets .65(b) 1.05 .88 .73 .92 1.14
Portfolio Turnover Rate 1.65(b) 4.42 1.89 7.64 9.61 7.15
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets,
end of period
($ x 1,000) 2,330,491 2,185,380 2,514,308 3,072,253 2,800,028 1,843,762
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus S&P 500 Index Fund (the "fund") is a separate non-diversified series of
Dreyfus Index 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 three series including the fund. The fund's investment objective is to
match the performance of the Standard & Poor's 500 Composite Stock Price Index.
The Dreyfus Corporation ("the Manager") serves as the fund's investment adviser.
The Manager is a wholly-owned subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Financial Corporation. Dreyfus Service
Corporation (the "Distributor" ), a wholly-owned subsidiary of the Manager, is
the distributor of the fund's shares, which are sold to the public without a
sales charge.
The fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which may require
the use of management estimates and assumptions. Actual results could differ
from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including financial futures)
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. Effective April 14, 2003, the fund began pricing securities
traded on the NASDAQ stock market using the NASDAQ official closing 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. Bid price is used when no asked price is
available. Securities for which there are no such valuations are valued at fair
value as determined in good faith under the direction of the Board of Directors
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss 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, amortization of discount and premium on investments, is recognized
on the accrual basis.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund may lend securities to qualified institutions. At origination, all
loans are secured by cash collateral of at least 102% of the value of U.S.
securities loaned and 105% of the value of foreign securities loaned. Collateral
equivalent to at least 100% of the market value of securities on loan will be
maintained at all times. Cash collateral is invested in certain money market
mutual funds managed by the Manager as shown in the fund's Statement of
Investments. The fund will be entitled to receive all income on securities
loaned, in addition to income earned as a result of the lending transaction.
Although each security loaned is fully collateralized, the fund would bear the
risk of delay in recovery of, or loss of rights in, the securities loaned should
a borrower fail to return the securities in a timely manner.
(C) REPURCHASE AGREEMENTS: The fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the fund,
through its custodian and sub-custodian, takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the fund's holding
period. The value of the collateral is at least equal, at all times, to the
total amount of the repurchase obligation, including interest. In the event of a
counter party default, the fund has the right to use the collateral to offset
losses incurred. There is potential loss to the fund in the event the fund is
delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the fund seeks to assert its
rights. The Manager, acting under the supervision of the Board of Directors,
reviews the value of the collateral and the creditworthiness of those banks and
dealers with which the fund enters into repurchase agreements to evaluate
potential risks.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain, 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 gain can be offset by capital loss
carryovers, it is the policy of the fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all federal income and excise taxes.
The fund has an unused capital loss carryover of $145,321,705 available for
federal income tax purposes to be applied against future net securities profits,
if any, realized subsequent to October 31, 2002. If not applied, $20,622,195 of
the carryover expires in fiscal 2008, $42,517,790 expires in fiscal 2009 and
$82,181,720 expires in fiscal 2010.
The tax character of distributions paid to shareholders during the fiscal year
ended October 31, 2002, was as follows: ordinary income $25,302,387. The tax
character of current year distributions will be determined at the end of the
current fiscal year.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund based on prevailing market rates
in effect at the time of borrowings. During the period ended April 30, 2003, the
fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to an Investment Management Agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .25 of 1% of the
value of the fund' s average daily net assets, and is
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
payable monthly. Under the terms of the Agreement, the Manager has agreed to pay
all the expenses of the fund, except management fees, brokerage commissions,
taxes, interest, commitment fees, Shareholder Services Plan fees, fees and
expenses of non-interested Board members (including counsel fees) and
extraordinary expenses. In addition, the Manager is required to reduce its fees
in an amount equal to the fund's allocable portion of fees and expenses of the
non-interested Board members (including counsel fees). Each Board member also
serves as a Board member of other funds within the Dreyfus complex
(collectively, the "Fund Group"). Each Board member receives an annual fee of
$25,000 and an attendance fee of $4,000 for each in person meeting and $500 for
telephone meetings. These fees are allocated among the funds in the Fund Group.
The chairman of the Board receives an additional 25% of such compensation (with
the exception of reimburseable amounts) . Subject to the Company's Emeritus
Program Guidelines, Emeritus Board Members, if any, receive 50% of the annual
retainer fee and per meeting fee paid at the time the Board member achieves
emeritus status. Amounts required to be paid by the Company directly to the
non-interested Board members, that were applied to offset a portion of the
management fee payable to the Manager, were in fact paid directly by the Manager
to the non-interested Board members.
(B) Under the Shareholder Services Plan, the fund pays the Distributor for the
provision of certain services a fee, at the annual rate of .25 of 1% of the
value of the fund's average daily net assets. 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 April 30, 2003, the fund was charged $2,715,858 pursuant to
the Shareholder Services Plan.
(C) A 1% redemption fee is charged and retained by the fund on shares redeemed
within six months following the date of issuance, including redemptions made
through the use of the fund's exchange privilege. During the period ended April
30, 2003, redemption fees amounted to $24,031.
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 April 30,
2003, amounted to $55,326,720 and $34,826,554, respectively.
The fund may invest in financial futures contracts in order to gain exposure to
or protect against changes in the market. The fund is exposed to market risk as
a result of changes in the value of the underlying financial instruments.
Investments in financial futures require the fund to "mark to market" on a daily
basis, which reflects the change in the market value of the contract at the
close of each day's trading. Accordingly, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the fund recognizes a realized gain or loss. These investments require
initial margin deposits with a broker, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. Contracts open as of April 30, 2003, are set
forth in the Statement of Financial Futures.
At April 30, 2003, accumulated net unrealized appreciation on investments was
$158,918,017, consisting of $541,225,057 gross unrealized appreciation and
$382,307,040 gross unrealized depreciation.
At April 30, 2003, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
PROXY RESULTS (Unaudited)
The fund held a special meeting of shareholders on December 18, 2002. The
proposals considered at the meeting, and the results, are as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
Shares
------------------------------------------------------------------------
For Against Abstained
------------------------------------------------------------------------
To approve changes to certain of the
fund's fundamental policies and
investment restrictions to permit
participation in a portfolio securities
lending program 35,920,282 4,213,850 2,135,051
To approve changes to certain of the
fund's fundamental policies and
investment restrictions to permit
investment in other investment
companies 35,417,465 4,142,813 2,708,905
For More Information
Dreyfus S&P 500
Index Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02109
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
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Dreyfus International
Stock Index Fund
SEMIANNUAL REPORT April 30, 2003
YOU, YOUR ADVISOR AND
DREYFUS
A MELLON FINANCIAL COMPANY
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 Letter from the Chairman
3 Discussion of Fund Performance
6 Statement of Investments
34 Statement of Financial Futures
35 Statement of Assets and Liabilities
36 Statement of Operations
37 Statement of Changes in Net Assets
38 Financial Highlights
39 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus International
Stock Index Fund
LETTER FROM THE CHAIRMAN
Dear Shareholder:
This semiannual report for Dreyfus International Stock Index Fund covers the
six-month period from November 1, 2002, through April 30, 2003. Inside, you'll
find valuable information about how the fund was managed during the reporting
period, including a discussion with the fund's portfolio manager, Susan Ellison.
We have recently seen what we believe are encouraging signs of stability in the
U.S. financial markets. Perhaps most important, the war in Iraq ended quickly,
without disruptions in oil supplies or major incidents of terrorism. Many major
stock market indices have posted modest gains since the start of 2003,
suggesting greater investor optimism. At the same time, yield differences
between U.S. Treasury securities and corporate bonds have moved closer to
historical norms as many companies have strengthened their balance sheets. Of
course, problems and concerns remain. In international markets, Europe's economy
remains stagnant, and Asia's economy has been weakened by the spread of SARS.
Positive factors appear to outweigh negative ones, however, and we believe that
the U.S. will lead the global economy to recovery. What are the implications for
your investments? We are generally optimistic about stocks, although security
selection by region, sector and company should remain a key factor. Your
financial advisor can help you to ensure that your portfolio reflects your
investment needs, long-term goals and attitudes toward risk. Thank you for your
continued confidence and support.
Sincerely,
Stephen E. Canter
Chairman and Chief Executive Officer
The Dreyfus Corporation
May 15, 2003
DISCUSSION OF FUND PERFORMANCE
Susan Ellison, Portfolio Manager
How did Dreyfus International Stock Index Fund
perform relative to its benchmark?
For the six-month period ended April 30, 2003, the fund produced a total return
of 0.87%.1 This compares with a 1.81% total return for the fund's benchmark, the
Morgan Stanley Capital International Europe, Australasia, Far East Free Index
(the "MSCI EAFE Free Index" or the "Index"), during the same period.2 For most
of the reporting period, international equity markets declined amidst the
pending conflict with Iraq and deteriorating investor confidence. As the
reporting period and the war concluded, and investor confidence began to
improve, international stocks began to rebound. As a result, this international
political and economic environment directly affected the fund's absolute
performance. The fund performed in line with its benchmark, with the difference
primarily attributable to fund fees and expenses. What is the fund's investment
approach?
