0000737520-13-000087.txt : 20130731 0000737520-13-000087.hdr.sgml : 20130731 20130731155004 ACCESSION NUMBER: 0000737520-13-000087 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 19 CONFORMED PERIOD OF REPORT: 20130531 FILED AS OF DATE: 20130731 DATE AS OF CHANGE: 20130731 EFFECTIVENESS DATE: 20130731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Strategic Funds, Inc. CENTRAL INDEX KEY: 0000737520 IRS NUMBER: 133272460 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03940 FILM NUMBER: 13998953 BUSINESS ADDRESS: STREET 1: THE DREYFUS CORPORATION STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2129226817 MAIL ADDRESS: STREET 1: C/O DREYFUS CORP STREET 2: 200 PARK AVENUE, 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS PREMIER NEW LEADERS FUND INC DATE OF NAME CHANGE: 20021213 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS NEW LEADERS FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS NEW EQUITY FUND INC DATE OF NAME CHANGE: 19850904 0000737520 S000015656 Global Stock Fund C000042690 Class A DGLAX C000042691 Class C DGLCX C000042692 Class I DGLRX 0000737520 S000015657 International Stock Fund C000042694 Class A DISAX C000042695 Class C DISCX C000042696 Class I DISRX 0000737520 S000022407 Dreyfus U.S. Equity Fund C000064456 Class A DPUAX C000064457 Class C DPUCX C000064458 Class I DPUIX 0000737520 S000024356 Dreyfus Select Managers Small Cap Value Fund C000072172 Class A DMVAX C000072173 Class C DMECX C000072174 Class I DMVIX N-CSRS 1 formncsr085.htm SEMI-ANNUAL REPORT formncsr085.htm - Generated by SEC Publisher for SEC Filing

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number

811-3940

 

 

 

Strategic Funds, Inc

 

 

(Exact name of Registrant as specified in charter)

 

 

 

 

 

 

c/o The Dreyfus Corporation

200 Park Avenue

New York, New York 10166

 

 

(Address of principal executive offices) (Zip code)

 

 

 

 

 

John Pak, Esq.

200 Park Avenue

New York, New York 10166

 

 

(Name and address of agent for service)

 

 

Registrant's telephone number, including area code:

(212) 922-6000

 

 

Date of fiscal year end:

 

11/30

 

Date of reporting period:

5/31/13

 

             

 

The following N-CSR relates only to the Registrant’s series listed below and does not affect the other series of the Registrant, which have different fiscal year ends and, therefore, different N-CSR reporting requirements.  Separate N-CSR Forms will be filed for these series, as appropriate.

 

Dreyfus Select Managers Small Cap Value Fund

Dreyfus U.S. Equity Fund

Global Stock Fund

International Stock Fund

 

 


 

 

 

FORM N-CSR

Item 1.      Reports to Stockholders.

 


 




Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.

The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.




 

Contents

 

THE FUND

2     

A Letter from the President

3     

Discussion of Fund Performance

6     

Understanding Your Fund’s Expenses

6     

Comparing Your Fund’s Expenses With Those of Other Funds

7     

Statement of Investments

22     

Statement of Assets and Liabilities

23     

Statement of Operations

24     

Statement of Changes in Net Assets

26     

Financial Highlights

29     

Notes to Financial Statements

 

FOR MORE INFORMATION

 

Back Cover



Dreyfus
Select Managers
Small Cap Value Fund

The Fund

A LETTER FROM THE PRESIDENT

Dear Shareholder:

We are pleased to present this semiannual report for Dreyfus Select Managers Small Cap Value Fund, covering the six-month period from December 1, 2012, through May 31, 2013. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

The U.S. economic recovery gained traction over the reporting period, but remained slower than historical norms. On one hand, the expansion has been fueled by gradually falling unemployment, recovering housing markets, rapid growth in domestic oil and gas production, and, perhaps most significant, the aggressively stimulative monetary policy of the Federal Reserve Board (the “Fed”). On the other hand, several factors have weighed on the nation’s economic growth rate, including relatively sluggish demand for exports to Europe and the emerging markets, higher tax rates for some Americans, and more restrictive fiscal policies stemming from sequestration. Investors appear to have adopted a more optimistic outlook, as several major stock market indices reached new record highs by the reporting period’s end.

In our analysis, real GDP growth seems poised to accelerate modestly over the remainder of 2013. In fact, we expect the relatively mild economic expansion to remain intact domestically and globally over the next several years. The moderate pace of the recovery implies that the risks of consumer price inflation are limited, making it unlikely that the Fed will adopt expansion-threatening, restrictive policies anytime soon. As always, we encourage you to discuss our observations with your financial advisor.

Thank you for your continued confidence and support.

Sincerely,


J. Charles Cardona
President
The Dreyfus Corporation
June 17, 2013

2



DISCUSSION OF FUND PERFORMANCE

For the period of December 1, 2012, through May 31, 2013, as provided by Keith L. Stransky and Robert B. Mayerick, Portfolio Allocation Managers, EACM Advisors LLC

Fund and Market Performance Overview

For the six-month period ended May 31, 2013, Dreyfus Select Managers Small Cap Value Fund’s Class A shares produced a total return of 20.52%, Class C shares returned 20.06% and Class I shares returned 20.73%.1 In comparison, the Russell 2000 Value Index (the “Index”), the fund’s benchmark, returned 19.69% for the same period.2

Improving U.S. economic trends generally drove small-cap value stocks higher during the reporting period. The fund outperformed its benchmark, primarily due to successful stock selection in six of the 10 market sectors represented in the Index.

The Fund’s Investment Approach

The fund seeks capital appreciation.To pursue its goal, the fund normally invests at least 80% of its net assets in the stocks of small-cap companies. The fund uses a “multi-manager” approach by selecting one or more sub-advisers to manage its assets. As the fund’s portfolio allocation managers, we seek sub-advisers that complement one another’s style of investing, consistent with the fund’s investment goal.We monitor and evaluate the performance of the sub-advisers and will make corresponding recommendations to Dreyfus and the fund’s Board based on our evaluations.

The fund’s assets are currently under the day-to-day portfolio management of seven sub-advisers, each acting independently of one another and using their own methodology to select portfolio investments.As of the end of the reporting period, 17% of the fund’s assets are under the management ofThompson, Siegel, andWalmsley, LLC, which employs a combination of quantitative and qualitative security selection methods based on a four-factor valuation model. Approximately 23% of the fund’s assets are under the management of Walthausen & Co., LLC, which uses a proprietary valuation model to identify companies that are trading at a discount to their intrinsic values.Approximately 14% of the fund’s assets are under the management of Neuberger Berman Management LLC, which uses fundamental analysis and a bottom-up stock selection process to identify publicly traded small-cap companies selling at a material discount to their intrinsic value.Approximately 21% of the fund’s assets are under the

The Fund 3



DISCUSSION OF FUND PERFORMANCE (continued)

management of Lombardia Capital Partners, which uses fundamental analysis and a bottom-up value-oriented approach in seeking stocks trading below their intrinsic values. Approximately 10% of the fund’s assets are under the management of Iridian Asset Management LLC, which employs bottom-up stock selection and a disciplined valuation process to identify and invest in corporate change.Approximately 10% of the fund’s assets are under the management of Vulcan Value Partners, LLC, which seeks companies with sustainable competitive advantages that may enable them to earn superior cash returns on capital. Approximately 5% of the fund’s assets are under the management of Kayne Anderson Rudnick Investment Management, LLC, which employs a fundamental, bottom-up, research-driven investment process in seeking to identify high-quality companies whose securities are trading at attractive valuations. These percentages can change over time, within ranges described in the prospectus.

Recovering Economy Fueled Market Gains

The reporting period began amid uncertainty surrounding automatic U.S. tax hikes and spending cuts scheduled for the start of 2013, but last-minute legislation to address the tax increases helped alleviate investors’ worries. Subsequently, investors responded positively to improved U.S. employment and housing market trends, and aggressively accommodative monetary policies adopted by the Federal Reserve Board and other central banks. Continued corporate earnings strength and encouraging economic data supported stock prices over the first five months of 2013, enabling some broad measures of stock market performance to set new record highs by the reporting period’s end. Small-cap stocks produced higher returns than their large-cap counterparts, but small-cap value stocks underperformed small-cap growth stocks, on average.

Stock Selections Buoyed Fund Results

The fund achieved particularly strong results in the financials sector. Real estate investment trusts (“REITs”) fared particularly well—including health care REITs Omega Healthcare Investors and Medical Properties Trust—as investors reached for high dividend yields. In the industrials sector, trucking company Arkansas Best was acquired at a premium to its stock price at the time, and seaborne shipping provider Danaos, which primarily traffics in consumer goods, benefited from improved consumer sentiment and recovering housing markets.

4



Disappointments were concentrated mainly in the consumer discretionary sector, where battery manufacturer ExideTechnologies reported lower-than-expected quarterly earnings from margin compression, and toymaker JAKKS Pacific posted an earnings shortfall stemming from a shift in consumers’ preferences from traditional toys to videogames.The fund’s investments in the energy sector also lagged market averages, as oil-and-gas exploration company Halcon Resources Corp. encountered subpar results in the Utica Shale formation.

A Constructive Outlook

The fund’s sub-advisers generally have been encouraged by recent trends among small-cap companies. It is expected that these companies will continue to benefit from increasing mergers-and-acquisitions activity, a strong domestic economy and reasonably attractive valuations. Recent value-oriented opportunities have been found in the information technology and industrials sectors, but relatively fewer among financial institutions.

June 17, 2013

Please note, the position in any security highlighted with italicized typeface was sold during the reporting period. Equity funds are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.

The prices of small company stocks tend to be more volatile than the prices of large company stocks, mainly because these companies have less established and more volatile earnings histories.They also tend to be less liquid than larger company stocks.

1 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the 
maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed 
on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past 
performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, 
fund shares may be worth more or less than their original cost. Return figures provided reflect the absorption of certain 
fund expenses by The Dreyfus Corporation pursuant to an undertaking in effect through April 1, 2014, at which 
time it may be extended, terminated or modified. Had these expenses not been absorbed, the fund’s returns would 
have been lower. 
2 SOURCE: LIPPER INC. — Reflects the reinvestment of dividends and, where applicable, capital gain 
distributions.The Russell 2000 Value Index is an unmanaged index, which measures the performance of those 
Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. Investors cannot invest 
directly in any index. 

 

The Fund 5



UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Select Managers Small CapValue Fund from December 1, 2012 to May 31, 2013. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended May 31, 2013

    Class A    Class C    Class I 
Expenses paid per $1,000  $ 7.26  $ 11.41  $ 5.28 
Ending value (after expenses)  $ 1,205.20  $ 1,200.60  $ 1,207.30 

 

COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended May 31, 2013

    Class A    Class C    Class I 
Expenses paid per $1,000  $ 6.64  $ 10.45  $ 4.84 
Ending value (after expenses)  $ 1,018.35  $ 1,014.56  $ 1,020.14 

 

† Expenses are equal to the fund’s annualized expense ratio of 1.32% for Class A, 2.08% for Class C and .96% 
for Class I, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half 
year period). 

 

6



STATEMENT OF INVESTMENTS

May 31, 2013 (Unaudited)

Common Stocks—95.9%  Shares   Value ($) 
Automobiles & Components—1.2%       
Cooper Tire & Rubber  43,100   1,113,704 
Dana Holding  34,800   658,416 
Gentherm  69,000 a  1,270,980 
Modine Manufacturing  89,600 a  918,400 
Thor Industries  66,096   2,822,960 
      6,784,460 
Banks—9.8%       
Astoria Financial  45,300   446,658 
BancorpSouth  23,039   395,349 
Bank of Hawaii  18,513 b  932,685 
Bank of the Ozarks  12,600   549,990 
BankUnited  35,500   872,590 
BBCN Bancorp  129,180   1,665,130 
BofI Holding  4,800 a  224,736 
Brookline Bancorp  55,184   467,960 
Bryn Mawr Bank  53,520   1,213,834 
Centerstate Banks  91,120   781,810 
City Holding  40,250 b  1,594,705 
City National  13,000   815,880 
Columbia Banking System  56,700   1,238,328 
Comerica  30,827   1,217,358 
Community Bank System  54,269 b  1,593,338 
CVB Financial  125,100   1,434,897 
Dime Community Bancshares  67,230   968,784 
East West Bancorp  88,132   2,321,397 
F.N.B  113,895   1,309,793 
First Bancorp  11,100 b  158,175 
First Commonwealth Financial  150,600   1,085,826 
First Financial Bankshares  40,080 b  2,204,400 
First Merchants  39,447   653,242 
First Midwest Bancorp  55,178   726,142 
First Niagara Financial Group  328,530   3,209,738 
FirstMerit  109,962   2,074,983 
Flushing Financial  33,145   518,056 
Hancock Holding  99,548   2,842,095 

 

The Fund 7



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Banks (continued)       
Heritage Financial Group  54,789   782,935 
Huntington Bancshares  170,810   1,323,778 
IBERIABANK  29,800   1,535,892 
Independent Bank  13,740   452,733 
Investors Bancorp  23,272   460,320 
MGIC Investment  96,100 a  593,898 
National Bank Holdings, Cl. A  30,099   545,996 
Ocwen Financial  84,250 a  3,604,215 
Park Sterling  124,360 a  727,506 
Rockville Financial  53,488 b  697,484 
SVB Financial Group  20,100 a  1,555,539 
TCF Financial  95,100   1,369,440 
Texas Capital Bancshares  55,000 a  2,428,800 
Trustmark  49,345 b  1,257,804 
Umpqua Holdings  181,710   2,456,719 
Union First Market Bankshares  37,374   748,227 
Washington Federal  28,928   505,951 
Westamerica Bancorporation  20,510 b  923,565 
Wintrust Financial  38,600   1,456,764 
      56,945,445 
Capital Goods—11.0%       
AAON  38,147   1,268,006 
AAR  2,756   55,285 
Aegion  23,575 a  538,217 
Aerovironment  18,850 a  378,319 
Albany International, Cl. A  51,190   1,624,771 
CAI International  84,520 a  2,162,022 
CLARCOR  20,415   1,107,310 
Columbus McKinnon  79,360 a  1,678,464 
Curtiss-Wright  47,968   1,744,116 
DigitalGlobe  35,700 a  1,079,211 
Donaldson  35,929   1,347,697 
DXP Enterprises  16,000 a  945,120 
Dycom Industries  31,990 a  727,773 
EnerSys  27,664   1,378,497 
ESCO Technologies  28,400   912,208 

 

8



Common Stocks (continued)  Shares   Value ($) 
Capital Goods (continued)       
Flow International  198,320 a  787,330 
Foster Wheeler  55,538 a  1,278,485 
Franklin Electric  24,601   831,760 
FreightCar America  33,214   602,502 
Generac Holdings  34,200 b  1,385,100 
General Cable  23,240   821,766 
Gibraltar Industries  34,330 a  557,176 
Graco  24,085   1,552,278 
GrafTech International  141,690 a,b  1,188,779 
Granite Construction  22,520   694,967 
H&E Equipment Services  30,900   691,542 
Harsco  26,550   620,739 
Hexcel  110,412 a  3,839,025 
Hyster-Yale Materials Handling  30,530   1,886,754 
II-VI  30,020 a  498,332 
ITT  42,800   1,290,420 
John Bean Technologies  62,110   1,341,576 
KBR  47,500   1,714,750 
Lawson Products  37,730   562,177 
Lincoln Electric Holdings  36,452   2,179,830 
LSI Industries  66,925   545,439 
Lydall  38,121 a  551,230 
Manitowoc  47,400   995,874 
Meritor  78,700 a  569,788 
Miller Industries  35,700   584,409 
Mistras Group  27,678 a  591,756 
Moog, Cl. A  9,820 a  491,687 
National Presto Industries  7,350 b  565,436 
NCI Building Systems  100,750 a  1,455,838 
Nordson  14,445   1,028,773 
Orion Marine Group  69,673 a  836,773 
Spirit Aerosystems Holdings, Cl. A  66,030 a  1,426,908 
Standex International  47,200   2,462,424 
Teledyne Technologies  15,800 a  1,220,076 
Textron  37,600   1,013,696 
Titan International  80,420 b  1,876,199 

 

The Fund 9



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Capital Goods (continued)       
TriMas  62,690 a  2,021,753 
Trinity Industries  14,000   573,020 
Triumph Group  6,390   496,184 
Tutor Perini  81,347 a  1,506,546 
Twin Disc  30,100 b  750,393 
Woodward  22,947   898,375 
      63,734,881 
Commercial & Professional Services—4.1%       
ABM Industries  54,200   1,310,556 
Acacia Research  38,850   971,250 
ACCO Brands  289,166 a  2,067,537 
ARC Document Solutions  38,274 a  146,207 
Avery Dennison  53,970   2,347,695 
The Brink’s Company  37,600   1,008,808 
CBIZ  181,074 a,b  1,205,953 
CDI  48,833   666,570 
Ceco Environmental  43,480   524,804 
Clean Harbors  10,200 a  583,440 
Corporate Executive Board  22,370   1,368,820 
Covanta Holding  63,800   1,304,710 
Deluxe  86,937   3,251,444 
Dun & Bradstreet  13,209 b  1,296,331 
Ennis  43,662   747,057 
FTI Consulting  68,120 a  2,587,879 
Insperity  5,200   156,832 
Korn/Ferry International  117,500 a  2,056,250 
      23,602,143 
Consumer Durables & Apparel—2.6%       
Crocs  100,130 a  1,766,293 
CSS Industries  40,200   1,111,530 
Deckers Outdoor  23,300 a,b  1,250,744 
Harman International Industries  27,533   1,462,002 
Iconix Brand Group  125,421 a  3,773,917 
JAKKS Pacific  60,229 b  608,313 
M/I Homes  80,690 a  2,005,147 

 

10



Common Stocks (continued)  Shares   Value ($) 
Consumer Durables & Apparel (continued)       
Standard Pacific  73,280 a,b  648,528 
Tupperware Brands  19,971   1,617,252 
Unifi  51,790 a  972,616 
      15,216,342 
Consumer Services—3.1%       
Coinstar  25,700 a,b  1,496,768 
Cracker Barrel Old Country Store  13,291   1,189,013 
Hillenbrand  121,775   2,905,552 
Ignite Restaurant Group  35,420   648,186 
Interval Leisure Group  25,337   547,533 
Krispy Kreme Doughnuts  44,600 a  772,472 
LifeLock  73,900 a  762,648 
Multimedia Games Holding Company  49,100 a  1,256,469 
Regis  39,020 b  718,358 
Ruth’s Hospitality Group  50,452   565,062 
Scientific Games, Cl. A  70,550 a  768,290 
SHFL Entertainment  59,200 a  1,021,200 
Sonic  82,634 a  1,084,984 
Strayer Education  11,000   588,390 
Universal Technical Institute  195,264   2,300,210 
Wendy’s  259,660   1,544,977 
      18,170,112 
Diversified Financials—5.2%       
Ares Capital  156,241   2,681,096 
Asta Funding  60,630   557,190 
Cash America International  22,300   1,063,933 
DFC Global  67,900 a  1,011,710 
Eaton Vance  61,764   2,563,824 
Encore Capital Group  49,600 a,b  1,769,232 
Fifth Street Finance  86,202 b  905,122 
First Cash Financial Services  51,070 a  2,748,077 
ING US  30,590 b  872,733 
Investment Technology Group  17,288 a  238,747 
Leucadia National  20,540   644,545 
MSCI  29,551 a  1,041,377 

