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 |
811-06325 | |||||
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Dreyfus Midcap Index Fund, Inc. |
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(Exact name of Registrant as specified in charter) |
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c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 |
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(Address of principal executive offices) (Zip code) |
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Bennett A. MacDougall, Esq. 200 Park Avenue New York, New York 10166 |
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(Name and address of agent for service) |
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Registrant's telephone number, including area code: |
(212) 922-6400 | |||||
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Date of fiscal year end:
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10/31 |
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Date of reporting period: |
04/30/17 |
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FORM N-CSR
Item 1. Reports to Stockholders.
Dreyfus Midcap Index Fund, Inc.
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SEMIANNUAL REPORT April 30, 2017 |
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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(s) only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds |
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the Fund’s Management Agreement |
FOR MORE INFORMATION
Back Cover
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The Fund |
A LETTER FROM THE CEO OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Midcap Index Fund, Inc., covering the six-month period from November 1, 2016 through April 30, 2017. 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.
Stocks advanced solidly but higher-quality bonds lost a degree of value over the reporting period amid heightened market volatility stemming from various economic and political developments. After giving back a portion of their previous gains due to uncertainty in advance of U.S. elections, equity markets rallied to a series of new highs in the wake of the election’s unexpected outcome as investors revised their expectations for U.S. fiscal, regulatory, and tax policies. Generally strong economic data and corporate earnings continued to support stock prices over the first four months of 2017. In the bond market, yields of U.S. government securities moved higher and prices fell in response to two short-term interest-rate hikes and rising longer-term rates, while lower-rated corporate-backed bonds continued to advance in anticipation of a more business-friendly market environment.
Some asset classes and industry groups seem likely to continue to benefit from a changing economic and geopolitical landscape, while others probably will face challenges as conditions evolve. Consequently, selectivity seems likely to be an important determinant of investment success in the months ahead. As always, we encourage you to discuss the implications of our observations with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Mark D. Santero
Chief Executive Officer
The Dreyfus Corporation
May 15, 2017
2
DISCUSSION OF FUND PERFORMANCE
For the period from November 1, 2016 through April 30, 2017, as provided by Thomas J. Durante, CFA, Karen Q. Wong, CFA, and Richard A. Brown, CFA, Portfolio Managers
Market and Fund Performance Overview
For the six-month period ended April 30, 2017, Dreyfus Midcap Index Fund’s Class I shares produced a total return of 15.50%, and its Investor shares returned 15.37%.1 In comparison, the S&P MidCap 400® Index (the “Index”), the fund’s benchmark, produced a total return of 15.68% for the same period.2,3
Mid-cap stocks gained ground amid better-than-expected corporate earnings reports, improving domestic growth prospects, and positive investor sentiment in the wake of the U.S. presidential election. The difference in returns between the fund and the Index was primarily the result of transaction costs and operating expenses that are not reflected in the Index’s results.
As of August 31, 2016, existing fund shares were renamed Investor shares and Class I shares were added as a new share class of the fund.
The Fund’s Investment Approach
The fund seeks to match the performance of the Index by generally investing in stocks included in the Index and in futures whose performance is tied to the Index. The fund generally invests in all 400 stocks in the Index in proportion to their weighting in the Index.
The Index is an unmanaged index of 400 common stocks of medium-sized companies. S&P weights each company’s stock in the Index by its market capitalization (i.e., the share price times the number of shares outstanding), adjusted by the number of available float shares (i.e., those shares available to public investors).
Post-Election Optimism Drove Markets Higher
While political and economic uncertainties caused U.S. equity markets to move lower in the days leading up to the 2016 presidential election, the election’s widely unexpected outcome quickly reenergized investor sentiment. Stocks rose sharply in anticipation of lower corporate taxes, reduced regulatory constraints on businesses, and increased infrastructure spending. As a result, the Index climbed sharply in November and December.
Stocks continued to gain value in early 2017, with better-than-expected corporate earnings, robust labor markets, increased bank lending activity, and encouraging global economic data driving several broad market indices, including the Index, to a series of new highs through early March. While disappointing macroeconomic data and concerns about the new administration’s ability to implement its business-friendly policies slowed the pace of the market’s advance later in March and in April, the Index ended the reporting period with solid double-digit gains.
Technology and Financial Stocks Led the Market’s Advance
Mid-cap stocks generally produced higher returns than their large-cap counterparts over the reporting period, in part due to government policy proposals that are expected to benefit domestically-oriented companies more than larger companies with significant exposure to
3
DISCUSSION OF FUND PERFORMANCE (continued)
international markets. Results were particularly strong in the financials sector, where banks led the rally in anticipation of reduced regulatory costs, higher lending volumes, and lower corporate taxes. Midsized capital markets companies and brokerage firms benefited from rising financial markets and higher assets under management, while insurers proved able to increase premiums.
In the information technology sector, early fears regarding the potential impact of trade policy proposals eased. In addition, many technology companies reported better-than-expected quarterly earnings, and electronic equipment producers and semiconductor manufacturers participated in positive trends in card reading technology, smartphones, and other innovations. The industrials sector also produced above-average results, largely on the strength of aerospace-and-defense companies expected to benefit from increased military spending and reduced restrictions on overseas weapons sales. Machinery stocks also fared well in anticipation of greater infrastructure spending and economic growth.
Only two segments of the Index produced negative absolute returns during the reporting period. The energy sector lost a degree of value when oil and gas prices moved mildly higher in early 2017, hurting drilling contractors. Other energy-related companies struggled due to unusually high oil and gas inventories during a mild winter season. In the telecommunication services sector, which comprises a relatively small part of the overall Index, results were constrained by intensifying competitive pressures from larger telecommunications companies.
Replicating the Performance of the Index
Although we do not actively manage the fund’s investments in response to macroeconomic trends, it is worth noting that the U.S. and global economic recoveries appear to have gained momentum, and corporate earnings have continued to come in higher than many analysts expected. However, the market’s currently constructive conditions could be undermined by geopolitical instability and uncertainty surrounding the new presidential administration’s ability to enact its policy proposals into law. As always, we have continued to monitor the factors considered by the fund’s investment model in light of current market conditions.
May 15, 2017
Equities 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.
Stocks of mid-cap companies often experience sharper price fluctuations than stocks of large-cap companies.
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2 Source: Lipper Inc. — The S&P MidCap 400® Index provides investors with a benchmark for midsized companies. The index measures the performance of midsized companies, reflecting the distinctive risk and return characteristics of this market segment. Investors cannot invest directly in any index.
3 “Standard & Poor’s®,” “S&P®,” and “S&P MidCap 400®” are registered trademarks of Standard & Poor’s Financial Services LLC, and have been licensed for use on behalf of the fund. The fund is not sponsored, endorsed, managed, advised, sold, or promoted by Standard & Poor’s and its affiliates and Standard & Poor’s and its affiliates make no representation regarding the advisability of investing in the fund.
