j29172

485BPOS 1 j29172.htm POST EFFECTIVE AMENDMENT NO. 22 j29172

		File Nos. 333-47011
		811-08673
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

[X]

Pre-Effective Amendment No.		[__]

Post-Effective Amendment No. 22		[X]
	and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[X]

Amendment No. 22

[X]

(Check appropriate box or boxes.)

DREYFUS INVESTMENT PORTFOLIOS

(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)

Registrant's Telephone Number, including Area Code: (212) 922-6000

Mark N. Jacobs, Esq.

200 Park Avenue

New York, New York 10166

(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box)
		immediately upon filing pursuant to paragraph (b)

X		on May 2, 2005 pursuant to paragraph (b)

		60 days after filing pursuant to paragraph (a)(1)
		on ________pursuant to paragraph (a)(1)
		75 days after filing pursuant to paragraph (a)(2)
		on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

this post-effective amendment designates a new effective date for a previously filed post-effective

amendment.

P:\Edgar Filings\Pending\172\485APOS-172-4-2005\j29172.doc

4/18/05

Dreyfus Investment Portfolios

Core Bond Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		4
Expenses		5
Management		6
Financial Highlights		10

Account Information

Account Policies		12
Distributions and Taxes		14
Exchange Privilege		14

For More Information

See back cover.

Portfolio shares are offered only to separate accounts established by insurance companies to fund variable annuity contracts (VA contracts) and variable life insurance policies (VLI policies). Individuals may not purchase shares directly from, or place sell orders directly with, the portfolio. The VA contracts and the VLI policies are described in the separate prospectuses issued by the participating insurance companies, as to which the portfolio assumes no responsibility. Conflicts may arise between the interests of VA contract holders and VLI policy-holders (collectively, policyowners). The board of trustees will monitor events to identify any material conflicts and, if such conflicts arise, determine what action, if any, should be taken.

The portfolio currently offers two classes of shares: Initial shares and Service shares. Policyowners should consult the applicable prospectus of the separate account of the participating insurance company to determine which class of portfolio shares may be purchased by the separate account.

While the portfolio’s investment objective and policies may be similar to those of other funds managed by the investment adviser, the portfolio’s investment results may be higher or lower than, and may not be comparable to, those of the other funds.

GOAL/APPROACH

The portfolio seeks to maximize total return through capital appreciation and current income.To pursue this goal, the portfolio normally invests at least 80% of its assets in bonds. These securities include U.S. government bonds and notes, corporate bonds, convertible securities, asset-backed securities, mortgage-related securities, and foreign bonds of issuers located in developed and emerging markets. The portfolio also may invest in preferred stocks and may own warrants and common stock acquired in “units” with bonds.

Generally, the portfolio seeks to maintain an investment grade (BBB/Baa) average credit quality. However, the portfolio may invest up to 35% of its assets in lower-rated securities (“high yield” or “junk” bonds). The portfolio has the flexibility to shift its investment focus among different fixed-income securities, based on market conditions and other factors. In choosing market sectors and securities for investment, the issuer’s financial strength, and the current state and long-term outlook of the industry or sector are reviewed. Current and forecasted interest rate and liquidity conditions also are important factors in this regard.The portfolio may invest up to 35% of its total assets in dollar-denominated and non-dollar-denominated securities of foreign issuers.

Typically, the portfolio can be expected to have an average effective maturity of between 5 and 10 years and an average effective duration between 3.5 and 6 years. While the portfolio’s duration and maturity usually will stay within these ranges, if the maturity or duration of the portfolio’s benchmark index moves outside these ranges, so may the portfolio’s.

The portfolio may, but is not required to, use derivatives, such as futures and options, as a substitute for taking a position in an underlying asset, to increase returns, to manage interest rate risk, or as part of a hedging strategy.The portfolio may enter into swap agreements, such as credit default swaps, which can be used to transfer the credit risk of a security without actually transferring ownership of the security. To enhance current income, the portfolio also may engage in a series of purchase and sale contracts or forward roll transactions in which the portfolio sells a mortgage-related security, for example, to a financial institution and simultaneously agrees to purchase a similar security from the institution at a later date at an agreed-upon price.

Concepts to understand

Average effective portfolio maturity: an average of the stated maturities of the bonds held by the portfolio, based on their dollar-weighted proportions in the portfolio, adjusted to reflect provisions or market conditions that may cause a bond’s principal to be repaid earlier than at maturity.

Duration: an indication of an investment’s “interest rate risk,” or how sensitive a bond or mutual fund portfolio may be to changes in interest rates. Generally, the longer a portfolio’s duration, the more it will react to interest rate fluctuations and the greater its long-term risks/return potential.

Bond rating: a ranking of a bond’s quality, based on its ability to pay interest and repay principal. Bonds are rated from a high of “AAA” or “Aaa” (highly unlikely to default) through a low of “D” (companies already in default).

High yield bonds: those rated at the time of purchase BB or Ba and below by credit rating agencies such as S&P or Moody’s or the unrated equivalent as determined by Dreyfus. Because their issuers may be at an early stage of development or have been unable to repay past debts, these bonds typically must offer higher yields than investment grade bonds to compensate investors for greater credit risk.

Credit default swap: a derivative instrument whereby the buyer makes fixed, periodic premium payments to the seller in exchange for being made whole on an agreed-upon amount of principal, should the specified reference entity (i.e., the issuer of a particular security) experience a “credit event” (e.g., failure to pay interest or principal, bankruptcy or restructuring).

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, which means shareholders could lose money.

Interest rate risk. Prices of bonds tend to move inversely with changes in interest rates.Typically, a rise in rates will adversely affect bond prices and, accordingly, the portfolio’s share price.The longer the portfolio’s effective maturity and duration, the more its share price is likely to react to changes in interest rates.
Call risk. Some bonds give the issuer the option to call, or redeem, the bonds before their maturity date. If an issuer “calls” its bond during a time of declining interest rates, the portfolio might have to reinvest the proceeds in an investment offering a lower yield.
Credit risk. Failure of an issuer to make timely interest or principal payments, or a decline or perception of a decline in the credit quality of a bond, can cause a bond’s price to fall, potentially lowering the portfolio’s share price. High yield (“junk”) bonds involve greater credit risk, including the risk of default, than investment grade bonds and are considered predominantly specula- tive with respect to the issuers continuing ability to make principal and interest payments. The prices of high yield bonds can fall dramatically in response to bad news about the issuer or its industry, or the economy in general.
Market risk. The value of a security may decline due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Liquidity risk. When there is little or no active trading market for specific types of securities, it can become more difficult to sell the securities at or near their perceived value. In such a market, the value of such securities and the portfolio’s share price may fall dramatically. Investments in foreign securities tend to have greater exposure to liquidity risk than domestic securities.
Prepayment and extension risk. When interest rates fall, the principal on mortgage-backed and certain asset-backed securities may be prepaid.The loss of higher-yielding, underlying mortgages and the reinvestment of proceeds at lower interest rates can reduce the portfolio’s potential price gain in response to falling interest rates, reduce the portfolio’s yield, or cause the portfolio’s share price to fall.When interest rates rise, the effective duration of the portfolio’s mortgage-related and other asset-backed securities may lengthen due to a drop in prepayments of the underlying mortgages or other assets.This is known as extension risk and would increase the portfolio’s sensitivity to rising rates and its potential for price declines.
Derivatives risk. The portfolio may invest in derivative instruments, such as options, futures and options on futures (including those relating to securities, indexes, foreign currencies and interest rates), swaps and other credit derivatives, CMOs, stripped mortgage-backed securities and assetbacked securities. A small investment in derivatives could have a potentially large impact on the portfolio’s performance. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in the value of a derivative held by the portfolio will not correlate with the portfolio’s other investments.

Market sector risk. The portfolio’s overall risk level will depend on the market sectors in which the portfolio is invested and the current interest rate,liq- uidity and credit quality of such sectors.The portfolio may significantly overweight or underweight certain companies, industries or market sectors, which may cause the portfolio’s performance to be more or less sensitive to developments affecting those companies, industries or sectors.

Foreign investment risk. The prices and yields of for- eign bonds may be affected by political and eco- nomic instability or changes in currency exchange rates.The bonds of issuers located in emerging mar- kets can be more volatile and less liquid than those of issuers in more mature economies.
Leveraging risk. The use of leverage, such as borrow- ing money to purchase securities, engaging in reverse repurchase agreements, lending portfolio securities and engaging in forward commitment transactions, will magnify the portfolio’s gains or losses.

Other potential risks

Under adverse market conditions, the portfolio could invest some or all of its assets in U.S. Treasury securities and money market securities. Although the portfolio would do this for temporary defensive purposes, it could reduce the benefit from any upswing in the market. During such periods, the portfolio may not achieve its investment objective.

The portfolio may engage in short-term trading, which could produce higher transaction costs. The portfolio’s forward roll transactions will increase its portfolio turnover rate.

The portfolio may lend its portfolio securities to brokers, dealers and other financial institutions. In connection with such loans, the portfolio will receive collateral from the borrower equal to at least 100% of the value of the loaned securities. Should the borrower of the securities fail financially, the portfolio may experience delays in recovering the loaned securities or exercising its rights in the collateral.

What the portfolio is — and isn’t

The portfolio is a mutual fund: a pooled investment that is professionally managed and gives shareholders the opportunity to participate in financial markets. It strives to reach its stated goal, although as with all mutual funds, it cannot offer guaranteed results.

An investment in the portfolio is not a bank deposit. It is not insured or guaranteed by the FDIC or any other government agency. It is not a complete investment program. Shareholders could lose money in the portfolio, but shareholders also have the potential to make money.

The Portfolio 3

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Initial shares from year to year. The table compares the average annual total returns of each of the portfolio’s share classes to those of the Lehman Brothers U.S. Aggregate Index (formerly known as the Lehman Brothers Aggregate Bond Index), an unmanaged benchmark of total return performance for bonds. Performance for the portfolio’s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio’s Initial shares prior to that date.The historical performance of the portfolio’s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses.

Average annual total returns as of 12/31/04

		Since inception
		of portfolio
	1 Year	(5/1/00)


Initial shares	4.54%	6.78%

Service shares	4.36%	6.71%

Lehman Brothers U.S.
Aggregate Index	4.34%	7.84%*

* For comparative purposes, the value of the index on 4/30/00 is used as

the beginning value on 5/1/00.

Additional costs

Performance information reflects the portfolio’s expenses only and does not reflect the fees and charges imposed by participating insurance companies under their VA contracts or VLI policies. Because these fees and charges will reduce total return, policyowners should consider them when evaluating and comparing the portfolio’s performance. Policyowners should consult the prospectus for their contract or policy for more information.

EXPENSES

Investors using this portfolio to fund a VA contract or a VLI policy will pay certain fees and expenses in connection with the portfolio, which are described in the table below. Annual portfolio operating expenses are paid out of portfolio assets, so their effect is included in the portfolio’s share price.As with the performance information given previously, these figures do not reflect any fees or charges imposed by participating insurance companies under their VA contracts or VLI policies.

Fee table
	Initial	Service
	shares	shares

Annual portfolio operating expenses
% of average daily net assets
Management fees	0.60%	0.60%
Rule 12b-1 fee	none	0.25%
Other expenses	0.11%	0.11%

Total annual portfolio
operating expenses	0.71%	0.96%
Fee waiver and/or expense
reimbursement	—	(0.16%)

Net operating expenses*	0.71%	0.80%

* The Dreyfus Corporation has agreed, until December 31, 2005, to

waive receipt of its fees and/or assume the expenses of the portfolio so

that the expenses of neither class (excluding taxes, brokerage commis-

sions, extraordinary expenses, interest expenses and commitment fees on

borrowings) exceed 0.80%.

Expense example
	1 Year	3 Years	5 Years	10 Years

Initial shares	$73	$227	$395	$883

Service shares	$82	$290	$515	$1,163

This example shows what an investor could pay in expenses over time. It uses the same hypothetical conditions other funds use in their prospectuses: $10,000 initial investment, 5% total return each year and no changes in expenses. This example does not reflect fees and expenses incurred under VA contracts and VLI policies; if they were reflected, the figures in the example would be higher. The one-year example and the first year of the three-, five- and ten-years examples for Service shares are based on net operating expenses, which reflect the expense waiver/reimbursement by Dreyfus. The figures shown would be the same whether investors sold their shares at the end of a period or kept them. Because actual returns and expenses will be different, the example

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

Rule 12b-1 fee: the fee paid to the portfolio’s distributor for distributing Service shares, for advertising and marketing related to Service shares, and for providing account service and maintenance for holders of Service shares. The distributor may pay all or part of this fee to participating insurance companies, and the broker-dealer acting as principal underwriter for their variable insurance products. Because this fee is paid on an ongoing basis out of portfolio assets attributable to Service shares, over time it will increase the cost of an investment in Service shares and could cost investors more than paying other types of sales charges.

Other expenses: fees paid by the portfolio for miscellaneous items such as transfer agency, custody, professional and registration fees. The portfolio also makes payments to certain financial intermediaries, including affiliates, who provide sub-administration, recordkeeping and/or sub-transfer agency services to beneficial owners of the portfolio.

The Portfolio 5

MANAGEMENT

Investment adviser

The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.60% of the portfolio’s average daily net assets. Dreyfus is the primary mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

The Dreyfus asset management philosophy is based on the belief that discipline and consistency are important to investment success. For each fund, Dreyfus seeks to establish clear guidelines for portfolio management and to be systematic in making decisions.This approach is designed to provide each fund with a distinct, stable identity.

The primary portfolio manager is Kent Wosepka. Mr.Wosepka has been the portfolio’s primary portfolio manager since January 2005. Mr.Wosepka has been employed by Dreyfus since September 2001. He also is a senior portfolio manager for active core strategies with Standish Mellon Asset Management, LLC (Standish Mellon), a subsidiary of Mellon Financial and an affiliate of Dreyfus. Mr. Wosepka joined Standish Mellon in 1998. In prior positions with Standish Mellon, he was a world high yield portfolio manager and an emerging markets debt analyst. The Statement of Additional Information provides additional information about the portfolio manager’s compensation, other accounts managed by the portfolio manager, and the portfolio manager’s ownership of portfolio shares.

In early 2004, two purported class and derivative actions were filed against Mellon Financial, Mellon Bank, N.A., Dreyfus, Founders Asset Management LLC, and certain directors of the Dreyfus Funds and the Dreyfus Founders Funds (together, the Funds) in the United States District Court for the Western District of Pennsylvania. In September 2004, plaintiffs served a Consolidated Amended Complaint (the Amended Complaint) on behalf of a purported class of all persons who acquired interests in any of the Funds between January 30, 1999 and November 17, 2003, and derivatively on behalf of the Funds. The Amended Complaint in the newly styled In re Dreyfus Mutual Funds Fee Litigation also named Dreyfus Service Corporation, Premier Mutual Fund Services, Inc. and two additional Fund directors as defendants and alleges violations of the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Pennsylvania Unfair Trade Practices and Consumer Protection Law and common-law claims. Plaintiffs seek to recover allegedly improper and excessive Rule 12b-1 and advisory fees allegedly charged to the Funds for marketing and distribution services. More specifically, plaintiffs claim, among other things, that 12b-1 fees and directed brokerage were improperly used to pay brokers to recommend the Funds over other funds, and that such payments were not disclosed to investors. In addition, plaintiffs assert that economies of scale and soft-dollar benefits were not passed on to the Funds. Plaintiffs further allege that 12b-1 fees were improperly charged to certain of the Funds that were closed to new investors. The Amended Complaint seeks compensatory and punitive damages, rescission of the advisory contracts, and an accounting and restitution of any unlawful fees, as well as an award of attorneys’ fees and litigation expenses.As noted, some of the claims in this litigation are asserted derivatively on behalf of the Funds that have been named as nominal defendants. With respect to such derivative claims, no relief is sought against the Funds. Dreyfus believes the allegations to be totally without merit and intends to defend the action vigorously.

Defendants filed motions to dismiss the Amended Complaint on November 12, 2004, and those motions are pending.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Funds believe that any of the pending actions will have a material adverse effect on the Funds or Dreyfus’ ability to perform its contract with the Funds.

Distributor

The portfolio’s distributor is Dreyfus Service Corporation (DSC), a wholly-owned subsidiary of Dreyfus. Dreyfus or DSC may provide additional cash payments out of its own resources to financial intermediaries that sell shares of the portfolio or provide other services. Such payments are in addition to any sales charges, 12b-1 fees and/or shareholder services fees or other expenses paid by the portfolio. These additional payments may be made to intermediaries, including affiliates, that provide shareholder servicing, sub-administration, record-keeping and/or sub-transfer agency services, marketing support and/or access to sales meetings, sales representatives and management representatives of the financial intermediary. Cash compensation also may be paid to intermediaries for inclusion of the portfolio on a sales list, including a preferred or select sales list or in other sales programs.These payments sometimes are referred to as “revenue sharing.” In some cases, these payments may create an incentive for a financial intermediary or its employees to recommend or sell shares of the portfolio to you. Please contact your financial representative for details about any payments they or their firm may receive in connection with the sale of portfolio shares or the provision of services to the portfolio.

From time to time, Dreyfus or DSC also may provide cash or non-cash compensation to financial intermediaries or their representatives in the form of occasional gifts; occasional meals, tickets or other entertainment; support for due diligence trips; educational conference sponsorship; support for recognition programs; and other forms of cash or non-cash compensation permissible under broker-dealer regulations, as periodically amended.

Code of ethics

The portfolio, Dreyfus and DSC have each adopted a code of ethics that permits its personnel, subject to such code, to invest in securities, including securities that may be purchased or held by the portfolio.The Dreyfus code of ethics restricts the personal securities transactions of its employees, and requires portfolio managers and other investment personnel to comply with the code’s preclearance and disclosure procedures. The primary purpose of the code is to ensure that personal trading by Dreyfus employees does not disadvantage any Dreyfus-managed fund.

The Portfolio 7

MANAGEMENT (continued)

Performance Information for a

Related Public Fund and the Portfolio

The portfolio has the same investment objective and follows substantially the same investment policies and strategies as a corresponding series of another open-end investment company advised by Dreyfus — Dreyfus Premier Core Bond Fund (the Public Fund). The portfolio currently has the same portfolio manager as the Public Fund.The first table on page 9 shows average annual total return information for Class A shares of the Public Fund and for the Lehman Brothers U.S. Aggregate Index. The index information is provided to represent the investment environment existing at the time periods shown.The index is unmanaged and an investor may not invest directly in the index. The second table shows average annual total return information for the portfolio’s Initial shares and for the Lehman Brothers U.S.Aggregate Index. Investors should not consider this performance data as an indication of the future performance of the portfolio or the Public Fund.

The performance figures for the Public Fund reflect the deduction of the historical fees and expenses paid by the Public Fund, and not those paid by the portfolio. The Public Fund’s total annual operating expenses for the fiscal year ended October 31, 2004 were 1.10% of its average daily net assets.

The performance figures for the Public Fund and the portfolio also do not reflect the deduction of charges or expenses attributable to VA contracts or VLI policies, which, if reflected, would lower the performance quoted. Policyowners should refer to the applicable insurance company prospectus for information on any such charges and expenses. Additionally, although it is anticipated that the portfolio and the Public Fund will hold similar securities, their investment results are expected to differ. In particular, differences in asset size and in cash flow resulting from purchases and redemptions of portfolio shares may result in different security selections, differences in the relative weightings of securities or differences in the price paid for particular portfolio holdings. Performance information for the Public Fund and the portfolio reflects the reinvestment of dividends and other distributions.

Please remember that past performance is not indicative of future returns, and that the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. To obtain a prospectus containing more information about the Public Fund, call the number or write to the address on the back cover.

Public Fund

Historical performance information for Class A shares of the Public Fund and the Lehman Brothers U.S. Aggregate Index for various periods ended December 31, 2004, as calculated pursuant to SEC guidelines, is as follows:

Average annual total returns as of 12/31/04

	1 Year	5 Years	10 Years

Dreyfus Premier
Core Bond Fund
Class A (NAV)	3.86%	6.36%	7.88%
Class A
(with sales load)	-0.81%	5.39%	7.38%
Lehman Brothers U.S.
Aggregate Index	4.34%	7.71%	7.72%

Portfolio

Average annual total returns for the portfolio’s Initial shares and for the Lehman Brothers U.S. Aggregate Index for various periods ended December 31, 2004, as calculated pursuant to SEC guidelines, are as follows:

Average annual total returns as of 12/31/04

		Since
		inception
	1 Year	(5/1/00)


Core Bond Portfolio —
Initial shares	4.54%	6.78%
Lehman Brothers U.S.
Aggregate Index	4.34%	7.84%*

* For comparative purposes, the value of the index on 4/30/00 is used as

the beginning value on 5/1/00.

The Portfolio 9

FINANCIAL HIGHLIGHTS

ed by Ernst & Young LLP, whose report, along with the portfolio’s financial statements, is included in the annual report, which is available upon request. Keep in mind that fees and charges imposed by participating insurance companies, which are not reflected in the tables, would reduce the investment returns that are shown.

		Year Ended December 31,

Initial shares	2004 ¹	2003	2002	2001 ²	2000 ³

Per-Share Data ($):
Net asset value, beginning of period	13.00	12.87	12.67	12.94	12.50

Investment operations: Investment income — net	.47 ⁴	.45 ⁴	.61 ⁴	.75 ⁴	.50

Net realized and unrealized gain (loss) on investments	.09	.47	.21	(.18)	.56

Total from investment operations	.56	.92	.82	.57	1.06

Distributions: Dividends from investment income — net	(.55)	(.54)	(.62)	(.72)	(.50)

Dividends from net realized gain on investments	—	(.25)	—	(.12)	(.12)
Total distributions	(.55)	(.79)	(.62)	(.84)	(.62)

Net asset value, end of period	13.01	13.00	12.87	12.67	12.94
Total Return (%)	4.54	7.27	6.70	4.55	8.61 ⁵

Ratios/Supplemental Data (%):

Ratio of total expenses to average net assets	.71	.72	.80	.97	1.90 ⁶

Ratio of net expenses to average net assets	.71	.72	.80	.80	.80 ⁶

Ratio of net investment income to average net assets	3.69	3.39	4.82	5.71	6.24 ⁶

Portfolio turnover rate	785.59 ⁷	905.09 ⁷	653.12	654.39	953.66 ⁵

Net assets, end of period ($ x 1,000)	26,089	31,912	33,810	26,744	12,048

¹As of January 1, 2004, the portfolio has adopted the method of accounting for interim payments on swap contracts in accordance with Financial Accounting Standards

Board Statement No. 133.These interim payments are reflected within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004,

these interim payments were reflected within interest income/expense in the Statement of Operations.The effect of this change for the period ended December 31,

2004, was to increase net investment income per share by less than $.01, decrease net realized and unrealized gain (loss) on investments per share by less than $.01

and increase the ratio of net investment income to average net assets from 3.66% to 3.69%. Per share data and ratios/supplemental data for periods prior to January

1, 2004 have not been restated to reflect this change in presentation.

²As required, effective January 1, 2001, the portfolio has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began

accreting discount or amortizing premium on fixed income securities on a scientific basis and including paydown gains and losses in interest income.The effect of this

change for the period ended December 31, 2001 was to decrease net investment income per share by $.04, increase net realized and unrealized gain (loss) on invest-

ments per share by $.04 and decrease the ratio of net investment income to average net assets from 6.04% to 5.71%. Per share data and ratios/supplemental data for

periods prior to January 1, 2001 have not been restated to reflect this change in presentation.

³From May 1, 2000 (commencement of operations) to December 31, 2000.

⁴Based on average shares outstanding at each month end.

⁵Not annualized.

⁶Annualized.

⁷The portfolio turnover rates excluding mortgage dollar roll transactions for the years ended December 31, 2004 and December 31, 2003, were 706.48% and

684.58%, respectively.

		Year Ended December 31,

Service shares	2004 ¹	2003	2002	2001 ²	2000 ³

Per-Share Data ($):
Net asset value, beginning of period	12.99	12.87	12.66	12.93	12.93

Investment operations: Investment income — net	.46 ⁴	.43 ⁴	.62 ⁴	.70 ⁴	—

Net realized and unrealized gain (loss) on investments	.10	.47	.21	(.13)	—

Total from investment operations	.56	.90	.83	.57	—

Distributions: Dividends from investment income — net	(.54)	(.53)	(.62)	(.72)	—

Dividends from net realized gain on investments	—	(.25)	—	(.12)	—
Total distributions	(.54)	(.78)	(.62)	(.84)	—

Net asset value, end of period	13.01	12.99	12.87	12.66	12.93
Total Return (%)	4.36	7.11	6.78	4.46	—

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	.96	.97	1.00	1.15	—

Ratio of net expenses to average net assets	.80	.80	.80	.80	—

Ratio of net investment income to average net assets	3.60	3.29	4.82	5.77	—

Portfolio turnover rate	785.59 ⁵	905.09 ⁵	653.12	654.39	953.66 ⁶

Net assets, end of period ($ x 1,000)	52,961	58,456	57,823	30,416	1

¹As of January 1, 2004, the portfolio has adopted the method of accounting for interim payments on swap contracts in accordance with Financial Accounting Standards

Board Statement No. 133.These interim payments are reflected within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004,

these interim payments were reflected within interest income/expense in the Statement of Operations.The effect of this change for the period ended December 31,

2004, was to increase net investment income per share by less than $.01, decrease net realized and unrealized gain (loss) on investments per share by less than $.01

and increase the ratio of net investment income to average net assets from 3.57% to 3.60%. Per share data and ratios/supplemental data for periods prior to January

1, 2004 have not been restated to reflect this change in presentation.

²As required, effective January 1, 2001, the portfolio has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began

accreting discount or amortizing premium on fixed income securities on a scientific basis and including paydown gains and losses in interest income.The effect of this

change for the period ended December 31, 2001 was to decrease net investment income per share by $.04, increase net realized and unrealized gain (loss) on invest-

ments per share by $.04 and decrease the ratio of net investment income to average net assets from 6.10% to 5.77%. Per share data and ratios/supplemental data for

periods prior to January 1, 2001 have not been restated to reflect this change in presentation.

³The portfolio commenced offering Service shares on December 31, 2000.

⁴Based on average shares outstanding at each month end.

⁵The portfolio turnover rates excluding mortgage dollar roll transactions for the years ended December 31, 2004 and December 31, 2003, were 706.48% and

684.58%, respectively.

⁶Not annualized.

The Portfolio 11

Account Information

ACCOUNT POLICIES

Buying/Selling shares

Portfolio shares may be purchased or sold (redeemed) by separate accounts of participating insurance companies. In addition, such participating insurance companies may receive payments from Dreyfus in connection with their offering of portfolio shares to their customers, or for marketing, distribution or other services. The receipt of such payments could create an incentive for the participating insurance company to offer the portfolio instead of other mutual funds where such payments are not received. Policyowners should consult the prospectus of the separate account of the participating insurance company for more information about buying or selling portfolio shares.

The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided the orders are received by the portfolio in proper form on the next business day.The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios: Core Bond Portfolio/ share class), for purchase of portfolio shares. The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead) and account registration and dealer number, if applicable, of the participating insurance company.

The portfolio’s investments generally are valued by one or more independent pricing services approved by the portfolio’s board or on the basis of market quotations.The pricing service’s procedures are reviewed under the general supervision of the board. If prices from a pricing service or market quotations are not readily available, or are determined not to reflect accurately fair value, the portfolio may value those investments at fair value as determined in accordance with the procedures approved by the portfolio’s board. Fair value of investments may be determined by the board, its pricing committee or its valuation committee in good faith using such information as it deems appropriate under the circumstances. Using fair value to price investments may result in a value that is different from a security’s most recent price and from prices used by other mutual funds to calculate their net asset values. Foreign securities held by the portfolio may trade on days that the portfolio is not open for business, thus affecting the value of the portfolio’s assets on days when fund investors have no access to the portfolio.

The portfolio is designed for long-term investors. Frequent purchases, redemptions and exchanges may disrupt portfolio management strategies and harm portfolio performance by diluting the value of portfolio shares and increasing bro-kerage and administrative costs. As a result, Dreyfus and the portfolio’s board have adopted a policy of discouraging excessive trading, short-term market timing and other abusive trading practices (frequent trading) that could adversely affect the portfolio or its operations. Dreyfus and the portfolio will not enter into arrangements with any person or group to permit frequent trading.

The portfolio reserves the right to:

change or discontinue its exchange privilege, or temporarily suspend the privilege during unusual market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for example, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, including those from any participating insurance company, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

Transactions in portfolio shares are processed by the participating insurance companies using omnibus accounts that aggregate the trades of multiple policyowners. Dreyfus’ ability to monitor the trading activity of these policyowners is limited because their individual transactions in portfolio shares are not disclosed to the portfolio. Accordingly, Dreyfus relies to a significant degree on the participating insurance company to detect and deter frequent trading.The agreement with the participating insurance company includes obligations to comply with all applicable federal and state laws. All participating insurance companies have been sent written reminders of their obligations under the agreements, specifically highlighting rules relating to trading portfolio shares. Further, all participating insurance companies have been requested in writing to notify Dreyfus immediately if, for any reason, they cannot meet their commitment to make portfolio shares available in accordance with the terms of the prospectus and relevant rules and regulations.

Dreyfus supplements the surveillance processes in place at participating insurance companies by monitoring total purchases and redemptions of portfolio shares on a periodic basis. If Dreyfus identifies patterns that may be indicative of frequent trading of large amounts, Dreyfus contacts the participating insurance company for assistance in disaggregating selected omnibus trades into their component parts. When this process identifies multiple roundtrips (i.e., an investment that is substantially liquidated within 60 days), Dreyfus instructs the participating insurance company to temporarily or permanently bar such policyowner’s future purchases of portfolio shares if Dreyfus concludes the policyowner is likely to engage in frequent trading. Dreyfus also may instruct the participating insurance company to apply these restrictions across all accounts under common ownership, control or perceived affiliation. In all instances, Dreyfus seeks to make these determinations to the best of its abilities in a manner that it believes is consistent with shareholder interests.

In addition to applying restrictions on future purchases or exchanges, Dreyfus or the participating insurance company may cancel or reverse the purchase or exchange on the business day following the transaction if the participating insurance company’s surveillance system identifies the account as one that is likely to engage in frequent trading. Dreyfus may also instruct the participating insurance com-pany to cancel or reverse the purchase or exchange on the following business day if the trade represents a significant amount of the portfolio’s assets and Dreyfus has concluded that the account is likely to engage in frequent trading.

Although these policies and procedures are designed to discourage market timing and excessive trading, none of these tools alone, nor all of them together, completely eliminates the potential for frequent trading.

Account Information 13

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends once a month and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Since the portfolio’s shareholders are the participating insurance companies and their separate accounts, the tax treatment of dividends and distributions will depend on the tax status of the participating insurance company.Accordingly, no discussion is included as to the federal personal income tax consequences to policyowners. For this information, policyowners should consult the prospectus of the separate account of the participating insurance company or their tax advisers.

Participating insurance companies should consult their tax advisers about federal, state and local tax consequences.

Who the shareholders are

The participating insurance companies and their separate accounts are the shareholders of the portfolio. From time to time, a shareholder may own a substantial number of portfolio shares. The sale of a large number of shares could hurt the portfolio’s NAV.

EXCHANGE PRIVILEGE

Shareholders can exchange shares of a class of the portfolio for shares of the same class of any other portfolio or fund managed by Dreyfus that is offered only to separate accounts established by insurance companies to fund VA contracts and VLI policies, or for shares of any such money market portfolio, subject to the terms and conditions relating to exchanges of the applicable insurance company prospectus. Policyowners should refer to the applicable insurance company prospectus for more information on exchanging portfolio shares.

NOTES

For More Information

Dreyfus Investment Portfolios

Core Bond Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Describes the portfolio’s performance, lists portfolio holdings and contains a letter from portfolio management discussing recent market conditions, economic trends and portfolio strategies that significantly affected the portfolio’s performance during the last fiscal period. The portfolio’s most recent annual and semiannual reports are available at www.dreyfus.com.

Statement of Additional Information (SAI)

Provides more details about the portfolio and its policies. A current SAI is available at www.dreyfus.com and is on file with the Securities and Exchange Commission (SEC). The SAI is incorporated by reference (is legally considered part of this prospectus).

Portfolio Holdings

The portfolio will disclose its complete schedule of portfolio holdings, as reported on a month-end basis, at www.dreyfus.com, under Mutual Fund Center – Dreyfus Mutual Funds – Mutual Fund Total Holdings. The information will be posted with a one-month lag and will remain accessible until the portfolio files a report on Form N-Q or Form N-CSR for the period that includes the date as of which the information was current. In addition, fifteen days following the end of each calendar quarter, the portfolio will publicly disclose on the website its complete schedule of portfolio holdings as of the end of such quarter.

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

You can also obtain copies, after paying a duplicating fee, by visiting the SEC’s Public Reference Room in Washington, DC (for information, call 1-202-942-8090) or by E-mail request to publicinfo@sec.gov, or by writing to the SEC’s Public Reference Section, Washington, DC 20549-0102.

Dreyfus Investment Portfolios

Core Value Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		4
Expenses		5
Management		6
Financial Highlights		9

Account Information

Account Policies		11
Distributions and Taxes		13
Exchange Privilege		13

For More Information

See back cover.

GOAL/APPROACH

The portfolio seeks long-term growth of capital, with current income as a secondary objective. To pursue these goals, the portfolio normally invests at least 80% of its assets in stocks.The portfolio focuses on stocks of large-cap value companies (market capitalizations of $1 billion and above).The portfolio typically invests mainly in the stocks of U.S. issuers, and will limit its foreign stock holdings to 20% of the value of its total assets. The portfolio’s stock investments may include common stocks, preferred stocks, convertible securities and depositary receipts. The portfolio may purchase securities of companies in initial public offerings (IPOs) or shortly thereafter.

In choosing stocks, the portfolio managers focus on individual stock selection (a “bottom-up” approach) rather than forecasting stock market trends (a “top-down” approach), and look for value companies. A three-step value screening process is used to select stocks:

value: quantitative screens track traditional measures such as price-to-earnings, price-to-book and price-to-sales; these ratios are analyzed and compared against the market
sound business fundamentals: a company’s balance sheet and income data are examined to determine the company’s financial history
positive business momentum: a company’s earnings and forecast changes are analyzed and sales and earnings trends are reviewed to determine the company’s financial condition

The portfolio typically sells a stock when it is no longer considered a value company, appears less likely to benefit from the current market and economic environment, shows deteriorating fundamentals or falls short of the portfolio managers’ expectations.

Concepts to understand

Value companies: companies that appear underpriced according to certain financial measurements of their intrinsic worth or business prospects (such as price-to-earnings or price-to-book ratios). Because a stock can remain undervalued for years, value investors often look for factors that could trigger a rise in price.

Large-cap companies: established companies that are considered “known quantities.” Large-cap companies often have the resources to weather economic shifts, though they can be slower to innovate than small companies.

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money.

Market risk. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.
Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s products or services.

Value stock risk. Value stocks involve the risk that they may never reach what the investment adviser believes is their full market value, either because the market fails to recognize the stock’s intrinsic worth or the investment adviser misgauged that worth. They also may decline in price, even though in theory they are already undervalued.

Foreign investment risk. To the extent the portfolio invests in foreign securities, its performance will be influenced by political, social and economic factors affecting investments in foreign companies. Special risks associated with investments in foreign companies include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards.

Foreign currency risk. Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged.

Market sector risk. The portfolio may significantly overweight or underweight certain companies, industries or market sectors, which may cause the portfolio’s performance to be more or less sensi- tive to developments affecting those companies, industries or sectors.

Leveraging risk. The use of leverage, such as borrowing money to purchase securities, engaging in reverse repurchase agreements, lending portfolio securities and engaging in forward commitment transactions, will magnify the portfolio’s gains or losses.

Derivatives risk. The portfolio may invest in derivative instruments, such as options, futures and options on futures (including those relating to stocks, indexes, foreign currencies and interest rates). A small investment in derivatives could have a potentially large impact on the portfolio’s performance.The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in the value of a derivative held by the portfolio will not correlate with the portfolio’s other investments.
IPO risk. The portfolio may purchase securities of companies in IPOs.The prices of securities purchased in IPOs can be very volatile.The effect of IPOs on the portfolio’s performance depends on a variety of factors, including the number of IPOs the portfolio invests in relative to the size of the portfolio and whether and to what extent a security purchased in an IPO appreciates or depreciates in value.As a fund’s asset base increases, IPOs often have a diminished effect on such fund’s performance.

Other potential risks

Under adverse market conditions, the porfolio could invest some or all of its assets in U.S. Treasury securities and money market securities. Although the portfolio would do this for temporary defensive purposes, it could reduce the benefit from any upswing in the market. During such periods, the portfolio may not achieve its primary investment objective.

The portfolio may engage in short-term trading, which could produce higher transaction costs.

What the portfolio is — and isn’t

The portfolio is a mutual fund: a pooled investment that is professionally managed and gives shareholders the opportunity to participate in financial markets. It strives to reach its stated goals, although as with all mutual funds, it cannot offer guaranteed results.

The Portfolio 3

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Initial shares from year to year. The table compares the average annual total returns of each of the portfolio’s share classes to those of the Standard & Poor’s 500/BARRA Value Index (S&P 500 BARRA Value), a broad measure of the performance of the stocks in the S&P 500 Index with the lowest price-to-book ratios. Performance for the portfolio’s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio’s Initial shares prior to that date. The historical performance of the portfolio’s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses.

Average annual total returns as of 12/31/04
			Since
			inception
			of portfolio
	1 Year	5 Years	(5/1/98)

Initial shares	11.60%	3.83%	4.76%
Service shares	11.44%	3.74%	4.70%
S&P 500 BARRA Value	15.71%	2.48%	3.95%*

* For comparative purposes, the value of the index on 4/30/98 is used

as the beginning value on 5/1/98.

Additional costs

Performance information reflects the portfolio’s expenses only and does not reflect the fees and charges imposed by participating insurance companies under theirVA contracts or VLI policies. Because these fees and charges will reduce total return, policyowners should consider them when evaluating and comparing the portfolio’s performance. Policyowners should consult the prospectus for their contract or policy for more information.

EXPENSES

Investors using this portfolio to fund a VA contract or a VLI policy will pay certain fees and expenses in connection with the portfolio, which are described in the table below. Annual portfolio operating expenses are paid out of portfolio assets, so their effect is included in the portfolio’s share price. As with the performance information given previously, these figures do not reflect any fees or charges imposed by participating insurance companies under their VA contracts or VLI policies.

Fee table
	Initial	Service
	shares	shares

Annual portfolio operating expenses
% of average daily net assets
Management fees	0.75%	0.75%
Rule 12b-1 fee	none	0.25%
Other expenses	0.10%	0.10%

Total annual portfolio
operating expenses	0.85%	1.10%
Fee waiver and/or expense
reimbursement	—	(0.10%)

Net operating expenses*	0.85%	1.00%

* The Dreyfus Corporation has agreed, until December 31, 2005, to

waive receipt of its fees and/or assume the expenses of the portfolio so

that the expenses of neither class (excluding taxes, brokerage commis-

sions, extraordinary expenses, interest expenses and commitment fees

on borrowings) exceed 1.00%.

Expense example
	1 Year	3 Years	5 Years	10 Years

Initial shares	$87	$271	$471	$1,049
Service shares	$102	$340	$597	$1,331

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

The Portfolio 5

MANAGEMENT

Investment adviser

The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.75% of the portfolio’s average daily net assets. Dreyfus is the prima-ry mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

Investment decisions for the portfolio are made by a committee of portfolio managers that comprise the Large Cap Value Team (the committee) of The Boston Company Asset Management, LLC (TBCAM), an affiliate of Dreyfus. The committee members are William E. Costello, Robert J. Eastman, Brian C. Ferguson and J. David Macey. Mr. Ferguson also has been an employee of Dreyfus since October 2002, and Messrs. Costello, Eastman and Macey also have been employees of Dreyfus since April 2004. Each committee member has been jointly and primarily responsible for the day-to-day management of the portfolio’s investments, since April 2004.

Mr. Ferguson serves as director of the committee and is a senior vice president of TBCAM, which he joined in June 1997. In his role as director of the committee, he has oversight responsibility for all of the research performed for the committee pertaining to the sectors in which the portfolio invests.

Mr. Costello serves as director of domestic equity research and is a vice president at TBCAM, which he joined in December 1997. He also is a research analyst covering the energy sector and oversees research done on the consumer sector.

Mr. Eastman is a senior vice president of TBCAM, which he joined in February 1991. He also is a quantitative research analyst covering the technology sector and oversees research done on the health-care, technology and industrials sectors.

Mr. Macey is a senior vice president of TBCAM, which he joined in February 1988. He also is a research analyst covering the financial sector and oversees research done on the financial sector.

There are no limitations on the role of a committee member with respect to making investment decisions for the portfolio.The relationship among the roles of the committee members outside the investment-decision-making process is based pri-marily on the areas of research for which they are responsible, although a committee member is not limited to recommending investments within his principal areas of research. The Statement of Additional Information provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers, and the portfolio managers’ ownership of portfolio shares.

and litigation expenses.As noted, some of the claims in this litigation are asserted derivatively on behalf of the Funds that have been named as nominal defendants. With respect to such derivative claims, no relief is sought against the Funds. Dreyfus believes the allegations to be totally without merit and intends to defend the action vigorously. Defendants filed motions to dismiss the Amended Complaint on November 12, 2004, and those motions are pending.

The Portfolio 7

MANAGEMENT (continued)

Distributor

Code of ethics

The portfolio, Dreyfus and DSC have each adopted a code of ethics that permits its personnel, subject to such code, to invest in securities, including securities that may be purchased or held by the portfolio.The Dreyfus code of ethics restricts the personal securities transactions of its employees, and requires portfolio managers and other investment personnel to comply with the code’s preclearance and disclosure procedures.The primary purpose of the code is to ensure that personal trading by Dreyfus employees does not disadvantage any Dreyfus-managed fund.

FINANCIAL HIGHLIGHTS

figures have been independently audited by Ernst & Young LLP, whose report, along with the portfolio’s financial statements, is included in the annual report, which is available upon request. Keep in mind that fees and charges imposed by participating insurance companies, which are not reflected in the tables, would reduce the investment returns that are shown.

		Year Ended December 31,
Initial shares	2004	2003	2002	2001	2000

Per-Share Data ($):
Net asset value, beginning of period	14.08	11.06	14.54	15.10	13.97
Investment operations: Investment income — net ¹	.17	.12	.09	.12	.17
Net realized and unrealized gain (loss) on investments	1.46	3.01	(3.46)	(.45)	1.50
Total from investment operations	1.63	3.13	(3.37)	(.33)	1.67
Distributions: Dividends from investment income — net	(.19)	(.11)	(.11)	(.01)	(.16)

Dividends from net realized gain on investments	—	—	—	(.22)	(.38)
Total distributions	(.19)	(.11)	(.11)	(.23)	(.54)

Net asset value, end of period	15.52	14.08	11.06	14.54	15.10
Total Return (%)	11.60	28.42	(23.29)	(2.08)	12.06

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	.85	.85	.88	.98	1.04

Ratio of net expenses to average net assets	.85	.85	.88	.96	.97

Ratio of net investment income to average net assets	1.16	.99	.69	.83	1.19
Portfolio turnover rate	76.19	55.90	65.72	65.13	110.74

Net assets, end of period ($ x 1,000)	35,847	31,812	27,354	37,595	23,897

¹Based on average shares outstanding at each month end.

The Portfolio 9

FINANCIAL HIGHLIGHTS (continued)

		Year Ended December 31,
Service shares	2004	2003	2002	2001	2000 ¹

Per-Share Data ($):
Net asset value, beginning of period	14.08	11.07	14.54	15.09	15.09

Investment operations: Investment income — net	.14 ²	.10 ²	.08 ²	.08 ²	—

Net realized and unrealized gain (loss) on investments	1.47	3.00	(3.45)	(.40)	—
Total from investment operations	1.61	3.10	(3.37)	(.32)	—
Distributions: Dividends from investment income — net	(.15)	(.09)	(.10)	(.01)	—

Dividends from net realized gain on investments	—	—	—	(.22)	—
Total distributions	(.15)	(.09)	(.10)	(.23)	—

Net asset value, end of period	15.54	14.08	11.07	14.54	15.09
Total Return (%)	11.44	28.14	(23.31)	(2.08)	—

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.10	1.10	1.13	1.27	—

Ratio of net expenses to average net assets	1.00	1.00	1.00	1.00	—

Ratio of net investment income to average net assets	.99	.84	.62	.61	—
Portfolio turnover rate	76.19	55.90	65.72	65.13	110.74

Net assets, end of period ($ x 1,000)	43,059	43,478	33,426	21,469	1
¹The portfolio commenced offering Service shares on December 31, 2000.
²Based on average shares outstanding at each month end.

