N-30D 1 pn30d763.txt SEMI-ANNUAL REPORT Dreyfus Stock Index Fund SEMIANNUAL REPORT June 30, 2001 (reg.tm) The views expressed herein are current to the date of this report. These views and the composition of the fund's portfolio are subject to change at any time based on market and other conditions. * Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value Contents THE FUND -------------------------------------------------- 2 Letter from the President 3 Discussion of Fund Performance 6 Statement of Investments 21 Statement of Financial Futures 22 Statement of Assets and Liabilities 23 Statement of Operations 24 Statement of Changes in Net Assets 26 Financial Highlights 28 Notes to Financial Statements FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Stock Index Fund LETTER FROM THE CHAIRMAN Dear Shareholder: We are pleased to present this semiannual report for Dreyfus Stock Index Fund, covering the six-month period from January 1, 2001 through June 30, 2001. Inside, you' ll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio managers, Steven Falci and Thomas Durante. While the first half of 2001 was difficult for the U.S. economy, we have recently seen signs that improvement may be in sight. The Federal Reserve Board' s aggressive easing of monetary policy produced a 2.75 percentage-point drop in short-term interest rates during the reporting period, a move designed to help revive the economy by reducing borrowing costs for corporations and consumers. Approval of the $1.3 trillion federal tax cut should further stimulate economic growth, as should reduced inventories of products on manufacturers' shelves. Based on these and other factors, we believe that the current borderline recession may give way to renewed economic growth later this year. In our view, the implications of this economic scenario may be positive for the stock market. Better economic times generally tend to lead to increased sales and profits for many companies, especially those that are sensitive to changes in the economic cycle. A stronger economy may also help spark a recovery in the shares of companies whose stock prices are inexpensive relative to historical norms, as well as stocks of fundamentally sound companies whose valuations dropped during the recent economic downturn. Of course, our economic perspectives may change as new information becomes available. We encourage you to contact your financial advisor for information about ways to refine your investment strategies in the current environment. For additional market perspectives, point your web browser to www.dreyfus.com and go to the Market Commentary section. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation July 16, 2001 DISCUSSION OF FUND PERFORMANCE Steven Falci and Thomas Durante, Portfolio Managers How did Dreyfus Stock Index Fund perform relative to its benchmark? For the six-month period ended June 30, 2001, Dreyfus Stock Index Fund produced total returns of -6.83% for its Initial shares and -6.95% for its Service shares.(1) In contrast, the fund' s benchmark, the Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index"), produced a total return of -6.69% for the same period.(2) The difference in returns is primarily due to transaction costs and fund operating expenses. What is the fund's investment approach? The fund seeks to match the total return of the S&P 500 Index. To pursue this goal, the fund generally invests in all 500 stocks in the S&P 500 Index in proportion to their weightings in the Index. Often considered a barometer for the domestic stock market in general, the S&P 500 Index is made up of 500 widely held common stocks and is dominated by large-cap, blue chip stocks which, when combined, cover nearly 75% of the total U.S. market capitalization. However, it is important to note that the S&P 500 Index is not composed of the 500 largest companies; rather, it is designed to capture the returns of many different sectors of the U.S. economy. Accordingly, it is composed of approximately 375 industrial, 40 utility, 75 financial and 10 transportation stocks. Each stock is weighted by its market capitalization. Overall, larger companies have greater representation in the S&P 500 Index than smaller ones. The fund may also use stock index futures as a substitute for the sale or purchase of stocks. Dreyfus Stock Index Fund uses a passive management approach -- all investment decisions are made based on the fund's objective, which is to seek to match the performance of the S& P 500 Index. The fund does not attempt to manage market volatility. The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) What other factors influenced the fund's performance? The most significant influence on stock prices during the reporting period was the six aggressive interest-rate reductions implemented by the Federal Reserve Board (the "Fed"). These cuts, totaling 2.75 percentage points, were made in an effort to stimulate a slowing economy. At the beginning of the period, investors were concerned when corporations warned investors that their earnings would fall short of analysts' expectations. Those concerns dissipated somewhat toward the end of the period, due in large part to the expectation that economic growth would accelerate in the