4
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 Midcap Index Fund, Inc. from November 1, 2016 to April 30, 2017. 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 April 30, 2017 |
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Investor Shares |
Class I |
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Expenses paid per $1,000† |
$2.67 |
$1.34 |
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Ending value (after expenses) |
$1,153.70 |
$1,155.00 |
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 April 30,2017 | ||||||||||
Investor Shares |
Class I |
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Expenses paid per $1,000† |
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$2.51 |
$1.25 |
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Ending value (after expenses) |
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$1,022.32 |
$1,023.55 |
† Expenses are equal to the fund’s annualized expense ratio of .50% for Investor shares and .25% for Class I, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
April 30, 2017 (Unaudited)
Common Stocks - 98.7% |
Shares |
Value ($) |
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Automobiles & Components - .9% |
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Cooper Tire & Rubber Co. |
118,300 |
4,530,890 |
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Dana |
326,736 |
6,345,213 |
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Gentex |
653,674 |
13,498,368 |
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Thor Industries |
107,563 |
10,345,409 |
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34,719,880 |
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Banks - 8.2% |
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Associated Banc-Corp |
346,374 |
8,624,713 |
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BancorpSouth |
193,601 |
a |
5,895,150 |
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Bank of Hawaii |
95,598 |
7,789,325 |
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Bank of the Ozarks |
206,334 |
9,794,675 |
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Cathay General Bancorp |
167,824 |
6,385,703 |
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Chemical Financial |
159,357 |
7,561,490 |
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Commerce Bancshares |
199,024 |
10,936,369 |
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Cullen/Frost Bankers |
129,187 |
12,193,961 |
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East West Bancorp |
325,884 |
17,685,725 |
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F.N.B. |
730,018 |
10,395,456 |
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First Horizon National |
532,527 |
9,771,870 |
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Fulton Financial |
390,639 |
7,207,290 |
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Hancock Holding |
192,178 |
8,974,713 |
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International Bancshares |
131,995 |
4,936,613 |
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MB Financial |
161,375 |
6,860,051 |
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New York Community Bancorp |
1,104,360 |
14,676,944 |
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PacWest Bancorp |
272,637 |
13,465,541 |
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PrivateBancorp |
181,121 |
10,463,360 |
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Prosperity Bancshares |
158,254 |
10,634,669 |
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Signature Bank |
121,331 |
b |
16,798,277 |
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SVB Financial Group |
118,182 |
b |
20,792,941 |
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Synovus Financial |
278,485 |
11,640,673 |
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TCF Financial |
385,870 |
6,370,714 |
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Texas Capital Bancshares |
112,883 |
b |
8,590,396 |
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Trustmark |
155,244 |
5,157,206 |
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UMB Financial |
98,349 |
7,129,319 |
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Umpqua Holdings |
502,566 |
8,880,341 |
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United Bankshares |
218,151 |
8,704,225 |
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Valley National Bancorp |
602,760 |
a |
7,088,458 |
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Washington Federal |
200,195 |
6,746,571 |
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Webster Financial |
209,648 |
10,652,215 |
6
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
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Banks - 8.2% (continued) |
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Wintrust Financial |
117,495 |
8,325,696 |
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311,130,650 |
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Capital Goods - 10.6% |
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A.O. Smith |
332,898 |
17,936,544 |
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AECOM |
353,551 |
b |
12,094,980 |
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AGCO |
152,136 |
9,735,183 |
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Carlisle Companies |
145,974 |
14,800,304 |
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Crane |
112,808 |
9,014,487 |
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Curtiss-Wright |
100,838 |
9,424,319 |
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Donaldson |
300,410 |
13,902,975 |
|||
Dycom Industries |
71,798 |
b |
7,586,177 |
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EMCOR Group |
134,424 |
8,837,034 |
|||
EnerSys |
97,973 |
8,142,536 |
|||
Esterline Technologies |
66,601 |
b |
6,090,661 |
||
GATX |
90,134 |
5,399,027 |
|||
Graco |
126,706 |
13,665,242 |
|||
Granite Construction |
90,109 |
4,749,645 |
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Hubbell |
116,612 |
13,192,316 |
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Huntington Ingalls Industries |
104,006 |
20,893,765 |
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IDEX |
172,373 |
18,057,795 |
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ITT |
201,267 |
8,479,379 |
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KBR |
320,760 |
4,506,678 |
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Kennametal |
179,842 |
7,477,830 |
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KLX |
117,246 |
b |
5,545,736 |
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Lennox International |
87,975 |
14,550,185 |
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Lincoln Electric Holdings |
139,723 |
12,439,539 |
