-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VO5CMxqlWRTFichPzTeQJ0IhJmqRpN2WTrAQVjAV1CyDw7IxIPTiW3HIPcbJZdIh Mum78SHIuLfhCzFeM5A66w== 0000890041-96-000006.txt : 19960304 0000890041-96-000006.hdr.sgml : 19960304 ACCESSION NUMBER: 0000890041-96-000006 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960301 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEPARATE ACCOUNT VA-2L OF TRANSAMERICA OCCIDENTAL LIFE INS C CENTRAL INDEX KEY: 0000890041 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 951060502 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07042 FILM NUMBER: 96530368 BUSINESS ADDRESS: STREET 1: 1150 SOUTH OLIVE ST CITY: LOS ANGELES STATE: CA ZIP: 90015 BUSINESS PHONE: 2137424454 MAIL ADDRESS: STREET 1: 1150 S OLIVE ST CITY: LOS ANGELES STATE: CA ZIP: 90015 N-30D 1 ANNUAL REPORT DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio LETTER TO SHAREHOLDERS Dear Shareholder: For its fiscal year ended December 31, 1995, the total return for the Growth and Income Portfolio of Dreyfus Variable Investment Fund was 61.89%.* This compares with a return of 37.53% for the Standard and Poor's 500 Composite Stock Price Index.** The Portfolio's performance does not reflect the deduction of additional charges imposed in connection with investing in variable annuity contracts and variable life insurance policies. There were several reasons for this 61.89% total return of the Portfolio in 1995. First, it was a favorable period for the overall stock market. Second, the Portfolio was invested in several dozen holdings. We believe this degree of concentration provides a combination of diversification with a substantial sensitivity to the performance of individual holdings. Third, the Portfolio was fortunate to have several individual investments which performed quite well during the period. Given its relative concentration, the Portfolio's performance is sensitive to the performance of the larger individual holdings. The Portfolio benefited from several holdings that were subject to successful takeover bids in 1995, including Midlantic and Cordis. In addition, several technology stocks held by the Portfolio were bid up sharply by favorable fundamentals and market enthusiasm. While these were purchased as long-term investments, the valuations rose to such relaltively high levels that we felt prudence required that profits on such stocks as UUNET Technologies and Premisys Communications be realized and they are no longer held in the Portfolio. To help achieve the income objective, several convertible bonds and preferred stocks were included in the Portfolio. The Portfolio's performance benefited from its position in the convertible bonds of American Travelers, which sells insurance for long-term care in nursing homes. The convertible preferred stocks of several REITs provided income, but no significant contribution to capital appreciation in the Portfolio. There are several long-term positive forces that have provided a supportive background for the financial markets. First, the trend of inflation has remained favorable in the last several years. Second, we are in the early stages of a key demographic shift as the baby boom generation begins to focus on the need for a permanent program of saving to provide for future retirement income. Third, U.S. productivity growth in manufacturing has been favorable. Finally, a broad consensus has begun to emerge on the importance of limiting the U.S. budget deficit. We believe that the period of strongest earnings growth in the U.S. economy is behind us for the time being. Corporate cost-cutting is very far advanced in many companies as are the benefits of refinancing high-cost debt. The rate of growth of the U.S. economy is decelerating. Many multinational companies have already reaped a significant portion of the profit benefits of a decline in the dollar. Thus we believe that strong profit growth will become increasingly scarce over the next year. Many of the largest positions held by the Portfolio are companies that we believe have a good chance of sustaining strong earnings growth even in this more challenging environment. While overall market valuations have risen, we continue to find good companies available in the stock market at reasonable valuation levels. The active stock market of 1995 provided favorable opportunities for capital appreciation. Shareholders should be aware, however, that the Portfolio's 61.89% total return in 1995 was unusual. We would be surprised if it were to be repeated even if market conditions are favorable in 1996. We appreciate the willingness of our shareholders to invest in the Growth and Income Portfolio of Dreyfus Variable Investment Fund. We will endeavor to realize a favorable return for the shareholders commensurate with a reasonable level of risk. There is likely to be an alternation of periods where the net asset value of the Portfolio declines and periods when the net asset value rises. Our focus is on achieving a satisfactory return for the shareholders over a period of time. Very truly yours, [Richard B. Hoey signature logo] Richard B. Hoey Portfolio Manager January 25, 1996 New York, N.Y. * Total return represents the change during the period in a hypothetical account with dividends reinvested. **SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of income dividends and, where applicable, capital gain distributions. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted unmanaged Index of stock market performance. DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio DECEMBER 31, 1995 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS VARIABLE INVESTMENT FUND, GROWTH AND INCOME PORTFOLIO AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX [Exhibit A Dollars $15,992 Dreyfus Variable Investment Fund, Growth and Income Portfolio $14,299 Standard & Poor's 500 Composite Stock Price Index* *Source: Lipper Analytical Services, Inc.] AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FROM INCEPTION (5/2/94) DECEMBER 31, 1995 TO DECEMBER 31, 1995 - ----------- -------------- 61.89% 32.46% Past performance is not predictive of future performance. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARG ES APPLICABLE TO SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES USING THE PORTFOLIO AS AN UNDERLYING INVESTMENT. The above graph compares a $10,000 investment in Dreyfus Variable Investment Fund, Growth and Income Portfolio on 5/2/94 (Inception Date) to a $10,000 investment made in the Standard & Poor's 500 Composite Stock Price Index on that date. For comparative purposes, the value of the Index on 4/30/94 is used as the beginning value on 5/2/94. All dividends and capital gain distributions are reinvested. The Portfolio's performance shown in the line graph takes into account all applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of overall stock market performance, which does not take into account charges, fees and other expenses. Further information relating to Portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report.
DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio STATEMENT OF INVESTMENTS DECEMBER 31, 1995 COMMON STOCKS-73.4% SHARES VALUE ------------- BANKING-3.4%..................BayBanks 25,000 $ 2,456,250 ------ BASIC INDUSTRIES-7.4%.... Consolidated Papers 15,000 841,875 Crown Cork & Seal...................... 40,000 (a) 1,670,000 ...Olin 20,000 1,485,000 Rohm & Haas............................ 20,000 1,287,500 ------ 5,284,375 ------ CAPITAL GOODS-2.0%........ Coltec Industries. 125,000 (a) 1,453,125 ------ CONSUMER-12.5%............Amway Asia Pacific 50,000 1,781,250 Ethan Allen Interiors.................. 81,200 (a) 1,654,450 Harcourt General....................... 20,000 837,500 Lauder (Estee)......................... 45,000 (a) 1,569,375 Lowe's................................. 75,000 2,512,500 West Marine............................ 17,500 (a) 546,875 ------ 8,901,950 ------ ENERGY-9.1%.............Texaco 20,000 1,570,000 Triton Energy.......................... 20,000 1,147,500 Union Pacific Resources Group.......... 100,000 2,537,500 Western Gas Resources.................. 74,400 1,199,700 ------ 6,454,700 ------ HEALTH CARE-3.2%.......... Mentor 60,000 1,380,000 ONCOR.................................. 200,000 (a) 900,000 ------ 2,280,000 ------ INSURANCE-6.0%........... Allmerica Financial 55,000 (a) 1,485,000 CMAC Investment........................ 20,000 880,000 Prudential Reinsurance Holdings........ 80,000 1,870,000 ------ 4,235,000 ------ MEDIA/ENTERTAINMENT-4.1%...... Disney (Walt) . . 50,000 2,950,000 ------ MINING & METALS-3.4%... Santa Fe Pacific Gold 200,000 2,425,000 ------ REAL ESTATE-5.1% Patriot American Hospitality 50,000 1,287,500 Simon Property Group................... 30,000 731,250 Sizeler Property Investors............. 180,000 1,597,500 ------ 3,616,250 ------ TECHNOLOGY-5.1%............ FSI International 50,000 (a) 1,012,500 ... Zoran 124,500 (a) 2,583,375 ------ 3,595,875 ------ TELECOMMUNICATIONS-7.5%......GTE 65,000 2,860,000 IntelCom Group......................... 200,000 (a) 2,475,000 ------ 5,335,000 ------ TRANSPORTATION-1.1%..... American Freightways 75,000 (a) 778,125 ------ UTILITIES-3.5%.............Texas Utilities 60,000 2,467,500 ------ TOTAL COMMON STOCKS (cost $48,824,332)................... $52,233,150
DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 CONVERTIBLE PREFERRED STOCKS-4.1% SHARES VALUE ------ ------- BANKING-2.1% Ahmanson (H.F.) Ser D., Cum., $3.00 25,000 $1,478,125 ------ REAL ESTATE-2.0% Merry Land & Investment, Ser. C, Cum., $2.15 15,000 431,250 Oasis Residential, Ser. A, Cum., $2.25. 20,000 515,000 Tanger Factory Outlet Centers, Cum., $1.80 20,000 460,000 ------ 1,406,250 ------ TOTAL CONVERTIBLE PREFERRED STOCKS (cost $2,784,690).................... $ 2,884,375 ======= PRINCIPAL CONVERTIBLE CORPORATE NOTES & BONDS-15.2% AMOUNT ------- CONSUMER-3.5% Staples, Sub Deb., 4.50%, 10/1/2000 $ 2,500,000 (b) $ 2,500,000 ------ ENERGY-3.4%.. Enron, Notes, 6.25%, 12/13/1998 100,000 2,400,000 ------ HEALTH CARE-3.3% Sandoz Capital, Sub. Deb., 2%, 10/6/2002 2,500,000 (b) 2,375,000 ------ INSURANCE-5.0%..............American Travellers, Sub. Deb., 6.50%, 10/1/2005 2,600,000...........3,581,500 ------ TOTAL CONVERTIBLE CORPORATE BONDS (cost $9,351,583).................... $10,856,500 ======= SHORT-TERM INVESTMENT-8.2% U.S. TREASURY BILL;. 6.075%, 3/7/1996 (cost $5,815,953).................... $ 5,870,000 $ 5,815,996 ======= TOTAL INVESTMENTS (cost $66,776,558)....... 100.9% $71,790,021 ===== ======= LIABILITIES, LESS CASH AND RECEIVABLES..... (.9%)$ (628,861) ===== ======= NET ASSETS.................................................................. 100.0% $71,161,160 ===== =======
NOTES TO STATEMENT OF INVESTMENTS: (a) Non-income producing. (b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 1995, these securities amounted to $4,875,000 or approximately 6.8% of net assets. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value (cost $66,776,558)-see statement...................................... $71,790,021 Cash.................................................................... 408,581 Receivable for investment securities sold............................... 3,206,994 Dividends and interest receivable....................................... 154,300 Prepaid expenses........................................................ 199 ------ 75,560,095 LIABILITIES: Due to The Dreyfus Corporation.......................................... $ 42,336 Payable for investment securities purchased............................. 4,324,665 Accrued expenses and other liabilities.................................. 31,934 4,398,935 ----- ------ NET ASSETS.................................................................. $71,161,160 ======= REPRESENTED BY: Paid-in capital......................................................... $64,667,080 Accumulated undistributed investment income-net......................... 24,857 Accumulated undistributed net realized gain on investments.............. 1,455,760 Accumulated net unrealized appreciation on investments-Note 4(b)........ 