wake of the Fed's previous interest-rate reductions In this lackluster economic and market environment, technology and pharmaceutical stocks were particularly hard-hit. The technology sector, which comprises approximately 19% of the S&P 500 Index and fund, fell sharply because of bloated inventory levels, high debt levels and a slowdown in corporate spending. Within these areas, the hardest hit sectors included communication equipment makers and semiconductor companies. Many pharmaceutical companies also performed poorly during the period, partly because of pending HMO legislation that could potentially alter pricing for their products. While recent medical breakthroughs have opened the door for the development of new drugs, it is expected to take several years before these products become available for consumers, and even longer before their sales have a positive effect on drug manufacturers' stock prices. On the other hand, stocks within the consumer discretionary area continued to post positive gains, because consumer spending has remained strong despite rising unemployment. One explanation may be that individuals have grown accustomed to enriched lifestyles, given the strength of the stock market and the U.S. economy in recent years. Within the consumer discretionary area, the stocks that performed best include homebuilding companies, movies and entertainment companies and automobile manufacturers. Companies in the vacation industry, including hotels and rental cars, also provided attractive returns, as did specialty retail and department stores. What is the fund's current strategy? Because the fund is an index fund, it seeks to provide broad diversified exposure to the large-capitalization U.S. equity market by attempting to replicate the return of the S&P 500 Index. Accordingly, we intend to maintain our strategy of investing in all 500 stocks in the S&P 500 Index in proportion to their weighting in the Index. July 16, 2001 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN AGREEMENT IN WHICH SHAREHOLDERS ARE GIVEN AT LEAST 180 DAYS' NOTICE, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE. The Fund STATEMENT OF INVESTMENTS June 30, 2001 (Unaudited) COMMON STOCKS--97.3% Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ BEVERAGES & TOBACCO--1.4% Adolph Coors, Cl. B 15,900 797,862 Anheuser-Busch Cos. 383,200 15,787,840 Brown-Forman, Cl. B 29,200 1,867,048 Philip Morris Cos. 939,000 47,654,250 UST 69,700 2,011,542 68,118,542 CONSUMER CYCLICAL--8.7% AMR 65,600 (a) 2,370,128 Alberto-Culver, Cl. B 24,200 1,017,367 Albertson's 172,877 5,184,581 AutoZone 47,800 (a) 1,792,500 Bed Bath & Beyond 123,200 (a) 3,843,840 Best Buy 89,400 (a) 5,678,688 Big Lots 48,400 (a) 662,112 Black & Decker 34,700 1,369,262 Brunswick 37,300 896,319 CVS 167,900 6,480,940 Circuit City Group 88,800 1,598,400 Cooper Tire & Rubber 30,900 438,780 Costco Wholesale 192,100 (a) 7,891,468 Cummins Engine 17,600 681,120 Dana 63,106 1,472,894 Darden Restaurants 50,400 1,406,160 Delphi Automotive Systems 239,003 3,807,318 Delta Air Lines 52,500 2,314,200 Dillard's, Cl. A 36,300 554,301 Dollar General 141,037 2,750,222 Eastman Kodak 123,800 5,778,984 Federated Department Stores 84,400 (a) 3,587,000 Ford Motor 781,030 19,174,287 Gap 366,900 10,640,100 General Motors 234,200 15,070,770 Harley-Davidson 129,100 6,078,028 Harrah's Entertainment 50,000 1,765,000 Hasbro 73,575 1,063,159 Hilton Hotel 157,500 1,827,000 Home Depot 996,200 46,373,110 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER CYCLICAL (CONTINUED) J.C. Penney 112,300 2,960,228 Johnson Controls 37,100 2,688,637 Kmart 209,200 (a) 2,399,524 Kohl's 142,200 (a) 8,920,206 Kroger 346,100 (a) 8,652,500 Leggett & Platt 83,700 1,843,911 Limited 182,000 3,006,640 Liz Claiborne 22,400 1,130,080 Lowe's Cos. 164,200 11,912,710 Marriott International, Cl. A 104,100 4,928,094 Mattel 183,900 3,479,388 May Department Stores 127,550 4,369,863 Maytag 32,500 950,950 McDonald's 552,100 14,939,826 NIKE, Cl. B 115,800 4,862,442 Navistar International 25,500 (a) 717,315 Nordstrom 57,100 1,059,205 Office Depot 127,100 (a) 1,319,298 PACCAR 32,700 1,681,434 RadioShack 79,300 2,418,650 Reebok International 25,000 (a) 798,750 Safeway 215,800 (a) 10,358,400 Sears, Roebuck & Co. 140,200 5,931,862 Southwest Airlines 325,125 6,011,561 Staples 194,750 (a) 3,114,053 Starbucks 162,300 (a) 3,732,900 Starwood Hotels & Resorts Worldwide 84,800 3,161,344 TJX Cos. 119,700 3,814,839 Target 383,800 13,279,480 Tiffany & Co. 62,300 2,256,506 Toys "R" Us 84,200 (a) 2,083,950 Tricon Global Restaurants 62,660 (a) 2,750,774 US Airways Group 28,600 (a) 694,980 V.F 47,800 1,738,964 Visteon 55,825 1,026,064 Wal-Mart Stores 1,908,600 93,139,680 Walgreen 434,500 14,838,175 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER CYCLICAL (CONTINUED) Wendy's International 48,500 1,238,690 Whirlpool 28,400 1,775,000 Winn-Dixie Stores 59,900 1,565,187 421,120,098 CONSUMER STAPLES--5.2% Archer-Daniels-Midland 269,750 3,506,750 Avon Products 101,300 4,688,164 Campbell Soup 174,300 4,488,225 Clorox 101,000 3,418,850 Coca-Cola 1,061,900 47,785,500 Coca-Cola Enterprises 179,400 2,933,190 Colgate-Palmolive 239,500 14,128,105 ConAgra Foods 229,300 4,542,433 Ecolab 54,500 2,232,865 Fortune Brands 65,200 