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MSC Industrial Direct, Cl. A |
102,212 |
9,151,040 |
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Nordson |
121,702 |
15,237,090 |
|||
NOW |
240,963 |
b |
4,098,781 |
||
Orbital ATK |
131,452 |
13,013,748 |
|||
Oshkosh |
169,842 |
11,785,336 |
|||
Regal Beloit |
100,462 |
7,921,429 |
|||
Rockwell Collins |
1 |
96 |
|||
Teledyne Technologies |
79,724 |
b |
10,749,187 |
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Terex |
241,685 |
8,454,141 |
|||
Timken |
158,524 |
7,648,783 |
|||
Toro |
245,291 |
15,924,292 |
|||
Trinity Industries |
344,649 |
9,271,058 |
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Valmont Industries |
50,693 |
7,723,079 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Capital Goods - 10.6% (continued) |
|||||
Wabtec |
194,911 |
16,351,084 |
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Watsco |
69,192 |
9,603,850 |
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Woodward |
126,113 |
8,534,067 |
|||
401,989,398 |
|||||
Commercial & Professional Services - 2.6% |
|||||
CDK Global |
333,393 |
21,673,879 |
|||
Clean Harbors |
117,080 |
b |
6,803,519 |
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Copart |
462,279 |
b |
14,284,421 |
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Deluxe |
109,395 |
7,866,594 |
|||
FTI Consulting |
95,489 |
b |
3,302,965 |
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Herman Miller |
135,889 |
4,497,926 |
|||
HNI |
98,826 |
4,621,104 |
|||
ManpowerGroup |
152,926 |
15,442,467 |
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MSA Safety |
70,117 |
5,458,608 |
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Pitney Bowes |
417,017 |
5,542,156 |
|||
Rollins |
215,238 |
8,357,692 |
|||
97,851,331 |
|||||
Consumer Durables & Apparel - 2.9% |
|||||
Brunswick |
202,525 |
11,493,294 |
|||
CalAtlantic Group |
162,598 |
a |
5,889,300 |
||
Carter's |
110,006 |
10,124,952 |
|||
Deckers Outdoor |
71,443 |
a,b |
4,257,288 |
||
Helen of Troy |
62,017 |
b |
5,829,598 |
||
Kate Spade & Company |
290,946 |
b |
5,062,460 |
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KB Home |
186,785 |
3,847,771 |
|||
NVR |
7,907 |
b |
16,693,654 |
||
Polaris Industries |
133,823 |
11,409,749 |
|||
Skechers USA, Cl. A |
300,937 |
b |
7,598,659 |
||
Tempur Sealy International |
107,360 |
b |
5,040,552 |
||
Toll Brothers |
335,177 |
12,063,020 |
|||
TRI Pointe Group |
356,463 |
b |
4,437,964 |
||
Tupperware Brands |
114,545 |
8,225,476 |
|||
111,973,737 |
|||||
Consumer Services - 3.6% |
|||||
Brinker International |
112,308 |
4,962,891 |
|||
Buffalo Wild Wings |
41,043 |
b |
6,466,325 |
||
Cheesecake Factory |
99,495 |
6,383,599 |
|||
Churchill Downs |
27,895 |
4,652,886 |
|||
Cracker Barrel Old Country Store |
54,835 |
8,784,019 |
8
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Consumer Services - 3.6% (continued) |
|||||
DeVry Education Group |
128,270 |
4,855,020 |
|||
Domino's Pizza |
108,578 |
19,694,963 |
|||
Dunkin' Brands Group |
209,351 |
11,694,347 |
|||
Graham Holdings, Cl. B |
10,566 |
6,357,562 |
|||
International Speedway, Cl. A |
57,499 |
2,133,213 |
|||
Jack in the Box |
72,470 |
7,389,766 |
|||
Panera Bread, Cl. A |
48,622 |
b |
15,203,127 |
||
Papa John's International |
60,150 |
4,755,459 |
|||
Service Corporation International |
427,645 |
13,778,722 |
|||
Sotheby's |
103,336 |
b |
4,893,993 |
||
Texas Roadhouse |
145,063 |
6,800,553 |
|||
Wendy's |
445,493 |
a |
6,566,567 |
||
135,373,012 |
|||||
Diversified Financials - 3.3% |
|||||
Dun & Bradstreet |
82,853 |
9,081,517 |
|||
Eaton Vance |
261,331 |
11,218,940 |
|||
FactSet Research Systems |
89,154 |
14,555,282 |
|||
Federated Investors, Cl. B |
206,807 |
5,546,564 |
|||
Janus Capital Group |
327,031 |
4,467,243 |
|||
Legg Mason |
199,780 |
7,467,776 |
|||
MarketAxess Holdings |
85,064 |
16,376,521 |
|||
MSCI |
205,323 |
20,598,003 |
|||
SEI Investments |
302,309 |
15,330,089 |
|||
SLM |
976,893 |
b |
12,250,238 |
||
Stifel Financial |
152,768 |
b |
7,465,772 |
||
124,357,945 |
|||||
Energy - 3.4% |
|||||
CONSOL Energy |
400,678 |
b |
6,082,292 |
||
Diamond Offshore Drilling |
145,242 |
b |
2,094,390 |
||
Dril-Quip |
84,754 |
b |
4,369,069 |
||
Energen |
220,936 |
b |
11,486,463 |
||
Ensco, Cl. A |
679,650 |
5,362,438 |
|||
Gulfport Energy |
355,604 |
b |
5,646,992 |
||
HollyFrontier |
403,904 |
11,365,859 |
|||
Nabors Industries |
650,591 |
6,727,111 |
|||
Noble |
548,044 |
2,630,611 |
|||
Oceaneering International |
222,066 |
5,860,322 |
|||
Oil States International |
116,985 |
b |
3,480,304 |
||
Patterson-UTI Energy |
379,084 |
8,205,273 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Energy - 3.4% (continued) |
|||||
PBF Energy, Cl. A |
212,859 |
4,751,013 |
|||
QEP Resources |
537,540 |
b |
6,348,347 |
||
Rowan Cos., Cl. A |
280,526 |
b |
3,947,001 |
||
SM Energy |
219,410 |
4,956,472 |
|||
Southwestern Energy |
1,135,002 |
b |
8,523,865 |
||
Superior Energy Services |
342,546 |
b |
4,137,956 |
||
Western Refining |
177,508 |
6,122,251 |
|||
World Fuel Services |
159,072 |
5,858,622 |
|||
WPX Energy |
896,656 |
b |
10,697,106 |
||
128,653,757 |
|||||
Food & Staples Retailing - .6% |
|||||
Casey's General Stores |
88,699 |
9,940,497 |
|||
Sprouts Farmers Market |
301,975 |
b |
6,737,062 |
||
United Natural Foods |
114,224 |
b |
4,743,723 |
||
21,421,282 |
|||||
Food, Beverage & Tobacco - 2.5% |
|||||
Boston Beer, Cl. A |
20,817 |
b |
3,004,934 |
||
Dean Foods |
201,985 |
3,987,184 |
|||
Flowers Foods |
412,266 |
8,084,536 |
|||
Hain Celestial Group |
232,667 |
b |
8,606,352 |
||
Ingredion |
163,099 |
20,194,918 |
|||
Lamb Weston Holdings |
313,840 |
13,102,820 |
|||
Lancaster Colony |
43,959 |
5,534,438 |
|||
Post Holdings |
146,263 |
b |
12,313,882 |
||
Snyder's-Lance |
192,308 |
6,780,780 |
|||
Tootsie Roll Industries |
39,636 |
a |
1,480,405 |
||
TreeHouse Foods |
129,321 |
a,b |
11,328,520 |
||
94,418,769 |
|||||
Health Care Equipment & Services - 6.2% |
|||||
ABIOMED |
91,621 |
b |
11,940,049 |
||
Acadia Healthcare |
171,673 |
b |
7,481,509 |
||
Align Technology |
170,518 |
b |
22,955,133 |
||
Allscripts Healthcare Solutions |
412,363 |
b |
4,935,985 |
||
Globus Medical, Cl. A |
162,830 |
b |
4,938,634 |
||
Halyard Health |
104,535 |
b |
4,129,133 |
||
HealthSouth |
202,228 |
9,484,493 |
|||
Hill-Rom Holdings |
134,663 |
10,185,909 |
|||
LifePoint Health |
90,128 |
b |
5,601,455 |
||
LivaNova |
99,982 |
b |
5,269,051 |
10
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Health Care Equipment & Services - 6.2% (continued) |
|||||
Masimo |
100,787 |
b |
10,354,856 |
||
MEDNAX |
212,083 |
b |
12,801,330 |
||
Molina Healthcare |
94,859 |
b |
4,723,030 |
||
NuVasive |
113,633 |
b |
8,239,529 |
||
Owens & Minor |
136,981 |
4,746,392 |
|||
ResMed |
320,018 |
21,758,024 |
|||
STERIS |
191,293 |
14,117,423 |
|||