Account Information

ACCOUNT POLICIES

Buying/Selling shares

The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided that the orders are received by the portfolio in proper form on the next business day. The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios: Core Value Portfolio/share class), for purchase of portfolio shares.The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead), account registration and dealer number, if applicable, of the participating insurance company.

The portfolio’s investments are valued on the basis of market quotations or official closing prices. If market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value (such as when the value of a security has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the portfolio calculates its NAV), the portfolio may value those investments at fair value as determined in accordance with the procedures approved by the portfolio’s board. Fair value of investments may be determined by the portfolio’s board, its pricing committee or its valuation committee in good faith using such information as it deems appropriate under the circumstances. Fair value of foreign equity securities may be determined with the assistance of a pricing service using correlations between the movement of prices of foreign securities and indexes of domestic securities and other appropriate indicators, such as closing market prices of relevant ADRs and futures contracts. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the prices used by other mutual funds to calculate their net asset values. Foreign securities may trade on days when the portfolio does not calculate its NAV and thus may affect the portfolio’s NAV on days when investors have no access to the portfolio.

Account Information 11

ACCOUNT POLICIES (continued)

The portfolio reserves the right to:

change or discontinue its exchange privilege, temporarily suspend the privilege during unusu al market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up seven days (generally applies only during unusu al market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securi ties rather than cash, if the amount redeemed large enough to affect portfolio operations (for example, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, includ ing those from any participating insurance com pany, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Since the portfolio’s shareholders are the participating insurance companies and their separate accounts, the tax treatment of dividends and distri-butions will depend on the tax status of the participating insurance company. Accordingly, no discussion is included as to the federal personal income tax consequences to policyowners. For this information, policyowners should consult the prospectus of the separate account of the participating insurance company or their tax advisers.

Participating insurance companies should consult their tax advisers about federal, state and local tax consequences.

Who the shareholders are

EXCHANGE PRIVILEGE

Account Information 13

For More Information

Dreyfus Investment Portfolios

Core Value Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Describes the portfolio’s performance, lists portfolio holdings and contains a letter from the portfolio managers discussing recent market conditions, economic trends and portfolio strategies that significantly affected the portfolio’s performance during the last fiscal year.The portfolio’s most recent annual and semiannual reports are available at www.dreyfus.com.

Statement of Additional Information (SAI)

Provides more details about the portfolio and its policies. A current SAI is available at www.dreyfus.com and is on file with the Securities and Exchange Commission (SEC).The SAI is incorporated by reference (is legally considered part of this prospectus).

Portfolio Holdings

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

By telephone

Call 1-800-554-4611 or 516-338-3300

By mail Write to:

The Dreyfus Family of Funds

144 Glenn Curtiss Boulevard

Uniondale, NY 11556-0144

Attn: Institutional Servicing

On the Internet Text-only versions of certain fund

documents can be viewed online or downloaded from:

http://www.sec.gov

Dreyfus Investment Portfolios

Emerging Leaders Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		4
Expenses		5
Management		6
Financial Highlights		8

Account Information

Account Policies		10
Distributions and Taxes		12
Exchange Privilege		12

For More Information

See back cover.

GOAL/APPROACH

The portfolio seeks capital growth. To pursue this goal, the portfolio normally invests at least 80% of its assets in stocks of companies Dreyfus believes to be emerging leaders: companies characterized by new or innovative products, services or processes having the potential to enhance earnings or revenue growth. Based on current market conditions, the portfolio primarily invests in companies with market capitalizations of less than $2 billion at the time of purchase. Because the portfolio may continue to hold a security whose market capitalization grows, a substantial portion of the portfolio’s holdings can have market capitalizations in excess of $2 billion at any given time.The portfolio may invest up to 25% of its assets in foreign securities. The portfolio’s investments may include common stocks, preferred stocks and convertible securities, including those issued in initial public offerings (IPOs) or shortly thereafter.

In choosing stocks, the portfolio uses a blended approach, investing in a combination of growth and value stocks. Using fundamental research and direct management contact, the portfolio managers seek stocks with dominant positions in major product lines, sustained achievement records and strong financial condition.They also seek special situations, such as corporate restructurings or management changes, that could increase the stock price.

The portfolio typically sells a stock when the reasons for buying it no longer apply, when the company begins to show deteriorating fundamentals or poor relative performance, or when a stock is fully valued by the market.

The portfolio may, but is not required to, use derivatives, such as futures and options, as a substitute for taking a position in an underlying asset, to increase returns or as part of a hedging strategy.The portfolio also may engage in short-selling, typically for hedging purposes, such as to limit exposure to a possible market decline in the value of its portfolio securities.

The portfolio currently intends to close to new investors after it reaches total assets of approximately $400 million.

Concepts to understand

Small companies: generally, new and often entrepreneurial companies. The portfolio may continue to hold securities of companies as their market capitalizations grow. Small-cap companies tend to grow faster than large-cap companies, but frequently are more volatile, are more vulnerable to major setbacks, and fail more often than larger companies.

Growth companies: companies whose revenues and/or earnings are expected to grow faster than the overall market. Often, growth stocks pay little or no dividends, have relatively higher price-to-earnings, price-to-book and price-to-sales ratios, and tend to be more volatile than value stocks.

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money.

Market risk. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally.They also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

• Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s products or services.

Small and midsize company risk. Small and midsize companies carry additional risks because their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies.The shares of smaller companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the portfolio’s ability to sell these securities.These companies may have limited product lines,markets or financial resources,or may depend on a limited management group. Some of the portfolio’s investments will rise and fall based on investor perception rather than economic factors.Other investments,including special situations, are made in anticipation of future products and services or events whose delay or cancellation could cause the stock price to drop.

Growth and value stock risk. By investing in a mix of growth and value companies, the portfolio assumes the risks of both. Investors often expect growth companies to increase their earnings at a certain rate. If these expectations are not met, investors can punish the stocks inordinately, even if earnings do increase. In addition, growth stocks typically lack the dividend yield that can cushion stock prices in market downturns. Value stocks involve the risk that they may never reach what the portfolio managers believe is their full market value, either because the market fails to recognize the stock’s intrinsic worth, or the portfolio managers misgauged that worth. They also may decline in price, even though in theory they are already undervalued.

Foreign investment risk. To the extent the portfolio invests in foreign securities, its performance will be influenced by political,social and economic factors affecting investments in foreign companies. Special risks associated with investments in foreign com- panies include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company informa- tion, political instability and differing auditing and legal standards.

Foreign currency risk. Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged.

Market sector risk. The portfolio may significantly overweight or underweight certain companies, industries or market sectors, which may cause the portfolio’s performance to be more or less sensitive to developments affecting those companies, industries or sectors.

Leveraging risk. The use of leverage, such as borrowing money to purchase securities, engaging in reverse repurchase agreements, lending portfolio securities and engaging in forward commitment transactions, will magnify the portfolio’s gains or losses.

Derivatives risk. The portfolio may invest in derivative instruments, such as options, futures and options on futures (including those relating to stocks, indexes, foreign currencies and interest rates). A small investment in derivatives could have a potentially large impact on the portfolio’s performance.The use of derivatives involves risks different from, or possibly greater than, the risks associ- ated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in the value of a derivative held by the portfolio will not correlate with the portfolio’s other investments.

Short sale risk. The portfolio may make short sales, which involves selling a security it does not own in anticipation that the security’s price will decline. Short sales expose the portfolio to the risk that it will be required to buy the security sold short (also known as “covering” the short position) at a time when the security has appreciated in value, thus resulting in a loss to the portfolio.

IPO risk. The portfolio may purchase securities of companies in IPOs. The prices of securities purchased in IPOs can be very volatile. The effect of IPOs on the portfolio’s performance depends on a variety of factors, including the number of IPOs the portfolio invests in relative to the size of the portfolio and whether and to what extent a security purchased in an IPO appreciates or depreciates in value. As a fund’s asset base increases, IPOs often have a diminished effect on such fund’s performance.

What the portfolio is — and isn’t

Other potential risks

The portfolio may engage in short-term trading, which could produce higher transaction costs.

The Portfolio 3

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Initial shares from year to year. The table compares the average annual total returns of each of the portfolio’s share classes to those of the Russell 2000 Index, a widely recognized, unmanaged small-cap index. Performance for the portfolio’s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio’s Initial shares prior to that date. The historical performance of the portfolio’s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses.

Average annual total returns as of 12/31/04

			Since
			inception
			of portfolio
	1 Year	5 Years	(12/15/99)

Initial shares	14.42%	14.15%	15.65%

Service shares	14.19%	13.96%	15.46%

Russell 2000 Index	18.33%	6.61%	8.77%*

* For comparative purposes, the value of the index on 11/30/99 is

used as the beginning value on 12/15/99.

Additional costs

EXPENSES

Fee table
	Initial	Service
	shares	shares

Annual portfolio operating expenses
% of average daily net assets
Management fees	0.90%	0.90%
Rule 12b-1 fee	none	0.25%
Other expenses	0.23%	0.23%

Total annual portfolio
operating expenses*	1.13%	1.38%

* The Dreyfus Corporation has agreed,until December 31, 2005,to waive

receipt of its fees and/or assume the expenses of the portfolio so that the

expenses of neither class (excluding taxes,brokerage commissions,extraordi-

nary expenses,interest expenses and commitment fees on borrowings) exceed

1.50%. For the prior year, the application of Dreyfus’ fee waiver and/or

expense reimbursement resulted in net operating expenses being 1.09% and

1.32% for the portfolio’s Initial shares and Service shares,respectively.

Expense example
	1 Year	3 Years	5 Years	10 Years

Initial shares	$115	$359	$622	$1,375

Service shares	$140	$437	$755	$1,657

This example shows what an investor could pay in expenses over time. It uses the same hypothetical conditions other funds use in their prospectuses: $10,000 initial investment, 5% total return each year and no changes in expenses. This example does not reflect fees and expenses incurred under VA contracts and VLI policies; if they were reflected, the figures in the example would be higher. The figures shown would be the same whether investors sold their shares at the end of a period or kept them. Because actual returns and expenses will be different, the example is for comparison only.

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

The Portfolio 5

MANAGEMENT

Investment adviser

The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.86% of the portfolio’s average daily net assets. Dreyfus is the primary mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

The portfolio’s primary portfolio managers are Paul Kandel and Hilary Woods. Mr. Kandel and Ms. Woods have been the portfolio’s primary portfolio managers since its inception. Mr. Kandel joined Dreyfus in 1994 as senior sector manager for the technology and telecommunications industries. Ms. Woods joined Dreyfus in 1987 as senior sector manager for the capital goods industry. The Statement of Additional Information provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers, and the portfolio managers’ ownership of portfolio shares.

Distributor

Code of ethics

The Portfolio 7

FINANCIAL HIGHLIGHTS

The following tables describe the performance of each share class for the fiscal periods indicated. Certain information reflects financial results for a single portfolio share. “Total return” shows how much an investment in the portfolio would have increased (or decreased) during each period, assuming the investor had reinvested all dividends and distributions. These figures have been independently audited by Ernst & Young LLP, whose report, along with the portfolio’s financial statements, is included in the annual report, which is available upon request. Keep in mind that fees and charges imposed by participating insurance companies, which are not reflected in the tables, would reduce the investment returns that are shown.

		Year Ended December 31,
Initial shares	2004	2003	2002	2001	2000

Per-Share Data ($):
Net asset value, beginning of period	21.92	14.85	18.53	17.05	13.44
Investment operations: Investment (loss) — net ¹	(.08)	(.12)	(.09)	(.08)	(.09)

Net realized and unrealized gain (loss) on investments	3.24	7.19	(3.59)	1.57	4.30
Total from investment operations	3.16	7.07	(3.68)	1.49	4.21
Distributions: Dividends from investment income — net	—	—	—	—	(.01)
Dividends from net realized gain on investments	(2.02)	—	—	(.01)	(.59)
Total distributions	(2.02)	—	—	(.01)	(.60)
Net asset value, end of period	23.06	21.92	14.85	18.53	17.05
Total Return (%)	14.42	47.61	(19.86)	8.74	31.70

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.13	1.15	1.17	1.62	2.20

Ratio of net expenses to average net assets	1.09	1.15	1.17	1.46	1.50

Ratio of net investment (loss) to average net assets	(.35)	(.67)	(.51)	(.44)	(.59)
Portfolio turnover rate	88.95	111.28	127.24	175.21	234.94

Net assets, end of period ($ x 1,000)	21,590	19,102	11,777	13,308	5,902

¹Based on average shares outstanding at each month end.

		Year Ended December 31,
Service shares	2004	2003	2002	2001	2000¹

Per-Share Data ($):
Net asset value, beginning of period	21.78	14.79	18.51	17.05	17.05

Investment operations: Investment (loss) — net	(.13) ²	(.16) ²	(.13) ²	(.08) ²	—

Net realized and unrealized gain (loss) on investments	3.22	7.15	(3.59)	1.55	—
Total from investment operations	3.09	6.99	(3.72)	1.47	—
Distributions: Dividends from net realized gain on investments	(2.02)	—	—	(.01)	—
Net asset value, end of period	22.85	21.78	14.79	18.51	17.05
Total Return (%)	14.19	47.16	(20.04)	8.62	—

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.38	1.41	1.43	1.80	—

Ratio of net expenses to average net assets	1.32	1.41	1.43	1.50

Ratio of net investment (loss) to average net assets	(.59)	(.92)	(.79)	(.49)	—
Portfolio turnover rate	88.95	111.28	127.24	175.21	234.94

Net assets, end of period ($ x 1,000)	16,877	16,397	9,631	4,730	1

¹The portfolio commenced offering Service shares on December 31, 2000.
²Based on average shares outstanding at each month end.

The Portfolio 9

Account Information

ACCOUNT POLICIES

Buying/Selling shares

The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided the orders are received by the portfolio in proper form on the next business day. The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios: Emerging Leaders Portfolio/share class), for purchase of portfolio shares. The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead) and account registration and dealer number, if applicable, of the participating insurance company.

The portfolio’s investments are valued on the basis of market quotations or official closing prices. If market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value (such as when the value of a security has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the portfolio calculates its NAV), the portfolio may value those investments at fair value as determined in accordance with the procedures approved by the portfolio’s board. Fair value of investments may be determined by the portfolio’s board, its pricing committee or its valuation committee in good faith using such information as it deems appropriate under the circumstances. Fair value of foreign equity securities may be determined with the assistance of a pricing service using correlations between the movement of prices of foreign securities and indexes of domestic securities and other appropriate indicators, such as closing market prices of relevant ADRs and futures contracts. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the prices used by other mutual funds to calculate their net asset values. Foreign securities may trade on days when the portfolio does not calculate its NAV and thus may affect the portfolio’s NAV on days when investors have no access to the portfolio.

The portfolio reserves the right to:

change or discontinue its exchange privilege, or temporarily suspend the privilege during unusual market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for example, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, including those from any participating insurance company, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

In addition to applying restrictions on future purchases or exchanges, Dreyfus or the participating insurance company may cancel or reverse the purchase or exchange on the business day following the transaction if the participating insurance company’s surveillance system identifies the account as one that is likely to engage in frequent trading. Dreyfus may also instruct the participating insurance company to cancel or reverse the purchase or exchange on the following business day if the trade represents a significant amount of the portfolio’s assets and Dreyfus has concluded that the account is likely to engage in frequent trading.

Account Information 11

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Participating insurance companies should consult their tax advisers about federal, state and local tax consequences.

Who the shareholders are

EXCHANGE PRIVILEGE

NOTES

For More Information

Dreyfus Investment Portfolios

Emerging Leaders Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Statement of Additional Information (SAI)

Provides more details about the portfolio and its policies. A current SAI is available at www.dreyfus.com and is on file with the Securities and Exchange Commission (SEC).The SAI is incorporated by reference (is legally considered part of this prospectus).

Portfolio Holdings

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

By telephone

Call 1-800-554-4611 or 516-338-3300

By mail Write to:

The Dreyfus Family of Funds

144 Glenn Curtiss Boulevard

Uniondale, NY 11556-0144

Attn: Institutional Servicing

On the Internet Text-only versions of certain fund

documents can be viewed online or downloaded from:

http://www.sec.gov

Dreyfus Investment Portfolios

Founders Discovery Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		4
Expenses		5
Management		6
Financial Highlights		8

Account Information

Account Policies		10
Distributions and Taxes		12
Exchange Privilege		12

For More Information

See back cover.

While the portfolio’s investment objective and policies may be similar to those of other funds managed by the investment advisers, the portfolio’s investment results may be higher or lower than, and may not be comparable to, those of the other funds.

GOAL/APPROACH

The portfolio seeks capital appreciation. To pursue this goal, the portfolio invests primarily in equity securities of small, U.S.-based companies which are characterized as “growth” companies.The portfolio may purchase securities of companies in initial public offerings (IPOs) or shortly thereafter.

The portfolio managers seek investment opportunities for the portfolio in companies with fundamental strengths that indicate the potential for growth in earnings per share. The portfolio managers focus on individual stock selection (a “bottom-up” approach) rather than on forecasting stock market trends (a “top-down” approach).

The portfolio may invest up to 30% of its assets in foreign securities.The portfolio may invest in securities of larger issuers if the portfolio managers believe these securities offer attractive opportunities for capital appreciation. The portfolio also may invest in investment grade debt securities of domestic or foreign issuers that the portfolio managers believe — based on market conditions, the financial condition of the issuer, general economic conditions, and other relevant factors — offer opportunities for capital appreciation.

Concepts to understand

Small companies: generally, new and often entrepreneurial companies. The stocks of these companies generally have market capitalizations of less than $2.5 billion at the time of purchase, depending on changes in the value of the stock market as a whole. The portfolio may continue to hold the securities of companies as their market capitalizations grow. Small companies tend to grow faster than large-cap companies, but frequently are more volatile, are more vulnerable to major setbacks, and fail more often than large companies.

Equity securities: common stocks, preferred stocks and convertible securities. The portfolio may invest in preferred stocks and convertible securities that are rated at the time of purchase at least B by a credit rating agency or the unrated equivalent as determined by the portfolio’s sub-adviser.

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money.

Market risk. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s products or services.

Small and midsize company risk. Small and midsize companies carry additional risks because their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies.The shares of smaller companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the portfolio’s ability to sell these securities. These companies may have limited product lines, markets or financial resources, or may depend on a limited management group. Some of the portfolio’s investments will rise and fall based on investor perception rather than economic factors. Other investments, including special situations, are made in anticipation of future products and services or events whose delay or cancellation could cause the stock price to drop.

Growth stock risk. Investors often expect growth companies to increase their earnings at a certain rate. If these expectations are not met, investors can punish the stocks inordinately, even if earnings do increase. In addition, growth stocks typically lack the dividend yield that can cushion stock prices in market downturns.

Foreign investment risk. To the extent the portfolio invests in foreign securities, its performance will be influenced by political, social and economic factors affecting investments in foreign companies. Special risks associated with investments in foreign companies include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards.

Foreign currency risk. Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged.

Market sector risk. The portfolio may significantly overweight or underweight certain companies, industries or market sectors, which may cause the portfolio’s performance to be more or less sensitive to developments affecting those companies, industries or sectors.

Derivatives risk. The portfolio may invest in derivative instruments, such as options, futures and options on futures (including those relating to stocks, indexes, foreign currencies and interest rates). A small investment in derivatives could have a potentially large impact on the portfolio’s performance.The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in the value of a derivative held by the portfolio will not correlate with the porfolio’s other investments.

IPO risk. The portfolio may purchase securities of companies in IPOs. The prices of securities purchased in IPOs can be very volatile.The effect of IPOs on the portfolio’s performance depends on a variety of factors, including the number of IPOs the portfolio invests in relative to the size of the portfolio and whether and to what extent a security purchased in an IPO appreciates or depreciates in value.As a fund’s asset base increases, IPOs often have a diminished effect on such fund’s performance.

Other potential risks

The portfolio may engage in short-term trading, which could produce higher transaction costs.

To the extent the portfolio invests in debt securities, such investments will be subject primarily to interest rate and credit risks. Prices of bonds tend to move inversely with changes in interest rates and are affected by changes in the credit rating or financial condition of the issuer.

What the portfolio is — and isn’t

The Portfolio 3

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Initial shares from year to year. The table compares the average annual total returns of each of the portfolio’s share classes to those of the Russell 2000 Index, a widely recognized, unmanaged small-cap index, and the Russell 2000 Growth Index, which measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. Performance for the portfolio’s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio’s Initial shares prior to that date. The historical performance of the portfolio’s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses.

Average annual total returns as of 12/31/04

			Since
			inception
			of portfolio
	1 Year	5 Years	(12/15/99)

Initial shares	9.87%	-6.67%	-4.64%

Service shares	9.68%	-6.79%	-4.76%

Russell 2000 Index	18.33%	6.61%	8.77%*

Russell 2000 Growth Index	14.31%	-3.57%	-0.38%*

* For comparative purposes, the value of each index on 11/30/99 is

used as the beginning value on 12/15/99.

Additional costs

EXPENSES

Fee table
	Initial	Service
	shares	shares

Annual portfolio operating expenses
% of average daily net assets
Management fees	0.90%	0.90%
Rule 12b-1 fee	none	0.25%
Other expenses	0.36%	0.35%

Total annual
portfolio operating expenses*	1.26%	1.50%

* The Dreyfus Corporation has agreed, until December 31, 2005, to

waive receipt of its fees and/or assume the expenses of the portfolio so

that the expenses of neither class (excluding taxes, brokerage commis-

sions, extraordinary expenses, interest expenses and commitment fees

on borrowings) exceed 1.50%.

Expense example
	1 Year	3 Years	5 Years	10 Years

Initial shares	$128	$400	$692	$1,523

Service shares	$153	$474	$818	$1,791

This example shows what an investor could pay in expenses over time. It uses the same hypothetical conditions other funds use in their prospectuses: $10,000 initial investment, 5% total return each year and no changes in expenses. This example does not reflect fees and expenses incurred under VA contracts and VLI policies; if they were reflected, the figures in the example would be higher. The figures shown would be the same whether investors sold their shares at the end of a period or kept them. Because actual returns and expenses will be different, the example is for comparison only.

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

The Portfolio 5

MANAGEMENT

Investment advisers

The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.90% of the portfolio’s average daily net assets. Dreyfus is the prima-ry mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

Dreyfus has engaged its growth specialist affiliate, Founders Asset Management LLC (Founders), to serve as the portfolio’s sub-investment adviser. Founders, located at 210 University Boulevard, Suite 800, Denver, Colorado 80206, and its predecessor companies have been offering tools to help investors pursue their financial goals since 1938. Founders is a wholly-owned subsidiary of Dreyfus Service Corporation, which is a wholly-owned subsidiary of Dreyfus. As of December 31, 2004, Founders managed mutual funds and other client accounts having aggregate assets of approximately $2.36 billion.

The portfolio’s primary portfolio managers are James Padgett, C.F.A. and Brad Orr, C.F.A. Messrs. Padgett and Orr have been primary portfolio managers of the portfolio since April 2004. Mr. Padgett is a portfolio manager at Founders, where he has been employed since 2002. Prior to joining Founders, Mr. Padgett was an equity analyst for Berger Financial LLC from 2000 to 2002, and a portfolio manager at Colorado Public Employees’ Retirement Association from 1997 to 2000. Mr.Orr is a portfolio manager at Founders, where he has been employed since 1995 and served as an equity analyst for Founders from 1997 to 2004. The Statement of Additional Information provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers, and the portfolio managers’ ownership of portfolio shares.

In early 2004, two purported class and derivative actions were filed against Mellon Financial, Mellon Bank, N.A., Dreyfus, Founders, and certain directors of the Dreyfus Funds and the Dreyfus Founders Funds (together, the Funds) in the United States District Court for the Western District of Pennsylvania. In September 2004, plaintiffs served a Consolidated Amended Complaint (the Amended Complaint) on behalf of a purported class of all persons who acquired interests in any of the Funds between January 30, 1999 and November 17, 2003, and derivatively on behalf of the Funds. The Amended Complaint in the newly styled In re Dreyfus Mutual Funds Fee Litigation also named Dreyfus Service Corporation, Premier Mutual Fund Services, Inc. and two additional Fund directors as defendants and alleges violations of the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Pennsylvania Unfair Trade Practices and Consumer Protection Law and common-law claims. Plaintiffs seek to recover allegedly improper and excessive Rule 12b-1 and advisory fees allegedly charged to the Funds for marketing and distribution services. More specifically, plaintiffs claim, among other things, that 12b-1 fees and directed brokerage were improperly used to pay brokers to recommend the Funds over other funds, and that such payments were not disclosed to investors. In addition, plaintiffs assert that economies of scale and soft-dollar benefits were not passed on to the Funds. Plaintiffs further allege that 12b-1 fees were improperly charged to certain of the Funds that were closed to new investors. The Amended Complaint seeks compensatory and punitive damages, rescission of the advisory contracts, and an accounting and restitution of any unlawful fees, as well as an award of attorneys’ fees and litigation expenses.As noted, some of the claims

in this litigation are asserted derivatively on behalf of the Funds that have been named as nominal defendants. With respect to such derivative claims, no relief is sought against the Funds. Dreyfus believes the allegations to be totally without merit and intends to defend the action vigorously. Defendants filed motions to dismiss the Amended Complaint on November 12, 2004, and those motions are pending.

Distributor

Code of ethics

The portfolio, Dreyfus, Founders and DSC have each adopted a code of ethics that permits its personnel, subject to such code, to invest in securities, including securities that may be purchased or held by the portfolio. The Dreyfus and Founders codes of ethics restrict the personal securities transactions of their employees, and require portfolio managers and other investment personnel to comply with the code’s preclearance and disclosure procedures. Each code’s primary purpose is to ensure that personal trading by Dreyfus or Founders employees does not disadvantage any fund managed by Dreyfus or Founders, as the case may be.

The Portfolio 7

FINANCIAL HIGHLIGHTS

		Year Ended December 31,
Initial shares	2004	2003	2002	2001	2000

Per-Share Data ($):
Net asset value, beginning of period	8.92	6.55	9.81	12.04	13.89
Investment operations: Investment (loss) — net ¹	(.08)	(.09)	(.08)	(.08)	(.08)

Net realized and unrealized
gain (loss) on investments	.96	2.46	(3.18)	(2.15)	(1.71)
Total from investment operations	.88	2.37	(3.26)	(2.23)	(1.79)
Distributions: Dividends from investment income — net	—	—	—	—	(.01)
Dividends from net realized gain on investments	—	—	—	—	(.05)
Total distributions	—	—	—	—	(.06)
Net asset value, end of period	9.80	8.92	6.55	9.81	12.04
Total Return (%)	9.87	36.18	(33.23)	(18.52)	(13.02)

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.26	1.41	1.39	1.50	1.93

Ratio of net expenses to average net assets	1.26	1.41	1.34	1.39	1.41

Ratio of net investment (loss) to average net assets	(.94)	(1.15)	(1.06)	(.77)	( . 6 0 )
Portfolio turnover rate	113.02	120.85	132.08	106.00	123.96

Net assets, end of period ($ x 1,000)	23,027	15,918	8,881	14,755	13,960

¹Based on average shares outstanding at each month end.

		Year Ended December 31,
Service shares	2004	2003	2002	2001	2000 ¹

Per-Share Data ($):
Net asset value, beginning of period	8.88	6.53	9.78	12.04	12.04

Investment operations: Investment (loss) — net	(.11) ²	(.09) ²	(.09) ²	(.09) ²	—

Net realized and unrealized
gain (loss) on investments	.97	2.44	(3.16)	(2.17)	—
Total from investment operations	.86	2.35	(3.25)	(2.26)	—
Net asset value, end of period	9.74	8.88	6.53	9.78	12.04
Total Return (%)	9.68	35.99	(33.23)	(18.77)	—

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.50	1.69	1.64	1.77	—

Ratio of net expenses to average net assets	1.50	1.50	1.46	1.49	—

Ratio of net investment (loss) to average net assets	(1.19)	(1.23)	(1.17)	(1.02)	—
Portfolio turnover rate	113.02	120.85	132.08	106.00	123.96

Net assets, end of period ($ x 1,000)	3,047	3,117	2,369	2,599	1

¹The portfolio commenced offering Service shares on December 31, 2000.
²Based on average shares outstanding at each month end.

The Portfolio 9

Account Information

ACCOUNT POLICIES

Buying/Selling shares

Portfolio shares may be purchased or sold (redeemed) by separate accounts of participating insurance companies. In addition, such participating insurance companies may receive payments from Dreyfus in connection with their offering of portfolio shares to their customers, or for marketing, distribution or other services. The receipt of such payments could create an incentive for the participating insurance companies to offer the portfolio instead of other mutual funds where such payments are not received. Policyowners should consult the prospectus of the separate account of the participating insurance company for more information about buying or selling portfolio shares.

The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided the orders are received by the portfolio in proper form on the next business day. The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios: Founders Discovery Portfolio/share class), for purchase of portfolio shares.The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead) and account registration and dealer number, if applicable, of the participating insurance company.

The portfolio is designed for long-term investors. Frequent purchases, redemptions and exchanges may disrupt portfolio management strategies and harm portfolio performance by diluting the value of portfolio shares and increasing brokerage and administrative costs. As a result, Dreyfus and the portfolio’s board have adopted a policy of discouraging excessive trading, short-term market timing and other abusive trading practices (frequent trading) that could adversely affect the portfolio or its operations. Dreyfus and the portfolio will not enter into arrangements with any person or group to permit frequent trading.

The portfolio reserves the right to:

change or discontinue its exchange privilege, or temporarily suspend the privilege during unusual market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for example, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, including those from any participating insurance company, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

Account Information 11

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Participating insurance companies should consult their tax advisers about federal, state and local tax consequences.

Who the shareholders are

EXCHANGE PRIVILEGE

NOTES

For More Information

Dreyfus Investment Portfolios

Founders Discovery Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Statement of Additional Information (SAI)

Provides more details about the portfolio and its poli-cies.A current SAI is available at www.dreyfus.com and is on file with the Securities and Exchange Commission (SEC).The SAI is incorporated by reference (is legally considered part of this prospectus).

Portfolio Holdings

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

By telephone

Call 1-800-554-4611 or 516-338-3300

By mail Write to:

The Dreyfus Family of Funds

144 Glenn Curtiss Boulevard

Uniondale, NY 11556-0144

Attn: Institutional Servicing

On the Internet Text-only versions of certain fund

documents can be viewed online or downloaded from:

http://www.sec.gov

Dreyfus Investment Portfolios

Founders International Equity Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		4
Expenses		5
Management		6
Financial Highlights		8

Account Information

Account Policies		10
Distributions and Taxes		12
Exchange Privilege		12

For More Information

See back cover.

GOAL/APPROACH

The portfolio seeks long-term growth of capital.To pursue this goal, the portfolio normally invests at least 80% of its assets in the equity securities of foreign companies. The portfolio focuses on equity securities of foreign companies that are characterized as “growth” companies.The portfolio may purchase securities of companies in initial public offerings (IPOs) or shortly thereafter.

The portfolio will seek investment opportunities, generally, in companies which the portfolio managers believe have fundamental strengths that indicate the potential for growth in earnings per share. The portfolio managers focus on individual stock selection (a “bottom-up” approach) rather than on forecasting stock market trends (a “top-down” approach).

The portfolio will invest primarily in foreign issuers from at least three foreign countries with established or emerging economies, but will not invest more than 50% of its assets in issuers in any one foreign country. Although the portfolio intends to invest substantially all of its assets in issuers located outside the United States, at times it may invest in U.S.-based companies.The portfolio also may invest in investment grade debt securities of foreign issuers that the portfolio managers believe — based on market conditions, the financial condition of the issuer, general economic conditions, and other relevant factors — offer opportunities for capital growth.

Concepts to understand

Equity securities: common stocks, preferred stocks and convertible securities. The portfolio will invest in preferred stocks and convertible securities that are rated at the time of purchase at least B by a credit rating agency or the unrated equivalent as determined by the portfolio’s sub-adviser.

Growth companies: companies whose revenues and/or earnings are expected to grow faster than the overall market or companies similar to those represented in the growth component of the Morgan Stanley Capital International (MSCI) World (ex U.S.) Growth Index. Often, growth stocks pay little or no dividends, have relatively high price-to-earnings, price-to-book and price-to-sales ratios, and tend to be more volatile than value stocks.

The MSCI World (ex U.S.) Growth Index, a subset of the MSCI World (ex U.S.) Index, measures global developed market equity performance of growth stocks outside of the United States. The MSCI World (ex U.S.) Index measures global developed market equity performance outside of the United States.

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money.

Foreign investment risk. The portfolio’s performance will be influenced by political, social and economic factors affecting investments in foreign companies. Special risks associated with investments in foreign companies include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards.

Foreign currency risk. Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged.

Emerging market risk. Emerging markets tend to be more volatile than the markets of more mature economies, and generally have less diverse and less mature economic structures and less stable political systems than those of developed countries.The securities of companies located in emerging markets are often subject to rapid and large changes in price.

Market risk. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage, and reduced demand for the issuer’s products or services.

Growth stock risk. Investors often expect growth companies to increase their earnings at a certain rate. If these expectations are not met, investors can punish the stocks inordinately, even if earnings do increase. In addition, growth stocks typically lack the dividend yield that can cushion stock prices in market downturns.

Market sector risk. The portfolio may significantly overweight or underweight certain companies, industries or market sectors, which may cause the portfolio’s performance to be more or less sensitive to developments affecting those companies, industries or sectors.

Derivatives risk. The portfolio may invest in deriv- ative instruments, such as options, futures and options on futures (including those relating to stocks, indexes, foreign currencies and interest rates). A small investment in derivatives could have a potentially large impact on the portfolio’s performance.The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underly- ing assets. Derivatives can be highly volatile, illiq- uid and difficult to value, and there is the risk that changes in the value of a derivative held by the portfolio will not correlate with the porfolio’s other investments.

IPO risk. The portfolio may purchase securities of companies in IPOs. The prices of securities pur- chased in IPOs can be very volatile.The effect of IPOs on the portfolio’s performance depends on a variety of factors, including the number of IPOs the portfolio invests in relative to the size of the portfolio and whether and to what extent a secu- rity purchased in an IPO appreciates or depreci- ates in value. As a fund’s asset base increases, IPOs often have a diminished effect on such fund’s per- formance.

Other potential risks

The portfolio may engage in short-term trading, which could produce higher transaction costs.

What the portfolio is — and isn’t

The Portfolio 3

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Initial shares from year to year. The table compares the average annual total returns of each of the portfolio’s share classes to those of the MSCI World (ex U.S.) Index, a broad measure of international stock performance, and the MSCI World (ex U.S.) Growth Index, a broad measure of international growth stock performance. Performance for the portfolio’s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio’s Initial shares prior to that date.The historical performance of the portfolio’s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses.

Average annual total returns as of 12/31/04

			Since
			inception
			of portfolio
	1 Year	5 Years	(9/30/98)


Initial shares	22.85%	-6.70%	4.35%

Service shares	22.74%	-6.70%	4.35%

MSCI World
(ex U.S.) Index	20.38%	-0.77%	6.51%

MSCI World
(ex U.S.) Growth Index	16.62%	-5.65%	3.09%

Additional costs

EXPENSES

Investors using this portfolio to fund a VA contract or a VLI policy will pay certain fees and expenses in connection with the portfolio, which are described in the table below. Annual portfolio operating expenses are paid out of portfolio assets, so their effect is included in the portfolio’s share price. As with the performance information given previously, these figures do not reflect any fees or charges imposed by participating insurance companies under their VA contracts or VLI policies.

Fee table
	Initial	Service
	shares	shares

Annual portfolio operating expenses
% of average daily net assets
Management fees	1.00%	1.00%
Rule 12b-1 fee	none	0.25%
Other expenses	1.11%	1.11%

Total annual portfolio
operating expenses	2.11%	2.36%
Fee waiver and/or expense
reimbursement	(0.61%)	(0.86%)

Net operating expenses*	1.50%	1.50%

*The Dreyfus Corporation has agreed, until December 31, 2005, to

waive receipt of its fees and/or assume the expenses of the portfolio so

that the expenses of neither class (excluding taxes, brokerage commis-

sions, extraordinary expenses, interest expenses and commitment fees

on borrowings) exceed 1.50%.

Expense example
	1 Year	3 Years	5 Years	10 Years

Initial shares	$153	$602	$1,078	$2,393
Service shares	$153	$654	$1,182	$2,630

This example shows what an investor could pay in expenses over time. It uses the same hypothetical conditions other funds use in their prospectuses: $10,000 initial investment, 5% total return each year and no changes in expenses. This example does not reflect fees and expenses incurred under VA contracts and VLI policies; if they were reflected, the figures in the example would be higher. The one-year example and the first year of the three-, five- and ten-years examples are based on net operating expenses, which reflect the expense waiver/reimbursement by Dreyfus. The figures shown would be the same whether investors sold their shares at the end of a period or kept them. Because actual returns and expenses will be different, the example is for comparison only.

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

Rule 12b-1 fee: the fee paid to the portfolio’s distributor for distributing Service shares, for advertising and marketing related to Service shares, and for providing account service and maintenance for holders of Service shares. The distributor may pay all or part of this fee to participating insurance companies, and the broker-dealer acting as the principal underwriter for their variable insurance products. Because this fee is paid on an ongoing basis out of portfolio assets attributable to Service shares, over time it will increase the cost of an investment in Service shares and could cost investors more than paying other types of sales charges.

The Portfolio 5

MANAGEMENT

Investment advisers

The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.39% of the portfolio’s average daily net assets. Dreyfus is the primary mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

Dreyfus has engaged its growth specialist affiliate, Founders Asset Management LLC (Founders), to serve as the portfolio’s sub-investment adviser. Founders, located at 210 University Boulevard, Suite 800, Denver, Colorado 80206, and its predecessor companies have been offering tools to help investors pursue their financial goals since 1938. Founders is a wholly-owned subsidiary of Dreyfus Service Corporation, which is a wholly owned subsidiary of Dreyfus. As of December 31, 2004, Founders managed mutual funds and other client accounts having aggregate assets of approximately $2.36 billion.

The portfolio’s primary portfolio managers are Remi J. Browne, C.F.A. and Daniel B. LeVan, C.F.A. Messrs. Browne and LeVan have been the portfolio’s co-primary portfolio managers and each has been employed by Founders since March 2003. Mr. Browne is also a senior vice president of The Boston Company Asset Management, LLC (TBCAM), an affiliate of Dreyfus, where he has been employed since 2003. Mr. Browne was formerly a senior vice president and chief investment officer of international equities at Standish Mellon Asset Management Company LLC (Standish Mellon), an affiliate of Dreyfus, from 1996 to 2003. Mr. LeVan is a senior vice president of TBCAM, where he has been employed since 2003. Mr. LeVan was formerly a vice president of Standish Mellon, where he was a lead portfolio manager for global, international and European small-cap portfolios at Standish Mellon, from 1994 to 2003.The Statement of Additional Information provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers, and the portfolio managers’ ownership of portfolio shares.

12b-1 fees were improperly charged to certain of the Funds that were closed to new investors. The Amended Complaint seeks compensatory and punitive damages, rescission of the advisory contracts, and an accounting and restitution of any unlawful fees, as well as an award of attorneys’ fees and litigation expenses.As noted, some of the claims in this litigation are asserted derivatively on behalf of the Funds that have been named as nominal defendants. With respect to such derivative claims, no relief is sought against the Funds. Dreyfus believes the allegations to be totally without merit and intends to defend the action vigorously. Defendants filed motions to dismiss the Amended Complaint on November 12, 2004, and those motions are pending.

Distributor

Code of ethics

The portfolio, Dreyfus, Founders and DSC have each adopted a code of ethics that permits its personnel, subject to such code, to invest in securities, including securities that may be purchased or held by the portfolio. The Dreyfus and Founders codes of ethics restrict the personal securities transactions of their employees, and require portfolio managers and other investment personnel to comply with the code’s preclearance and disclosure procedures. The primary purpose of the respective code is to ensure that personal trading by Dreyfus or Founders employees does not disadvantage any fund managed by Dreyfus or Founders, as the case may be.

The Portfolio 7

FINANCIAL HIGHLIGHTS

		Year Ended December 31,
Initial shares	2004	2003	2002	2001	2000

Per-Share Data ($):
Net asset value, beginning of period	11.83	8.72	11.97	17.00	21.65
Investment operations: Investment income (loss) — net ¹	.08	.06	.01	(.02)	.00 ²
Net realized and unrealized gain (loss) on investments	2.61	3.06	(3.26)	(5.00)	(3.55)
Total from investment operations	2.69	3.12	(3.25)	(5.02)	(3.55)
Distributions: Dividends from investment income — net	(.06)	(.01)	—	(.01)	—
Dividends from net realized gain on investments	—	—	—	—	(1.10)

Total distributions	(.06)	(.01)	—	(.01)	(1.10)

Net asset value, end of period	14.46	11.83	8.72	11.97	17.00
Total Return (%)	22.85	35.81	(27.15)	(29.56)	(17.41)

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	2.11	2.41	2.01	2.22	2.07

Ratio of net expenses to average net assets	1.49	1.50	1.50	1.50	1.50

Ratio of net investment income (loss) to average net assets	.64	.66	.06	(.13)	.02

Portfolio turnover rate	90.61	145.42	226.63	201.61	171.34

Net assets, end of period ($ x 1,000)	7,329	6,483	5,103	9,099	11,888

¹Based on average shares outstanding at each month end.
²Amount represents less than $.01 per share.

		Year Ended December 31,
Service shares	2004	2003	2002	2001	2000¹

Per-Share Data ($):
Net asset value, beginning of period	11.84	8.72	11.98	17.00	17.00

Investment operations: Investment income (loss) — net	.08 ²	.06 ²	.01 ²	(.06) ²	—

Net realized and unrealized gain (loss) on investments	2.60	3.07	(3.27)	(4.95)	—
Total from investment operations	2.68	3.13	(3.26)	(5.01)	—
Distributions: Dividends from investment income — net	(.06)	(.01)	—	(.01)	—

Net asset value, end of period	14.46	11.84	8.72	11.98	17.00
Total Return (%)	22.74	35.92	(27.21)	(29.50)	—

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	2.36	2.66	2.26	2.55	—

Ratio of net expenses to average net assets	1.49	1.50	1.50	1.50

Ratio of net investment income (loss) to average net assets	.61	.64	.05	(.46)	—

Portfolio turnover rate	90.61	145.42	226.63	201.61	171.34

Net assets, end of period ($ x 1,000)	2,399	2,085	1,602	1,504	1

¹The portfolio commenced offering Service shares on December 31, 2000.
²Based on average shares outstanding at each month end.

The Portfolio 9

Account Information

ACCOUNT POLICIES

Buying/Selling shares

The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided that the orders are received by the portfolio in proper form on the next business day.The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios: Founders International Equity Portfolio/share class), for purchase of portfolio shares. The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead), account registration and dealer number, if applicable, of the participating insurance company.

The portfolio reserves the right to:

change or discontinue its exchange privilege, or temporarily suspend the privilege during unusual market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for example, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, including those from any participating insurance company, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

Account Information 11

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Participating insurance companies should consult their tax advisers about federal, state and local tax consequences.

Who the shareholders are

EXCHANGE PRIVILEGE

NOTES

For More Information

Dreyfus Investment Portfolios

Founders International Equity Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Statement of Additional Information (SAI)

Portfolio Holdings

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

By telephone

Call 1-800-554-4611 or 516-338-3300

By mail Write to:

The Dreyfus Family of Funds

144 Glenn Curtiss Boulevard

Uniondale, NY 11556-0144

Attn: Institutional Servicing

On the Internet Text-only versions of certain fund

documents can be viewed online or downloaded from:

http://www.sec.gov

Dreyfus Investment Portfolios

Founders Growth Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		4
Expenses		5
Management		6
Financial Highlights		8

Account Information

Account Policies		10
Distributions and Taxes		12
Exchange Privilege		12

For More Information

See back cover.

GOAL/APPROACH

The portfolio seeks long-term growth of capital.To pursue this goal, the portfolio invests primarily in equity securities of well-established, high quality “growth” companies.These companies tend to have strong performance records, solid market positions and reasonable financial strength, and have continuous operating records of three years or more.

