-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P454SXi7KKE8MaauDrLL9sjwU2Y0uX4vEvRwN1uJp1TFBZxXC71PxPUVN9GdFi/M 9GTp5ZHgznjHW6ztx1JtAQ== 0001056707-98-000004.txt : 19980902 0001056707-98-000004.hdr.sgml : 19980902 ACCESSION NUMBER: 0001056707-98-000004 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980901 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS INVESTMENT PORTFOLIOS CENTRAL INDEX KEY: 0001056707 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-08673 FILM NUMBER: 98702147 BUSINESS ADDRESS: STREET 1: C/O THE DREYFUS CORPORATION STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 MAIL ADDRESS: STREET 1: C/O THE DREYFUS CORPORATION STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 N-30D 1 SEMI-ANNUAL REPORT DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to provide you with your first semi-annual report for Dreyfus Investment Portfolios -- Core Value Portfolio, which began operations on May 1, 1998. In the two-month period between May 1, 1998 and June 30, 1998, the close of the Portfolio's semi-annual fiscal period, your Portfolio's total return was - -3.68% .* This compares with a total return of 2.27% for the Standard & Poor's 500 Composite Stock Price Index for the same period.** ECONOMIC REVIEW Fears of Federal Reserve Board tightening appear to have eased due to accumulating evidence of slower overall economic growth since the spring. Monetary tightening has been deterred by the Asian financial crisis. The Fed's main domestic concern is that the tight labor market has begun to fuel faster wage growth across many industries. However, thus far rising wages have still not meant rising prices. Instead, this cost-price mix threatens to further erode corporate profit margins. Market interest rates have already rejected the slower economy, and the interest rate curve has become quite flat. The shift to slower economic growth this spring is largely due to the drag from Asia's recession, but may well be reinforced this summer by the multiplier impacts of the General Motors strike. Among broader economic factors, the trade deficit has widened sharply due to both weak exports and strong growth in imports. Also, inventories soared earlier this year, potentially creating some drag on future production. However, thus far slowing industrial output has largely been met by shortening the manufacturing work week, not by cutting jobs. Hence, the shift to slower growth has not relieved the tightness in the labor market. Instead, the virtual absence of bad news has left consumers to enjoy the benefits of rising real wages and lower interest rates that, in turn, have boosted spending and home ownership. Although growth in corporate profits has slowed in many sectors in the past year, consensus estimates of future profit growth continue to be cut by many analysts. Profit margins had already begun to shrink under the weight of rising labor costs, making companies' reported profits increasingly dependent on growth of sales. Overall profits could thus prove quite vulnerable to a period of significantly slower economic growth. Virtually all Treasury market interest rates have already fallen near to the floor set by the Federal Funds rate. This implies that further substantial interest rate drops are unlikely unless the economy weakens enough to justify action by the Fed to ease credit. MARKET OVERVIEW The brief period when the Portfolio was operating before June 30, 1998 was marked by general market weakness in May, followed by a rebound in June by large-capitalization stocks, primarily those with growth characteristics. Value stocks, especially those in the mid-cap range, were left aside in the market's June advance. PORTFOLIO FOCUS Against this backdrop, the Portfolio emphasized value stocks with strong operating fundamentals and positive business momentum. The Portfolio' s characteristics demonstrate favorable value relative to its benchmark, the S&P 500. The Portfolio' s 1998 estimated price-to-earnings ratio of 15.3 is well below the S& P 500's price-to-earnings ratio of 21.2. The price-to-book ratio also compared favorably at 2.6 for the Portfolio and 4.3 for the S&P 500. Currently, the Portfolio is overweighted in the financial services, consumer services, and energy sectors. Chase Manhattan, Harcourt General, Union Pacific, Waste Management, and NationsBank are currently the Portfolio' s largest holdings. The Portfolio' s strongest performing sectors, since its inception, include capital goods, energy, and consumer services. News Corp. A.D.S., Harcourt General, Waste Management, Circuit City Stores -- Circuit City Group, and General Re were among the top contributors to performance during this period. Underperforming sectors included technology, consumer nondurables, and health care. Columbia/HCA Healthcare, Union Pacific, Philips Electronics N.V., and Lam Research detracted from the Portfolio's performance. Thank you for your confidence in Dreyfus. We look forward to serving your investment needs. Sincerely, [Valerie J. Sill, signature logo] Portfolio Manager July 20, 1998 New York, N.Y. *Total return includes reinvestment of dividends and any capital gains paid. The Portfolio's performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts, which will reduce returns. **SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Reflects the reinvestment of income dividends and, where applicable, capital gain distributions. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of U.S. stock market performance. DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED) Common Stocks--93.0% Shares Value - ------------------------------------------------------- ___________ __________ Basic Industries--5.6% Bethlehem Steel (a) 1,600 $ 19,900 British Steel, A.D.S. 1,800 40,950 Broken Hill Proprietary, A.D.R. 1,900 32,181 Crown Cork & Seal 700 33,250 IMC Global 1,200 36,150 Inco 1,800 24,525 Louisiana Pacific 1,200 21,900 Phelps Dodge 400 22,875 Reynolds Metals 600 33,563 Union Carbide 500 26,688 ___________ 291,982 ___________ Capital Goods--7.5% Case 200 9,650 Federal-Mogul 400 27,000 Lockheed Martin 600 63,525 Northrop Grumman 400 41,250 Raytheon, Cl. A 1,100 63,388 United Technologies 800 74,000 Waste Management 3,100 108,500 ___________ 387,313 ___________ Consumer Durables--5.5% Lear (a) 1,400 71,838 Philips Electronics, N.V. 750 63,750 Republic Industries (a) 4,000 100,000 Whirlpool 700 48,125 ___________ 283,713 ___________ Consumer Non-Durables--9.0% Harcourt General 2,000 119,000 Hasbro 700 27,519 Kimberly-Clark 1,800 82,575 Loews 1,000 87,125 Philip Morris 2,600 102,375 RJR Nabisco Holdings 1,900 45,125 ___________ 463,719 ___________ Consumer Services--13.2% ACNielsen (a) 1,600 40,400 American Stores 1,800 43,537 Circuit City Stores-Circuit City Group 1,700 79,687 Deluxe 800 28,650 Federated Department Stores (a) 1,100 59,194 First Data 1,600 53,300 Limited 2,200 72,875 LucasVarity, A.D.S 1,300 51,756 McDonald's 900 62,100 Toys R Us (a) 1,700 40,056 Tricon Global Restaurants (a) 2,400 76,050 Venator Group (a) 4,000 76,500 ___________ 684,105 ___________ DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998 (UNAUDITED) Common Stocks (continued) Shares Value - ------------------------------------------------------- ___________ __________ Energy--11.0% Amoco 1,200 $ 49,950 Burlington Resources 1,000 43,063 Canadian Pacific 2,500 70,937 Elf Aquitaine, A.D.S 800 56,800 Mobil 900 68,963 Oryx Energy (a) 900 19,913 Phillips Petroleum 1,600 77,100 Tosco 2,100 61,688 Unocal 2,000 71,500 YPF Sociedad Anonima, A.D.S 1,600 48,100 ___________ 568,014 ___________ Financial Services--18.1% Aetna 500 38,062 Ahmanson (H.F.) & Co. 800 56,800 Allmerica Financial 800 52,000 Astoria Financial 300 16,050 BankAmerica 600 51,862 Chase Manhattan 1,600 120,800 CIGNA 1,500 103,500 Dun & Bradstreet 1,100 39,737 Equitable 700 52,456 Everest Reinsurance Holdings 1,200 46,125 First Union 1,800 104,850 General Re 200 50,700 Golden State Bancorp (a) 500 14,875 NationsBank 1,400 107,100 Republic New York 600 37,763 Washington Mutual 1,050 45,609 ___________ 938,289 ___________ Health Care--6.2% Amgen (a) 1,000 65,375 Columbia/HCA Healthcare 3,500 101,937 Foundation Health Systems (a) 1,800 47,475 Mallinckrodt 800 23,750 Pharmacia & Upjohn 1,100 50,738 Tenet Healthcare (a) 1,100 34,375 ___________ 323,650 ___________ Technology--8.6% Adaptec (a) 2,300 32,919 Applied Materials (a) 1,600 47,200 Compaq Computer 2,100 59,587 Electronic Data Systems 1,300 52,000 Intel 700 51,887 International Business Machines 650 74,628 Lam Research (a) 1,600 30,600 National Semiconductor (a) 100 1,318 Sun Microsystems (a) 1,300 56,469 Teradyne (a) 1,400 37,450 ___________ 444,058 ___________ DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998 (UNAUDITED) Common Stocks (continued) Shares Value - ------------------------------------------------------- ___________ __________ Transportation--2.3% Union Pacific 2,700 $ 119,138 __________ Utilities--6.0% Bell Atlantic 1,000 45,625 CMS Energy 1,300 57,200 Duke Energy 500 29,625 Edison International 800 23,650 Entergy 1,700 48,875 GTE 700 38,937 Pinnacle West Capital 900 40,500 Southern 1,000 27,688 ___________ 312,100 ___________ TOTAL COMMON STOCKS (cost $5,023,973) $4,816,081 =========== Preferred Stocks--1.9% - ------------------------------------------------------- Consumer Services; News Corp, A.D.S. (cost $82,833) 3,500 $ 98,875 =========== Principal Short-Term Investments--6.5% Amount - ------------------------------------------------------------------------------------------ ___________ Agency Discount Notes; Federal Home Loan Banks, 5.85%, 7/1/1998 (cost $337,000) $ 337,000 $ 337,000 =========== TOTAL INVESTMENTS (cost $5,443,806) 101.4% $5,251,956 ========== =========== LIABILITIES, LESS CASH AND RECEIVABLES (1.4%) $ (70,190) ========== =========== NET ASSETS 100.0% $5,181,766 ========== =========== Notes to Statement of Investments: - ----------------------------------------------------------------------------- (a) Non-income producing. SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1998 (UNAUDITED) Cost Value ___________ __________ ASSETS: Investments in securities--See Statement of Investments $ 5,443,806 $5,251,956 Cash 13,816 Receivable for investment securities sold 41,598 Dividends and interest receivable 8,980 Prepaid expenses--Note 1(f) 29,242 Due from The Dreyfus Corporation and affiliates 5,514 __________ 5,351,106 __________ LIABILITIES: Payable for investment securities purchased 129,182 Accrued expenses 40,158 __________ 169,340 __________ NET ASSETS $5,181,766 ========== REPRESENTED BY: Paid-in capital $5,373,134 Accumulated undistributed investment income-net 11,514 Accumulated net realized gain (loss) on investments (11,032) Accumulated net unrealized appreciation (depreciation) on investments--Note 3 (191,850) ___________ NET ASSETS $5,181,766 =========== SHARES OUTSTANDING (UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST AUTHORIZED) 430,482 NET ASSET VALUE, offering and redemption price per share $12.04 ======= SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- STATEMENT OF OPERATIONS FROM MAY 1, 1998 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998 (UNAUDITED) INVESTMENT INCOME INCOME: Cash dividends (net of $1,174 foreign taxes withheld at source) $ 14,343 Interest 5,805 __________ Total Income $ 20,148 EXPENSES: Investment advisory fee--Note 2(a) 6,358 Auditing fees 5,000 Custodian fees--Note 2(a) 1,963 Registration fees 1,585 Shareholders' reports 1,250 Organization expense--Note 1(f) 1,008 Legal fees 831 Trustees' fees and expenses--Note 2(b) 779 Shareholder servicing costs 213 Miscellaneous 256 __________ Total Expenses 19,243 Less--expense reimbursement from Dreyfus due to undertaking--Note 2(a) (10,609) __________ Net Expenses 8,634 _________ INVESTMENT INCOME--NET 11,514 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3: Net realized gain (loss) on investments $ (11,032) Net unrealized appreciation (depreciation) on investments (191,850) __________ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (202,882) _________ NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(191,368) ========= SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS FROM MAY 1, 1998 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998 (UNAUDITED) OPERATIONS: Investment income--net $ 11,514 Net realized gain (loss) on investments (11,032) Net unrealized appreciation (depreciation) on investments (191,850) ___________ Net Increase (Decrease) in Net Assets Resulting from Operations (191,368) ___________ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold 5,329,758 Cost of shares redeemed (6,624) ___________ Increase (Decrease) in Net Assets from Beneficial Interest Transactions 5,323,134 ___________ Total Increase (Decrease) in Net Assets 5,131,766 NET ASSETS: Beginning of Period--Note 1 50,000 ___________ End of Period $ 5,181,766 =========== UNDISTRIBUTED INVESTMENT INCOME--NET $ 11,514 Shares ___________ CAPITAL SHARE TRANSACTIONS: Shares sold 427,028 Shares redeemed (546) ___________ Net Increase (Decrease) in Shares Outstanding 426,482 =========== SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for the period from May 1, 1998 (commencement of operations) to June 30, 1998. This information has been derived from the Series' financial statements. PER SHARE DATA: Net asset value, beginning of period $12.50 _______ Investment Operations: Investment income--net .03 Net realized and unrealized gain (loss) on investments (.49) _______ Total from Investment Operations . (.46) _______ Net asset value, end of period $12.04 ======= TOTAL INVESTMENT RETURN (3.68%)* RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets .17%* Ratio of net investment income to average net assets . .23%* Decrease reflected in above expense ratio due to undertaking by The Dreyfus Corporation .21%* Portfolio Turnover Rate 18.98%* Net Assets, end of period (000's Omitted) $5,182 - ------------------------ * Not annualized. SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE 1--SIGNIFICANT ACCOUNTING POLICIES: Dreyfus Investment Portfolios (the "Fund") had no operations until May 1, 1998 (commencement of operations) other than matters relating to its organization and registration as a diversified open-end management investment company under the Investment Company Act