 

The Fund 11



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Diversified Financials (continued)       
NASDAQ OMX Group  72,303   2,274,652 
Oppenheimer Holdings  38,760   769,774 
PHH  138,530 a  2,792,764 
PICO Holdings  38,187 a  862,644 
Stifel Financial  38,285 a  1,377,877 
Waddell & Reed Financial, Cl. A  34,729   1,598,923 
Walter Investment Management  60,872 a  2,216,350 
World Acceptance  23,984 a,b  2,215,162 
      30,205,732 
Energy—4.9%       
Adams Resources & Energy,  3,000   187,920 
Atwood Oceanics  19,003 a  997,848 
Cal Dive International  450,120 a,b  931,748 
Callon Petroleum  74,673 a  277,784 
CARBO Ceramics  14,900 b  981,910 
Dawson Geophysical  6,700 a  240,597 
Delek US Holdings  46,140   1,662,424 
Energy XXI  58,100   1,483,293 
EPL Oil & Gas  52,007 a  1,583,613 
GulfMark Offshore, Cl. A  19,726   904,634 
Helix Energy Solutions Group  50,400 a  1,202,544 
ION Geophysical  101,000 a  645,390 
Kodiak Oil & Gas  97,808 a  858,754 
McDermott International  78,680 a  751,394 
Newpark Resources  243,150 a,b  2,711,123 
PetroQuest Energy  100,880 a  462,030 
Stone Energy  137,407 a  3,093,031 
Synergy Resources  162,220 a  1,098,229 
Tesco  53,020 a  676,535 
TETRA Technologies  131,000 a  1,363,710 
Tidewater  39,463   2,174,017 
Ultra Petroleum  16,560 a  377,237 
Warren Resources  266,219 a  780,022 
Western Refining  31,860 b  1,063,168 

 

12



Common Stocks (continued)  Shares   Value ($) 
Energy (continued)       
World Fuel Services  37,125   1,512,101 
WPX Energy  20,670 a,b  398,104 
      28,419,160 
Exchange-Traded Funds—.2%       
iShares Russell 2000 Index Fund  11,550 b  1,129,590 
Food & Staples Retailing—.6%       
Andersons  17,100   871,074 
Harris Teeter Supermarkets  26,543   1,247,521 
Nash Finch  43,651   948,536 
Village Super Market, Cl. A  5,000   187,000 
      3,254,131 
Food, Beverage & Tobacco—.9%       
Crimson Wine Group  72,190 a,b  633,106 
Darling International  107,880 a  2,115,527 
Hillshire Brands  24,050   833,092 
National Beverage  62,825   1,032,215 
Seaboard  130   358,186 
Smithfield Foods  11,900 a  391,986 
      5,364,112 
Health Care Equipment & Services—4.1%       
Acadia Healthcare  44,375 a  1,481,681 
Accuray  66,370 a,b  356,407 
Air Methods  42,500 b  1,591,200 
Allscripts Healthcare Solutions  142,810 a  1,977,919 
AmSurg  38,875 a  1,381,229 
AngioDynamics  65,859 a  716,546 
Antares Pharma  68,600 a,b  278,516 
Chemed  9,100 b  637,182 
CryoLife  77,737   481,192 
Given Imaging  25,400 a  364,236 
Health Net  23,460 a  747,670 
HealthSouth  16,630 a  487,093 
Hill-Rom Holdings  58,008   2,095,829 
Kindred Healthcare  154,259 a  2,082,497 

 

The Fund 13



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Health Care Equipment &       
     Services (continued)       
Magellan Health Services  38,870 a  2,118,415 
Natus Medical  45,756 a  644,702 
NxStage Medical  34,170 a  476,672 
Owens & Minor  41,035 b  1,402,576 
Symmetry Medical  122,865 a  1,146,330 
Syneron Medical  63,040 a  561,056 
Team Health Holdings  34,900 a  1,363,543 
Teleflex  6,140   480,946 
Universal American  79,150   721,848 
      23,595,285 
Household & Personal Products—1.2%       
Church & Dwight  7,770   472,494 
Medifast  58,000 a  1,670,980 
Nu Skin Enterprises, Cl. A  54,201 b  3,187,019 
WD-40  27,520   1,492,685 
      6,823,178 
Insurance—6.1%       
American Equity Investment Life Holding  223,474   3,620,279 
American Financial Group  6,990   339,434 
American National Insurance  7,950   794,046 
Argo Group International Holdings  17,644   698,879 
Aspen Insurance Holdings  26,500   973,610 
Assurant  9,310   463,079 
Donegal Group, Cl. A  12,186   180,353 
Endurance Specialty Holdings  70,104   3,528,334 
Everest Re Group  16,966   2,198,963 
FBL Financial Group, Cl. A  18,119   744,510 
Fidelity National Financial, Cl. A  45,440   1,195,526 
HCC Insurance Holdings  44,666   1,913,938 
Horace Mann Educators  43,300   1,052,190 
Maiden Holdings  56,300   601,284 
Navigators Group  40,633 a  2,369,717 
Platinum Underwriters Holdings  35,140   2,006,494 
Primerica  51,010   1,796,572 
ProAssurance  21,312   1,069,862 
RLI  40,055   3,007,330 

 

14



Common Stocks (continued)  Shares   Value ($) 
Insurance (continued)       
Stewart Information Services  17,800   492,882 
The Hanover Insurance Group  38,639   1,940,837 
Tower Group International  158,115   3,056,363 
Validus Holdings  32,537   1,174,911 
      35,219,393 
Materials—6.3%       
American Vanguard  26,100   795,006 
AptarGroup  6,000   340,320 
Balchem  13,460   646,215 
Carpenter Technology  8,110   390,578 
Chemtura  64,100 a  1,469,813 
Crown Holdings  35,100 a  1,486,485 
Cytec Industries  7,500   536,025 
FutureFuel  85,300   1,192,494 
Glatfelter  93,719   2,317,671 
Greif, Cl. A  25,761   1,342,148 
Haynes International  27,080   1,325,295 
Headwaters  92,800 a  984,608 
Kaiser Aluminum  31,310   1,986,306 
KMG Chemicals  111,701   2,480,879 
Kraton Performance Polymers  98,300 a  2,038,742 
LSB Industries  47,290 a  1,596,983 
Materion  61,880   1,844,024 
Mercer International  180,915 a  1,244,695 
NewMarket  1,907   522,976 
Noranda Aluminum Holding  136,200   550,248 
Olympic Steel  31,430 b  796,122 
OMNOVA Solutions  101,840 a  754,634 
PolyOne  70,230   1,804,209 
RPM International  21,092   698,778 
RTI International Metals  36,410 a  1,056,254 
Sealed Air  57,700   1,385,954 
Sensient Technologies  36,006   1,485,968 
Sonoco Products  32,447   1,136,294 
Stillwater Mining  48,310 a,b  579,237 
Worthington Industries  49,700   1,708,686 
      36,497,647 

 

The Fund 15



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Media—.7%       
John Wiley & Sons, Cl. A  76,764   3,047,531 
Starz—Liberty Capital  32,320 a  745,946 
      3,793,477 
Pharmaceuticals, Biotech &       
     Life Sciences—1.9%       
Affymetrix  109,400 a,b  410,250 
Auxilium Pharmaceuticals  26,180 a  390,606 
Cambrex  57,500 a  791,200 
Charles River Laboratories International  39,300 a  1,702,083 
Flamel Technologies, ADR  219,557 a,b  1,058,265 
Furiex Pharmaceuticals  18,300 a  676,551 
Impax Laboratories  21,900 a  415,005 
PerkinElmer  69,422   2,174,297 
Questcor Pharmaceuticals  31,100 b  1,062,687 
Sagent Pharmaceuticals  35,020 a,b  630,710 
Santarus  69,700 a  1,552,219 
      10,863,873 
Real Estate—2.6%       
Altisource Portfolio Solutions  38,753 a  3,653,245 
Capstead Mortgage  82,500 c  1,013,100 
EPR Properties  14,900 c  781,058 
First Potomac Realty Trust  41,462 c  567,200 
Hersha Hospitality Trust  322,884 c  1,846,896 
LaSalle Hotel Properties  27,555 c  727,452 
Lexington Realty Trust  78,700 c  990,833 
Medical Properties Trust  137,345 c  2,038,200 
Omega Healthcare Investors  72,316 c  2,343,762 
Ramco-Gershenson Properties Trust  57,465 c  897,029 
      14,858,775 
Retailing—5.0%       
Aeropostale  16,990 a  248,224 
Ascena Retail Group  103,422 a  2,102,569 
Barnes & Noble  51,700 a,b  1,163,250 
Bebe Stores  106,206   579,885 
Big Lots  12,230 a  416,431 
Chico’s FAS  38,750   699,825 
Express  27,700 a  603,860 

 

16



Common Stocks (continued)  Shares   Value ($) 
Retailing (continued)       
Finish Line, Cl. A  33,607   707,763 
Genesco  33,782 a  2,282,988 
JOS. A. Bank Clothiers  67,642 a,b  3,039,155 
Kirkland’s  47,740 a  714,190 
Men’s Wearhouse  33,000   1,194,600 
OfficeMax  174,100   2,268,523 
PEP Boys-Manny Moe & Jack  35,400 a  436,836 
RadioShack  644,870 b  2,386,019 
Rent-A-Center  164,918   6,032,700 
Select Comfort  40,192 a  891,860 
Shutterfly  20,200 a  984,548 
Sonic Automotive, Cl. A  64,971   1,479,390 
Travelcenters of America  68,500 a  762,405 
      28,995,021 
Semiconductors & Semiconductor       
     Equipment—2.6%       
Axcelis Technologies  532,745 a  852,392 
Cabot Microelectronics  45,215   1,616,436 
Ceva  28,200 a  472,914 
FormFactor  182,412 a  1,074,407 
Freescale Semiconductor  54,270 a,b  863,978 
GT Advanced Technologies  541,700 a,b  2,410,565 
Ikanos Communications  76,600 a  103,410 
Integrated Silicon Solution  66,036 a  714,510 
Kulicke & Soffa Industries  88,850 a  1,101,740 
LTX-Credence  99,532 a  564,346 
Mellanox Technologies  6,760 a,b  350,641 
Rambus  119,950 a  945,206 
Silicon Image  214,100 a  1,303,869 
Spansion, Cl. A  63,640 a  871,868 
Teradyne  29,050 a,b  521,157 
Ultratech  29,300 a  1,068,278 
      14,835,717 
Software & Services—10.4%       
Accelrys  84,200 a  702,228 
ACI Worldwide  46,128 a  2,145,413 
Acxiom  72,454 a  1,593,263 

 

The Fund 17



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Software & Services (continued)       
American Software, Cl. A  113,863   967,835 
AVG Technologies  73,100 a,b  1,332,613 
Bankrate  26,750 a,b  382,792 
CACI International, Cl. A  34,297 a,b  2,199,810 
Cadence Design Systems  60,900 a  921,417 
Cardtronics  49,900 a  1,423,647 
Cass Information Systems  28,168   1,264,180 
Computer Services  22,135   648,777 
Comverse  28,893 a  862,745 
Convergys  147,650   2,682,801 
CoreLogic  58,300 a  1,527,460 
DealerTrack Technologies  39,600 a  1,276,704 
Digital River  94,100 a  1,643,927 
DST Systems  19,300   1,315,874 
Ebix  24,500 b  486,080 
Fair Isaac  39,233   1,925,556 
FalconStor Software  415,478 a  556,741 
Global Payments  41,408   1,985,928 
Hackett Group  42,500   214,200 
Heartland Payment Systems  85,978 b  2,756,455 
Jack Henry & Associates  32,540   1,527,102 
Lender Processing Services  140,780   4,658,410 
MoneyGram International  53,700 a  1,056,816 
NetScout Systems  62,100 a  1,512,135 
NeuStar, Cl. A  53,693 a  2,601,963 
Open Text  21,244   1,443,742 
Rovi  67,310 a  1,736,598 
SeaChange International  70,600 a,b  759,656 
SS&C Technologies Holdings  45,300 a  1,432,839 
SYKES Enterprises  60,900 a  962,829 
Syntel  23,385 b  1,494,535 
TIBCO Software  22,000 a  469,260 
TiVo  85,700 a  1,108,958 
Tyler Technologies  16,300 a  1,124,863 
Unwired Planet  234,632 a  483,342 
ValueClick  167,272 a  4,405,945 

 

18



Common Stocks (continued)  Shares   Value ($) 
Software & Services (continued)       
Velti  72,400 a,b  127,424 
VeriFone Systems  27,120 a  632,710 
Verint Systems  46,088 a  1,547,179 
      59,902,752 
Technology Hardware & Equipment—7.9%       
ADTRAN  35,775 b  827,118 
Anixter International  15,489   1,188,471 
ARRIS Group  81,800 a  1,237,634 
Aviat Networks  201,248 a  533,307 
Badger Meter  22,325   994,802 
Benchmark Electronics  33,815 a  659,392 
Black Box  53,090   1,428,652 
Brocade Communications Systems  207,700 a  1,127,811 
Ciena  37,600 a,b  629,424 
Cognex  15,746   707,468 
CTS  131,452   1,580,053 
Dolby Laboratories, Cl. A  22,700 b  794,500 
Electronics for Imaging  51,725 a  1,442,610 
Emulex  204,800 a  1,275,904 
GSI Group  67,570 a  550,020 
Infinera  110,200 a,b  1,160,406 
Ingram Micro, Cl. A  9,367 a  179,003 
Itron  20,440 a  858,480 
Ituran Location and Control  96,904   1,640,585 
Lexmark International, Cl. A  83,110 b  2,535,686 
Mercury Systems  44,300 a  387,182 
Methode Electronics  123,580   1,943,913 
Oplink Communications  84,549 a  1,439,024 
Park Electrochemical  49,335   1,191,440 
Plantronics  57,987   2,678,999 
Plexus  99,954 a  2,916,658 
Pulse Electronics  36,128 a,b  119,222 
QLogic  147,165 a  1,433,388 
Quantum  712,769 a  1,104,792 
Radisys  86,093 a  430,465 
Rofin-Sinar Technologies  67,590 a  1,808,708 

 

The Fund 19



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Technology Hardware &       
     Equipment (continued)       
ScanSource  37,617 a  1,201,111 
Sierra Wireless  58,400 a,b  661,672 
SYNNEX  37,280 a  1,511,704 
Vishay Intertechnology  239,780 a,b  3,491,196 
Vishay Precision Group  38,170 a  551,938 
Zebra Technologies, Cl. A  31,289 a  1,428,656 
      45,651,394 
Telecommunication Services—.2%       
Leap Wireless International  122,800 a,b  693,820 
MagicJack VocalTec  37,150 a,b  554,650 
      1,248,470 
Transportation—1.5%       
Air Transport Services Group  151,567 a  916,980 
Arkansas Best  37,055   707,380 
Atlas Air Worldwide Holdings  16,200 a  752,004 
Con-way  30,500   1,159,610 
Danaos  122,600 a  529,632 
Hawaiian Holdings  114,400 a  681,824 
Landstar System  28,760   1,518,240 
Ryder System  19,300   1,216,672 
SkyWest  20,800   291,824 
Werner Enterprises  46,547   1,165,071 
      8,939,237 
Utilities—1.8%       
Atmos Energy  29,276   1,236,033 
Dynegy  26,000 a  633,620 
Empire District Electric  55,600   1,208,188 
NorthWestern  47,100   1,938,636 
NRG Energy  35,421   903,944 
Ormat Technologies  43,200 b  985,824 
PNM Resources  42,200   946,124 
Portland General Electric  57,017   1,735,597 
UNS Energy  19,400   909,472 
      10,497,438 
Total Common Stocks       
     (cost $452,538,050)      554,547,765 

 

20



Investment of Cash Collateral         
for Securities Loaned—9.0%  Shares   Value ($)  
Registered Investment Company;         
Dreyfus Institutional Cash         
Advantage Fund         
(cost $51,928,680)  51,928,680 d  51,928,680  
 
Total Investments (cost $504,466,730)  104.9 %  606,476,445  
Liabilities, Less Cash and Receivables  (4.9 %)  (28,342,156 ) 
Net Assets  100.0 %  578,134,289  

 

ADR—American Depository Receipts

a Non-income producing security. 
b Security, or portion thereof, on loan.At May 31, 2013, the value of the fund’s securities on loan was $49,497,987 
and the value of the collateral held by the fund was $51,928,680. 
c Investment in real estate investment trust. 
d Investment in affiliated money market mutual fund. 

 

Portfolio Summary (Unaudited)     
 
  Value (%)    Value (%) 
Capital Goods  11.0  Semiconductors &   
Software & Services  10.4  Semiconductor Equipment  2.6 
Banks  9.8  Pharmaceuticals, Biotech &   
Money Market Investments  9.0  Life Sciences  1.9 
Technology Hardware & Equipment  7.9  Utilities  1.8 
Materials  6.3  Transportation  1.5 
Insurance  6.1  Automobiles & Components  1.2 
Diversified Financials  5.2  Household & Personal Products  1.2 
Retailing  5.0  Food, Beverage & Tobacco  .9 
Energy  4.9  Media  .7 
Commercial & Professional Services  4.1  Food & Staples Retailing  .6 
Health Care Equipment & Services  4.1  Exchange-Traded Funds  .2 
Consumer Services  3.1  Telecommunication Services  .2 
Consumer Durables & Apparel  2.6     
Real Estate  2.6    104.9 
 
† Based on net assets.       
See notes to financial statements.       

 

The Fund 21



STATEMENT OF ASSETS AND LIABILITIES

May 31, 2013 (Unaudited)

  Cost  Value 
Assets ($):     
Investments in securities—See Statement of Investments (including     
securities on loan, valued at $49,497,987)—Note 1(b):     
Unaffiliated issuers  452,538,050  554,547,765 
Affiliated issuers  51,928,680  51,928,680 
Cash    26,053,956 
Receivable for investment securities sold    3,897,340 
Dividends and securities lending income receivable    442,310 
Receivable for shares of Common Stock subscribed    250,203 
Prepaid expenses    26,758 
    637,147,012 
Liabilities ($):     
Due to The Dreyfus Corporation and affiliates—Note 3(c)    459,530 
Liability for securities on loan—Note 1(b)    51,928,680 
Payable for investment securities purchased    6,380,092 
Payable for shares of Common Stock redeemed    181,995 
Accrued expenses    62,426 
    59,012,723 
Net Assets ($)    578,134,289 
Composition of Net Assets ($):     
Paid-in capital    456,656,242 
Accumulated undistributed investment income—net    2,274,407 
Accumulated net realized gain (loss) on investments    17,193,925 
Accumulated net unrealized appreciation     
(depreciation) on investments    102,009,715 
Net Assets ($)    578,134,289 

 

Net Asset Value Per Share       
  Class A  Class C  Class I 
Net Assets ($)  1,258,561  156,956  576,718,772 
Shares Outstanding  55,982  7,250  25,412,407 
Net Asset Value Per Share ($)  22.48  21.65  22.69 
See notes to financial statements.       