2,501,071 General Mills 121,500 5,319,270 Gillette 450,200 13,051,298 H.J. Heinz 148,800 6,084,432 Hershey Foods 58,300 3,597,693 International Flavors & Fragrances 40,900 1,027,817 Kellogg 173,300 5,025,700 Kimberly-Clark 227,200 12,700,480 National Service Industries 17,500 394,975 Newell Rubbermaid 113,671 2,853,142 Pepsi Bottling Group 61,400 2,462,140 PepsiCo 625,000 27,625,000 Procter & Gamble 552,900 35,275,020 Quaker Oats 56,400 5,146,500 Ralston Purina Group 132,300 3,971,646 SUPERVALU 56,500 991,575 Sara Lee 335,800 6,360,052 Sysco 287,100 7,794,765 Tupperware 24,800 581,064 Unilever, N.V. (New York Shares) 243,989 14,534,425 Wm. Wrigley Jr. 96,400 4,516,340 249,538,487 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ ENERGY--7.6% Amerada Hess 38,100 3,078,480 Anadarko Petroleum 106,951 5,778,563 Apache 53,500 2,715,125 Baker Hughes 143,320 4,801,220 Burlington Resources 90,290 3,607,086 Chevron 273,900 24,787,950 Conoco, Cl. B 266,735 7,708,641 Devon Energy 55,200 2,898,000 Duke Energy 329,518 12,854,497 EOG Resources 49,500 1,759,725 El Paso 217,406 11,422,511 Enron 318,500 15,606,500 Exxon Mobil 1,472,669 128,637,637 Halliburton 183,200 6,521,920 Kerr-McGee 40,458 2,681,152 KeySpan 58,600 2,137,728 Kinder Morgan 48,900 2,457,225 McDermott International 26,100 304,065 Nabors Industries 62,700 (a) 2,332,440 Nicor 19,500 760,110 NiSource 88,200 2,410,506 Noble Drilling 57,300 (a) 1,876,575 ONEOK 25,400 500,380 Occidental Petroleum 158,200 4,206,538 Peoples Energy 15,100 607,020 Phillips Petroleum 109,200 6,224,400 Public Service Enterprise Group 88,800 4,342,320 Rowan Cos. 40,300 (a) 890,630 Royal Dutch Petroleum (New York Shares) 915,400 53,340,358 Schlumberger 244,700 12,883,455 Sunoco 35,800 1,311,354 Texaco 235,200 15,664,320 Tosco 65,900 2,902,895 Transocean Sedco Forex 135,700 5,597,625 USX-Marathon Group 131,700 3,886,467 Unocal 103,900 3,548,185 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ ENERGY (CONTINUED) Williams Cos. 206,900 6,817,355 369,860,958 HEALTH CARE--12.3% Abbott Laboratories 661,200 31,744,211 Allergan 56,200 4,805,100 American Home Products 561,100 32,790,684 Amgen 445,300 (a) 27,020,804 Applera - Applied Biosystems Group 90,100 2,410,175 Bausch & Lomb 22,900 829,896 Baxter International 252,900 12,392,100 Becton, Dickinson & Co. 110,000 3,936,900 Biogen 63,400 (a) 3,446,424 Biomet 76,400 3,671,784 Boston Scientific 171,400 (a) 2,913,800 Bristol-Myers Squibb 829,700 43,393,310 C.R. Bard 21,600 1,230,120 Cardinal Health 190,325 13,132,425 Chiron 81,100 (a) 4,136,100 Eli Lilly & Co. 479,800 35,505,200 Forest Laboratories 75,200 (a) 5,339,200 Guidant 131,200 (a) 4,723,200 HCA-Healthcare 229,450 10,368,846 HEALTHSOUTH 166,300 (a) 2,655,811 Humana 72,600 (a) 715,110 Johnson & Johnson 1,292,660 64,633,000 King Pharmaceuticals 73,200 (a) 3,934,500 Manor Care 43,900 (a) 1,393,825 Mckesson HBOC 121,646 4,515,500 MedImmune 90,800 (a) 4,285,760 Medtronic 516,000 23,741,160 Merck & Co. 978,900 62,561,499 Pfizer 2,694,975 107,933,749 Pharmacia 555,357 25,518,654 Schering-Plough 624,600 22,635,504 St. Jude Medical 36,600 (a) 2,196,000 Stryker 83,700 4,590,945 Tenet Healthcare 138,400 (a) 7,140,056 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (CONTINUED) UnitedHealth Group 135,400 8,360,950 Watson Pharmaceuticals 45,200 (a) 2,786,128 Wellpoint Health Networks 27,000 (a) 2,544,480 595,932,910 INTEREST SENSITIVE--22.2% AFLAC 224,500 7,069,505 Aetna 60,799 (a) 1,572,870 Allstate 309,300 13,606,107 Ambac Financial Group 45,200 2,630,640 American Express 564,800 21,914,240 American General 213,130 9,899,889 American International Group 995,087 85,577,482 Amsouth Bancorp 158,050 2,922,345 Aon 111,825 3,913,875 BB&T 173,900 6,382,130 Bank One 497,510 17,810,858 Bank of America 684,346 41,081,290 Bank of New York 314,000 15,072,000 Bear Stearns Cos. 44,827 2,643,447 CIGNA 63,900 6,122,898 Capital One Financial 89,000 5,340,000 Cendant 363,648 (a) 7,091,136 Charles Schwab 591,675 9,052,628 Charter One Financial 88,200 2,813,580 Chubb 74,800 5,791,764 Cincinnati Financial 68,600 2,709,700 Citigroup 2,146,722 113,432,790 Comerica 76,200 4,389,120 Concord EFS 102,700 (a) 5,341,427 Conseco 144,201 1,968,344 Countrywide Credit Industries 50,600 2,321,528 Equifax 61,100 2,241,148 Fannie Mae 427,000 36,359,050 Fifth Third Bancorp 245,672 14,752,604 First Union 418,890 14,636,017 FleetBoston Financial 462,398 18,241,601 Franklin Resources 112,900 5,167,433 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ INTEREST SENSITIVE (CONTINUED) Federal Home Loan Mortgage 295,700 20,699,000 General Electric 4,240,400 206,719,500 Golden West Financial 67,700 4,349,048 H&R Block 39,000 2,517,450 Hartford Financial Services Group 101,200 6,922,080 Household International 198,025 13,208,268 Huntington Bancshares 107,158 1,752,033 J.P. Morgan Chase & Co. 847,480 37,797,608 Jefferson-Pilot 64,925 3,137,176 John Hancock Financial Services 131,500 5,294,190 Keycorp 181,200 4,720,260 Lehman Brothers Holdings 105,200 8,179,300 Lincoln National 80,200 4,150,350 Loews 84,200 5,425,006 MBIA 63,250 3,521,760 MBNA 363,587 11,980,192 MGIC Investment 45,700 3,319,648 Marsh & McLennan Cos. 117,550 11,872,550 Mellon Financial 203,700 9,370,200 Merrill Lynch 358,300 21,229,275 MetLife 