In managing this fund, our goal is to match the performance of the MSCI EAFE
Free Index, a broadly diversified, international index composed of slightly more
than 1,000 stocks that trade in 21 major markets outside the United States,
including Great Britain, Germany, France, Japan, Hong Kong, Singapore, Australia
and New Zealand. Weighted by market capitalization (the total value of all
shares outstanding in a country's stock market) and share liquidity (a measure
of the proportion of a company's shares actually available to be bought or sold
by the public), approximately 71% of the MSCI EAFE Free Index's total value is
represented by its top five countries, which currently are Great Britain, Japan,
France, Switzerland and Germany. The MSCI EAFE Free Index is diversified among
industry groups, as those groups are represented in individual country markets.
In order to simplify management and control costs, the fund attempts to match
the Index's return, not to duplicate its composition. Our carefully created
sample attempts to match index weightings at the country, industry and
individual security levels. Beginning by country, the fund invests in proportion
to each country's weighting in the Index. That means that if the British market
comprises 28% of the Index, then approximately 28% of the fund's assets will be
invested in Britain. In addition, the fund's industry allocation also matches
that of the Index, in the proper proportion. For example, if a certain
percentage of the market value in the Japanese sub-index is comprised of
financial services firms, that same approximate percentage of the investment in
the Japanese markets will also be invested in that sector. At the individual
company level, the fund invests in a carefully selected sample of the stocks
that make up each country's index component. The fund also invests in securities
that represent the market as a whole, such as stock index futures, and manages
its exposure to foreign currencies so that the fund's currency profile matches
the currency makeup of the MSCI EAFE Free Index. What other factors influenced
the fund's performance?
As an index fund, we seek to match the performance of the MSCI EAFE FREE Index.
Factors that can influence a fund's overall total return - in addition to
political and economic factors - are fees and expenses associated with fund
operations, and trading costs associated with rebalancing the fund's portfolio
each time a change in the fund's benchmark should occur. On November 30, 2002,
one stock was added to the MSCI EAFE Free Index and ten stocks were dropped
which resulted in a rebalancing of the fund's portfolio. Global equity markets
rallied in April 2003 as coalition forces seized Baghdad, signaling the end of
military action in Iraq. European markets rallied sharply as investors flocked
to German stocks that had been deeply depressed by poor economic conditions and
heavy pension, welfare and labor costs. As a result, Germany's leaders have
proposed pension and tax reforms. Mixed economic news and the SARS outbreak in
Asia created a tense investment environment in that region. Japanese stocks
sagged as consumer electronics giant Sony reported weak earnings. On a more
positive note, the Japanese government seems to be taking a more aggressive
position to restructure the nation's banks, which have been a drag on Japan's
economy. As of April 30, 2003, the top five country weightings in the MSCI EAFE
Free Index and fund were approximately as follows: Great Britain (27.7% of the
Index), Japan (19.3%), France (9.7%), Switzerland (8.1%) and Germany (6.3%).
What is the fund's current strategy?
As an index fund, we do not actively select stocks based on their individual
merits or underlying fundamentals. The fund's continuing strategy is to provide
broad exposure to the international markets by remaining fully invested in a way
that attempts to match the performance of the MSCI EAFE Free Index.
May 15, 2003
1 Total return includes reinvestment of dividends and any capital gains paid.
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 original cost.
2 SOURCE: LIPPER INC. - Reflects reinvestment of net dividends and, where
applicable, capital gains distributions. The Morgan Stanley Capital
International Europe, Australasia, Far East (MSCI EAFE) Free Index is an
unmanaged index composed of a sample of companies representative of the
market structure of European and Pacific Basin countries. The index
reflects actual investable opportunities for global investors for stocks
that are free of foreign ownership limits or legal restrictions at the
country level.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
COMMON STOCKS--94.1% Shares Value ($)
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AUSTRALIA--4.8%
AMP 17,208 93,966
AMP Diversified Property Trust (Units) 6,000 11,109
Alumina 17,580 47,944
Amcor 12,380 64,350
Ansell 1,500 (a) 5,451
Aristocrat Leisure 4,353 (b) 4,248
Australia and New Zealand Banking 20,270 236,461
Australian Gas Light 6,439 46,035
Australian Stock Exchange 700 5,035
BHP Billiton 52,562 297,213
BHP Steel 9,472 20,085
Boral 8,184 24,367
Brambles Industries 12,929 41,649
CFS Gandel Retail Trust (Units) 13,489 11,812
CSL 1,487 14,547
CSR 11,900 13,249
Coca-Cola Amatil 5,971 21,251
Cochlear 616 13,047
Coles Myer 14,715 (a) 63,325
Commonwealth Bank of Australia 16,571 282,140
Computershare 3,800 4,041
David Jones 6,337 4,162
Deutsche Office Trust (Units) 29,000 20,316
Foster's 31,663 88,727
Futuris 13,182 12,615
General Property Trust (Units) 25,216 47,318
Harvey Norman 7,600 10,839
Iluka Resources 4,328 11,126
Insurance Australia 35,168 68,193
James Hardie Industries 6,600 27,082
John Fairfax 7,800 14,881
Leighton 2,900 17,632
Lend Lease 4,904 31,012
M.I.M 31,926 33,949
Macquarie Bank 2,574 40,380
Macquarie Infrastructure (Units) 26,742 55,032
Mayne 12,622 23,369
COMMON STOCKS (CONTINUED) Shares Value ($)
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AUSTRALIA (CONTINUED)
Mirvac 15,599 40,785
National Australia Bank 20,561 417,979
Newcrest Mining 4,532 18,568
News Corporation 19,887 141,531
OneSteel 7,421 7,938
Orica 5,354 33,154
Origin Energy 6,434 18,070
PaperlinX 6,000 19,253
Patrick 2,000 16,251
Principal Office Fund (Units) 7,000 6,086
Publishing & Broadcasting 1,600 8,837
QBE Insurance 8,947 47,793
Rinker 11,900 (a) 36,175
Rio Tinto 4,943 98,259
Santos 10,100 36,642
Sonic Healthcare 3,726 14,823
Sons of Gwalia 3,013 3,487
Southcorp 7,524 17,790
Stockland (Units) 10,873 34,005
Suncorp-Metway 8,005 56,931
TAB 5,000 10,102
TABCORP 6,000 39,782
Telstra 36,467 96,031
Transurban 7,226 21,334
WMC Resources 17,580 43,985
Wesfarmers 5,197 79,642
Westfield 6,494 59,305
Westfield Trust (Units) 30,039 64,447
Westpac Banking 23,338 (a) 232,253
Woodside Petroleum 6,800 48,743
Woolworths 16,267 131,277
3,729,216
AUSTRIA--.1%
Erste Bank der oesterreichischen Sparkassen 300 23,737
Flughafen Wien 300 10,466
Mayr-Melnhof Karton 100 8,475
OMV 115 (b) 13,810
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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AUSTRIA (CONTINUED)