 

22



STATEMENT OF OPERATIONS

Six Months Ended May 31, 2013 (Unaudited)

Investment Income ($):     
Income:     
Cash dividends (net of $9,385 foreign taxes withheld at source):  4,349,627  
Income from securities lending—Note 1(b)  289,997  
Total Income  4,639,624  
Expenses:     
Management fee—Note 3(a)  2,263,217  
Custodian fees—Note 3(c)  44,271  
Registration fees  34,105  
Professional fees  30,967  
Directors’ fees and expenses—Note 3(d)  16,761  
Prospectus and shareholders’ reports  8,588  
Shareholder servicing costs—Note 3(c)  3,161  
Loan commitment fees—Note 2  1,483  
Distribution fees—Note 3(b)  540  
Miscellaneous  11,161  
Total Expenses  2,414,254  
Less—reduction in expenses due to undertaking—Note 3(a)  (100 ) 
Less—reduction in fees due to earnings credits—Note 3(c)  (7 ) 
Net Expenses  2,414,147  
Investment Income—Net  2,225,477  
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):     
Net realized gain (loss) on investments  21,536,581  
Net unrealized appreciation (depreciation) on investments  69,467,221  
Net Realized and Unrealized Gain (Loss) on Investments  91,003,802  
Net Increase in Net Assets Resulting from Operations  93,229,279  
 
See notes to financial statements.     

 

The Fund 23



STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  May 31, 2013   Year Ended  
  (Unaudited)   November 30, 2012  
Operations ($):         
Investment income—net  2,225,477   1,908,421  
Net realized gain (loss) on investments  21,536,581   18,752,627  
Net unrealized appreciation         
(depreciation) on investments  69,467,221   28,174,786  
Net Increase (Decrease) in Net Assets         
Resulting from Operations  93,229,279   48,835,834  
Dividends to Shareholders from ($):         
Investment income—net:         
Class A Shares  (8 )   
Class I Shares  (1,841,668 )  (639,291 ) 
Net realized gain on investments:         
Class A Shares  (41,592 )  (75,831 ) 
Class C Shares  (6,501 )  (14,596 ) 
Class I Shares  (21,618,710 )  (25,288,419 ) 
Total Dividends  (23,508,479 )  (26,018,137 ) 
Capital Stock Transactions ($):         
Net proceeds from shares sold:         
Class A Shares  324,685   118,438  
Class C Shares  33,211   506  
Class I Shares  98,408,360   147,573,196  
Dividends reinvested:         
Class A Shares  41,600   75,831  
Class C Shares  6,501   14,596  
Class I Shares  11,970,795   13,220,617  
Cost of shares redeemed:         
Class A Shares  (140,844 )  (421,174 ) 
Class C Shares  (67,469 )  (22,518 ) 
Class I Shares  (32,949,492 )  (50,912,127 ) 
Increase (Decrease) in Net Assets         
from Capital Stock Transactions  77,627,347   109,647,365  
Total Increase (Decrease) in Net Assets  147,348,147   132,465,062  
Net Assets ($):         
Beginning of Period  430,786,142   298,321,080  
End of Period  578,134,289   430,786,142  
Undistributed investment income—net  2,274,407   1,890,606  

 

24



  Six Months Ended      
  May 31, 2013   Year Ended  
  (Unaudited)   November 30, 2012  
Capital Share Transactions:         
Class Aa         
Shares sold  15,494   6,248  
Shares issued for dividends reinvested  2,155   4,401  
Shares redeemed  (6,985 )  (22,730 ) 
Net Increase (Decrease) in Shares Outstanding  10,664   (12,081 ) 
Class Ca         
Shares sold  1,590   30  
Shares issued for dividends reinvested  349   869  
Shares redeemed  (3,372 )  (1,216 ) 
Net Increase (Decrease) in Shares Outstanding  (1,433 )  (317 ) 
Class I         
Shares sold  4,711,503   7,796,955  
Shares issued for dividends reinvested  614,943   761,027  
Shares redeemed  (1,569,191 )  (2,677,729 ) 
Net Increase (Decrease) in Shares Outstanding  3,757,255   5,880,253  

 

a During the period ended May 31, 2013, 1,060 Class C shares representing $22,840 were exchanged for 1,021 
Class A shares. 

 

See notes to financial statements.

The Fund 25



FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated.All information (except portfolio turnover rate) reflects financial results for a single fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.

Six Months Ended
  May 31, 2013   Year Ended November 30,  
Class A Shares  (Unaudited)   2012   2011   2010   2009 a 
Per Share Data ($):                     
Net asset value, beginning of period  19.62   18.66   19.63   15.24   12.50  
Investment Operations:                     
Investment income (loss)—netb  .06   .02   (.04 )  (.05 )  (.00 )c 
Net realized and unrealized                     
gain (loss) on investments  3.80   2.56   .23   4.47   2.74  
Total from Investment Operations  3.86   2.58   .19   4.42   2.74  
Distributions:                     
Dividends from investment income—net  (.00 )c         
Dividends from net realized                     
gain on investments  (1.00 )  (1.62 )  (1.16 )  (.03 )   
Total Distributions  (1.00 )  (1.62 )  (1.16 )  (.03 )   
Net asset value, end of period  22.48   19.62   18.66   19.63   15.24  
Total Return (%)d  20.52 e  15.04   .62   29.05   21.92 e 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                     
to average net assets  1.33 f  1.40   1.29   1.34   2.94 f 
Ratio of net expenses                     
to average net assets  1.32 f  1.36   1.27   1.32   1.40 f 
Ratio of net investment income                     
(loss) to average net assets  .54 f  .12   (.18 )  (.27 )  (.02 )f 
Portfolio Turnover Rate  38.64 e  74.74   67.49   56.03   48.43 e 
Net Assets, end of period ($ x 1,000)  1,259   889   1,071   7,308   6,289  

 

a  From December 17, 2008 (commencement of operations) to November 30, 2009. 
b  Based on average shares outstanding at each month end. 
c  Amount represents less than $.01 per share. 
d  Exclusive of sales charge. 
e  Not annualized. 
f  Annualized. 

 

See notes to financial statements.

26



Six Months Ended
  May 31, 2013   Year Ended November 30,  
Class C Shares  (Unaudited)   2012   2011   2010   2009 a 
Per Share Data ($):                     
Net asset value, beginning of period  19.00   18.25   19.34   15.13   12.50  
Investment Operations:                     
Investment (loss)—netb  (.01 )  (.12 )  (.18 )  (.18 )  (.10 ) 
Net realized and unrealized                     
gain (loss) on investments  3.66   2.49   .25   4.42   2.73  
Total from Investment Operations  3.65   2.37   .07   4.24   2.63  
Distributions:                     
Dividends from net realized                     
gain on investments  (1.00 )  (1.62 )  (1.16 )  (.03 )   
Net asset value, end of period  21.65   19.00   18.25   19.34   15.13  
Total Return (%)c  20.06 d  14.16   (.03 )  28.07   21.04 d 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                     
to average net assets  2.10 e  2.15   2.03   2.10   3.70 e 
Ratio of net expenses                     
to average net assets  2.08 e  2.12   2.02   2.08   2.15 e 
Ratio of net investment (loss)                     
to average net assets  (.11 )e  (.64 )  (.92 )  (1.02 )  (.77 )e 
Portfolio Turnover Rate  38.64 d  74.74   67.49   56.03   48.43 d 
Net Assets, end of period ($ x 1,000)  157   165   164   916   617  

 

a  From December 17, 2008 (commencement of operations) to November 30, 2009. 
b  Based on average shares outstanding at each month end. 
c  Exclusive of sales charge. 
d  Not annualized. 
e  Annualized. 

 

See notes to financial statements.

The Fund 27



FINANCIAL HIGHLIGHTS (continued)

Six Months Ended                  
  May 31, 2013       Year Ended November 30,      
Class I Shares  (Unaudited)   2012   2011   2010   2009 a 
Per Share Data ($):                     
Net asset value,                     
beginning of period  19.84   18.83   19.72   15.28   12.50  
Investment Operations:                     
Investment income—netb  .09   .10   .04   .00 c  .03  
Net realized and unrealized                     
gain (loss) on investments  3.84   2.57   .23   4.47   2.75  
Total from Investment Operations  3.93   2.67   .27   4.47   2.78  
Distributions:                     
Dividends from                     
investment income—net  (.08 )  (.04 )    (.00 )c   
Dividends from net realized                     
gain on investments  (1.00 )  (1.62 )  (1.16 )  (.03 )   
Total Distributions  (1.08 )  (1.66 )  (1.16 )  (.03 )   
Net asset value, end of period  22.69   19.84   18.83   19.72   15.28  
Total Return (%)  20.73 d  15.45   1.04   29.32   22.24 d 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                     
to average net assets  .96 e  .99   .99   1.07   1.91 e 
Ratio of net expenses                     
to average net assets  .96 e  .99   .99   1.06   1.15 e 
Ratio of net investment income                     
to average net assets  .89 e  .52   .20   .02   .26 e 
Portfolio Turnover Rate  38.64 d  74.74   67.49   56.03   48.43 d 
Net Assets, end of period                     
($ x 1,000)  576,719   429,732   297,086   243,304   63,379  

 

a  From December 17, 2008 (commencement of operations) to November 30, 2009. 
b  Based on average shares outstanding at each month end. 
c  Amount represents less than $.01 per share. 
d  Not annualized. 
e  Annualized. 

 

See notes to financial statements.

28



NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Select Managers Small CapValue Fund (the “fund”) is a separate non-diversified series of Strategic Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund.The fund’s investment objective is to seek capital appreciation. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary ofThe Bank of NewYork Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. EACM Advisors LLC (“EACM”), a subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s portfolio allocation manager. Thompson, Siegel and Walmsley, LLC (“TS&W”), Walthausen & Co., LLC (“Walthausen”), Neuberger Berman Management LLC (“Neuberger Berman”), Lombardia Capital Partners, LLC (“Lombardia”), Iridian Asset Management LLC (“Iridian”),VulcanValue Partners, LLC (“Vulcan”) and Kayne Anderson Rudnick Investment Management, LLC (“Kayne”) serve as the fund’s sub-investment advisers, each managing an allocated portion of the fund’s portfolio.

MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares.The fund is authorized to issue 100 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A, Class C and Class I. Class A shares generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The Fund 29



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The sales charge may be reduced or waived for certain purchases of Class A shares. Effective April 1, 2013, pursuant to new/modified front-end sales charge waivers, Class A shares of the fund may be purchased at net asset value without payment of a sales charge by (a) investors who participate in a self-directed investment brokerage account program offered by financial intermediaries that have entered into an agreement with the fund’s Distributor (financial intermediaries offering self-directed investment brokerage accounts may or may not charge their customers a transaction fee) and (b) investors who purchase Class A shares directly through the fund’s Distributor, and either (i) have, or whose spouse or minor children have, beneficially owned shares and continuously maintained an open account with the Distributor in a Dreyfus-managed fund since on or before February 28, 2006, or (ii) such purchase is for a self-directed investment account that may or may not be subject to a transaction fee.

On April 29, 2013, the Company’s Board of Directors (the “Board”) authorized the fund to offer Class Y shares, as a new class of shares, to certain investors, including certain institutional investors. Effective July 1, 2013, ClassY shares will be offered at net asset value and will not be subject to certain fees, including Distribution Plan and Shareholder Services Plan fees. The Board approved an increase in the authorized shares of the fund from 300 million to 400 million and authorized 100 million ClassY shares.

The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC

30



registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.

The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).

The Fund 31



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are categorized within Level 1 of the fair value hierarchy.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and financial futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces

32



that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers.These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.

For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.

The following is a summary of the inputs used as of May 31, 2013 in valuing the fund’s investments:

    Level 2—Other  Level 3—   
  Level 1—  Significant  Significant   
  Unadjusted  Observable  Unobservable   
  Quoted Prices  Inputs  Inputs  Total 
Assets ($)         
Investments in Securities:       
Equity Securities—         
Domestic         
Common         
Stocks  542,724,694      542,724,694 
Equity Securities—         
Foreign         
Common         
Stocks  10,693,481      10,693,481 
Exchange         
Traded Funds  1,129,590      1,129,590 
Mutual Funds  51,928,680      51,928,680 
 
† See Statement of Investments for additional detailed categorizations.   

 

At May 31, 2013, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.

(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

The Fund 33



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by Dreyfus, U.S. Government and Agency securities or letters of credit.The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner. During the period ended May 31, 2013, The Bank of NewYork Mellon earned $96,666 from lending portfolio securities, pursuant to the securities lending agreement.

(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act. Investments in affiliated investment companies during the period ended May 31, 2013 were as follows:

Affiliated           
Investment  Value     Value  Net 
Company  11/30/2012($)  Purchases ($)  Sales($) 5/31/2013 ($)  Assets (%) 
Dreyfus           
Institutional           
Cash           
Advantage           
Fund  43,410,240 107,862,507  99,344,067   51,928,680  9.0 

 

(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal

34



Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.

As of and during the period ended May 31, 2013, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

Each tax year in the three-year period ended November 30, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.

The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2012 was as follows: ordinary income $7,650,223 and long-term capital gains $18,367,914.The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed funds in a $210 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion

The Fund 35



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2013, the fund did not borrow under the Facilities.

NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .90% of the value of the fund’s average daily net assets and is payable monthly. Dreyfus had contractually agreed, from December 1, 2012 through April 1, 2013, to waive receipt of its fees and/or assume the expenses of the fund so that the expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceeded 1.15% of the value of the fund’s average daily net assets. Thereafter, Dreyfus has contractually agreed from April 2, 2013 through July 1, 2014, to waive receipt of its fees and/or assume the expenses of the fund so that the expenses of none of the classes (exclusive of certain expenses as described above) exceed 1.05% of the value of the fund’s average daily net assets.The reduction in expenses, pursuant to the undertaking, amounted to $100 during the period ended May 31, 2013.

Pursuant to a Portfolio Allocation Agreement between Dreyfus and EACM, Dreyfus pays EACM a monthly fee at an annual percentage of the value of the fund’s average daily net assets.

Pursuant to separate Sub-Investment Advisory Agreements between Dreyfus and TS&W, Walthausen, Neuberger Berman, Lombardia, Iridian,Vulcan and Kayne, Dreyfus pays each sub-investment adviser separate monthly fees at an annual percentage of the value of the fund’s average daily net assets managed by such sub-investment adviser.

During the period ended May 31, 2013, the Distributor retained $766 from commissions earned on sales of the fund’s Class A shares.

36



(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended May 31, 2013, Class C shares were charged $540 pursuant to the Distribution Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended May 31, 2013, Class A and Class C shares were charged $1,278 and $180, respectively, pursuant to the Shareholder Services Plan.

The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency services for the fund and cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $1,253 for transfer agency services and $43 for cash management services. Cash management fees were partially offset by earnings credits of $7.These fees are included in Shareholder servicing costs in the Statement of Operations.

The Fund 37



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The fund compensatesThe Bank of NewYork Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2013, the fund was charged $44,271 pursuant to the custody agreement.

The fund compensates The Bank of New York Mellon under a cash management agreement for performing certain cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $26 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations.

During the period ended May 31, 2013, the fund was charged $4,558 for services performed by the Chief Compliance Officer and his staff.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $431,881, Distribution Plan fees $101, Shareholder Services Plan fees $286, custodian fees $22,883, Chief Compliance Officer fees $3,830 and transfer agency fees $573, which are offset against an expense reimbursement currently in effect in the amount of $24.

(d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended May 31, 2013, amounted to $235,896,834 and $186,399,842, respectively.

At May 31, 2013, accumulated net unrealized appreciation on investments was $102,009,715, consisting of $111,992,927 gross unrealized appreciation and $9,983,212 gross unrealized depreciation.

At May 31, 2013, 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).

38





NOTES










Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.

The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.




 

Contents

 

THE FUND

2     

A Letter from the President

3     

Discussion of Fund Performance

6     

Understanding Your Fund’s Expenses

6     

Comparing Your Fund’s Expenses With Those of Other Funds

7     

Statement of Investments

11     

Statement of Assets and Liabilities

12     

Statement of Operations

13     

Statement of Changes in Net Assets

15     

Financial Highlights

18     

Notes to Financial Statements

 

FOR MORE INFORMATION

 

Back Cover



Dreyfus
U.S. Equity Fund

The Fund

A LETTER FROM THE PRESIDENT

Dear Shareholder:

We are pleased to present this semiannual report for Dreyfus U.S. Equity Fund, covering the six-month period from December 1, 2012, through May 31, 2013. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

The U.S. economic recovery gained traction over the reporting period, but remained slower than historical norms. On one hand, the expansion has been fueled by gradually falling unemployment, recovering housing markets, rapid growth in domestic oil and gas production, and, perhaps most significant, the aggressively stimulative monetary policy of the Federal Reserve Board (the “Fed”). On the other hand, several factors have weighed on the nation’s economic growth rate, including relatively sluggish demand for exports to Europe and the emerging markets, higher tax rates for some Americans, and more restrictive fiscal policies stemming from sequestration. Investors appear to have adopted a more optimistic outlook, as several major stock market indices reached new record highs by the reporting period’s end.

In our analysis, real GDP growth seems poised to accelerate modestly over the remainder of 2013. In fact, we expect the relatively mild economic expansion to remain intact domestically and globally over the next several years. The moderate pace of the recovery implies that the risks of consumer price inflation are limited, making it unlikely that the Fed will adopt expansion-threatening, restrictive policies anytime soon. As always, we encourage you to discuss our observations with your financial advisor.

Thank you for your continued confidence and support.

Sincerely,


J. Charles Cardona
President
The Dreyfus Corporation
June 17, 2013

2



DISCUSSION OF FUND PERFORMANCE

For the period of December 1, 2012, through May 31, 2013, as provided by Charlie Macquaker and Roy Leckie of Walter Scott & Partners Limited (Walter Scott), Sub-investment adviser

Fund and Market Performance Overview

For the six-month period ended May 31, 2013, Dreyfus U.S. Equity Fund’s Class A shares achieved a return of 13.80%, Class C shares returned 13.29%, and Class I shares returned 14.03%.1 In comparison, the fund’s benchmark, the Morgan Stanley Capital International USA Index (“MSCI USA Index”), achieved a 15.92% return over the same period.2

Despite occasional bouts of market volatility, stocks generally rallied over the reporting period when investors responded positively to improved economic trends. The fund produced lower returns than its benchmark, mainly due to its conservative investment posture in a rising market.