320,100 9,916,698 Morgan Stanley Dean Witter & Co. 475,034 30,511,434 National City 256,500 7,895,070 Northern Trust 95,000 5,937,500 PNC Financial Services Group 123,400 8,118,486 Progressive 31,500 4,258,485 Providian Financial 121,900 7,216,480 Regions Financial 97,100 3,107,200 Safeco 54,400 1,604,800 SouthTrust 145,100 3,772,600 St. Paul Cos. 91,490 4,637,628 State Street 138,900 6,874,161 Stilwell Financial 93,600 3,141,216 SunTrust Banks 124,600 8,071,588 Synovus Financial 123,800 3,884,844 T. Rowe Price Group 52,500 1,962,975 Torchmark 53,600 2,155,256 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ INTEREST SENSITIVE (CONTINUED) U.S. Bancorp 813,479 18,539,186 USA Education 69,600 5,080,800 Union Planters 58,500 2,550,600 UnumProvident 103,044 3,309,773 Wachovia 89,800 6,389,270 Washington Mutual 374,663 14,068,596 Wells Fargo 732,600 34,014,618 Zions Bancorporation 39,300 2,318,700 1,075,372,304 INTERNET--2.2% AOL Time Warner 1,891,400 (a) 100,244,200 BroadVision 116,800 (a) 584,000 Yahoo! 242,000 (a) 4,837,580 105,665,780 PRODUCER GOODS & SERVICES--7.1% Air Products & Chemicals 97,300 4,451,475 Alcan Aluminium 136,300 5,727,326 Alcoa 368,464 14,517,482 Allegheny Technologies 34,366 (a) 621,681 American Power Conversion 83,300 1,311,975 Ashland 29,800 1,194,980 Avery Dennison 47,100 2,404,455 B.F. Goodrich 44,100 1,674,918 Ball 11,800 561,208 Barrick Gold 169,100 2,561,865 Bemis 22,500 903,825 Boeing 372,424 20,706,773 Boise Cascade 24,600 865,182 Burlington Northern Santa Fe 167,200 5,044,424 CSX 91,100 3,301,464 Caterpillar 146,500 7,332,325 Centex 25,300 1,030,975 Cooper Industries 40,000 1,583,600 Crane 25,475 789,725 Deere & Co. 100,200 3,792,570 Dow Chemical 383,176 12,740,602 E.I. dupont deNemours & Co. 445,232 21,477,992 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ PRODUCER GOODS & SERVICES (CONTINUED) Eastman Chemical 32,900 1,567,027 Emerson Electric 182,900 11,065,450 Engelhard 55,800 1,439,082 FMC 13,300 (a) 911,848 FedEx 131,140 (a) 5,271,828 Fluor 33,800 1,526,070 Freeport-McMoRan Copper, Cl. B 61,400 (a) 678,470 General Dynamics 85,800 6,676,098 Genuine Parts 73,350 2,310,525 Georgia-Pacific 96,372 3,262,192 Goodyear Tire & Rubber 67,800 1,898,400 Great Lakes Chemical 21,500 663,275 Hercules 46,000 519,800 Homestake Mining 112,400 871,100 Honeywell International 345,512 12,089,465 Illinois Tool Works 129,800 8,216,340 Inco 77,500 (a) 1,337,650 Ingersoll-Rand 68,250 2,811,900 International Paper 206,183 7,360,733 KB Home 18,800 567,196 Lockheed Martin 185,400 6,869,070 Louisiana-Pacific 44,700 524,331 Masco 196,300 4,899,648 Mead 42,400 1,150,736 Minnesota Mining & Manufacturing 169,000 19,282,900 Newmont Mining 83,419 1,552,428 Norfolk Southern 164,200 3,398,940 Nucor 33,100 1,618,259 PPG Industries 71,900 3,779,783 Pactiv 67,800 (a) 908,520 Pall 52,301 1,230,643 Parker-Hannifin 49,850 2,115,634 Phelps Dodge 33,633 1,395,770 Placer Dome 139,700 1,369,060 Potlach 12,100 416,361 Praxair 68,600 3,224,200 Pulte 18,000 767,340 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ PRODUCER GOODS & SERVICES (CONTINUED) Raytheon 151,700 4,027,635 Rockwell International 78,100 2,977,172 Rohm & Haas 94,006 3,092,797 Sealed Air 35,712 (a) 1,330,272 Sherwin-Williams 66,900 1,485,180 Sigma-Aldrich 32,300 1,247,426 Snap-On 24,650 595,544 Stanley Works 36,400 1,524,432 TRW 53,300 2,185,300 Temple-Inland 21,000 1,119,090 Textron 60,200 3,313,408 Thomas & Betts 24,900 549,543 Timken 25,600 433,664 Tyco International 826,723 45,056,404 USX-U.S. Steel Group 38,000 765,700 Union Pacific 105,800 5,809,478 United Technologies 201,000 14,725,260 Vulcan Materials 43,200 2,322,000 W.W. Grainger 40,500 1,666,980 Westvaco 42,900 1,042,041 Weyerhaeuser 91,900 5,051,743 Willamette Industries 46,800 2,316,600 Worthington Industries 36,400 495,040 343,277,603 SERVICES--5.2% ALLTEL 133,600 8,184,336 Allied Waste Industries 84,200 (a) 1,572,856 American Greetings, Cl. A 27,100 298,100 Automatic Data Processing 266,500 13,245,050 Carnival 249,600 7,662,720 Cintas 72,200 3,339,250 Clear Channel Communications 250,800 (a) 15,725,160 Comcast, Cl. A 403,400 (a) 17,507,560 Computer Sciences 72,000 (a) 2,491,200 Convergys 72,900 (a) 2,205,225 Deluxe 30,200 872,780 Dow Jones & Co 36,900 2,203,299 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ SERVICES (CONTINUED) Electronic Data Systems 199,800 12,487,500 First Data 167,200 10,742,600 Fiserv 53,100 (a) 3,397,338 Gannett 112,900 7,440,110 IMS Health 125,800 3,585,300 Interpublic Group Cos. 159,000 4,666,650 Knight-Ridder 31,300 1,856,090 McGraw-Hill Cos. 83,300 5,510,295 Meredith 21,300 762,753 Moody's 67,200 2,251,200 NEXTEL Communications, Cl. A 326,600 (a) 5,715,500 New York Times, Cl. A 68,000 2,856,000 Omnicom Group 79,100 6,802,600 Paychex 159,425 6,377,000 Quintiles Transnational 49,800 (a) 1,257,450 R.R. Donnelley & Sons 50,100 1,487,970 Robert Half International 74,900 (a) 1,864,261 Ryder System 25,800 505,680 Sprint (PCS Group) 400,000 (a) 9,660,000 TMP Worldwide 45,400 (a) 2,683,594 Tribune 127,400 5,097,274 Univision Communications, Cl. A 89,000 (a) 3,807,420 Viacom, Cl. B 760,008 (a) 39,330,414 Walt Disney 892,200 25,775,657 Waste Management 266,972 8,228,077 249,456,269 TECHNOLOGY--18.1% ADC Telecommunications 