Oesterreichische Elektrizitaetswirtschafts, Cl. A 45 4,159
Telekom Austria 2,700 (a) 27,661
VA Technologie 150 3,758
Wienerberger 500 9,430
101,496
BELGIUM--1.0%
Agfa Gevaert 1,450 (b) 28,804
Barco 140 8,093
Bekaert 240 11,024
Colruyt 35 2,287
Compagnie Maritime Belge 150 9,375
Delhaize 420 8,873
Dexia 9,100 104,298
Electrabel 382 91,572
Fortis 14,222 238,711
Groupe Bruxelles Lambert 1,105 45,443
Interbrew 2,300 (b) 51,336
KBC Bankverzekeringsholding 1,412 (b) 49,953
Omega Pharma 300 7,784
S.A. D'Ieteren 70 8,890
Solvay 450 31,789
UCB 1,300 35,980
Umicore 100 4,544
738,756
DENMARK--.7%
A/S Dampskibsselskabet Svenborg, Cl. B 2 (b) 26,245
A/S Det Ostasiatiske Kompagni 200 (b) 4,720
Bang & Olufsen, Cl. B 100 2,014
Carlsberg, Cl. B 400 14,551
Coloplast, Cl. B 100 7,396
D/S 1912, Cl. B 3 (b) 26,922
Danisco 800 29,221
Danske Bank 7,800 150,076
FLS Industries, Cl. B 500 (a) 4,322
GN Store Nord 2,400 (a) 8,189
Group 4 Falck 880 15,344
H. Lundbeck 1,100 22,818
COMMON STOCKS (CONTINUED) Shares Value ($)
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DENMARK (CONTINUED)
ISS 632 23,655
NEG Micon 300 (a) 3,021
NKT 500 5,487
Novo Nordisk, Cl. B 3,657 132,479
Novozymes, Cl. B 625 15,266
TDC 1,860 (b) 46,272
Topdanmark 400 (a) 13,047
Vestas Wind Systems 1,300 (b) 10,161
William Demant 600 (a) 14,972
576,178
FINLAND--2.0%
Amer 300 9,308
Elisa 600 (a) 4,620
Fortum 5,100 36,199
Instrumentarium 600 (b) 22,499
Kesko, Cl. B 700 (b) 7,875
Kone, Cl. B 470 16,024
Metso 1,910 (b) 18,204
Nokia 66,685 1,128,214
Orion-Yhtyma, Cl. B 500 8,258
Outokumpu 600 (b) 4,955
Pohjola, Cl. D 400 6,013
Rautaruukki 5,100 (a) 21,628
Sampo, Cl. A 3,520 (b) 25,534
Stora Enso, Cl. R 8,956 97,750
TietoEnator 1,410 23,367
UPM-Kymmene 6,980 103,213
Uponor 500 10,044
Wartsila, Cl. B 500 (b) 5,775
1,549,480
FRANCE--8.8%
Accor 2,709 89,276
Air France 200 (b) 2,228
Alcatel 14,825 (a) 121,438
Alstom 5,100 (a) 10,359
Altran Technologies 600 2,203
Atos Origin 200 (a) 7,136
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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FRANCE (CONTINUED)
Autoroutes du Sud de la France 700 19,139
Aventis 9,560 485,544
Axa 20,451 310,625
BNP Paribas 11,409 535,527
Bouygues 2,500 (b) 61,157
Business Objects 350 (a) 7,574
Cap Gemini 1,497 46,578
Carrefour 8,129 353,534
Casino Guichard-Perrachon 463 31,519
Club Mediterranee 150 (a) 3,348
Compagnie de Saint-Gobain 4,146 143,527
Compagnie Generale des Etablissements Michelin, Cl. B 1,742 64,446
Dassault Systemes 730 21,092
Essilor International 1,136 46,515
European Aeronautic Defence and Space 4,500 41,833
France Telecom 10,020 231,474
Groupe Danone 1,748 247,357
Imerys 106 14,065
L'Air Liquide 1,395 211,260
L'Oreal 4,824 344,818
LVMH Moet Hennessy Louis Vuitton 2,645 115,416
Lafarge 1,754 117,839
Lagardere S.C.A 1,605 61,330
PSA Peugeot Citroen 2,32 108,681
Pechiney, Cl. A 820 23,656
Pernod-Ricard 875 76,802
Pinault-Printemps-Redoute 950 66,369
Publicis 1,610 35,522
Renault 2,268 98,080
Sagem 50 4,046
Sanofi-Synthelabo 5,707 340,424
Schneider Electric 2,715 128,530
Societe BIC 550 19,335
Societe Generale, Cl. A 4,145 253,495
Societe Television Francaise 1 1,950 54,775
Sodexho Alliance 858 19,524
Suez 11,955 194,670
COMMON STOCKS (CONTINUED) Shares Value ($)
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FRANCE (CONTINUED)
Technip-Coflexip 273 22,363
Thales 1,091 29,185
Thomson 2,600 (a) 38,098
Total Fina Elf 8,925 1,170,335
Unibail 489 32,716
Valeo 1,204 34,492
Vinci 900 58,607
Vivendi Universal 12,787 208,346
Wanadoo 5,600 (a) 38,248
Zodiac 80 1,805
6,806,261
GERMANY--5.7%
Adidas-Salomon 601 (b) 51,981
Aixtron 600 (b) 2,036
Allianz 3,696 (b) 259,858
Altana 986 (b) 48,637
BASF 7,469 (b) 330,499
Bayer 9,276 168,738
Bayerische Hypo-und Vereinsbank 5,221 (b) 69,604
Beiersdorf 405 (b) 49,537
Buderus 690 22,655
Continental 1,400 (b) 24,842
DaimlerChrysler 12,066 (b) 389,158
Deutsche Bank 7,858 (b) 405,152
Deutsche Boerse 800 37,141
Deutsche Lufthansa 2,624 (a,b) 26,941
Deutsche Post 5,900 (b) 70,782
Deutsche Telekom 29,350 392,400
Douglas 440 8,004
E.ON 8,180 (b) 387,977
Epcos 600 (a,b) 9,174
Fresenius Medical Care 461 (b) 23,100
Gehe 362 (b) 14,423
HeidelbergCement 420 (b) 12,820
Infineon Technologies 5,700 (a) 41,984
KarstadtQuelle 780 (b) 13,188
Linde 1,233 (b) 46,372
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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GERMANY (CONTINUED)
MAN 1,350 (b) 24,407
MLP 1,300 (b) 15,088
Merck KGaA 750 (b) 20,172
Metro 2,093 (b) 57,460
Muenchener Rueckversicherungs-Gesellschaft 1,420 (b) 141,357
QIAGEN 2,300 (a,b) 15,914
RWE 4,777 (b) 129,013
SAP 2,868 (b) 291,583
Schering 2,380 (b) 106,110
Siemens 11,202 553,813
TUI 1,795 (b) 26,302
ThyssenKrupp 4,634 (b) 47,578
Volkswagen 2,980 (b) 104,426
WCM Beteiligungs-und Grundbesitz 2,140 (a) 5,827
4,446,053
GREECE--.3%
Alpha Bank 3,100 42,968
Bank of Piraeus 1,500 9,274
Coca-Cola Hellenic Bottling 1,038 15,175
Commercial Bank of Greece 950 13,274
EFG Eurobank Ergasias 2,400 29,998
Greek Organization of Football Prognostics 800 7,303
Hellenic Petroleum 1,300 7,834
Hellenic Telecommunications Organization 4,600 49,385
Intracom 500 2,846
National Bank of Greece 2,000 28,168
Public Power 800 12,142
Titan Cement 500 18,436
Viohalco 2,000 8,437
Vodafone Panafon 3,400 21,401
266,641
HONG KONG--1.5%
ASM Pacific Technology 5,000 12,405
BOC Hong Kong 35,500 (b) 34,594
Bank of East Asia 20,991 38,892
CLP 25,788 105,479
Cathay Pacific Airways 18,000 (b) 21,695
COMMON STOCKS (CONTINUED) Shares Value ($)
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HONG KONG (CONTINUED)
Cheung Kong 19,000 105,000
Cheung Kong Infrastructure 6,000 11,232
Esprit 8,000 15,694
Giordano International 20,000 5,385
Hang Lung Properties 14,000 (b) 12,117
Hang Seng Bank 10,100 100,041
Henderson Land Development 8,000 19,849
Hong Kong and China Gas 56,772 66,970
Hong Kong Exchanges & Clearing 16,000 18,669
Hongkong Electric 21,000 84,280
Hutchison Whampoa 28,800 160,266
Hysan Development 9,000 6,751
Johnson Electric 26,400 28,434
Li & Fung 26,000 29,170
MTR 24,500 26,388
New World Development 31,708 (b) 9,656
PCCW 26,207 (a,b) 16,633
SCMP 11,759 4,448
Shangri-La Asia 20,000 12,630
Sino Land 38,664 (b) 10,287
Sun Hung Kai Properties 15,384 72,195
Swire Pacific, Cl. A 13,500 53,487
Television Broadcasts 3,000 9,174
Wharf 20,171 35,304
1,127,125
IRELAND--.8%
Allied Irish Banks 12,239 187,807
Bank of Ireland 14,311 174,883
CRH 6,716 103,132
DCC 1,000 12,388
Elan 6,074 (a) 20,336
Greencore 2,474 7,593
Independent News & Media 4,200 5,531
Independent News & Media (Rights) 1,120 (a) 588
Irish Life & Permanent 4,000 45,577
Kerry 1,600 23,659
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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IRELAND (CONTINUED)
Ryanair 6,300 (a) 43,099
Waterford Wedgwood (Units) 16,900 4,527
629,120
ITALY--3.7%
ACEA 1,400 5,703
Alitalia 16,500 (a) 3,867
Alleanza Assicurazioni 6,800 (b) 63,594
Assicurazioni Generali 13,632 (b) 313,242
Autogrill 1,528 (a) 14,904