Teleflex |
101,474 |
20,993,956 |
|||
Tenet Healthcare |
184,323 |
b |
2,888,341 |
||
VCA |
183,630 |
b |
16,814,999 |
||
WellCare Health Plans |
100,757 |
b |
15,457,131 |
||
West Pharmaceutical Services |
165,689 |
15,248,359 |
|||
235,064,721 |
|||||
Household & Personal Products - .8% |
|||||
Avon Products |
996,306 |
b |
4,832,084 |
||
Edgewell Personal Care |
130,012 |
b |
9,294,558 |
||
Energizer Holdings |
140,353 |
8,313,108 |
|||
Nu Skin Enterprises, Cl. A |
112,120 |
6,192,388 |
|||
28,632,138 |
|||||
Insurance - 4.9% |
|||||
Alleghany |
34,883 |
b |
21,303,048 |
||
American Financial Group |
165,245 |
16,079,991 |
|||
Aspen Insurance Holdings |
135,632 |
7,100,335 |
|||
Brown & Brown |
258,332 |
11,082,443 |
|||
CNO Financial Group |
390,756 |
8,233,229 |
|||
Everest Re Group |
92,378 |
23,252,466 |
|||
First American Financial |
250,629 |
10,879,805 |
|||
Genworth Financial, Cl. A |
1,115,560 |
b |
4,506,862 |
||
Hanover Insurance Group |
95,450 |
8,425,371 |
|||
Kemper |
111,870 |
4,402,085 |
|||
Mercury General |
82,492 |
5,072,433 |
|||
Old Republic International |
556,559 |
11,509,640 |
|||
Primerica |
103,526 |
8,675,479 |
|||
Reinsurance Group of America |
145,397 |
18,180,441 |
|||
RenaissanceRe Holdings |
92,180 |
13,105,231 |
|||
W.R. Berkley |
219,237 |
14,903,731 |
|||
186,712,590 |
|||||
Materials - 7.9% |
|||||
Allegheny Technologies |
243,038 |
4,459,747 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Materials - 7.9% (continued) |
|||||
AptarGroup |
141,952 |
11,398,746 |
|||
Ashland Global Holdings |
140,627 |
17,367,434 |
|||
Bemis |
208,771 |
9,380,081 |
|||
Cabot |
140,777 |
8,473,368 |
|||
Carpenter Technology |
104,406 |
4,238,884 |
|||
Chemours |
414,057 |
16,682,357 |
|||
Commercial Metals |
259,102 |
4,829,661 |
|||
Compass Minerals International |
75,805 |
5,003,130 |
|||
Domtar |
143,370 |
5,684,620 |
|||
Eagle Materials |
109,568 |
10,515,241 |
|||
Greif, Cl. A |
57,925 |
3,395,564 |
|||
Louisiana-Pacific |
329,184 |
b |
8,473,196 |
||
Minerals Technologies |
78,385 |
6,168,899 |
|||
NewMarket |
20,933 |
9,853,163 |
|||
Olin |
376,535 |
12,098,070 |
|||
Owens-Illinois |
367,030 |
b |
8,008,595 |
||
Packaging Corporation of America |
212,883 |
21,028,583 |
|||
PolyOne |
189,833 |
7,443,352 |
|||
Reliance Steel & Aluminum |
164,789 |
12,988,669 |
|||
Royal Gold |
147,884 |
10,452,441 |
|||
RPM International |
301,949 |
15,870,439 |
|||
Scotts Miracle-Gro |
100,937 |
9,750,514 |
|||
Sensient Technologies |
99,744 |
8,159,059 |
|||
Silgan Holdings |
84,584 |
5,127,482 |
|||
Sonoco Products |
223,495 |
11,691,023 |
|||
Steel Dynamics |
547,678 |
19,793,083 |
|||
United States Steel |
396,526 |
8,850,460 |
|||
Valspar |
165,204 |
18,575,538 |
|||
Worthington Industries |
98,482 |
4,283,967 |
|||
300,045,366 |
|||||
Media - 1.4% |
|||||
AMC Networks, Cl. A |
130,847 |
b |
7,808,949 |
||
Cable One |
10,637 |
7,252,945 |
|||
Cinemark Holdings |
239,352 |
10,340,006 |
|||
John Wiley & Sons, Cl. A |
100,938 |
5,319,433 |
|||
Live Nation Entertainment |
299,466 |
b |
9,630,827 |
||
Meredith |
82,556 |
4,833,654 |
|||
New York Times, Cl. A |
280,244 |
4,049,526 |
12
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Media - 1.4% (continued) |
|||||
Time |
227,172 |
3,453,014 |
|||
52,688,354 |
|||||
Pharmaceuticals, Biotechnology & Life Sciences - 2.5% |
|||||
Akorn |
198,480 |
b |
6,639,156 |
||
Bio-Rad Laboratories, Cl. A |
47,079 |
b |
10,275,463 |
||
Bio-Techne |
83,712 |
8,963,881 |
|||
Bioverativ |
245,564 |
14,441,619 |
|||
Catalent |
279,892 |
b |
8,195,238 |
||
Charles River Laboratories International |
106,656 |
b |
9,567,043 |
||
Endo International |
448,899 |
b |
5,103,982 |
||
INC Research Holdings, Cl. A |
121,136 |
b |
5,451,120 |
||
PAREXEL International |
118,766 |
b |
7,580,834 |
||
Prestige Brands Holdings |
120,955 |
b |
6,944,027 |
||
United Therapeutics |
102,325 |
b |
12,862,252 |
||
96,024,615 |
|||||
Real Estate - 9.7% |
|||||
Alexander & Baldwin |
103,440 |
4,759,274 |
|||
American Campus Communities |
303,143 |
c |
14,365,947 |
||
Camden Property Trust |
197,872 |
c |
16,290,802 |
||
Care Capital Properties |
187,845 |
c |
5,047,395 |
||
CoreCivic |
268,379 |
9,245,657 |
|||
Corporate Office Properties Trust |
225,246 |
c |
7,374,554 |
||
Cousins Properties |
948,077 |
c |
8,049,174 |
||
CyrusOne |
176,504 |
a,c |
9,644,179 |
||
DCT Industrial Trust |
209,332 |
10,583,826 |
|||
Douglas Emmett |
330,927 |
c |
12,466,020 |
||
Duke Realty |
803,359 |
c |
22,277,145 |
||
Education Realty Trust |
164,130 |
c |
6,363,320 |
||
EPR Properties |
145,091 |
c |
10,549,567 |
||
First Industrial Realty Trust |
263,072 |
c |
7,402,846 |
||
GEO Group |
276,057 |
c |
9,198,219 |
||
Healthcare Realty Trust |
265,530 |
c |
8,709,384 |
||
Highwoods Properties |
231,436 |
c |
11,775,464 |
||
Hospitality Properties Trust |
373,918 |
c |
11,901,810 |
||
Jones Lang LaSalle |
103,050 |
11,836,323 |
|||
Kilroy Realty |
221,039 |
c |
15,589,881 |
||
Lamar Advertising, Cl. A |
187,302 |
a,c |
13,498,855 |
||
LaSalle Hotel Properties |
255,012 |
c |
7,283,143 |
||
Liberty Property Trust |
334,420 |
c |
13,567,419 |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Real Estate - 9.7% (continued) |
|||||
Life Storage |
105,301 |
c |
8,254,545 |
||
Mack-Cali Realty |
201,501 |
c |
5,450,602 |
||
Medical Properties Trust |
797,630 |
c |
10,425,024 |
||
National Retail Properties |
332,932 |
c |
14,056,389 |
||
Omega Healthcare Investors |
447,370 |
c |
14,763,210 |
||
Potlatch |
92,261 |
c |
4,156,358 |
||
Quality Care Properties |
212,327 |
3,683,873 |
|||
Rayonier |
275,904 |
c |
7,786,011 |
||
Senior Housing Properties Trust |
540,827 |
c |
11,638,597 |
||
Tanger Factory Outlet Centers |
216,662 |
c |
6,757,688 |
||
Taubman Centers |
137,050 |
c |
8,572,477 |
||
Uniti Group |
345,256 |
9,480,730 |
|||
Urban Edge Properties |
205,822 |
c |
5,248,461 |
||
Washington Prime Group |
422,276 |
c |
3,716,029 |
||
Weingarten Realty Investors |
268,644 |
c |
8,803,464 |
||
370,573,662 |
|||||
Retailing - 2.8% |
|||||
Aaron's |
142,693 |
5,128,386 |
|||
American Eagle Outfitters |
381,925 |
5,381,323 |
|||
Big Lots |
101,423 |
5,120,847 |
|||
Cabela's |
116,601 |
b |
6,366,415 |
||
Chico's FAS |
295,798 |
4,087,928 |
|||
CST Brands |
171,486 |
8,281,059 |
|||
Dick's Sporting Goods |
200,358 |
10,128,097 |
|||
Dillard's, Cl. A |
57,439 |
3,180,397 |
|||
GameStop, Cl. A |
228,531 |
5,185,368 |
|||
HSN |
71,603 |
2,642,151 |
|||
J.C. Penney |
699,620 |
a,b |
3,763,956 |
||
Murphy USA |
80,753 |
b |
5,617,986 |
||
Office Depot |
1,193,010 |
5,929,260 |
|||
Pool |
93,136 |
11,140,928 |
|||
Sally Beauty Holdings |
325,612 |
b |
6,193,140 |
||
The Michaels Companies |
237,685 |
b |
5,552,322 |
||
Urban Outfitters |
198,468 |
b |
4,540,948 |
||
Williams-Sonoma |
182,972 |
9,889,637 |
|||
108,130,148 |
|||||