The portfolio will seek investment opportunities, generally, in companies which the portfolio manager believes have fundamental strengths that indicate the potential for growth in earnings per share.The portfolio manager focuses on individual stock selection (a “bottom-up” approach) rather than on forecasting stock market trends (a “top-down” approach).

The portfolio may purchase securities of companies in initial public offerings (IPOs).The portfolio may invest up to 30% of its assets in foreign securities, and up to 25% of its assets in any one foreign coun-try.The portfolio also may invest in securities issued by other investment companies, including securities issued by exchange-traded investment companies which are designed to provide investment results corresponding to an equity index. The portfolio also may invest in investment grade debt securities of domestic or foreign issuers that the portfolio manager believes — based on market conditions, the financial condition of the issuer, general economic conditions, and other relevant factors —offer opportunities for capital growth.

Concepts to understand

Growth companies: companies whose revenues and/or earnings are expected to grow faster than the overall market. Often, growth stocks pay little or no dividends, have relatively high price-to-earnings, price-to-book and price-to-sales ratios, and tend to be more volatile than value stocks.

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money.

Market risk. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s products or services.

Growth stock risk. Investors often expect growth companies to increase their earnings at a certain rate. If these expectations are not met, investors can punish the stocks inordinately, even if earnings do increase. In addition, growth stocks typically lack the dividend yield that can cushion stock prices in market downturns.

Foreign investment risk. To the extent the portfolio invests in foreign securities, its performance will be influenced by political, social and economic factors affecting investments in foreign companies. Special risks associated with investments in foreign companies include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards.

Foreign currency risk. Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged.

Market sector risk. The portfolio may significantly overweight or underweight certain companies, industries or market sectors, which may cause the portfolio’s performance to be more or less sensitive to developments affecting those companies, industries or sectors.

Derivatives risk. The portfolio may invest in derivative instruments, such as options, futures and options on futures (including those relating to stocks, indexes, foreign currencies and interest rates). A small investment in derivatives could have a potentially large impact on the portfolio’s performance.The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in the value of a derivative held by the portfolio will not correlate with the portfolio’s other investments.

Other potential risks

Under adverse market conditions, the portfolio could invest some or all of its assets in U.S. Treasury securities and money market securities. Although the portfolio would do this for temporary purposes, it could reduce the benefit from any upswing in the market. During such periods, the portfolio may not achieve its investment objective.

The portfolio may engage in short-term trading, which could produce higher transaction costs.

Investing in exchange-traded funds, which are investment companies, may involve duplication of advisory fees and certain other expenses.

IPO risk. The portfolio may purchase securities of companies in IPOs. The prices of securities purchased in IPOs can be very volatile.The effect of IPOs on the portfolio’s performance depends on a variety of factors, including the number of IPOs the portfolio invests in relative to the size of the portfolio and whether and to what extent a security purchased in an IPO appreciates or depreciates in value.As a fund’s asset base increases, IPOs often have a diminished effect on such fund’s performance.

What the portfolio is — and isn’t

The Portfolio 3

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Initial shares from year to year. The table compares the average annual total returns of each of the portfolio’s share classes to those of the Standard & Poor’s 500/BARRA Growth Index (S&P 500/BARRA Growth Index), a broad measure of the performance of stocks in the S&P 500 Index with the highest price-to-book ratios. Performance for the portfolio’s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio’s Initial shares prior to that date.The historical performance of the portfolio’s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses.

Average annual total returns as of 12/31/04

			Since inception
			of portfolio
	1 Year	5 Years	(9/30/98)

Initial shares	7.86%	-9.61%	1.04%
Service shares	7.68%	-9.65%	1.00%
S&P 500 BARRA
Growth Index	6.13%	-7.07%	1.64%

Additional costs

EXPENSES

Investors using this portfolio to fund a VA contract or a VLI policy will pay certain fees and expenses in connection with the portfolio, which are described in the table below. Annual portfolio operating expenses are paid out of portfolio assets, so their effect is included in the portfolio’s share price. As with the performance information given previously, these figures do not reflect any fees or charges imposed by participating insurance companies under their VA contracts or VLI policies.

Fee table
	Initial	Service
	shares	shares

Annual portfolio operating expenses
% of average daily net assets
Management fees	0.75%	0.75%
Rule 12b-1 fee	none	0.25%
Other expenses	0.25%	0.25%

Total annual portfolio
operating expenses	1.00%	1.25%
Fee waiver and/or expense
reimbursement	-	(0.25%)

Net operating expenses*	1.00%	1.00%

* The Dreyfus Corporation has agreed, until December 31, 2005, to

waive receipt of its fees and/or assume the expenses of the portfolio so

that the expenses of neither class (excluding taxes, brokerage commissions,

extraordinary expenses, interest expenses and commitment fees on bor-

rowings) exceed 1.00%. For the prior year, the application of Dreyfus’

fee waiver and/or expense reimbursement resulted in net operating

expenses being 0.97% for the portfolio’s Initial shares.

Expense example
	1 Year	3 Years	5 Years	10 Years

Initial shares	$102	$318	$552	$1,225

Service shares	$102	$372	$662	$1,489

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

The Portfolio 5

MANAGEMENT

Investment advisers

The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.72% of the portfolio’s average daily net assets. Dreyfus is the primary mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

Dreyfus has engaged its growth specialist affiliate, Founders Asset Management LLC (Founders), to serve as the portfolio’s sub-investment adviser. Founders, located at 210 University Boulevard, Suite 800, Denver, Colorado 80206, and its predecessor companies have been offering tools to help investors pursue their financial goals since 1938. Founders is a wholly owned subsidiary of Dreyfus Service Corporation, which is a wholly owned subsidiary of Dreyfus. As of December 31, 2004, Founders managed mutual funds and other client accounts having aggregate assets of approximately $2.36 billion.

John B. Jares is the portfolio’s primary portfolio manager. Mr. Jares, a chartered financial analyst, has been the portfolio’s primary portfolio manager, and has been employed by Founders, since November 2001. Mr. Jares is a vice president of investments. Prior to joining Founders, Mr. Jares was formerly a vice president and senior portfolio manager at Delaware Investments from May 2000 to November 2001.The Statement of Additional Information provides additional information about the portfolio manager’s compensation, other accounts managed by the portfolio manager, and the portfolio manager’s ownership of portfolio shares.

In early 2004, two purported class and derivative actions were filed against Mellon Financial, Mellon Bank, N.A., Dreyfus, Founders, and certain directors of the Dreyfus Funds and the Dreyfus Founders Funds (together, the Funds) in the United States District Court for the Western District of Pennsylvania. In September 2004, plaintiffs served a Consolidated Amended Complaint (the Amended Complaint) on behalf of a purported class of all persons who acquired interests in any of the Funds between January 30, 1999 and November 17, 2003, and derivatively on behalf of the Funds. The Amended Complaint in the newly styled In re Dreyfus Mutual Funds Fee Litigation also named Dreyfus Service Corporation, Premier Mutual Fund Services, Inc. and two additional Fund directors as defendants and alleges violations of the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Pennsylvania Unfair Trade Practices and Consumer Protection Law and common-law claims. Plaintiffs seek to recover allegedly improper and excessive Rule 12b-1 and advisory fees allegedly charged to the Funds for marketing and distribution services. More specifically, plaintiffs claim, among other things, that 12b-1 fees and directed brokerage were improperly used to pay brokers to recommend the Funds over other funds, and that such payments were not disclosed to investors. In addition, plaintiffs assert that economies of scale and soft-dollar benefits were not passed on to the Funds. Plaintiffs further allege that 12b-1 fees were improperly charged to certain of the Funds that were closed to new investors. The Amended Complaint seeks compensatory and puni-tive damages, rescission of the advisory contracts, and an accounting and restitution of any unlawful fees, as well as an award of attorneys’ fees and litigation expenses. As noted, some of the claims in this litigation are asserted derivatively on behalf of the Funds that have been named as nominal defendants. With respect to such derivative claims, no relief is sought against the Funds. Dreyfus believes the allegations to be totally without merit and intends to defend the action vigorously. Defendants filed motions to dismiss the Amended Complaint on November 12,2004,and those motions are pending.

Distributor

Code of ethics

The Portfolio 7

FINANCIAL HIGHLIGHTS

audited by Ernst & Young LLP, whose report, along with the portfolio’s financial statements, is included in the annual report, which is available upon request. Keep in mind that fees and charges imposed by participating insurance companies, which are not reflected in the tables, would reduce the investment returns that are shown.

		Year Ended December 31,
Initial shares	2004	2003	2002	2001	2000

Per-Share Data ($):
Net asset value, beginning of period	11.03	8.44	11.77	14.73	19.87
Investment operations: Investment income (loss) — net ¹	.07	.01	(.01)	.01	.02
Net realized and unrealized gain (loss) on investments	.80	2.58	(3.31)	(2.96)	(5.03)
Total from investment operations	.87	2.59	(3.32)	(2.95)	(5.01)
Distributions: Dividends from investment income — net	(.06)	—	(.01)	(.01)	—
Dividends from net realized gain
on investments	—	—	—	—	(.13)
Total distributions	(.06)	—	(.01)	(.01)	(.13)
Net asset value, end of period	11.84	11.03	8.44	11.77	14.73
Total Return (%)	7.86	30.69	(28.25)	(20.03)	(25.40)

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.00	1.09	1.09	1.09	1.08

Ratio of net expenses to average net assets	.97	1.00	1.00	.99	.97

Ratio of net investment income (loss) to average net assets	.65	.08	(.08)	.08	.11

Portfolio turnover rate	114.49	126.24	165.08	180.84	171.96

Net assets, end of period ($ x 1,000)	16,045	16,725	14,442	25,607	28,583

¹Based on average shares outstanding at each month end.

		Year Ended December 31,
Service shares	2004	2003	2002	2001	2000¹

Per-Share Data ($):
Net asset value, beginning of period	11.02	8.43	11.76	14.73	14.73

Investment operations: Investment income (loss) — net	.07 ²	.01 ²	(.01) ²	(.00) ^2,3	—

Net realized and unrealized gain (loss) on investments	.79	2.58	(3.31)	(2.96)	—
Total from investment operations	.86	2.59	(3.32)	(2.96)	—
Distributions: Dividends from investment income — net	(.06)	—	(.01)	(.01)	—
Net asset value, end of period	11.82	11.02	8.43	11.76	14.73
Total Return (%)	7.68	30.72	(28.21)	(20.16)	—

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.25	1.35	1.34	1.40	—

Ratio of net expenses to average net assets	1.00	1.00	1.00	1.00	—

Ratio of net investment income (loss) to average net assets	.63	.09	(.06)	(.01)	—

Portfolio turnover rate	114.49	126.24	165.08	180.84	171.96

Net assets, end of period ($ x 1,000)	5,370	5,719	4,333	4,147	— ⁴

¹		The portfolio commenced offering Service shares on December 31, 2000.
²		Based on average shares outstanding at each month end.
³		Amount represents less than $.01 per share.
⁴		Amount represents less than $1,000.

The Portfolio 9

Account Information

ACCOUNT POLICIES

Buying/Selling shares

The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided that the orders are received by the portfolio in proper form on the next business day.The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios: Founders Growth Portfolio/share class), for purchase of portfolio shares. The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead), account registration and dealer number, if applicable, of the participating insurance company.

The portfolio reserves the right to:

change or discontinue its exchange privilege, or temporarily suspend the privilege during unusual market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for example, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, including those from any participating insurance company, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

Account Information 11

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Since the portfolio’s shareholders are the participating insurance companies and their separate accounts, the tax treatment of dividends and distributions will depend on the tax status of the participating insurance company. Accordingly, no discussion is included as to the federal personal income tax consequences to policyowners. For this information, policyowners should consult the prospectus of the separate account of the participating insurance company or their tax advisers.

Participating insurance companies should consult their tax advisers about federal, state and local tax consequences.

Who the shareholders are

EXCHANGE PRIVILEGE

NOTES

For More Information

Dreyfus Investment Portfolios

Founders Growth Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Describes the portfolio’s performance, lists portfolio holdings and contains a letter from the portfolio manager discussing recent market conditions, economic trends and portfolio strategies that significantly affected the portfolio’s performance during the last fiscal year. The portfolio’s most recent annual and semiannual reports are available at www.dreyfus.com.

Statement of Additional Information (SAI)

Portfolio Holdings

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

By telephone

Call 1-800-554-4611 or 516-338-3300

By mail Write to:

The Dreyfus Family of Funds

144 Glenn Curtiss Boulevard

Uniondale, NY 11556-0144

Attn: Institutional Servicing

On the Internet Text-only versions of certain fund

documents can be viewed online or downloaded from:

http://www.sec.gov

Dreyfus Investment Portfolios

MidCap Stock Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		4
Expenses		5
Management		6
Financial Highlights		8

Account Information

Account Policies		10
Distributions and Taxes		12
Exchange Privilege		12

For More Information

See back cover.

GOAL/APPROACH

The portfolio seeks investment results that are greater than the total return performance of publicly traded common stocks of medium-size domestic companies in the aggregate, as represented by the Standard & Poor’s MidCap 400^®Index (S&P 400). To pursue this goal, the portfolio normally invests at least 80% of its assets in stocks of midsize companies. The portfolio invests in growth and value stocks, which are chosen through a disciplined investment process that combines computer modeling techniques, fundamental analysis and risk management. Consistency of returns compared to the S&P 400 is a primary goal of the investment process. The portfolio’s stock investments may include common stocks, preferred stocks, convertible securities and depositary receipts, including those issued in initial public offerings (IPOs) or shortly thereafter.

In selecting securities, Dreyfus uses a computer model to identify and rank stocks within an industry or sector, based on several characteristics, including:

value, or how a stock is priced relative to its perceived intrinsic worth
growth, in this case the sustainability or growth of earnings
financial profile, which measures the financial health of the company

Next, based on fundamental analysis, Dreyfus generally selects the most attractive of the higher ranked securities, drawing on a variety of sources, including internal as well as Wall Street research, and company management.

Dreyfus then manages risk by diversifying across companies and industries, limiting the potential adverse impact from any one stock or industry.The portfolio is structured so that its sector weightings and risk characteristics, such as growth, size, quality and yield, are similar to those of the S&P 400.

Concepts to understand

Midsize companies: generally, established companies that may not be well known with market capitalizations ranging between $1 billion and $15 billion at the time of purchase. This range may fluctuate depending on changes in the value of the stock market as a whole. Midsize companies may lack the resources to weather economic shifts, though they can be faster to innovate than large companies.

Computer model: a proprietary computer model that evaluates and ranks a large universe of stocks. The model screens each stock for relative attractiveness within its economic sector and industry. Dreyfus reviews each of the screens on a regular basis and maintains the flexibility to adapt the screening criteria to changes in market conditions.

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money.

Market risk. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s products or services.

Midsize company risk. Midsize companies carry additional risks because their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies. Some of the portfolio’s investments will rise and fall based on investor perception rather than economic factors.
Other investments, including special situations, are made in anticipation of future products and services or events whose delay or cancellation could cause the stock price to drop.

Stock selection risk. Although the portfolio seeks to manage risk by broadly diversifying among industries and by maintaining a risk profile very similar to the S&P 400, the portfolio is expected to hold fewer securities than the index. Owning fewer securities and the ability to purchase stocks of companies not listed in the S&P 400 can cause the portfolio to underperform the index.

Growth and value stock risk. By investing in a mix of growth and value companies, the portfolio assumes the risks of both. Investors often expect growth companies to increase their earnings at a certain rate. If these expectations are not met, investors can punish the stocks inordinately, even if earnings do increase. In addition, growth stocks typically lack the dividend yield that can cushion stock prices in market downturns. Value stocks involve the risk that they may never reach what the investment adviser believes is their full market value, either because the market fails to recognize the stock’s intrinsic worth or the investment adviser misgauged that worth. They also may decline in price, even though in theory they are already undervalued.

Leveraging risk. The use of leverage, such as borrowing money to purchase securities, engaging in reverse repurchase agreements, lending portfolio securities and engaging in forward commitment transactions, will magnify the portfolio’s gains or losses.
Foreign investment risk. To the extent the portfolio invests in foreign securities, its performance will be influenced by political, social and economic factors affecting investments in foreign companies. Special risks associated with investments in foreign companies include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards.
Foreign currency risk. Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged.

Derivatives risk. The portfolio may invest in deriv- ative instruments, such as options, futures and options on futures (including those relating to stocks, indexes and interest rates). A small invest- ment in derivatives could have a potentially large impact on the portfolio’s performance.The use of derivatives involves risks different from, or possi- bly greater than, the risks associated with invest- ing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in the value of a derivative held by the portfolio will not correlate with the portfolio’s other investments.
IPO risk. The portfolio may purchase securities of companies in IPOs.The prices of securities pur- chased in IPOs can be very volatile.The effect of IPOs on the portfolio’s performance depends on a variety of factors, including the number of IPOs the portfolio invests in relative to the size of the portfolio and whether and to what extent a secu- rity purchased in an IPO appreciates or depreci- ates in value.As a fund’s asset base increases, IPOs often have a diminished effect on such fund’s performance.

Other potential risks

What the portfolio is — and isn’t

The Portfolio 3

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Initial shares from year to year.The table compares the average annual total returns of each of the portfolio’s share classes to those of the S&P 400, a broad measure of mid-cap stock performance. Performance for the portfolio’s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio’s Initial shares prior to that date. The historical performance of the portfolio’s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses.

Average annual total returns as of 12/31/04

			Since
			inception
			of portfolio
	1 Year	5 Years	(5/1/98)

Initial shares	14.48%	6.69%	6.19%
Service shares	14.23%	6.54%	6.08%
S&P 400	16.48%	9.54%	10.16%*

* For comparative purposes, the value of the index on 4/30/98 is used

as the beginning value on 5/1/98.

Additional costs

EXPENSES

Investors using this portfolio to fund a VA contract or a VLI policy will pay certain fees and expenses in connection with the portfolio, which are described in the table below. Annual portfolio operating expenses are paid out of portfolio assets, so their effect is included in the portfolio’s share price. As with the performance information given previously, these figures do not reflect any fees or charges imposed by participating insurance companies under their VA contracts or VLI policies.

Fee table
	Initial	Service
	shares	shares

Annual portfolio operating expenses
% of average daily net assets
Management fees	0.75%	0.75%
Rule 12b-1 fee	none	0.25%
Other expenses	0.03%	0.03%

Total annual portfolio
operating expenses	0.78%	1.03%
Fee waiver and/or expense
reimbursement	—	(0.03%)

Net operating expenses*	0.78%	1.00%

^*The Dreyfus Corporation has agreed, until December 31, 2005, to

waive receipt of its fees and/or assume the expenses of the portfolio so

that the expenses of neither class (excluding taxes, brokerage commis-

sions, extraordinary expenses, interest expenses and commitment fees

on borrowings) exceed 1.00%.

Expense example
	1 Year	3 Years	5 Years	10 Years

Initial shares	$80	$249	$433	$966

Service shares	$102	$325	$566	$1,257

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

The Portfolio 5

MANAGEMENT

Investment adviser

The investment adviser for the fund is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.75% of the portfolio’s average daily net assets. Dreyfus is the primary mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

John O’Toole is the portfolio’s primary portfolio manager, a position he has held since the portfolio’s inception. He has been employed by Dreyfus since October 1994. Mr. O’Toole also is a senior vice president and a portfolio manager for Mellon Equity Associates, LLP, an affiliate of Dreyfus, and has been employed by Mellon Bank, N.A. since 1979. The Statement of Additional Information provides additional information about the portfolio manager’s compensation, other accounts managed by the portfolio manager, and the portfolio manager’s ownership of portfolio shares.

Distributor

Code of ethics

The portfolio, Dreyfus and DSC have each adopted a code of ethics that permits its personnel, subject to such code, to invest in securities, including securities that may be purchased or held by the portfolio.The Dreyfus code of ethics restricts the personal securities transactions of its employees, and requires portfolio managers and other investment personnel to comply with the code’s preclearance and disclosure procedures.The primary purpose of the code is to ensure that personal trading by Dreyfus employees does not disadvantage any Dreyfus-managed fund.

The Portfolio 7

FINANCIAL HIGHLIGHTS

		Year Ended December 31,
Initial shares	2004	2003	2002	2001	2000

Per-Share Data ($):
Net asset value, beginning of period	15.82	12.04	13.80	14.29	13.44
Investment operations: Investment income — net ¹	.07	.04	.04	.03	.05
Net realized and unrealized gain (loss) on investments	2.22	3.78	(1.76)	(.50)	1.05
Total from investment operations	2.29	3.82	(1.72)	(.47)	1.10
Distributions: Dividends from investment income — net	(.07)	(.04)	(.04)	(.02)	(.03)
Dividends from net realized gain on investments	(.42)	—	—	—	(.13)
Dividends in excess of net realized gain on investments	—	—	—	—	(.09)
Total distributions	(.49)	(.04)	(.04)	(.02)	(.25)
Net asset value, end of period	17.62	15.82	12.04	13.80	14.29
Total Return (%)	14.48	31.72	(12.49)	(3.26)	8.28

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	.78	.82	.85	.89	1.04

Ratio of net expenses to average net assets	.78	.82	.85	.89	.98

Ratio of net investment income to average net assets	.43	.32	.32	.24	.34

Portfolio turnover rate	79.75	74.15	69.15	76.37	102.89

Net assets, end of period ($ x 1,000)	344,979	302,253	218,387	181,028	76,784

¹Based on average shares outstanding at each month end.

		Year Ended December 31,
Service shares	2004	2003	2002	2001	2000 ¹

Per-Share Data ($):
Net asset value, beginning of period	15.77	12.02	13.78	14.29	14.29

Investment operations: Investment income — net	.04 ²	.02 ²	.02 ²	.01 ²	—

Net realized and unrealized gain (loss) on investments	2.21	3.75	(1.75)	(.50)	—
Total from investment operations	2.25	3.77	(1.73)	(.49)	—
Distributions: Dividends from investment income — net	(.03)	(.02)	(.03)	(.02)	—

Dividends from net realized gain on investments	(.42)	—	—	—	—

Total distributions	(.45)	(.02)	(.03)	(.02)	—

Net asset value, end of period	17.57	15.77	12.02	13.78	14.29
Total Return (%)	14.23	31.48	(12.64)	(3.36)	—

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.03	1.06	1.10	1.17	—

Ratio of net expenses to average net assets	1.00	1.00	1.00	1.00	—

Ratio of net investment income to average net assets	.22	.12	.15	.07	—

Portfolio turnover rate	79.75	74.15	69.15	76.37	102.89

Net assets, end of period ($ x 1,000)	81,680	58,224	18,320	9,764	1

¹The portfolio commenced offering Service shares on December 31, 2000.
²Based on average shares outstanding at each month end.

The Portfolio 9

Account Information

ACCOUNT POLICIES

Buying/Selling shares

The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided that the orders are received by the portfolio in proper form on the next business day.The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios: MidCap Stock Portfolio/ share class), for purchase of portfolio shares. The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead), account registration and dealer number, if applicable, of the participating insurance company.

The portfolio is designed for long-term investors. Frequent purchases, redemptions and exchanges may disrupt portfolio management strategies and harm portfolio performance by diluting the value of portfolio shares and increasing brokerage and administrative costs. As a result, Dreyfus and the portfolio’s board have adopted a policy of discouraging excessive trading, short-term market timing and other abusive trading practices (frequent trading) that could adversely affect the portfolio or its operations. Dreyfus and the portfolio will not enter into arrangements with any person or group to permit frequent trading.

The portfolio reserves the right to:

change or discontinue its exchange privilege, or temporarily suspend the privilege during unusu al market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for exam ple, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, includ ing those from any participating insurance com pany, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

Account Information 11

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Since the portfolio’s shareholders are the participating insurance companies and their separate accounts, the tax treatment of dividends and distributions will depend on the tax status of the participating insurance company. Accordingly, no discussion is included as to the federal personal income tax consequences to policyowners. For this information, policyowners should consult the prospectus of the separate account of the participating insurance company or their tax advisors.

Participating insurance companies should consult their tax advisors about federal, state and local tax consequences.

Who the shareholders are

EXCHANGE PRIVILEGE

Shareholders can exchange shares of a class of the portfolio for shares of the same class of any other portfolio or fund managed by Dreyfus that is offered only to separate accounts established by insurance companies to fund VA contracts and VLI policies, or for shares of any such money market portfolio, subject to the terms and conditions relating to exchanges of the applicable insurance company prospectus. Policyowners should refer to the appli-cable insurance company prospectus for more information on exchanging portfolio shares.

NOTES

For More Information

Dreyfus Investment Portfolios

MidCap Stock Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Statement of Additional Information (SAI)

Portfolio Holdings

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

By telephone

Call 1-800-554-4611 or 516-338-3300

By mail Write to:

The Dreyfus Family of Funds

144 Glenn Curtiss Boulevard

Uniondale, NY 11556-0144

Attn: Institutional Servicing

On the Internet Text-only versions of certain fund

documents can be viewed online or downloaded from:

http://www.sec.gov

Dreyfus Investment Portfolios

Small Cap Stock Index Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		3
Expenses		4
Management		5
Financial Highlights		8

Account Information

Account Policies		9
Distributions and Taxes		11
Exchange Privilege		11

For More Information

See back cover.

Portfolio shares are offered only to separate accounts established by insurance companies to fund variable annuity contracts (VA contracts) and variable life insurance policies (VLI policies). Individuals may not purchase shares directly from, or place sell orders directly with, the portfolio. The VA contracts and VLI policies are described in the separate prospectuses issued by the participating insurance companies, as to which the portfolio assumes no responsibility. Conflicts may arise between the interests of VA contract holders and VLI poli-cyholders (collectively, policyowners). The board of trustees will monitor events to identify any material conflicts and, if such conflicts arise, determine what action, if any, should be taken.

The portfolio currently offers only Service shares.

GOAL/APPROACH

The portfolio seeks to match the performance of the Standard & Poor’s (S&P) SmallCap 600 Index^®. To pursue this goal, the portfolio invests in a representative sample of stocks included in the S&P SmallCap 600 Index, and in futures whose performance is related to the index, rather than attempt to replicate the index.

The portfolio attempts to have a correlation between its performance and that of the index of at least .95, before expenses. A correlation of 1.00 would mean that the portfolio and the index were perfectly correlated.

The portfolio’s investments are selected by a “sampling” process based on market capitalization, industry representation and other means. By using this sampling process, the portfolio typically will not invest in all 600 stocks in the S&P SmallCap 600 Index. However, at times, the portfolio may be fully invested in all the stocks that comprise the index. Under these circumstances, the portfolio maintains approximately the same weighting for each stock as the index does.The portfolio also may use stock index futures as a substitute for the sale or purchase of securities.

The S&P SmallCap 600 Index is composed of 600 domestic stocks with market capitalizations ranging between approximately $70 million and $4.9 billion, depending on index composition. Each stock is weighted by its market capitalization, which means larger companies have greater representation in the index than smaller ones.

Concepts to understand

Index funds: mutual funds that are designed to meet the performance of an underlying benchmark index. In seeking to match index performance, the manager uses a passive management approach and purchases all or a representative sample of the stocks comprising the benchmark index. Because the portfolio has expenses, performance will tend to be slightly lower than that of the target benchmark.

Sampling: a statistical process used to select stocks so that the portfolio has investment characteristics that closely approximate those of the index.

Small-cap companies: generally, new and often entrepreneurial companies. Small-cap companies tend to grow faster than large-cap companies, but frequently are more volatile, are more vulnerable to major setbacks, and fail more often than larger companies.

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money.

Market risk. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s products or services.

Concepts to understand

“Standard & Poor’s^®,” “S&P^®,” “S&P SmallCap 600” and “Standard & Poor’s SmallCap 600” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the portfolio. The portfolio 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 portfolio. Please see the Statement of Additional Information which sets forth certain additional disclaimers and limitations of liability on behalf of S&P.

Small and midsize company risk. Small and midsize companies carry additional risks because their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies. The shares of smaller companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the portfolio’s ability to sell these securities.These companies may have limited product lines, markets or financial resources, or may depend on a limited management group. Some of the portfolio’s investments will rise and fall based on investor perception rather than economic factors. Other investments, including special situations, are made in anticipation of future products and services or events whose delay or cancellation could cause the stock price to drop.

Other potential risks

Indexing strategy risk. The portfolio uses an indexing strategy. It does not attempt to manage market volatility, use defensive strategies or reduce the effects of any long-term periods of poor stock performance. The correlation between portfolio and index performance may be affected by the portfolio’s expenses,changes in securities markets,changes in the composition of the index and the timing of purchases and redemptions of portfolio shares.

Derivatives risk. The portfolio may invest in stock index futures contracts whose performance is tied to the S&P SmallCap 600 Index.While used primarily as a substitute for the sale or purchase of securities, such investments can increase the portfolio’s volatility and lower its return. Derivatives, such as futures contracts, can be illiquid, and a small investment in certain derivatives could have a potentially large impact on the portfolio’s performance.

What the portfolio is — and isn’t

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Service shares from year to year.The table compares the average annual total returns of the portfolio’s Service shares to those of the S&P SmallCap 600 Index, a broad measure of small-cap stock perfor-mance.All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results.

Average annual total returns as of 12/31/04

		Since inception
		of portfolio
	1 Year	(5/1/02)


Service shares	21.89%	9.97%

S&P SmallCap 600 Index	22.65%	11.01%*

* For comparative purposes, the value of the index on 4/30/02 is used as

the beginning value on 5/1/02.

Additional costs

The Portfolio 3

EXPENSES

Investors using this portfolio to fund a VA contract or a VLI policy will pay certain fees and expenses in connection with the portfolio, which are described in the table below. Annual portfolio operating expenses are paid out of portfolio assets, so their effect is included in the portfolio’s share price. As with the performance information given previously, these figures do not reflect any fees or charges imposed by participating insurance companies under their VA contracts or VLI policies.

Fee table
			Service
			shares

Annual portfolio operating expenses
% of average daily net assets
Management fees			0.35%
Rule 12b-1 fee			0.25%
Other expenses			0.00%

Total annual portfolio operating expenses			0.60%




Expense example
1 Year	3 Years	5 Years	10 Years


Service shares $61	$192	$335	$750

This example shows what an investor could pay in expenses over time. It uses the same hypothetical conditions other funds use in their prospectuses: $10,000 initial investment, 5% total return each year and no changes in expenses. This example does not reflect fees and expenses incurred under VA contracts and VLI policies; if they were reflected, the figures in the example would be higher. The figures shown would be the same whether investors sold their shares at the end of a period or kept them. Because actual returns and expenses will be different, the example is for comparison only.

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

Under the portfolio’s management contract, Dreyfus has agreed to pay all of the portfolio’s expenses, except management fees, Rule 12b-1 fees, brokerage commissions, taxes, interest, fees and expenses of the non-interested board members, fees and expenses of independent counsel to the portfolio and the non-interested board members, and extraordinary expenses.

Rule 12b-1 fee: the fee paid to the portfolio’s distributor for distributing the portfolio’s shares, for advertising and marketing and shareholder account service and maintenance. The distributor may pay all or part of this fee to participating insurance companies and the principal underwriter for their variable insurance products. Because this fee is paid out of the portfolio’s assets on an ongoing basis, over time it will increase the cost of an investment in the portfolio and could cost investors more than paying other types of sales charges.

Other expenses: Under its agreement with Dreyfus, the portfolio only pays the management fee, Rule 12b-1 fee and certain other expenses described above which were 0% of the portfolio’s average daily net assets for the past fiscal year.

MANAGEMENT

Investment adviser

The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.35% of the portfolio’s average daily net assets. Dreyfus is the primary mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

Thomas Durante is the portfolio’s primary portfolio manager. Mr. Durante has been the primary portfolio manager of the portfolio since September 2003 and has been employed by Dreyfus since August 1982. He is also a portfolio manager with Mellon Equity Associates, an affiliate of Dreyfus, and has been employed by Mellon Bank, N.A. since January 2000. The Statement of Additional Information provides additional information about the portfolio manager’s compensation, other accounts managed by the portfolio manager, and the portfolio manager’s ownership of portfolio shares. Dreyfus manages the portfolio by making investment decisions based on the portfolio’s investment objective, policies and restrictions in seeking to match the performance of the S&P SmallCap 600 Index.

The Portfolio 5

MANAGEMENT (continued)

and intends to defend the action vigorously. Defendants filed motions to dismiss the Amended Complaint on November 12, 2004, and those motions are pending.

Distributor

The portfolio’s distributor is Dreyfus Service Corporation (DSC), a wholly-owned subsidiary of Dreyfus. Dreyfus or DSC may provide additional cash payments out of its own resources to financial intermediaries that sell shares of the portfolio or provide other services. Such payments are in addition to any sales charges, 12b-1 fees and/or shareholder services fees paid by the portfolio. These additional payments may be made to intermedi-aries, including affiliates, that provide shareholder servicing, sub-administration, recordkeeping and/or sub-transfer agency services, marketing support and/or access to sales meetings, sales representatives and management representatives of the financial intermediary. Cash compensation also may be paid to intermediaries for inclusion of the portfolio on a sales list, including a preferred or select sales list or in other sales programs.These payments sometimes are referred to as “revenue sharing.” In some cases, these payments may create an incentive for a financial intermediary or its employees to recommend or sell shares of the portfolio to you. Please contact your financial representative for details about any payments they or their firm may receive in connection with the sale of portfolio shares or the provision of services to the portfolio.

Code of ethics

Performance Information for a

Public Fund and the Portfolio

The portfolio has the same investment objective and follows the same investment policies and strategies as a corresponding mutual fund advised by Dreyfus that is offered to the public — Dreyfus Smallcap Stock Index Fund (the Public Fund).The first table at right shows average annual total return information for the Public Fund and for the S&P SmallCap 600 Index.The index is unmanaged and an investor may not invest directly in the index.The second table shows average annual total return information for the portfolio’s Service shares and for the S&P SmallCap 600 Index. Investors should not consider this performance data as an indication of the future performance of the portfolio or the Public Fund.

The performance figures for the Public Fund reflect the deduction of the historical fees and expenses paid by the Public Fund, and not those paid by the portfolio. Total annual operating expenses of the Public Fund for its fiscal year ended October 31, 2004 were 0.50% of its average daily net assets. If the Public Fund’s performance had been adjusted to reflect the expenses of the portfolio, the performance shown would have been lower.The performance figures for the Public Fund do not reflect the deduction of charges or expenses attributable to VA contracts or VLI policies, which, if reflected, would lower the performance quoted. Policyowners should refer to the applicable insurance company prospectus for information on any such charges and expenses.Additionally, although it is anticipated that the portfolio and the Public Fund will hold similar securities, their investment results are expected to differ. In particular, differences in asset size and in cash flow resulting from purchases and redemptions of portfolio shares may result in different security selections, differences in the relative weightings of securities or differences in the price paid for particular portfolio holdings. Please remember that past performance is not indicative of future returns, and that the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than

their original cost.To obtain a prospectus containing more information about the Public Fund, call the number or write to the address set forth on the back cover.

Public Fund

Historical performance information for the Public Fund and the S&P SmallCap 600 Index for various periods ended December 31, 2004 is shown below. The performance information for the Public Fund was calculated pursuant to SEC guidelines. All returns reflect the reinvestment of dividends and other distributions.

Average annual total returns as of 12/31/04

			Since
			inception
	1 Year	5 Years	(6/30/97)


Dreyfus Smallcap
Stock Index Fund	22.21%	11.09%	10.38%

S&P SmallCap
600 Index	22.65%	11.60%	10.83%



Portfolio

Average annual total returns for the portfolio’s Service shares and for the S&P SmallCap 600 Index for various periods ended December 31, 2004, as calculated pursuant to SEC guidelines, are as follows:

Average annual total returns as of 12/31/04

		Since
		inception
	1 Year	(5/1/02)


Small Cap Stock Index Portfolio —
Service shares	21.89%	9.97%

S&P SmallCap
600 Index	22.65%	11.01%*

* For comparative purposes, the value of the index on 4/30/02 is used as

the beginning value on 5/1/02.

The Portfolio 7

FINANCIAL HIGHLIGHTS

The following table describes the performance of the portfolio’s Service shares for the fiscal periods indicated. Certain information reflects financial results for a single portfolio share. “Total return” shows how much an investment in the portfolio would have increased (or decreased) during each period, assuming the investor had reinvested all dividends and distributions. These figures have been

independently audited by Ernst & Young LLP, whose report, along with the portfolio’s financial statements, is included in the annual report, which is available upon request. Keep in mind that fees and charges imposed by participating insurance companies, which are not reflected in the table, would reduce the investment returns that are shown.

		Year Ended December 31,
Service shares	2004	2003	2002 ¹

Per-Share Data ($):
Net asset value, beginning of period	13.11	9.58	12.50
Investment operations: Investment income — net ²	.08	.04	.03
Net realized and unrealized gain (loss) on investments	2.79	3.58	(2.94)
Total from investment operations	2.87	3.62	(2.91)
Distributions: Dividends from investment income — net	(.06)	(.02)	(.01)

Dividends from net realized gain on investments	(.33)	(.07)	—

Total distributions	(.39)	(.09)	(.01)

Net asset value, end of period	15.59	13.11	9.58
Total Return (%)	21.89	37.78	(23.25) ³

Ratios/Supplemental Data (%):
Ratio of expenses to average net assets	.60	.60	.40 ³
Ratio of net investment income to average net assets	.57	.33	.27 ³

Portfolio turnover rate	25.06	32.49	117.52 ³

Net assets, end of period ($ x 1,000)	355,175	179,454	42,094

¹		From May 1, 2002 (commencement of operations) to December 31, 2002.
²		Based on average shares outstanding at each month end.
³		Not annualized.

Account Information

ACCOUNT POLICIES

Buying/Selling shares

The price for portfolio shares is the net asset value per share (NAV), which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided that the orders are received by the portfolio in proper form on the next business day.The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios: Small Cap Stock Index Portfolio/Service shares), for purchase of portfolio shares.The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead), account registration and dealer number, if applicable, of the participating insurance company.

To maximize the portfolio’s ability to track the S&P SmallCap 600 Index, shareholders are urged to transmit redemption requests so that they may be received by the portfolio or its authorized agent prior to 12:00 noon Eastern time on the day the shareholder wants the request to be effective.

Account Information 9

ACCOUNT POLICIES (continued)

and the portfolio’s board have adopted a policy of discouraging excessive trading, short-term market timing and other abusive trading practices (frequent trading) that could adversely affect the portfolio or its operations. Dreyfus and the portfolio will not enter into arrangements with any person or group to permit frequent trading.

The portfolio reserves the right to:

change or discontinue its exchange privilege, or temporarily suspend the privilege during unusual market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for example, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, including those from any participating insurance company, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

reason, they cannot meet their commitment to make portfolio shares available in accordance with the terms of the prospectus and relevant rules and regulations.

Dreyfus supplements the surveillance processes in place at participating insurance companies by monitoring total purchases and redemptions of portfolio shares on a periodic basis.If Dreyfus identifies patterns that may be indicative of frequent trading of large amounts, Dreyfus contacts the participating insurance company for assistance in disaggregating selected omnibus trades into their component parts.When this process identifies multiple roundtrips (i.e., an investment that is substantially liquidated within 60 days), Dreyfus instructs the participating insurance compa-ny to temporarily or permanently bar such policy-owner’s future purchases of portfolio shares if Dreyfus concludes the policyowner is likely to engage in frequent trading. Dreyfus also may instruct the participating insurance company to apply these restrictions across all accounts under common ownership, control or perceived affiliation. In all instances, Dreyfus seeks to make these determinations to the best of its abilities in a manner that it believes is consistent with shareholder interests.

In addition to applying restrictions on future purchases or exchanges, Dreyfus or the participating insurance company may cancel or reverse the purchase or exchange on the business day following the transaction if the participating insurance company’s surveillance system identifies the account as one that is likely to engage in frequent trading. Dreyfus may also instruct the participating insurance company to cancel or reverse the purchase or exchange on the following business day if the trade represents a significant amount of the portfolio’s assets and Dreyfus has concluded that the account is likely to engage in frequent trading.

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Since the portfolio’s shareholders are the participating insurance companies and their separate accounts, the tax treatment of dividends and distributions will depend on the tax status of the participating insurance company. Accordingly, no discussion is included as to the federal personal income tax consequences to policyowners. For this information, policyowners should consult the prospectus of the separate account of the participating insurance company or their tax advisers.

Participating insurance companies should consult their tax advisers about federal, state and local tax consequences.

Who the shareholders are

EXCHANGE PRIVILEGE

Shareholders can exchange Service class shares of the portfolio for Service class shares of any other portfolio or fund managed by Dreyfus that is offered only to separate accounts established by insurance companies to fund VA contracts and VLI policies, or for shares of any such money market portfolio, subject to the terms and conditions relating to exchanges of the applicable insurance company prospectus. Policyowners should refer to the applicable insurance company prospectus for more information on exchanging portfolio shares.

Account Information 11

NOTES

For More Information

Dreyfus Investment Portfolios

Small Cap Stock Index Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Statement of Additional Information (SAI)

Portfolio Holdings

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

By telephone

Call 1-800-554-4611 or 516-338-3300

By mail Write to:

The Dreyfus Family of Funds

144 Glenn Curtiss Boulevard

Uniondale, NY 11556-0144

Attn: Institutional Servicing

On the Internet Text-only versions of certain fund

documents can be viewed online or downloaded from:

http://www.sec.gov

Dreyfus Investment Portfolios

Technology Growth Portfolio

The Portfolio

Contents


The Portfolio

Goal/Approach		1
Main Risks		2
Past Performance		4
Expenses		5
Management		6
Financial Highlights		8

Account Information

Account Policies		10
Distributions and Taxes		12
Exchange Privilege		12

For More Information

See back cover.

GOAL/APPROACH

The portfolio seeks capital appreciation. To pursue this goal, the portfolio normally invests at least 80% of its assets in the stocks of growth companies of any size that Dreyfus believes to be leading producers or beneficiaries of technological innovation. Up to 25% of the portfolio’s assets may be invested in foreign securities. The portfolio’s stock investments may include common stocks, preferred stocks and convertible securities.

In choosing stocks, the portfolio looks for technology companies with the potential for strong earnings or revenue growth rates, although some of the portfolio’s investments may currently be experiencing losses.The portfolio focuses on the technology sectors that are expected to outperform on a relative scale. The more attractive sectors are overweighted. Among the sectors evaluated are those that develop, produce or distribute products or services in the computer, internet, semiconductor, electronics, communications, health care, biotech-nology, medical services, computer software and hardware, electronic components and systems, network and cable broadcasting, telecommunications, defense and aerospace, and environmental sectors.

The portfolio typically sells a stock when the manager believes there is a more attractive alternative, the stock’s valuation is excessive or there are deteriorating fundamentals, such as a loss of competitive advantage, a failure in management execution or deteriorating capital structure. The portfolio also may sell stocks when the manager’s evaluation of a sector has changed.

Although the portfolio looks for companies with the potential for strong earnings growth rates, some of the portfolio’s investments may currently be experiencing losses. Moreover, the portfolio may invest in small-, mid- and large-cap securities in all available trading markets, including initial public offerings (IPOs) and the aftermarket.

The portfolio may, but is not required to, use derivatives, such as futures and options, as a substitute for taking a position in an underlying asset, to increase returns, or as part of a hedging strategy.The portfolio also may engage in short-selling, typically for hedging purposes, such as to limit exposure to a possible market decline in the value of its portfolio securities.

Concepts to understand

Growth companies: companies whose revenues and/or earnings are expected to grow faster than the overall market. Often, growth stocks pay little or no dividends, have relatively high price-to-earnings, price-to-book and price-to-sales ratios, and tend to be more volatile than value stocks.

The Portfolio 1

MAIN RISKS

The portfolio’s principal risks are discussed below. The value of a shareholder’s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money.

Technology company risk. Technology companies, especially small-cap technology companies, involve greater risk because their revenue and/or earnings tend to be less predictable (and some companies may be experiencing significant loss- es) and their share prices tend to be more volatile. Certain technology companies may have limited product lines, markets or financial resources, or may depend on a limited management group. In addition, these companies are strongly affected by worldwide technological developments, and their products and services may not be economically successful or may quickly become outdated. Investor perception may play a greater role in determining the day-to-day value of tech stocks than it does in other sectors. Portfolio investments made in anticipation of future products and ser- vices may decline dramatically in value if the anticipated products or services are delayed or cancelled.
Technology sector risk. The technology sector has been among the most volatile sectors of the stock market. Because the portfolio’s investments are concentrated in the technology sector, its performance will be affected by developments in that sector.
Market risk. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They also may decline because of factors that affect a par- ticular industry or industries, such as labor short- ages or increased production costs and competi- tive conditions within an industry.
Smaller company risk. The risks associated with technology companies are magnified in the case of small-cap technology companies.The shares of smaller companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the portfolio’s ability to sell these securities.

Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, finan- cial leverage and reduced demand for the issuer’s products or services.
Growth stock risk. Investors often expect growth companies to increase their earnings at a certain rate. If these expectations are not met, investors can punish the stocks inordinately, even if earn- ings do increase. In addition, growth stocks typi- cally lack the dividend yield that can cushion stock prices in market downturns.
Foreign investment risk. To the extent the portfolio invests in foreign securities, its performance will be influenced by political, social and economic factors affecting investments in foreign compa- nies. Special risks associated with investments in foreign companies include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards.
Foreign currency risk. Investments in foreign cur- rencies are subject to the risk that those curren- cies will decline in value relative to the U.S. dol- lar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged.
Leveraging risk. The use of leverage, such as bor- rowing money to purchase securities, engaging in reverse repurchase agreements, lending portfo- lio securities and engaging in forward commit- ment transactions, will magnify the portfolio’s gains or losses.
Derivatives risk. The portfolio may invest in derivative instruments, such as options, futures and options on futures (including those relating to stocks, indexes, foreign currencies and interest rates). A small investment in derivatives could have a potentially large impact on the portfolio’s performance.The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underly- ing assets. Derivatives can be highly volatile, illiq- uid and difficult to value, and there is the risk that changes in the value of a derivative held by the portfolio will not correlate with the portfo- lio’s other investments.

Short sale risk. The portfolio may make short sales, which involves selling a security it does not own in anticipation that the security’s price will decline. Short sales expose the portfolio to the risk that it will be required to buy the security sold short (also known as “covering” the short position) at a time when the security has appre- ciated in value, thus resulting in a loss to the portfolio.
IPO risk.The portfolio may purchase securities of companies in IPOs. The prices of securities purchased in IPOs can be very volatile.The effect of IPOs on the portfolio’s performance depends on a variety of factors, including the number of IPOs the portfolio invests in relative to the size of the portfolio and whether and to what extent a security purchased in an IPO appreciates or depreciates in value, and the asset base of the portfolio. As a fund’s asset base increases, IPOs often have a diminished effect on such fund’s performance.

What the portfolio is — and isn’t

Other potential risks

The portfolio may engage in short-term trading, which could produce higher transaction costs.

The Portfolio 3

PAST PERFORMANCE

The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the changes in the performance of the portfolio’s Initial shares from year to year. The table compares the average annual total returns of each of the portfolio’s share classes to those of the Standard & Poor’s 500 Composite Stock Price Index (S&P 500^®), a broad measure of stock performance, and to those of the Morgan Stanley High Technology 35 Index, an unmanaged, equal dollar-weighted index of 35 U.S. stocks from the electronics-based subsectors. Performance for the portfolio’s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio’s Initial shares prior to that date. The historical performance of the portfolio’s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses.

Average annual total returns as of 12/31/04

			Since
			inception
			of portfolio
	1 Year	5 Years	(8/31/99)


Initial shares	0.46%	-14.81%	-6.51%

Service shares	0.23%	-15.01%	-6.71%

S&P 500	10.87%	-2.30%	-0.10%

Morgan Stanley
High Technology
35 Index	7.06%	-10.97%	-2.73%

Additional costs

EXPENSES

Fee table
			Initial	Service
			shares	shares

Annual portfolio operating expenses
% of average daily net assets
Management fees			0.75%	0.75%
Rule 12b-1 fee			none	0.25%
Other expenses			0.10%	0.10%

Total			0.85%	1.10%




Expense example

	1 Year	3 Years	5 Years	10 Years


Initial shares	$87	$271	$471	$1,049

Service shares	$112	$350	$606	$1,340

This example shows what an investor could pay in expenses over time. It uses the same hypothetical conditions other funds use in their prospectuses: $10,000 initial investment, 5% total return each year and no changes in expenses. This example does not reflect fees and expenses incurred under VA contracts and VLI policies; if they were reflected, the figures in the example would be higher. The figures shown would be the same whether investors sold their shares at the end of a period or kept them. Because actual returns and expenses will be different, the example is for comparison only.

Concepts to understand

Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio’s operations.

The Portfolio 5

MANAGEMENT

Investment adviser

The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages approximately $159 billion in approximately 200 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.75% of the portfolio’s average daily net assets. Dreyfus is the prima-ry mutual fund business of Mellon Financial Corporation (Mellon Financial), a global financial services company with approximately $4.0 trillion of assets under management, administration or custody, including approximately $707 billion under management. Mellon Financial provides financial services for institutions, corporations and individuals, offering institutional asset management, mutual funds, private wealth management, asset servicing, human resources services and treasury services. Mellon Financial is headquartered in Pittsburgh, Pennsylvania.

The portfolio’s primary portfolio manager is Mark Herskovitz. Mr. Herskovitz has been the primary portfolio manager of the portfolio since its inception and has been employed by Dreyfus since 1996. The Statement of Additional Information provides additional information about the portfolio manager’s compensation, other accounts managed by the portfolio manager, and the portfolio manager’s ownership of portfolio shares.

District of Pennsylvania. In September 2004, plaintiffs served a Consolidated Amended Complaint (the Amended Complaint) on behalf of a purported class of all persons who acquired interests in any of the Funds between January 30, 1999 and November 17, 2003, and derivatively on behalf of the Funds. The Amended Complaint in the newly styled In re Dreyfus Mutual Funds Fee Litigation also named Dreyfus Service Corporation, Premier Mutual Fund Services, Inc. and two additional Fund directors as defendants and alleges violations of the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Pennsylvania Unfair Trade Practices and Consumer Protection Law and common-law claims. Plaintiffs seek to recover allegedly improper and excessive Rule 12b-1 and advisory fees allegedly charged to the Funds for marketing and distribution services. More specifically, plaintiffs claim, among other things, that 12b-1 fees and directed brokerage were improperly used to pay brokers to recommend the Funds over other funds, and that such payments were not disclosed to investors. In addition, plaintiffs assert that economies of scale and soft-dollar benefits were not passed on to the Funds. Plaintiffs further allege that 12b-1 fees were improperly charged to certain of the Funds that were closed to new investors. The Amended Complaint seeks compensatory and punitive damages, rescission of the advisory contracts, and an accounting and restitution of any unlawful fees, as well as an award of attorneys’ fees and litigation expenses.As noted, some of the claims in this litigation are asserted derivatively on behalf of the Funds that have been named as nominal defendants. With respect to such derivative claims, no relief is sought against the Funds. Dreyfus believes the allegations to be totally without merit and intends to defend the action vigorously. Defendants filed motions to dismiss the Amended Complaint on November 12, 2004, and those motions are pending.

Distributor

Code of ethics

The portfolio, Dreyfus and DSC have each adopted a code of ethics that permits its personnel, subject to such code, to invest in securities, including securities that may be purchased or held by the portfo-lio.The Dreyfus code of ethics restricts the personal securities transactions of its employees, and requires portfolio managers and other investment personnel to comply with the code’s preclearance and disclosure procedures.The primary purpose of the code is to ensure that personal trading by Dreyfus employees does not disadvantage any Dreyfus-managed fund.

The Portfolio 7

FINANCIAL HIGHLIGHTS

		Year Ended December 31,
Initial shares	2004	2003	2002	2001	2000

Per-Share Data ($):
Net asset value, beginning of period	8.68	5.75	9.49	14.19	19.45
Investment operations: Investment (loss) — net ¹	(.01)	(.03)	(.04)	(.02)	(.06)

Net realized and unrealized gain (loss) on investments	.05	2.96	(3.70)	(4.68)	(5.18)

Total from investment operations	.04	2.93	(3.74)	(4.70)	(5.24)

Distributions: Dividends from net realized gain on investments	—	—	—	—	(.02)

Net asset value, end of period	8.72	8.68	5.75	9.49	14.19
Total Return (%)	.46	50.96	(39.41)	(33.12)	(26.98)

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	.85	.88	.89	.87	.84

Ratio of net expenses to average net assets	.85	.88	.89	.87	.84

Ratio of net investment (loss) to average net assets	(.10)	(.42)	(.53)	(.15)	(.30)

Portfolio turnover rate	62.50	38.22	91.47	86.25	121.88

Net assets, end of period ($ x 1,000)	94,397	102,441	52,786	94,992	139,547

¹Based on average shares outstanding at each month end.

		Year Ended December 31,
Service shares	2004	2003	2002	2001	2000 ¹

Per-Share Data ($):
Net asset value, beginning of period	8.60	5.71	9.45	14.19	14.19

Investment operations: Investment (loss) — net	(.02) ²	(.05) ²	(.05) ²	(.05) ²	—

Net realized and unrealized gain (loss) on investments	.04	2.94	(3.69)	(4.69)	—
Total from investment operations	.02	2.89	(3.74)	(4.74)	—
Net asset value, end of period	8.62	8.60	5.71	9.45	14.19
Total Return (%)	.23	50.61	(39.58)	(33.40)	—

Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	1.10	1.13	1.12	1.20	—

Ratio of net expenses to average net assets	1.10	1.13	1.12	1.20

Ratio of net investment (loss) to average net assets	(.24)	(.70)	(.77)	(.60)	—

Portfolio turnover rate	62.50	38.22	91.47	86.25	121.88

Net assets, end of period ($ x 1,000)	36,047	17,353	5,787	8,151	1

¹The portfolio commenced offering Service shares on December 31, 2000.
²Based on average shares outstanding at each month end.

The Portfolio 9

Account Information

ACCOUNT POLICIES

Buying/Selling shares

The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) on days the exchange is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided that the orders are received by the portfolio in proper form on the next business day. The participating insurance company is responsible for properly transmitting purchase and sale orders.

Wire purchase payments may be made if the bank account of the participating insurance company is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA#8900375108/Dreyfus Investment Portfolios:Technology Growth Portfolio/share class), for purchase of portfolio shares. The wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead), account registration and dealer number, if applicable, of the participating insurance company.

The portfolio reserves the right to:

change or discontinue its exchange privilege, or temporarily suspend the privilege during unusu- al market conditions
change its minimum or maximum investment amounts
delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading)
“redeem in kind,” or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for exam- ple, if it exceeds 1% of the portfolio’s assets)
refuse any purchase or exchange request, includ- ing those from any participating insurance com- pany, individual or group who, in Dreyfus’ view, is likely to engage in frequent trading

Account Information 11

DISTRIBUTIONS AND TAXES

The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise.

Since the portfolio’s shareholders are the participating insurance companies and their separate accounts, the tax treatment of dividends and distributions will depend on the tax status of the participating insurance company. Accordingly, no discussion is included as to the federal personal income tax consequences to policyowners. For this information, policyowners should consult the prospectus of the separate account of the participating insurance company or their tax advisers.

Participating insurance companies should consult their tax advisers about federal, state and local tax consequences.

Who the shareholders are

EXCHANGE PRIVILEGE

Shareholders can exchange shares of a class of the portfolio for shares of the same class of any other portfolio or fund managed by Dreyfus that is offered only to separate accounts established by insurance companies to fund VA contracts and VLI policies, or for shares of any such money market portfolio, subject to the terms and conditions relating to exchanges of the applicable insurance company prospectus. Policyowners should refer to the appli-cable insurance company prospectus for more information on exchanging portfolio shares.

NOTES

For More Information

Dreyfus Investment Portfolios

Technology Growth Portfolio

SEC file number: 811-08673

More information on the portfolio is available free upon request, including the following:

Annual/Semiannual Report

Statement of Additional Information (SAI)

Portfolio Holdings

A complete description of the portfolio’s policies and procedures with respect to the disclosure of the portfolio’s portfolio securities is available in the portfolio’s SAI.

To obtain information:

By telephone

Call 1-800-554-4611 or 516-338-3300

By mail Write to:

The Dreyfus Family of Funds

144 Glenn Curtiss Boulevard

Uniondale, NY 11556-0144

Attn: Institutional Servicing

On the Internet Text-only versions of certain fund

documents can be viewed online or downloaded from:

http://www.sec.gov

____________________________________________________________________________

DREYFUS INVESTMENT PORTFOLIOS

CORE BOND PORTFOLIO

CORE VALUE PORTFOLIO

EMERGING LEADERS PORTFOLIO

MIDCAP STOCK PORTFOLIO

SMALL CAP STOCK INDEX PORTFOLIO

TECHNOLOGY GROWTH PORTFOLIO

FOUNDERS DISCOVERY PORTFOLIO

FOUNDERS GROWTH PORTFOLIO

FOUNDERS INTERNATIONAL EQUITY PORTFOLIO

STATEMENT OF ADDITIONAL INFORMATION

MAY 1, 2005

(FOR INITIAL AND SERVICE SHARES)

This Statement of Additional Information, which is not a prospectus, supplements and should be read in conjunction with the relevant current Prospectus dated May 1, 2005 of the Core Bond, Core Value, Emerging Leaders, MidCap Stock, Small Cap Stock Index, Technology Growth, Founders Discovery, Founders Growth and Founders International Equity Portfolios (each, a "Portfolio" and collectively, the "Portfolios"), each a separate series of Dreyfus Investment Portfolios (the "Fund"), as each Prospectus may be revised from time to time. To obtain a copy of a Portfolio's Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call 1-800-554-4611 or 516-338-3300.

Portfolio shares are offered only to variable annuity and variable life insurance separate accounts established by insurance companies ("Participating Insurance Companies") to fund variable annuity contracts ("VA contracts") and variable life insurance policies ("VLI policies," and together with VA contracts, the "Policies"). Individuals may not purchase shares of any Portfolio directly from the Fund. The Policies are described in the separate prospectuses issued by the Participating Insurance Companies.

Each Portfolio, except the Small Cap Stock Index Portfolio, currently offers two classes of shares: Initial shares and Service shares. The Small Cap Stock Index Portfolio offers Service shares only. VA contract holders and VLI policy holders (collectively, "Policyowners") should consult the applicable prospectus of the separate account of the Participating Insurance Company to determine which class of Portfolio shares may be purchased by the separate account.

The most recent Annual Report and Semi-Annual Report to Shareholders for each Portfolio are separate documents supplied with this Statement of Additional Information, and the financial statements, accompanying notes and report of the independent registered public accounting firm appearing in the Annual Report are incorporated by reference into this Statement of Additional Information.

TABLE OF CONTENTS
		Page

Description of the Fund and Portfolios		B-3
Management of the Fund		B-34
Management Arrangements		B-40
How to Buy Shares		B-52
Distribution Plan (Service Shares Only)		B-53
How to Redeem Shares		B-55
Exchange Privilege		B-56
Determination of Net Asset Value		B-56
Dividends, Distributions And Taxes		B-57
Portfolio Transactions		B-59
Summary of the Proxy Voting Policy, Procedures and Guidelines

of The Dreyfus Family of Funds		B-67
Information About the Fund and Portfolios		B-68
Counsel and Independent
Registered Public Accounting Firm		B-72
Appendix		A-1

B-2

DESCRIPTION OF THE FUND AND PORTFOLIOS

The Fund is a Massachusetts business trust that commenced operations on May 1, 1998. Each Portfolio is a separate series of the Fund, an open-end management investment company, known as a mutual fund. Each Portfolio is a diversified fund, which means that, with respect to 75% of the Portfolio's total assets, the Portfolio will not invest more than 5% of its assets in the securities of any single issuer nor hold more than 10% of the outstanding voting securities of any single issuer (other than, in each case, securities of other investment companies, and securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities).

The Dreyfus Corporation (the "Manager" or "Dreyfus") serves as each Portfolio's investment adviser. The Manager has engaged Founders Asset Management LLC ("Founders") to serve as sub-investment adviser to each of the Founders Discovery, Founders Growth and Founders International Equity Portfolios (collectively, the "Founders Portfolios") and to provide day-to-day management of the Founders Portfolios' investments, subject to the supervision of the Manager. Founders is also referred to in this Statement of Additional Information as the "Sub-Adviser."

Dreyfus Service Corporation (the "Distributor") is the distributor of each Portfolio's shares.

Certain Portfolio Securities

The following information supplements (except as noted) and should be read in conjunction with the relevant Portfolio's Prospectus.

Depositary Receipts. (All Portfolios, except the Core Bond and Small Cap Stock Index Portfolios) Each of these Portfolios may invest in the securities of foreign issuers in the form of American Depositary Receipts and American Depositary Shares (collectively, "ADRs") and Global Depositary Receipts and Global Depositary Shares (collectively, "GDRs") and other forms of depositary receipts or shares. These securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs are receipts typically issued by a United States bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. GDRs are receipts issued outside the United States typically by non-United States banks and trust companies that evidence ownership of either foreign or domestic securities. Generally, ADRs in registered form are designed for use in the United States securities markets and GDRs in bearer form are designed for use outside the United States.

These securities may be purchased through "sponsored" or "unsponsored" facilities. A sponsored facility is established jointly by the issuer of the underlying security and a depositary. A depositary may establish an unsponsored facility without participation by the issuer of the deposited security. Holders of unsponsored depositary receipts generally bear all the costs of such facilities, and the depositary of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts in respect of the deposited securities.

B-3

Foreign Government Obligations; Securities of Supranational Entities. (Core Bond, Emerging Leaders and Founders Portfolios only) Each of these Portfolios may invest in obligations issued or guaranteed by one or more foreign governments or any of their political subdivisions, agencies or instrumentalities that are determined by the Manager (or Sub-Adviser in the case of the Founders Portfolios) to be of comparable quality to the other obligations in which the Portfolio may invest. Such securities also include debt obligations of supranational entities. Supranational entities include international organizations designated or supported by governmental entities to promote economic reconstruction or development and international banking institutions and related government agencies. Examples include the International Bank for Reconstruction and Development (the World Bank), the European Coal and Steel Community, the Asian Development Bank and the InterAmerican Development Bank.

Mortgage-Related Securities. (Core Bond Portfolio only) Mortgage-related securities are a form of derivative collateralized by pools of commercial or residential mortgages. Pools of mortgage loans are assembled as securities for sale to investors by various governmental, government-related and private organizations. These securities may include complex instruments such as collateralized mortgage obligations and stripped mortgage-backed securities, mortgage pass-through securities, interests in real estate mortgage investment conduits ("REMICs"), adjustable rate mortgages, real estate investment trusts ("REITs"), or other kinds of mortgage-backed securities, including those with fixed, floating and variable interest rates, those with interest rates based on multiples of changes in a specified index of interest rates and those with interest rates that change inversely to changes in interest rates, as well as those that do not bear interest.

Residential Mortgage-Related Securities—The Core Bond Portfolio may invest in mortgage-related securities representing participation interests in pools of one- to four-family residential mortgage loans issued or guaranteed by governmental agencies or instrumentalities, such as the Government National Mortgage Association ("GNMA"), the Federal National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"), or issued by private entities. Residential mortgage-related securities have been issued using a variety of structures, including multi-class structures featuring senior and subordinated classes.

Mortgage-related securities issued by GNMA include GNMA Mortgage Pass-Through Certificates (also know as "Ginnie Maes") which are guaranteed as to the timely payment of principal and interest by GNMA and such guarantee is backed by the full faith and credit of the United States. GNMA certificates also are supported by the authority of GNMA to borrow funds from the U.S. Treasury to make payments under its guarantee. Mortgage-related securities issued by FNMA include FNMA Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes") which are solely the obligations of FNMA and are not backed by or entitled to the full faith and credit of the United States. Fannie Maes are guaranteed as to timely payment of principal and interest by FNMA. Mortgage-related securities issued by FHLMC include FHLMC Mortgage Participation Certificates (also known as "Freddie Macs" or "PCs"). Freddie Macs are not guaranteed by the United States or by any Federal Home Loan Bank and do not constitute a debt or obligation of the United States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of interest, which is guaranteed by FHLMC. FHLMC

B-4

guarantees either ultimate collection or timely payment of all principal payments on the underlying mortgage loans. When FHLMC does not guarantee timely payment of principal, FHLMC may remit the amount due on account of its guarantee of ultimate payment of principal at any time after default on an underlying mortgage, but in no event later than one year after it becomes payable.

Commercial Mortgage-Related Securities—The Core Bond Portfolio may invest in commercial mortgage-related securities which generally are multi-class debt or pass-through certificates secured by mortgage loans on commercial properties. These mortgage-related securities generally are constructed to provide protection to the senior classes investors against potential losses on the underlying mortgage loans. This protection generally is provided by having the holders of subordinated classes of securities ("Subordinated Securities") take the first loss if there are defaults on the underlying commercial mortgage loans. Other protection, which may benefit all of the classes or particular classes, may include issuer guarantees, reserve funds, additional Subordinated Securities, cross-collateralization and over-collateralization.

Subordinated Securities—The Core Bond Portfolio may invest in Subordinated Securities issued or sponsored by commercial banks, savings and loan institutions, mortgage bankers, private mortgage insurance companies and other non-governmental issuers. Subordinated Securities have no governmental guarantee, and are subordinated in some manner as to the payment of principal and/or interest to the holders of more senior mortgage-related securities arising out of the same pool of mortgages. The holders of Subordinated Securities typically are compensated with a higher stated yield than are the holders of more senior mortgage-related securities. On the other hand, Subordinated Securities typically subject the holder to greater risk than senior mortgage-related securities and tend to be rated in a lower rating category, and frequently a substantially lower rating category, than the senior mortgage-related securities issued in respect of the same pool of mortgage. Subordinated Securities generally are likely to be more sensitive to changes in prepayment and interest rates and the market for such securities may be less liquid than is the case for traditional fixed-income securities and senior mortgage-related securities.

Collateralized Mortgage Obligations ("CMOs") and Multi-Class Pass-Through-Securities—The Core Bond Portfolio may invest in CMOs which are multiclass bonds backed by pools of mortgage pass-through certificates or mortgage loans. CMOs may be collateralized by (a) Ginnie Mae, Fannie Mae, or Freddie Mac pass-through certificates, (b) unsecuritized mortgage loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans' Affairs, (c) unsecuritized conventional mortgages, (d) other mortgage-related securities, or (e) any combination thereof.

Each class of CMOs, often referred to as a "tranche," is issued at a specific coupon rate and has a stated maturity or final distribution date. Principal prepayments on collateral underlying a CMO may cause it to be retired substantially earlier than the stated maturities or final distribution dates. The principal and interest on the underlying mortgages may be allocated among the several classes of a series of a CMO in many ways. One or more tranches of a CMO may have coupon rates which reset periodically at a specified increment over an index, such as the London Interbank Offered Rate ("LIBOR") (or sometimes more than one index). These floating rate CMOs typically are issued with lifetime caps on the coupon rate thereon. The

B-5

Portfolio also may invest in inverse floating rate CMOs. Inverse floating rate CMOs constitute a tranche of a CMO with a coupon rate that moves in the reverse direction to an applicable index such a LIBOR. Accordingly, the coupon rate thereon will increase as interest rates decrease. Inverse floating rate CMOs are typically more volatile than fixed or floating rate tranches of CMOs.

Many inverse floating rate CMOs have coupons that move inversely to a multiple of the applicable indices. The effect of the coupon varying inversely to a multiple of an applicable index creates a leverage factor. Inverse floaters based on multiples of a stated index are designed to be highly sensitive to changes in interest rates and can subject the holders thereof to extreme reductions of yield and loss of principal. The markets for inverse floating rate CMOs with highly leveraged characteristics at times may be very thin. The Portfolio's ability to dispose of its positions in such securities will depend on the degree of liquidity in the markets for such securities. It is impossible to predict the amount of trading interest that may exist in such securities, and therefore the future degree of liquidity.

Stripped Mortgage-Backed Securities—The Core Bond Portfolio also may invest in stripped mortgage-backed securities which are created by segregating the cash flows from underlying mortgage loans or mortgage securities to create two or more new securities, each with a specified percentage of the underlying security's principal or interest payments. Mortgage securities may be partially stripped so that each investor class receives some interest and some principal. When securities are completely stripped, however, all of the interest is distributed to holders of one type of security, known as an interest-only security, or IO, and all of the principal is distributed to holders of another type of security known as a principal-only security, or PO. Strips can be created in a pass-through structure or as tranches of a CMO. The yields to maturity on IOs and POs are very sensitive to the rate of principal payments (including prepayments) on the related underlying mortgage assets. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Portfolio may not fully recoup its initial investment in IOs. Conversely, if the underlying mortgage assets experience less than anticipated prepayments of principal, the yield on POs could be materially and adversely affected.

Adjustable-Rate Mortgage Loans ("ARMs")—The Core Bond Portfolio may invest in ARMs. ARMs eligible for inclusion in a mortgage pool will generally provide for a fixed initial mortgage interest rate for a specified period of time, generally for either the first three, six, twelve, thirteen, thirty-six, or sixty scheduled monthly payments. Thereafter, the interest rates are subject to periodic adjustment based on changes in an index. ARMs typically have minimum and maximum rates beyond which the mortgage interest rate may not vary over the lifetime of the loans. Certain ARMs provide for additional limitations on the maximum amount by which the mortgage interest rate may adjust for any single adjustment period. Negatively amortizing ARMs may provide limitations on changes in the required monthly payment. Limitations on monthly payments can result in monthly payments that are greater or less than the amount necessary to amortize a negatively amortizing ARM by its maturity at the interest rate in effect during any particular month.

Private Entity Securities—The Core Bond Portfolio may invest in mortgage-related securities issued by commercial banks, savings and loan institutions, mortgage bankers, private mortgage

B-6

insurance companies and other non-governmental issuers. Timely payment of principal and interest on mortgage-related securities backed by pools created by non-governmental issuers often is supported partially by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance. The insurance and guarantees are issued by government entities, private insurers and the mortgage poolers. There can be no assurance that the private insurers or mortgage poolers can meet their obligations under the policies, so that if the issuers default on their obligations the holders of the security could sustain a loss. No insurance or guarantee covers the Portfolio or the price of the Portfolio's shares. Mortgage-related securities issued by non-governmental issuers generally offer a higher rate of interest than government-agency and government-related securities because there are no direct or indirect government guarantees of payment.

Other Mortgage-Related Securities—Other mortgage-related securities in which the Core Bond Portfolio may invest include securities other than those described above that directly or indirectly represent a participation in, or are secured by and payable from, mortgage loans on real property, including CMO residuals. Other mortgage-related securities may be equity or debt securities issued by agencies or instrumentalities of the U.S. Government or by private originators of, or investors in, mortgage loans, including savings and loan associations, homebuilders, mortgage banks, commercial banks, investment banks, partnerships, trusts and special purpose entities of the foregoing.

Asset-Backed Securities. (Core Bond Portfolio only) Asset-backed securities are a form of derivative. The securitization techniques used for asset-backed securities are similar to those used for mortgage-related securities. These securities include debt securities and securities with debt-like characteristics. The collateral for these securities has included home equity loans, automobile and credit card receivables, boat loans, computer leases, airplane leases, mobile home loans, recreational vehicle loans and hospital account receivables. The Portfolio may invest in these and other types of asset-backed securities that may be developed in the future.

Asset-backed securities present certain risks that are not presented by mortgage-backed securities. Primarily, these securities may provide the Portfolio with a less effective security interest in the related collateral than do mortgage-backed securities. Therefore, there is the possibility that recoveries on the underlying collateral may not, in some cases, be available to support payments on these securities.

Real Estate Investment Trusts. (Core Bond, MidCap Stock and Small Cap Stock Index Portfolios only) Each of these Portfolios may invest in REITs. A REIT is a corporation, or a business trust that would otherwise be taxed as a corporation, which meets the definitional requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The Code permits a qualifying REIT to deduct dividends paid, thereby effectively eliminating corporate level Federal income tax and making the REIT a pass-through vehicle for Federal income tax purposes. To meet the definitional requirements of the Code, a REIT must, among other things, invest substantially all of its assets in interests in real estate (including mortgages and other REITs) or cash and government securities, derive most of its income from rents from real property or interest on loans secured by mortgages on real property, and distribute to shareholders annually a substantial portion of its otherwise taxable income.

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REITs are characterized as equity REITs, mortgage REITs and hybrid REITs. Equity REITs, which may include operating or finance companies, own real estate directly and the value of, and income earned by, the REITs depends upon the income of the underlying properties and the rental income they earn. Equity REITs also can realize capital gains (or losses) by selling properties that have appreciated (or depreciated) in value. Mortgage REITs, which only the Core Bond Portfolio may invest in, can make construction, development or long-term mortgage loans and are sensitive to the credit quality of the borrower. Mortgage REITs derive their income from interest payments on such loans. Hybrid REITs combine the characteristics of both equity and mortgage REITs, generally by holding both ownership interests and mortgage interests in real estate. The value of securities issued by REITs are affected by tax and regulatory requirements and by perceptions of management skill. They also are subject to heavy cash flow dependency, defaults by borrowers or tenants, self-liquidation and the possibility of failing to qualify for tax-free status under the Code or to maintain exemption from the 1940 Act.

Variable and Floating Rate Securities. (Core Bond Portfolio only) Variable and floating rate securities provide for a periodic adjustment in the interest rate paid on the obligations. The terms of such obligations must provide that interest rates are adjusted periodically based upon an interest rate adjustment index as provided in the respective obligations. The adjustment intervals may be regular, and range from daily up to annually, or may be event based, such as based on a change in the prime rate.

The Portfolio may invest in floating rate debt instruments ("floaters"). The interest rate on a floater is a variable rate which is tied to another interest rate, such as a money-market index or Treasury bill rate. The interest rate on a floater resets periodically, typically every six months. Because of the interest rate reset feature, floaters provide the Portfolio with a certain degree of protection against rises in interest rates, although the Portfolio will participate in any declines in interest rates as well.

The Portfolio also may invest in inverse floating rate debt instruments ("inverse floaters"). The interest rate on an inverse floater resets in the opposite direction from the market rate of interest to which the inverse floater is indexed or inversely to a multiple of the applicable index. An inverse floating rate security may exhibit greater price volatility than a fixed rate obligation of similar credit quality.

Investment Companies. (All Portfolios) Each Portfolio may invest in securities issued by registered and unregistered investment companies, including exchange-traded funds described below. Under the 1940 Act, a Portfolio's investment in such securities, subject to certain exceptions, currently is limited to (i) 3% of the total voting stock of any one investment company, (ii) 5% of the Portfolio's total assets with respect to any one investment company and (iii) 10% of the Portfolio's total assets in the aggregate. As a shareholder of another investment company, the Portfolio would bear, along with other shareholders, its pro rata portion of the other investment company's expenses, including advisory fees. These expenses would be in addition to the advisory fees and other expenses that the Portfolio bears directly in connection with its own operations. Each Portfolio also may invest its uninvested cash reserves, or cash it receives as collateral from borrowers of its portfolio securities in connection with the Portfolio's

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securities lending program, in shares of one or more money market funds advised by the Manager. Such investments will not be subject to the limitations described above, except that a Portfolio's aggregate investment of uninvested cash reserves in such money market funds may not exceed 25% of its total assets. See "Lending Portfolio Securities."

Exchange-Traded Funds. (All Portfolios, except the Core Bond Portfolio) Each of these Portfolios may invest in shares of exchange-traded funds (collectively, "ETFs") which are designed to provide investment results corresponding to a securities or commodities index. These may include Standard & Poor's Depositary Receipts ("SPDRs"), DIAMONDS, Nasdaq-100 Index Tracking Stock (also referred to as "Nasdaq-100 Shares") and iShares exchange-traded funds ("iShares"), such as iShares S&P SmallCap 600 Index Fund. ETFs are usually either units of beneficial interest in an investment trust or represent undivided ownership interests in a portfolio of securities, in each case with respect to a portfolio of all or substantially all of the component securities (or commodities) of, and in substantially the same weighting as, the relevant benchmark index. The benchmark indices of SPDRs, DIAMONDS and Nasdaq-100 Shares are the Standard & Poor's 500 Stock Index, the Dow Jones Industrial Average and the Nasdaq-100 Index, respectively. The benchmark index for iShares varies, generally corresponding to the name of the particular iShares fund. ETFs are designed to provide investment results that generally correspond to the price and yield performance of the component securities (or commodities) of the benchmark index. ETFs are listed on an exchange and trade in the secondary market on a per-share basis.

The values of ETFs are subject to change as the values of their respective component securities (or commodities) fluctuate according to market volatility. Investments in ETFs that are designed to correspond to an equity index involve certain inherent risks generally associated with investments in a broadly based portfolio of common stocks, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of ETFs invested in by a Portfolio. Moreover, a Portfolio's investments in ETFs may not exactly match the performance of a direct investment in the respective indices to which they are intended to correspond due to the temporary unavailability of certain index securities in the secondary market or other extraordinary circumstances, such as discrepancies with respect to the weighting of securities.

Convertible Securities. (All Portfolios, except the Small Cap Stock Index Portfolio) Convertible securities may be converted at either a stated price or stated rate into underlying shares of common stock. Convertible securities have characteristics similar to both fixed-income and equity securities. Convertible securities generally are subordinated to other similar but non-convertible securities of the same issuer, although convertible bonds, as corporate debt obligations, enjoy seniority in right of payment to all equity securities, and convertible preferred stock is senior to common stock, of the same issuer. Because of the subordination feature, however, convertible securities typically have lower ratings than similar non-convertible securities.

Although to a lesser extent than with fixed-income securities, the market value of convertible securities tends to decline as interest rates increase and, conversely, tends to increase as interest rates decline. In addition, because of the conversion feature, the market value of

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convertible securities tends to vary with fluctuations in the market value of the underlying common stock. A unique feature of convertible securities is that as the market price of the underlying common stock declines, convertible securities tend to trade increasingly on a yield basis, and so may not experience market value declines to the same extent as the underlying common stock. When the market price of the underlying common stock increases, the prices of the convertible securities tend to rise as a reflection of the value of the underlying common stock. While no securities investments are without risk, investments in convertible securities generally entail less risk than investments in common stock of the same issuer.

Convertible securities provide for a stable stream of income with generally higher yields than common stocks, but there can be no assurance of current income because the issuers of the convertible securities may default on their obligations. A convertible security, in addition to providing fixed income, offers the potential for capital appreciation through the conversion feature, which enables the holder to benefit from increases in the market price of the underlying common stock. There can be no assurance of capital appreciation, however, because securities prices fluctuate. Convertible securities generally offer lower interest or dividend yields than non-convertible securities of similar quality because of the potential for capital appreciation.

Warrants. (All Portfolios, except the Small Cap Stock Index Portfolio) A warrant is a form of derivative that gives the holder the right to subscribe to a specified amount of the issuing corporation's capital stock at a set price for a specified period of time. Each Portfolio may invest up to 5% of its net assets in warrants, except that this limitation does not apply to warrants purchased by the Portfolio that are sold in units with, or attached to, other securities.

Participation Interests. (Core Bond Portfolio only) The Core Bond Portfolio may invest in short-term corporate obligations denominated in U.S. and foreign currencies that are originated, negotiated and structured by a syndicate of lenders ("Co-Lenders"), consisting of commercial banks, thrift institutions, insurance companies, financial companies or other financial institutions one or more of which administers the security on behalf of the syndicate (the "Agent Bank"). Co-Lenders may sell such securities to third parties called "Participants." The Portfolio may invest in such securities either by participating as a Co-Lender at origination or by acquiring an interest in the security from a Co-Lender or a Participant (collectively, "participation interests"). Co-Lenders and Participants interposed between the Portfolio and the corporate borrower (the "Borrower"), together with Agent Banks, are referred herein as "Intermediate Participants."

The Portfolio also may purchase a participation interest in a portion of the rights of an Intermediate Participant, which would not establish any direct relationship between the Portfolio and the Borrower. A participation interest gives the Portfolio an undivided interest in the security in the proportion that the Portfolio's participation interest bears to the total principal amount of the security. These instruments may have fixed, floating or variable rates of interest. The Portfolio would be required to rely on the Intermediate Participant that sold the participation interest not only for the enforcement of the Portfolio's rights against the Borrower but also for the receipt and processing of payments due to the Portfolio under the security. Because it may be necessary to assert through an Intermediate Participant such rights as may exist against the Borrower, in the event the Borrower fails to pay principal and interest when due, the Portfolio

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may be subject to delays, expenses and risks that are greater than those that would be involved if the Portfolio would enforce its rights directly against the Borrower. Moreover, under the terms of a participation interest, the Portfolio may be regarded as a creditor of the Intermediate Participant (rather than of the Borrower), so that the Portfolio may also be subject to the risk that the Intermediate Participant may become insolvent. Similar risks may arise with respect to the Agent Bank if, for example, assets held by the Agent Bank for the benefit of the Portfolio were determined by the appropriate regulatory authority or court to be subject to the claims of the Agent Bank's creditors. In such case, the Portfolio might incur certain costs and delays in realizing payment in connection with the participation interest or suffer a loss of principal and/or interest. Further, in the event of the bankruptcy or insolvency of the Borrower, the obligation of the Borrower to repay the loan may be subject to certain defenses that can be asserted by such Borrower as a result of improper conduct by the Agent Bank or Intermediate Participant.

Municipal Obligations. (Core Bond Portfolio only) Municipal obligations are debt obligations issued by states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities, or multistate agencies or authorities, and certain specified entities, to obtain funds for various public purposes, and include certain industrial development bonds issued by or on behalf of public authorities. Municipal obligations are classified as general obligation bonds, revenue bonds and notes. General obligation bonds are secured by the issuer's pledge of its full faith, credit and taxing power for the payment of principal and interest. Revenue bonds are payable from the revenue derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source, but not from the general taxing power. Industrial development bonds, in most cases, are revenue bonds that do not carry the pledge of the credit of the issuing municipality, but generally are guaranteed by the corporate entity on whose behalf they are issued. Notes are short-term instruments which are obligations of the issuing municipalities or agencies and are sold in anticipation of a bond sale, collection of taxes or receipt of other revenues. Municipal obligations include municipal lease/purchase agreements which are similar to installment purchase contracts for property or equipment issued by municipalities. Municipal obligations bear fixed, floating or variable rates of interest, which are determined in some instances by formulas under which the municipal obligation's interest rate will change directly or inversely to changes in interest rates or an index, or multiples thereof, in many cases subject to a maximum and minimum. Certain municipal obligations are subject to redemption at a date earlier than their stated maturity pursuant to call options, which may be separated from the related municipal obligation and purchased and sold separately. The Core Bond Portfolio also may acquire call options on specific municipal obligations. The Portfolio generally would purchase these call options to protect the Portfolio from the issuer of the related municipal obligation redeeming, or other holder of the call option from calling away, the municipal obligation before maturity.

While, in general, municipal obligations are tax exempt securities having relatively low yields as compared to taxable, non-municipal obligations of similar quality, certain municipal obligations are taxable obligations offering yields comparable to, and in some cases greater than, the yields available on other permissible Portfolio investments. Dividends received by shareholders on Portfolio shares which are attributable to interest income received by the Portfolio from municipal obligations generally will be subject to Federal income tax. The

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Portfolio may invest in municipal obligations, the ratings of which correspond with the ratings of other permissible Fund investments. The Portfolio currently intends to invest no more than 25% of its assets in municipal obligations. However, this percentage may be varied from time to time without shareholder approval.

Zero Coupon, Pay-In-Kind and Step-Up Securities. (Core Bond Portfolio only) The Core Bond Portfolio may invest in zero coupon U.S. Treasury securities, which are Treasury Notes and Bonds that have been stripped of their unmatured interest coupons, the coupons themselves and receipts or certificates representing interests in such stripped debt obligations and coupons. Zero coupon securities also are issued by corporations and financial institutions which constitute a proportionate ownership of the issuer's pool of underlying U.S. Treasury securities. A zero coupon security pays no interest to its holders during its life and is sold at a discount to its face value at maturity. The Core Bond Portfolio may invest in pay-in-kind bonds, which are bonds which generally pay interest through the issuance of additional bonds. The Portfolio also may purchase step-up coupon bonds, which are debt securities which typically do not pay interest for a specified period of time and then pay interest at a series of different rates. The market prices of these securities generally are more volatile and are likely to respond to a greater degree to changes in interest rates than the market prices of securities that pay cash interest periodically having similar maturities and credit qualities. In addition, unlike bonds that pay cash interest throughout the period to maturity, the Portfolio will realize no cash until the cash payment date unless a portion of such securities are sold and, if the issuer defaults, the Portfolio may obtain no return at all on its investment. Federal income tax law requires the holder of a zero coupon security or of certain pay-in-kind or step-up bonds to accrue income with respect to these securities prior to the receipt of cash payments. To maintain its qualification as a regulated investment company and avoid liability for Federal income taxes, the Portfolio may be required to distribute such income accrued with respect to these securities and may have to dispose of portfolio securities under disadvantageous circumstances in order to generate cash to satisfy these distribution requirements. See "Dividends, Distributions and Taxes."

Illiquid Securities. (All Portfolios) Each Portfolio may invest up to 15% of the value of its net assets in securities as to which a liquid trading market does not exist, provided such investments are consistent with the Portfolio's investment objective. These securities may include securities that are not readily marketable, such as securities that are subject to legal or contractual restrictions on resale, repurchase agreements providing for settlement in more than seven days after notice, and certain privately negotiated, non-exchange traded options and securities used to cover such options. As to these securities, the Portfolio is subject to a risk that should it desire to sell them when a ready buyer is not available at a price the Portfolio deems representative of their value, the value of the Portfolio's net assets could be adversely affected.

Money Market Instruments. (All Portfolios) When the Manager (or Sub-Adviser in the case of the Founders Portfolios) determines that adverse market conditions exist, a Portfolio may adopt a temporary defensive position and invest some or all of its assets in money market instruments, including the securities described below ("Money Market Instruments"). Each Portfolio also may purchase Money Market Instruments when it has cash reserves or in anticipation of taking a market position.

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U.S. Government Securities—Securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities include U.S. Treasury securities that differ in their interest rates, maturities and times of issuance. Some obligations issued or guaranteed by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations from the agency or instrumentality; and others only by the credit of the agency or instrumentality. These securities bear fixed, floating or variable rates of interest. While the U.S. Government provides financial support for such U.S. Government-sponsored agencies and instrumentalities, no assurance can be given that it will always do so since it is not obligated by law. A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to timely payment of interest and principal when held to maturity. Neither the market value of such securities nor the Portfolio's share price is guaranteed.

Repurchase Agreements—Each Portfolio may enter into repurchase agreements with certain banks or non-bank dealers. In a repurchase agreement, the Portfolio buys, and the seller agrees to repurchase, a security at a mutually agreed upon time and price (usually within seven days). The repurchase agreement thereby determines the yield during the purchaser's holding period, while the seller's obligation to repurchase is secured by the value of the underlying security. The Portfolio's custodian or sub-custodian will have custody of, and will hold in a segregated account, securities acquired by the Portfolio under a repurchase agreement. Repurchase agreements are considered by the staff of the Securities and Exchange Commission (the "SEC") to be loans by the Portfolio that enters into them. Repurchase agreements could involve risks in the event of a default or insolvency of the other party to the agreement, including possible delays or restrictions upon the Portfolio's ability to dispose of the underlying securities. In an attempt to reduce the risk of incurring a loss on a repurchase agreement, each Portfolio will enter into repurchase agreements only with domestic banks with total assets in excess of $1 billion, or primary government securities dealers reporting to the Federal Reserve Bank of New York, with respect to securities of the type in which the Portfolio may invest, and will require that additional securities be deposited with it if the value of the securities purchased should decrease below resale price.

Bank Obligations—Each Portfolio may purchase certificates of deposit ("CDs"), time deposits ("TDs"), bankers' acceptances and other short-term obligations issued by domestic banks, foreign subsidiaries or foreign branches of domestic banks, domestic and foreign branches of foreign banks, domestic savings and loan associations and other banking institutions. With respect to such securities issued by foreign subsidiaries or foreign branches of domestic banks, and domestic and foreign branches of foreign banks, the Portfolio may be subject to additional investment risks that are different in some respects from those incurred by a fund which invests only in debt obligations of U.S. domestic issuers.

CDs are negotiable certificates evidencing the obligation of a bank to repay funds deposited with it for a specified period of time.

TDs are non-negotiable deposits maintained in a banking institution for a specified period of time (in no event longer than seven days) at a stated interest rate.