Banca Fideuram 5,400 (b) 28,505
Banca Intesa 49,677 (b) 128,619
Banca Intesa (RNC) 23,587 (b) 42,775
Banca Monte dei Paschi di Siena 13,050 (b) 37,866
Banca Nazionale del Lavoro 15,500 (a) 25,117
Banca Populare di Milano 5,900 24,560
Benetton 730 (b) 6,314
Bulgari 2,300 10,729
Capitalia 18,516 (b) 29,239
Enel 31,970 (b) 191,237
Eni 38,825 553,307
e.Biscom 300 (a) 8,618
Fiat 3,585 (b) 27,286
Fiat (RNC) 1,500 6,713
FinecoGroup 19,250 (a,b) 9,066
Gruppo Editoriale L'Espresso 3,900 15,320
Italcementi 1,565 16,348
Luxottica 2,100 23,998
Mediaset 8,865 (b) 75,783
Mediobanca 4,756 44,001
Mediolanum 4,300 (b) 22,458
Mondadori (Arnoldo) Editore 2,050 (b) 14,528
Parmalat Finanziaria 7,306 (b) 18,671
Pirelli 13,500 (b) 13,318
Riunione Adriatica di Sicurta 4,764 68,691
Sanpaolo IMI 10,852 (b) 89,499
Seat Pagine Gialle 69,400 (a,b) 47,090
Snam Rete Gas 11,600 42,073
COMMON STOCKS (CONTINUED) Shares Value ($)
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ITALY (CONTINUED)
Snia 4,800 (a) 9,187
Telecom Italia 31,231 (b) 255,130
Telecom Italia (RNC) 30,350 (b) 149,369
Telecom Italia Mobile 52,211 (b) 245,889
Tiscali 1,650 (a) 7,955
UniCredito Italiano 50,192 219,576
2,910,145
JAPAN--18.3%
ACOM 650 (b) 18,258
ADERANS 400 7,329
ADVANTEST 1,000 33,540
AEON 2,900 65,898
AEON CREDIT SERVICE 220 5,248
AIFUL 400 15,026
ALL NIPPON AIRWAYS 7,000 (a,b) 11,739
ALPS ELECTRIC 2,000 21,583
AMADA 5,000 11,781
ANRITSU 2,000 (a,b) 6,507
AOYAMA TRADING 200 2,690
ASAHI BREWERIES 6,000 35,670
ASAHI KASEI 16,900 (b) 46,055
ASATSU-DK 300 5,031
AUTOBACS SEVEN 500 9,957
Ajinomoto 7,800 79,138
Amano 1,000 4,897
Asahi Glass 10,800 57,505
Ashikaga Financial 9,000 (a) 11,018
BANK OF FUKUOKA 8,000 34,144
BELLSYSTEM24 20 2,566
BRIDGESTONE 8,400 95,298
Bank of Yokohama 14,000 (a,b) 49,421
Benesse 1,000 (b) 13,332
CANON 12,100 489,032
CAPCOM 900 (b) 7,184
CASIO COMPUTER 2,000 (b) 12,158
CHUGAI PHARMACEUTICAL 4,128 43,267
COCA-COLA WEST JAPAN 500 8,326
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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JAPAN (CONTINUED)
CSK 1,100 (b) 19,416
Central Japan Railway 11 71,390
Chiba Bank 9,000 (b) 31,846
Chubu Electric Power 8,200 165,018
Citizen Watch 4,000 21,097
Credit Saison 1,800 33,884
DAI NIPPON PRINTING 8,800 85,447
DAICEL CHEMICAL INDUSTRIES 2,000 6,691
DAIDO STEEL 200 268
DAIFUKU 3,000 7,999
DAIICHI PHARMACEUTICAL 3,000 37,984
DAIKIN INDUSTRIES 2,000 33,272
DAINIPPON INK AND CHEMICALS 12,000 (b) 18,615
DAINIPPON SCREEN MANUFACTURING 2,000 (a,b) 6,943
DAITO TRUST CONSTRUCTION 1,100 20,984
DENKI KAGAKU KOGYO KABUSHIKI KAISHA 5,600 12,443
DENSO 6,700 95,506
DENTSU 1 2,977
DOWA MINING 3,000 9,936
Daiei 2,000 (a,b) 2,147
Daimaru 3,000 10,792
Daiwa House Industry 5,400 32,601
Daiwa Securities 16,000 (b) 62,921
EBARA 3,000 8,578
East Japan Railway 44 199,229
Eisai 3,000 52,952
FANUC 1,400 57,287
FAST RETAILING 900 26,186
FUJI ELECTRIC 5,000 8,553
FUJI MACHINE MANUFACTURING 700 4,696
FUJI SOFT ABC 400 4,226
FUJISAWA PHARMACEUTICAL 3,000 50,813
FUJITSU 21,800 (a) 60,870
FamilyMart 600 11,446
Fuji Photo Film 6,200 158,041
Fuji Television Network 4 14,120
Fujikura 3,000 6,767
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
Furukawa Electric 6,000 (b) 11,018
GUNZE 5,000 18,824
Gunma Bank 6,000 (b) 28,174
HANKYU DEPARTMENT STORES 2,000 (b) 10,951
HINO MOTORS 2,000 9,525
HIROSE ELECTRIC 400 28,610
HONDA MOTOR 8,900 294,776
HOUSE FOODS 1,220 11,079
HOYA 1,500 88,672
Hitachi 41,900 139,831
Hitachi Cable 3,000 5,937
Hitachi Software Engineering 200 3,066
Hitachi Zosen 9,500 (a) 5,974
Hokuriku Bank 14,000 (a) 17,726
ISHIHARA SANGYO KAISHA 8,000 (a) 10,397
ITO EN 300 9,056
ITOCHU 18,500 38,781
ITOCHU TECHNO-SCIENCE 300 5,383
ITO-YOKADO 5,000 117,600
Isetan 2,000 13,466
Ishikawajima-Harima Heavy Industries 17,000 (b) 15,537
JAPAN TOBACCO 8 46,621
JFE 5,960 71,814
JGC 3,000 21,130
JSR 2,000 20,862
Japan Airlines System 10,600 (a,b) 18,843
Joyo Bank 11,462 33,158
KAJIMA 10,800 23,002
KAKEN PHARMACEUTICAL 1,000 4,193
KANDENKO 105 312
KANEBO 6,000 (a,b) 6,138
KANEKA 3,000 (b) 13,609
KATOKICHI 600 (b) 8,814
KEIO ELECTRIC RAILWAY 8,000 38,840
KEYENCE 440 70,726
KIKKOMAN 2,000 12,460
KINDEN 3,000 9,383
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
KIRIN BREWERY 10,000 77,142
KOKUYO 1,000 7,605
KOMATSU 14,600 55,702
KOMORI 1,000 8,066
KONAMI 1,200 15,777
KONICA 3,000 27,444
KOYO SEIKO 2,000 (b) 11,571
KUBOTA 15,000 34,588
KYOCERA 2,200 107,362
KYOWA EXEO 1,000 2,155
KYOWA HAKKO KOGYO 5,000 22,430
Kamigumi 2,400 10,988
Kansai Electric Power 8,999 150,537
Kao 8,000 145,900
Kawasaki Heavy Industries 15,000 (b) 12,326
Kawasaki Kisen Kaisha 9,000 20,602
Keihin Electric Express Railway 6,000 (b) 28,727
Kinki Nippon Railway 18,354 (a,b) 45,862
Kuraray 5,000 (b) 28,425
Kurita Water Industries 1,000 8,670
Kyushu Electric Power 4,700 73,066
LAWSON 600 18,414
MABUCHI MOTOR 300 22,413
MAEDA ROAD CONSTRUCTION 200 738
MARUHA 400 453
MARUI 4,800 39,966
MEITEC 500 (b) 12,703
MINEBEA 4,000 (b) 11,873
MITSUBISHI GAS CHEMICAL 5,000 7,211
MITSUBISHI MATERIALS 10,000 (a) 8,888
MITSUI & CO. 15,400 72,958
MITSUMI ELECTRIC 100 758
MORI SEIKI 500 2,096
MURATA MANUFACTURING 3,300 117,600
Makita 2,000 15,009
Marubeni 23,000 21,793
Matsushita Electric Industrial 30,995 246,900
COMMON STOCKS (CONTINUED) Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
Matsushita Electric Works 7,000 (b) 36,685
Meiji Dairies 4,000 14,624
Meiji Seika Kaisha 6,000 (b) 20,023
Millea 18 (b) 116,820
Mitsubishi 13,000 (b) 77,285
Mitsubishi Chemical 22,200 (b) 36,857
Mitsubishi Electric 25,000 64,774
Mitsubishi Estate 14,000 81,939
Mitsubishi Heavy Industries 45,700 101,547
Mitsubishi Logistics 2,000 11,387
Mitsubishi Paper Mills 7,000 (a) 7,396
Mitsubishi Rayon 7,000 16,024
Mitsubishi Tokyo Financial 51 172,765
Mitsui Chemicals 9,000 36,601
Mitsui Engineering & Shipbuilding 11,000 11,437
Mitsui Fudosan 11,000 59,215
Mitsui Mining & Smelting 7,000 18,372
Mitsui O.S.K Lines 8,000 20,929
Mitsui Sumitomo Insurance 18,230 (b) 85,601
Mitsui Trust 9,380 (a,b) 17,933
Mitsukoshi 5,000 (b) 12,284
Mizuho Financial 85 (a,b) 45,401
NAMCO 700 9,808
NEC 19,800 (a) 61,927
NGK INSULATORS 4,000 19,386
NGK SPARK PLUG 2,000 (b) 14,288
NICHIREI 4,000 12,242
NIDEC 500 (b) 26,371
NIKON 3,600 (b) 23,998
NIPPON KAYAKU 2,000 8,419
NIPPON MEAT PACKERS 2,000 17,961
NIPPON MINING 6,800 11,860
NIPPON OIL 19,800 78,861
NIPPON SHOKUBAI 3,000 15,521
NIPPON STEEL 73,100 81,522
NIPPON TELEGRAPH AND TELEPHONE 73 255,861
NISSAN MOTOR 31,900 244,747
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
NISSHINBO INDUSTRIES 2,000 8,570
NITTO DENKO 1,500 43,141
NORITAKE 3,000 7,471
NSK 7,000 18,665
NTN 6,000 (b) 22,941
NTT Data 14 33,104
NTT DoCoMo 244 503,304
Net One Systems 2 8,133
Nikko Cordial 20,000 53,664
Nintendo 1,300 101,593
Nippon COMSYS 1,000 3,614
Nippon Express 12,000 44,776
Nippon Light Metal 400 419
Nippon Sanso 3,000 8,402
Nippon Sheet Glass 6,000 12,326
Nippon Unipac 10 32,115
Nippon Yusen Kabushiki Kaisha 13,800 46,633
Nishimatsu Construction 5,000 (b) 14,087
Nissan Chemical Industries 2,000 9,006