333,700 (a) 2,202,420 Adobe Systems 102,100 4,798,700 Advanced Micro Devices 146,800 (a) 4,239,584 Agilent Technologies 194,950 (a) 6,335,875 Altera 165,100 (a) 4,787,900 Analog Devices 153,600 (a) 6,643,200 Andrew 34,550 (a) 637,448 Apple Computer 149,000 (a) 3,464,250 Applied Materials 347,100 (a) 17,042,610 Applied Micro Circuits 128,300 (a) 2,206,760 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ TECHNOLOGY (CONTINUED) Autodesk 23,000 857,900 Avaya 121,170 (a) 1,660,029 BMC Software 103,900 (a) 2,341,906 Broadcom, Cl. A 111,000 (a) 4,746,360 Cabletron Systems 80,600 (a) 1,841,710 Cisco Systems 3,124,500 (a) 56,865,900 Citrix Systems 78,800 (a) 2,750,120 Compaq Computer 720,972 11,167,856 Computer Associates International 246,025 8,856,900 Compuware 156,900 (a) 2,195,031 Comverse Technology 73,000 (a) 4,206,260 Conexant Systems 105,500 (a) 944,225 Corning 397,100 6,635,541 Danaher 60,800 3,404,800 Dell Computer 1,110,400 (a) 29,036,960 Dover 86,800 3,268,020 EMC 942,100 (a) 27,368,005 Eaton 29,400 2,060,940 Gateway 137,900 (a) 2,268,455 Hewlett-Packard 829,400 23,720,840 ITT Industries 37,500 1,659,375 Intel 2,870,900 83,973,825 International Business Machines 741,700 83,812,100 Intuit 89,100 (a) 3,563,109 JDS Uniphase 561,900 (a) 7,164,225 Jabil Circuit 81,700 (a) 2,521,262 KLA-Tencor 79,100 (a) 4,624,977 LSI Logic 154,300 (a) 2,900,840 Lexmark International Group, Cl. A 54,700 (a) 3,678,575 Linear Technology 135,700 6,000,654 Lucent Technologies 1,453,947 9,014,471 Maxim Integrated Products 140,200 (a) 6,198,242 Mercury Interactive 35,300 (a) 2,114,470 Micron Technology 254,500 (a) 10,459,950 Microsoft 2,297,600 (a) 167,724,800 Millipore 20,100 1,245,798 Molex 83,375 3,045,689 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ TECHNOLOGY (CONTINEUD) Motorola 937,506 15,525,099 NCR 41,200 (a) 1,936,400 National Semiconductor 74,000 (a) 2,154,880 Network Appliance 139,000 (a) 1,904,300 Nortel Networks 1,360,180 12,364,036 Northrop Grumman 36,400 2,915,640 Novell 136,000 (a) 773,840 Novellus Systems 60,800 (a) 3,452,832 Oracle 2,396,400 (a) 45,531,600 Palm 241,619 (a) 1,466,627 Parametric Technology 112,800 (a) 1,578,072 PeopleSoft 125,500 (a) 6,178,365 PerkinElmer 43,100 1,186,543 Pitney Bowes 105,400 4,439,448 Power-One 33,700 (a) 560,768 QLogic 39,300 (a) 2,532,885 QUALCOMM 323,300 (a) 18,906,584 Sabre Holdings 56,699 (a) 2,834,950 Sanmina 136,500 (a) 3,195,465 Sapient 52,500 (a) 511,875 Scientific-Atlanta 69,500 2,821,700 Siebel Systems 193,400 (a) 9,070,460 Solectron 278,900 (a) 5,103,870 Sun Microsystems 1,390,300 (a) 21,855,516 Symbol Technologies 96,700 2,146,740 Tektronix 40,000 (a) 1,086,000 Tellabs 174,700 (a) 3,368,216 Teradyne 74,400 (a) 2,462,640 Texas Instruments 741,100 23,344,650 Thermo Electron 77,400 (a) 1,704,348 Unisys 135,200 (a) 1,988,792 Veritas Software 169,683 (a) 11,289,010 Vitesse Semiconductor 78,300 (a) 1,647,432 Xerox 296,400 2,836,548 Xilinx 142,000 (a) 5,856,080 874,791,078 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES--7.3% AES 227,100 (a) 9,776,655 AT&T 1,472,976 32,405,472 Allegheny Energy 53,200 2,566,900 Ameren 58,600 2,502,220 American Electric Power 137,460 6,346,527 BellSouth 800,100 32,220,027 CINergy 67,900 2,373,105 CMS Energy 56,300 1,567,955 Calpine 127,500 (a) 4,819,500 CenturyTel 60,150 1,822,545 Citizens Communications 121,800 (a) 1,465,254 Consolidated Edison 90,500 3,601,900 Constellation Energy Group 69,900 2,977,740 DTE Energy 70,400 3,269,376 Dominion Resources 105,593 6,349,307 Dynegy, Cl. A 139,200 6,472,800 Edison International 139,000 1,549,850 Entergy 94,200 3,616,338 Exelon 136,850 8,774,822 FPL Group 75,100 4,521,771 FirstEnergy 95,600 3,074,496 GPU 51,000 1,792,650 Global Crossing 378,440 (a) 3,269,722 Mirant 144,932 (a) 4,985,661 Niagara Mohawk Power 68,300 (a) 1,208,227 PG&E 165,100 1,849,120 PPL 62,300 3,426,500 Pinnacle West Capital 36,200 1,715,880 Progress Energy 88,026 3,954,128 Qwest Communications International 709,237 22,603,383 Reliant Energy 127,039 4,091,926 SBC Communications 1,437,762 57,596,746 Sempra Energy 87,891 2,402,940 Southern 292,400 6,798,300 Sprint (FON Group) 378,400 8,082,624 TXU 109,730 5,287,889 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES (CONTINUED) Verizon Communications 1,154,610 61,771,635 WorldCom 1,232,854 (a) 17,506,527 Xcel Energy 146,500 4,167,925 354,586,343 TOTAL COMMON STOCKS (cost $3,985,921,935) 4,707,720,372 ------------------------------------------------------------------------------------------------------------------------------------ Principal SHORT-TERM INVESTMENTS--2.4% Amount ($) Value ($) ------------------------------------------------------------------------------------------------------------------------------------ REPURCHASE AGREEMENT--2.2% Greenwich Capital Markets, Tri-Party Repurchase Agreement, 3.98%, dated 6/29/2001, due 7/2/2001 in the amount of $104,934,792 (fully collateralized by $103,017,000 of various U.S. Government Agency Obligations, value $106,998,918) 104,900,000 104,900,000 U.S. TREASURY BILLS--.2% 3.76%, 7/12/2001 650,000 (b) 649,409 3.61%, 7/26/2001 1,000,000 (b) 997,800 3.47%, 8/2/2001 1,000,000 (b) 997,140 3.70%, 8/9/2001 500,000 (b) 498,215 3.87%, 8/16/2001 3,000,000 (b) 2,987,010 3.62%, 8/23/2001 2,500,000 (b) 2,487,575 3.76%, 8/30/2001 500,000 (b) 497,130 9,114,279 TOTAL SHORT-TERM INVESTMENTS (cost $114,010,369) 114,014,279 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (cost $4,099,932,304) 99.7% 4,821,734,651 CASH AND RECEIVABLES (NET) .3% 15,768,177 NET ASSETS 100.0% 4,837,502,828 (A) NON-INCOME PRODUCING. (B) PARTIALLY HELD BY THE BROKER IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN FINANCIAL FUTURES POSITIONS. SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF FINANCIAL FUTURES June 30, 2001 (Unaudited) Market Value Unrealized Covered by (Depreciation) Contracts Contracts ($) Expiration at 6/30/2001 ($) ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL FUTURES LONG Standard & Poor's 500 404 124,401,700 September 2001 (2,754,695) SEE NOTES TO FINANCIAL STATEMENTS.
The Fund STATEMENT OF ASSETS AND LIABILITIES June 30, 2001 (Unaudited) Cost Value ------------------------------------------------------------------------------ ASSETS ($): Investments in securities-- See Statement of Investments--Note 1(b) 4,099,932,304 4,821,734,651 Cash 13,279,289 Receivable for shares of Common Stock subscribed 3,598,977 Dividends and interest receivable 3,541,889 Receivable for investment securities sold 2,161,867 Receivable for futures variation margin--Note 4(a) 349,295 Prepaid expenses 146,945 4,844,812,913 -------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 982,939 Payable for investment securities purchased 5,250,795 Payable for shares of Common Stock redeemed 883,289 Accrued expenses 193,062 7,310,085 -------------------------------------------------------------------------------- NET ASSETS ($) 4,837,502,828 -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 4,112,910,74 Accumulated undistributed investment income--net 478,755 Accumulated net realized gain (loss) on investments and financial futures 5,065,672 Accumulated net unrealized appreciation (depreciation) on investments [including ($2,754,695) net unrealized (depreciation) on financial futures]--Note 4(b) 719,047,652 -------------------------------------------------------------------------------- NET ASSETS ($) 4,837,502,828 NET ASSET VALUE PER SHARE Initial Shares Service Shares -------------------------------------------------------------------------------- Net Assets ($) 4,827,208,263 10,294,565 Shares Outstanding 153,255,098 326,870 -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE ($) 31.50 31.49 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Six Months Ended June 30, 2001 (Unaudited) -------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $153,689 foreign taxes withheld at source) 29,038,549 Interest 2,003,547 TOTAL INCOME 31,042,096 EXPENSES: Management fee--Note 3(a) 5,936,539 Prospectus and shareholders' reports 164,299 Directors' fees and expenses--Note 3(d) 64,376 Professional fees 56,397 Loan commitment fees--Note 2 27,327 Registration fees 21,432 Shareholder servicing costs--Note 3(c) 11,432 Distribution fees--Note 3(b) 4,980 Miscellaneous 56,393 TOTAL EXPENSES 6,343,175 INVESTMENT INCOME--NET 24,698,921 -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments 25,063,854 Net realized gain (loss) on financial futures (11,864,567) NET REALIZED GAIN (LOSS) 13,199,287 Net unrealized appreciation (depreciation) on investments (including $3,035 net unrealized appreciation on financial futures) (394,548,983) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (381,349,696) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (356,650,775) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Six Months Ended June 30, 2001 Year Ended (Unaudited) December 31, 2000(a) -------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 24,698,921 50,558,831 Net realized gain (loss) on investments 13,199,287 80,354,312 Net unrealized appreciation (depreciation) on investments (394,548,983) (649,453,754) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (356,650,775) (518,540,611) -------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Investment income--net: Initial shares (24,849,099) (50,548,602) Service shares (27,643) -- Net realized gain on investments: Initial shares (891,476) (83,423,621) Service shares (780) -- TOTAL DIVIDENDS (25,768,998) (133,972,223) -------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold: Initial shares 532,368,401 1,497,873,041 Service shares 10,914,356 500 Dividends reinvested: Initial shares 25,740,575 133,972,223 Service shares 28,423 -- Cost of shares redeemed: Initial shares (482,822,990) (1,074,843,967) Service shares (501,430) -- INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 85,727,335 557,001,797 TOTAL INCREASE (DECREASE) IN NET ASSETS (296,692,438) (95,511,037) -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 5,134,195,266 5,229,706,303 END OF PERIOD 4,837,502,828 5,134,195,266 Undistributed investment income--net 478,755 656,576 Six Months Ended June 30, 2001 Year Ended (Unaudited) December 31, 2000(a) -------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: INITIAL SHARES Shares sold 16,479,953 39,948,205 Shares issued for dividends reinvested 840,641 3,774,732 Shares redeemed (15,085,398) (28,714,921) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 2,235,196 15,008,016 -------------------------------------------------------------------------------- SERVICE SHARES Shares sold 341,923 15 Shares issued for dividends reinvested 921 -- Shares redeemed (15,989) -- NET INCREASE (DECREASE) IN SHARES OUTSTANDING 326,855 15 (A) EFFECTIVE DECEMBER 31, 2000, SHARES OF THE FUND WERE REDESIGNATED AS INTITAL SHARES AND THE FUND COMMENCED SELLING SERVICE SHARES. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements. Six Months Ended June 30, 2001 Year Ended December 31, ---------------------------------------------------------------- INITIAL SHARES (Unaudited) 2000 1999 1998 1997 1996 ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 34.00 38.45 32.52 25.75 20.28 17.20 Investment Operations: Investment income--net .16(a) .35(a) .40(a) .37 .37 .39 Net realized and unrealized gain (loss) on investments (2.48) (3.88) 6.24 6.85 6.26 3.43 Total from Investment Operations (2.32) (3.53) 6.64 7.22 6.63 3.82 Distributions: Dividends from investment income--net (.17) (.35) (.38) (.38) (.37) (.39) Dividends from net realized gain on investments (.01) (.57) (.33) (.07) (.79) (.35) Total Distributions (.18) (.92) (.71) (.45) (1.16) (.74) Net asset value, end of period 31.50 34.00 38.45 32.52 25.75 20.28 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) (6.83)(b) (9.28) 20.60 28.21 32.96 22.54 ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .13(b) .26 .26 .26 .28 .30 Ratio of net investment income to average net assets .51(b) .95 1.13 1.35 1.66 2.24 Portfolio Turnover Rate 1.20(b) 4.97 2.64 2.40 3.53 10.92 ------------------------------------------------------------------------------------------------------------------------------------ Net Assets, end of period ($ x 1,000) 4,827,208 5,134,195 5,229,706 3,440,542 1,868,672 813,959 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (B) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended June 30, 2001 Period Ended SERVICE SHARES Unaudited) December 31, 2000(a) -------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 34.00 34.00 Investment Operations: Investment income--net .09(b) -- Net realized and unrealized gain (loss) on investments (2.45) -- Total from Investment Operations (2.36) -- Distributions: Dividends from investment income--net (.14) -- Dividends from net realized gain on investments (.01) -- Total Distributions (.15) -- Net asset value, end of period 31.49 34.00 -------------------------------------------------------------------------------- TOTAL RETURN (%) (6.95)(c) -- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .32(c) -- Ratio of net investment income to average net assets .30(c) -- Portfolio Turnover Rate 1.20(c) 4.97 -------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 10,295 1 (A) THE PORTFOLIO COMMENCED OFFERING SERVICE SHARES ON DECEMBER 31, 2000. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1--Significant Accounting Policies: Dreyfus Stock Index Fund (the "fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a non-diversified open-end management investment company, that is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The fund's investment objective is to provide investment results that correspond to the price and yield performance of publicly traded common stocks as represented by the Standard and Poor's 500 Composite Stock Price Index. The Dreyfus Corporation ("Dreyfus") serves as the fund's manager and Mellon Equity Associates ("Mellon Equity"), an affiliate of Dreyfus, serves as the fund's index manager. Dreyfus is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund's shares, which are sold without a sales charge. The fund is authorized to issue 400 million shares of $.001 par value Common Stock in each of the following classes of shares: Initial shares (250 million shares authorized) and Service shares (150 million shares authorized). Initial shares are subject to a shareholder services fee and Service shares are subject to a distribution fee. Each class of shares has identical rights and privileges, except with respect to the distribution plan and the expenses borne by each class and certain voting rights. The fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which may require the use of management estimates and assumptions. Actual results could differ from those estimates. (A) PORTFOLIO VALUATION: Investments in securities (including financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange of the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount and premium on investments, is recognized on the accrual basis. The fund may enter into repurchase agreements with financial institutions, deemed to be creditworthy by Dreyfus, subject to the seller's agreement to repurchase and the fund' s agreement to resell such securities at a mutually agreed upon price. Securities purchased subject to repurchase agreements are deposited with the fund's custodian and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the fund will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the fund maintains the right to sell the underlying securities at market value and may claim any resulting loss against the seller. (C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. Dividends from net realized capital gain are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the