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Bankers' acceptances are credit instruments evidencing the obligation of a bank to pay a draft drawn on it by a customer. These instruments reflect the obligation both of the bank and the drawer to pay the face amount of the instruments upon maturity. The other short-term obligations may include uninsured, direct obligations bearing fixed, floating or variable interest rates.

Commercial Paper and Other Short-Term Corporate Obligations—Each Portfolio may purchase commercial paper consisting of short-term, unsecured promissory notes issued to finance short-term credit needs. The commercial paper purchased by the Portfolio will consist only of direct obligations which, at the time of their purchase, are rated at least Prime-1 by Moody's Investors Service, Inc. ("Moody's"), A-1 by Standard & Poor's Ratings Services ("S&P") or F-1 by Fitch Ratings ("Fitch" and, together with Moody's and S&P, the "Rating Agencies"), or issued by companies having an outstanding unsecured debt issue currently rated at least A by Moody's, S&P or Fitch, or, if unrated, determined by the Manager (or Sub-Adviser in the case of the Founders Portfolios) to be of comparable quality to those rated obligations which may be purchased by the Portfolio.

These instruments also include variable amount master demand notes, which are obligations that permit the Portfolio to invest fluctuating amounts at varying rates of interest pursuant to direct arrangements between the Portfolio, as lender, and the borrower. These notes permit daily changes in the amounts borrowed. Because these obligations are direct lending arrangements between the lender and borrower, it is not contemplated that such instruments generally will be traded, and there generally is no established secondary market for these obligations, although they are redeemable at face value, plus accrued interest, at any time. Accordingly, where these obligations are not secured by letters of credit or other credit support arrangements, the Portfolio's right to redeem is dependent on the ability of the borrower to pay principal and interest on demand. Such obligations frequently are not rated by credit rating agencies, and the Portfolio may invest in them only if at the time of an investment the borrower meets the criteria set forth above for other commercial paper issuers.

Investment Techniques

The following information supplements (except as noted) and should be read in conjunction with the relevant Portfolio's Prospectus.

Duration and Portfolio Maturity. (Core Bond Portfolio only) As a measure of a fixed-income security's cash flow, duration is an alternative to the concept of "term to maturity" in assessing the price volatility associated with changes in interest rates. Generally, the longer the duration, the more volatility an investor should expect. For example, the market price of a bond with a duration of three years would be expected to decline 3% if interest rates rose 1%. Conversely, the market price of the same bond would be expected to increase 3% if interest rates fell 1%. The market price of a bond with a duration of six years would be expected to increase or decline twice as much as the market price of a bond with a three-year duration. Duration is a way of measuring a security's maturity in terms of the average time required to receive the present value of all interest and principal payments as opposed to its term to maturity. The

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maturity of a security measures only the time until final payment is due; it does not take account of the pattern of a security's cash flows over time, which would include how cash flow is affected by prepayments and by changes in interest rates. Incorporating a security's yield, coupon interest payments, final maturity and option features into one measure, duration is computed by determining the weighted average maturity of a bond's cash flows, where the present values of the cash flows serve as weights. In computing the duration of the Core Bond Portfolio, the Manager will estimate the duration of obligations that are subject to features such as prepayment or redemption by the issuer, put options retained by the investor or other imbedded options, taking into account the influence of interest rates on prepayments and coupon flows.

The Core Bond Portfolio typically will maintain an average effective maturity ranging between five and ten years. However, to the extent the maturity of the Portfolio's benchmark index is outside this range at a particular time (generally, this may occur during other than usual market conditions), the Portfolio's average effective maturity also may fall outside such range. For purposes of calculating average effective portfolio maturity, a security that is subject to redemption at the option of the issuer on a particular date (the "call date") which is prior to the security's stated maturity may be deemed to mature on the call date rather than on its stated maturity date. The call date of a security will be used to calculate average effective portfolio maturity when the Manager reasonably anticipates, based upon information available to it, that the issuer will exercise its right to redeem the security. The Manager may base its conclusion on such factors as the interest-rate paid on the security compared to prevailing market rates, the amount of cash available to the issuer of the security, events affecting the issuer of the security, and other factors that may compel or make it advantageous for the issuer to redeem a security prior to its stated maturity.

Foreign Currency Transactions. (All Portfolios, except the Small Cap Stock Index Portfolio) Each of these Portfolios may enter into foreign currency transactions for a variety of purposes, including: to fix in U.S. dollars, between trade and settlement date, the value of a security the Portfolio has agreed to buy or sell; to hedge the U.S. dollar value of securities the Portfolio already owns, particularly if it expects a decrease in the value of the currency in which the foreign security is denominated; or to gain exposure to the foreign currency in an attempt to realize gains.

Foreign currency transactions may involve, for example, the Portfolio's purchase of foreign currencies for U.S. dollars or the maintenance of short positions in foreign currencies. A short position would involve the Portfolio agreeing to exchange an amount of a currency it did not currently own for another currency at a future date in anticipation of a decline in the value of the currency sold relative to the currency the Portfolio contracted to receive. The Portfolio's success in these transactions will depend principally on the ability of the Manager (or Sub-Adviser in the case of the Founders Portfolios) to predict accurately the future exchange rates between foreign currencies and the U.S. dollar.

Currency exchange rates may fluctuate significantly over short periods of time. They generally are determined by the forces of supply and demand in the foreign exchange markets and the relative merits of investments in different countries, actual or perceived changes in

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interest rates and other complex factors, as seen from an international perspective. Currency exchange rates also can be affected unpredictably by intervention by U.S. or foreign governments or central banks, or the failure to intervene, or by currency controls or political developments in the United States or abroad.

Borrowing Money. (All Portfolios) Each Portfolio is permitted to borrow to the extent permitted under the 1940 Act, which permits an investment company to borrow in an amount up to 33-1/3% of the value of its total assets. Each Founders Portfolio and the Small Cap Stock Index Portfolio currently intend to borrow money only for temporary or emergency (not leveraging) purposes. While such borrowings exceed 5% of the Portfolio's total assets, the Portfolio will not make any additional investments. Money borrowed will be subject to interest costs. The Core Bond, Core Value, Emerging Leaders, MidCap Stock and Technology Growth Portfolios may borrow money for investment purposes as described below under "Leverage."

Leverage. (All Portfolios, except the Small Cap Stock Index and Founders Portfolios) Leveraging (buying securities using borrowed money) exaggerates the effect on net asset value of any increase or decrease in the market value of a Portfolio's investments. These borrowings will be subject to interest costs which may or may not be recovered by appreciation of the securities purchased; in certain cases, interest costs may exceed the return received on the securities purchased. For borrowings for investment purposes, the 1940 Act requires the Portfolio to maintain continuous asset coverage (total assets including borrowings, less liabilities exclusive of borrowings) of 300% of the amount borrowed. If the required coverage should decline as a result of market fluctuations or other reasons, the Portfolio may be required to sell some of its portfolio holdings within three days to reduce the amount of its borrowings and restore the 300% asset coverage, even though it may be disadvantageous from an investment standpoint to sell securities at that time. The Portfolio also may be required to maintain minimum average balances in connection with such borrowing or pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.

Reverse Repurchase Agreements. (All Portfolios, except the Founders Portfolios) Each of these Portfolios may enter into reverse repurchase agreements with banks, broker/dealers or other financial institutions. This form of borrowing involves the transfer by the Portfolio of an underlying debt instrument in return for cash proceeds based on a percentage of the value of the security. The Portfolio retains the right to receive interest and principal payments on the security. At an agreed upon future date, the Portfolio repurchases the security at principal plus accrued interest. To the extent a Portfolio enters into a reverse repurchase agreement, the Portfolio will segregate permissible liquid assets at least equal to the aggregate amount of its reverse repurchase obligations, plus accrued interest, in certain cases, in accordance with releases promulgated by the SEC. The SEC views reverse repurchase transactions as collateralized borrowings by a Portfolio. Except for these transactions, borrowings by those Portfolios that may engage in leveraging generally will be unsecured. Reverse repurchase agreements may be preferable to a regular sale and later repurchase of the securities because it avoids certain market risks and transaction costs. Such transactions, however, may increase the risk of potential fluctuations in the market value of the Portfolio's assets. In addition, interest costs on the cash received may exceed the return on the securities purchased.

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Lending Portfolio Securities. (All Portfolios) Each Portfolio may lend securities from its portfolio to brokers, dealers and other financial institutions needing to borrow securities to complete certain transactions. In connection with such loans, the Portfolio remains the owner of the loaned securities and continues to be entitled to payments in amounts equal to the interest, dividends or other distributions payable on the loaned securities. The Portfolio also has the right to terminate a loan at any time. The Portfolio may call the loan to vote proxies if a material issue affecting the Portfolio's investment is to be voted upon. Loans of portfolio securities may not exceed 33-1/3% of the value of the Portfolio's total assets (including the value of all assets received as collateral for the loan). The Portfolio will receive collateral consisting of cash, U.S. Government securities or irrevocable letters of credit which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. If the collateral consists of a letter of credit or securities, the borrower will pay the Portfolio a loan premium fee. If the collateral consists of cash, the Portfolio will reinvest the cash and pay the borrower a pre-negotiated fee or "rebate" from any return earned on the investment. The Portfolio may participate in a securities lending program operated by Mellon Bank, N.A., as lending agent (the "Lending Agent"). The Lending Agent will receive a percentage of the total earnings of the Portfolio derived from lending its portfolio securities. Should the borrower of the securities fail financially, the Portfolio may experience delays in recovering the loaned securities or exercising its rights in the collateral. Loans are made only to borrowers that are deemed by the Manager to be of good financial standing. In a loan transaction, the Portfolio will also bear the risk of any decline in value of securities acquired with cash collateral. A Portfolio will minimize this risk by limiting the investment of cash collateral to money market funds advised by the Manager, repurchase agreements or other high quality instruments with short maturities.

Short-Selling. (Core Bond, Emerging Leaders and Technology Growth Portfolios only) In these transactions, a Portfolio sells a security it does not own in anticipation of a decline in the market value of the security. To complete the transaction, the Portfolio must borrow the security to make delivery to the buyer. The Portfolio is obligated to replace the security borrowed by purchasing it subsequently at the market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Portfolio, which would result in a loss or gain, respectively.

No Portfolio will sell securities short if, after effect is given to any such short sale, the total market value of all securities sold short would exceed 25% of the value of the Portfolio's net assets.

The Portfolio also may make short sales "against the box," in which the Portfolio enters into a short sale of a security it owns. At no time will more than 15% of the value of the Portfolio's net assets be in deposits on short sales against the box.

Until the Portfolio closes its short position or replaces the borrowed security, the Portfolio will: (a) segregate permissible liquid assets in an amount that, together with the amount provided as collateral, always equals the current value of the security sold short; or (b) otherwise cover its short position.

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Derivatives. (All Portfolios) Each Portfolio may invest in, or enter into, derivatives for a variety of reasons, including to hedge certain market or interest rate risks, to provide a substitute for purchasing or selling particular securities or to increase potential income gain. Generally, derivatives are financial contracts whose value depends upon, or is derived from, the value of an underlying asset, reference rate or index, and may relate to stocks, bonds, interest rates, currencies or currency exchange rates, commodities, and related indexes. Derivatives may provide a cheaper, quicker or more specifically focused way for a Portfolio to invest than "traditional" securities would. Examples of derivative instruments include options contracts, futures contracts, options on futures contracts, structured notes, and swap agreements. A portfolio manager may decide not to employ any of these strategies and there is no assurance that any derivatives strategy used by a Portfolio will succeed.

Derivatives can be volatile and involve various types and degrees of risk, depending upon the characteristics of the particular derivative and the portfolio as a whole. Derivatives permit a Portfolio to increase or decrease the level of risk, or change the character of the risk, to which its portfolio is exposed in much the same way as the Portfolio can increase or decrease the level of risk, or change the character of the risk, of its portfolio by making investments in specific securities. However, derivatives may entail investment exposures that are greater than their cost would suggest, meaning that a small investment in derivatives could have a large potential impact on a Portfolio's performance.

If a Portfolio invests in derivatives at inopportune times or judges market conditions incorrectly, such investments may lower the Portfolio's return or result in a loss. A Portfolio also could experience losses if its derivatives were poorly correlated with its other investments, or if the Portfolio were unable to liquidate its position because of an illiquid secondary market. The market for many derivatives is, or suddenly can become, illiquid. Changes in liquidity may result in significant, rapid and unpredictable changes in the prices for derivatives.

Derivatives may be purchased on established exchanges or through privately negotiated transactions referred to as over-the-counter derivatives. Exchange-traded derivatives generally are guaranteed by the clearing agency which is the issuer or counterparty to such derivatives. This guarantee usually is supported by a daily variation margin system operated by the clearing agency in order to reduce overall credit risk. As a result, unless the clearing agency defaults, there is relatively little counterparty credit risk associated with derivatives purchased on an exchange. In contrast, no clearing agency guarantees over-the-counter derivatives. Therefore, each party to an over-the-counter derivative bears the risk that the counterparty will default. Accordingly, the Manager (or Sub-Adviser in the case of the Founders Portfolios) will consider the creditworthiness of counterparties to over-the-counter derivatives in the same manner as it would review the credit quality of a security to be purchased by a Portfolio. Over-the-counter

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derivatives are less liquid than exchange-traded derivatives since the other party to the transaction may be the only investor with sufficient understanding of the derivative to be interested in bidding for it.

Neither the Fund nor the Portfolios will be a commodity pool. In addition, as a registered investment company, the Fund has filed notice with the Commodity Futures Trading Commission and National Futures Association of its eligibility for an exclusion from the definition of commodity pool operator and, therefore, the Fund is not subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.

Futures Transactions—In General. A futures contract is an agreement between two parties to buy and sell a security for a set price on a future date. These contracts are traded on exchanges, so that, in most cases, either party can close out its position on the exchange for cash, without delivering the security. An option on a futures contract gives the holder of the option the right to buy from or sell to the writer of the option a position in a futures contract at a specified price on or before a specified expiration date.

Although some futures contracts call for making or taking delivery of the underlying securities, generally these obligations are closed out before delivery by offsetting purchases or sales of matching futures contracts (same exchange, underlying security or index, and delivery month). Closing out a futures contract sale is effected by purchasing a futures contract for the same aggregate amount of the specific type of financial instrument with the same delivery date. If an offsetting purchase price is less than the original sale price, the Portfolio realizes a capital gain or if it is more, the Portfolio realizes a capital loss. Conversely, if an offsetting sale price is more than the original purchase price, the Portfolio realizes a capital gain, or if it is less, the Portfolio realizes a capital loss. Transaction costs also are included in these calculations.

Each Portfolio may enter into futures contracts in U.S. domestic markets, or, except for the MidCap Stock and Small Cap Stock Index Portfolios, on exchanges located outside the United States. Foreign markets may offer advantages such as trading opportunities or arbitrage possibilities not available in the United States. Foreign markets, however, may have greater risk potential than domestic markets. For example, some foreign exchanges are principal markets so that no common clearing facility exists and an investor may look only to the broker for performance of the contract. In addition, any profits a Portfolio might realize in trading could be eliminated by adverse changes in the exchange rate, or the Portfolio could incur losses as a result of those changes. Transactions on foreign exchanges may include commodities which are traded on domestic exchanges or those which are not. Unlike trading on domestic commodity exchanges, trading on foreign commodity exchanges is not regulated by the Commodity Futures Trading Commission.

Engaging in these transactions involves risk of loss to a Portfolio which could adversely affect the value of the Portfolio's net assets. Although each Portfolio intends to purchase or sell futures contracts only if there is an active market for such contracts, no assurance can be given that a liquid market will exist for any particular contract at any particular time. Many futures exchanges and boards of trade limit the amount of fluctuation permitted in futures contract prices during a single trading day. Once the daily limit has been reached in a particular contract, no

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trades may be made that day at a price beyond that limit or trading may be suspended for specified periods during the trading day. Futures contract prices could move to the limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and potentially subjecting the Portfolio to substantial losses.

Successful use of futures by a Portfolio also is subject to the ability of the Manager (or Sub-Adviser in the case of the Founders Portfolios) to predict correctly movements in the direction of the relevant market and, to the extent the transaction is entered into for hedging purposes, to ascertain the appropriate correlation between the position being hedged and the price movements of the futures contract. For example, if a Portfolio uses futures to hedge against the possibility of a decline in the market value of securities held in its portfolio and the prices of such securities instead increase, the Portfolio will lose part or all of the benefit of the increased value of securities which it has hedged because it will have offsetting losses in its futures positions. Furthermore, if in such circumstances the Portfolio has insufficient cash, it may have to sell securities to meet daily variation margin requirements. A Portfolio may have to sell such securities at a time when it may be disadvantageous to do so.

Pursuant to regulations and/or published positions of the SEC, a Portfolio may be required to segregate permissible liquid assets to cover its obligations relating to its transactions in derivatives. To maintain this required cover, the Portfolio may have to sell portfolio securities at disadvantageous prices or times since it may not be possible to liquidate a derivative position at a reasonable price. In addition, the segregation of such assets will have the effect of limiting the Portfolio's ability otherwise to invest those assets.

Specific Futures Transactions. Each Portfolio may purchase and sell stock index futures contracts. A stock index future obligates the Portfolio to pay or receive an amount of cash equal to a fixed dollar amount specified in the futures contract multiplied by the difference between the settlement price of the contract on the contract's last trading day and the value of the index based on the stock prices of the securities that comprise it at the opening of trading in such securities on the next business day.

Each Portfolio, except the MidCap Stock and Small Cap Stock Index Portfolios, may purchase and sell currency futures. A foreign currency future obligates the Portfolio to purchase or sell an amount of a specific currency at a future date at a specific price.

Each Portfolio, except the Small Cap Stock Index Portfolios, may purchase and sell interest rate futures contracts. An interest rate future obligates the Portfolio to purchase or sell an amount of a specific debt security at a future date at a specific price.

The Small Cap Stock Index Portfolio may invest in, or enter into, derivatives, such as stock index futures in anticipation of taking a market position when, in the opinion of the Manager, available cash balances do not permit an economically efficient trade in the cash market, to hedge dividend accruals or to meet liquidity needs.

Credit Derivatives. (Core Bond Portfolio only) The Core Bond Portfolio may engage in credit derivative transactions, such as those involving default price risk derivatives and market spread

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derivatives. Default price risk derivatives are linked to the price of reference securities or loans after a default by the issuer or borrower, respectively. Market spread derivatives are based on the risk that changes in market factors, such as credit spreads, can cause a decline in the value of a security, loan or index. There are three basic transactional forms for credit derivatives: swaps, options and structured instruments. The use of credit derivatives is a highly specialized activity which involves strategies and risks different from those associated with ordinary portfolio security transactions. If the Manager is incorrect in its forecasts of default risks, market spreads or other applicable factors, the investment performance of the Portfolio would diminish compared with what it would have been if these techniques were not used. Moreover, even if the Manager is correct in its forecasts, there is a risk that a credit derivative position may correlate imperfectly with the price of the asset or liability being hedged. There is no limit on the amount of credit derivative transactions that may be entered into by the Portfolio. The Portfolio's risk of loss in a credit derivative transaction varies with the form of the transaction. For example, if the Portfolio purchases a default option on a security, and if no default occurs with respect to the security, the Portfolio's loss is limited to the premium it paid for the default option. In contrast, if there is a default by the grantor of a default option, the Portfolio's loss will include both the premium that is paid for the option and the decline in value of the underlying security that the default option hedged.

Options—In General. Each Portfolio, except the Small Cap Stock Index Portfolio, may invest up to 5% of its assets, represented by the premium paid, in the purchase of call and put options. Each Portfolio, other than the Small Cap Stock Index Portfolio, may write (i.e., sell) covered call and put option contracts to the extent of 20% of the value of its net assets at the time such option contracts are written. A call option gives the purchaser of the option the right to buy, and obligates the writer to sell, the underlying security or securities at the exercise price at any time during the option period, or at a specific date. Conversely, a put option gives the purchaser of the option the right to sell, and obligates the writer to buy, the underlying security or securities at the exercise price at any time during the option period, or at a specific date.

A covered call option written by a Portfolio is a call option with respect to which the Portfolio owns the underlying security or otherwise covers the transaction by segregating permissible liquid assets. A put option written by a Portfolio is covered when, among other things, the Portfolio segregates permissible liquid assets having a value equal to or greater than the exercise price of the option to fulfill the obligation undertaken. The principal reason for writing covered call and put options is to realize, through the receipt of premiums, a greater return than would be realized on the underlying securities alone. A Portfolio receives a premium from writing covered call or put options which it retains whether or not the option is exercised.

There is no assurance that sufficient trading interest to create a liquid secondary market on a securities exchange will exist for any particular option or at any particular time, and for some options no such secondary market may exist. A liquid secondary market in an option may cease to exist for a variety of reasons. In the past, for example, higher than anticipated trading activity or order flow, or other unforeseen events, at times have rendered certain of the clearing facilities inadequate and resulted in the institution of special procedures, such as trading rotations, restrictions on certain types of orders or trading halts or suspensions in one or more

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options. There can be no assurance that similar events, or events that may otherwise interfere with the timely execution of customers' orders, will not recur. In such event, it might not be possible to effect closing transactions in particular options. If, as a covered call option writer, the Portfolio is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying security until the option expires or it delivers the underlying security upon exercise or it otherwise covers its position.

Specific Options Transactions. Each Portfolio, except the Core Bond and Small Cap Stock Index Portfolios, may purchase and sell call and put options in respect of specific securities (or groups or "baskets" of specific securities) or stock indices listed on national securities exchanges or traded in the over-the-counter market. An option on a stock index is similar to an option in respect of specific securities, except that settlement does not occur by delivery of the securities comprising the index. Instead, the option holder receives an amount of cash if the closing level of the stock index upon which the option is based is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. Thus, the effectiveness of purchasing or writing stock index options will depend upon price movements in the level of the index rather than the price of a particular stock.

Each Portfolio, except the MidCap Stock and Small Cap Stock Index Portfolios, may purchase and sell call and put options on foreign currency. These options convey the right to buy or sell the underlying currency at a price which is expected to be lower or higher than the spot price of the currency at the time the option is exercised or expires.

Each Portfolio, except the Core Bond and Small Cap Stock Index Portfolios, may purchase cash-settled options on equity index swaps in pursuit of its investment objective. Equity index swaps involve the exchange by the Portfolio with another party of cash flows based upon the performance of an index or a portion of an index of securities which usually includes dividends. A cash-settled option on a swap gives the purchaser the right, but not the obligation, in return for the premium paid, to receive an amount of cash equal to the value of the underlying swap as of the exercise date. These options typically are purchased in privately negotiated transactions from financial institutions, including securities brokerage firms.

Successful use by a Portfolio of options will be subject to the ability of the Manager (or Sub-Adviser in the case of the Founders Portfolios) to predict correctly movements in the prices of individual stocks, the stock market generally, foreign currencies or interest rates. To the extent such predictions are incorrect, the Portfolio may incur losses.

Future Developments. (All Portfolios) A Portfolio may take advantage of opportunities in options and futures contracts and options on futures contracts and any other derivatives which are not presently contemplated for use by the Portfolio or which are not currently available but which may be developed, to the extent such opportunities are both consistent with the Portfolio's investment objective and legally permissible for the Portfolio. Before entering into such transactions or making any such investment on behalf of a Portfolio, the Fund will provide appropriate disclosure in its Prospectus or Statement of Additional Information.

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Forward Commitments. (All Portfolios, except the Small Cap Stock Index Portfolio) Each of these Portfolios may purchase or sell securities on a forward commitment, when-issued or delayed-delivery basis, which means that delivery and payment take place a number of days after the date of the commitment to purchase or sell. The payment obligation and the interest rate receivable on a forward commitment, when-issued or delayed-delivery security are fixed when the Portfolio enters into the commitment, but the Portfolio does not make a payment until it receives delivery from the counter party. The Portfolio will commit to purchase such securities only with the intention of actually acquiring the securities, but the Portfolio may sell these securities before the settlement date if it is deemed advisable. The Portfolio will segregate permissible liquid assets at least equal at all times to the amount of the Portfolio's purchase commitments.

The Core Bond Portfolio intends to engage in forward commitments to increase its portfolio's financial exposure to changes in interest rates and will increase the volatility of its returns. If the Portfolio is fully or almost fully invested when forward commitment purchases are outstanding, such purchases may result in a form of leverage. At no time will the Portfolio have more than 33-1/3% of its assets committed to purchase securities on a forward commitment basis.

Securities purchased on a forward commitment, when-issued or delayed-delivery basis are subject to changes in value (generally changing in the same way, i.e., appreciating when interest rates decline and depreciating when interest rates rise) based upon the public's perception of the creditworthiness of the issuer and changes, real or anticipated, in the level of interest rates. Securities purchased on a forward commitment, when-issued or delayed-delivery basis may expose a Portfolio to risks because they may experience such fluctuations prior to their actual delivery. Purchasing securities on a forward commitment, when-issued or delayed-delivery basis can involve the additional risk that the yield available in the market when the delivery takes place actually may be higher than that obtained in the transaction itself. Purchasing securities on a forward commitment, when-issued or delayed-delivery basis when a Portfolio is fully or almost fully invested may result in greater potential fluctuation in the value of the Portfolio's net assets and its net asset value per share.

Forward Roll Transactions. (Core Bond Portfolio only) To enhance current income, the Portfolio may enter into forward roll transactions with respect to mortgage-related securities. In a forward roll transaction, the Portfolio sells a mortgage-related security to a financial institution, such as a bank or broker-dealer, and simultaneously agrees to purchase a similar security from the institution at a later date at an agreed upon price. The securities that are purchased will bear the same interest rate as those sold, but generally will be collateralized by different pools of mortgages with different pre-payment histories than those sold. During the period between the sale and purchase, the Portfolio will not be entitled to receive interest and principal payments on the securities sold. Proceeds of the sale typically will be invested in short-term instruments, particularly repurchase agreements, and the income from these investments, together with any additional fee income received on the sale will be expected to generate income for the Portfolio exceeding the yield on the securities sold. Forward roll transactions involve the risk that the market value of the securities sold by the Portfolio may decline below the purchase price of those

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securities. The Portfolio will segregate permissible liquid assets at least equal to the amount of the repurchase price (including accrued interest).

Certain Investment Considerations and Risks

Equity Securities. (All Portfolios) Equity securities, including common stock, and certain preferred stock, convertible securities and warrants, fluctuate in value, often based on factors unrelated to the value of the issuer of the securities, and such fluctuations can be pronounced. Changes in the value of a Portfolio's investments will result in changes in the value of its shares and thus the Portfolio's total return to investors.

Each Portfolio, except the Core Bond Portfolio, may purchase securities of companies in initial public offerings ("IPOs") or shortly thereafter. An IPO is a corporation's first offering of stock to the public. Shares are given a market value reflecting expectations for the corporation's future growth. Special rules of the National Association of Securities Dealers, Inc. apply to the distribution of IPOs. Corporations offering IPOs generally have a limited operating history and may involve greater risk. The prices of these companies' securities may be very volatile, rising and falling rapidly, sometimes based solely on investor perceptions rather than economic reasons. A Portfolio may purchase securities of companies which have no earnings or have experienced losses. A Portfolio generally will make these investments based on a belief that actual anticipated products or services will produce future earnings. If the anticipated event is delayed or does not occur, or if investor perception about the company changes, the company's stock price may decline sharply and its securities may become less liquid.

Fixed-Income Securities. (All Portfolios, except the Small Cap Stock Index Portfolio) The Core Value Portfolio may invest up to 5% of its net assets, and the Core Bond Portfolio may invest, in fixed-income securities, including those of companies that are close to entering, or already in, reorganization proceedings which are rated below investment grade by the Rating Agencies. The MidCap Stock Portfolio also may invest in corporate obligations rated at least Baa by Moody's or BBB by S&P or Fitch, or, if unrated, of comparable quality as determined by the Manager. Each Founders Portfolio may invest in debt securities of foreign issuers that management believes, based on market conditions, the financial condition of the issuer, general economic conditions and other relevant factors, offer opportunities for capital growth. The bonds, debentures and corporate obligations (other than convertible securities and preferred stock) in which each Founders Portfolio may invest must be rated not lower than Baa by Moody's or BBB by S&P and Fitch, or, if unrated, deemed to be of comparable quality by Founders. Even though interest-bearing securities are investments which promise a stable stream of income, the prices of such securities generally are inversely affected by changes in interest rates and, therefore, are subject to the risk of market price fluctuations. Certain securities that may be purchased by a Portfolio, such as those with interest rates that fluctuate directly or indirectly based on multiples of a stated index, are designed to be highly sensitive to changes in interest rates and can subject the holders thereof to extreme reductions of yield and possibly loss of principal.

The values of fixed-income securities also may be affected by changes in the credit rating or financial condition of the issuer. Certain securities that may be purchased by a Portfolio, such

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as those rated Baa by Moody's and BBB by S&P and Fitch, or, with respect to the Core Value and Core Bond Portfolios, lower, may be subject to such risk with respect to the issuing entity and to greater market fluctuations than certain lower yielding, higher rated fixed-income securities. Once the rating of a security held by a Portfolio has been changed, the Portfolio will consider all circumstances deemed relevant in determining whether to continue to hold the security.

Index Investing. (Small Cap Stock Index Portfolio only) The Small Cap Stock Index Portfolio is managed by determining which stocks are to be purchased or sold to match, to the extent feasible, the investment characteristics of the S&P SmallCap 600 Index. The Portfolio will attempt to achieve a correlation between its performance and that of the Index, in both rising and falling markets, of at least 0.95, without taking into account expenses. A correlation of 1.00 would indicate perfect correlation, which would be achieved when the Portfolio's net asset value, including the value of its dividends and capital gain distributions, increases or decreases in exact proportion to changes in the Index. The Portfolio's ability to correlate its performance with that of the S&P SmallCap 600 Index, however, may be affected by, among other things, changes in securities markets, the manner in which the total return of the S&P SmallCap 600 Index is calculated, the size of the Portfolio, the amount of cash or cash equivalents held in the Portfolio, and the timing, frequency and size of shareholder purchases and redemptions. The Portfolio will use cash flows from shareholder purchase and redemption activity to maintain, to the extent feasible, the similarity of its portfolio to the securities comprising the S&P SmallCap 600 Index. Inclusion of a security in the S&P SmallCap 600 Index in no way implies an opinion by the sponsor of the Index as to its attractiveness as an investment. In the future, subject to the approval of the Portfolio's shareholders, the Portfolio may select a different index if such a standard of comparison is deemed to be more representative of the performance of the securities the Portfolio seeks to match. The Portfolio is not sponsored, endorsed, sold or promoted by the sponsor of the S&P SmallCap 600 Index.

The Small Cap Stock Index Portfolio may not hold all of the issues that comprise the S&P SmallCap 600 Index because of the costs involved and the illiquidity of certain of the securities which comprise the Index. Instead, the Portfolio will attempt to hold a representative sample of the securities in the S&P SmallCap 600 Index so that, in the aggregate, the investment characteristics of the Portfolio resemble that of the Index. The stocks to be included in the Portfolio will be selected using a statistical process known as "sampling." The process will be used to select stocks so that the market capitalizations, industry weightings, dividend yield, and beta. The sampling techniques utilized by the Small Cap Stock Index Portfolio are expected to be an effective means of substantially duplicating the investment performance of the S&P SmallCap 600 Index; however, the Portfolio is not expected to track the S&P SmallCap 600 Index with the same degree of accuracy that complete replication of the Index would have provided. Over time, the portfolio composition of the Small Cap Stock Index Portfolio will be altered (or "rebalanced") to reflect changes in the composition of the S&P SmallCap 600 Index.

Technology Sector. Each Portfolio, to the extent described in its Prospectus, may invest in securities issued by companies in the technology sector, which has been among the most volatile sectors of the stock market. Technology companies involve greater risk because their revenues and earnings tend to be less predictable (and some companies may be experiencing

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significant losses) and their share prices tend to be more volatile. Certain technology companies may have limited product lines, markets or financial resources, or may depend on a limited management group. In addition, these companies are strongly affected by worldwide technological developments, and their products and services may not be economically successful or may quickly become outdated. Investor perception may play a greater role in determining the day-to-day value of technology stocks than it does in other sectors. Portfolio investments made in anticipation of future products and services may decline dramatically in value if the anticipated products or services are delayed or canceled.

Smaller Company Securities. (Emerging Leaders, MidCap Stock, Small Cap Stock Index, Technology Growth and Founders Discovery Portfolios only) Each of these Portfolios may purchase securities of smaller capitalization companies, the prices of which may be subject to more abrupt or erratic market movements than larger, more established companies, because these securities typically are traded in lower volume and the issuers typically are more subject to changes in earnings and prospects. The Technology Growth Portfolio is not limited in the amount it may invest in these securities or companies, and the Small Cap Stock Index Portfolio will invest substantially all of its assets in such securities or companies. The Portfolios, together with other investment companies advised by the Manager and its affiliates, may own significant positions in portfolio companies which, depending on market conditions, may affect adversely a Portfolio's ability to dispose of some or all of its position should it desire to do so.

Lower Rated Securities. (Core Bond, Core Value and Founders Portfolios only) Each of these Portfolios may invest a portion of its assets in higher yielding (and, therefore, higher risk) debt securities (convertible securities and preferred stocks with respect to the Founders Portfolios) such as those rated as low as B by a Rating Agency in the case of the Founders Portfolios, or as low as the lowest rating assigned by a Rating Agency in the case of the Core Bond and Core Value Portfolios. They may be subject to certain risks with respect to the issuing entity and to greater market fluctuations than certain lower yielding, higher rated fixed-income securities. The retail secondary market for these securities may be less liquid than that of higher rated securities; adverse conditions could make it difficult at times for the Portfolio to sell certain securities or could result in lower prices than those used in calculating the Portfolio's net asset value.

Bond prices are inversely related to interest rate changes; however, bond price volatility also may be inversely related to coupon. Accordingly, below investment grade securities may be relatively less sensitive to interest rate changes than higher quality securities of comparable maturity, because of their higher coupon. This higher coupon is what the investor receives in return for bearing greater credit risk. The higher credit risk associated with below investment grade securities potentially can have a greater effect on the value of such securities than may be the case with higher quality issues of comparable maturity, and will be a substantial factor in the Portfolio's relative share price volatility. Although ratings may be useful in evaluating the safety of interest and principal payments, they do not evaluate the market value risk of these securities. The Portfolio will rely on the judgment, analysis and experience of the Manager (or Founders in the case of the Founders Portfolios) in evaluating the creditworthiness of an issuer.

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Companies that issue certain of these securities often are highly leveraged and may not have available to them more traditional methods of financing. Therefore, the risk associated with acquiring the securities of such issuers generally is greater than is the case with higher rated securities. For example, during an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of these securities may not have sufficient revenues to meet their interest payment obligations. The issuer's ability to service its debt obligations also may be affected adversely by specific corporate developments, or the issuer's inability to meet specific projected business forecasts, or the unavailability of additional financing. The risk of loss because of default by the issuer is significantly greater for the holders of these securities because such securities generally are unsecured and often are subordinated to other creditors of the issuer.

Because there is no established retail secondary market for many of these securities, the Fund anticipates that such securities could be sold only to a limited number of dealers or institutional investors. To the extent a secondary trading market for these securities does exist, it generally is not as liquid as the secondary market for higher rated securities. The lack of a liquid secondary market may have an adverse impact on market price and yield and the Portfolio's ability to dispose of particular issues when necessary to meet such Portfolio's liquidity needs or in response to a specific economic event such as a deterioration in the creditworthiness of the issuer. The lack of a liquid security market for certain securities also may make it more difficult for the Portfolio to obtain accurate market quotations for purposes of valuing its portfolio and calculating its net asset value. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of these securities. In such cases, judgment may play a greater role in valuation because less reliable, objective data may be available.

These securities may be particularly susceptible to economic downturns. An economic recession could adversely affect the ability of the issuers of lower rated bonds to repay principal and pay interest thereon and increase the incidence of default for such securities. It is likely that any economic recession also could disrupt severely the market for such securities and have an adverse impact on their value.

Each of these Portfolios may acquire these securities during an initial offering. Such securities may involve special risks because they are new issues. The Fund has no arrangement with any persons concerning the acquisition of such securities, and the Manager (or Founders in the case of the Founders Portfolios) will review carefully the credit and other characteristics pertinent to such new issues.

The credit risk factors pertaining to lower rated securities also apply to lower rated zero coupon, pay-in-kind and step-up securities. In addition to the risks associated with the credit rating of the issuers, the market prices of these securities may be very volatile during the period no interest is paid.

The ratings of the Ratings Agencies represent their opinions as to the quality of the obligations which they undertake to rate. Ratings are relative and subjective and, although ratings may be useful in evaluating the safety of interest and principal payments, they do not evaluate the market value risk of such obligations. Although these ratings may be an initial

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criterion for selection of portfolio investments, the Manager (or Founders in the case of the Founders Portfolios) also will evaluate these securities and the ability of the issuers of such securities to pay interest and principal.

With respect to Core Bond Portfolio, the average distribution of investments of the Portfolio in corporate bonds (excluding convertible preferred stocks and convertible bonds) by ratings for the fiscal year ended December 31, 2004, calculated monthly on a dollar weighted basis, was as follows:

Core Bond Portfolio
Moody's	or	S&P or Fitch	Percentage

Aaa		AAA	70.0%
Aa		AA	4.1%
A		A	5.7%
Baa		BBB	12.9%
Ba		BB	2.3%
B		B	2.3%
Cc		CC	2.9%
NR		NR	1.8%*
			102.0%**

*		These unrated securities have been determined by the Manager to be of comparable quality to securities
		rated as follows: B/B (0.5%) and Caa/CCC (1.3%).
**		The Portfolio also owns preferred stocks rated A/A (0.4%), convertible preferred stocks rated
		Baa/BBB (0.2%) and Caa/CCC (0.8%), convertible bonds rated Baa/BBB (
		0.8%) and B/B (0.5%).

The actual distribution of the Portfolio's corporate bond investments by ratings on any given date will vary, and the distribution of the Portfolio's investments by ratings as set forth above should not be considered as representative of the Portfolio's future portfolio composition.

Foreign Securities. (All Portfolios, except the Small Cap Stock Index Portfolio) Foreign securities markets generally are not as developed or efficient as those in the United States. Securities of some foreign issuers, including depositary receipts, foreign government obligations and securities of supranational entities, are less liquid and more volatile than securities of comparable U.S. issuers. Similarly, volume and liquidity in most foreign securities markets are less than in the United States and, at times, volatility of price can be greater than in the United States.

Because evidences of ownership of foreign securities usually are held outside the United States, a Portfolio will be subject to additional risks which include possible adverse political and economic developments, seizure or nationalization of foreign deposits and adoption of governmental restrictions which might adversely affect or restrict the payment of principal and interest on the foreign securities to investors located outside the country of the issuer, whether

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from currency blockage or otherwise. Moreover, foreign securities held by a Portfolio may trade on days when the Portfolio does not calculate its net asset value and thus may affect the Portfolio's net asset value on days when investors have no access to the Portfolio.

With respect to certain securities that may be purchased by the Founders Portfolios and the Core Bond Portfolio only, developing countries have economic structures that are generally less diverse and mature, and political systems that are less stable, than those of developed countries. The markets of developing countries may be more volatile than the markets of more mature economies; however, such markets may provide higher rates of return to investors. Many developing countries providing investment opportunities for the Portfolio have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had and may continue to have adverse effects on the economies and securities markets of certain of these countries.

Since foreign securities often are purchased with and payable in currencies of foreign countries, the value of these assets as measured in U.S. dollars may be affected favorably or unfavorably by changes in currency rates and exchange control regulations.

Mortgage-Related Securities. (Core Bond Portfolio only) Mortgage-related securities are complex derivative instruments, subject to both credit and prepayment risk, and may be more volatile and less liquid, and more difficult to price accurately, than more traditional debt securities. Although certain mortgage-related securities are guaranteed by a third party (such as a U.S. Government agency or instrumentality with respect to government-related mortgage-backed securities) or otherwise similarly secured, the market value of the security, which may fluctuate, is not secured.

Mortgage-related securities generally are subject to credit risks associated with the performance of the underlying mortgage properties and to prepayment risk. In certain instances, the credit risk associated with mortgage-related securities can be reduced by third party guarantees or other forms of credit support. Improved credit risk does not reduce prepayment risk which is unrelated to the rating assigned to the mortgage-related security. Prepayment risk can lead to fluctuations in value of the mortgage-related security which may be pronounced. If a mortgage-related security is purchased at a premium, all or part of the premium may be lost if there is a decline in the market value of the security, whether resulting from changes in interest rates or prepayments on the underlying mortgage collateral. Certain mortgage-related securities that may be purchased by the Portfolio, such as inverse floating rate collateralized mortgage obligations, have coupons that move inversely to a multiple of a specific index which may result in a form of leverage. As with other interest-bearing securities, the prices of certain mortgage-related securities are inversely affected by changes in interest rates. However, although the value of a mortgage-related security may decline when interest rates rise, the converse is not necessarily true, since in periods of declining interest rates the mortgages underlying the security are more likely to be prepaid. For this and other reasons, a mortgage-related security's stated maturity may be shortened by unscheduled prepayments on the underlying mortgages, and, therefore, it is not possible to predict accurately the security's return to the Portfolio. Moreover, with respect to certain stripped mortgage-backed securities, if the underlying mortgage securities experience greater than anticipated prepayments of principal, the Portfolio may fail to fully

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recoup its initial investment even if the securities are rated in the highest rating category by a nationally recognized statistical rating organization. During periods of rapidly rising interest rates, prepayments of mortgage-related securities may occur at slower than expected rates. Slower prepayments effectively may lengthen a mortgage-related security's expected maturity which generally would cause the value of such security to fluctuate more widely in response to changes in interest rates. Were the prepayments on the Portfolio's mortgage-related securities to decrease broadly, the Portfolio's effective duration, and thus sensitivity to interest rate fluctuations, would increase. Commercial real property loans, however, often contain provisions that reduce the likelihood that such securities will be prepaid. The provisions generally impose significant prepayment penalties on loans and in some cases there may be prohibitions on principal prepayments for several years following origination.

State Insurance Regulation. (All Portfolios) The Fund is intended to be a funding vehicle for VA contracts and VLI policies to be offered by Participating Insurance Companies and will seek to be offered in as many jurisdictions as possible. Certain states have regulations concerning concentration of investments, purchase and sale of future contracts and short sales of securities, among other techniques. If applied to a Portfolio, the Portfolio may be limited in its ability to engage in such techniques and to manage its portfolio with the flexibility provided herein. It is the Fund's intention that each Portfolio operate in material compliance with current insurance laws and regulations, as applied, in each jurisdiction in which the Portfolio is offered.

Simultaneous Investments. (All Portfolios) Investment decisions for each Portfolio are made independently from those of the other Portfolios and investment companies advised by the Manager (and, where applicable, Founders). The Manager has adopted written trade allocation procedures for its equity and fixed income trading desks. Under the procedures, portfolio managers or the trading desks will ordinarily seek to aggregate (or "bunch") orders that are placed or received concurrently for more than one investment company or account. In some cases, this procedure may adversely affect the size of the position obtained for or disposed of by the Portfolio or the price paid or received by the Portfolio. Each Portfolio, together with other investment companies advised by the Manager or Founders and their affiliates, may own significant positions in portfolio companies which, depending on market conditions, may affect adversely a Portfolio's ability to dispose of some or all of its positions should it desire to do so.

Investment Restrictions

Each Portfolio's investment objective is a fundamental policy, which cannot be changed without approval by the holders of a majority (as defined in the 1940 Act) of the Portfolio's outstanding voting shares. In addition, each Portfolio has adopted certain investment restrictions as fundamental policies and certain other investment restrictions as non-fundamental policies, as described below. Under normal circumstances, the Core Bond Portfolio invests at least 80% of its net assets, plus any borrowings for investment purposes, in bonds (or other investments with similar economic characteristics). Under normal circumstances, each of the Core Value, Emerging Leaders, MidCap Stock and Technology Growth Portfolios invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks (or other investments with similar economic characteristics). These stocks are issued by (i) in the case of Emerging Leaders Portfolio, companies the Manager believes to be emerging leaders, (ii) in the case of MidCap

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Stock Portfolio, mid-cap companies, and (iii) in the case of Technology Growth Portfolio, companies of any size that the Manager believes to be leading producers or beneficiaries of technological innovation. Under normal circumstances, the Founders International Equity Portfolio invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities (or other investments with similar economic characteristics) from a minimum of three countries outside the U.S. Each of these Portfolios has adopted a policy to provide its shareholders with at least 60 days' prior notice of any change in its policy to so invest 80% of its assets.