Nisshin Seifun 2,000 13,617
Nissin Food Products 1,000 21,801
Nomura 25,000 (a) 247,568
OBAYASHI 9,000 24,526
OJI PAPER 11,000 41,598
OKUMURA 3,000 9,559
OLYMPUS OPTICAL 3,000 51,945
OMRON 3,000 48,298
ONWARD KASHIYAMA 2,000 14,372
ORACLE CORPORATION JAPAN 200 (b) 5,048
ORIENTAL LAND 600 25,105
ORIX 1,040 47,526
OSAKA GAS 28,000 80,999
Oki Electric Industry 7,000 (a,b) 15,026
PIONEER 2,000 40,080
Promise 1,200 (b) 39,242
Q.P. 1,100 8,855
RICOH 8,000 122,690
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
ROHM 1,500 154,578
Resona 54,000 (a) 25,809
SANDEN 4,000 16,669
SANKYO 5,000 72,447
SANYO ELECTRIC 21,000 65,680
SAPPORO BREWERIES 5,000 (b) 12,494
SECOM 2,500 (b) 58,276
SEGA 1,400 (a,b) 7,748
SEIYU 3,000 (a,b) 6,691
SEVEN-ELEVEN JAPAN 5,000 119,068
SHIMACHU 400 6,611
SHIMAMURA 300 16,602
SHIMANO 800 12,698
SHIMIZU 9,000 23,545
SHIZUOKA BANK 8,400 55,502
SHOWA SHELL SEKIYU 1,000 (b) 6,398
SKYLARK 1,000 10,733
SMC 500 37,649
SOFTBANK 2,700 (b) 30,269
SONY 12,280 298,608
SUMITOMO 10,000 40,248
SUMITOMO CHEMICAL 15,000 40,626
SUMITOMO HEAVY INDUSTRIES 12,000 (a) 9,760
SURUGA BANK 2,000 8,452
SUZUKEN 600 15,848
Sanrio 600 (a) 2,505
Sanwa Shutter 200 735
Seino Transportation 2,000 11,806
Sekisui Chemical 7,000 17,961
Sekisui House 7,000 51,417
77 Bank 4,000 16,971
Sharp 12,000 125,776
Shin-Etsu Chemical 4,900 146,680
Shionogi & Co. 4,000 47,493
Shiseido 5,000 45,657
Showa Denko 15,000 22,765
Snow Brand Milk Products 3,750 (a) 8,490
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
Sompo Japan Insurance 12,000 (b) 54,838
Stanley Electric 2,000 25,155
Sumitomo Bakelite 2,000 7,077
Sumitomo Electric Industries 7,800 43,624
Sumitomo Forestry 3,000 10,867
Sumitomo Metal Industries 44,000 19,554
Sumitomo Metal Mining 6,000 18,061
Sumitomo Mitsui Financial 48 (b) 75,264
Sumitomo Osaka Cement 4,000 5,534
Sumitomo Realty & Development 6,000 (b) 19,621
Sumitomo Trust and Banking 13,000 36,844
TAIHEIYO CEMENT 14,000 19,369
TAISEI 13,000 27,687
TAISHO PHARMACEUTICAL 2,000 28,191
TAKARA 2,000 (b) 8,955
TAKEFUJI 1,050 54,675
TAKUMA 1,000 5,065
TDK 1,500 52,071
TEIJIN 11,000 24,073
TEIKOKU OIL 4,000 11,471
TERUMO 2,800 46,557
THK 900 (b) 8,301
TIS 500 6,834
TOBU RAILWAY 12,000 (b) 33,607
TODA 3,000 5,836
TOHO 1,900 16,394
TOKYO BROADCASTING SYSTEM 1,000 11,731
TOKYO GAS 38,000 123,629
TOKYO STYLE 1,000 (b) 8,410
TOKYU 14,820 (b) 40,138
TOPPAN PRINTING 8,000 50,713
TORAY INDUSTRIES 17,000 41,053
TOSHIBA 43,000 114,657
TOSOH 6,000 13,533
TOTO 4,000 20,057
TOYO SEIKAN KAISHA 2,000 17,827
TOYOBO 8,200 11,758
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
TOYODA GOSEI 800 (b) 14,255
TOYOTA INDUSTRIES 1,200 17,760
Taiyo Yuden 1,100 8,384
Takashimaya 4,000 (b) 17,843
Takeda Chemical Industries 11,100 406,733
Tohoku Electric Power 6,000 (b) 95,539
Tokyo Electric Power 16,072 326,130
Tokyo Electron 2,000 74,962
TonenGeneral Sekiyu 4,000 25,423
Tostem Inax 3,424 36,520
Toyota Motor 32,814 742,896
Trend Micro 1,500 (a) 18,237
UFJ 37 (a,b) 29,784
UNI-CHARM 600 23,897
UNY 2,000 16,921
USHIO 1,000 (b) 11,236
Ube Industries 7,600 (b) 9,814
WACOAL 2,000 14,540
WORLD 500 8,297
West Japan Railway 11 34,311
YAKULT HONSHA 2,000 29,348
YAMADA DENKI 500 9,643
YAMAHA 2,000 22,623
YAMATO TRANSPORT 5,400 60,402
YAMAZAKI BAKING 2,000 12,510
YOKOGAWA ELECTRIC 2,900 20,669
Yamaha Motor 1,000 (b) 7,446
Yamanouchi Pharmaceutical 4,300 108,528
14,189,982
LUXEMBOURG--.1%
Arcelor 5,365 60,712
NETHERLANDS--5.1%
ABN AMRO 19,929 336,725
ASML 7,230 (a) 62,451
Aegon 18,130 184,327
Akzo Nobel 3,745 83,254
Buhrmann 1,227 4,094
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NETHERLANDS (CONTINUED)
Hagemeyer 1,242 6,016
Heineken 2,527 (b) 93,826
IHC Caland 374 19,304
ING Groep 23,602 383,245
Koninklijke Ahold 9,254 42,343
Koninklijke Luchtvaart Maatschappij 650 4,584
Koninklijke (Royal) KPN 23,619 (a) 157,098
Koninklijke Numico 2,632 24,556
Koninkiljke (Royal) Philips Electronics 18,379 341,918
Koninklijke Vendex KBB 1,357 13,327
Oce 1,000 9,419
Reed Elsevier 8,950 101,880
Royal Dutch Petroleum 29,127 1,191,335
STMicroelectronics 7,985 165,037
TPG 4,908 76,573
Unilever 7,956 501,214
VNU 3,246 94,186
Vedior 1,381 9,108
Wolters Kluwer 4,304 56,054
3,961,874
NEW ZEALAND--.2%
Auckland International Airport 2,592 7,510
Carter Holt Harvey 15,900 14,497
Contact Energy 8,900 21,655
Fisher & Paykel Appliances 2,392 14,316
Fletcher Building 8,122 15,219
Telecom Corporation of New Zealand 28,727 76,968
Warehouse 5,200 16,288
166,453
NORWAY--.4%
Bergesen, Cl. A 300 (b) 7,374
DnB 6,800 (b) 32,456
Frontline 600 (b) 6,345
Gjensidige NOR 300 (b) 10,396
Kvaerner 8,334 (a,b) 4,907
Merkantildata 4,000 (a) 2,286
Norsk Hydro 1,874 (b) 79,268
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NORWAY (CONTINUED)
Norske Skogindustrier 1,250 (b) 17,148
Orkla 2,969 (b) 51,762
Schibsted 500 (b) 5,787
Smedvig, Cl. A 400 (b) 1,955
Statoil 6,675 (b) 52,940
Storebrand 3,200 (a) 13,033
Tandberg 1,400 (a) 5,442
Telenor 6,081 (b) 24,332
Tomra Systems 2,550 (b) 12,061
327,492
PORTUGAL--.4%
Banco BPI 7,914 21,109
Banco Comercial Portugues 22,304 (b) 31,612
Banco Espirito Santo 1,744 (b) 25,010
Brisa-Auto Estradas de Portugal 5,200 (b) 28,029
CIMPOR 3,445 (a,b) 12,764
EDP 27,400 (b) 49,537
Jeronimo Martins 1,200 (a) 9,495
PT Multimedia 600 (a) 9,408
Portugal Telecom 13,134 (b) 93,955
Sonae 19,560 (a) 8,513
289,432
SINGAPORE--.7%
Capitaland 24,000 13,922
Chartered Semiconductor Manufacturing 11,000 (a,b) 4,274
City Developments 7,000 13,325
Creative Technology 1,000 6,364
Cycle & Carriage 2,518 5,843
DBS 14,059 68,886
Fraser & Neave 2,700 12,165
Haw Par 658 1,208
Keppel 11,500 28,886
Neptune Orient Lines 19,000 (a) 13,055
Oversea-Chinese Banking 14,143 75,271
Overseas Union Enterprise 1,000 3,210
SembCorp Industries 16,037 10,657
SembCorp Logistics 8,000 8,065
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
SINGAPORE (CONTINUED)
Singapore Airlines 7,000 37,255
Singapore Press 4,900 45,534
Singapore Technologies Engineering 23,000 20,725
Singapore Telecommunications 94,900 77,498
United Overseas Bank 17,112 100,228
United Overseas Land 10,000 9,743
Venture 3,000 25,006
581,120
SPAIN--3.5%
ACS 550 (b) 20,716
Acciona 200 9,598
Acerinox 670 24,966
Acesa Infraestructuras 1,598 20,776
Altadis 3,881 100,044
Amadeus Global Travel Distribution 4,900 24,498
Banco Bilbao Vizcaya Argentaria 42,567 428,493
Banco Santander Cental Hispano 62,841 (b) 493,719
Corporacion Mapfre 300 2,812
Endesa 13,005 (b) 184,468
Fomento de Construcciones y Contratas 731 18,714
Gas Natural SDG 2,460 47,083
Grupo Dragados 1,770 (b) 33,817
Grupo Ferrovial 900 (b) 23,885
Iberdrola 10,400 167,480
Iberia Lineas Aereas de Espana 5,400 9,462
Industria de Diseno Textil 3,108 61,948
NH Hoteles 900 (a) 8,085
Promotora de Informaciones 1,300 9,866
Repsol YPF 12,400 180,591
Sociedad General de Aguas de Barcelona 1,331 15,478
Sol Melia 1,541 6,054
Telefonica 69,066 763,840
Telefonica Publicidad e Informacion 1,800 7,714
TelePizza 1,000 (a,b) 1,172
Terra Networks 4,440 (a) 23,586
Union Fenosa 2,519 35,056
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