Semiconductors & Semiconductor Equipment - 2.4% |
|||||
Cirrus Logic |
146,408 |
b |
9,421,355 |
||
Cree |
224,941 |
b |
4,921,709 |
14
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Semiconductors & Semiconductor Equipment - 2.4% (continued) |
|||||
Cypress Semiconductor |
746,971 |
a |
10,465,064 |
||
First Solar |
175,318 |
b |
5,180,647 |
||
Integrated Device Technology |
301,965 |
b |
7,244,140 |
||
Microsemi |
260,786 |
b |
12,241,295 |
||
Monolithic Power Systems |
86,449 |
7,910,083 |
|||
Silicon Laboratories |
93,978 |
b |
6,686,535 |
||
Synaptics |
79,157 |
a,b |
4,335,429 |
||
Teradyne |
451,168 |
15,912,695 |
|||
Versum Materials |
243,768 |
7,805,451 |
|||
92,124,403 |
|||||
Software & Services - 7.5% |
|||||
ACI Worldwide |
268,489 |
b |
5,769,829 |
||
Acxiom |
177,368 |
b |
5,125,935 |
||
ANSYS |
193,031 |
b |
21,264,295 |
||
Broadridge Financial Solutions |
268,777 |
18,798,263 |
|||
Cadence Design Systems |
639,565 |
b |
20,830,632 |
||
CommVault Systems |
93,812 |
b |
4,732,815 |
||
Convergys |
212,242 |
4,777,567 |
|||
CoreLogic |
193,421 |
b |
8,266,814 |
||
DST Systems |
70,984 |
8,738,840 |
|||
Fair Isaac |
70,815 |
9,594,016 |
|||
Fortinet |
339,131 |
b |
13,226,109 |
||
j2 Global |
109,828 |
9,910,879 |
|||
Jack Henry & Associates |
176,473 |
17,103,763 |
|||
Leidos Holdings |
322,882 |
17,002,966 |
|||
LogMeIn |
118,954 |
13,441,802 |
|||
Manhattan Associates |
157,904 |
b |
7,372,538 |
||
MAXIMUS |
145,414 |
8,868,800 |
|||
NeuStar, Cl. A |
123,691 |
b |
4,106,541 |
||
PTC |
261,709 |
b |
14,145,371 |
||
Sabre |
461,531 |
10,804,441 |
|||
Science Applications International |
99,412 |
7,256,082 |
|||
Take-Two Interactive Software |
230,710 |
b |
14,500,123 |
||
Tyler Technologies |
75,827 |
b |
12,404,539 |
||
Ultimate Software Group |
67,096 |
b |
13,598,346 |
||
WebMD Health |
84,735 |
b |
4,595,179 |
||
WEX |
86,434 |
b |
8,769,594 |
||
285,006,079 |
15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Technology Hardware & Equipment - 6.6% |
|||||
3D Systems |
246,643 |
a,b |
3,904,359 |
||
ARRIS International |
428,425 |
b |
11,134,766 |
||
Arrow Electronics |
201,039 |
b |
14,173,249 |
||
Avnet |
293,278 |
11,346,926 |
|||
Belden |
94,603 |
6,593,829 |
|||
Brocade Communications Systems |
928,194 |
11,667,399 |
|||
Ciena |
316,578 |
b |
7,252,802 |
||
Cognex |
194,531 |
16,601,276 |
|||
Coherent |
55,915 |
b |
12,055,274 |
||
Diebold Nixdorf |
171,868 |
4,846,678 |
|||
InterDigital |
77,242 |
6,944,056 |
|||
IPG Photonics |
85,345 |
b |
10,780,780 |
||
Jabil Circuit |
413,346 |
11,995,301 |
|||
Keysight Technologies |
416,093 |
b |
15,574,361 |
||
Knowles |
198,466 |
b |
3,518,802 |
||
Littelfuse |
50,834 |
7,836,061 |
|||
National Instruments |
238,232 |
8,316,679 |
|||
NCR |
281,841 |
b |
11,625,941 |
||
NetScout Systems |
205,924 |
b |
7,753,039 |
||
Plantronics |
74,394 |
4,061,912 |
|||
SYNNEX |
65,471 |
7,099,021 |
|||
Tech Data |
78,599 |
b |
7,517,994 |
||
Trimble |
570,174 |
b |
20,201,265 |
||
VeriFone Systems |
256,026 |
b |
4,746,722 |
||
ViaSat |
118,752 |
a,b |
7,603,691 |
||
Vishay Intertechnology |
299,469 |
a |
4,896,318 |
||
Zebra Technologies, Cl. A |
120,413 |
b |
11,351,334 |
||
251,399,835 |
|||||
Telecommunication Services - .3% |
|||||
Frontier Communications |
2,635,280 |
a |
4,954,326 |
||
Telephone & Data Systems |
211,638 |
5,811,579 |
|||
10,765,905 |
|||||
Transportation - 1.7% |
|||||
Avis Budget Group |
196,202 |
b |
5,984,161 |
||
Genesee & Wyoming, Cl. A |
139,720 |
b |
9,467,427 |
||
JetBlue Airways |
761,970 |
b |
16,633,805 |
||
Kirby |
121,392 |
b |
8,570,275 |
||
Landstar System |
93,731 |
8,009,314 |
|||
Old Dominion Freight Line |
156,671 |
13,868,517 |
16
Common Stocks - 98.7% (continued) |
Shares |
Value ($) |
|||
Transportation - 1.7% (continued) |
|||||
Werner Enterprises |
98,984 |
2,702,263 |
|||
65,235,762 |
|||||
Utilities - 5.4% |
|||||
Aqua America |
403,740 |
13,359,757 |
|||
Atmos Energy |
237,687 |
19,257,401 |
|||
Black Hills |
119,739 |
8,144,647 |
|||
Great Plains Energy |
489,880 |
14,495,549 |
|||
Hawaiian Electric Industries |
246,380 |
a |
8,258,658 |
||
IDACORP |
114,115 |
9,645,000 |
|||
MDU Resources Group |
444,528 |
11,957,803 |
|||
National Fuel Gas |
194,358 |
10,763,546 |
|||
New Jersey Resources |
193,970 |
7,826,689 |
|||
NorthWestern |
110,536 |
6,607,842 |
|||
OGE Energy |
451,484 |
15,702,614 |
|||
ONE Gas |
117,909 |
8,115,676 |
|||
PNM Resources |
178,660 |
6,655,085 |
|||
Southwest Gas Holdings |
108,399 |
9,079,500 |
|||
UGI |
390,790 |
19,602,026 |
|||
Vectren |
187,659 |
11,150,698 |
|||
Westar Energy |
321,060 |
16,704,752 |
|||
WGL Holdings |
116,739 |
9,626,298 |
|||
206,953,541 |
|||||
Total Common Stocks (cost $2,559,611,635) |
3,751,246,880 |
||||
Short-Term Investments - .0% |
Principal Amount ($) |
Value ($) |
|||
U.S. Treasury Bills |
|||||
0.75%, 6/15/17 |
2,305,000 |
d |
2,303,126 |
||
Other Investment - 1.3% |
Shares |
Value ($) |
|||
Registered Investment Company; |
|||||
Dreyfus Institutional Preferred Government Plus Money Market Fund |
48,314,669 |
e |
48,314,669 |
17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Investment of Cash Collateral for Securities Loaned - .4% |
Shares |
Value ($) |
|||
Registered Investment Company; |
|||||
Dreyfus Institutional Preferred Money Market Fund, Hamilton Shares |
15,015,557 |
e |
15,015,557 |
||
Total Investments (cost $2,625,244,686) |
100.4% |
3,816,880,232 |
|||
Liabilities, Less Cash and Receivables |
(.4%) |
(15,165,999) |
|||
Net Assets |
100.0% |
3,801,714,233 |
a Security, or portion thereof, on loan. At April 30, 2017, the value of the fund’s securities on loan was $61,361,452 and the value of the collateral held by the fund was $65,227,898, consisting of cash collateral of $15,015,557 and U.S. Government & Agency securities valued at $50,212,341.
b Non-income producing security.
c Investment in real estate investment trust.
d Held by or on behalf of a counterparty for open futures contracts.
e Investment in affiliated money market mutual fund.
18
Portfolio Summary (Unaudited) † |
Value (%) |
Capital Goods |
10.6 |
Real Estate |
9.7 |
Banks |
8.2 |
Materials |
7.9 |
Software & Services |
7.5 |
Technology Hardware & Equipment |
6.6 |
Health Care Equipment & Services |
6.2 |
Utilities |
5.4 |
Insurance |
4.9 |
Consumer Services |
3.6 |
Energy |
3.4 |
Diversified Financials |
3.3 |
Consumer Durables & Apparel |
2.9 |
Retailing |
2.8 |
Commercial & Professional Services |
2.6 |
Pharmaceuticals, Biotechnology & Life Sciences |
2.5 |
Food, Beverage & Tobacco |
2.5 |
Semiconductors & Semiconductor Equipment |
2.4 |
Short-Term/Money Market Investments |
1.7 |
Transportation |
1.7 |
Media |
1.4 |
Automobiles & Components |
.9 |
Household & Personal Products |
.8 |
Food & Staples Retailing |
.6 |
Telecommunication Services |
.3 |
100.4 |
† Based on net assets.