Core Value Portfolio, MidCap Stock Portfolio, Technology Growth Portfolio, Founders Discovery Portfolio, Founders Growth Portfolio and Founders International Equity Portfolio only. Each of these Portfolios has adopted investment restrictions numbered 1 through 10 as fundamental policies which cannot be changed, as to a Portfolio, without approval by the holders of a majority (as defined in the 1940 Act) of the Portfolio's outstanding voting shares. Investment restrictions numbered 11 through 15 are not fundamental policies and may be changed, as to a Portfolio, by a vote of a majority of the Fund's Board members at any time. None of these Portfolios may:

1. Invest more than 25% of the value of its total assets in the securities of issuers in any single industry, provided that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities. For purposes of this Investment Restriction with respect to the Technology Growth Portfolio, the technology sector in general is not considered an industry.

2. Invest more than 5% of its assets in the obligations of any one issuer, except that up to 25% of the value of the Portfolio's total assets may be invested, and securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities may be purchased, without regard to any such limitation.

3. Purchase the securities of any issuer if such purchase would cause the Portfolio to hold more than 10% of the voting securities of such issuer. This restriction applies only with respect to 75% of the Portfolio's total assets.

4. Invest in commodities, except that a Portfolio may purchase and sell options, forward contracts, futures contracts, including those relating to indices, and options on futures contracts or indices.

5. Purchase, hold or deal in real estate, or oil, gas or other mineral leases or exploration or development programs, but a Portfolio may purchase and sell securities that are secured by real estate or issued by companies that invest or deal in real estate or real estate investment trusts.

6. Borrow money, except to the extent permitted under the 1940 Act (which currently limits borrowing to no more than 33-1/3% of the value of the Portfolio's total assets). For purposes of this Investment Restriction, the entry into options, forward contracts, futures

B-31

contracts, including those relating to indices, and options on futures contracts or indices shall not constitute borrowing.

7. Make loans to others, except through the purchase of debt obligations and the entry into repurchase agreements. However, a Portfolio may lend its portfolio securities in an amount not to exceed 33-1/3% of the value of its total assets. Any loans of portfolio securities will be made according to guidelines established by the SEC and the Fund's Board.

8. Act as an underwriter of securities of other issuers, except to the extent a Portfolio may be deemed an underwriter under the Securities Act of 1933, as amended, by virtue of disposing of portfolio securities.

9. Issue any senior security (as such term is defined in Section 18(f) of the 1940

Act), except to the extent the activities permitted in Investment Restriction Nos. 4, 6, 12 and 13 may be deemed to give rise to a senior security.

10. Purchase securities on margin, but a Portfolio may make margin deposits in connection with transactions in options, forward contracts, futures contracts, including those relating to indices, and options on futures contracts or indices.

11. Invest in the securities of a company for the purpose of exercising management or control, but the Portfolio will vote the securities it owns as a shareholder in accordance with its views.

12. Pledge, mortgage or hypothecate its assets, except to the extent necessary to secure permitted borrowings and to the extent related to the purchase of securities on a when-issued or forward commitment basis and the deposit of assets in escrow in connection with writing covered put and call options and collateral and initial or variation margin arrangements with respect to options, forward contracts, futures contracts, including those relating to indices, and options on futures contracts or indices.

13. Purchase, sell or write puts, calls or combinations thereof, except as described in the Prospectus and Statement of Additional Information.

14. Enter into repurchase agreements providing for settlement in more than seven days after notice or purchase securities which are illiquid, if, in the aggregate, more than 15% of the value of its net assets would be so invested.

15. Purchase securities of other investment companies, except to the extent permitted under the 1940 Act.

* * *

Core Bond Portfolio, Emerging Leaders Portfolio and Small Cap Stock Index Portfolio. Each of these Portfolios has adopted investment restrictions numbered 1 through 10 as fundamental policies which cannot be changed, as to a Portfolio, without approval by the holders

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of a majority (as defined in the 1940 Act) of the Portfolio's outstanding voting shares. Investment restrictions numbered 11 through 13 are not fundamental policies and may be changed, as to a Portfolio, by a vote of a majority of the Fund's Board members at any time. None of these Portfolios may:

1. Invest more than 25% of the value of its total assets in the securities of issuers in any single industry (except, for Small Cap Stock Index Portfolio, to the extent such Portfolio's benchmark Index as described in its Prospectus is so concentrated), provided that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities.

4. Invest in commodities, except that the Portfolio may purchase and sell options, forward contracts, futures contracts, including those relating to indices, and options on futures contracts or indices.

5. Purchase, hold or deal in real estate, or oil, gas or other mineral leases or exploration or development programs, but the Portfolio may purchase and sell securities that are secured by real estate or issued by companies that invest or deal in real estate or real estate investment trusts.

6. Borrow money, except to the extent permitted under the 1940 Act (which currently limits borrowing to no more than 33-1/3% of the value of a Portfolio's total assets). For purposes of this Investment Restriction, the entry into options, forward contracts, futures contracts, including those relating to indices, and options on futures contracts or indices shall not constitute borrowing.

7. Lend any securities or make any other loans if, as a result, more than 33-1/3% of its total assets would be lent to others, except that this limitation does not apply to the purchase of debt obligations and the entry into repurchase agreements. Any loans of portfolio securities will be made according to guidelines established by the SEC and the Fund's Board.

8. Act as an underwriter of securities of other issuers, except to the extent the Portfolio may be deemed an underwriter under the Securities Act of 1933, as amended, by virtue of disposing of portfolio securities.

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9. Issue any senior security (as such term is defined in Section 18(f) of the 1940 Act), except to the extent the activities permitted in Investment Restriction Nos. 4, 6 and 12 may be deemed to give rise to a senior security.

10. Purchase securities on margin, but the Portfolio may make margin deposits in connection with transactions in options, forward contracts, futures contracts, including those relating to indices, and options on futures contracts or indices.

11. Invest in the securities of a company for the purpose of exercising management or control, but the Portfolio will vote the securities it owns as a shareholder in accordance with its views.

13. Enter into repurchase agreements providing for settlement in more than seven days after notice or purchase securities which are illiquid, if, in the aggregate, more than 15% of the value of its net assets would be so invested.

* * *

In addition, each Portfolio has adopted the following policies as non-fundamental policies. Each Portfolio intends (i) to comply with the diversification requirements prescribed in regulations under Section 817(h) of the Code, and (ii) to comply in all material respects with insurance laws and regulations that the Fund has been advised are applicable to investments of separate accounts of Participating Insurance Companies. As non-fundamental policies, these policies may be changed by vote of a majority of the Board members at any time.

If a percentage restriction is adhered to at the time of investment, a later change in percentage resulting from a change in values or assets will not constitute a violation of such restriction. With respect to Investment Restriction No. 6, however, if borrowings exceed 33-1/3% of the value of a Portfolio's total assets as a result of a change in values or assets, the Portfolio must take steps to reduce such borrowings at least to the extent of such excess.

The Fund and the Manager have received an exemptive order from the SEC which, among other things, permits each Portfolio to use cash collateral received in connection with lending the Portfolio's securities and other uninvested cash to purchase shares of one or more registered money market funds advised by the Manager in excess of the limitations imposed by the 1940 Act.

MANAGEMENT OF THE FUND

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The Fund's Board is responsible for the management and supervision of each Portfolio, and approves all significant agreements with those companies that furnish services to the Fund. These companies are as follows:

The Dreyfus Corporation		Investment Adviser

Founders Asset Management LLC		Sub-Investment Adviser to the Founders
		Portfolios
Dreyfus Service Corporation		Distributor
Dreyfus Transfer, Inc		Transfer Agent
The Bank of New York		Custodian for the Founders International
		Equity Portfolio
Mellon Bank, N.A		Custodian for the Core Bond, Core
		Value, Emerging Leaders, Founders
		Discovery, Founders Growth, MidCap
		Stock, Technology Growth and Small
		Cap Stock Index Portfolios

Board Members of the Fund¹

Board members of the Fund, together with information as to their position with the Fund, principal occupations and other board memberships and affiliations, are shown below:

Name (Age)	Principal Occupation

Position with Fund (Since)	During Past 5 Years	Other Board Memberships and Affiliations


Joseph S. DiMartino (61)	Corporate Director and Trustee	The Muscular Dystrophy Association, Director

~~Chairman of the Board (1998)~~		Levcor International, Inc., an apparel fabric processor,

		Director

		Century Business Services, Inc., a provider of

		outsourcing functions for small and medium size

		companies, Director

		The Newark Group, a provider of a national market of

		paper recovery facilities, paperboard mills and

		paperboard converting plants, Director
		~~Azimuth Trust, an institutional asset management firm,~~

		Member of Board of Managers and Advisory Board


Clifford L. Alexander, Jr. (71)	President of Alexander &

Board Member (1998)	Associates, Inc., a management

	consulting firm

	(January 1981 – present)

	~~Chairman of the Board of Moody's~~	Mutual of America Life Insurance Company,

	Corporation (October 2000 –	Director

	October 2003)

	Chairman of the Board and Chief
	~~Executive Officer of The Dun and~~
	~~Bradstreet Corporation (October~~


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Name (Age)	Principal Occupation

Position with Fund (Since)	During Past 5 Years	Other Board Memberships and Affiliations


	1999 –September 2000)

¹None of the Board members are "interested persons" of the Fund, as defined in the 1940 Act.

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Name (Age)	Principal Occupation
Position with Fund (Since)	During Past 5 Years	Other Board Memberships and Affiliations


Lucy Wilson Benson (77)	President of Benson and Associates,	The International Executive Services Corps., Director
Board Member (1998)	consultants to business and	Citizens Network for Foreign Affairs, Vice Chairperson
	government (1980 - present)	Council on Foreign Relations, Member
		Lafayette College Board of Trustees, Vice Chairperson
		Emeritus
		Atlantic Council of the U.S., Director

David W. Burke (68)	Corporate Director and Trustee	John F. Kennedy Library Foundation, Director
Board Member (2003)		U.S.S. Constitution Museum, Director

Whitney I. Gerard (70)	Partner of Chadbourne & Parke	None
Board Member (2003)	LLP

Arthur A. Hartman (79)	Chairman of First NIS Regional	APCO Associates, Inc., Senior Consultant
Board Member (2003)	Fund (ING/Barings Management)
	and New Russia Fund
	Advisory Council Member to
	Barings Vostok


George L. Perry (71)	Economist and Senior Fellow at
Board Member (2003)	Brookings Institution	None

Board members are elected to serve for an indefinite term. The Fund has standing audit, nominating and compensation committees, each comprised of its Board members who are not "interested persons" of the Fund, as defined in the 1940 Act. The function of the audit

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committee is (i) to oversee the Fund's accounting and financial reporting processes and the audits of the Fund's financial statements and (ii) to assist in the Board's oversight of the integrity of the Fund's financial statements, the Fund's compliance with legal and regulatory requirements and the independent auditors' qualifications, independence and performance. The Fund's nominating committee is responsible for selecting and nominating persons as members of the Board for election or appointment by the Board and for election by shareholders. In evaluating potential nominees, including any nominees recommended by shareholders, the committee takes into consideration various factors listed in the nominating committee charter, including character and integrity, business and professional experience, and whether the committee believes the person has the ability to apply sound and independent business judgment and would act in the interest of the Fund and its shareholders. The nominating committee will consider recommendations for nominees from shareholders submitted to the Secretary of the Fund, c/o The Dreyfus Corporation Legal Department, 200 Park Avenue, 8^th Floor West, New York, New York 10166, which includes information regarding the recommended nominee as specified in the nominating committee charter. The function of the compensation committee is to establish the appropriate compensation for serving on the Board. The Fund also has a standing pricing committee comprised of any one Board member. The function of the pricing committee is to assist in valuing the Portfolios' investments. The audit committee met seven times, the pricing committee met six times and the compensation and nominating committees each met once during the fiscal year ended December 31, 2004.

The table below indicates the dollar range of each Board member's ownership of Portfolio shares and shares of other funds in the Dreyfus Family of Funds for which he or she is a Board member, in each case as of December 31, 2004.

	Core Bond	Core Value	Emerging Leaders
Name of Board Member	Portfolio	Portfolio	Portfolio

Joseph S. DiMartino	None	None	None
Clifford L. Alexander, Jr.	None	None	None
Lucy Wilson Benson	None	None	None
David W. Burke	None	None	None
Whitney I. Gerard	None	None	None
Arthur A. Hartman	None	None	None
George L. Perry	None	None	None



	Founders	Founders	Founders
	Discovery	Growth	International
Name of Board Member	Portfolio	Portfolio	Equity Portfolio

Joseph S. DiMartino	None	None	None
Clifford L. Alexander, Jr.	None	None	None
Lucy Wilson Benson	None	None	None

David W. Burke	None	None	None
Whitney I. Gerard	None	None	None
Arthur A. Hartman	None	None	None
George L. Perry	None	None	None



	B-38

				Aggregate Holding
		Small		of Funds in the
		Cap		Dreyfus Family of
	MidCap	Stock	Technology	Funds for which
	Stock	Index	Growth	Responsible as a
Name of Board Member	Portfolio	Portfolio	Portfolio	Board Member

Joseph S. DiMartino	None	None	None	Over $100,000
Clifford L. Alexander, Jr.	None	None	None	Over $100,000
Lucy Wilson Benson	None	None	None	Over $100,000
David W. Burke	None	None	None	Over $100,000
Whitney I. Gerard	None	None	None	Over $100,000
Arthur A. Hartman	None	None	None	None
George L. Perry	None	None	None	None

As of December 31, 2004, none of the Board members or their immediate family members owned securities of the Manager, Founders, or the Distributor or any person (other than a registered investment company) directly or indirectly controlling, controlled by or under common control with the Manager, Founders, or the Distributor.

The Fund pays its Board members its allocated portion of an annual retainer of $60,000 and a fee of $7,500 per meeting (with a minimum of $500 per meeting and per telephone meeting) attended for the Fund and fourteen other funds (comprised of 28 portfolios) in the Dreyfus Family of Funds, and reimburses them for their expenses. The Chairman of the Board receives an additional 25% of such compensation. Emeritus Board members, if any, are entitled to receive an annual retainer and a per meeting attended fee of one-half the amount paid to them as Board members. The aggregate amount of compensation paid to each Board member by the Fund and by all funds in the Dreyfus Family of Funds for which such person is a Board member (the number of portfolios of such funds is set forth in parenthesis next to each Board member's total compensation) for the year ended December 31, 2004, was as follows:

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		Total Compensation
	Aggregate	From the Fund and Fund
	Compensation From	Complex Paid to Board
Name of Board Member	the Fund*	Member(**)


Joseph S. DiMartino	$5,230	$
		874,125 (193)



Clifford L. Alexander	$4,184	$218,500
		(66)

Lucy Wilson Benson	$4,184	$129,500
		(40)

David W. Burke	$4,308	$318,000
		(84)

Whitney I. Gerard	$4,184	$109,000
		(38)

Arthur A. Hartman	$4,146	$108,500
		(38)

George L. Perry	$3,884	$101,000

		(38)

*		Amount does not include reimbursed expenses for attending Board meetings, which
		amounted to $8,679 for all Board members as a group.
**		Represents the number of separate portfolios comprising the investment companies in the
		Fund Complex, including the Portfolios, for which the Board members serve.

Officers of the Fund

STEPHEN E. CANTER, President since March 2000. Chairman of the Board, Chief Executive Officer and Chief Operating Officer of the Manager, and an officer of 91 investment companies (comprised of 186 portfolios) managed by the Manager. Mr. Canter also is a Board member and, where applicable, an Executive Committee Member of the other investment management subsidiaries of Mellon Financial Corporation, each of which is an affiliate of the Manager. He is 59 years old and has been an employee of the Manager since May 1995.

STEPHEN R. BYERS, Executive Vice President since November 2002. Chief Investment Officer, Vice Chairman and a director of the Manager, and an officer of 91 investment companies (comprised of 186 portfolios) managed by the Manager. Mr. Byers also is an officer, director or an Executive Committee Member of certain other investment

B-40

management subsidiaries of Mellon Financial Corporation, each of which is an affiliate of the Manager. He is 51 years old and has been an employee of the Manager since January 2000.

MARK N. JACOBS, Vice President since March 2000. Executive Vice President, Secretary, and General Counsel of the Manager, and an officer of 92 investment companies (comprised of 202 portfolios) managed by the Manager. He is 58 years old and has been an employee of the Manager since June 1977.

STEVEN F. NEWMAN, Secretary since March 2000. Associate General Counsel and Assistant Secretary of the Manager, and an officer of 92 investment companies (comprised of 202 portfolios) managed by the Manager. He is 55 years old and has been an employee of the Manager since July 1980.

JEFF PRUSNOFSKY, Assistant Secretary since March 2000. Associate General Counsel of the Manager, and an officer of 25 investment companies (comprised of 89 portfolios) managed by the Manager. He is 39 years old and has been an employee of the Manager since October 1990.

MICHAEL A. ROSENBERG, Assistant Secretary since March 2000. Associate General Counsel of the Manager, and an officer of 89 investment companies (comprised of 195 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since October 1991.

ROBERT R. MULLERY, Assistant Secretary since January 2003. Associate General Counsel of the Manager, and an officer of 25 investment companies (comprised of 59 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since May 1986.

JAMES WINDELS, Treasurer since November 2001. Director – Mutual Fund Accounting of the Manager, and an officer of 92 investment companies (comprised of 202 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since April 1985.

KENNETH J. SANDGREN, Assistant Treasurer since November 2001. Mutual Funds Tax Director of the Manager, and an officer of 92 investment companies (comprised of 202 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since June 1993.

RICHARD CASSARO, Assistant Treasurer since August 2003. Senior Accounting Manager - Equity Funds of the Manager, and an officer of 26 investment companies (comprised of 104 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since September 1982.

ROBERT SVAGNA, Assistant Treasurer since December 2002. Senior Accounting Manager - Equity Funds of the Manager, and an officer of 27 investment companies (comprised

B-41

of 109 portfolios) managed by the Manager. He is 37 years old and has been an employee of the Manager since November 1990.

ERIK D. NAVILOFF, Assistant Treasurer since December 2002. Senior Accounting Manager –Taxable Fixed Income Funds of the Manager, and an officer of 18 investment companies (comprised of 74 portfolios) managed by the Manager. He is 36 years old and has been an employee of the Manager since November 1992.

WILLIAM GERMENIS, Anti-Money Laundering Compliance Officer since September 2002. Vice President and Anti-Money Laundering Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 88 investment companies (comprised of 198 portfolios) managed by the Manager. He is 34 years old and has been an employee of the Distributor since October 1998.

JOSEPH W. CONNOLLY, Chief Compliance Officer since October 2004. Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (92 investment companies, comprising 202 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon's Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. Mr. Connolly has served in various capacities with the Manager since 1980, including manager of the firms' Fund Accounting Department from 1997 through October 2001. Mr. Connolly is 47 years old.

The address of each Board member and officer of the Fund is 200 Park Avenue, New York, New York 10166.

The Fund's Board members and officers, as a group, owned less than 1% of each Portfolio's shares outstanding on April 1, 2005. See "Information About the Fund and Portfolios" for a list of shareholders known by the Fund to own of record 5% or more of a Portfolio's outstanding voting securities as of April 1, 2005.

MANAGEMENT ARRANGEMENTS

Investment Adviser. The Manager is a wholly-owned subsidiary of Mellon Financial Corporation ("Mellon"). Mellon is a global financial holding company incorporated under Pennsylvania law in 1971 and registered under the Federal Bank Holding Company Act of 1956, as amended. Mellon provides a comprehensive range of financial products and services in domestic and selected international markets.

The Manager provides management services pursuant to a Management Agreement between the Fund and the Manager. As to each Portfolio, the Management Agreement is subject to annual approval by (i) the Fund's Board or (ii) vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Portfolio, provided that in either event the continuance also is approved by a majority of the Board members who are not "interested persons" (as defined in the 1940 Act) of the Fund or the Manager, by vote cast in person at a meeting called

B-42

for the purpose of voting on such approval. As to each Portfolio, the Management Agreement is terminable without penalty, on 60 days' notice, by the Fund's Board or by vote of the holders of a majority of the shares of the Portfolio, or, upon not less than 90 days' notice, by the Manager. The Management Agreement will terminate automatically, as to the relevant Portfolio, in the event of its assignment (as defined in the 1940 Act).

The following persons are officers and/or directors of the Manager: Stephen E. Canter, Chairman of the Board, Chief Executive Officer and Chief Operating Officer; Thomas F. Eggers, President and a director; Stephen R. Byers, Chief Investment Officer, Vice Chairman and a director; J. Charles Cardona, Vice Chairman and a director; J. David Officer, Vice Chairman and a director; Ronald P. O'Hanley III, Vice Chairman and a director; Diane P. Durnin, Executive Vice President, Mark N. Jacobs, Executive Vice President, General Counsel and Secretary; Patrice M. Kozlowski, Senior Vice President-Corporate Communications; Lisa A. Fox, Vice President-Human Resources; Anthony Mayo, Vice President-Information Systems; Theodore A. Schachar, Vice President Tax; Alex G. Sciulli, Vice President; Wendy H. Strutt, Vice President; William H. Maresca, Controller; Joseph W. Connolly, Chief Compliance Officer; James Bitetto, Assistant Secretary; Steven F. Newman, Assistant Secretary; and Steven G. Elliott, David F. Lamere, Martin G. McGuinn and Richard W. Sabo, directors.

The Manager maintains office facilities on behalf of the Fund, and furnishes statistical and research data, clerical help, accounting, data processing, bookkeeping and internal auditing and certain other required services to the Fund. The Manager, from time to time, may make payments from its own assets, including past profits but not including the management fees paid by the Portfolios, to Participating Insurance Companies in connection with the provision of certain administrative services to one or more Portfolios or servicing and/or maintaining shareholder accounts. The Manager also may make such advertising and promotional expenditures, using its own resources, as it from time to time deems appropriate.

Sub-Investment Adviser. With respect to the Founders Portfolios, the Manager has entered into a Sub-Investment Advisory Agreement with Founders (the "Founders Sub-Advisory Agreement"). As to each Founders Portfolio, the Founders Sub-Advisory Agreement is subject to annual approval by (i) the Fund's Board or (ii) vote of a majority (as defined in the 1940 Act) of the Portfolio's outstanding voting securities, provided that in either event the continuance also is approved by a majority of the Board members who are not "interested persons" (as defined in the 1940 Act) of the Fund or Founders, by vote cast in person at a meeting called for the purpose of voting on such approval. As to each Founders Portfolio, the Founders Sub-Advisory

Agreement is terminable without penalty (i) by the Manager on 60 days' notice, (ii) by the Fund's Board or by vote of the holders of a majority of the Portfolio's outstanding voting securities on 60 days' notice, or (iii) upon not less than 90 days' notice, by Founders. The Founders Sub-Advisory Agreement will terminate automatically, as to the relevant Founders Portfolio, in the event of its assignment (as defined in the 1940 Act).

The following persons are officers of Founders: Stephen E. Canter, Chairman; Richard W. Sabo, President and Chief Executive Officer; Kenneth R. Christoffersen, Senior Vice President, General Counsel and Secretary; David L. Ray, Senior Vice President, Treasurer and Assistant Secretary; Richard A. Sampson, Senior Vice President; Robert T. Ammann, Vice

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President; Janelle E. Belcher, Vice President; John B. Jares, Vice President; Robert T. Kelly, Vice President; William L. Reith, Vice President; Tracy P. Stouffer, Vice President; David Sundquist, Vice President; and Lisa G. Warshafsky, Vice President.

Portfolio Management. The Manager manages each Portfolio's investments in accordance with the stated policies of the Portfolio, subject to the approval of the Fund's Board. Founders, with respect to each Founders Portfolio, provides day-to-day management of the respective Founders Portfolio's investments, subject to the supervision of the Manager and the Fund's Board. Each Portfolio's adviser is responsible for investment decisions and provides the Fund with portfolio managers who are authorized by the Fund's Board to execute purchases and sales of securities for the relevant Portfolio. The portfolio managers of Core Bond Portfolio are Kent Wosepka and Marc Seidner. The portfolio managers of Core Value Portfolio are Brian C. Ferguson, William E. Costello, Robert J. Eastman and J. David Macey. The portfolio managers of Emerging Leaders Portfolio are Paul Kandel, Hilary Woods and George C. Saffaye. The portfolio managers of MidCap Stock Portfolio are John O'Toole, Ronald Gala and Robert Wilk. The portfolio manager of Small Cap Stock Index Portfolio is Thomas Durante. The portfolio manager of Technology Growth Portfolio is Mark Herskovitz. The portfolio managers of Founders Discovery Portfolio are James Padgett and Brad Orr. The portfolio manager of Founders Growth Portfolio is John B. Jares. The portfolio managers of Founders International Equity Portfolio are Remi Browne, Daniel LeVan and Jeffrey R. Sullivan. The Manager and Founders maintain research departments with professional portfolio managers and securities analysts who provide research services for the Portfolios and for other funds advised by the Manager or Founders.

In approving the current Management Agreement, and the Sub-Investment Advisory Agreement, the Board considered a number of factors, including the nature and quality of the services provided by the Manager and Founders, as the case may be; the investment philosophy and investment approach as applied to the Portfolios by the Manager and, as applicable, Founders; the investment management expertise of the Manager and Founders in respect of the relevant Portfolio's investment strategies; the personnel, resources and experience of the Manager, and, as applicable, Founders; each Portfolio's performance history and the management and sub-advisory fees paid to the Manager and Founders, respectively, relative to those of mutual funds with similar investment objectives, strategies and restrictions; the Manager's costs of providing services under the Management Agreement; the relationship between the fees paid to the Manager under the Management Agreement and the Fund's Distribution Plan; and ancillary benefits the Manager may receive from its relationship with the Fund.

Mellon and its affiliates may have deposit, loan and commercial banking or other relationships with the issuers of securities purchased by a Portfolio. The Manager has informed the Fund that in making its investment decisions it does not obtain or use material inside information that Mellon or its affiliates may possess with respect to such issuers.

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The Fund, the Manager, Founders and the Distributor each have adopted a Code of Ethics that permits its personnel, subject to the respective Code of Ethics, to invest in securities, including securities that may be purchased or held by a Portfolio. The Manager's Code of Ethics subjects its employees' personal securities transactions to various restrictions to ensure that such trading does not disadvantage any fund advised by the Manager. In that regard, the Manager's portfolio managers and other investment personnel must preclear and report their personal securities transactions and holdings, which are reviewed for compliance with the Manager's Code of Ethics and also are subject to the oversight of Mellon's Investment Ethics Committee. Portfolio managers and other investment personnel who comply with the preclearance and disclosure procedures of the Manager's Code of Ethics and the requirements of the Committee may be permitted to purchase, sell or hold securities which also may be or are held in fund(s) they manage or for which they otherwise provide investment advice.

Portfolio Manager Compensation (Emerging Leaders and Technology Growth Portfolios only). Portfolio manager compensation is comprised primarily of a market-based salary and an incentive compensation plan. The Portfolio’s portfolio managers are compensated by Dreyfus or its affiliates and not by the Portfolio. The incentive compensation plan is comprised of three components: portfolio performance (approximately 60%), individual qualitative performance (approximately 20%) and Dreyfus financial performance as measured by Dreyfus’ pre-tax net income (approximately 20%). Up to 10% of the incentive plan compensation may be paid in Mellon restricted stock.

Portfolio performance is measured by the one-year performance (weighted 40%) and three-year performance (weighted 60%) of all of the portfolio manager's accounts relative to the return of the appropriate Lipper peer group. The portfolio manager’s performance is measured on either a straight average (each account weighted equally) or a combination of straight average and asset-weighted average. Generally, if the asset-weighted average is higher, then that is used to measure performance. If the straight average is higher, then typically an average of the two is used to measure performance.

Individual qualitative performance is based on Dreyfus’ Chief Investment Officer’s evaluation of the portfolio manager’s performance based on any combination of the following: marketing contributions; new product development; performance on special assignments; people development; methodology enhancements; fund growth/gain in market; and support to colleagues. The Chief Investment Officer may consider additional factors at his discretion.

Portfolio managers are also eligible for Dreyfus’ Long Term Incentive Plan. Under that plan, cash and/or Mellon restricted stock is awarded at the discretion of the Chief Investment Officer based on individual performance and contributions to the Investment Management Department and the Mellon organization.

Portfolio Manager Compensation (Core Value Portfolio only). The portfolio managers’ cash compensation is comprised primarily of a market-based salary and incentive compensation plans (annual and long term incentive). Funding for the The Boston Company Asset Management LLC (“TBCAM”) Annual Incentive Plan and Long Term Incentive Plan is through a pre-determined fixed percentage of overall TBCAM profitability. Therefore, all bonus awards

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are based initially on TBCAM’s financial performance. The portfolio managers are eligible to receive annual cash bonus awards from the Annual Incentive Plan. Annual incentive opportunities are pre-established for each individual, expressed as a percentage of base salary ("target awards"). Annual awards are determined by applying multiples to this target award (0-2 times target award represents a portfolio manager’s range of opportunity) and are capped at a maximum range of incentive opportunity for the job category. Awards are 100% discretionary and regardless of performance will be subject to pool funding availability. Awards are paid in cash on an annual basis. A significant portion of the target opportunity awarded is based upon the one-year (weighted 50%) and three-year (weighted 50%) pre-tax performance of the portfolio manager’s accounts relative to the performance of the appropriate Lipper and Callan peer groups. Other factors considered in determining the award are individual qualitative performance and the asset size and revenue growth of the products managed.

All portfolio managers are also eligible to participate in the TBCAM Long Term Incentive Plan. This plan provides for an annual award, payable equally in Mellon Financial restricted stock and TBCAM phantom stock. Both the restricted stock and phantom stock cliff vest after three years. The value of the phantom stock award changes during the vesting period based upon changes in TBCAM’s operating income.

Portfolio Manager Compensation (Core Bond Portfolio only). The portfolio manager’s cash compensation is comprised primarily of a market-based salary and an incentive compensation plan (annual and long term incentive). Funding for the Standish Mellon Asset Management (“SMAM”) Annual Incentive Plan and Long Term Incentive Plan is through a predetermined fixed percentage of overall company profitability. Therefore, all bonus awards are based initially on Company performance. The investment professionals are eligible to receive annual cash bonus awards from the incentive compensation plan. Annual awards are granted in March, for the prior calendar year. Individual awards for investment professionals are discretionary, based on product performance relative to both benchmarks and peer comparisons and goals established at the beginning of each calendar year. Goals are to a substantial degree based on investment performance, including performance for one and three year periods. Also considered in determining individual awards are team participation and general contributions to SMAM.

All portfolio managers are also eligible to participate in the SMAM Long Term Incentive Plan. This plan provides for an annual award, payable in deferred cash that cliff vests after 3 years, with an interest rate equal to the average year over year earnings growth of SMAM (capped at 20% per year). Management has discretion with respect to actual participation.

Portfolio managers whose compensation exceeds certain levels may elect to defer portions of their base salaries and/or incentive compensation pursuant to Mellon’s elective deferred compensation plan.

Portfolio Manager Compensation (Founders Discovery and Founders International Equity Portfolios only). The portfolio managers are compensated by Founders or its affiliates, and not by the Portfolio. The portfolio managers’ cash compensation is comprised primarily of a market-based salary and an incentive compensation plan. The incentive compensation plan is comprised of three components: portfolio performance (weighted 70%), individual qualitative

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performance (weighted 20%) and Founders’ financial performance as measured by Founders’ recurring operating income (weighted 10%). Up to 10% of the incentive plan compensation may be paid in Mellon restricted stock.

Portfolio performance is measured by the 1-year (weighted 50%), two-year (weighted 25%) and 3-year (weighted 25%) pre-tax annualized total return of all of the portfolio manager’s accounts relative to the annualized total return of the appropriate Lipper peer group, measured quarterly. The performance of the Class F shares of the Dreyfus Founders Funds is used as a proxy for the performance of any other accounts managed in substantially the same manner by the portfolio managers (these groups of accounts are referred to as “product lines”). The proxy for the Founders Discovery and Founders International Equity Portfolios are the Dreyfus Founders Discovery Fund and Dreyfus Founders Equity Growth Fund, respectively. For product lines that do not include a Dreyfus Founders Fund, performance is measured using the largest share class of the largest mutual fund in the group. The portfolio managers’ incentive compensation is determined by weighting the performance of the various product lines managed, generally based on their relative assets. The portfolio managers will receive more incentive compensation the higher within the relevant Lipper peer group their product lines are ranked, and will receive less or no incentive compensation (for the performance component of the formula) if their product lines rank lower within their peer group.

Individual qualitative performance is based on an evaluation of the portfolio managers’ performance by Founders’ President and/or Director of Investments. Performance is measured against expectations established from some or all of the following categories: marketing contributions; new product development; performance on special assignments; people development; methodology enhancements; support to colleagues, fund growth/gain in market share, portfolio turnover and cash management. The President and/or Director of Investments may consider additional factors at their discretion.

The portfolio managers have been guaranteed minimum incentive compensation awards for certain calendar years. The portfolio managers are also eligible to participate in Mellon’s Long Term Incentive Plan. Under that plan, Mellon restricted stock is awarded at the discretion of Founders’ President based on individual performance and contributions to the Investment Department and the Mellon organization. The portfolio managers also may elect to defer a portion of their base salaries and/or incentive compensation pursuant to Mellon’s deferred compensation plan.

Portfolio Manager Compensation (Founders Growth Portfolio only). The portfolio managers are compensated by Founders or its affiliates, and not by the Portfolio. The portfolio managers are dual employees of Founders and TBCAM, which are both indirect, wholly owned subsidiaries of Mellon. The portfolio managers’ cash compensation is comprised primarily of a market-based salary and incentive compensation plans (annual and long term incentive). Funding for the TBCAM Annual Incentive Plan and Long Term Incentive Plan is through a predetermined fixed percentage of overall TBCAM profitability. Therefore, all bonus awards are based initially on TBCAM’s financial performance. The portfolio managers are eligible to receive annual cash bonus awards from the Annual Incentive Plan. Annual incentive opportunities are pre-established for each individual, expressed as a percentage of base salary ("target awards"). Annual awards are determined by applying multiples to this target award (0-2

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times target award represents a portfolio manager’s range of opportunity) and are capped at a maximum range of incentive opportunity for the job category. Awards are 100% discretionary and, regardless of performance, are subject to pool funding availability. For Messrs. Browne and LeVan, a significant portion of the target opportunity awarded is based upon the one-year and three-year (weighted more heavily) pre-tax performance of the portfolio manager’s accounts relative to the performance of the appropriate Lipper/Morningstar (for mutual funds) and Callan (for other accounts) peer groups. Other factors considered in determining the award are individual qualitative performance and the asset size and revenue growth of the products managed.

The portfolio managers are also eligible to participate in the TBCAM Long Term Incentive Plan. This plan provides for an annual award, payable in cash after a three-year vesting period. The value of the award increases during the vesting period based upon the growth in TBCAM’s net income.

Portfolio Manager Compensation (MidCap Stock and Small Cap Stock Index Portfolios only). The portfolio manager’s cash compensation is comprised primarily of a market-based salary and an incentive compensation plan (annual and long term incentive). Funding for the Mellon Equity Associates, LLP (“MEA”) Annual Incentive Plan and Long Term Incentive Plan is through a pre-determined fixed percentage of overall company profitability. Therefore, all bonus awards are based initially on Company performance. The investment professionals are eligible to receive annual cash bonus awards from the incentive compensation plan. Annual awards are granted in March for the prior calendar year. Awards greater than $25,000 are paid out over a two-year period. Individual awards for investment professionals are discretionary, based on product performance, goals established at the beginning of each calendar year and a subjective evaluation of the portfolio manager’s contribution to the overall investment process. Also considered in determining individual awards are team participation and general contributions to MEA.

All portfolio managers are also eligible to participate in the MEA Long Term Incentive Plan. This plan provides for an annual award, payable in deferred cash that cliff vests after 3 years, with an interest rate equal to the average year over year earnings growth of MEA (capped at 20% per year). Management has discretion with respect to actual participation and award size.

Additional Information About Portfolio Managers. The following table lists the number and types of other accounts advised by each primary portfolio manager and assets under management in those accounts as of the end of the Portfolio’s fiscal year:

	Registered
	Investment
Portfolio Manager	Company	Assets	Pooled	Assets	Other	Assets
	Accounts	Managed	Accounts	Managed	Accounts	Managed
Kent Wosepka	4	$1.5 billion	3	$69 million	34	$2.5 billion
Brian C. Ferguson	8	$1.8 billion	3	$275 million	109	$5.2 billion
William E. Costello	7	$1.7 billion	2	$262 million	87	$3.6 billion
Robert J. Eastman	7	$1.7 billion	2	$262 million	87	$3.6 billion
J. David Macey	7	$1.7 billion	2	$262 million	87	$3.6 billion
Paul Kandel	7	$3.4 billion	0	$0	17	$1.5 billion
Hilary Woods	8	$4.7 billion	0	$0	17	$1.5 billion
John O'Toole	4	$888 million	4	$69 million	18	$1.2 million
Thomas Durante	11	$12.5 billion	1	$639 million	4	$239 million
Mark Herskovitz	4	$2 billion	1	$8 million	0	$0
James Padgett	3*	$1.1 billion	0	$0	1	$2 million
Brad Orr	3*	$1.1 billion	0	$0	1	$2 million
John B. Jares	6	$1.1 billion	0	$0	2	$3 million
Remi Browne	5	$341 million	1	$44 million	7	$1.5 billion

Daniel LeVan	5	$505 million	1	$278 million	9	$664 million

* The advisory fee for one of these accounts, which has total assets of $226,127,654, is based on the performance of the account.

The dollar range of Portfolio shares beneficially owned by the primary portfolio manager are as follows as of the end of the Portfolio’s fiscal year:

		Dollar Range of Portfolio
Portfolio Manager	Portfolio Name	Shares Beneficially Owned
Kent Wosepka	Core Bond Portfolio	None
Brian C. Ferguson	Core Value Portfolio	None
William E. Costello	Core Value Portfolio	$10,001-$50,000
Robert J. Eastman	Core Value Portfolio	$100,001-$500,000
J. David Macey	Core Value Portfolio	None
Paul Kandel	Emerging Leaders Portfolio	None
Hilary Woods	Emerging Leaders Portfolio	None
John O'Toole	MidCap Stock Portfolio	None
Thomas Durante	Small Cap Stock Index	None
	Portfolio
Mark Herskovitz	Technology Growth Portfolio	None
James Padgett	Founders Discovery Portfolio	None
Brad Orr	Founders Discovery Portfolio	None
John B. Jares	Founders Growth Portfolio	None
Remi Browne	Founders International Equity	$50,001-$100,000
	Portfolio
Daniel LeVan	Founders International Equity	None
	Portfolio

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Portfolio managers may manage multiple accounts for a diverse client base, including mutual funds, separate accounts (assets managed on behalf of institutions such as pension funds, insurance companies and foundations), bank common trust accounts and wrap fee programs (“Other Accounts”).

Potential conflicts of interest may arise because of Dreyfus’ management of the Portfolio and Other Accounts. For example, conflicts of interest may arise with both the aggregation and allocation of securities transactions and allocation of limited investment opportunities, as Dreyfus may be perceived as causing accounts it manages to participate in an offering to increase Dreyfus’ overall allocation of securities in that offering, or to increase Dreyfus’ ability to participate in future offerings by the same underwriter or issuer. Allocations of bunched trades, particularly trade orders that were only partially filled due to limited availability, and allocation of investment opportunities generally, could raise a potential conflict of interest, as Dreyfus may have an incentive to allocate securities that are expected to increase in value to preferred accounts. Initial public offerings, in particular, are frequently of very limited availability. Additionally, portfolio managers may be perceived to have a conflict of interest if there are a large number of Other Accounts, in addition to the Portfolio, that they are managing on behalf of Dreyfus. Dreyfus periodically reviews each portfolio manager’s overall responsibilities to ensure that they are able to allocate the necessary time and resources to effectively manage the Portfolio. In addition, Dreyfus could be viewed as having a conflict of interest to the extent that Dreyfus or its affiliates and/or portfolios managers have a materially larger investment in Other Accounts than their investment in the Portfolio.

Other Accounts may have investment objectives, strategies and risks that differ from those of the Portfolio. For these or other reasons, the portfolio manager may purchase different securities for the Portfolio and the Other Accounts, and the performance of securities purchased for the Portfolio may vary from the performance of securities purchased for Other Accounts. The portfolio manager may place transactions on behalf of Other Accounts that are directly or indirectly contrary to investment decisions made for the Portfolio, which could have the potential to adversely impact the Portfolio, depending on market conditions.

A potential conflict of interest may be perceived to arise if transactions in one account closely follow related transactions in another account, such as when a purchase increases the value of securities previously purchase by the other account, or when a sale in one account lowers the sale price received in a sale by a second account.

Dreyfus’ goal is to provide high quality investment services to all of its clients, while meeting Dreyfus' fiduciary obligation to treat all clients fairly. Dreyfus has adopted and implemented policies and procedures, including brokerage and trade allocation policies and procedures, that it believes address the conflicts associated with managing multiple accounts for multiple clients. In addition, Dreyfus monitors a variety of areas, including compliance with Portfolio guidelines, the allocation of IPOs, and compliance with the firm’s Code of Ethics. Furthermore, senior investment and business personnel at Dreyfus periodically review the performance of the portfolio managers for Dreyfus-managed funds.

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Expenses. All expenses incurred in the operation of the Fund (other than with respect to Small Cap Stock Index Portfolio) are borne by the Fund, except to the extent specifically assumed by the Manager (or, if applicable, the Portfolio's Sub-Adviser). The expenses borne by the Fund include: organizational costs, taxes, interest, loan commitment fees, dividends and interest on securities sold short, brokerage fees and commissions, if any, fees of Board members who are not officers, directors, employees or holders of 5% or more of the outstanding voting securities of the Manager or Founders or any of their affiliates, SEC fees, state Blue Sky qualification fees, advisory fees, charges of custodians, transfer and dividend disbursing agents' fees, certain insurance premiums, industry association fees, outside auditing and legal expenses, costs of maintaining the Fund's existence, costs of independent pricing services, costs attributable to investor services (including, without limitation, telephone and personnel expenses), costs of shareholders' reports and meetings, costs of preparing and printing prospectuses and statements of additional information for regulatory purposes and for distribution to existing shareholders, and any extraordinary expenses. In addition, each class of shares bears any class specific expenses allocated to such class, such as expenses related to the distribution and/or shareholder servicing of such class. Each Portfolio's Service shares are subject to an annual distribution fee. See "Distribution Plan (Service Shares Only)." Other than for Small Cap Stock Index Portfolio, expenses attributable to a particular Portfolio are charged against the assets of that Portfolio; other expenses of the Fund are allocated among the Portfolios on the basis determined by the Fund's Board, including, but not limited to, proportionately in relation to the net assets of each Portfolio.

All expenses incurred in the operation of Small Cap Stock Index Portfolio are borne by the Manager, except management fees, Distribution Plan fees, taxes, interest, brokerage fees and commissions, if any, extraordinary expenses, and the Portfolio's allocated portion of the fees and expenses of Board members who are not "interested persons" (as defined in the 1940 Act) and fees and expenses of independent counsel to the Fund and the Board members who are not "interested persons."

As compensation for the Manager's services, the Fund has agreed to pay the Manager a monthly fee at the annual rate set forth below as a percentage of the relevant Portfolio's average daily net assets:

Name of Portfolio		Management Fee

Core Bond Portfolio		0.60%
Core Value Portfolio		0.75%
Emerging Leaders Portfolio		0.90%
MidCap Stock Portfolio		0.75%
Small Cap Stock Index Portfolio		0.35%*
Technology Growth Portfolio		0.75%
Founders Discovery Portfolio		0.90%
Founders Growth Portfolio		0.75%
Founders International Equity Portfolio		1.00%

*		With respect to the Small Cap Stock Index Portfolio, the Manager has agreed to reduce its
		management fee in an amount equal to the Portfolio's allocated portion of the accrued fees and

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Name of Portfolio

Management Fee

expenses of the non-interested Board members and fees and expenses of independent counsel to the Fund and to the non-interested Board members.