SPAIN (CONTINUED)
Vallehermoso 1,470 15,191
Zeltia 1,600 (b) 12,499
2,751,611
SWEDEN--2.1%
AB SKF, Cl. A 318 9,291
AB SKF, Cl. B 800 (b) 23,179
Assa Abloy, Cl. B 4,200 40,050
Atlas Copco, Cl. A 1,500 (b) 36,401
Atlas Copco, Cl. B 1,000 (b) 22,617
Drott, Cl. B 700 7,402
Electrolux, Cl. B 4,400 (b) 82,570
Eniro 2,000 (b) 15,282
Gambro, Cl. A 3,532 (b) 19,863
Hennes & Mauritz, Cl. B 6,300 (b) 140,176
Hoganas, Cl. B 500 (b) 9,322
Holmen, Cl. B 400 10,343
Modern Times, Cl. B 600 (a) 6,712
Nordea 36,452 (b) 193,312
OM 550 (b) 3,141
SAS 1,500 (a) 7,188
SSAB Svenskt Stal, Ser. A 900 (b) 11,828
Sandvik 3,127 (b) 79,516
Sapa 600 11,736
Securitas, Cl. B 4,120 48,354
Skandia Forsakrings 11,890 (b) 34,596
Skandinaviska Enskilda Banken, Cl. A 6,720 (b) 69,831
Skanska, Cl. B 5,600 (b) 32,383
Svenska Cellulosa, Cl. B 2,670 (b) 90,418
Svenska Handelsbanken, Cl. A 7,700 (b) 122,376
Svenska Handelsbanken, Cl. B 600 (b) 9,206
Swedish Match 6,764 (b) 50,029
Telefonaktiebolaget LM Ericsson, Cl. B 229,920 (a,b) 209,409
Tele2, Cl. B 975 (a) 32,541
TeliaSonera 28,654 (b) 101,939
Trelleborg, Cl. B 1,200 (b) 11,443
Volvo, Cl. A 1,522 (b) 29,213
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
SWEDEN (CONTINUED)
Volvo, Cl. B 2,325 46,473
WM-data, Cl. B 5,000 6,785
1,624,925
SWITZERLAND--7.7%
ABB 13,158 (a) 40,455
Adecco 1,554 59,580
Centerpulse 164 (a) 35,852
Ciba Specialty Chemicals 1,000 69,085
Clariant 2,200 (b) 24,574
Compagnie Financiere Richemont 7,630 112,793
Credit Suisse 16,970 (b) 405,388
Forbo 20 6,193
Georg Fischer 30 2,969
Givaudan 67 (b) 25,935
Holcim 379 71,117
Kudelski 435 (a,b) 7,521
Kuoni Reisen 30 (a) 6,591
Logitech International 516 (a) 19,022
Lonza 480 29,144
Nestle 5,533 1,127,976
Nobel Biocare 300 16,706
Novartis 38,416 1,515,340
Phonak 350 3,716
PubliGroupe 40 (a) 7,402
Roche Holding (Bearer) 450 46,284
Roche Holding-Genusschein 9,840 (b) 626,109
SGS Societe Generale de Surveillance 65 (b) 22,740
Schindler 35 5,858
Serono 83 45,040
Sulzer 22 2,713
Swatch (Bearer) 420 35,302
Swatch (Reg'd) 1,320 22,628
Swiss Re 4,414 (b) 288,344
Swisscom 340 (b) 105,161
Syngenta 1,509 (b) 77,881
Synthes-Stratec 41 25,846
Tecan 150 3,943
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
SWITZERLAND (CONTINUED)
UBS 17,645 837,172
Unaxis 100 7,981
Valora 49 8,797
Zurich Financial Services 1,922 202,644
5,951,802
UNITED KINGDOM--26.2%
AMEC 3,500 12,978
ARM 13,750 (a,b) 14,065
AWG 2,168 (a) 18,555
Aegis 14,500 16,975
Aggreko 3,100 7,952
Amersham 8,590 61,746
Amvescap 9,350 50,808
Associated British Ports 4,300 27,050
AstraZeneca 23,852 935,882
Aviva 31,392 220,758
BAA 15,560 120,116
BAE SYSTEMS 47,481 96,376
BBA 6,007 18,649
BG 51,153 204,593
BHP Billiton 32,027 163,799
BOC 6,573 82,887
BP 312,564 1,980,737
BPB 7,500 37,159
BT 124,139 355,641
Balfour Beatty 6,400 18,335
Barclays 91,916 634,996
Barratt Developments 3,100 20,710
Berkeley 1,755 17,521
Boots 11,713 107,174
Brambles Industries 10,050 29,876
British Airways 9,250 (a) 18,702
British American Tobacco 22,826 218,890
British Land 6,100 39,777
British Sky Broadcasting 16,706 (a) 173,152
Bunzl 7,223 52,006
Cable & Wireless 34,333 41,292
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
Cadbury Schweppes 28,329 157,790
Canary Wharf 7,700 20,060
Capita 9,000 36,464
Carlton Communications 9,078 15,234
Carnival 2,605 65,033
Celltech 3,820 (a) 15,599
Centrica 66,065 175,541
Chubb 12,250 13,069
Close Brothers 1,914 16,496
Compass 33,655 154,913
Corus 42,022 (a) 9,302
Daily Mail and General Trust 3,000 25,916
De La Rue 2,707 9,908
Diageo 44,233 490,626
Dixons 30,969 55,064
EMI 10,600 20,330
Electrocomponents 7,000 34,962
Exel 3,212 30,801
FKI 8,710 10,336
FirstGroup 5,500 21,097
GKN 10,550 34,735
GUS 13,160 121,623
George Wimpey 5,200 20,777
GlaxoSmithKline 83,782 1,679,163
Granada 48,320 52,708
Great Portland Estates 5,400 18,943
HBOS 52,525 615,339
HSBC 146,292 1,602,776
Hammerson 3,700 26,906
Hanson 9,977 55,890
Hays 22,570 30,121
Hilton 22,099 54,039
IMI 5,900 25,884
Imperial Chemical Industries 18,375 38,105
Imperial Tobacco 10,086 168,776
InterContinental Hotels 9,960 (a) 60,492
International Power 14,403 (a) 25,782
COMMON STOCKS (CONTINUED) Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
Invensys 44,309 10,445
Johnson Matthey 2,662 35,462
Kelda 4,733 31,299
Kidde 9,000 10,357
Kingfisher 38,371 149,943
Land Securities 6,245 75,557
Legal & General 93,371 115,653
Lloyds TSB 78,496 516,252
LogicaCMG 10,017 17,691
Man 3,035 51,175
Marks & Spencer 31,505 146,779
Misys 8,027 24,568
Mitchells & Butlers 9,960 (a) 33,748
National Grid Transco 44,668 293,415
Next 3,627 54,693
Novar 7,400 13,070
Pearson 10,131 84,441
Peninsular and Oriental Steam Navigation 9,073 27,987
Pilkington 16,105 15,701
Provident Financial 3,264 29,944
Prudential 26,988 165,201
RMC 3,796 24,268
Rank 7,746 29,929
Reckitt Benckiser 7,407 130,635
Reed Elsevier 17,285 137,852
Rentokil Initial 28,100 83,983
Reuters 23,643 51,013
Rexam 6,100 38,120
Rio Tinto 14,729 281,546
Rolls-Royce 23,286 (b) 33,774
Royal & Sun Alliance Insurance 26,474 46,226
Royal Bank of Scotland 38,032 997,476
SABMiller 11,800 81,284
SSL International 1,900 6,468
Safeway 16,240 70,599
Sage 22,108 49,026
Sainsbury (J) 21,750 82,212
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
Schroders 315 3,060
Scottish & Newcastle 10,827 61,863
Scottish & Southern Energy 11,609 119,303
Scottish Power 25,637 159,288
Securicor 8,900 13,371
Serco 5,682 13,576
Severn Trent 4,888 55,857
Shell Transport & Trading 136,075 815,013
Signet 27,343 36,709
Slough Estates 6,000 30,375
Smith & Nephew 7,270 77,733
Smiths 13,789 91,955
Stagecoach 12,000 8,439
Tate & Lyle 5,102 24,218
Taylor Woodrow 6,900 21,615
Tesco 105,096 332,580
3i 7,413 55,092
Unilever 38,933 382,682
United Business Media 3,894 15,559
United Utilities 7,401 71,090
Vodafone 958,900 1,892,714
WPP 14,830 105,533
Whitbread 3,054 30,238
Wolseley 7,234 69,948
20,345,360
TOTAL COMMON STOCKS
(cost $87,333,535) 73,131,234
PREFERRED STOCKS--.4%
- ------------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA--.2%
News Corporation 28,408 167,637
GERMANY--.2%
Fresenius Medical Care 300 (b) 10,412
Henkel KGaA 800 (b) 51,515
Hugo Boss 600 8,035
Porsche 70 25,467
ProSiebenSat.1 Media 1,500 (b) 8,370
PREFERRED STOCKS (CONTINUED) Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
GERMANY (CONTINUED)
RWE 546 13,284
Volkswagen 1,490 (b) 37,746
Wella 200 14,821
169,650
ITALY--.0%
Fiat 1,100 4,812
TOTAL PREFERRED STOCKS
(cost $419,425) 342,099
OTHER INVESTMENTS--4.4%
- -----------------------------------------------------------------------------------------------------------------------------------
REGULATED INVESTMENT COMPANIES:
Dreyfus Institutional Cash Advantage Fund 1,138,333 (c) 1,138,333
Dreyfus Institutional Cash Advantage Plus Fund 1,138,333 (c) 1,138,333
Dreyfus Institutional Preferred Plus Money Market Fund 1,138,334 (c) 1,138,334
TOTAL OTHER INVESTMENTS
(cost $3,415,000) 3,415,000
Principal
SHORT-TERM INVESTMENTS--.5% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS;
1.05%, 6/12/2003