of 1940 ("Act") and the Securities Act of 1933 and the sale and issuance of 4,000 shares of Beneficial Interest ("Initial Shares") to The Dreyfus Corporation (" Dreyfus" ). The Fund operates as a series company currently offering two series, including the Core Value Portfolio (the "Series") . The Fund is only offered to variable annuity and variable life insurance separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies and to qualified pension and retirement plans. The Series' investment objective is to provide long-term capital growth. Dreyfus serves as the Series' investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. ("Mellon"), which is a wholly-owned subsidiary of Mellon Bank Corporation. Premier Mutual Fund Services, Inc. is the distributor of the Series' shares, which are sold without a sales charge. As of June 30, 1998, MBIC Investment Corp., an indirect subsidiary of Mellon Bank Corporation, held 400,000 shares of the Series. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. The Series' financial statements are prepared in accordance with generally accepted accounting principles which may require the use of management estimates and assumptions. Actual results could differ from those estimates. (A) PORTFOLIO VALUATION: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Trustees. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. (B) FOREIGN CURRENCY TRANSACTIONS: The Series does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series' books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. Under the terms of the custodian agreement, the Series received net earnings credits of $203 during the period ended June 30, 1998 based on available cash balances left on deposit. Income earned under this arrangement is included in interest income. DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO - ----------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) (D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gain, if any, are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Series not to distribute such gain. (E) FEDERAL INCOME TAXES: It is the policy of the Series to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. (F) OTHER: Organization expenses paid by the Fund are included in prepaid expenses and are being amortized to operations from May 1, 1998, the date operations commenced, over the period during which it is expected that a benefit will be realized, not to exceed five years. At June 30, 1998, the unamortized balance of such expenses amounted to $29,242. In the event that any of the Initial Shares are redeemed during the amortization period, the redemption proceeds will be reduced by any unamortized organization expenses in the same proportion as the number of such shares being redeemed bears to the number of such shares outstanding at the time of such redemption. NOTE 2--INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment advisory fee is computed at the annual rate of .75 of 1% of the value of the Series' average daily net assets and is payable monthly. However, Dreyfus had undertaken from May 1, 1998 through June 30, 1998, to reduce the management fee and reimburse such excess expenses paid by the Series, to the extent that the Series' aggregate annual expenses (exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses) exceeded an annual rate of 1% of the value of the Series' average daily net assets. The expense reimbursement, pursuant to the undertaking, amounted to $10,609 during the period ended June 30, 1998. The Series compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the Series. The Series compensates Mellon under a custody agreement for providing custodial services for the Series. During the period ended June 30, 1998, the Series was charged $1,963 pursuant to the custody agreement. (B) Each trustee who is not an "affiliated person" as defined in the Act receives from the Fund an annual fee of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 3--SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended June 30, 1998 amounted to $5,737,224 and $619,387, respectively. At June 30, 1998, accumulated net unrealized depreciation on investments was $191,850, consisting of $125,035 gross unrealized appreciation and $316,885 gross unrealized depreciation. At June 30, 1998, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). [reg.tm] [reg.tm] DREYFUS INVESTMENT PORTFOLIOS, CORE VALUE PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 CUSTODIAN Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, PA 15258 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. P.O. Box 9671 Providence, RI 02940 Printed in U.S.A. 172SA986 Investment Portfolios, CORE VALUE PORTFOLIO Semi-Annual Report June 30, 1998 -----END PRIVACY-ENHANCED MESSAGE-----