For the fiscal periods ended December 31, 2002, 2003 and 2004 (except as indicated), the management fees payable by each indicated Portfolio to the Manager, the amounts waived by the Manager and the net fee paid by the indicated Portfolio were as follows:

			Management		Fee Payable
		2002		2003		2004
Core Value Portfolio		$	480,210	$	491,092	$	571,357
MidCap Stock Portfolio		$1,748,357		$2,091,663		$2,859,526
Founders Growth Portfolio		$	181,793	$	151,001	$	160,629
Founders International Equity		$	87,190	$	67,308	$	88,355
Portfolio
Emerging Leaders Portfolio		$	198,227	$	237,215	$	325,648
Founders Discovery Portfolio		$	123,322	$	126,110	$	195,779
Technology Growth Portfolio		$	584,402	$	619,676	$	920,873
Core Bond Portfolio		$	475,208	$	562,655	$	499,643
Small Cap Stock Index Portfolio		$		$	327,764	$	837,107
		56,561 ⁽¹⁾

			Reduction in Fee
		2002		2003		2004
Core Value Portfolio		$0		$0		$0
MidCap Stock Portfolio		$0		$0		$0
Founders Growth Portfolio		$22,438		$19,004		$	5,991
Founders International Equity		$44,790		$61,483		$53,915
Portfolio
Emerging Leaders Portfolio		$0		$0		$14,020
Founders Discovery Portfolio		$	6,621	$0		$0
Technology Growth Portfolio		$0		$0		$0
Core Bond Portfolio		$0		$0		$0
Small Cap Stock Index Portfolio		$0 ⁽¹⁾		$0		$0

			Net Fee Paid
		2002		2003		2004
Core Value Portfolio		$	480,210	$	491,092	$	571,357
MidCap Stock Portfolio		$1,748,357		$2,091,663		$2,859,526
Founders Growth Portfolio		$	159,355	$	131,997	$	154,638
Founders International Equity		$	42,400	$	5,825	$	34,440
Portfolio
Emerging Leaders Portfolio		$	198,227	$	237,215	$	311,628
Founders Discovery Portfolio		$	116,701	$	126,110	$	195,779
Technology Growth Portfolio		$	584,402	$	619,676	$	920,873
Core Bond Portfolio		$	475,208	$	562,655	$	499,643
Small Cap Stock Index Portfolio		$	56,561 ⁽¹⁾	$	327,764	$	837,107

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Net Fee Paid
2002	2003	2004

(1)

From May 3, 2002 (commencement of operations) through December 31, 2002.

As compensation for Founders' services, the Manager has agreed to pay Founders a monthly sub-advisory fee at the annual rate set forth below as a percentage of the relevant Founders Portfolio's average daily net assets:

Name of Portfolio		Sub-Investment Advisory Fee

Founders Discovery Portfolio and Founders Growth Portfolio
0 to $100 million of average daily net assets		0.25%
$100 million to $1 billion of average daily net assets		0.20%
$1 billion to $1.5 billion of average daily net assets		0.16%
$1.5 billion or more of average daily net assets		0.10%

Founders International Equity Portfolio
0 to $100 million of average daily net assets		0.35%
$100 million to $1 billion of average daily net assets		0.30%
$1 billion to $1.5 billion of average daily net assets		0.26%
$1.5 billion or more of average daily net assets		0.20%

The fees paid by the Manager to Founders with respect to the Founders Portfolios for the fiscal years ended December 31, 2002, 2003 and 2004 were as follows:

	Sub-Investment Advisory Fee Paid
	2002	2003	2004
Founders Discovery Portfolio	$34,256	$35,033	$54,383
Founders Growth Portfolio	$66,607	$55,335	$53,543
Founders International Equity	$30,513	$23,567	$30,922
Portfolio

The aggregate of the fees payable to the Manager is not subject to reduction as the value of a Portfolio's assets increases.

Distributor. The Distributor, a wholly-owned subsidiary of the Manager, located at 200 Park Avenue, New York, New York 10166, serves as each Portfolio's distributor on a best efforts basis pursuant to an agreement with the Fund which is renewable annually.

The Manager or the Distributor may provide additional cash payments out of its own resources to Participating Insurance Companies that sell shares of the Portfolios or provide other services. Such payments are in addition to any sales charges, 12b-1 fees and/or shareholder services fees or other expenses paid by the Portfolios. These additional payments may be made to Participating Insurance Companies and other financial intermediaries, including affiliates, that provide shareholder servicing, sub-administration, recordkeeping and/or sub-transfer agency

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services, marketing support and/or access to sales meetings, sales representatives and management representatives of the Participating Insurance Companies. Cash compensation also may be paid to Participating Insurance Companies for inclusion of a Portfolio on a sales list, including a preferred or select sales list or in other sales programs. These payments sometimes are referred to as "revenue sharing." In some cases, these payments may create an incentive for the Participating Insurance Company to recommend or sell shares of the Portfolio to you. Please contact your Participating Insurance Company for details about any payments it may receive in connection with the sale of Fund shares or the provision of services to the Portfolios.

From time to time, the Manager or the Distributor also may provide cash or non-cash compensation to Participating Insurance Companies in the form of: occasional gifts; occasional meals, tickets, or other entertainment; support for due diligence trips; educational conference sponsorship; support for recognition programs; and other forms of cash or non-cash compensation permissible under broker-dealer regulations, as periodically amended.

Transfer and Dividend Disbursing Agent and Custodian. Dreyfus Transfer, Inc. (the "Transfer Agent"), a wholly-owned subsidiary of the Manager, 200 Park Avenue, New York, New York 10166, is the Fund's transfer and dividend disbursing agent. Under a transfer agency agreement with the Fund, the Transfer Agent arranges for the maintenance of shareholder account records for each Portfolio, the handling of certain communications between shareholders and the Fund and the payment of dividends and distributions payable by the Fund. For these services, the Transfer Agent receives a monthly fee computed on the basis of the number of shareholder accounts it maintains for the Fund during the month, and is reimbursed for certain out-of-pocket expenses.

Mellon Bank, N.A., an affiliate of the Manager, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, acts as custodian with respect to the Core Bond, Core Value, Emerging Leaders, Founders Discovery, Founders Growth, MidCap Stock, Technology Growth and Small Cap Stock Index Portfolios. Under a custody agreement with the Fund, Mellon Bank, N.A. holds each such Portfolio's securities and keeps all necessary accounts and records. For its custody services, Mellon Bank, N.A. receives a monthly fee based on the market value of each such Portfolio's assets held in custody and receives certain securities transaction charges. Mellon Bank, N.A. has no part in determining the investment policies of the Portfolios or which securities are to be purchased or sold by the Portfolios.

The Bank of New York, 100 Wall Street, New York, New York 10286, serves as the Fund's custodian with respect to the Founders International Equity Portfolio. The Bank of New York has no part in determining the investment policies of the Portfolio or which securities are to be purchased or sold by the Portfolio.

HOW TO BUY SHARES

Each Portfolio, except the Small Cap Stock Index Portfolio, offers two classes of shares—Initial shares and Service shares. The Small Cap Stock Index Portfolio offers only Service shares. The classes are identical, except as to the expenses borne by each class which may affect performance. See "Distribution Plan (Service Shares Only)." Portfolio shares

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currently are offered only to separate accounts of Participating Insurance Companies. Individuals may not place purchase orders directly with the Fund.

As discussed under "Management Arrangements – Distributor," Participating Insurance Companies may receive revenue sharing payments from the Manager or the Distributor. The receipt of such payments could create an incentive for a Participating Insurance Company to recommend or sell shares of a Portfolio instead or other mutual funds where such payments are not received. Please contact your Participating Insurance Company for details about any payments it may receive in connection with the sale of Portfolio shares or the provision of services to the Portfolios.

Separate accounts of the Participating Insurance Companies place orders based on, among other things, the amount of premium payments to be invested pursuant to Policies. See the prospectus of the separate account of the applicable Participating Insurance Company for more information on the purchase of Portfolio shares and with respect to the availability for investment in specific classes of the Portfolios and in specific Portfolios of the Fund. The Fund does not issue share certificates.

Purchase orders from separate accounts based on premiums and transaction requests received by the Participating Insurance Company on a given business day in accordance with procedures established by the Participating Insurance Company will be effected at the net asset value of the applicable Portfolio determined on such business day if the orders are received by the Fund in proper form and in accordance with applicable requirements on the next business day and Federal Funds (monies of member banks within the Federal Reserve System which are held on deposit at a Federal Reserve Bank) in the net amount of such orders are received by the Fund on the next business day in accordance with applicable requirements. It is each Participating Insurance Company's responsibility to properly transmit purchase orders and Federal Funds in accordance with applicable requirements. Policy holders should refer to the prospectus for their Policies in this regard.

Portfolio shares are sold on a continuous basis. Net asset value per share is determined as of the close of trading on the floor of the New York Stock Exchange ("NYSE") (usually 4:00 p.m. Eastern time), on each day that the NYSE is open for regular business. For purposes of determining net asset value, certain options and futures may be valued 15 minutes after the close of trading on the floor of the NYSE. Net asset value per share of each class of shares is computed by dividing the value of a Portfolio's net assets represented by such class (i.e., the value of its assets less liabilities) by the total number of shares of such class outstanding. For information regarding methods employed in valuing each Portfolio's investments, see "Determination of Net Asset Value."

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DISTRIBUTION PLAN

(SERVICE SHARES ONLY)

Rule 12b-1 (the "Rule") adopted by the SEC under the 1940 Act provides, among other things, that an investment company may bear expenses of distributing its shares only pursuant to a plan adopted in accordance with the Rule. The Fund's Board has adopted such a plan (the "Distribution Plan") with respect to each Portfolio's Service shares pursuant to which the Portfolio pays the Distributor at an annual rate of 0.25% of the value of the average daily net assets of the Portfolio's Service shares for distributing Service shares, for advertising and marketing related to Service shares and for servicing and/or maintaining accounts of Service class shareholders. Under the Distribution Plan, the Distributor may make payments to

Participating Insurance Companies and the principal underwriters for their Policies in respect of these services. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. The Board believes that there is a reasonable likelihood that the Fund's Distribution Plan will benefit each Portfolio and the holders of its Service shares.

A quarterly report of the amounts expended under the Distribution Plan, and the purposes for which such expenditures were incurred, must be made to the Fund's Board for its review. The Distribution Plan provides that it may not be amended to increase materially the costs which holders of Service shares may bear without the approval of the holders of Service shares and that other material amendments of the Distribution Plan must be approved by the Board, and by the Board members who are not "interested persons" (as defined in the 1940 Act) of the Fund and have no direct or indirect financial interest in the operation of the Distribution Plan or in any agreements entered into in connection with the Distribution Plan, by vote cast in person at a meeting called for the purpose of considering such amendments. The Distribution Plan is subject to annual approval by such vote of the Board members cast in person at a meeting called for the purpose of voting on the Distribution Plan. As to each Portfolio, the Distribution Plan may be terminated at any time by vote of a majority of the Board members who are not "interested persons" and have no direct or indirect financial interest in the operation of the Distribution Plan or in any agreements entered into in connection with the Distribution Plan or by vote of the holders of a majority of such Portfolio's Service shares.

Set forth below are the amounts paid pursuant to the Plan by each indicated Portfolio, with respect to its Service shares, to the Distributor for the fiscal year ended December 31, 2004:

	Payments	Reduction	Net Fee
Name of Portfolio	To Distributor	In Fee	Paid
Core Bond Portfolio	$137,690	$89,674	$48,016

Core Value Portfolio	$106,320
		$44,355	$61,965

Emerging Leaders Portfolio	$40,903	$2,564	$38,339

MidCap Stock Portfolio	$173,623



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	Payments	Reduction	Net Fee
Name of Portfolio	To Distributor	In Fee	Paid
		$23,446	$150,177

Small Cap Stock Index Portfolio	$597,934	-0-	$597,934

Technology Growth Portfolio	$64,507	-0-	$64,507

Founders Discovery Portfolio	$7,423	-0-
			$7,423
Founders Growth Portfolio	$13,427		$1,674
		$11,753

Founders International Equity Portfolio	$5,214		$11
		$5,203

HOW TO REDEEM SHARES

Portfolio shares may be redeemed at any time by the separate accounts of the Participating Insurance Companies. Individuals may not place redemption orders directly with the Fund.

Redemption requests received by the Participating Insurance Company from separate accounts on a given business day in accordance with procedures established by the Participating Insurance Company will be effected at the net asset value of the applicable Portfolio determined on such business day if the requests are received by the Fund in proper form and in accordance with applicable requirements on the next business day. It is each Participating Insurance Company's responsibility to properly transmit redemption requests in accordance with applicable requirements. Policyowners should consult their Policy prospectus in this regard. The value of the shares redeemed may be more or less than their original cost, depending on the Portfolio's then-current net asset value. No charges are imposed by the Fund when shares are redeemed.

The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the Transfer Agent of a redemption request in proper form, except as provided by the rules of the SEC.

Should any conflict between Policyowners arise which would require that a substantial amount of net assets be withdrawn, orderly portfolio management could be disrupted to the potential detriment the of Policyowners.

Redemption Commitment. The Fund has committed to pay in cash all redemption requests by any shareholder of record of a Portfolio, limited in amount during any 90-day period to the lesser of $250,000 or 1% of the value of such Portfolio's net assets at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. In the case of requests for redemption in excess of such amount, the Fund's Board reserves the right to make

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payments in whole or in part in securities or other assets of the Portfolio in case of an emergency or any time a cash distribution would impair the liquidity of the Portfolio to the detriment of the existing shareholders. In such event, the securities would be valued in the same manner as the Portfolio's investments are valued. If the recipient sells such securities, brokerage charges would be incurred.

Suspension of Redemptions. The right of redemption may be suspended or the date of payment postponed (a) during any period when the NYSE is closed (other than customary weekend and holiday closings), (b) when trading in the markets the Fund ordinarily utilizes is restricted, or when an emergency exists as determined by the SEC so that disposal of the Fund's investments or determination of its net asset value is not reasonably practicable, or (c) for such other periods as the SEC by order may permit to protect the Fund's shareholders.

EXCHANGE PRIVILEGE

Investors can exchange shares of a Portfolio for shares of the same class of any other portfolio or fund managed by the Manager that is offered only to separate accounts established by Participating Insurance Companies to fund Policies, or for shares of any such money market portfolio, subject to the terms and conditions relating to exchanges set forth in the applicable Policy prospectus. Policy holders should refer to the applicable Policy prospectus for more information on exchanging Portfolio shares. The Fund reserves the right to modify or discontinue its exchange program at any time upon 60 days' notice to the Participating Insurance Companies.

DETERMINATION OF NET ASSET VALUE

Valuation of Portfolio Securities. Each Portfolio's investments, except Core Bond Portfolio, are valued on the basis of market quotation or official closing prices. Each Portfolio's investment securities, including covered call options written by the Portfolio, are valued at the last sale price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the Nasdaq National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price on that day, at the last sale price. Securities not listed on an exchange or national securities market, or securities in which there were no transactions, are valued at the average of the most recent bid and asked prices, except that open short positions are valued at the asked price. Bid price is used when no asked price is available. Market quotations for foreign securities denominated in foreign currencies are translated into U.S. dollars at the prevailing rates of exchange. Because of the need to obtain prices as of the close of trading on various exchanges throughout the world, the calculation of net asset value may not take place contemporaneously with the determination of prices of certain of the foreign investment securities held by a Portfolio. Certain short-term investments may be carried at amortized cost, which approximates value.

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Expenses and fees, including the management fee (reduced by any fee waiver or expense reimbursement arrangement), and fees pursuant to the Distribution Plan, with respect to each Portfolio's Service shares, are accrued daily and taken into account for the purpose of determining the net asset value of the relevant Portfolio's shares.

Substantially all of the Core Bond Portfolio's investments (excluding short-term investments) are valued each business day by an independent pricing service (the "Service") approved by the Fund's Board. Securities valued by the Service for which quoted bid prices in the judgment of the Service are readily available and are representative of the bid side of the market are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other debt securities are valued by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Debt securities that are not valued by the Service are valued at the average of the most recent bid and asked prices in the market in which such investments are primarily traded, or at the last sales price for securities traded primarily on an exchange. In the absence of reported sales of investments traded primarily on an exchange, the average of the most recent bid and asked prices is used. Bid price is used when no asked price is available.

Restricted securities, as well as securities or other assets for which recent market quotations or official closing prices are not readily available or are determined by the Fund not to reflect accurately fair value (such as when the value of a security has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market) but before the Fund calculates a Portfolio's NAV), are valued at fair value as determined in good faith based on procedures approved by the Board. Fair value of investments may be determined by the Fund's Board, its pricing committee or its valuation committee in good faith using such information as it deems appropriate. The factors that may be considered when fair valuing a security include fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased or sold, and public trading in similar securities of the issuer or comparable issuers. Fair value of foreign equity securities may be determined with the assistance of a pricing service using correlations between the movement of prices of foreign securities and indices of domestic securities and other appropriate indicators, such as closing market prices of relevant ADRs and futures contracts. The valuation of a security based on a fair value procedures may differ from the security's most recent closing price, and from the prices used by other mutual funds to calculate their net asset values. Foreign securities held by a Portfolio may trade on days that the Portfolio is not open for business, thus affecting the value of the Portfolio's assets on days when Portfolio investors have no access to the Portfolio. Restricted securities which are, or are convertible into, other securities of the same class of securities for which a public market exists usually will be valued at market value less the same percentage discount at which such restricted securities were purchased. This discount will be revised by the Board, if the Board members believe that it no longer reflects the value of the restricted securities. Restricted securities not of the same class as securities for which a public market exists usually will be valued initially at cost. Any subsequent adjustment from cost will be based upon considerations deemed relevant by the Fund's Board.

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NYSE Closings. The holidays (as observed) on which the NYSE is closed currently are: New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Management believes that each Portfolio has qualified for treatment as a regulated investment company under the Code for the fiscal year ended December 31, 2004. Each Portfolio intends to continue to so qualify, if such qualification is in the best interest of its shareholders. As a regulated investment company, each Portfolio will pay no Federal income tax on net investment income and net realized securities gains to the extent that such income and gains are distributed to shareholders in accordance with applicable provisions of the Code. To qualify as a regulated investment company, the Portfolio must pay out at least 90% of the Portfolio's net income (consisting of net investment income and net short-term capital gain) to its shareholders. The term "regulated investment company" does not imply the supervision of management or investment practices or policies by any government agency.

Each Portfolio intends to comply with the diversification requirements imposed by section 817(h) of the Code and the regulations thereunder. These requirements place certain limitations on the proportion of each Portfolio's assets that may be represented by any single investment (which includes all securities of the same issuer). For purposes of section 817(h), all securities of the same issuer, all interests in the same real property project, and all interest in the same commodity are treated as a single investment. In addition, each U.S. Government agency or instrumentality is treated as a separate issuer, while the securities of a particular foreign government and its agencies, instrumentalities and political subdivisions all will be considered securities issued by the same issuer.

Generally, a regulated investment company must distribute substantially all of its ordinary income and capital gains in accordance with a calendar year distribution requirement in order to avoid a nondeductible 4% excise tax. However, the excise tax does not apply to a fund whose only shareholders are certain tax exempt trusts or segregated asset accounts of life insurance companies held in connection with variable contracts. In order to avoid this excise tax, each Portfolio intends to qualify for this exemption or to make its distributions in accordance with the calendar year.

In order to maintain its qualifications as a regulated investment company, a Portfolio's ability to invest in certain types of financial instruments (for example, securities issued or acquired at a discount) may be restricted and a Portfolio may be required to maintain or dispose of its investments in certain types of financial instruments beyond the time when it might otherwise be advantageous to do so.

Investment by a Portfolio in securities issued at a discount or providing for deferred interest or for payment of interest in the form of additional obligations could, under special tax rules, affect the amount, timing and character of distributions to shareholders by causing a Portfolio to recognize income prior to the receipt of cash payments. For example, the Portfolio

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could be required to recognize annually a portion of the discount (or deemed discount) at which such securities were issued and to distribute an amount equal to such income in order to maintain its qualification as a regulated investment company. In such case, the Portfolio may have to dispose of securities which it might otherwise have continued to hold in order to generate cash to satisfy these distribution requirements.

If a Portfolio fails to qualify as a regulated investment company, the Portfolio will be subject to Federal, and possibly state, corporate taxes on its taxable income and gains, distributions to its shareholders will be taxed as ordinary dividend income to the extent of such Portfolio's available earnings and profits, and Policy holders could lose the benefit of tax deferral on distributions made to the separate accounts of Participating Insurance Companies. Similarly, if a Portfolio failed to comply with the diversification requirements of section 817(h) of the Code and the regulations thereunder, Policy holders could be subject to current tax on distributions made to the separate accounts of Participating Insurance Companies.

Portfolios investing in foreign securities or currencies may be required to pay withholding, income or other taxes to foreign governments or U.S. possessions. Foreign tax withholding from dividends and interest, if any, is generally at a rate between 10% and 35%. The investment yield of any Portfolio that invests in foreign securities or currencies is reduced by these foreign taxes. Policy holders investing in such Portfolios bear the cost of any foreign taxes but will not be able to claim a foreign tax credit or deduction for these foreign taxes. Tax conventions between certain countries and the United States may reduce or eliminate these foreign taxes, however, and foreign countries generally do not impose taxes on capital gains in respect of investments by foreign investors.

Certain Portfolios may invest in an entity that is classified as a "passive foreign investment company" ("PFIC") For Federal income tax purposes, the operation of certain provisions of the Code applying to PFICs could result in the imposition of certain Federal income taxes on the Portfolios. In addition, gain realized from the sale or other disposition of PFIC securities may be treated as ordinary income.

The foregoing is only a general summary of some of the important Federal income tax considerations generally affecting the Portfolios and their shareholders. No attempt is made to present a complete explanation of the Federal tax treatment of the Portfolios' activities or to discuss state and local tax matters affecting the Portfolios. Policy holders are urged to consult their own tax advisers for more detailed information concerning tax implications of investments in the Portfolios. For more information concerning the Federal income tax consequences, Policy holders should refer to the prospectus for their Policies.

PORTFOLIO TRANSACTIONS

General. (All Portfolios) The Manager or Sub-Adviser assumes general supervision over the placement of securities buy and sell orders on behalf of the funds it manages. In choosing brokers, the Manager or Sub-Adviser evaluates the ability of the broker to execute the particular transaction (taking into account the market for the stock and the size of the order) at the best combination of price and quality of execution. In selecting brokers no factor is necessarily

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determinative, and seeking to obtain best execution for all trades takes precedence over all other considerations. Brokers are selected after a review of relevant criteria, which may include: the actual price to be paid for the shares; the broker's knowledge of the market for the particular stock; the broker's reliability; the broker's integrity or ability to maintain confidentiality; the broker's research capability; commission rates; the broker's ability to ensure that the shares will be delivered on settlement date; the broker's ability to handle specific orders of various size and complexity; the broker's financial condition; the broker's willingness to commit capital; and the broker's infrastructure and operational capabilities. At various times and for various reasons, certain factors will be more important than others in determining which broker to use.

The Manager and the Sub-Adviser have adopted written trade allocation procedures for their equity and fixed income trading desks. Under the procedures, portfolio managers and the trading desks ordinarily will seek to aggregate (or "bunch") orders that are placed or received concurrently for more than one account. In some cases, this policy may adversely affect the price paid or received by an account, or the size of the position obtained or liquidated. Generally, bunched trades will be allocated among the participating accounts based on the number of shares designated for each account on the trade order. If securities available are insufficient to satisfy the requirements of the participating accounts, available securities generally are allocated among accounts pro rata, based on order sizes. In the case of debt securities, the pro rata allocation is based on the account's asset sizes. In allocating trades made on a combined basis, the trading desks typically seek to achieve the same net unit price of the securities for each participating account. Because a pro rata allocation may not always adequately accommodate all facts and circumstances, the trade allocation procedures may allow the allocation of securities on a basis other than pro rata. For example, adjustments may be made to eliminate de minimis positions, to give priority to accounts with specialized investment policies and objectives or to consider the unique characteristics of certain accounts (e.g., available cash, industry or issuer concentration, duration, credit exposure).

The Core Bond, Core Value, Emerging Leaders, MidCap Stock and Small Cap Stock Index Portfolios are each managed by dual employees of the Manager and an affiliated entity in the Mellon organization. Portfolios managed by dual employees use the research and trading facilities, and are subject to the internal policies and procedures, of the affiliated entities. While the policies and procedures of the affiliated entities are different than those of the Manager or the Sub-Adviser, they are based on the same principles, and are substantially similar.

The Manager or Sub-Adviser may deem it appropriate for one of its accounts to sell a security while another of its accounts is purchasing the same security. Under such circumstances, the Manager or Sub-Adviser may arrange to have the purchase and sale transaction effected directly between its accounts ("cross transactions"). Cross transactions will be effected pursuant to procedures adopted under Rule 17a-7 under the 1940 Act.

For the fiscal periods ended December 31, 2002, 2003 and 2004 the amounts paid by the indicated Portfolios for brokerage commissions, gross spreads and concessions on principal transactions none of which was paid directly to the Manager or Sub-Adviser or the Distributor, were as follows:

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		Brokerage Commissions Paid
	2002		2003		2004
Core Value Portfolio	$201,968		$138,536		$175,670
MidCap Stock Portfolio	$517,297		$650,439		$918,750
Founders Growth Portfolio	$	96,067	$	76,657	$	66,110
Founders International Equity	$	97,830	$	39,038	$	23,859
Portfolio
Emerging Leaders Portfolio	$201,059		$217,849		$166,063
Founders Discovery Portfolio	$	66,523	$	65,823	$	98,079
Technology Growth Portfolio	$312,726		$229,941		$294,014
Core Bond Portfolio	$	38,361	$	82,661	$	67,360
Small Cap Stock Index Portfolio	$	81,760 ⁽¹⁾	$135,645		$155,433

	Concessions on Principal Transactions
	2002		2003		2004
Core Value Portfolio	$0		$0		$34,536
MidCap Stock Portfolio	$0		$0		$0
Founders Growth Portfolio	$0		$	664	$0
Founders International Equity	$0		$0		$0
Portfolio
Emerging Leaders Portfolio	$15,725		$26,356		$131,015
Founders Discovery Portfolio	$58,930		$48,177		$	55,908
Technology Growth Portfolio	$0		$	7,034	$0
Core Bond Portfolio	$0		$0		$0
Small Cap Stock Index Portfolio	N/A		$0		$0

(1) From May 3, 2002, (commencement of operations) through December 31, 2002.

With respect to the following Portfolios, the reasons for the difference between the aggregate dollar amount of brokerage commissions paid in the most recent fiscal year and the aggregate amount of brokerage commissions paid in either or both of the prior fiscal years is as follows:

MidCap Stock Portfolio: the difference between such amounts paid in 2004 and such amounts paid in each of 2002 and 2003 primarily was due to increase in assets from $237 million in 2002, to $360 million in 2003 and to $427 million in 2004.

Founders International Equity Portfolio: the difference between such amounts paid in 2004 and such amounts paid in 2002 primarily was due to decreased trading activity in 2004. The Portfolio’s portfolio turnover rate decreased to 90% in 2004 from 226% in 2002.

Core Bond Portfolio: the difference between such amounts paid in 2004 and such amounts paid in 2002 primarily was due to use of futures transactions in 2004.

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Small Cap Stock Index Portfolio: the difference between such amounts paid in 2004 and such amounts paid in 2002 primarily was due to increased trading in 2004.

The Fund contemplates that, consistent with the policy of obtaining the most favorable net price, brokerage transactions may be conducted through the Manager or Founders or their affiliates. The Fund's Board has adopted procedures in conformity with Rule 17e-1 under the 1940 Act to ensure that all brokerage commissions paid to the Manager or Founders or their affiliates are reasonable and fair.

For the fiscal year ended December 31, 2004, Technology Growth Portfolio paid Harborside Plus, Inc., an indirect minority-owned subsidiary of Mellon and an affiliate of the Manager, brokerage commissions of $ 120, which represented less than 1% of the aggregate brokerage commissions paid by the Portfolio for transactions involving less than 1% of the aggregate dollar amount for which the Portfolio paid brokerage commissions.

IPO Allocations. (Technology Growth Portfolios only) The Manager has adopted IPO procedures that require portfolio managers seeking to participate in an IPO to use reasonable efforts to indicate their interest in the IPO, in writing, to Dreyfus' Equity Trading Desk at least 24 hours before the pricing of the shares offered in the IPO. Generally, the number of shares requested by a portfolio manager must be limited to the number of IPO shares which, if received, would not exceed a position that is .50% greater than the fund's average equity position.

Portfolio managers may specify a minimum number of shares deemed to be an adequate allocation for a fund, and will not receive an allocation of less than the number of shares so specified. Portfolio managers must accept an allocation that is equal to or greater than the minimum number of shares requested, but are not required to accept shares in excess of the amount requested. Any de minimis adjustment may result in larger funds participating in IPOs to a lesser extent than smaller funds.

A portfolio manager who indicates an interest in participating in an IPO on behalf of less than all of the funds under his or her management must explain why shares are not being requested on behalf of each non-participating fund.

Based on the indications of interest, the Equity Trading Desk establishes an appropriate order size for each fund. In establishing the appropriate order sizes, the following factors may be considered: (i) the number of shares requested for each fund; (ii) the relative size of each fund; (iii) each fund's investment objectives, style and portfolio composition; and (iv) any other factors relevant to achieving a fair and equitable allocation among funds.

If there are insufficient securities to satisfy all orders, allocations are generally made among participating funds pro rata on the basis of each fund's order size. Allocations may

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deviate from a strict pro rata allocation if the Chief Investment Officer or his designee determines that it is fair and equitable to allocate on other than a pro rata basis.

Certain funds or groups of funds (each a "Rotational Group") may participate in IPOs on a rotational basis. Each Rotational Group participates in an IPO based on a pre-determined sequential order and only one Rotational Group may participate in a particular IPO. Shares allocated to a Rotational Group generally are re-allocated pro rata to the funds in the group based on the order size as determined by the Equity Trading Desk.

Funds managed by dual employees of the Manager and an affiliated entity are subject to the IPO procedures of the affiliated entities. While the IPO policies and procedures may differ from those of the Manager, they are based on the same principles and are substantially similar.

IPO Allocations. (Core Value and Emerging Leaders Portfolios only) Each of these Portfolios' portfolio managers are dual employees of the Manager and TBCAM and each such Portfolio is subject to the IPO procedures of TBCAM. Under the procedures, all portfolio managers seeking to participate in an IPO must indicate their interest in the IPO to the equity trader prior to the pricing of the offering. Portfolio managers may specify for each account the minimum position deemed to be an adequate allocation. Shares received in an offering are allocated among participating accounts on a pro rata basis based on account size, with a minimum domestic equity allocation of ten shares to any one account.

IPO Allocations. (MidCap Stock and Small Cap Stock Index Portfolios only) Each of these Portfolio's portfolio managers is a dual employee of the Manager and MEA. Portfolio managers seeking to participate in an IPO must indicate their interest in the IPO, by account or fund and in writing, to the MEA trading operation prior to the pricing of a deal. Shares received in an offering are allocated among accounts with similar investment objectives on a pro rata basis. If a pro rata allocation among all accounts that indicated an interest in the offering would result in a position that is not meaningful to an account, MEA may allocate the shares received to less than all those accounts indicating an interest.

IPO Allocations. (Founders Portfolios only) Each Founders Portfolio is subject to the IPO procedures of Founders. Under the procedures, all portfolio managers seeking to participate in an IPO must inform the Trading Department Manager, or his or her designee, of the accounts for which the offering would be suitable at least 24 hours prior to the time the offering is to be priced or the books are to be closed, whichever occurs first. If it is not possible to give this notice, the portfolio manager will give notice as soon as practicable under the circumstances.

The key criterion for determining the eligibility of an account to participate in an IPO is the suitability of the investment for the account. Guidelines based on the estimated market capitalization of the issuer are used to help determine the accounts for which offerings are most suitable. If the portfolio manager of an account for which a particular offering would be most suitable based on the market capitalization guidelines determines not to have that account participate in the offering, other accounts may participate in the offering.

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Allocations among accounts with the same or a similar investment objective managed by the same portfolio manager generally are allocated pro rata based on the net asset values of the applicable accounts. However, a portfolio manager may determine not to participate in an offering for an account based on the circumstances affecting that account including, without limitation, cash availability, desired position size, the account's investment policies and restrictions, or tax considerations. If an offering is suitable for accounts managed by different portfolio managers and more than one portfolio manager wants to participate in the offering, the shares are allocated to the accounts for which the offering is deemed most suitable. Such offerings generally are then allocated pro rata based on net asset value. In the case of secondary public offerings, allocations may be based on position weightings desired for each participating account.

Allocations may be adjusted based on factors deemed appropriate by the portfolio manager, including, but not limited to, the liquidity of the offering or a rotational system designed to ensure that, over time, allocations of IPO securities are fair and equitable to all accounts.

If under the procedures an account would receive an allocation equal to or less than the greater of (a) a portfolio position of .25 of 1%; or (b) 100 shares, the portfolio manager may decline the allocation for that account. Shares not taken as a result of this rule are reallocated to the other accounts participating in the allocation on a pro rata basis based on their net asset values.

From time to time, special circumstances may arise in which deviations from these policies are appropriate. Any such exceptions must by approved by Founders' President or his designee.

Soft Dollars. (All Portfolios) Subject to the policy of seeking the best combination of price and execution, a Portfolio may execute transactions with brokerage firms that provide, along with brokerage services, research services and products, as defined in Section 28(e) of the Securities Exchange Act of 1934. Section 28(e) provides a "safe harbor" to investment managers who use commission dollars of their advised accounts to obtain investment research and brokerage services and products. These arrangements are often called soft dollar arrangements. Research and brokerage services and products that provide lawful and appropriate assistance to the manager in performing investment decision-making responsibilities fall within the safe harbor.

The services and products provided under these arrangements permit the Manager or Sub-Adviser to supplement its own research and analysis activities, and provide it with information from individuals and research staffs of many securities firms.

Some of the research products or services received by the Manager or a sub-investment adviser may have both a research function and a non-research administrative function (a "mixed use"). If the Manager or Sub-Adviser determines that any research product or service has a mixed use, the Manager or Sub-Adviser will allocate in good faith the cost of such service or

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product accordingly. The portion of the product or service that the Manager or Sub-Adviser determines will assist it in the investment decision-making process may be paid for in soft dollars. The non-research portion is paid for by the Manager or Sub-Adviser in hard dollars. Any such allocation may create a conflict of interest for the Manager or Sub-Adviser.

Certain funds are managed by dual employees of the Manager and an affiliated entity in the Mellon organization. The affiliated entity effects trades for funds managed by these dual employees. Because those funds may benefit from the research products and services the affiliated entity receives from brokers, commissions generated by those funds may be used to help pay for research products and services used by the affiliated entity.

The Manager or Sub-Adviser generally considers the amount and nature of research, execution and other services provided by brokerage firms, as well as the extent to which such services are relied on, and attempts to allocate a portion of the brokerage business of its clients on the basis of that consideration. Neither the research services nor the amount of brokerage given to a particular brokerage firm are made pursuant to any agreement or commitment with any of the selected firms that would bind the Manager or Sub-Adviser to compensate the selected brokerage firm for research provided. The Manager or Sub-Adviser endeavors to direct sufficient commissions to broker/dealers that have provided it with research to ensure continued receipt of research the Manager or Sub-Adviser believes is useful. Actual brokerage commissions received by a broker/dealer may be more or less than the suggested allocations.

The Manager or Sub-Adviser may receive a benefit from the research services and products that is not passed on to a Portfolio in the form of a direct monetary benefit. Further, research services and products may be useful to the Manager or Sub-Adviser in providing investment advice to any of the Portfolio's or clients it advises. Likewise, information made available to the Manager or Sub-Adviser from brokerage firms effecting securities transactions for a Portfolio may be utilized on behalf of another fund or client. Thus, there may be no correlation between the amount of brokerage commissions generated by a particular Portfolio or client and the indirect benefits received by that Portfolio or client.

The aggregate amount of transactions during the fiscal year ended December 31, 2004 in securities effected on an agency basis through a broker for, among other things, research services, and the commissions and concessions related to such transactions were as follows:

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Name of Portfolio	Transaction	Commissions and Concessions
Amount
Core Value Portfolio	$5,470,967	$6,481

MidCap Stock Portfolio	$137,011,861	$224,921

Founders Growth Portfolio	$46,211,162	$23,338

Founders International Equity Portfolio	$7,813,328	$2,372

Emerging Leaders Portfolio	$4,968,873	$12,468

Founders Discovery Portfolio	$51,666,184	$26,817

Technology Growth Portfolio	$31,163,804	$58,063

Core Bond Portfolio	$0	$0
Small Cap Stock Index Portfolio	$0	$0

Regular Broker-Dealers. A Portfolio may execute transactions with one or more of its "regular brokers or dealers," as defined in Rule 10b-1 under the 1940 Act. Rule 10b-1 provides that a "regular broker or dealer" is one of the ten brokers or dealers that, during the Portfolio's most recent fiscal year (i) received the greatest dollar amount of brokerage commissions from participating, either directly or indirectly, in the Portfolio's portfolio transactions, (ii) engaged as principal in the largest dollar amount of the Portfolio's transactions or (iii) sold the largest dollar amount of the Portfolio's securities. The following is a list of each Portfolio that acquired securities of its regular brokers or dealers for the fiscal year ended December 31, 2004, the issuer of the securities and the aggregate value per issuer, as of December 31, 2004, of such securities:

Portfolio	Name of Regular Broker Dealer	Aggregate Value Per Issuer

Core Value Portfolio	Morgan Stanley Dean Witter & Co.	$1,893,000
	Goldman Sachs & Co.	$1,561,000
	J.P. Morgan Chase & Co.	$2,177,000
	Merrill Lynch, Pierce, Fenner & Smith, Inc.	$1,177,000
	Citigroup Capital Markets, Inc.	$2,886,000

Core Bond Portfolio	J.P. Morgan Chase & Co.	$759,000
	Credit Suisse First Boston Corporation	$	105,000
	Banc of America
	Securities LLC	$	138,000
	Morgan Stanley Dean Witter
	& Co.	$	182,000

Founders Growth	Citigroup Capital Markets, Inc.	$	231,000


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Portfolio	Name of Regular Broker Dealer	Aggregate Value Per Issuer

Portfolio
	Goldman Sachs & Co.	$	351,000
	Morgan Stanley Dean Witter & Co.	$	242,000
	J.P. Morgan Chase & Co.	$ 103,000

Founders International
Equity Portfolio	Credit Suisse First Boston Corporation	$ 103,000

MidCap Stock Portfolio	RBS Greenwich Capital Markets, Inc.	$ 7,300,000
	Bear, Stearns & Co.	$	2,834,000

Small Cap Stock Index
Portfolio	RBS Greenwich Capital Markets, Inc.	$	850,000

Disclosure of Portfolio Holdings. It is the policy of each Portfolio to protect the confidentiality of its portfolio holdings and prevent the selective disclosure of non-public information about such holdings. Each Portfolio will publicly disclose its holdings in accordance with regulatory requirements, such as periodic portfolio disclosure in filings with the SEC. Each Portfolio will publicly disclose its complete schedule of portfolio holdings, as reported on a month-end basis at www.dreyfus.com. The information will be posted with a one-month lag and will remain accessible until the Fund files a report on Form N-Q or Form N-CSR for the period that includes the date as of which the information was current. In addition, fifteen days following the end of each calendar quarter, each Portfolio will publicly disclose on the website its complete schedule of portfolio holdings as of the end of the such quarter.

If portfolio holdings are released pursuant to an ongoing arrangement with any party, the Fund must have a legitimate business purpose for doing so, and neither the Fund, nor Dreyfus or its affiliates, may receive any compensation in connection with an arrangement to make available information about any Portfolio's portfolio holdings. The Fund may distribute portfolio holdings to mutual fund evaluation services such as S&P's, Morningstar or Lipper Analytical Services; due diligence departments of broker-dealers and wirehouses that regularly analyze the portfolio holdings of mutual funds before their public disclosure; and broker-dealers that may be used by the Portfolio, for the purpose of efficient trading and receipt of relevant research, provided that: (a) the recipient does not distribute the portfolio holdings to persons who are likely to use the information for purposes of purchasing or selling Portfolio shares or portfolio holdings of a Portfolio before the portfolio holdings become public information; and (b) the recipient signs a written confidentiality agreement.

A Portfolio may also disclose any and all portfolio information to its service providers and others who generally need access to such information in the performance of their contractual duties and responsibilities and are subject to duties of confidentiality, including a duty not to trade on non-public information, imposed by law and/or contract. These services providers include the Fund's custodian, auditors, investment adviser, administrator, and each of their respective affiliates and advisers.

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Disclosure of the portfolio holdings of a Portfolio may be authorized only by the Fund's Chief Compliance Officer, and any exceptions to this policy are reported quarterly to the Fund's Board.

SUMMARY OF THE PROXY VOTING POLICY, PROCEDURES AND GUIDELINES OF

THE DREYFUS FAMILY OF FUNDS

The Board of each fund in the Dreyfus Family of Funds has delegated to the Manager the authority to vote proxies of companies held in the fund's portfolio. The Manager, through its participation on the Mellon Proxy Policy Committee (the "MPPC"), applies Mellon's Proxy Voting Policy, related procedures, and voting guidelines when voting proxies on behalf of the funds.

The Manager recognizes that an investment adviser is a fiduciary that owes its clients, including funds it manages, a duty of utmost good faith and full and fair disclosure of all material facts. An investment adviser's duty of loyalty requires an adviser to vote proxies in a manner consistent with the best interest of its clients and precludes the adviser from subrogating the clients' interests to its own. In addition, an investment adviser voting proxies on behalf of a fund must do so in a manner consistent with the best interests of the fund and its shareholders.

The Manager seeks to avoid material conflicts of interest by participating in the MPPC, which applies detailed, pre-determined written proxy voting guidelines (the "Voting Guidelines") in an objective and consistent manner across client accounts, based on internal and external research and recommendations provided by a third party vendor, and without consideration of any client relationship factors. Further, the MPPC engages a third party as an independent fiduciary to vote all proxies of funds managed by Mellon or its affiliates (including the Dreyfus Family of Funds), and may engage an independent fiduciary to vote proxies of other issuers at its discretion.

All proxies received by the funds are reviewed, categorized, analyzed and voted in accordance with the Voting Guidelines. The guidelines are reviewed periodically and updated as necessary to reflect new issues and any changes in Mellon's or the Manager's policies on specific issues. Items that can be categorized under the Voting Guidelines are voted in accordance with any applicable guidelines or referred to the MPPC, if the applicable guidelines so require. Proposals that cannot be categorized under the Voting Guidelines are referred to the MPPC for discussion and vote. Additionally, the MPPC reviews proposals where it has identified a particular company, industry or issue for special scrutiny. With regard to voting proxies of foreign companies, the MPPC weighs the cost of voting and potential inability to sell the securities (which may occur during the voting process) against the benefit of voting the proxies to determine whether or not to vote. With respect to securities lending transactions, the MPPC seeks to balance the economic benefits of continuing to participate in an open securities lending transaction against the inability to vote proxies.

When evaluating proposals, the MPPC recognizes that the management of a publicly-held company may need protection from the market's frequent focus on short-term considerations, so as to be able to concentrate on such long-term goals as productivity and development of competitive products and services. In addition, the MPPC generally supports proposals designed

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to provide management with short-term insulation from outside influences so as to enable them to bargain effectively with potential suitors to the extent such proposals are discrete and not bundled with other proposals. The MPPC believes that a shareholder's role in the governance of a publicly-held company is generally limited to monitoring the performance of the company and its management and voting on matters which properly come to a shareholder vote. However, the MPPC generally opposes proposals designed to insulate an issuer's management unnecessarily from the wishes of a majority of shareholders. Accordingly, the MPPC generally votes in accordance with management on issues that the MPPC believes neither unduly limit the rights and privileges of shareholders nor adversely affect the value of the investment.

On questions of social responsibility where economic performance does not appear to be an issue, the MPPC attempts to ensure that management reasonably responds to the social issues. Responsiveness will be measured by management's efforts to address the particular social issue including, where appropriate, assessment of the implications of the proposal to the ongoing operations of the company. The MPPC will pay particular attention to repeat issues where management has failed in its commitment in the intervening period to take actions on issues.

In evaluating proposals regarding incentive plans and restricted stock plans, the MPPC typically employs a shareholder value transfer model. This model seeks to assess the amount of shareholder equity flowing out of the company to executives as options are exercised. After determining the cost of the plan, the MPPC evaluates whether the cost is reasonable based on a number of factors, including industry classification and historical performance information. The MPPC generally votes against proposals that permit or are silent on the repricing or replacement of stock options without shareholder approval.