The Fund’s Investment Approach

The fund seeks long-term real returns by investing in stocks of companies that are located in the United States.When selecting stocks,Walter Scott seeks companies with fundamental strengths that indicate the potential for sustainable growth. The firm focuses on individual stock selection through extensive fundamental research. Candidates are initially selected for research if they meet certain broad absolute and trend criteria. Financial statements are analyzed in an effort to identify the nature of their cash generation and to understand the variables that add value to their businesses. Companies meeting the financial criteria are subjected to a detailed investigation of their products, costs and pricing, competition, industry position, and outlook.

Recovering Economy Fueled Market Gains

The reporting period began in the midst of a strong stock market rally after various global macroeconomic concerns failed to materialize. Instead, investor sentiment responded positively to improved U.S. employment and housing market trends, a new quantitative easing program from the European Central Bank, and expectations that new economic policies in China would boost global growth. Investors also were

The Fund 3



DISCUSSION OF FUND PERFORMANCE (continued)

encouraged by the launch of a new, open-ended round of quantitative easing by the Federal Reserve Board (the “Fed”) and the implementation of an aggressively accommodative monetary policy by a new government in Japan.

Investor optimism faltered briefly toward year-end 2012 due to uncertainty surrounding automatic U.S. tax hikes and spending cuts scheduled for the start of 2013, but last-minute legislation to address the increases helped alleviate investors’ worries. Continued corporate earnings strength and encouraging economic data lent further support to stock prices over the first five months of 2013 as the U.S. unemployment rate continued to decline and housing prices rebounded. Some financial markets encountered heightened volatility in May when remarks by Fed Chairman Ben Bernanke were widely interpreted as a signal that the central bank would back away from its quantitative easing program sooner than many had expected, but equity investors remained optimistic about the future as evidenced by new record highs established by several stock market indices.

Conservative Positioning Weighed on Fund Performance

The fund’s conservative approach typically fares better than market averages when markets fall, but generally lags during rallies.The reporting period was no exception, as the fund did not fully participate in gains posted by more speculative stocks. In addition, relative performance suffered due to the fund’s lack of holdings in the financials sector, which we have long regarded as an unattractive industry group where risks outweigh potential rewards.

Among individual holdings, laggards during the reporting period included oil & gas production materials supplier CARBO Ceramics, which was hurt by a slowdown in production trends and competition from Chinese rivals. Discount retailer Family Dollar Stores posted lower-than-expected earnings due to constrained spending by its customers. Logistics company C.H. Robinson Worldwide proved unable to pass through higher costs to its customers. Health care equipment maker Varian Medical Systems saw weaker demand from hospitals due to uncertainty surrounding implementation of the Affordable Care Act.Telecommunications systems developer QUALCOMM lost a degree of value despite strong underlying fundamentals when investors favored more speculative industry groups.

4



The fund achieved better results with biotechnology firm Celgene, which raised earnings guidance after several new products moved closer to regulatory approval. Online media giant Google, Cl. A benefited from strong sales of its smartphone operating system and lower costs related to online advertising. In the information technology sector, U.S. software giant Microsoft reported better-than-expected quarterly sales and earnings, and equipment maker Cisco Systems achieved higher profit margins across its various business segments.Aircraft manufacturer Boeing also advanced more strongly than market averages.

A new position was purchased during the reporting period in industrial parts distributor W.W. Grainger, where recent strategic initiatives appear to be gaining traction.

Finding Opportunities Among Individual Companies

While Walter Scott has been somewhat encouraged by recent domestic and global economic news, we remain concerned that the market’s gains over the reporting period were not fully supported by underlying business fundamentals. Consequently, we have retained a generally cautious investment posture and an emphasis on individual companies that, in our analysis, are poised for growth on their own merits, independent of economic conditions.

June 17, 2013

Equity funds are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.

1 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the 
maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed 
on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past 
performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, 
fund shares may be worth more or less than their original cost. 
2 SOURCE: LIPPER INC. – Reflects reinvestment of net dividends and, where applicable, capital gain distributions. 
The Morgan Stanley Capital International USA (MSCI USA) Index is an unmanaged, market capitalization 
weighted index that is designed to measure the performance of publicly traded stocks issued by companies in the 
United States. Investors cannot invest directly in any index. 

 

The Fund 5



UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus U.S. Equity Fund from December 1, 2012 to May 31, 2013. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment 
assuming actual returns for the six months ended May 31, 2013 

 

    Class A    Class C    Class I 
Expenses paid per $1,000  $ 6.13  $ 10.90  $ 4.27 
Ending value (after expenses)  $ 1,138.00  $ 1,132.90  $ 1,140.30 

 

COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended May 31, 2013

    Class A    Class C    Class I 
Expenses paid per $1,000  $ 5.79  $ 10.30  $ 4.03 
Ending value (after expenses)  $ 1,019.20  $ 1,014.71  $ 1,020.94 

 

† Expenses are equal to the fund’s annualized expense ratio of 1.15% for Class A, 2.05% for Class C and .80% 
for Class I, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half 
year period). 

 

6



STATEMENT OF INVESTMENTS

May 31, 2013 (Unaudited)

Common Stocks—96.8%  Shares   Value ($) 
Capital Goods—17.6%       
Boeing  152,900   15,140,158 
Donaldson  371,400   13,931,214 
Emerson Electric  242,700   13,945,542 
Fastenal  244,100   12,737,138 
Flowserve  93,200   15,669,716 
MSC Industrial Direct, Cl. A  155,500   12,855,185 
Precision Castparts  67,860   14,516,611 
Rockwell Collins  203,800   13,196,050 
W.W. Grainger  27,100   6,976,624 
      118,968,238 
Consumer Durables & Apparel—3.8%       
Coach  191,000   11,127,660 
NIKE, Cl. B  235,700   14,533,262 
      25,660,922 
Consumer Services—5.1%       
McDonald’s  128,900   12,447,873 
Panera Bread, Cl. A  36,200 a  6,944,246 
Starbucks  239,900   15,130,493 
      34,522,612 
Energy—9.4%       
Apache  145,000   11,908,850 
CARBO Ceramics  161,700 b  10,656,030 
EOG Resources  101,460   13,098,486 
Occidental Petroleum  140,900   12,972,663 
Schlumberger  197,750   14,441,682 
      63,077,711 
Food & Staples Retailing—2.1%       
Wal-Mart Stores  188,900   14,137,276 
Food, Beverage & Tobacco—1.8%       
Coca-Cola  312,000   12,476,880 

 

The Fund 7



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Health Care Equipment &       
     Services—9.7%       
C.R. Bard  105,450   10,870,840 
Meridian Bioscience  566,900 b  12,250,709 
ResMed  356,800 b  17,126,400 
Stryker  200,700   13,324,473 
Varian Medical Systems  174,400 a  11,686,544 
      65,258,966 
Household & Personal Products—2.1%       
Colgate-Palmolive  247,200   14,298,048 
Materials—5.9%       
Monsanto  139,100   13,999,024 
Praxair  107,600   12,301,908 
Sigma-Aldrich  160,100   13,393,966 
      39,694,898 
Pharmaceuticals, Biotech &       
Life Sciences—4.0%       
Celgene  109,800 a  13,576,770 
Johnson & Johnson  160,500   13,510,890 
      27,087,660 
Retailing—8.0%       
Family Dollar Stores  210,400   12,865,960 
The TJX Companies  315,300   15,957,333 
Tractor Supply  122,500   13,717,550 
Urban Outfitters  274,200 a  11,497,206 
      54,038,049 
Semiconductors & Semiconductor       
Equipment—2.0%       
Intel  555,000   13,475,400 

 

8



Common Stocks (continued)  Shares   Value ($) 
Software & Services—15.0%       
Adobe Systems  291,300 a  12,499,683 
Automatic Data Processing  222,200   15,269,584 
Google, Cl. A  16,960 a  14,762,154 
MasterCard, Cl. A  28,370   16,177,993 
Microsoft  433,100   15,106,528 
Oracle  405,300   13,682,928 
Paychex  372,000 b  13,849,560 
      101,348,430 
Technology Hardware &       
Equipment—6.2%       
Amphenol, Cl. A  172,800   13,461,120 
Cisco Systems  592,700   14,272,216 
QUALCOMM  218,500   13,870,380 
      41,603,716 
Transportation—4.1%       
C.H. Robinson Worldwide  241,900   13,713,311 
Expeditors International       
of Washington  354,000   13,816,620 
      27,529,931 
Total Common Stocks       
(cost $512,304,241)      653,178,737 
 
Other Investment—4.2%       
Registered       
Investment Company;       
Dreyfus Institutional Preferred       
Plus Money Market Fund       
(cost $27,999,000)  27,999,000 c  27,999,000 

 

The Fund 9



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Investment of Cash Collateral         
for Securities Loaned—4.4%  Shares   Value ($)  
Registered Investment Company;         
Dreyfus Institutional Cash Advantage Fund         
(cost $29,644,207)  29,644,207 c  29,644,207  
Total Investments (cost $569,947,448)  105.4 %  710,821,944  
Liabilities, Less Cash and Receivables  (5.4 %)  (36,441,578 ) 
Net Assets  100.0 %  674,380,366  

 

a Non-income producing security. 
b Security, or portion thereof, on loan.At May 31, 2013, the value of the fund’s securities on loan was $27,949,757 
and the value of the collateral held by the fund was $29,644,207. 
c Investment in affiliated money market mutual fund. 

 

Portfolio Summary (Unaudited)     
 
  Value (%)    Value (%) 
Capital Goods  17.6  Pharmaceuticals,   
Software & Services  15.0  Biotech & Life Sciences  4.0 
Health Care Equipment & Services  9.7  Consumer Durables & Apparel  3.8 
Energy  9.4  Food & Staples Retailing  2.1 
Money Market Investments  8.6  Household & Personal Products  2.1 
Retailing  8.0  Semiconductors &   
Technology Hardware & Equipment  6.2  Semiconductor Equipment  2.0 
Materials  5.9  Food, Beverage & Tobacco  1.8 
Consumer Services  5.1     
Transportation  4.1    105.4 
 
† Based on net assets.       
See notes to financial statements.       

 

10



STATEMENT OF ASSETS AND LIABILITIES

May 31, 2013 (Unaudited)

  Cost  Value 
Assets ($):     
Investments in securities—See Statement of Investments (including     
securities on loan, valued at $27,949,757)—Note 1(b):     
Unaffiliated issuers  512,304,241  653,178,737 
Affiliated issuers  57,643,207  57,643,207 
Cash    470,462 
Dividends and securities lending income receivable    1,116,279 
Receivable for shares of Common Stock subscribed    655,490 
Prepaid expenses    38,235 
    713,102,410 
Liabilities ($):     
Due to The Dreyfus Corporation and affiliates—Note 3(c)    445,167 
Liability for securities on loan—Note 1(b)    29,644,207 
Payable for investment securities purchased    7,841,069 
Payable for shares of Common Stock redeemed    729,222 
Accrued expenses    62,379 
    38,722,044 
Net Assets ($)    674,380,366 
Composition of Net Assets ($):     
Paid-in capital    530,527,983 
Accumulated undistributed investment income—net    1,676,615 
Accumulated net realized gain (loss) on investments    1,301,272 
Accumulated net unrealized appreciation     
(depreciation) on investments    140,874,496 
Net Assets ($)    674,380,366 

 

Net Asset Value Per Share       
  Class A  Class C  Class I 
Net Assets ($)  1,556,553  324,530  672,499,283 
Shares Outstanding  89,169  19,138  38,408,591 
Net Asset Value Per Share ($)  17.46  16.96  17.51 
 
See notes to financial statements.       

 

The Fund 11



STATEMENT OF OPERATIONS

Six Months Ended May 31, 2013 (Unaudited)

Investment Income ($):     
Income:     
Cash dividends:     
Unaffiliated issuers  4,848,686  
Affiliated issuers  8,627  
Income from securities lending—Note 1(b)  81,027  
Total Income  4,938,340  
Expenses:     
Management fee—Note 3(a)  2,262,910  
Professional fees  32,913  
Registration fees  31,709  
Directors’ fees and expenses—Note 3(d)  27,517  
Custodian fees—Note 3(c)  22,152  
Shareholder servicing costs—Note 3(c)  5,460  
Prospectus and shareholders’ reports  3,930  
Loan commitment fees—Note 2  2,154  
Distribution fees—Note 3(b)  1,172  
Miscellaneous  14,005  
Total Expenses  2,403,922  
Less—reduction in fees due to earnings credits—Note 3(c)  (13 ) 
Net Expenses  2,403,909  
Investment Income—Net  2,534,431  
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):     
Net realized gain (loss) on investments  4,705,839  
Net unrealized appreciation (depreciation) on investments  70,508,436  
Net Realized and Unrealized Gain (Loss) on Investments  75,214,275  
Net Increase in Net Assets Resulting from Operations  77,748,706  
 
See notes to financial statements.     

 

12



STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  May 31, 2013   Year Ended  
  (Unaudited)   November 30, 2012  
Operations ($):         
Investment income—net  2,534,431   4,547,140  
Net realized gain (loss) on investments  4,705,839   (733,670 ) 
Net unrealized appreciation         
(depreciation) on investments  70,508,436   36,376,747  
Net Increase (Decrease) in Net Assets         
Resulting from Operations  77,748,706   40,190,217  
Dividends to Shareholders from ($):         
Investment income—net:         
Class A Shares  (11,577 )   
Class I Shares  (5,289,594 )  (1,914,449 ) 
Total Dividends  (5,301,171 )  (1,914,449 ) 
Capital Stock Transactions ($):         
Net proceeds from shares sold:         
Class A Shares  394,853   1,520,589  
Class C Shares  46,816   119,955  
Class I Shares  114,699,672   200,047,673  
Dividends reinvested:         
Class A Shares  10,342    
Class I Shares  1,722,258   606,842  
Cost of shares redeemed:         
Class A Shares  (864,759 )  (782,606 ) 
Class C Shares  (38,813 )  (75,248 ) 
Class I Shares  (51,143,854 )  (80,298,753 ) 
Increase (Decrease) in Net Assets         
from Capital Stock Transactions  64,826,515   121,138,452  
Total Increase (Decrease) in Net Assets  137,274,050   159,414,220  
Net Assets ($):         
Beginning of Period  537,106,316   377,692,096  
End of Period  674,380,366   537,106,316  
Undistributed investment income—net  1,676,615   4,443,355  

 

The Fund 13



STATEMENT OF CHANGES IN NET ASSETS (continued)

  Six Months Ended      
  May 31, 2013   Year Ended  
  (Unaudited)   November 30, 2012  
Capital Share Transactions:         
Class A         
Shares sold  24,140   101,027  
Shares issued for dividends reinvested  675    
Shares redeemed  (52,811 )  (53,436 ) 
Net Increase (Decrease) in Shares Outstanding  (27,996 )  47,591  
Class C         
Shares sold  2,909   8,430  
Shares redeemed  (2,314 )  (5,290 ) 
Net Increase (Decrease) in Shares Outstanding  595   3,140  
Class I         
Shares sold  6,931,014   13,460,380  
Shares issued for dividends reinvested  112,273   42,645  
Shares redeemed  (3,126,416 )  (5,385,690 ) 
Net Increase (Decrease) in Shares Outstanding  3,916,871   8,117,335  
 
See notes to financial statements.         

 

14



FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated.All information (except portfolio turnover rate) reflects financial results for a single fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.

Six Months Ended                    
  May 31, 2013     Year Ended November 30,      
Class A Shares  (Unaudited)   2012  2011   2010   2009   2008 a 
Per Share Data ($):                       
Net asset value,                       
beginning of period  15.45   14.20  12.83   11.68   9.14   12.50  
Investment Operations:                       
Investment income—netb  .04   .08  .04   .01   .04   .02  
Net realized and unrealized                       
gain (loss) on investments  2.08   1.17  1.39   1.16   2.53   (3.38 ) 
Total from                       
Investment Operations  2.12   1.25  1.43   1.17   2.57   (3.36 ) 
Distributions:                       
Dividends from                       
investment income—net  (.11 )      (.02 )  (.03 )   
Dividends from net realized                       
gain on investments      (.06 )       
Total Distributions  (.11 )    (.06 )  (.02 )  (.03 )   
Net asset value, end of period  17.46   15.45  14.20   12.83   11.68   9.14  
Total Return (%)c  13.80 d  8.80  11.17   10.01   28.19   (26.88 )d 
Ratios/Supplemental Data (%):                    
Ratio of total expenses                       
to average net assets  1.15 e  1.22  1.15   1.76   4.65   5.54 e 
Ratio of net expenses                       
to average net assets  1.15 e  1.22  1.15   1.40   1.40   1.40 e 
Ratio of net investment income                       
to average net assets  .53 e  .57  .29   .04   .42   .33 e 
Portfolio Turnover Rate  1.73 d  5.73  10.61   13.62   31.79   7.98 d 
Net Assets, end of period                       
($ x 1,000)  1,557   1,810  988   2,424   3,884   2,618  

 

a  From May 30, 2008 (commencement of operations) to November 30, 2008. 
b  Based on average shares outstanding at each month end. 
c  Exclusive of sales charge. 
d  Not annualized. 
e  Annualized. 

 

See notes to financial statements.

The Fund 15



FINANCIAL HIGHLIGHTS (continued)

Six Months Ended                      
  May 31, 2013       Year Ended November 30,      
Class C Shares  (Unaudited)   2012   2011   2010   2009   2008 a 
Per Share Data ($):                         
Net asset value,                         
beginning of period  14.97   13.88   12.65   11.58   9.11   12.50  
Investment Operations:                         
Investment (loss)—netb  (.03 )  (.05 )  (.06 )  (.09 )  (.03 )  (.02 ) 
Net realized and unrealized                         
gain (loss) on investments  2.02   1.14   1.35   1.16   2.50   (3.37 ) 
Total from                         
Investment Operations  1.99   1.09   1.29   1.07   2.47   (3.39 ) 
Distributions:                         
Dividends from net realized                         
gain on investments      (.06 )       
Net asset value, end of period  16.96   14.97   13.88   12.65   11.58   9.11  
Total Return (%)c  13.29 d  7.85   10.22   9.24   27.11   (27.12 )d 
Ratios/Supplemental Data (%):                      
Ratio of total expenses                         
to average net assets  2.05 e  2.08   1.94   2.52   5.83   6.30 e 
Ratio of net expenses                         
to average net assets  2.05 e  2.08   1.94   2.15   2.15   2.14 e 
Ratio of net investment (loss)                         
to average net assets  (.42 )e  (.33 )  (.47 )  (.71 )  (.27 )  (.41 )e 
Portfolio Turnover Rate  1.73 d  5.73   10.61   13.62   31.79   7.98 d 
Net Assets, end of period                         
($ x 1,000)  325   278   214   312   497   374  

 

a  From May 30, 2008 (commencement of operations) to November 30, 2008. 
b  Based on average shares outstanding at each month end. 
c  Exclusive of sales charge. 
d  Not annualized. 
e  Annualized. 