See notes to financial statements.
19
STATEMENT OF FUTURES
April 30, 2017 (Unaudited)
Contracts |
Market Value Covered by Contracts ($) |
Expiration |
Unrealized Appreciation ($) |
|||
Futures Long |
||||||
E-mini Standard & Poor's Midcap |
295 |
51,035,000 |
June 2017 |
473,538 |
||
Gross Unrealized Appreciation |
473,538 |
See notes to financial statements.
20
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2017 (Unaudited)
|
|
|
|
|
|
|
|
|
|
Cost |
|
Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
|
| ||
Unaffiliated issuers |
|
2,561,914,460 |
|
3,753,550,006 |
| |
Affiliated issuers |
|
63,330,226 |
|
63,330,226 |
| |
Cash |
|
|
|
|
3,450,890 |
|
Receivable for investment securities sold |
|
|
|
|
3,359,975 |
|
Receivable for shares of Common Stock subscribed |
|
|
|
|
2,238,145 |
|
Dividends and securities lending income receivable |
|
|
|
|
1,979,765 |
|
Other assets |
|
|
|
|
66,473 |
|
|
|
|
|
|
3,827,975,480 |
|
Liabilities ($): |
|
|
|
| ||
Due to The Dreyfus Corporation and affiliates—Note 3(b) |
|
|
|
|
1,330,046 |
|
Liability for securities on loan—Note 1(b) |
|
|
|
|
15,015,557 |
|
Payable for investment securities purchased |
|
|
|
|
6,572,306 |
|
Payable for shares of Common Stock redeemed |
|
|
|
|
2,820,193 |
|
Payable for futures variation margin—Note 4 |
|
|
|
|
519,145 |
|
Accrued expenses |
|
|
|
|
4,000 |
|
|
|
|
|
|
26,261,247 |
|
Net Assets ($) |
|
|
3,801,714,233 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
|
2,488,501,870 |
|
Accumulated undistributed investment income—net |
|
|
|
|
11,112,787 |
|
Accumulated net realized gain (loss) on investments |
|
|
|
|
109,990,492 |
|
Accumulated net unrealized appreciation (depreciation) |
|
|
|
1,192,109,084 |
| |
Net Assets ($) |
|
|
3,801,714,233 |
|
Net Asset Value Per Share |
Investor Shares |
Class I |
|
Net Assets ($) |
2,878,822,149 |
922,892,084 |
|
Shares Outstanding |
78,566,297 |
25,228,951 |
|
Net Asset Value Per Share ($) |
36.64 |
36.58 |
|
See notes to financial statements. |
21
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2017 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends: |
|
|
|
| ||
Unaffiliated issuers |
|
|
27,947,543 |
| ||
Affiliated issuers |
|
|
136,794 |
| ||
Income from securities lending—Note 1(b) |
|
|
532,402 |
| ||
Interest |
|
|
6,468 |
| ||
Total Income |
|
|
28,623,207 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
|
4,477,204 |
| ||
Shareholder servicing costs—Note 3(b) |
|
|
3,505,788 |
| ||
Directors’ fees—Note 3(a,c) |
|
|
148,755 |
| ||
Loan commitment fees—Note 2 |
|
|
37,644 |
| ||
Interest expense—Note 2 |
|
|
1,073 |
| ||
Total Expenses |
|
|
8,170,464 |
| ||
Less—Directors’ fees reimbursed by Dreyfus—Note 3(a) |
|
|
(148,755) |
| ||
Net Expenses |
|
|
8,021,709 |
| ||
Investment Income—Net |
|
|
20,601,498 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments |
137,066,316 |
| ||||
Net realized gain (loss) on futures |
3,651,538 |
| ||||
Net Realized Gain (Loss) |
|
|
140,717,854 |
| ||
Net unrealized appreciation (depreciation) on investments |
|
|
331,939,066 |
| ||
Net unrealized appreciation (depreciation) on futures |
|
|
1,309,543 |
| ||
Net Unrealized Appreciation (Depreciation) |
|
|
333,248,609 |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
|
473,966,463 |
| ||
Net Increase in Net Assets Resulting from Operations |
|
494,567,961 |
| |||
See notes to financial statements. |
22
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
Six Months Ended |
|
|
|
Year Ended |
|
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
|
20,601,498 |
|
|
|
38,435,057 |
| |
Net realized gain (loss) on investments |
|
140,717,854 |
|
|
|
306,785,191 |
| ||
Net unrealized appreciation (depreciation) |
|
333,248,609 |
|
|
|
(171,325,259) |
| ||
Net Increase (Decrease) in Net Assets |
494,567,961 |
|
|
|
173,894,989 |
| |||
Distributions to Shareholders from ($): |
|
|
|
|
|
|
|
| |
Investment income—net: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
|
(26,534,814) |
|
|
|
(36,004,235) |
| |
Class I |
|
|
(10,489,747) |
|
|
|
- |
| |
Net realized gain on investments: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
|
(235,966,420) |
|
|
|
(329,464,990) |
| |
Class I |
|
|
(72,401,716) |
|
|
|
- |
| |
Total Distributions |
|
|
(345,392,697) |
|
|
|
(365,469,225) |
| |
Capital Stock Transactions ($): |
|
|
|
|
|
|
|
| |
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
|
470,378,474 |
|
|
|
784,480,251 |
| |
Class I |
|
|
941,783,181 |
|
|
|
6,001,720 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
|
258,429,799 |
|
|
|
317,581,364 |
| |
Class I |
|
|
35,405,826 |
|
|
|
- |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
|
(1,200,845,251) |
|
|
|
(1,022,196,189) |
| |
Class I |
|
|
(50,293,869) |
|
|
|
(27,973) |
| |
Increase (Decrease) in Net Assets |
454,858,160 |
|
|
|
85,839,173 |
| |||
Total Increase (Decrease) in Net Assets |
604,033,424 |
|
|
|
(105,735,063) |
| |||
Net Assets ($): |
|
|
|
|
|
|
|
| |
Beginning of Period |
|
|
3,197,680,809 |
|
|
|
3,303,415,872 |
| |
End of Period |
|
|
3,801,714,233 |
|
|
|
3,197,680,809 |
| |
Undistributed investment income—net |
11,112,787 |
|
|
|
27,535,850 |
| |||
Capital Share Transactions (Shares): |
|
|
|
|
|
|
|
| |
Investor Sharesb |
|
|
|
|
|
|
|
| |
Shares sold |
|
|
12,991,277 |
|
|
|
23,191,078 |
| |
Shares issued for distributions reinvested |
|
|
7,363,563 |
|
|
|
9,652,279 |
| |
Shares redeemed |
|
|
(32,545,007) |
|
|
|
(29,721,816) |
| |
Net Increase (Decrease) in Shares Outstanding |
(12,190,167) |
|
|
|
3,121,541 |
| |||
Class Ib |
|
|
|
|
|
|
|
| |
Shares sold |
|
|
25,419,413 |
|
|
|
167,576 |
| |
Shares issued for distributions reinvested |
|
|
1,011,414 |
|
|
|
- |
| |
Shares redeemed |
|
|
(1,368,676) |
|
|
|
(776) |
| |
Net Increase (Decrease) in Shares Outstanding |
25,062,151 |
|
|
|
166,800 |
| |||
a On August 31, 2016, the fund redesignated existing shares as Investor shares and commenced offering Class I shares. |
|||||||||
b During the period ended April 30, 2017, 5,310 Class I shares representing $186,611 were exchanged for 5,297 Investor shares. |
|||||||||
See notes to financial statements. |
23
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s financial statements.