Information regarding how the Fund voted proxies for each Portfolio is available at http://www.dreyfus.com and on the SEC's website at http://www.sec.gov on each Portfolio's Form N-PX filed with the SEC.

INFORMATION ABOUT THE FUND AND PORTFOLIOS

Each Portfolio's shares are classified into two classes with the exception of Small Cap Stock Index Portfolio, which has one class. Each Portfolio share has one vote and shareholders will vote in the aggregate and not by class, except as otherwise required by law or with respect to any matter which affects only one class. Each Portfolio share, when issued and paid for in accordance with the terms of the offering, is fully paid and non-assessable. Portfolio shares have equal rights as to dividends and in liquidation. Shares have no preemptive, subscription or conversion rights and are freely transferable.

Under Massachusetts law, shareholders, under certain circumstances, could be held personally liable for the obligations of the Fund. However, the Fund's Agreement and Declaration of Trust (the "Trust Agreement") disclaims shareholder liability for acts or obligations of the Fund and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Fund or a Trustee. The Trust Agreement provides for indemnification from the Fund's property for all losses and expenses of any shareholder held personally liable for the obligations of the Fund. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which

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the Fund itself would be unable to meet its obligations, a possibility which management believes is remote. Upon payment of any liability incurred by the Fund, the shareholder paying such liability will be entitled to reimbursement from the general assets of the Fund. The Fund intends to conduct its operations in such a way so as to avoid, as far as possible, ultimate liability of the shareholders for liabilities of the Fund.

Unless otherwise required by the 1940 Act, ordinarily it will not be necessary for the Fund to hold annual meetings of shareholders. As a result, shareholders may not consider each year the election of Board members or the appointment of auditors. However, the holders of at least 10% of the shares outstanding and entitled to vote may require the Fund to hold a special meeting of shareholders for purposes of removing a Board member from office. Shareholders may remove a Board member by the affirmative vote of two-thirds of the Fund's outstanding voting shares. In addition, the Board will call a meeting of shareholders for the purpose of electing Board members if, at any time, less than a majority of the Board members then holding office have been elected by shareholders.

The Fund is a "series fund," which is a mutual fund divided into separate portfolios, each of which is treated as a separate entity for certain matters under the 1940 Act and for other purposes. A shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. For certain matters shareholders vote together as a group; as to others they vote separately by portfolio.

To date, the Board has authorized the creation of 9 Portfolios of shares. All consideration received by the Fund for shares of one of the Portfolios, and all assets in which such consideration is invested, will belong to that Portfolio (subject only to the rights of creditors of the Fund) and will be subject to the liabilities related thereto. The income attributable to, and the expenses of, one Portfolio would be treated separately from those of the other Portfolios. The Fund has the ability to create, from time to time, new series without shareholder approval.

Rule 18f-2 under the 1940 Act provides that any matter required to be submitted under the provisions of the 1940 Act or applicable state law or otherwise to the holders of the outstanding voting securities of an investment company, such as the Fund, will not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding shares of each portfolio affected by such matter. Rule 18f-2 further provides that a portfolio shall be deemed to be affected by a matter unless it is clear that the interests of each portfolio in the matter are identical or that the matter does not affect any interest of such portfolio. The Rule exempts the selection of independent accountants and the election of Board members from the separate voting requirements of the rule.

Each Portfolio will send annual and semi-annual financial statements to all its shareholders.

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The Small Cap Stock Index Portfolio is not sponsored, endorsed, sold or promoted by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes no representation or warranty, express or implied, to the owners of the Portfolio or any member of the public regarding the advisability of investing in securities generally or in the Portfolio particularly or the ability of the S&P 600 SmallCap Index to track general stock market performance. S&P's only relationship to the Fund is the licensing of certain trademarks and trade names of S&P and of the S&P SmallCap 600 Index which is determined, composed and calculated by S&P without regard to the Fund or the Portfolio. S&P has no obligation to take the needs of the Fund or the owners of the Portfolio into consideration in determining, composing, or calculating the S&P SmallCap 600 Index. S&P is not responsible for and has not participated in the determination of the prices and amount of the Portfolio or the timing of the issuance or sale of the Portfolio or in the calculation of the equation by which the Portfolio is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Small Cap Stock Index Portfolio.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, OWNERS OF THE PORTFOLIO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

The following shareholders are known by the Fund to own of record 5% or more of the indicated Portfolio's shares outstanding on April 1, 2005. A shareholder who

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beneficially owns, directly or indirectly, more than 25% of a Portfolio's voting securities may be deemed a "control person" (as defined in the 1940 Act) of the Portfolio.

Shareholder	Portfolio	Percentage

Allianz Life Insurance Co.	Small Cap Stock Index - Service shares	56.25%
of North America
Minneapolis, MN 55416-1297

Allmerica Financial	MidCap Stock-Initial shares	22.22%
Life & Annuity Co.
Attn: Separate Accounts
Worcester, MA 01653

First TransAmerica Life Insurance Co.	Core Bond-Initial shares	23.96%

Cedar Rapids, IA 52499	Core Bond-Service	81.78%
	shares
	Core Value-Initial shares	14.48%

	Emerging Leaders-	26.39%
	Initial shares
	Founders Discovery-Initial shares	5.96%

	Founders Discovery-Service shares	7.28%
	Founders Growth-Initial shares	15.16%
	Founders Growth-Service shares	6.05%
	Founders International Equity-Initial shares	13.80%

	Founders International Equity-Service shares	8.76%
	Technology Growth-Initial shares	14.19%

Kemper Investors Life Insurance Co.	MidCap Stock – Initial shares	48.93%

Schaumburg, IL 60196-6801

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Shareholder	Portfolio	Percentage

Nationwide Insurance Co.	Emerging Leaders – Service shares	8.92%
Portfolio Accounting	SmallCap Stock Index – Service shares	36.26%

Columbus, OH 43218-2029


NYLIAC	Technology Growth-Initial shares	41.09%

Parsippany, NJ 07054	Technology Growth-Service shares	59.97%

Principal Financial	Founders Discovery – Initial shares	66.09%
Group
Des Moines, IA 50392-0002


Safeco Life Insurance Co.	MidCap Stock – Initial	11.07%
	Shares
Redmond, WA 98052-9664	Technology Growth-Initial shares	8.45%


The Manufacturers Life Insurance	MidCap Stock – Service shares	51.87%
Company of New York
Boston, MA 02116-3740

TransAmerica Accidental	Core Bond-Initial shares	76.03%

Life Insurance Company	Core Bond-Service shares	14.41%

Accounting Department	Emerging Leaders-Initial	67.49%
	shares
Cedar Rapids,
IA 52499-0001



	B-75

Shareholder	Portfolio		Percentage

TransAmerica Financial			8.46%
Life Insurance Company	Core Value – Service shares
	Emerging Leaders – Service shares
Cedar Rapids, IA 52499-0001			13.11%


TransAmerica Occidential Life Ins.	MidCap Stock – Initial shares		10.53%

Los Angeles, CA 90015

TransAmerica Occidential Life Ins.	Core Value –	Initial shares	83.07%
Cedar Rapids, IA 52499-0001	Core Value –	Service shares	88.39%
	Emerging Leaders – Service shares		74.31%
	Founders Discovery – Initial shares		27.95%
	Founders Discovery – Service shares		92.72%
	Founders Growth – Initial shares		87.54%
	Founders Growth – Service shares		93.95%
	Founders International Equity – Initial shares		86.20%
	Founders International Equity – Service shares		91.24%
	MidCap Stock – Service shares		23.93%
	Technology Growth – Initial shares		34.54%
	Technology Growth – Service shares		15.93%

Ameritas Variable Life Insurance Co.	MidCap Stock – Service shares		6.85%
Lincoln, NE 68510

Travelers Life & Annuity Co.	MidCap Stock – Service shares		6.30%
Attn: Shareholder Accounting
Hartford, CT 06199-0027

American Enterprise Life Insurance Co.	Technology Growth – Service shares		19.69%
Minneapolis MN 55440

COUNSEL AND INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038-4982, as counsel for the Fund, has rendered its opinion as to certain legal matters regarding the due authorization and valid issuance of the shares being sold pursuant to the Fund's Prospectuses.

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Ernst & Young LLP, 5 Times Square, New York, New York 10036, an independent registered public accounting firm, have been selected as independent auditors of the Fund.

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APPENDIX

Rating Categories

Description of certain ratings assigned by Standard & Poor's Ratings Services ("S&P"), Moody's Investors Service, Inc. ("Moody's"), and Fitch Ratings ("Fitch"):

S&P

Long-term

AAA

An obligation rated 'AAA' has the highest rating assigned by S&P. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.

An obligation rated 'AA' differs from the highest rated obligations only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.

An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.

BBB

An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

BB, B, CCC, CC, and C

Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative characteristics. 'BB' indicates the least degree of speculation and 'C' the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.

CCC

An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

An obligation rated 'CC' is currently highly vulnerable to nonpayment.

A subordinated debt or preferred stock obligation rated 'C' is currently highly vulnerable to nonpayment. The 'C' rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken, but payments on this obligation are being continued. A 'C' also will be assigned to a preferred stock issue in arrears on dividends or sinking fund payments, but that is currently paying.

An obligation rated 'D' is in payment default. The 'D' rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

The symbol 'r' is attached to the ratings of instruments with significant noncredit risks. It highlights risks to principal or volatility of expected returns which are not addressed in the credit rating. Examples include: obligations linked or indexed to equities, currencies, or commodities; obligations exposed to severe prepayment risk—such as interest-only or principal-only mortgage securities; and obligations with unusually risky interest terms, such as inverse floaters.

N.R.

The designation 'N.R.' indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular obligation as a matter of policy.

Note: The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign designation to show relative standing within the major rating categories.

Short-term

A-1

A short-term obligation rated 'A-1' is rated in the highest category by S&P. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category,

certain obligations are given a plus sign (+) designation. This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.

A-2

A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.

A-3

A short-term obligation rated 'A-3' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

A short-term obligation rated 'B' is regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet is financial commitment on the obligation.

A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

A short-term obligation rated 'D' is in payment default. The 'D' rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

Moody's

Long-term

Aaa

Bonds rated 'Aaa' are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.

Bonds rated 'Aa' are judged to be of high quality by all standards. Together with the 'Aaa' group they comprise what are generally known as high-grade bonds. They are rated lower than the best

bonds because margins of protection may not be as large as in 'Aaa' securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than the 'Aaa' securities.

Bonds rated 'A' possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time in the future.

Baa

Bonds rated 'Baa' are considered as medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.

Bonds rated 'Ba' are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.

Bonds rated 'B' generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.

Caa

Bonds rated 'Caa' are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.

Bonds rated 'Ca' represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.

Bonds rated 'C' are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.

Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from 'Aa' through 'Caa'. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.

Prime rating system (short-term)

Issuers rated Prime-1 (or supporting institutions) have a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics:

Leading market positions in well-established industries.

High rates of return on funds employed.

Conservative capitalization structure with moderate reliance on debt and ample asset

protection.

Broad margins in earnings coverage of fixed financial charges and high internal cash

generation.

Well-established access to a range of financial markets and assured sources of alternate

liquidity.

Issuers rated Prime-2 (or supporting institutions) have a strong ability for repayment of senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or supporting institutions) have an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained.

Issuers rated Not Prime do not fall within any of the Prime rating categories.

Fitch

Long-term investment grade

AAA

Highest credit quality. 'AAA' ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

Very high credit quality. 'AA' ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

High credit quality. 'A' ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.

BBB

Good credit quality. 'BBB' ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.

Long-term speculative grade

Speculative. 'BB' ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade.

Highly speculative. 'B' ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.

CCC, CC, C

High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. 'CC' ratings indicate that default of some kind appears probable. 'C' ratings signal imminent default.

DDD, DD, D

Default. The ratings of obligations in this category are based on their prospects for achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be estimated with any precision, the following serve as general guidelines. 'DDD' obligations have the highest potential for recovery, around 90% - 100% of outstanding amounts and accrued interest. 'DD' ratings indicate potential recoveries in the range of 50% - 90% and 'D' the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their obligations. Entities rated 'DDD' have the highest prospect for resumption of performance or continued operation with or without a formal reorganization process. Entities rated 'DD' and 'D' are generally undergoing a formal reorganization or liquidation process; those rated 'DD' are likely to satisfy a higher portion of their outstanding obligations, while entities rated 'D' have a poor prospect of repaying all obligations.

Short-term

A short-term rating has a time horizon of less than 12 months for most obligations, or up to three years for U.S. public finance securities, and thus places greater emphasis on the liquidity necessary to meet financial commitments in a timely manner.

Highest credit quality. Indicates the strongest capacity for timely payment of financial commitments; may have an added "+" to denote any exceptionally strong credit feature.

Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of the higher ratings.

Fair credit quality. The capacity for timely payment of financial commitment is adequate; however, near-term adverse changes could result in a reduction non-investment grade.

Speculative. Minimal capacity for timely payment of financial commitments plus vulnerability to near-term adverse changes in financial and economic conditions.

High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment.

Default. Denotes actual or imminent payment default.

'NR' indicates that Fitch does not rate the issuer or issue in question.

Notes to long-term and short-term ratings: A plus (+) or minus (-) sign designation may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the 'AAA' long-term rating category, to categories below 'CCC', or to short-term ratings other than 'F1.'

DREYFUS INVESTMENT PORTFOLIOS

PART C. OTHER INFORMATION

Item 23.		Exhibits

(a) Registrant's Agreement and Declaration of Trust is incorporated by reference to the Registration Statement on Form N-1A, filed on February 28, 1998.

(b) Registrant's By-Laws, as amended, are incorporated by reference to Exhibit (b) of Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A, filed on February 14, 2000.

(d)(1) Revised Management Agreement is incorporated by reference to Exhibit (d)(1) of Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A, filed on April 17, 2003.

(d)(2) Revised Sub-Investment Advisory Agreements are incorporated by reference to Exhibit (d)(2) of Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A, filed on April 17, 2003.

(e) Revised Distribution Agreement is incorporated by reference to Exhibit (e) of Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A, filed on April 17, 2003.

(g)(1) Custody Agreements are incorporated by reference to Exhibit (g) of Post-Effective Amendment No. 19 to the Registration Statement on Form N-1A, filed on April 15, 2002.

(g)(2) Amended Bank of New York Custody Agreement is incorporated by reference to Exhibit (g)(2) of Post-Effective Amendment No. 21 to the Registration Statement on Form N-1A, filed on April 20, 2004.

(i) Opinion and consent of Registrant's counsel is incorporated by reference to Exhibit (10) of Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A, filed on April 24, 1998.

(j) Consent of Independent Auditors.

(m) Revised Distribution Plan (12b-1 Plan) is incorporated by reference to Exhibit (m) of Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A, filed on April 17, 2003.

(o) Revised Rule 18f-3 Plan is incorporated by reference to Exhibit (o) of Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A, filed on April 17, 2003.

(p)(1) Code of Ethics adopted by the Registrant.

(p)(2) Code of Ethics adopted by the Sub-Investment Advisers to the Registrant is incorporated by reference to Exhibit (p)(2) of Post-Effective Amendment No. 16 to the Registration Statement on Form N-1A, filed on April 27, 2001.

Item 23.	Exhibits. - List (continued)


	Other Exhibits

	(a)(1)	Power of Attorney of the Board members is incorporated by reference to Other Exhibits
		(a)(1) of Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A,
		filed on April 17, 2003.
	(a)(2)	Power of Attorney of the Officers of the Registrant is incorporated by reference to Other
		Exhibits (a)(2) of Post-Effective Amendment No. 19 to the Registration Statement on Form
		N-1A, filed on April 15, 2002.

(b)	Certificate of Assistant Secretary is incorporated by reference to Other Exhibits (b) of Post- Effective Amendment No. 20 to the Registration Statement on Form N-1A, filed on April 17, 2003.

Item 24.		Persons Controlled by or under Common Control with Registrant.


		Not Applicable


Item 25.		Indemnification


		The Statement as to the general effect of any contract, arrangements or statute under which a Board
		member, officer, underwriter or affiliated person of the Registrant is insured or indemnified in any manner
		against any liability which may be incurred in such capacity, other than insurance provided by any Board
		member, officer, affiliated person or underwriter for their own protection, is incorporated by reference to
		Item 27 of Part C of Post-Effective Amendment No. 2 to the Registration Statement on Form N-1A, filed
		on September 15, 1998.

		Reference is also made to the Distribution Agreement attached as Exhibit (e) of Post-Effective Amendment
		No. 18 to the Registrant Statement on Form N-1A, filed on March 28, 2002.


Item 26.		Business and Other Connections of Investment Adviser.


		The Dreyfus Corporation ("Dreyfus") and subsidiary companies comprise a financial service organization
		whose business consists primarily of providing investment management services as the investment adviser
		and manager for sponsored investment companies registered under the Investment Company Act of 1940
		and as an investment adviser to institutional and individual accounts. Dreyfus also serves as sub-
		investment adviser to and/or administrator of other investment companies. Dreyfus Service Corporation, a
		wholly-owned subsidiary of Dreyfus, serves primarily as a registered broker-dealer and distributor of other
		investment companies advised and administered by Dreyfus. Dreyfus Investment Advisors, Inc., another
		wholly-owned subsidiary, provides investment management services to various pension plans, institutions
		and individuals.

C-2

P:\Word Processing\FUNDS\172\J30-172-4-03.doc-035-042-004/023

ITEM 26. Business and Other Connections of Investment Adviser (continued)


Officers and Directors of Investment Adviser

Name and Position
With Dreyfus	Other Businesses	Position Held	Dates

Stephen R. Byers	Lighthouse Growth Advisors LLC⁺⁺	Member, Board of	9/02 - Present
Director, Vice Chairman, and		Managers
Chief Investment Officer

	Dreyfus Service Corporation⁺⁺	Senior Vice President	3/00 - Present

	Founders Asset Management,	Member, Board of	6/02 - Present
	LLC^****	Managers

	Dreyfus Investment Advisors,	Chief Investment Officer	2/02 - Present
	Inc. ⁺⁺	Director	2/02 - Present

Stephen E. Canter	Mellon Financial Corporation⁺	Vice Chairman	6/01 - Present
Chairman of the Board,
Chief Executive Officer and	Mellon Bank, N.A.⁺	Vice Chairman	6/01 - Present
Chief Operating Officer

	Standish Mellon Asset Management	Board Manager	7/03 - Present
	Company, LLC*

	Mellon Growth Advisors, LLC^*	Board Member	1/02 – 7/03

	Newton Management Limited	Director	2/99 - Present
	London, England

	Mellon Bond Associates, LLP⁺	Executive Committee	1/99 – 7/03
		Member

	Mellon Equity Associates, LLP⁺	Executive Committee	1/99 - Present
		Member

	Franklin Portfolio Associates,	Director	2/99 - Present
	LLC^*

	Franklin Portfolio Holdings, Inc.^*	Director	2/99 - Present

	TBCAM Holdings, LLC^*	Director	2/99 - Present

	Mellon Capital Management	Director	1/99 - Present
	Corporation^***

	Founders Asset Management	Member, Board of	12/97 - Present
	LLC^****	Managers

	The Dreyfus Trust Company⁺⁺⁺	Director	6/95 - Present
		Chairman	1/99 - Present
		President	1/99 - Present
		Chief Executive Officer	1/99 - Present

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C-4

Name and Position
With Dreyfus	Other Businesses	Position Held	Dates

J. Charles Cardona	Dreyfus Investment Advisors,	Chairman of the Board	2/02 - Present
Director and Vice Chairman	Inc.⁺⁺

	Boston Safe Advisors, Inc.⁺⁺	Director	10/01 - Present

	Dreyfus Service Corporation⁺⁺	Executive Vice President	2/97 - Present
		Director	8/00 - Present

Thomas F. Eggers	Dreyfus Service Corporation⁺⁺	Chairman	4/05 – Present
Director and President		Chief Executive Officer	4/05 – Present

	Dreyfus Service Organization⁺⁺	Director	4/05 – Present

	Founders Asset Management LLC^****	Member, Board of	4/05 – Present
		Managers

	Lighthouse Growth Advisers LLC⁺⁺	Member, Board of	4/05 – Present
		Managers

	Scudder Investments	President	5/02 – 3/05
	345 Park Avenue	Chief Executive Officer	5/02 – 3/05
	New York, NY 10154

	Scudder Distributor	Chairman	5/02-3/05
	345 Park Avenue
	New York, NY 10154

Steven G. Elliott	Mellon Financial Corporation⁺	Director	1/01 - Present
Director		Senior Vice Chairman	1/99 - Present

	Mellon Bank, N.A.⁺	Director	1/01 - Present
		Senior Vice Chairman	3/98 – Present

	Mellon Financial Services	Director	1/96 - Present
	Corporation #1	Vice President	1/96 - Present
	Mellon Bank Center, 8^thFloor
	1735 Market Street
	Philadelphia, PA 19103

	Allomon Corporation	Director	12/87 - Present
	Two Mellon Bank Center
	Pittsburgh, PA 15259

	Mellon Funding Corporation⁺	Director	8/87 – Present

	Mellon Ventures, Inc. ⁺	Director	1/99 – Present

David F. Lamere	Mellon Financial Corporation ⁺	Vice Chairman	9/01 – Present
Director
	Wellington-Medford II Properties, Inc.	President and Director	2/99 – Present
	Medford, MA

	TBC Securities Co., Inc.	President and Director	2/99 – Present
	Medford, MA

	The Boston Company, Inc. ^*	Chairman & CEO	1/99 – Present

	Boston Safe Deposit and Trust	Chairman & CEO	1/99 – Present
	Company^*

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C-5

Name and Position
With Dreyfus	Other Businesses	Position Held	Dates

	Newton Management Limited	Director	10/98 - Present
	London, England

	Laurel Capital Advisors, LLP⁺	Executive Committee	8/98 – Present
		Member

	Mellon Bank, N.A. ⁺	Vice Chairman	9/01 - Present
		Exec. Management	8/01 - Present
		Group

	Mellon United National Bank	Director	11/98 - Present
	2875 Northeast 191^stStreet,
	North Miami, FL 33180

	Mellon Global Investing Corp.⁺	President	1/00 - Present

Martin G. McGuinn	Mellon Financial Corporation⁺	Chairman	1/99 - Present
Director		Chief Executive Officer	1/99 - Present
		Director	1/98 - Present

	Mellon Bank, N. A. ⁺	Chairman	3/98 - Present
		Chief Executive Officer	3/98 - Present
		Director	1/98 - Present

Ronald P. O’Hanley	Mellon Financial Corporation⁺	Vice Chairman	6/01 - Present
Vice Chairman
and Director
	Mellon Bank, N.A. ⁺	Vice Chairman	6/01 – Present

	Mellon Growth Advisors, LLC^*	Board Member	1/02 - 7/03

	TBC General Partner, LLC^*	President	7/03 - Present

	Standish Mellon Asset Management	Board Member	7/01 - 7/03
	Holdings, LLC
	One Financial Center
	Boston, MA 02211

	Standish Mellon Asset Management	Board Member	7/01 – Present
	Company, LLC
	One Financial Center
	Boston, MA 02211

	Franklin Portfolio Holdings, LLC^*	Director	12/00 - Present

	Franklin Portfolio Associates,	Director	4/97 – Present
	LLC^*

	Pareto Partners (NY)	Partner Representative	2/00 – Present
	505 Park Avenue
	NY, NY 10022

	Buck Consultants, Inc.⁺⁺	Director	7/97 – Present

	Newton Management Limited	Executive Committee	10/98 - Present
	London, England	Member
		Director	10/98 - Present

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C-6

Name and Position
With Dreyfus	Other Businesses	Position Held	Dates

	Mellon Global Investments Japan Ltd.	Non-Resident Director	11/98 - Present
	Tokyo, Japan

	TBCAM Holdings, LLC^*	Director	1/98 – Present

	Fixed Income (MA) Trust^*	Trustee	6/03 – Present

	Fixed Income (DE) Trust^*	Trustee	6/03 – Present

	Pareto Partners	Partner Representative	5/97 – Present
	271 Regent Street
	London, England W1R 8PP

	Mellon Capital Management	Director	2/97 – Present
	Corporation^***

	Certus Asset Advisors Corp.^**	Director	2/97 - 7/03

	Mellon Bond Associates, LLP⁺	Executive Committee	1/98 - 7/03
		Member
		Chairman	1/98 - 7/03

	Mellon Equity Associates, LLP⁺	Executive Committee	1/98 – Present
		Member
		Chairman	1/98 - Present

	Mellon Global Investing Corp.^*	Director	5/97 – Present
		Chairman	5/97 - Present
		Chief Executive Officer	5/97 - Present

J. David Officer	Dreyfus Service Corporation⁺⁺	President	3/00 - Present
Vice Chairman		Director	3/99 - Present
and Director
	MBSC, LLC⁺⁺	Manager, Board of	4/02 - Present
		Managers
		President	4/02 – Present

	Boston Safe Advisors, Inc. ⁺⁺	Director	10/01 - Present

	Dreyfus Transfer, Inc. ⁺⁺	Chairman and Director	2/02 - Present

	Dreyfus Service Organization,	Director	3/99 - Present
	Inc.⁺⁺

	Dreyfus Insurance Agency of	Director	5/98 - 10/04
	Massachusetts, Inc.⁺⁺

	Seven Six Seven Agency, Inc.⁺⁺	Director	10/98 - Present

	Mellon Residential Funding Corp. ⁺	Director	4/97 - Present

	Mellon Bank, N.A.⁺	Executive Vice President	2/94 - Present

	Mellon United National Bank	Director	3/98 - Present
	1399 SW 1^stAve., Suite 400
	Miami, Florida

Richard W. Sabo	Founders Asset Management	President	12/98 - Present
Director	LLC^****	Chief Executive Officer	12/98 - Present

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C-7

Name and Position
With Dreyfus	Other Businesses	Position Held	Dates

Diane P. Durnin	Seven Six Seven Agency, Inc. ⁺⁺	Director	4/02 – Present
Executive Vice President

Mark N. Jacobs	Dreyfus Investment	Director	4/97 - Present
General Counsel,	Advisors, Inc.⁺⁺
Executive Vice President, and
Secretary
	The Dreyfus Trust Company⁺⁺⁺	Director	3/96 - Present

	The TruePenny Corporation⁺⁺	President	10/98 - 11/04
		Director	3/96 - 11/04

Patrice M. Kozlowski	None
Senior Vice President –
Corporate
Communications

William H. Maresca	Lighthouse Growth Advisors LLC⁺⁺	Member, Board of	9/02 - Present
Controller		Managers
		Vice President and	9/02 - Present
		Treasurer

	The Dreyfus Trust Company⁺⁺⁺	Chief Financial Officer	3/99 - Present
		Treasurer	9/98 - Present
		Director	3/97 - Present

	MBSC, LLC⁺⁺	Chief Financial Officer	4/02 - Present
		Manager, Board of	4/02 - Present
		Managers

	Boston Safe Advisors, Inc. ⁺⁺	Chief Financial Officer	10/01 - Present
		and Director

	Dreyfus Service Corporation⁺⁺	Chief Financial Officer	12/98 - Present
		Director	8/00 - Present

	Dreyfus Consumer Credit	Treasurer	10/98 - Present
	Corporation ⁺⁺

	Dreyfus Investment	Treasurer	10/98 – Present
	Advisors, Inc. ⁺⁺

	The TruePenny Corporation⁺⁺	Vice President	10/98 - 11/04
		Director	2/02 - 11/04
		Treasurer	5/00 - 11/04

	Dreyfus Transfer, Inc. ⁺⁺	Chief Financial Officer	5/98 - Present

	Dreyfus Service	Treasurer	3/99 - Present
	Organization, Inc.⁺⁺

	Dreyfus Insurance Agency of	Treasurer	3/99 - 10/04
	Massachusetts, Inc. ⁺⁺

Joseph W. Connolly	The Dreyfus Family of Funds⁺⁺	Chief Compliance	10/04 - Present
Chief Compliance Officer		Officer
	The Mellon Funds Trust⁺⁺	Chief Compliance	10/04 - Present
		Officer
	Dreyfus Investment Advisors, Inc. ⁺⁺	Chief Compliance	10/04 - Present
		Officer

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C-8

Name and Position
With Dreyfus	Other Businesses	Position Held	Dates

	Lighthouse Growth Advisors, LLC ⁺⁺	Chief Compliance	10/04 - Present
		Officer
	MBSC, LLC⁺⁺	Chief Compliance	10/04 - Present
		Officer
	Dreyfus Service Corporation⁺⁺	Chief Compliance	10/04 - Present
		Officer
	Boston Safe Advisors⁺⁺	Chief Compliance	10/04 - Present
		Officer
	Mellon Securities Services⁺	First Vice President	11/01 - 2/04

Lisa A. Fox	Mellon Bank, N.A. ⁺	Vice President	10/01 - Present
Vice President -
Human Resources

Anthony Mayo	None
Vice President -
Information Systems

Theodore A. Schachar	Lighthouse Growth Advisors LLC⁺⁺	Assistant Treasurer	9/02 - Present
Vice President – Tax
	Dreyfus Service Corporation⁺⁺	Vice President - Tax	10/96 - Present

	MBSC, LLC⁺⁺	Vice President - Tax	4/02 – Present

	The Dreyfus Consumer Credit	Chairman	6/99 - Present
	Corporation ⁺⁺	President	6/99 - Present

	Dreyfus Investment Advisors,	Vice President - Tax	10/96 - Present
	Inc.⁺⁺

	Dreyfus Service Organization,	Vice President - - Tax	10/96 - Present
	Inc.⁺⁺

Alex G. Sciulli	AFCO Acceptance Corp.	Vice President	05/94 – Present
Vice President	110 William Street
	29^thFloor
	New York, NY 10038-3901

	AFCO Credit Corp.	Vice President	05/94 – Present
	110 William Street
	29^thFloor
	New York, NY 10038-3901

	The Boston Company, Inc.^*	Vice President	09/01 - Present

	Dreyfus Service Corporation⁺⁺	Vice President	11/01 - Present

	Dreyfus Transfer. Inc.⁺⁺	Vice President	11/01 - Present

	Founders Asset Management LLC^****	Authorized Agent	12/01 - Present

	Franklin Portfolio Associates LLC^*	Vice President	06/01 - Present

	Franklin Portfolio Holdings LLC^*	Vice President	06/01 - Present

	Mellon Bank, N.A.⁺	Senior Vice President	08/01 - Present

	Mellon HR Solutions LLC	Vice President	06/02 – Present
	2100 N. Central Road
	Fort Lee, NJ 07024

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C-9

Name and Position
With Dreyfus	Other Businesses	Position Held	Dates
	Mellon Human Resources & Investor	Vice President	03/04 – Present
	Solutions, Inc.⁺
	Mellon Private Trust Company, N.A.^*	Vice President for	08/01 – Present
		Facilities
	Mellon Trust of California	Vice President for	08/01 – Present
		Facilities
	Mellon Trust of New England, N.A.*	Vice President	09/03 – Present
	Mellon Trust of New York, LLC	Vice President for	08/01 – Present
		Facilities
	Mellon Trust of Washington	Vice President for	08/01 – Present
		Facilities
	Mellon United National Bank	Vice President	09/01 – Present
	Mellon Financial Tower
	111 Brickell Avenue
	Miami, FL 33131
	Standish Mellon Asset Management	Vice President	10/01 – Present
	LLC
	One Financial Center
	Boston, MA 02210
	Katrena Corporation⁺	Vice President	08/01 - Present
	Laurel Capital Advisors, LLP*	Vice President	08/01 - Present
	MBC Investments Corporation⁺	Vice President	08/01 - Present
	MFS Leasing Corp. ⁺	Vice President	08/01 - Present
	MMIP, LLC⁺	Vice President	08/01 - Present
	Mellon Capital Management	Vice President	08/01 - Present
	Corporation***
	Mellon Equity Associates, LLP⁺	Vice President	08/01 - Present
	Mellon Financial Markets, LLC⁺	Vice President	08/01 - Present
	Mellon Financial Services	Vice President	08/01 - Present
	Corporation #1⁺
	Mellon Financial Services	Vice President	08/01 - Present
	Corporation #4⁺
	Mellon Funding Corporation⁺	Vice President	08/01 - Present
	Mellon Insurance Agency, Inc. ⁺	Vice President	08/01 - Present
	Mellon International Investment	Vice President	08/01 - Present
	Corporation⁺
	Mellon International Leasing Company⁺	Vice President	08/01 - Present
	Mellon Leasing Corporation⁺	Vice President	08/01 - Present

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C-10

Name and Position
With Dreyfus	Other Businesses	Position Held	Dates
	Mellon Overseas Investment	Vice President	08/01 - Present
	Corporation⁺
	Mellon Trust Company of Illinois⁺	Vice President	08/01 - Present
	Mellon VA Partners, LLC⁺	Vice President	08/01 - Present
	Mellon Ventures, Inc. ⁺	Vice President	08/01 - Present
	Pontus, Inc. ⁺	Vice President	08/01 - Present
	Texas AP, Inc. ⁺	Vice President	08/01 - Present
Wendy Strutt	Boston Safe Advisers, Inc.	Chief Operating Officer	3/03 - Present
Vice President
James Bitetto	The TruePenny Corporation⁺⁺	Secretary	9/98 - 11/04
Assistant Secretary
	Dreyfus Service Corporation⁺⁺	Assistant Secretary	8/98 - Present
	Dreyfus Investment	Assistant Secretary	7/98 - Present
	Advisors, Inc.⁺⁺
	Dreyfus Service	Assistant Secretary	7/98 - Present
	Organization, Inc.⁺⁺
	The Dreyfus Consumer Credit	Vice President and	2/02 - Present
	Corporation⁺⁺	Director
Steven F. Newman	Dreyfus Transfer, Inc. ⁺⁺	Vice President	2/97 - Present
Assistant Secretary		Director	2/97 - Present
		Secretary	2/97 - Present
	Dreyfus Service	Secretary	7/98 - Present
	Organization, Inc.⁺⁺

^*		The address of the business so indicated is One Boston Place, Boston, Massachusetts, 02108.
^**		The address of the business so indicated is One Bush Street, Suite 450, San Francisco, California 94104.
^***		The address of the business so indicated is 595 Market Street, Suite 3000, San Francisco, California 94105.
^****		The address of the business so indicated is 2930 East Third Avenue, Denver, Colorado 80206.
⁺		The address of the business so indicated is One Mellon Bank Center, Pittsburgh, Pennsylvania 15258.
⁺⁺		The address of the business so indicated is 200 Park Avenue, New York, New York 10166.
⁺⁺⁺		The address of the business so indicated is 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.

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C-11

Item 27.		Principal Underwriters

(a)		Other investment companies for which Registrant's principal underwriter
(exclusive distributor) acts as principal underwriter or exclusive distributor:

1.		CitizensSelect Funds
2.		Dreyfus A Bonds Plus, Inc.
3.		Dreyfus Appreciation Fund, Inc.
4.		Dreyfus Balanced Fund, Inc.
5.		Dreyfus BASIC Money Market Fund, Inc.
6.		Dreyfus BASIC U.S. Mortgage Securities Fund
7.		Dreyfus BASIC U.S. Government Money Market Fund
8.		Dreyfus Bond Funds, Inc.
9.		Dreyfus California Intermediate Municipal Bond Fund
10.		Dreyfus California Tax Exempt Money Market Fund
11.		Dreyfus Cash Management
12.		Dreyfus Cash Management Plus, Inc.
13.		Dreyfus Connecticut Intermediate Municipal Bond Fund
14.		Dreyfus Connecticut Municipal Money Market Fund, Inc.
15.		Dreyfus Fixed Income Securities
16.		Dreyfus Florida Intermediate Municipal Bond Fund
17.		Dreyfus Florida Municipal Money Market Fund
18.		Dreyfus Founders Funds, Inc.
19.		The Dreyfus Fund Incorporated
20.		Dreyfus GNMA Fund, Inc.
21.		Dreyfus Government Cash Management Funds
22.		Dreyfus Growth and Income Fund, Inc.
23.		Dreyfus Growth and Value Funds, Inc.
24.		Dreyfus Growth Opportunity Fund, Inc.
25.		Dreyfus Index Funds, Inc.
26.		Dreyfus Institutional Cash Advantage Funds
27.		Dreyfus Institutional Money Market Fund
28.		Dreyfus Institutional Preferred Money Market Funds
29.		Dreyfus Insured Municipal Bond Fund, Inc.
30.		Dreyfus Intermediate Municipal Bond Fund, Inc.
31.		Dreyfus International Funds, Inc.
32.		Dreyfus Investment Grade Funds, Inc.
33.		Dreyfus Investment Portfolios
34.		The Dreyfus/Laurel Funds, Inc.
35.		The Dreyfus/Laurel Funds Trust
36.		The Dreyfus/Laurel Tax-Free Municipal Funds
37.		Dreyfus LifeTime Portfolios, Inc.
38.		Dreyfus Liquid Assets, Inc.
39.		Dreyfus Massachusetts Intermediate Municipal Bond Fund
40.		Dreyfus Massachusetts Municipal Money Market Fund
41.		Dreyfus Midcap Index Fund, Inc.
42.		Dreyfus Money Market Instruments, Inc.
43.		Dreyfus Municipal Bond Fund, Inc.
44.		Dreyfus Municipal Cash Management Plus
45.		Dreyfus Municipal Funds, Inc.
46.		Dreyfus Municipal Money Market Fund, Inc.

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C-12

47.		Dreyfus New Jersey Intermediate Municipal Bond Fund
48.		Dreyfus New Jersey Municipal Money Market Fund, Inc.
49.		Dreyfus New York Municipal Cash Management
50.		Dreyfus New York Tax Exempt Bond Fund, Inc.
51.		Dreyfus New York Tax Exempt Intermediate Bond Fund
52.		Dreyfus New York Tax Exempt Money Market Fund
53.		Dreyfus U.S. Treasury Intermediate Term Fund
54.		Dreyfus U.S. Treasury Long Term Fund
55.		Dreyfus 100% U.S. Treasury Money Market Fund
56.		Dreyfus Pennsylvania Intermediate Municipal Bond Fund
57.		Dreyfus Pennsylvania Municipal Money Market Fund
58.		Dreyfus Premier California Tax Exempt Bond Fund, Inc.
59.		Dreyfus Premier Equity Funds, Inc.
60.		Dreyfus Premier Fixed Income Funds
61.		Dreyfus Premier International Funds, Inc.
62.		Dreyfus Premier GNMA Fund
63.		Dreyfus Premier Manager Funds I
64.		Dreyfus Premier Manager Funds II
65.		Dreyfus Premier Municipal Bond Fund
66.		Dreyfus Premier New Jersey Municipal Bond Fund, Inc.
67.		Dreyfus Premier New Leaders Fund, Inc.
68.		Dreyfus Premier New York Municipal Bond Fund
69.		Dreyfus Premier Opportunity Funds
70.		Dreyfus Premier State Municipal Bond Fund
71.		Dreyfus Premier Stock Funds
72.		The Dreyfus Premier Third Century Fund, Inc.
73.		The Dreyfus Premier Value Equity Funds
74.		Dreyfus Premier Worldwide Growth Fund, Inc.
75.		Dreyfus Short-Intermediate Government Fund
76.		Dreyfus Short-Intermediate Municipal Bond Fund
77.		The Dreyfus Socially Responsible Growth Fund, Inc.
78.		Dreyfus Stock Index Fund, Inc.
79.		Dreyfus Tax Exempt Cash Management
80.		Dreyfus Treasury Cash Management
81.		Dreyfus Treasury Prime Cash Management
82.		Dreyfus Variable Investment Fund
83.		Dreyfus Worldwide Dollar Money Market Fund, Inc.
84.		General California Municipal Money Market Fund
85.		General Government Securities Money Market Funds, Inc.
86.		General Money Market Fund, Inc.
87.		General Municipal Money Market Funds, Inc.
88.		General New York Municipal Bond Fund, Inc.
89.		General New York Municipal Money Market Fund
90.		Mellon Funds Trust

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C-13

(b)

Name and principal		Positions and Offices
Business address	Positions and offices with the Distributor	with Registrant

Thomas F. Eggers *	Chief Executive Officer and Chairman of the Board	None
J. David Officer *	President and Director	None
J. Charles Cardona *	Executive Vice President and Director	None
James Neiland*	Executive Vice President and Director	None
Irene Papadoulis **	Executive Vice President and Director	None
Prasanna Dhore *	Executive Vice President	None
Noreen Ross *	Executive Vice President	None
Richard Sabo ***	Executive Vice President	None
William H. Maresca *	Chief Financial Officer and Director	None
Ken Bradle **	Senior Vice President	None
Stephen R. Byers *	Senior Vice President	Executive Vice President
Walter Kress *	Senior Vice President	None
Matthew Perrone **	Senior Vice President	None
Bradley J. Skapyak *	Senior Vice President	None
Michael Schuermann **	Senior Vice President	None
Bret Young *	Senior Vice President	None
Jane Knight *	Chief Legal Officer and Secretary	None
Joseph W. Connolly*	Chief Compliance Officer	Chief Compliance Officer
Stephen Storen *	Chief Compliance Officer	None
Maria Georgopoulos *	Vice President – Facilities Management	None
William Germenis *	Vice President – Compliance	Anti-Money Laundering
		Compliance Officer
Tracy Hopkins *	Vice President	None
Donna Impagliazzo *	Vice President – Compliance	None
Mary Merkle *	Vice President – Compliance	None
Paul Molloy *	Vice President	None
James Muir *	Vice President – Compliance	None
Anthony Nunez *	Vice President – Finance	None
Gary Pierce *	Vice President – Finance	None
David Ray ***	Vice President	None
Theodore A. Schachar *	Vice President – Tax	None
William Schalda *	Vice President	None
Alex G. Sciulli****	Vice President	None
John Shea*	Vice President – Finance	None
Susan Verbil*	Vice President – Finance	None
William Verity*	Vice President – Finance	None
James Windels *	Vice President	Treasurer
James Bitetto *	Assistant Secretary	None
Ken Christoffersen ***	Assistant Secretary	None
Ronald Jamison *	Assistant Secretary	None
Sarrita Cypress *	Assistant Secretary	None

*	Principal business address is 200 Park Avenue, New York, NY 10166.

**	Principal business address is 144 Glenn Curtiss Blvd., Uniondale, NY 11556-0144.

***	Principal business address is 210 University Blvd., Suite 800, Denver, CO 80206.

****	Principal business address is One Mellon Bank Center, Pittsburgh, PA 15258.

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Item 28. Location of Accounts and Records
_______

________________________________

1.		Mellon Bank, N.A.
		One Mellon Bank Center
Pittsburgh, PA 15258

2.		The Bank of New York
		One Wall Street
		New York, New York 10286

3.		DST Systems, Inc.
		1055 Broadway
		Kansas City, MO 64105

4.		The Dreyfus Corporation
		200 Park Avenue
		New York, New York 10166

5.		Founders Asset Management LLC
210 University Boulevard
		Suite 800
Denver, Colorado 80206

Item 29.		Management Services

		Not Applicable
Item 30.		Undertakings

		None

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4/14/05

SIGNATURES
_____________

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Amendment to the Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, and State of New York on the 25^th day of April, 2005.

DREYFUS INVESTMENT PORTFOLIOS

BY:		/s/STEPHEN E. CANTER*

		Stephen E. Canter, President

Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the date indicated.

Signatures	Title	Date



/s/STEPHEN E. CANTER*	President (Principal Executive	04/25/05

Stephen E. Canter	Officer)

/s/JAMES WINDELS*	Treasurer (Principal Financial	04/25/05

James Windels	and Accounting Officer)

/s/JOSEPH S. DIMARTINO*	Chairman of the Board	04/25/05

Joseph S. DiMartino

/s/CLIFFORD L. ALEXANDER JR.*	Board Member	04/25/05
Clifford L. Alexander Jr.

/s/LUCY WILSON BENSON*	Board Member	04/25/05

Lucy Wilson Benson

/s/DAVID W. BURKE*	Board Member	04/25/05
David W. Burke

/s/WHITNEY I. GERARD*	Board Member	04/25/05

Whitney I. Gerard

/s/ARTHUR A. HARTMAN*	Board Member	04/25/05

Arthur A. Hartman

/s/GEORGE L. PERRY*	Board Member	04/25/05

George L. Perry

*BY:		/s/ Jeff Prusnofksy
		Jeff Prusnofsky
		Attorney-in-Fact

		EXHIBIT INDEX
Exhibits
(j)		Consent of Independent Auditors.
(j)		Code of Ethics.