 

See notes to financial statements.

16



Six Months Ended                      
  May 31, 2013       Year Ended November 30,      
Class I Shares  (Unaudited)   2012   2011   2010   2009   2008 a 
Per Share Data ($):                         
Net asset value,                         
beginning of period  15.51   14.27   12.88   11.70   9.16   12.50  
Investment Operations:                         
Investment income—netb  .07   .14   .09   .07   .05   .03  
Net realized and unrealized                         
gain (loss) on investments  2.08   1.17   1.38   1.15   2.54   (3.37 ) 
Total from                         
Investment Operations  2.15   1.31   1.47   1.22   2.59   (3.34 ) 
Distributions:                         
Dividends from                         
investment income—net  (.15 )  (.07 )  (.02 )  (.04 )  (.05 )   
Dividends from net realized                         
gain on investments      (.06 )       
Total Distributions  (.15 )  (.07 )  (.08 )  (.04 )  (.05 )   
Net asset value, end of period  17.51   15.51   14.27   12.88   11.70   9.16  
Total Return (%)  14.03 c  9.23   11.46   10.47   28.36   (26.72 )c 
Ratios/Supplemental Data (%):                      
Ratio of total expenses                         
to average net assets  .80 d  .80   .82   .94   3.77   5.25 d 
Ratio of net expenses                         
to average net assets  .80 d  .80   .82   .94   1.15   1.14 d 
Ratio of net investment income                         
to average net assets  .84 d  .95   .67   .56   .54   .59 d 
Portfolio Turnover Rate  1.73 c  5.73   10.61   13.62   31.79   7.98 c 
Net Assets, end of period                         
($ x 1,000)  672,499   535,019   376,490   144,771   1,870   366  

 

a  From May 30, 2008 (commencement of operations) to November 30, 2008. 
b  Based on average shares outstanding at each month end. 
c  Not annualized. 
d  Annualized. 

 

See notes to financial statements.

The Fund 17



NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus U.S. Equity Fund (the “fund”) is a separate diversified series of Strategic Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund.The fund’s investment objective is to seek long-term total return. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.Walter Scott & Partners Limited (“Walter Scott”), a subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s sub-investment adviser.

MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares.The fund is authorized to issue 100 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A, Class C and Class I. Class A shares generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The sales charge may be reduced or waived for certain purchases of Class A shares. Effective April 1, 2013, pursuant to new/modified front-end sales charge waivers, Class A shares of the fund may be purchased at net asset value without payment of a sales charge by (a) investors who participate in a self-directed investment brokerage

18



account program offered by financial intermediaries that have entered into an agreement with the fund’s Distributor (financial intermediaries offering self-directed investment brokerage accounts may or may not charge their customers a transaction fee) and (b) investors who purchase Class A shares directly through the fund’s Distributor, and either (i) have, or whose spouse or minor children have, beneficially owned shares and continuously maintained an open account with the Distributor in a Dreyfus-managed fund since on or before February 28, 2006, or (ii) such purchase is for a self-directed investment account that may or may not be subject to a transaction fee.

On April 29, 2013, the Company’s Board of Directors (the “Board”) authorized the fund to offer Class Y shares, as a new class of shares, to certain investors, including certain institutional investors. Effective July 1, 2013, ClassY shares will be offered at net asset value and will not be subject to certain fees, including Distribution Plan and Shareholder Services Plan fees. The Board approved an increase in the authorized shares of the fund from 300 million to 400 million and authorized 100 million ClassY shares.

The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.

The Fund 19



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

20



Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are categorized within Level 1 of the fair value hierarchy.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and financial futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing invest-

The Fund 21



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

ments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.

For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.

The following is a summary of the inputs used as of May 31, 2013 in valuing the fund’s investments:

    Level 2—Other  Level 3—   
  Level 1—  Significant  Significant   
  Unadjusted  Observable  Unobservable   
  Quoted Prices  Inputs  Inputs  Total 
Assets ($)         
Investments in Securities:       
Equity Securities—         
Domestic         
Common Stocks  653,178,737      653,178,737 
Mutual Funds  57,643,207      57,643,207 
 
† See Statement of Investments for additional detailed categorizations.   

 

At May 31, 2013, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.

(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, the fund may lend securities to qualified institutions. It is the fund’s

22



policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by Dreyfus, U.S. Government and Agency securities or letters of credit.The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner. During the period ended May 31, 2013, The Bank of NewYork Mellon earned $34,726 from lending portfolio securities, pursuant to the securities lending agreement.

(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act. Investments in affiliated investment companies during the period ended May 31, 2013 were as follows:

Affiliated           
Investment  Value     Value  Net 
Company  11/30/2012($)  Purchases ($)  Sales ($)  5/31/2013 ($)   Assets (%) 
Dreyfus           
Institutional           
Preferred           
Plus Money           
Market           
Fund  18,726,000  74,326,000 65,053,000   27,999,000  4.2 
Dreyfus           
Institutional           
Cash           
Advantage           
Fund  4,361,023  140,868,200  115,585,016 29,644,207  4.4 
Total  23,087,023  215,194,200  180,638,016  57,643,207  8.6 

 

(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid

The Fund 23



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.

As of and during the period ended May 31, 2013, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

Each tax year in the three-year period ended November 30, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.

Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Furthermore, post-enactment capital loss carryovers retain their character as either short-term or long-term capital losses rather than short-term as they were under previous statute.The 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years prior to the effective date of the 2010 Act (“pre-enactment losses”).As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.

The fund has an unused capital loss carryover of $1,790,028 available for federal income tax purposes to be applied against future net real-

24



ized capital gains, if any, realized subsequent to November 30, 2012. If not applied, the carryover expires in fiscal year 2019.

The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2012 was as follows: ordinary income $1,914,449. The tax character of current year distributions will be determined at the current fiscal year.

NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed funds in a $210 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2013, the fund did not borrow under the Facilities.

NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly. Dreyfus had contractually agreed from, December 1, 2012 through April 1, 2013, to waive receipt of its fees and/or assume the direct expenses of the fund, so that the expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceeded 1.15% of the value of the fund’s average daily net assets. Thereafter, Dreyfus has contractually agreed, from April 2, 2013 through July 1, 2014, to waive receipt of its fees and/or assume the direct expenses of the fund, so that the expenses of

The Fund 25



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

none of the classes (excluding certain expenses as described above) exceed .90% of the value of the fund’s average daily net assets. During the period ended May 31, 2013, there were no reduction in expenses pursuant to the undertaking.

Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott a monthly fee at an annual percentage of the fund’s average daily net assets.

During the period ended May 31, 2013, the Distributor retained $682 from commissions earned on sales of the fund’s Class A shares.

(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended May 31, 2013, Class C shares were charged $1,172, pursuant to the Distribution Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts.The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended May 31, 2013, Class A and Class C shares were charged $2,079 and $391, respectively, pursuant to the Shareholder Services Plan.

The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.

26



The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency services for the fund and cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $2,543 for transfer agency services and $75 for cash management services. Cash management fees were partially offset by earnings credits of $13.These fees are included in Shareholder servicing costs in the Statement of Operations.

The fund compensatesThe Bank of NewYork Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2013, the fund was charged $22,152 pursuant to the custody agreement.

The fund compensates The Bank of New York Mellon under a cash management agreement for performing certain cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $46 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations.

During the period ended May 31, 2013, the fund was charged $4,558 for services performed by the Chief Compliance Officer and his staff.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $428,764, Distribution Plan fees $214, Shareholder Services Plan fees $414, custodian fees $11,100, Chief Compliance Officer fees $3,830 and transfer agency fees $845.

(d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.

The Fund 27



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended May 31, 2013, amounted to $65,742,324 and $10,100,292, respectively.

At May 31, 2013, accumulated net unrealized appreciation on investments was $140,874,496, consisting of $149,685,561 gross unrealized appreciation and $8,811,065 gross unrealized depreciation.

At May 31, 2013, 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).

28










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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.




 

Contents

 

THE FUND

2     

A Letter from the President

3     

Discussion of Fund Performance

6     

Understanding Your Fund’s Expenses

6     

Comparing Your Fund’s Expenses With Those of Other Funds

7     

Statement of Investments

10     

Statement of Assets and Liabilities

11     

Statement of Operations

12     

Statement of Changes in Net Assets

14     

Financial Highlights

17     

Notes to Financial Statements

 

FOR MORE INFORMATION

 

Back Cover



Global Stock Fund

The Fund

A LETTER FROM THE PRESIDENT

Dear Shareholder:

We are pleased to present this semiannual report for Global Stock Fund, covering the six-month period from December 1, 2012, through May 31, 2013. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

Although a sustained global economic recovery generally gained traction over the second half of 2012, we more recently have seen reports of slower growth in some parts of the world as evidenced by declining commodity prices.The recent slowdown is due to a combination of factors, including the final months of recession in Europe, more restrictive U.S. fiscal policies stemming from sequestration, and some rebalancing in China. Consequently, global equity markets advanced strongly early in the reporting period when economic conditions seemed poised for improvement, but subsequent gains were more subdued, on average.

We believe the current subcycle of slower growth is likely to be temporary. We anticipate a mild acceleration of global economic growth near the end of 2013 and throughout 2014, fueled by aggressively stimulative monetary policies from central banks throughout the world. Some economists have expressed concern that low interest rates and quantitative easing programs may spark an acceleration of consumer price inflation, but we believe these fears are premature. In fact, the relatively sluggish pace of the recovery implies that inflation risks are limited, making it unlikely that central banks will adopt expansion-threatening, restrictive policies anytime soon. As always, we encourage you to discuss our observations with your financial advisor.

Thank you for your continued confidence and support.

Sincerely,


J. Charles Cardona
President
The Dreyfus Corporation
June 17, 2013

2



DISCUSSION OF FUND PERFORMANCE

For the period of December 1, 2012, through May 31, 2013, as provided by Charlie Macquaker and Roy Leckie of Walter Scott & Partners Limited (Walter Scott), Sub-investment adviser

Fund and Market Performance Overview

For the six-month period ended May 31, 2013, Global Stock Fund’s Class A shares produced a total return of 9.36%, Class C shares returned 8.97%, and Class I shares returned 9.49%.1 In comparison, the fund’s benchmark, the Morgan Stanley Capital International World Index (the “MSCI World Index”), achieved a 13.26% return over the same period.2

Despite bouts of heightened volatility, global equities generally advanced when economic trends began to show some signs of improvement, particularly in developed markets. The fund produced lower returns than its benchmark, mainly due to its relatively conservative investment posture.

The Fund’s Investment Approach

The fund seeks long-term real returns by investing in high-quality companies capable of sustainable growth and wealth creation over a long time horizon.The firm focuses on individual stock selection through extensive fundamental research. Candidates are initially selected for research if they meet certain broad absolute and trend criteria. Financial statements are analyzed in an effort to identify the nature of the cash generation that is looked for in any investment and to understand the variables that demonstrate robust financial health and define long-term competitive advantage. Companies meeting the financial criteria are then subjected to a detailed investigation of products, costs and pricing, competition, industry position, and outlook.

Developed Markets Outpaced Emerging Markets

Sustained stock market rallies began throughout the world in the weeks prior to the reporting period when various global macroeconomic concerns failed to materialize. Instead, investors were encouraged by a new quantitative easing program from the European Central Bank that appeared to forestall a more severe banking crisis in the region, expectations that new government leadership in China might adopt policies more conducive to stronger regional growth, and actions by a new Japanese govern-

The Fund 3



DISCUSSION OF FUND PERFORMANCE (continued)

ment that sought to address longstanding economic stagnation and deflationary pressures. In addition, investors responded positively to gradually improving U.S. employment and housing market trends, which were sparked in part by the Federal Reserve Board’s aggressively accommodative monetary policy.

However, investors’ optimism at the time may have been overblown, as the global economy expanded at a relatively sluggish rate during the reporting period amid an ongoing financial crisis and fiscal austerity in Europe and slackening demand from the emerging markets for energy and construction materials.

These developments helped produce widely disparate returns across individual stock markets, as strength in developed markets was balanced by relative weakness in many emerging markets. More specifically, Japan, the United States, and, to a lesser degree, Europe led global markets higher, while China, India, and Brazil either barely advanced or lost a modest amount of value.

Conservative Positioning Weighed on Fund Performance

The fund’s conservative approach typically fares better than market averages when markets fall, but generally lags during rallies.The reporting period was no exception, the fund did not fully participate in gains posted by more speculative stocks.

For example, the fund’s holdings in Japan focused mainly on large, multinational exporters at a time when smaller, domestically focused companies rallied from depressed levels. For example, Japanese robotics maker FANUC and air conditioning systems specialist Daikin Industries were hurt by lackluster demand in Asian emerging markets. In China, a sluggish economy undermined energy producer China Shenhua Energy, Cl. H as coal prices declined, and offshore oil& gas and exploration& production company CNOOC struggled with rising costs and narrower profit margins. In other regions, WM Morrison Supermarkets in the United Kingdom failed to benefit from recent store format changes, leading to its elimination from the fund. From an industry group perspective, substantially underweighted exposure to the financials sector weighed on relative performance.

The fund achieved better results in the information technology sector, where U.S. software giant Microsoft reported better-than-expected quarterly sales and earnings, and equipment maker Cisco Systems achieved higher profit margins across its various

4



business segments. Among consumer discretionary companies, U.S. sports apparel company, NIKE, Cl. B offset weakness in Asian markets with robust sales in North America, and Japanese auto parts seller Denso achieved higher profit margins in a consolidating industry. Gains in Japanese real estate developer Mitsubishi Estate were driven by falling vacancies and rising rents in a recovering domestic economy.

Two new positions were purchased during the reporting period in two health care companies. Roche Holding has built a leading franchise in oncology pharmaceuticals, and medical devices producer Stryker Corporation has exhibited strong growth trends.

Finding Opportunities Among Individual Companies

While Walter Scott has been somewhat encouraged by recent economic news, we remain concerned that the market’s gains over the reporting period were not fully supported by underlying business fundamentals. Consequently, we have retained a generally cautious investment posture and an emphasis on individual companies that, in our analysis, are poised for growth on their own merits, independent of economic conditions.

June 17, 2013

Please note, the position in any security highlighted with italicized typeface as sold during the reporting period. Equity funds are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.

Investing internationally involves special risks, including changes in currency exchange rates, political, economic and social instability, a lack of comprehensive company information, differing auditing and legal standards and less market liquidity.These risks generally are greater with emerging market countries than with more economically and politically established foreign countries.

1 Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the 
maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed 
on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past 
performance is no guarantee of future results. Share price, yield and investment return fluctuate such that upon 
redemption, fund shares may be worth more or less than their original cost. 
2 SOURCE: LIPPER INC. — Reflects reinvestment of net dividends and, where applicable, capital gain 
distributions.The Morgan Stanley Capital International (MSCI) World Index is an unmanaged index of global stock 
market performance, including the United States, Canada, Europe,Australia, New Zealand and the Far East. 
Investors cannot invest directly in any index. 

 

The Fund 5



UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Global Stock Fund from December 1, 2012 to May 31, 2013. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended May 31, 2013

    Class A    Class C    Class I 
Expenses paid per $1,000  $ 6.42  $ 10.47  $ 4.75 
Ending value (after expenses)  $ 1,093.60  $ 1,089.70  $ 1,094.90 

 

COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended May 31, 2013

    Class A    Class C    Class I 
Expenses paid per $1,000  $ 6.19  $ 10.10  $ 4.58 
Ending value (after expenses)  $ 1,018.80  $ 1,014.91  $ 1,020.39 

 

† Expenses are equal to the fund’s annualized expense ratio of 1.23% for Class A, 2.01% for Class C and .91% 
for Class I, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half 
year period). 

 

6



STATEMENT OF INVESTMENTS

May 31, 2013 (Unaudited)

Common Stocks—97.0%  Shares  Value ($) 
Australia—3.4%     
CSL  385,300  21,842,432 
Woodside Petroleum  663,900  22,624,250 
    44,466,682 
Brazil—1.5%     
Petroleo Brasileiro, ADR  1,044,300  19,465,752 
Canada—1.4%     
Suncor Energy  611,200  18,540,863 
China—2.4%     
China Shenhua Energy, Cl. H  3,182,000  10,250,273 
CNOOC  11,577,000  20,356,298 
    30,606,571 
Denmark—1.9%     
Novo Nordisk, Cl. B  153,000  24,562,688 
France—3.9%     
Essilor International  226,200  24,651,643 
L’Oreal  154,000  25,816,426 
    50,468,069 
Hong Kong—4.4%     
China Mobile  2,124,500  22,207,615 
CLP Holdings  1,301,000  10,963,329 
Hong Kong & China Gas  8,287,668  23,402,741 
    56,573,685 
Japan—13.1%     
Canon  584,800  20,128,376 
Chugai Pharmaceutical  371,100  7,439,663 
Denso  614,100  25,487,157 
FANUC  148,000  21,871,662 
Honda Motor  619,300  22,903,994 
Keyence  33,557  10,283,592 
Komatsu  1,094,000  27,599,855 
Mitsubishi Estate  382,000  9,380,088 
Shin-Etsu Chemical  368,600  23,180,151 
    168,274,538 
Singapore—2.0%     
DBS Group Holdings  1,888,074  25,553,486 

 

The Fund 7



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares   Value ($) 
Spain—1.6%       
Inditex  171,300   21,231,848 
Sweden—1.7%       
Hennes & Mauritz, Cl. B  643,300   21,982,912 
Switzerland—7.2%       
Nestle  332,000   21,907,642 
Novartis  150,700   10,798,519 
Roche Holding  94,100   23,284,133 
SGS  5,000   11,182,723 
Syngenta  67,000   26,291,096 
      93,464,113 
Taiwan—2.0%       
Taiwan Semiconductor Manufacturing, ADR  1,346,800   25,131,288 
United Kingdom—9.2%       
BG Group  1,309,000   23,823,793 
HSBC Holdings  2,072,000   22,696,787 
Reckitt Benckiser Group  344,000   24,542,802 
Standard Chartered  1,105,000   25,409,868 
Tesco  4,120,300   22,738,163 
      119,211,413 
United States—41.3%       
Adobe Systems  574,500 a  24,651,795 
Amphenol, Cl. A  165,400   12,884,660 
Automatic Data Processing  377,400   25,934,928 
C.R. Bard  79,700   8,216,273 
Cisco Systems  1,110,700   26,745,656 
Colgate-Palmolive  434,400   25,125,696 
EOG Resources  182,400   23,547,840 
Fastenal  210,000   10,957,800 
Google, Cl. A  31,200 a  27,156,792 
Intel  1,110,700   26,967,796 
Johnson & Johnson  275,500   23,191,590 
MasterCard, Cl. A  45,600   26,003,400 
Microsoft  801,800   27,966,784 
NIKE, Cl. B  446,400   27,525,024 
Oracle  771,000   26,028,960 
Praxair  205,700   23,517,681 

 

8



Common Stocks (continued)  Shares   Value ($) 
United States (continued)       
Precision Castparts  139,500   29,841,840 
QUALCOMM  352,100   22,351,308 
Schlumberger  337,600   24,654,928 
Sigma-Aldrich  166,400   13,921,024 
Stryker  393,900   26,151,021 
The TJX Companies  481,900   24,388,959 
Wal-Mart Stores  327,200   24,487,648 
      532,219,403 
Total Common Stocks       
     (cost $1,038,719,024)      1,251,753,311 
 
Other Investment—2.4%       
Registered Investment Company;       
Dreyfus Institutional Preferred       
     Plus Money Market Fund       
(cost $30,406,000)  30,406,000 b  30,406,000 
Total Investments (cost $1,069,125,024)  99.4 %  1,282,159,311 
Cash and Receivables (Net)  .6 %  7,125,413 
Net Assets  100.0 %  1,289,284,724 

 

ADR—American Depository Receipts

a  Non-income producing security. 
b  Investment in affiliated money market mutual fund. 