Six Months Ended |
||||||||||
April 30, 2017 |
Year Ended October 31, | |||||||||
Investor Shares |
(Unaudited) |
2016a |
2015 |
2014 |
2013 |
2012 | ||||
Per Share Data ($): |
||||||||||
Net asset value, |
35.17 |
37.70 |
39.13 |
36.81 |
29.10 |
27.46 | ||||
Investment Operations: |
||||||||||
Investment income—netb |
.20 |
.42 |
.39 |
.37 |
.35 |
.26 | ||||
Net realized and unrealized |
5.03 |
1.45 |
.81 |
3.64 |
8.80 |
2.72 | ||||
Total from Investment Operations |
5.23 |
1.87 |
1.20 |
4.01 |
9.15 |
2.98 | ||||
Distributions: |
||||||||||
Dividends from investment |
(.38) |
(.43) |
(.40) |
(.32) |
(.34) |
(.20) | ||||
Dividends from net realized |
(3.38) |
(3.97) |
(2.23) |
(1.37) |
(1.10) |
(1.14) | ||||
Total Distributions |
(3.76) |
(4.40) |
(2.63) |
(1.69) |
(1.44) |
(1.34) | ||||
Net asset value, end of period |
36.64 |
35.17 |
37.70 |
39.13 |
36.81 |
29.10 | ||||
Total Return (%) |
15.37c |
5.79 |
2.98 |
11.21 |
32.84 |
11.51 | ||||
Ratios/Supplemental Data (%) |
||||||||||
Ratio of total expenses |
.51d |
.51 |
.51 |
.51 |
.51 |
.51 | ||||
Ratio of net expenses |
.50d |
.50 |
.50 |
.50 |
.50 |
.50 | ||||
Ratio of net investment income |
1.11d |
1.23 |
1.00 |
.98 |
1.07 |
.92 | ||||
Portfolio Turnover Rate |
12.01c |
21.68 |
19.45 |
16.22 |
10.41 |
12.76 | ||||
Net Assets, end of period ($ x 1,000) |
2,878,822 |
3,191,813 |
3,303,416 |
3,572,418 |
3,406,208 |
2,494,980 |
a On August 31, 2016, the fund redesignated existing shares as Investor shares.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.
24
Six Months Ended |
|||||||||||
April 30, 2017 |
Period Ended | ||||||||||
Class I Shares |
(Unaudited) |
October 31 2016a | |||||||||
Per Share Data ($): |
|||||||||||
Net asset value, beginning of period |
35.18 |
36.39 | |||||||||
Investment Operations: |
|||||||||||
Investment income—netb |
.25 |
.02 | |||||||||
Net realized and unrealized |
5.02 |
(1.23) | |||||||||
Total from Investment Operations |
5.27 |
(1.21) | |||||||||
Distributions: |
|||||||||||
Dividends from investment |
(.49) |
— | |||||||||
Dividends from net realized |
(3.38) |
— | |||||||||
Total Distributions |
(3.87) |
— | |||||||||
Net asset value, end of period |
36.58 |
35.18 | |||||||||
Total Return (%)c |
15.50 |
(3.33) | |||||||||
Ratios/Supplemental Data (%): |
|||||||||||
Ratio of total expenses |
.26 |
.26 | |||||||||
Ratio of net expenses |
.25 |
.25 | |||||||||
Ratio of net investment income |
1.30 |
.70 | |||||||||
Portfolio Turnover Rate |
12.01c |
21.68 | |||||||||
Net Assets, end of period ($ x 1,000) |
922,892 |
5,867 |
a From August 31, 2016 (commencement of initial offering) to October 31, 2016.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Midcap Index Fund, Inc. (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a non-diversified open-end management investment company. The fund’s investment objective is to seek to match the performance of the Standard & Poor’s MidCap 400® Index. 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.
MBSC Securities 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 300 million shares of $.001 par value Common Stock. The fund currently has authorized two classes of shares: Investor shares (200 million shares authorized) and Class I (100 million shares authorized). Investor shares are sold primarily to retail investors through financial intermediaries and bear Shareholder Services Plan fees. Class I shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, 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 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 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
26
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:
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. For open short positions, asked prices are 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 generally categorized within Level 1 of the fair value hierarchy.
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. U.S. Treasury Bills are valued at the
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
mean price between quoted bid prices and asked prices by an independent pricing service (the “Service”) approved by the fund’s Board of Directors (the “Board”). These securities are generally categorized within Level 2 of the fair value hierarchy.
The Service is engaged under the general supervision of the Board.
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 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.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are generally categorized within Level 3 of the fair value hierarchy.
Futures, which are traded on an exchange, 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 on each business day and are generally categorized within Level 1 of the fair value hierarchy.
The following is a summary of the inputs used as of April 30, 2017 in valuing the fund’s investments:
28
Level 1 - |
Level 2 – Other |
Level 3 - |
Total | |
Assets ($) |
||||
Investments in Securities: |
||||
Equity Securities—Domestic |
3,737,984,780 |
– |
– |
3,737,984,780 |
Equity Securities—Foreign |
13,262,100 |
– |
– |
13,262,100 |
Registered |
63,330,226 |
– |
– |
63,330,226 |
U.S. Treasury |
– |
2,303,126 |
– |
2,303,126 |
Other Financial Instruments: |
||||
Futures†† |
473,538 |
– |
– |
473,538 |
† See Statement of Investments for additional detailed categorizations.
†† Amount shown represents unrealized appreciation at period end.
At April 30, 2017, there were no transfers between levels 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 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, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the
29
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended April 30, 2017, The Bank of New York Mellon earned $119,425 from lending portfolio securities, pursuant to the securities lending agreement.
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act. Investments in affiliated investment companies during the period ended April 30, 2017 were as follows:
Affiliated Investment Company |
Value |
Purchases ($) |
Sales ($) |
Value 4/30/2017 ($) |
Net Assets (%) |
Dreyfus Institutional |
31,678,167 |
390,296,069 |
373,659,567 |
48,314,669 |
1.3 |
Dreyfus Institutional |
174,867,178 |
479,040,977 |
638,892,598 |
15,015,557 |
.4 |
Total |
206,545,345 |
869,337,046 |
1,012,552,165 |
63,330,226 |
1.7 |
(d) Dividends and distributions to shareholders: Dividends and distributions 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.
(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 April 30, 2017, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest
30
and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended April 30, 2017, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended October 31, 2016 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 October 31, 2016 was as follows: ordinary income $36,004,235 and long-term capital gains $329,464,990. 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 an $810 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.
The average amount of borrowings outstanding under the Facilities during the period ended April 30, 2017 was approximately $133,100 with a related weighted average annualized interest rate of 1.63%.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .25% of the value of the fund’s average daily net assets and is payable monthly. Out of its fee, Dreyfus pays all of the expenses of the fund except management fees, Shareholder Services Plan fees, brokerage fees and commissions, taxes, interest expense, commitment fees on borrowings, fees and expenses of the interested Directors (including counsel fees) and extraordinary expenses. In addition, Dreyfus is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-interested Directors (including counsel fees). During the period ended April 30, 2017, fees reimbursed by Dreyfus amounted to $148,755.
(b) Under the Shareholder Services Plan, Investor shares pay the Distributor at an annual rate of .25% of the value of its average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as
31
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts such as recordkeeping and sub-accounting services. 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 April 30, 2017, the fund was charged $3,505,788 pursuant to the Shareholder Services Plan.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $770,267 and Shareholder Services Plan fees $584,452, which are offset against an expense reimbursement currently in effect in the amount of $24,673.