(cost $399,508) 400,000 (d) 399,500
INVESTMENT OF CASH COLLATERAL
FOR SECURITIES LOANED--14.3% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY;
Dreyfus Institutional Preferred Money Market Fund
(cost $11,112,207) 11,112,207 11,112,207
TOTAL INVESTMENTS (cost $102,679,675) 113.7% 88,400,040
LIABILITIES, LESS CASH AND RECEIVABLES (13.7%) (10,694,117)
NET ASSETS 100.0% 77,705,923
(A) NON-INCOME PRODUCING.
(B) A PORTION OF THESE SECURITIES ARE ON LOAN. AT APRIL 30, 2003, THE TOTAL
MARKET VALUE OF THE PORTFOLIO'S SECURITIES ON LOAN IS $10,654,762 AND THE
TOTAL MARKET VALUE OF THE COLLATERAL HELD BY THE PORTFOLIO IS $11,112,207.
(C) INVESTMENTS IN AFFILIATED MONEY MARKET FUNDS--SEE NOTE 3(D).
(D) PARTIALLY HELD BY THE BROKER IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN
FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF FINANCIAL FUTURES
April 30, 2003 (Unaudited)
Unrealized
Market Value Appreciation
Covered by (Depreciation)
Contracts Contracts ($) Expiration at 4/30/200 ($)
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES LONG
DJ Euro STOXX 50 34 869,676 June 2003 (13,542)
DJ STOXX 50 10 256,792 June 2003 10,134
Financial Times 100 11 687,935 June 2003 (7,743)
Morgan Stanley Capital
International Pan-Euro 85 1,303,376 June 2003 61,985
S&P ASX 200 9 419,961 June 2003 (3,024)
TOPIX 14 925,625 June 2003 (4,281)
43,529
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2003 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments
(including securities loaned
valued at $10,654,762)--Note 1(c) 102,679,675 88,400,040
Cash 388,005
Cash denominated in foreign currencies 415,365 426,476
Dividends and interest receivable 346,331
Receivable for shares of Common Stock subscribed 122,246
Net unrealized appreciation on forward
currency exchange contracts--Note 4 93,127
Receivable for investment securities sold 19,562
Receivable for futures variation margin--Note 4 8,290
89,804,077
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 36,763
Liability for securities loaned--Note 1(c) 11,112,207
Payable for shares of Common Stock redeemed 949,184
12,098,154
- --------------------------------------------------------------------------------
NET ASSETS ($) 77,705,923
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 108,922,341
Accumulated undistributed investment income--net 349,972
Accumulated net realized gain (loss) on investments (17,452,492)
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions (including
$43,529 net unrealized appreciation on financial futures) (14,113,898)
- --------------------------------------------------------------------------------
NET ASSETS ($) 77,705,923
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(200 million shares of $.001 par value Common Stock authorized) 8,857,635
NET ASSET VALUE, offering and redemption price per share--Note 3(c) ($) 8.77
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2003 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $112,047 foreign taxes withheld at source) 894,220
Income from securities lending 28,787
Interest 9,610
TOTAL INCOME 932,617
EXPENSES:
Management fee--Note 3(a) 138,180
Shareholder servicing costs--Note 3(b) 98,700
Interest expense--Note 2 682
TOTAL EXPENSES 237,562
INVESTMENT INCOME--NET 695,055
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments and foreign currency
transactions (3,042,442)
Net realized gain (loss) on forward currency exchange contracts 660,070
Net realized gain (loss) on financial futures (536,137)
NET REALIZED GAIN (LOSS) (2,918,509)
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions [including ($232,395)
net unrealized (depreciation) on financial futures] 2,469,080
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (449,429)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 245,626
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2003 Year Ended
(Unaudited) October 31, 2002
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 695,055 1,161,572
Net realized gain (loss) on investments (2,918,509) (7,433,789)
Net unrealized appreciation
(depreciation) on investments 2,469,080 (5,466,179)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 245,626 (11,738,396)
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (1,799,886) (842,448)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 69,483,252 159,214,473
Dividends reinvested 1,503,823 654,324
Cost of shares redeemed (73,847,621) (137,547,364)
Redemption fee 29,635 6,537
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (2,830,911) 22,327,970
TOTAL INCREASE (DECREASE) IN NET ASSETS (4,385,171) 9,747,126
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 82,091,094 72,343,968
END OF PERIOD 77,705,923 82,091,094
Undistributed investment income--net 349,972 1,454,803
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 8,151,285 15,845,097
Shares issued for dividends reinvested 173,852 61,729
Shares redeemed (8,702,629) (13,495,421)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (377,492) 2,411,405
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
Six Months Ended
April 30, 2003 Year Ended October 31,
----------------------------------------------------------------------
(Unaudited) 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 8.89 10.60 14.18 14.95 12.25 11.27
Investment Operations:
Investment income--net .08(a) .15(a) .15(a) .19(a) .17(a) .12
Net realized and unrealized
gain (loss) on investments .00(b) (1.73) (3.74) (.78) 2.62 .96
Total from Investment Operations .08 (1.58) (3.59) (.59) 2.79 1.08
Distributions:
Dividends from
investment income--net (.20) (.13) -- (.18) (.09) (.10)
Redemption fee reimbursement .00(b) .00(b) .01 .00(b) -- --
Net asset value, end of period 8.77 8.89 10.60 14.18 14.95 12.25
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) .87(c) (15.12) (25.25) (4.09) 22.87 9.68
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses
to average net assets .30(c) .60 .60 .60 .60 .60
Ratio of net investment income
to average net assets .87(c) 1.44 1.26 1.21 1.27 1.32
Portfolio Turnover Rate 6.75(c) 24.12 30.02 15.32 9.01 22.62
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 77,706 82,091 72,344 51,619 37,504 24,887
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus International Stock Index Fund (the "fund") is a separate
non-diversified series of Dreyfus Index 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 three series including the fund. The fund's investment
objective is to provide investment results that correspond to the net dividend
and total return performance of equity securities of international issuers in
the aggregate, as represented by the Morgan Stanley Capital International
Europe, Australia, Far East (Free) Index. The Dreyfus Corporation (the "
Manager" ) serves as the fund' s investment adviser. The Manager is a
wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary
of Mellon Financial Corporation. Dreyfus Service Corporation (the
"Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of
the fund's shares, which are sold to the public without a sales charge.
The fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which may require
the use of management estimates and assumptions. Actual results could differ
from those estimates.
(a) Portfolio valuation: Investments in securities (including financial futures)
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. Effective April 14, 2003, the fund began pricing securities
traded on the NASDAQ stock market using the NASDAQ official closing 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. Bid price is used when no asked price is
available. Securities for which there are no such valuations are valued at fair
value as determined in good faith under the direction of the Board of Directors.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Forward currency exchange contracts are valued
at the forward rate.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(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 from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss 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, amortization of discount and premium on investments, is recognized
on the accrual basis.
The fund may lend securities to qualified institutions. At origination, all
loans are secured by cash collateral of at least 102% of the value of U.S.
securities loaned and 105% of the value of foreign securities loaned. Collateral
equivalent to at least 100% of the market value of securities on loan will be
maintained at all times. Cash collateral is invested in certain money market
mutual funds managed by the Manager as shown in the Statement of Investments.
The fund will be entitled to receive all income on securities loaned, in
addition to income earned as a result of the lending transaction. Although each
security loaned is fully collateralized, the fund would bear the risk of delay
in recovery of, or loss of rights in, the securities loaned should a borrower
fail to return the securities in a timely manner.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain, 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 gain can be offset by capital loss
carryovers, it is the policy of the fund not to distribute such gains.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all federal income and excise taxes.
The fund has an unused capital loss carryover of $8,991,103 available for
federal income tax purposes to be applied against future net securities profits,
if any, realized subsequent to October 31, 2002. If not applied, $58,106 of the
carryover expires in fiscal 2005, $167,514 expires in fiscal 2006, $2,874,348
expires in fiscal 2009 and $5,891,135 expires in fiscal 2010.
The tax character of distributions paid to shareholders during the fiscal year
ended October 31, 2002, was as follows: ordinary income $842,448. The tax
character of current year distributions will be determined at the end of the
current fiscal year.
NOTE 2--Bank Line Of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund based on prevailing market rates
in effect at the time of borrowings.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The average daily amount of borrowings outstanding under the Facility during the
period ended April 30, 2003 was approximately $78,500, with a related weighted
average annualized interest rate of 1.75%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to an Investment Management Agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .35 of 1% of the
value of the fund's average daily net assets, and is payable monthly. Under the
terms of the Agreement, the Manager has agreed to pay all the expenses of the
fund, except management fees, brokerage commissions, taxes, commitment fees,
interest, Shareholder Services Plan fees, fees and expenses of non-interested
Board Members (including counsel fees) and extraordinary expenses. In addition,
the Manager is required to reduce its fee in an amount equal to the fund's
allocable portion of fees and expenses of the non-interested Board Members
(including counsel fees) . Each Board member also serves as a Board Member of
other funds within the Dreyfus complex (collectively, the "Fund Group"). Each
Board member receives an annual fee of $25,000 and an attendance fee of $4,000
for each in person meeting and $500 for telephone meetings. These fees are
allocated among the funds in the Fund Group. The chairman of the Board receives
an additional 25% of such compensation (with the exception of reimbursable
amounts) . Subject to the Company's Emeritus Program Guidelines, Emeritus Board
members, if any, receive 50% of the Company's annual retainer fee and per
meeting fee paid at the time the Board member achieves emeritus status. Amounts
required to be paid by the Company directly to the non-interested Board members,
that were applied to offset a portion of the management fee payable to the
Manager were in fact paid directly by the Manager to the non-interested Board
members.
(b) Under the Shareholder Services Plan, the fund pays the Distributor for the
provision of certain services, a fee at the annual rate of .25 of 1% of the
value of the fund's average daily net assets. 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 April 30, 2003, the fund was charged $98,700
pursuant to the Shareholder Services Plan.
(c) A 1% redemption fee is charged and retained by the fund on shares redeemed
within six months following the date of issuance, including redemptions made
through the use of the fund's exchange privilege.
(d) Pursuant to an exemptive order from the Securities and Exchange Commission,
the fund invests it available cash balances in affiliated money market funds as
shown in the fund's Statement of Investments. Management fees are not charged to
these accounts. During the period ended April 30, 2003, the fund derived $23,695
in income from these investments, which is included as dividend income in the
fund's Statement of Operations.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, forward currency exchange contracts and financial
futures, during the period ended April 30, 2003, amounted to $5,006,760 and
$5,352,766, respectively.
The fund may enter into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings and to settle foreign currency transactions. When executing
forward currency exchange contracts, the fund is obligated to buy or sell a
foreign currency at a specified rate on a certain date in the future. With
respect to sales of forward currency exchange contracts, the fund would incur a
loss if the value of the contract increases between the date the forward
contract is opened
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
and the date the forward contract is closed. The fund realizes a gain if the
value of the contract decreases between those dates. With respect to purchases
of forward currency exchange contracts, the fund would incur a loss if the value
of the contract decreases between the date the forward contract is opened and
the date the forward contract is closed. The fund realizes a gain if the value
of the contract increases between those dates. The fund is also exposed to
credit risk associated with counter party nonperformance on these forward
currency exchange contracts which is typically limited to the unrealized gain on
each open contract.
The following summarizes open forward currency exchange contracts at April 30,
2003:
Foreign Unrealized
Forward Currency Currency Appreciation
Exchange Contracts Amounts Cost ($) Value ($) (Depreciation) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
PURCHASES:
Australian Dollars,
expiring 6/19/2003 653,631 400,559 407,016 6,457
British Pounds,
expiring 6/19/2003 437,943 693,024 697,871 4,847
Euro, expiring
6/19/2003 2,282,151 2,459,667 2,542,773 83,106
Japanese Yen,
expiring 6/19/2003 31,239,330 263,688 262,405 (1,283)
TOTAL 93,127
The fund may invest in financial futures contracts in order to gain exposure to
or protect against changes in the market. The fund is exposed to market risk as
a result of changes in the value of the underlying financial instruments.
Investments in financial futures require the fund to "mark to market" on a daily
basis, which reflects the change in the market value of the contract at the
close of each day's trading. Typically, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the fund recognizes a realized gain or loss. These investments require
initial margin deposits with a broker, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of thes
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. Contracts open as of April 30, 2003, are set
forth in the Statement of Financial Futures.
At April 30, 2003, accumulated net unrealized depreciation on investments was
$14,279,635, consisting of $4,391,212 gross unrealized appreciation and
$18,670,847 gross unrealized depreciation.
At April 30, 2003, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
Dreyfus International
Stock Index Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02109
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to info@dreyfus.com
ON THE INTERNET Information
can be viewed online or
downloaded from:
http://www.dreyfus.com
(c) 2003 Dreyfus Service Corporation 079SA0403
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. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the Disclosure Controls and Procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, the
"Disclosure Controls") as of a date within 90 days prior to the filing date
(the "Filing Date") of this Form N-CSR (the "Report"), the Disclosure
Controls are effectively designed to ensure that information required to be
disclosed by the Registrant in the Report is recorded, processed, summarized
and reported by the Filing Date, including ensuring that information required
to be disclosed in the Report is accumulated and communicated to the
Registrant's management, including the Registrant's principal executive
officer and principal financial officer, as appropriate to allow timely
decisions regarding required disclosure.
(b) There were no significant changes in the Registrant's internal controls
or in other factors that could significantly affect these controls subsequent
to the date of their evaluation, and there were no corrective actions with
regard to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
(a) Not applicable.
(b)(1) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2 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 INDEX FUNDS, INC.
By: /s/Stephen E. Canter
_____________________
Stephen E. Canter
President
Date: June 26, 2003
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/ STEPHEN E. CANTER
Stephen E. Canter
Chief Executive Officer
Date: June 26, 2003
By: /S/ JAMES WINDELS
James Windels
Chief Financial Officer
Date: June 26, 2003
EXHIBIT INDEX
(b)(1) Certifications of principal executive officer and
principal financial officer as required by Rule 30a-2 under the
Investment Company Act of 1940.
(b)(2) Certification of principal executive officer and
principal financial officer as required by Section 906 of the
Sarbanes-Oxley Act of 2002.