 

Portfolio Summary (Unaudited)     
 
  Value (%)    Value (%) 
Information Technology  23.4  Materials  6.7 
Health Care  13.2  Financial  6.4 
Energy  12.7  Utilities  2.7 
Consumer Staples  11.2  Money Market Investment  2.4 
Consumer Discretionary  11.1  Telecommunication Services  1.7 
Industrial  7.9    99.4 
 
† Based on net assets.       
See notes to financial statements.       

 

The Fund 9



STATEMENT OF ASSETS AND LIABILITIES

May 31, 2013 (Unaudited)

  Cost  Value  
Assets ($):       
Investments in securities—See Statement of Investments:       
Unaffiliated issuers  1,038,719,024  1,251,753,311  
Affiliated issuers  30,406,000  30,406,000  
Cash    3,128,746  
Cash denominated in foreign currencies  545,498  541,841  
Dividends receivable    5,879,353  
Receivable for investment securities sold    2,717,351  
Receivable for shares of Common Stock subscribed    184,474  
Prepaid expenses    61,245  
    1,294,672,321  
Liabilities ($):       
Due to The Dreyfus Corporation and affiliates—Note 3(c)    1,038,238  
Payable for investment securities purchased    3,802,825  
Payable for shares of Common Stock redeemed    412,290  
Unrealized depreciation on forward foreign       
currency exchange contracts—Note 4    10,166  
Accrued expenses    124,078  
    5,387,597  
Net Assets ($)    1,289,284,724  
Composition of Net Assets ($):       
Paid-in capital    1,073,502,534  
Accumulated undistributed investment income—net    8,520,318  
Accumulated net realized gain (loss) on investments    (5,653,919 ) 
Accumulated net unrealized appreciation (depreciation)       
on investments and foreign currency transactions    212,915,791  
Net Assets ($)    1,289,284,724  

 

Net Asset Value Per Share       
  Class A  Class C  Class I 
Net Assets ($)  72,035,523  18,817,879  1,198,431,322 
Shares Outstanding  4,407,613  1,173,938  72,404,117 
Net Asset Value Per Share ($)  16.34  16.03  16.55 
 
See notes to financial statements.       

 

10



STATEMENT OF OPERATIONS

Six Months Ended May 31, 2013 (Unaudited)

Investment Income ($):     
Income:     
Cash dividends (net of $996,661 foreign taxes withheld at source):     
Unaffiliated issuers  14,331,282  
Affiliated issuers  20,331  
Total Income  14,351,613  
Expenses:     
Management fee—Note 3(a)  4,708,207  
Shareholder servicing costs—Note 3(c)  195,391  
Custodian fees—Note 3(c)  98,239  
Registration fees  91,311  
Distribution fees—Note 3(b)  65,712  
Professional fees  44,985  
Directors’ fees and expenses—Note 3(d)  22,085  
Loan commitment fees—Note 2  3,638  
Prospectus and shareholders’ reports  2,529  
Miscellaneous  27,216  
Total Expenses  5,259,313  
Less—reduction in fees due to earnings credits—Note 3(c)  (58 ) 
Net Expenses  5,259,255  
Investment Income—Net  9,092,358  
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):     
Net realized gain (loss) on investments and foreign currency transactions  (207,932 ) 
Net realized gain (loss) on forward foreign currency exchange contracts  (501,656 ) 
Net Realized Gain (Loss)  (709,588 ) 
Net unrealized appreciation (depreciation) on     
investments and foreign currency transactions  81,072,967  
Net unrealized appreciation (depreciation) on     
forward foreign currency exchange contracts  (10,166 ) 
Net Unrealized Appreciation (Depreciation)  81,062,801  
Net Realized and Unrealized Gain (Loss) on Investments  80,353,213  
Net Increase in Net Assets Resulting from Operations  89,445,571  
 
See notes to financial statements.     

 

The Fund 11



STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  May 31, 2013   Year Ended  
  (Unaudited)   November 30, 2012  
Operations ($):         
Investment income—net  9,092,358   6,765,358  
Net realized gain (loss) on investments  (709,588 )  (1,806,095 ) 
Net unrealized appreciation         
(depreciation) on investments  81,062,801   73,510,804  
Net Increase (Decrease) in Net Assets         
Resulting from Operations  89,445,571   78,470,067  
Dividends to Shareholders from ($):         
Investment income—net:         
Class A Shares  (320,140 )  (361,165 ) 
Class C Shares    (5,282 ) 
Class I Shares  (6,883,220 )  (5,003,982 ) 
Net realized gain on investments:         
Class A Shares    (446,761 ) 
Class C Shares    (130,675 ) 
Class I Shares    (4,313,537 ) 
Total Dividends  (7,203,360 )  (10,261,402 ) 
Capital Stock Transactions ($):         
Net proceeds from shares sold:         
Class A Shares  18,990,895   25,765,348  
Class C Shares  3,033,447   3,753,627  
Class I Shares  513,652,237   281,322,507  
Dividends reinvested:         
Class A Shares  309,658   778,549  
Class C Shares    91,613  
Class I Shares  4,696,245   4,912,548  
Cost of shares redeemed:         
Class A Shares  (14,374,947 )  (19,549,231 ) 
Class C Shares  (1,541,504 )  (3,380,751 ) 
Class I Shares  (63,475,010 )  (151,541,785 ) 
Increase (Decrease) in Net Assets         
from Capital Stock Transactions  461,291,021   142,152,425  
Total Increase (Decrease) in Net Assets  543,533,232   210,361,090  
Net Assets ($):         
Beginning of Period  745,751,492   535,390,402  
End of Period  1,289,284,724   745,751,492  
Undistributed investment income—net  8,520,318   6,631,320  

 

12



  Six Months Ended      
  May 31, 2013   Year Ended  
  (Unaudited)   November 30, 2012  
Capital Share Transactions:         
Class Aa         
Shares sold  1,184,507   1,825,152  
Shares issued for dividends reinvested  20,095   59,567  
Shares redeemed  (910,893 )  (1,387,430 ) 
Net Increase (Decrease) in Shares Outstanding  293,709   497,289  
Class Ca         
Shares sold  192,446   270,088  
Shares issued for dividends reinvested    7,107  
Shares redeemed  (97,917 )  (245,232 ) 
Net Increase (Decrease) in Shares Outstanding  94,529   31,963  
Class I         
Shares sold  32,203,847   19,533,004  
Shares issued for dividends reinvested  301,235   371,881  
Shares redeemed  (3,950,618 )  (10,561,836 ) 
Net Increase (Decrease) in Shares Outstanding  28,554,464   9,343,049  

 

a During the period ended May 31, 2013, 10,068 Class C shares representing $168,940 were exchanged for 9,874 
Class A shares. 

 

See notes to financial statements.

The Fund 13



FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated.All information (except portfolio turnover rate) reflects financial results for a single fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.

Six Months Ended                      
May 31, 2013       Year Ended November 30,      
Class A Shares  (Unaudited)   2012   2011   2010   2009   2008  
Per Share Data ($):                         
Net asset value,                         
beginning of period  15.02   13.51   12.99   12.23   8.91   13.73  
Investment Operations:                         
Investment income—neta  .10   .11   .11   .07   .06   .05  
Net realized and unrealized                         
gain (loss) on investments  1.30   1.62   .52   .75   3.28   (4.70 ) 
Total from Investment Operations  1.40   1.73   .63   .82   3.34   (4.65 ) 
Distributions:                         
Dividends from                         
investment income—net  (.08 )  (.10 )  (.07 )  (.06 )  (.02 )  (.08 ) 
Dividends from net realized                         
gain on investments    (.12 )  (.04 )      (.09 ) 
Total Distributions  (.08 )  (.22 )  (.11 )  (.06 )  (.02 )  (.17 ) 
Net asset value, end of period  16.34   15.02   13.51   12.99   12.23   8.91  
Total Return (%)b  9.36 c  13.08   4.86   6.70   37.57   (34.32 ) 
Ratios/Supplemental Data (%):                         
Ratio of total expenses                         
to average net assets  1.23 d  1.28   1.27   1.32   1.38   1.59  
Ratio of net expenses                         
to average net assets  1.23 d  1.28   1.27   1.32   1.38   1.47  
Ratio of net investment income                         
to average net assets  1.24 d  .80   .80   .56   .53   .44  
Portfolio Turnover Rate  1.65 c  6.05   8.54   7.50   12.75   15.54  
Net Assets, end of period                         
($ x 1,000)  72,036   61,806   48,872   37,152   8,212   3,329  

 

a  Based on average shares outstanding at each month end. 
b  Exclusive of sales charge. 
c  Not annualized. 
d  Annualized. 

 

See notes to financial statements.

14



Six Months Ended                      
May 31, 2013       Year Ended November 30,      
Class C Shares  (Unaudited)   2012   2011   2010   2009   2008  
Per Share Data ($):                         
Net asset value,                         
beginning of period  14.71   13.24   12.78   12.07   8.83   13.64  
Investment Operations:                         
Investment income (loss)—neta  .04   .01   .01   (.02 )  (.01 )  (.04 ) 
Net realized and unrealized                         
gain (loss) on investments  1.28   1.59   .50   .73   3.25   (4.68 ) 
Total from Investment Operations  1.32   1.60   .51   .71   3.24   (4.72 ) 
Distributions:                         
Dividends from                         
investment income—net    (.01 )  (.01 )  (.00 )b     
Dividends from net realized                         
gain on investments    (.12 )  (.04 )      (.09 ) 
Total Distributions    (.13 )  (.05 )  (.00 )b    (.09 ) 
Net asset value, end of period  16.03   14.71   13.24   12.78   12.07   8.83  
Total Return (%)c  8.97 d  12.21   4.01   5.90   36.69   (34.82 ) 
Ratios/Supplemental Data (%):                         
Ratio of total expenses                         
to average net assets  2.01 e  2.05   2.03   2.09   2.12   2.36  
Ratio of net expenses                         
to average net assets  2.01 e  2.05   2.03   2.09   2.09   2.22  
Ratio of net investment income                         
(loss) to average net assets  .48 e  .05   .05   (.17 )  (.11 )  (.29 ) 
Portfolio Turnover Rate  1.65 d  6.05   8.54   7.50   12.75   15.54  
Net Assets, end of period                         
($ x 1,000)  18,818   15,883   13,872   10,243   1,873   695  

 

a  Based on average shares outstanding at each month end. 
b  Amount represents less than $.01 per share. 
c  Exclusive of sales charge. 
d  Not annualized. 
e  Annualized. 

 

See notes to financial statements.

The Fund 15



FINANCIAL HIGHLIGHTS (continued)

Six Months Ended                      
  May 31, 2013       Year Ended November 30,      
Class I Shares  (Unaudited)   2012   2011   2010   2009   2008  
Per Share Data ($):                         
Net asset value,                         
beginning of period  15.24   13.70   13.15   12.36   8.99   13.76  
Investment Operations:                         
Investment income—neta  .14   .16   .16   .12   .11   .10  
Net realized and unrealized                         
gain (loss) on investments  1.30   1.64   .53   .76   3.31   (4.76 ) 
Total from Investment Operations 1.44   1.80   .69   .88   3.42   (4.66 ) 
Distributions:                         
Dividends from                         
investment income—net  (.13 )  (.14 )  (.10 )  (.09 )  (.05 )  (.02 ) 
Dividends from net realized                         
gain on investments    (.12 )  (.04 )      (.09 ) 
Total Distributions  (.13 )  (.26 )  (.14 )  (.09 )  (.05 )  (.11 ) 
Net asset value, end of period  16.55   15.24   13.70   13.15   12.36   8.99  
Total Return (%)  9.49 b  13.49   5.23   7.12   38.22   (34.12 ) 
Ratios/Supplemental Data (%):                      
Ratio of total expenses                         
to average net assets  .91 c  .93   .93   .96   .99   1.17  
Ratio of net expenses                         
to average net assets  .91 c  .93   .93   .96   .99   1.15  
Ratio of net investment income                         
to average net assets  1.69 c  1.14   1.13   .94   1.05   .83  
Portfolio Turnover Rate  1.65 b  6.05   8.54   7.50   12.75   15.54  
Net Assets, end of period                         
($ x 1,000)  1,198,431   668,063   472,646   364,688   263,694   72,656  

 

a  Based on average shares outstanding at each month end. 
b  Not annualized. 
c  Annualized. 

 

See notes to financial statements.

16



NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Global Stock Fund (the “fund”) is a separate diversified series of Strategic Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund.The fund’s investment objective is to seek long-term total return. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of NewYork Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Walter Scott & Partners Limited (“Walter Scott”), a subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s sub-investment adviser.

MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares.The fund is authorized to issue 100 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A, Class C and Class I. Class A shares generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The sales charge may be reduced or waived for certain purchases of Class A shares. Effective April 1, 2013, pursuant to new/modified front-end sales charge waivers, Class A shares of the fund may be purchased at net asset value without payment of a sales charge by (a) investors who participate in a self-directed investment brokerage account program

The Fund 17



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

offered by financial intermediaries that have entered into an agreement with the fund’s Distributor (financial intermediaries offering self-directed investment brokerage accounts may or may not charge their customers a transaction fee) and (b) investors who purchase Class A shares directly through the fund’s Distributor, and either (i) have, or whose spouse or minor children have, beneficially owned shares and continuously maintained an open account with the Distributor in a Dreyfus-managed fund since on or before February 28, 2006, or (ii) such purchase is for a self-directed investment account that may or may not be subject to a transaction fee.

On April 29, 2013, the Company’s Board of Directors (the “Board”) authorized the fund to offer ClassY shares, as a new class of shares, to certain investors, including certain institutional investors. Effective July 1, 2013, Class Y shares will be offered at net asset value and will not be subject to certain fees, including Distribution Plan and Shareholder Services Plan fees.The Board approved an increase in the authorized shares of the fund from 300 million to 400 million and authorized 100 million Class Y shares.

The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.

18



The Company enters into contracts that contain a variety of indemnifications.The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The Fund 19



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are categorized within Level 1 of the fair value hierarchy.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and financial futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable

20



issuers.These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.

For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.

Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.

Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate. These securities are generally categorized within Level 2 of the fair value hierarchy.

The following is a summary of the inputs used as of May 31, 2013 in valuing the fund’s investments:

    Level 2—Other   Level 3—     
  Level 1—  Significant   Significant     
  Unadjusted  Observable   Unobservable     
  Quoted Prices  Inputs   Inputs  Total  
Assets ($)             
Investments in Securities:           
Equity Securities—             
Domestic             
Common             
Stocks  532,219,403      532,219,403  
Equity Securities—             
Foreign             
Common Stocks  44,597,040  674,936,868 ††    719,533,908  
Mutual Funds  30,406,000      30,406,000  
Liabilities ($)             
Other Financial             
Instruments:             
Forward Foreign             
Currency Exchange           
Contracts†††    (10,166 )    (10,166 ) 

 

  See Statement of Investments for additional detailed categorizations. 
††  Securities classified as Level 2 at period end as the values were determined pursuant to the 
  fund’s fair valuation procedures. 
†††  Amount shown represents unrealized (depreciation) at period end. 

 

The Fund 21



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

At November 30, 2012, no exchange traded foreign equity securities were classified within Level 2 of the fair value hierarchy.

(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also included with net realized and unrealized gain or loss on investments.

(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act. Investments in affiliated investment companies during the period ended May 31, 2013 were as follows:

Affiliated           
Investment  Value     Value  Net 
Company  11/30/2012 ($)  Purchases ($)  Sales ($) 5/31/2013 ($)  Assets (%) 
Dreyfus           
Institutional           
Preferred           
Plus Money           
Market           
Fund  15,460,000 434,446,000  419,500,000   30,406,000  2.4 

 

22



(e) Risk: Investing in foreign markets may involve special risks and considerations not typically associated with investing in the U.S. These risks include revaluation of currencies, high rates of inflation, repatriation restrictions on income and capital, and adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls and delayed settlements, and their prices may be more volatile than those of comparable securities in the U.S.

(f) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.

As of and during the period ended May 31, 2013, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

Each tax year in the three-year period ended November 30, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.

The Fund 23



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Furthermore, post-enactment capital loss carryovers retain their character as either short-term or long-term capital losses rather than short-term as they were under previous statute.

The fund has an unused capital loss carryover of $4,741,012 available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to November 30, 2012. The fund has $239,900 of post-enactment short-term capital losses and $4,501,112 of post-enactment long-term capital losses which can be carried forward for an unlimited period.

The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2012 was as follows: ordinary income $7,714,574 and long-term capital gains $2,546,828.The tax character of current year distributions will be determined at the end of the current fiscal year.

(h) New Accounting Pronouncement: In January 2013, FASB issued Accounting Standards Update No. 2013-01 (“ASU 2013-01”), “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, which replaced Accounting Standards Update No. 2011-11 (“ASU 2011-11”), “Disclosures about Offsetting Assets and Liabilities”. ASU 2013-01 is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. ASU 2011-11 was intended to enhance disclosure requirements on the offsetting of financial assets and liabilities.ASU 2013-01 limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. Management is currently evaluating the application of ASU 2013-01 and its impact on the fund’s financial statements.

24



NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed funds in a $210 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2013, the fund did not borrow under the Facilities.

NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .85% of the value of the fund’s average daily net assets and is payable monthly.

Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott a monthly fee at an annual percentage of the value of the fund’s average daily net assets.

During the period ended May 31, 2013, the Distributor retained $4,574 from commissions earned on sales of the fund’s Class A shares and $368 from CDSCs on redemptions of the fund’s Class C shares.

(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended May 31, 2013, Class C shares were charged $65,712, pursuant to the Distribution Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services.The ser-

The Fund 25



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

vices provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts.The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended May 31, 2013, Class A and Class C shares were charged $82,430 and $21,904, respectively, pursuant to the Shareholder Services Plan.