fund not to distribute such gain. The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) (D) 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. NOTE 2--Bank Line of Credit: The fund participates with other Dreyfus-managed funds in a $500 million redemption credit facility (the "Facility" ) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowings. During the period ended June 30, 2001, the fund did not borrow under the Facility. NOTE 3--Management Fee, Index Management Fee and Other Transactions With Affiliates: (A) Pursuant to an Management Agreement with Dreyfus, the management fee is computed at the annual rate of .245 of 1% of the value of the fund's average daily net assets, and is payable monthly. Dreyfus has agreed to pay Mellon Equity, a monthly index-management fee at the annual rate of .095 of 1% of the value of the fund' s average daily net assets. Dreyfus has undertaken from January 1, 2001 until such time as they give shareholders at least 180 days notice to the contrary that if any full fiscal year the fund's aggregate expenses exclusive of brokerage commissions, Rule 12b-1 fees, transaction fees and extraordinary expenses, exceed an annual rate of .40 of 1% of the fund's average daily net assets, the fund may deduct from the payments to be made to Dreyfus, or Dreyfus will bear, such excess expense. During the period ended June 30, 2001, there was no expense reimbursement pursuant to the undertaking. (B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing their shares, for servicing and/or maintaining Service shares shareholder accounts and for advertising and marketing for Service shares. The Plan provides payments to be made at an annual rate of .25 of 1% of the value of the Service shares average daily net assets. The Distributor may make payments to Participating Insurance Companies and brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2001, the Service shares were charged $4,980 pursuant to the Plan. (C) Under the Shareholder Services Plan, the Initial shares reimburses the Distributor an amount not to exceed an annual rate of .25 of 1% of the value of the Initial shares' average daily net assets for certain allocated expenses with respect to servicing and/or maintaining Initial shares shareholder accounts. During the period ended June 30, 2001, the Initial shares were charged $10,702 pursuant to the Shareholder Services Plan. The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended June 30, 2001, the fund was charged $618 pursuant to the transfer agency agreement. (D) Each Board member also serves a Board member of other funds within the Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not an "affiliated person" as defined in the Act receives an annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting and $500 for telephone meetings. These fees are allocated among the funds in the Fund Group. The chairman of the Board receives an additional 25% of such compensation. Subject to the fund's Emeritus Program Guidelines, Emeritus Board Members, if any, The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) receive 50% of the annual retainer fee and per meeting fee paid at the time the Board member achieves emeritus status. NOTE 4--Securities Transactions: (A) The aggregate amount of purchases and sales of investment securities, excluding short-term securities and financial futures, during the period ended June 30, 2001, amounted to $93,707,005 and $57,600,752, respectively. The fund may invest in financial futures contracts in order to gain exposure to or protect against changes in the market. The fund is exposed to market risk as a result of changes in the value of the underlying financial instruments. Investments in financial futures require the fund to "mark to market" on a daily basis, which reflects the change in the market value of the contract at the close of each day's trading. Typically, variation margin payments are received or made to reflect daily unrealized gains or losses. When the contracts are closed, the fund recognizes a realized gain or loss. These investments require initial margin deposits with a custodian, which consist of cash or cash equivalents, up to approximately 10% of the contract amount. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Contracts open at June 30, 2001 are set forth in the Statement of Financial Futures. (B) At June 30, 2001, accumulated net unrealized appreciation on investments and financial futures was $719,047,652, consisting of $1,213,761,376 gross unrealized appreciation and $494,713,724 gross unrealized depreciation. At June 30, 2001, 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). For More Information Dreyfus Stock Index Fund 200 Park Avenue New York, NY 10166 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Index Fund Manager Mellon Equity Associates 500 Grant Street Pittsburgh, PA 15258 Custodian Boston Safe Deposit and Trust Company One Boston Place Boston, MA 02109 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9263 Boston, MA 02205-8501 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call 1-800-554-4611 or 516-338-3300 BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 Attn: Institutional Servicing (c) 2001 Dreyfus Service Corporation 763SA0601