(c) 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 futures, during the period ended April 30, 2017, amounted to $543,694,003 and $423,670,583, respectively.
Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. Each type of derivative instrument that was held by the fund during the period ended April 30, 2017 is discussed below.
Futures: In the normal course of pursuing its investment objective, the fund is exposed to market risk, including equity price risk, as a result of changes in value of underlying financial instruments. The fund invests in futures in order to manage its exposure to or protect against changes in the market. A futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a counterparty, which consist of cash or cash equivalents. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. When the contracts are closed, the fund recognizes a realized gain or loss which is reflected in the Statement of Operations. There is minimal counterparty credit risk to the fund with futures since they are exchange traded, and the
32
exchange guarantees the futures against default. Futures open at April 30, 2017 are set forth in the Statement of Futures.
The following summarizes the average market value of derivatives outstanding during the period ended April 30, 2017:
|
|
Average Market Value ($) |
Equity futures |
52,456,006 | |
At April 30, 2017, accumulated net unrealized appreciation on investments was $1,191,635,546, consisting of $1,326,578,096 gross unrealized appreciation and $134,942,550 gross unrealized depreciation.
At April 30, 2017, 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).
NOTE 5—Pending Legal Matters:
The fund and dozens of other entities and individuals have been named as defendants in an adversary proceeding pending in the United States Bankruptcy Court for the Southern District of New York (Weisfelner, as Trustee of the LB Creditor Trust v. Fund 1, et al., Adv. Pro. No. 10-04609 the “Creditor Trust Action”). In addition, two separate adversary proceedings have been brought in the same Bankruptcy Court against putative defendant classes ( Weisfeiner, as Trustee of the LB Litigation Trust v. Hofman, at al., Adv. Pro No. 10-05525, the “Litigation Trust Action ”; Weisfelner, as Trustee of the LB Creditor Trust v. Reichman, et al., Adv. Pro. No. 12-1570; the “Reichman Action” and collectively with the Creditor Trust Action and the Litigation Trust Action, the “Actions”). In the Actions, plaintiffs allege that payments made to shareholders of Lyondell Chemical Company (“Lyondell”) in connection with the acquisition of Lyondell by Basell AF S.C.A. in a cash-out merger on December 20, 2007 constitute “fraudulent transfers” under applicable law, and seek to recover from the former Lyondell shareholders the merger consideration received for their shares. The Creditor Trust and Reichman Action assert state law claims for both intentional and constructive fraudulent transfer, while the Litigation Trust Action asserts a single claim for intentional fraudulent transfer.
On November 18, 2015, the Bankruptcy Court granted defendants’ motion to dismiss the intentional fraudulent transfer claim in all three Actions, and on July 20, 2016, the Bankruptcy Court in the Creditor Trust and Reichman Actions issued a Report and Recommendation (the “R&R”) to the United States District Court for the Southern District of New York recommending dismissal of the remaining constructive fraudulent transfer
33
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
claim; plaintiffs in these Actions filed objections to the R&R on August 3, 2016, which remain pending.
On July 27, 2016, the District Court reversed the Bankruptcy Court’s order dismissing the intentional fraudulent transfer claim in the Litigation Trust Action.
At this stage in the proceedings, it is not possible to assess with any reasonable certainty the probable outcome of the pending litigation. Consequently, at this time, management is unable to estimate the possible loss that may result.
34
INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited)
At a meeting of the fund’s Board of Directors held on March 9-10, 2017, the Board considered the renewal of the fund’s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”). The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from Dreyfus representatives. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to them at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. Dreyfus provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or Dreyfus) and Dreyfus’ corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund.
The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered Dreyfus’ extensive administrative, accounting and compliance infrastructures. The Board also considered portfolio management’s brokerage policies and practices (including policies and practices regarding soft dollars) and the standards applied in seeking best execution.
Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), all for various periods ended January 31, 2017, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Broadridge as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Broadridge used to select the Performance Group and Performance Universe and the Expense Group and Expense Universe.
35
INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued)
Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds. The Board discussed with representatives of Dreyfus and/or its affiliates the results of the comparisons and considered that the fund’s total return performance was at or above the Performance Group and Performance Universe medians for all periods. Dreyfus also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s benchmark index.
The Board also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons. Taking into account the fund’s “unitary” fee structure, the Board considered that the fund’s contractual management fee was at the Expense Group median, the fund’s actual management fee was above the Expense Group and Expense Universe medians and the fund’s total expenses were at the Expense Group median and above the Expense Universe median.
Dreyfus representatives reviewed with the Board the management or investment advisory fees (1) paid by funds advised or administered by Dreyfus that are in the same Broadridge category as the fund and (2) paid to Dreyfus or the Dreyfus-affiliated primary employer of the fund’s primary portfolio manager(s) for advising any separate accounts and/or other types of client portfolios that are considered to have similar investment strategies and policies as the fund (the “Similar Clients”), and explained the nature of the Similar Clients. They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors, noting the fund’s “unitary” fee structure. The Board considered the relevance of the fee information provided for the Similar Clients to evaluate the appropriateness of the fund’s management fee.
Analysis of Profitability and Economies of Scale. Dreyfus representatives reviewed the expenses allocated and profit received by Dreyfus and its affiliates and the resulting profitability percentage for managing the fund and the aggregate profitability percentage to Dreyfus and its affiliates for managing the funds in the Dreyfus fund complex, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by Dreyfus. The Board also had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.
The Board considered, on the advice of its counsel, the profitability analysis (1) as part of its evaluation of whether the fees under the Agreement, considered in relation to the mix of services provided by Dreyfus, including the nature, extent and quality of such services, supported the renewal of the Agreement and (2) in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Dreyfus representatives also stated that, as a result of
36
shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level. The Board also considered potential benefits to Dreyfus from acting as investment adviser and took into consideration the soft dollar arrangements in effect for trading the fund’s investments.
At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Agreement. Based on the discussions and considerations as described above, the Board concluded and determined as follows.
· The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
· The Board was satisfied with the fund’s performance.
· The Board concluded that the fee paid to Dreyfus supported the renewal of the Agreement in light of the considerations described above.
· The Board determined that the economies of scale which may accrue to Dreyfus and its affiliates in connection with the management of the fund had been adequately considered by Dreyfus in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.
In evaluating the Agreement, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with Dreyfus and its affiliates, of Dreyfus and the services provided to the fund by Dreyfus. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of the fund and the investment management and other services provided under the Agreement, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of the Agreement for the fund, or substantially similar agreements for other Dreyfus funds that the Board oversees, during which lengthy discussions took place between the Board and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the fund’s arrangements, or similar arrangements for other Dreyfus funds that the Board oversees, in prior years. The Board determined to renew the Agreement.
37
Dreyfus Midcap Index Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York Mellon
225 Liberty Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Ticker Symbols: |
Investor: PESPX Class I: DMIDX |
Telephone Call your financial representative or 1-800-DREYFUS
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (phone 1-800-SEC-0330 for information).
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
© 2017 MBSC Securities Corporation |
|
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.
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.
Dreyfus Midcap Index Fund, Inc.
By: /s/ Bradley J. Skapyak
Bradley J. Skapyak
President
Date: June 29, 2017
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: June 29, 2017
By: /s/ James Windels
James Windels
Treasurer
Date: June 29, 2017
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]—Exhibit (a)(2)
SECTION 302 CERTIFICATION
I, Bradley J. Skapyak, certify that:
1. I have reviewed this report on Form N-CSR of Dreyfus Midcap Index Fund, 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: June 29, 2017
1
SECTION 302 CERTIFICATION
I, James Windels, certify that:
1. I have reviewed this report on Form N-CSR of Dreyfus Midcap Index Fund, 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: June 29, 2017
2
[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: June 29, 2017
By: /s/ James Windels
James Windels
Treasurer
Date: June 29, 2017
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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