The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency services for the fund and cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $7,992 for transfer agency services and $342 for cash management services. Cash management fees were partially offset by earnings credits of $57.These fees are included in Shareholder servicing costs in the Statement of Operations.

The fund compensatesThe Bank of NewYork Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2013, the fund was charged $98,239 pursuant to the custody agreement.

The fund compensates The Bank of New York Mellon under a cash management agreement for performing certain cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $198 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $1.

26



During the period ended May 31, 2013, the fund was charged $4,558 for services performed by the Chief Compliance Officer and his staff.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $956,878, Distribution Plan fees $12,246, Shareholder Services Plan fees $19,586, custodian fees $42,061, Chief Compliance Officer fees $3,830 and transfer agency fees $3,637.

(d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward contracts, during the period ended May 31, 2013, amounted to $460,884,434 and $17,508,549, respectively.

Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. Each type of derivative instrument that was held by the fund during the period ended May 31, 2013 is discussed below.

Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates.With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes

The Fund 27



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments.The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract.The following summarizes open forward contracts at May 31, 2013:

    Foreign         
Forward Foreign Currency   Currency      Unrealized  
Exchange Contracts   Amounts  Cost ($)  Value ($) (Depreciation) ($)   
Purchases:            
British Pound,            
Expiring            
    6/3/2013a  767,081  1,165,810  1,165,511  (299 ) 
Swiss Franc,            
Expiring:            
    6/3/2013a   1,657,428  1,736,617  1,733,258  (3,359 ) 
    6/4/2013a  867,175  909,656  906,849  (2,807 ) 
Sales:     Proceeds ($)       
Japanese Yen,            
Expiring            
    6/5/2013a  272,971,456  2,713,650  2,717,351  (3,701 ) 
          (10,166 ) 
 
Counterparty:            
a National Australia Bank            

 

The following summarizes the average market value of derivatives outstanding during the period ended May 31, 2013:

  Average Market Value ($) 
Forward contracts  17,908,625 

 

At May 31, 2013, accumulated net unrealized appreciation on investments was $213,034,287, consisting of $225,855,332 gross unrealized appreciation and $12,821,045 gross unrealized depreciation.

At May 31, 2013, 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).

28










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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.




 

Contents

 

THE FUND

2     

A Letter from the President

3     

Discussion of Fund Performance

6     

Understanding Your Fund’s Expenses

6     

Comparing Your Fund’s Expenses With Those of Other Funds

7     

Statement of Investments

10     

Statement of Assets and Liabilities

11     

Statement of Operations

12     

Statement of Changes in Net Assets

14     

Financial Highlights

17     

Notes to Financial Statements

 

FOR MORE INFORMATION

 

Back Cover



International
Stock Fund

The Fund

A LETTER FROM THE PRESIDENT

Dear Shareholder:

We are pleased to present this semiannual report for International Stock Fund, covering the six-month period from December 1, 2012, through May 31, 2013. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

Although a sustained global economic recovery generally gained traction over the second half of 2012, we more recently have seen reports of slower growth in some parts of the world as evidenced by declining commodity prices.The recent slowdown is due to a combination of factors, including the final months of recession in Europe, more restrictive U.S. fiscal policies stemming from sequestration, and some rebal-ancing in China. Consequently, global equity markets advanced strongly early in the reporting period when economic conditions seemed poised for improvement, but subsequent gains were more subdued, on average.

We believe the current subcycle of slower growth is likely to be temporary. We anticipate a mild acceleration of global economic growth near the end of 2013 and throughout 2014, fueled by aggressively stimulative monetary policies from central banks throughout the world. Some economists have expressed concern that low interest rates and quantitative easing programs may spark an acceleration of consumer price inflation, but we believe these fears are premature. In fact, the relatively sluggish pace of the recovery implies that inflation risks are limited, making it unlikely that central banks will adopt expansion-threatening, restrictive policies anytime soon. As always, we encourage you to discuss our observations with your financial advisor.

Thank you for your continued confidence and support.

Sincerely,


J. Charles Cardona
President
The Dreyfus Corporation
June 17, 2013

2



DISCUSSION OF FUND PERFORMANCE

For the period of December 1, 2012, through May 31, 2013, as provided by Charlie Macquaker and Roy Leckie of Walter Scott & Partners Limited (Walter Scott), Sub-investment adviser

Fund and Market Performance Overview

For the six-month period ended May 31, 2013, International Stock Fund’s Class A shares achieved a return of 5.05%, Class C shares returned 4.68%, and Class I shares returned 5.29%.1 In comparison, the fund’s benchmark index, the Morgan Stanley Capital International Europe,Australasia, Far East Index (the “MSCI EAFE Index”), achieved an 11.39% return over the same period.2

Despite bouts of heightened volatility, international equities advanced when economic trends began to show signs of improvement, particularly in developed markets.The fund produced lower returns than its benchmark, mainly due to its conservative investment posture.

The Fund’s Investment Approach

The fund seeks long-term real return by investing in high-quality companies capable of sustainable growth and wealth creation over a long time horizon.The fund invests in stocks of foreign companies that are predominantly located in the world’s developed markets outside of the United States. When selecting stocks, Walter Scott seeks companies with fundamental strengths that indicate the potential for sustainable growth.The firm focuses on individual stock selection through extensive fundamental research. Candidates are initially selected for research if they meet certain broad absolute and trend criteria. Financial statements are analyzed in an effort to identify the nature of their cash generation and to understand the variables that could add value to their businesses. Companies meeting the financial criteria are subjected to a detailed investigation of products, costs and pricing, competition, industry position, and outlook.

Developed Markets Outpaced Emerging Markets

Sustained stock market rallies began throughout the world prior to the reporting period when various global macroeconomic concerns failed to materialize. Instead, investors were encouraged by a new quantitative easing program from the European

The Fund 3



DISCUSSION OF FUND PERFORMANCE (continued)

Central Bank, expectations that new government leadership in China might adopt policies more conducive to stronger regional growth, and actions by a new Japanese government that sought to address longstanding economic stagnation and deflation-ary pressures. In addition, international investors responded positively to gradually improving U.S. economic trends.

However, investors’ optimism at the time may have been overblown, as the global economy expanded at a relatively sluggish rate during the reporting period amid an ongoing financial crisis and fiscal austerity in Europe and slackening demand for commodities from the emerging markets.

These developments helped produce widely disparate returns across individual stock markets, as strength in developed markets was balanced by relative weakness in many emerging markets. More specifically, Japan and, to a lesser degree, Europe led international markets higher, while China, India, and Brazil either barely advanced or lost a modest amount of value.

Conservative Positioning Weighed on Fund Performance

The fund’s conservative approach typically fares better than market averages when markets fall, but generally lags during rallies.The reporting period was no exception, the fund did not fully participate in gains posted by more speculative stocks.

For example, the fund’s holdings in Japan focused mainly on large, multinational exporters at a time when smaller, domestically focused companies rallied from depressed levels. In China, a sluggish economy undermined energy producer China Shenhua Energy, Cl. H as coal prices declined, and offshore oil & gas exploration & production company CNOOC struggled with rising costs and narrower profit margins. In other regions, Australian bottler Coca-Cola Amatil reduced guidance due to weakness in the domestic grocery segment. From an industry group perspective, results in the consumer discretionary, energy, and health care sectors proved most disappointing.

The fund achieved better results among individual stocks across a variety of regions and sectors. In Japan, gains in real estate developer Mitsubishi Estate were driven by falling vacancies and rising rents in a recovering domestic economy, and auto

4



parts seller Denso achieved higher profit margins in a consolidating industry. Swiss pharmaceuticals developer Roche Holding benefited from a leading franchise in oncology drugs. French beauty products seller L’Oreal achieved year-over-year sales growth in all of its geographic markets.The German sports apparel company, Adidas, expanded its gross profit margin after raising prices.

Two new positions were purchased during the reporting period. Hong Kong-based shopping mall developer Hang Lung Properties is expected to benefit from expansion into mainland China, and U.K.-based food services provider Compass Group is growing as more corporations outsource non-core activities.

Finding Opportunities Among Individual Companies

While Walter Scott has been somewhat encouraged by recent economic news, we remain concerned that the market’s gains over the reporting period were not fully supported by underlying business fundamentals. Consequently, we have retained a generally cautious investment posture and an emphasis on individual companies that, in our analysis, are poised for growth on their own merits, independent of economic conditions.

June 17, 2013

Equity funds are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.

Investing internationally involves special risks, including changes in currency exchange rates, political, economic and social instability, a lack of comprehensive company information, differing auditing and legal standards and less market liquidity.

1 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the 
maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed 
on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past 
performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, 
fund shares may be worth more or less than their original cost. 
2 SOURCE: LIPPER INC. – Reflects reinvestment of net dividends and, where applicable, capital gain distributions. 
The Morgan Stanley Capital International Europe,Australasia, Far East (MSCI EAFE) Index is an unmanaged 
index composed of a sample of companies representative of the market structure of European and Pacific Basin 
countries. Returns are calculated on a month-end basis. Investors cannot invest directly in any index. 

 

The Fund 5



UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in International Stock Fund from December 1, 2012 to May 31, 2013. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended May 31, 2013

    Class A    Class C    Class I 
Expenses paid per $1,000  $ 6.65  $ 10.41  $ 4.71 
Ending value (after expenses)  $ 1,050.50  $ 1,046.80  $ 1,052.90 

 

COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended May 31, 2013

    Class A    Class C    Class I 
Expenses paid per $1,000  $ 6.54  $ 10.25  $ 4.63 
Ending value (after expenses)  $ 1,018.45  $ 1,014.76  $ 1,020.34 

 

† Expenses are equal to the fund’s annualized expense ratio of 1.30% for Class A, 2.04% for Class C and .92% 
for Class I, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half 
year period). 

 

6



STATEMENT OF INVESTMENTS

May 31, 2013 (Unaudited)

Common Stocks—94.2%  Shares  Value ($) 
Australia—8.7%     
Coca-Cola Amatil  4,763,000  58,565,322 
Cochlear  356,600  21,948,312 
CSL  1,019,000  57,766,516 
Woodside Petroleum  1,692,000  57,659,635 
Woolworths  1,865,000  58,540,905 
    254,480,690 
Belgium—1.5%     
Colruyt  849,000  43,167,964 
Brazil—1.9%     
Petroleo Brasileiro, ADR  2,917,800  54,387,792 
Canada—1.8%     
Suncor Energy  1,711,000  51,903,497 
China—2.8%     
China Shenhua Energy, Cl. H  9,062,500  29,193,305 
CNOOC  29,894,000  52,563,805 
    81,757,110 
Denmark—1.9%     
Novo Nordisk, Cl. B  341,100  54,760,346 
Finland—1.0%     
Kone, Cl. B  318,000  27,955,445 
France—7.8%     
Air Liquide  450,100  57,427,595 
Danone  742,000  54,505,626 
Essilor International  507,576  55,316,457 
L’Oreal  366,700  61,473,270 
    228,722,948 
Germany—4.1%     
Adidas  603,300  65,507,709 
SAP  728,000  55,448,804 
    120,956,513 
Hong Kong—6.5%     
China Mobile  5,309,000  55,495,519 
CLP Holdings  6,249,000  52,659,370 
Hang Lung Properties  8,164,000  28,516,860 
Hong Kong & China Gas  19,166,206  54,121,587 
    190,793,336 

 

The Fund 7



STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)  Shares  Value ($) 
Italy—.6%     
Tenaris, ADR  388,800  16,352,928 
Japan—19.8%     
AEON Mall  866,900  22,639,125 
Canon  1,347,200  46,369,611 
Chugai Pharmaceutical  628,000  12,589,890 
Daito Trust Construction  586,700  54,686,776 
Denso  1,309,100  54,331,927 
FANUC  370,900  54,812,159 
Honda Motor  1,333,700  49,325,136 
INPEX  12,500  52,810,148 
Keyence  98,520  30,191,599 
Komatsu  2,451,400  61,844,866 
Mitsubishi Estate  836,000  20,528,151 
Shimamura  204,300  23,398,341 
Shin-Etsu Chemical  906,500  57,007,073 
Tokio Marine Holdings  1,336,200  38,772,183 
    579,306,985 
Singapore—1.9%     
DBS Group Holdings  2,363,305  31,985,336 
Oversea-Chinese Banking  2,715,061  22,116,424 
    54,101,760 
Spain—1.9%     
Inditex  442,300  54,821,054 
Sweden—1.8%     
Hennes & Mauritz, Cl. B  1,566,000  53,513,508 
Switzerland—8.6%     
Nestle  879,000  58,002,460 
Novartis  776,200  55,619,180 
Roche Holding  238,400  58,989,769 
SGS  11,090  24,803,280 
Syngenta  138,000  54,151,809 
    251,566,498 
Taiwan—2.1%     
Taiwan Semiconductor Manufacturing, ADR  3,346,000  62,436,360 
United Kingdom—19.5%     
BG Group  3,575,000  65,064,981 

 

8



Common Stocks (continued)  Shares   Value ($) 
United Kingdom (continued)       
Burberry Group  2,506,000   54,619,708 
Centrica  9,895,000   57,041,999 
Compass Group  4,369,900   57,353,599 
HSBC Holdings  5,347,000   58,571,293 
Reckitt Benckiser Group  798,000   56,933,593 
SABMiller  1,086,000   54,625,718 
Smith & Nephew  4,995,000   58,058,873 
Standard Chartered  2,331,000   53,602,174 
Tesco  9,900,000   54,633,841 
      570,505,779 
Total Common Stocks       
(cost $2,418,629,618)      2,751,490,513 
 
Other Investment—3.5%       
Registered Investment Company;       
Dreyfus Institutional Preferred       
    Plus Money Market Fund       
(cost $101,000,000)  101,000,000 a  101,000,000 
 
Total Investments (cost $2,519,629,618)  97.7 %  2,852,490,513 
Cash and Receivables (Net)  2.3 %  66,724,450 
Net Assets  100.0 %  2,919,214,963 
 
ADR—American Depository Receipts       
a Investment in affiliated money market mutual fund.       

 

Portfolio Summary (Unaudited)     
 
  Value (%)    Value (%) 
Consumer Staples  17.1  Industrial  5.8 
Consumer Discretionary  14.1  Materials  5.8 
Financial  11.4  Utilities  5.6 
Energy  13.0  Money Market Investment  3.5 
Health Care  12.8  Telecommunication Services  1.9 
Information Technology  6.7    97.7 
 
† Based on net assets.       
See notes to financial statements.       

 

The Fund 9



STATEMENT OF ASSETS AND LIABILITIES

May 31, 2013 (Unaudited)

  Cost  Value  
Assets ($):       
Investments in securities—See Statement of Investments:       
Unaffiliated issuers  2,418,629,618  2,751,490,513  
Affiliated issuers  101,000,000  101,000,000  
Cash    93,027,708  
Cash denominated in foreign currencies  2,549,945  2,560,414  
Dividends receivable    16,189,395  
Receivable for investment securities sold    6,259,106  
Receivable for shares of Common Stock subscribed    5,030,359  
Unrealized appreciation on forward foreign       
currency exchange contracts—Note 4    1,561  
Prepaid expenses    125,514  
    2,975,684,570  
Liabilities ($):       
Due to The Dreyfus Corporation and affiliates—Note 3(c)    2,364,788  
Payable for investment securities purchased    52,468,042  
Payable for shares of Common Stock redeemed    953,917  
Unrealized depreciation on forward foreign       
currency exchange contracts—Note 4    396,505  
Accrued expenses    286,355  
    56,469,607  
Net Assets ($)    2,919,214,963  
Composition of Net Assets ($):       
Paid-in capital    2,623,738,759  
Accumulated undistributed investment income—net    22,976,039  
Accumulated net realized gain (loss) on investments    (59,818,445 ) 
Accumulated net unrealized appreciation (depreciation)       
on investments and foreign currency transactions    332,318,610  
Net Assets ($)    2,919,214,963  

 

Net Asset Value Per Share       
  Class A  Class C  Class I 
Net Assets ($)  239,955,554  33,635,852  2,645,623,557 
Shares Outstanding  16,375,862  2,332,870  179,071,472 
Net Asset Value Per Share ($)  14.65  14.42  14.77 
 
See notes to financial statements.       

 

10



STATEMENT OF OPERATIONS

Six Months Ended May 31, 2013 (Unaudited)

Investment Income ($):     
Income:     
Cash dividends (net of $3,623,191 foreign taxes withheld at source):     
Unaffiliated issuers  41,039,072  
Affiliated issuers  40,110  
Total Income  41,079,182  
Expenses:     
Management fee—Note 3(a)  10,943,883  
Shareholder servicing costs—Note 3(c)  622,487  
Custodian fees—Note 3(c)  341,532  
Registration fees  156,724  
Distribution fees—Note 3(b)  111,057  
Directors’ fees and expenses—Note 3(d)  108,221  
Professional fees  81,910  
Prospectus and shareholders’ reports  27,288  
Loan commitment fees—Note 2  11,960  
Miscellaneous  61,099  
Total Expenses  12,466,161  
Less—reduction in fees due to earnings credits—Note 3(c)  (268 ) 
Net Expenses  12,465,893  
Investment Income—Net  28,613,289  
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):     
Net realized gain (loss) on investments and foreign currency transactions  6,424,829  
Net realized gain (loss) on forward foreign currency exchange contracts  (121,902 ) 
Net Realized Gain (Loss)  6,302,927  
Net unrealized appreciation (depreciation) on     
investments and foreign currency transactions  75,996,607  
Net unrealized appreciation (depreciation) on     
forward foreign currency exchange contracts  (394,944 ) 
Net Unrealized Appreciation (Depreciation)  75,601,663  
Net Realized and Unrealized Gain (Loss) on Investments  81,904,590  
Net Increase in Net Assets Resulting from Operations  110,517,879  
 
See notes to financial statements.     

 

The Fund 11



STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  May 31, 2013   Year Ended  
  (Unaudited)   November 30, 2012  
Operations ($):         
Investment income—net  28,613,289   32,588,010  
Net realized gain (loss) on investments  6,302,927   (26,607,763 ) 
Net unrealized appreciation         
(depreciation) on investments  75,601,663   229,692,690  
Net Increase (Decrease) in Net Assets         
Resulting from Operations  110,517,879   235,672,937  
Dividends to Shareholders from ($):         
Investment income—net:         
Class A Shares  (2,453,861 )  (1,727,130 ) 
Class C Shares  (156,624 )  (33,444 ) 
Class I Shares  (32,893,538 )  (14,304,931 ) 
Total Dividends  (35,504,023 )  (16,065,505 ) 
Capital Stock Transactions ($):         
Net proceeds from shares sold:         
Class A Shares  82,720,931   69,431,573  
Class C Shares  10,993,204   6,334,328  
Class I Shares  789,876,897   952,851,615  
Dividends reinvested:         
Class A Shares  2,370,457   1,702,274  
Class C Shares  110,933   23,020  
Class I Shares  22,258,109   7,414,889  
Cost of shares redeemed:         
Class A Shares  (25,853,459 )  (108,468,076 ) 
Class C Shares  (2,324,377 )  (8,328,062 ) 
Class I Shares  (169,812,732 )  (338,580,321 ) 
Increase (Decrease) in Net Assets         
from Capital Stock Transactions  710,339,963   582,381,240  
Total Increase (Decrease) in Net Assets  785,353,819   801,988,672  
Net Assets ($):         
Beginning of Period  2,133,861,144   1,331,872,472  
End of Period  2,919,214,963   2,133,861,144  
Undistributed investment income—net  22,976,039   29,866,773  

 

12



  Six Months Ended      
  May 31, 2013   Year Ended  
  (Unaudited)   November 30, 2012  
Capital Share Transactions:         
Class Aa         
Shares sold  5,583,574   5,272,552  
Shares issued for dividends reinvested  164,615   140,566  
Shares redeemed  (1,746,989 )  (8,325,957 ) 
Net Increase (Decrease) in Shares Outstanding  4,001,200   (2,912,839 ) 
Class Ca         
Shares sold  754,395   485,056  
Shares issued for dividends reinvested  7,807   1,923  
Shares redeemed  (158,810 )  (648,380 ) 
Net Increase (Decrease) in Shares Outstanding  603,392   (161,401 ) 
Class I         
Shares sold  53,327,016   72,715,136  
Shares issued for dividends reinvested  1,535,042   608,776  
Shares redeemed  (11,445,899 )  (25,572,016 ) 
Net Increase (Decrease) in Shares Outstanding  43,416,159   47,751,896  

 

a During the period ended May 31, 2013, 6,275 Class C shares representing $95,883 were exchanged for 6,174 
Class A shares. 

 

See notes to financial statements.

The Fund 13



FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated.All information (except portfolio turnover rate) reflects financial results for a single fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.

Six Months Ended                      
May 31, 2013       Year Ended November 30,      
Class A Shares  (Unaudited)   2012   2011   2010   2009   2008  
Per Share Data ($):                         
Net asset value,                         
beginning of period  14.13   12.58   12.83   11.97   8.43   13.72  
Investment Operations:                         
Investment income—neta  .14   .21   .15   .09   .05   .09  
Net realized and unrealized                         
gain (loss) on investments  .57   1.46   (.31 )  .86   3.58   (5.28 ) 
Total from Investment Operations  .71   1.67   (.16 )  .95   3.63   (5.19 ) 
Distributions:                         
Dividends from                         
investment income—net  (.19 )  (.12 )  (.09 )  (.09 )  (.09 )  (.02 ) 
Dividends from net realized                         
gain on investments            (.08 ) 
Total Distributions  (.19 )  (.12 )  (.09 )  (.09 )  (.09 )  (.10 ) 
Net asset value, end of period  14.65   14.13   12.58   12.83   11.97   8.43  
Total Return (%)b  5.05 c  13.40   (1.32 )  7.99   43.33   (38.07 ) 
Ratios/Supplemental Data (%):                         
Ratio of total expenses                         
to average net assets  1.30 d  1.31   1.27   1.34   1.43   1.43  
Ratio of net expenses                         
to average net assets  1.30 d  1.31   1.27   1.34   1.42   1.41  
Ratio of net investment income                         
to average net assets  1.85 d  1.62   1.08   .69   .50   .79  
Portfolio Turnover Rate  .72 c  5.47   5.07   5.91   21.67   13.18  
Net Assets, end of period                         
($ x 1,000)  239,956   174,825   192,351   124,347   18,059   1,126  

 

a  Based on average shares outstanding at each month end. 
b  Exclusive of sales charge. 
c  Not annualized. 
d  Annualized. 

 

See notes to financial statements.

14



Six Months Ended                      
May 31, 2013       Year Ended November 30,      
Class C Shares  (Unaudited)   2012   2011   2010   2009   2008  
Per Share Data ($):                         
Net asset value,                         
beginning of period  13.86   12.33   12.64   11.83   8.32   13.64  
Investment Operations:                         
Investment income (loss)—neta  .08   .12   .04   (.02 )  (.01 )  .00 b 
Net realized and unrealized                         
gain (loss) on investments  .57   1.43   (.30 )  .87   3.53   (5.24 ) 
Total from Investment Operations  .65   1.55   (.26 )  .85   3.52   (5.24 ) 
Distributions:                         
Dividends from                         
investment income—net  (.09 )  (.02 )  (.05 )  (.04 )  (.01 )   
Dividends from net realized                         
gain on investments            (.08 ) 
Total Distributions  (.09 )  (.02 )  (.05 )  (.04 )  (.01 )  (.08 ) 
Net asset value, end of period  14.42   13.86   12.33   12.64   11.83   8.32  
Total Return (%)c  4.68 d  12.58   (2.08 )  7.18   42.31   (38.58 ) 
Ratios/Supplemental Data (%):                         
Ratio of total expenses                         
to average net assets  2.04 e  2.06   2.05   2.13   2.25   2.24  
Ratio of net expenses                         
to average net assets  2.04 e  2.06   2.05   2.13   2.22   2.20  
Ratio of net investment income                         
(loss) to average net assets  1.13 e  .90   .33   (.12 )  (.13 )  .03  
Portfolio Turnover Rate  .72 d  5.47   5.07   5.91   21.67   13.18  
Net Assets, end of period                         
($ x 1,000)  33,636   23,962   23,319   13,959   1,224   197  

 

a  Based on average shares outstanding at each month end. 
b  Amount represents less than $.01 per share. 
c  Exclusive of sales charge. 
d  Not annualized. 
e  Annualized. 

 

See notes to financial statements.

The Fund 15



FINANCIAL HIGHLIGHTS (continued)

Six Months Ended                      
  May 31, 2013       Year Ended November 30,      
Class I Shares  (Unaudited)   2012   2011   2010   2009   2008  
Per Share Data ($):                         
Net asset value,                         
beginning of period  14.26   12.70   12.93   12.04   8.47   13.76  
Investment Operations:                         
Investment income—neta  .17   .26   .19   .14   .12   .14  
Net realized and unrealized                         
gain (loss) on investments  .58   1.46   (.31 )  .86   3.57   (5.30 ) 
Total from                         
Investment Operations  .75   1.72   (.12 )  1.00   3.69   (5.16 ) 
Distributions:                         
Dividends from                         
investment income—net  (.24 )  (.16 )  (.11 )  (.11 )  (.12 )  (.05 ) 
Dividends from net realized                         
gain on investments            (.08 ) 
Total Distributions  (.24 )  (.16 )  (.11 )  (.11 )  (.12 )  (.13 ) 
Net asset value,                         
end of period  14.77   14.26   12.70   12.93   12.04   8.47  
Total Return (%)  5.29 b  13.74   (1.01 )  8.38   43.98   (37.82 ) 
Ratios/Supplemental Data (%):                      
Ratio of total expenses                         
to average net assets  .92 c  .93   .93   .97   1.01   1.03  
Ratio of net expenses                         
to average net assets  .92 c  .93   .93   .97   1.01   1.02  
Ratio of net investment income                      
to average net assets  2.27 c  1.96   1.41   1.11   1.18   1.19  
Portfolio Turnover Rate  .72 b  5.47   5.07   5.91   21.67   13.18  
Net Assets, end of period                         
($ x 1,000)  2,645,624   1,935,074   1,116,202   688,992   339,535   119,650  

 

a  Based on average shares outstanding at each month end. 
b  Not annualized. 
c  Annualized. 

 

See notes to financial statements.

16



NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

International Stock Fund (the “fund”) is a separate diversified series of Strategic Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund.The fund’s investment objective is to seek long-term total return. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Walter Scott & Partners Limited (“Walter Scott”), a subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s sub-investment adviser. Effective as of the close of business on or about July 29, 2013, the fund will be closed to new investors.

On April 29, 2013, the Company’s Board of Directors (the “Board”) approved an increase in authorized shares of the fund from 400 million to 500 million and an increase in the authorized shares of Class I from 200 million to 300 million.

MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares.The fund is authorized to issue 500 million shares of $.001 par value Common Stock.The fund currently offers three classes of shares: Class A (100 million shares authorized), Class C (100 million shares authorized) and Class I (300 million shares authorized). Class A shares generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The Fund 17



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The sales charge may be reduced or waived for certain purchases of Class A shares. Effective April 1, 2013, pursuant to new/modified front-end sales charge waivers, Class A shares of the fund may be purchased at net asset value without payment of a sales charge by (a) investors who participate in a self-directed investment brokerage account program offered by financial intermediaries that have entered into an agreement with the fund’s Distributor (financial intermediaries offering self-directed investment brokerage accounts may or may not charge their customers a transaction fee) and (b) investors who purchase Class A shares directly through the fund’s Distributor, and either (i) have, or whose spouse or minor children have, beneficially owned shares and continuously maintained an open account with the Distributor in a Dreyfus-managed fund since on or before February 28, 2006, or (ii) such purchase is for a self-directed investment account that may or may not be subject to a transaction fee.

On April 29, 2013, the Board authorized the fund to offer Class Y shares, as a new class of shares, to certain investors, including certain institutional investors. Effective July 1, 2013, Class Y shares will be offered at net asset value and will not be subject to certain fees, including Distribution Plan and Shareholder Services Plan fees. The Board also approved an increase in the authorized shares of the fund from 500 million to 600 million and authorized 100 million ClassY shares.

The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.

18



The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

The Fund 19



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are categorized within Level 1 of the fair value hierarchy.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and financial futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers.These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.

20



For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.

Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.

Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate. These securities are generally categorized within Level 2 of the fair value hierarchy.

The following is a summary of the inputs used as of May 31, 2013 in valuing the fund’s investments:

    Level 2—Other   Level 3—     
  Level 1—  Significant   Significant     
  Unadjusted  Observable   Unobservable     
  Quoted Prices  Inputs   Inputs  Total  
Assets ($)             
Investments in Securities:           
Equity Securities—             
Foreign             
Common             
Stocks  133,177,080  2,618,313,433 ††    2,751,490,513  
Mutual Funds  101,000,000      101,000,000  
Other Financial             
Instruments:             
Forward Foreign             
Currency Exchange           
Contracts†††    1,561     1,561  
Liabilities ($)             
Other Financial             
Instruments:             
Forward Foreign             
Currency Exchange           
Contracts†††    (396,505 )    (396,505 ) 

 

  See Statement of Investments for additional detailed categorizations. 
††  Securities classified as Level 2 at period end as the values were determined pursuant to the fund's 
  fair valuation procedures. 
††† Amount shown represents unrealized appreciation (depreciation) at period end. 

 

The Fund 21



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

At November 30, 2012, no exchange traded foreign equity securities were classified within Level 2 of the fair value hierarchy.

(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also included with net realized and unrealized gain or loss on investments.

(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act. Investments in affiliated investment companies during the period ended May 31, 2013 were as follows:

Affiliated           
Investment  Value     Value  Net 
Company  11/30/2012($)  Purchases ($)  Sales ($) 5/31/2013 ($) Assets (%)  
Dreyfus           
Institutional        
Preferred           
Plus Money           
Market           
Fund  47,720,000  533,140,000  479,860,000 101,000,000  3.5 

 

22



(e) Risk: Investing in foreign markets may involve special risks and considerations not typically associated with investing in the U.S.These risks include revaluation of currencies, high rates of inflation, repatriation restrictions on income and capital, and adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls and delayed settlements, and their prices may be more volatile than those of comparable securities in the U.S.

(f) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.

As of and during the period ended May 31, 2013, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

Each tax year in the three-year period ended November 30, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.

The Fund 23



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Furthermore, post-enactment capital loss carryovers retain their character as either short-term or long-term capital losses rather than short-term as they were under previous statute.The 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years prior to the effective date of the 2010 Act (“pre-enactment losses”).As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.

The fund has an unused capital loss carryover of $63,186,457 available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to November 30, 2012. If not applied, $598,805 of the carryover expires in fiscal year 2016, $15,114,500 expires in fiscal year 2017 and $16,297,830 expires in fiscal year 2019.The fund has $4,753,073 of post-enactment short-term capital losses and $26,422,249 of post-enactment long-term capital losses which can be carried forward for an unlimited period.

The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2012 was as follows: ordinary income $16,065,505. The tax character of current year distributions will be determined at the end of the current fiscal year.

(h) New Accounting Pronouncement: In January 2013, FASB issued Accounting Standards Update No. 2013-01 (“ASU 2013-01”), “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, which replaced Accounting Standards Update No. 2011-11 (“ASU 2011-11”),“Disclosures about Offsetting Assets and Liabilities”. ASU 2013-01 is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. ASU 2011-11 was intended to enhance disclosure requirements on the offsetting of financial assets and liabilities. ASU 2013-01 limits the scope of the new balance sheet offsetting disclosures to deriva-

24



tives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. Management is currently evaluating the application of ASU 2013-01 and its impact on the fund’s financial statements.

NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed funds in a $210 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2013, the fund did not borrow under the Facilities.

NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .85% of the value of the fund’s average daily net assets and is payable monthly.

Pursuant to a sub-investment advisory agreement between Dreyfus and Walter Scott, Dreyfus pays Walter Scott a monthly fee at an annual percentage of the value of the fund’s average daily net assets.

During the period ended May 31, 2013, the Distributor retained $12,665 from commissions earned on sales of the fund’s Class A shares and $2,960 from CDSCs on redemptions of the fund’s Class C shares.

(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its

The Fund 25



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

shares at an annual rate of .75% of the value of its average daily net assets. During the period ended May 31, 2013, Class C shares were charged $111,057, pursuant to the Distribution Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts.The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended May 31, 2013, Class A and Class C shares were charged $267,303 and $37,019, respectively, pursuant to the Shareholder Services Plan.

The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency services for the fund and cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $36,839 for transfer agency services and $1,584 for cash management services. Cash management fees were partially offset by earnings credits of $265. These fees are included in Shareholder servicing costs in the Statement of Operations.

The fund compensatesThe Bank of NewYork Mellon under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2013, the fund was charged $341,532 pursuant to the custody agreement.

26



The fund compensates The Bank of New York Mellon under a cash management agreement for performing certain cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2013, the fund was charged $902 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $3.

During the period ended May 31, 2013, the fund was charged $4,558 for services performed by the Chief Compliance Officer and his staff.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $2,121,593, Distribution Plan fees $21,820, Shareholder Services Plan fees $59,419, custodian fees $144,343, Chief Compliance Officer fees $3,830 and transfer agency fees $13,783.

(d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward contracts, during the period ended May 31, 2013, amounted to $608,878,966 and $17,757,732, respectively.

Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. Each type of derivative instrument that was held by the fund during the period ended May 31, 2013 is discussed below.

Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy.

The Fund 27



NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments.The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract. The following summarizes open forward contracts at May 31, 2013:

    Foreign      Unrealized  
Forward Foreign Currency   Currency      Appreciation  
Exchange Contracts   Amounts  Cost ($)  Value ($) (Depreciation) ($)   
Purchases:            
Australian Dollar,            
    Expiring            
    6/4/2013a  38,340,806  37,069,463  36,693,980  (375,483 ) 
Hong Kong Dollar,            
    Expiring            
    6/3/2013a  72,400,073  9,325,220  9,326,781  1,561  
Swiss Franc,            
    Expiring            
    6/3/2013a  6,165,212  6,459,778  6,447,281  (12,497 ) 
Sales:     Proceeds ($)       
Japanese Yen,            
    Expiring            
    6/5/2013a  628,758,471  6,250,581  6,259,106  (8,525 ) 
Gross Unrealized            
Appreciation         1,561  
Gross Unrealized            
Depreciation         (396,505 ) 

 

Counterparty: 
a National Australia Bank 

 

28



The following summarizes the average market value of derivatives outstanding during the period ended May 31, 2013:

  Average Market Value ($) 
Forward contracts  16,630,225 

 

At May 31, 2013, accumulated net unrealized appreciation on investments was $332,860,895, consisting of $408,989,517 gross unrealized appreciation and $76,128,622 gross unrealized depreciation.

At May 31, 2013, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).

The Fund 29




 

Item 2.      Code of Ethics.

                  Not applicable.

Item 3.      Audit Committee Financial Expert.

                  Not applicable.

Item 4.      Principal Accountant Fees and Services.

                  Not applicable.

Item 5.      Audit Committee of Listed Registrants.

                  Not applicable.

Item 6.      Investments.

(a)              Not applicable.

Item 7.      Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

                  Not applicable.

Item 8.      Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9.      Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

                  Not applicable.  [CLOSED END FUNDS ONLY]

Item 10.    Submission of Matters to a Vote of Security Holders.

                  There have been no material changes to the procedures applicable to Item 10.

Item 11.    Controls and Procedures.

(a)        The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b)        There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

 


 

 

Item 12.    Exhibits.

(a)(1)   Not applicable.

(a)(2)   Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3)   Not applicable.

(b)        Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.

 


 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Strategic Funds, Inc.

By: /s/ Bradley J. Skapyak

Bradley J. Skapyak,

President

 

Date:

July 24, 2013

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

By: /s/ Bradley J. Skapyak

Bradley J. Skapyak,

President

 

Date:

July 24, 2013

 

By: /s/ James Windels

James Windels,

Treasurer

 

Date:

July 24, 2013

 

 

 


 

 

EXHIBIT INDEX

(a)(2)   Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.  (EX-99.CERT)

(b)        Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.  (EX-99.906CERT)

EX-99.CERT 2 exhibit302085.htm CERTIFICATION REQUIRED BY RULE 30A-2 exhibit302085.htm - Generated by SEC Publisher for SEC Filing

 

[EX-99.CERT]—Exhibit  (a)(2)

SECTION 302 CERTIFICATION

 

I, Bradley J. Skapyak, certify that:

1.  I have reviewed this report on Form N-CSR of Strategic Funds, Inc;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.  The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By: /s/ Bradley J. Skapyak

Bradley J. Skapyak,

President

Date: July 24, 2013

 

 


 

 

SECTION 302 CERTIFICATION

I, James Windels, certify that:

1.  I have reviewed this report on Form N-CSR of Strategic Funds, Inc;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.  The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By: /s/ James Windels

James Windels,

Treasurer

Date: July 24, 2013

 

EX-99.906CERT 3 exhibit906085.htm CERTIFICATION REQUIRED BY SECTION 906 exhibit906085.htm - Generated by SEC Publisher for SEC Filing

 

[EX-99.906CERT]

Exhibit (b)

 

 

SECTION 906 CERTIFICATIONS

            In connection with this report on Form N-CSR for the Registrant as furnished to the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

            (1)        the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable; and

 

            (2)        the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

By: /s/ Bradley J. Skapyak

Bradley J. Skapyak,

President

 

Date: July 24, 2013

 

 

By: /s/ James Windels

James Windels,

Treasurer

 

Date: July 24, 2013

 

 

This certificate is furnished pursuant to the requirements of Form N-CSR and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

 

 

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