5,013,463 ------ NET ASSETS at value applicable to 3,882,738 shares outstanding (unlimited number of $.001 par value shares of Beneficial Interest authorized).................................................... $71,161,160 ======= NET ASSET VALUE, offering and redemption price per share ($71,161,160 / 3,882,738 shares)........................................ $18.33 =======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INCOME: Cash dividends (net of $837 foreign taxes withheld at source)......... $ 415,869 Interest.............................................................. 395,795 ------ TOTAL INCOME...................................................... $ 811,664 EXPENSES: Investment advisory fee-Note 3(a)..................................... 194,344 Registration fees..................................................... 21,928 Auditing fees......................................................... 15,490 Custodian fees........................................................ 7,548 Prospectus and shareholders' reports.................................. 3,587 Trustees' fees and expenses-Note 3(b)................................. 1,946 Legal fees............................................................ 1,569 Shareholder servicing costs-Note 3(a)................................. 421 Miscellaneous......................................................... 753 ------ TOTAL EXPENSES.................................................... 247,586 Less-reduction in investment advisory fee due to undertakings-Note 3(a) 8,743 ------ NET EXPENSES.................................................... 238,843 ----- INVESTMENT INCOME-NET........................................... 572,821 ----- REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain (loss) on investments-Note 4(a): Long transactions..................................................... $ 4,307,148 Short sale transactions............................................... (224,625) ------ NET REALIZED GAIN................................................. 4,082,523 Net unrealized appreciation on investments.............................. 5,056,480 ----- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS....................... 9,139,003 ----- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $9,711,824 ======= See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, -------------------------------- 1994* 1995 ------- ------- OPERATIONS: Investment income-net................................................... $ 22,787 $ 572,821 Net realized gain on investments........................................ 7,824 4,082,523 Net unrealized appreciation (depreciation) on investments for the year.. (43,017) 5,056,480 ------ ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................................................ (12,406) 9,711,824 ------ ------ DIVIDENDS TO SHAREHOLDERS FROM: Investment income-net................................................... (22,729) (548,022) Net realized gain on investments........................................ (7,302) (2,627,285) ------ ------ TOTAL DIVIDENDS....................................................... (30,031) (3,175,307) ------ ------ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold........................................... 1,053,630 71,235,254 Dividends reinvested.................................................... 30,031 3,175,307 Cost of shares redeemed................................................. (1,330) (10,825,812) ------ ------ INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...................................................... 1,082,331 63,584,749 ------ ------ TOTAL INCREASE IN NET ASSETS...................................... 1,039,894 70,121,266 NET ASSETS: Beginning of year....................................................... _- 1,039,894 ------ ------ End of year (including undistributed investment income-net: $58 in 1994 and $24,857 in 1995)...................................... $ 1,039,894 $ 71,161,160 ====== ====== SHARES SHARES ------ ------ CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 84,474 4,269,435 Shares issued for dividends reinvested.................................. 2,457 179,268 Shares redeemed......................................................... (109) (652,787) ------ ------ NET INCREASE IN SHARES OUTSTANDING.................................... 86,822 3,795,916 ====== ====== *From May 2, 1994 (commencement of operations) to December 31, 1994. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements.
YEAR ENDED DECEMBER 31, ---------------------------- PER SHARE DATA: 1994(1) 1995 ---- ---- Net asset value, beginning of year.......................................... $12.50 $11.98 --- --- INVESTMENT OPERATIONS: Investment income-net....................................................... .28 .28 Net realized and unrealized gain (loss) on investments...................... (.43) 7.07 --- --- TOTAL FROM INVESTMENT OPERATIONS.......................................... (.15) 7.35 --- --- DISTRIBUTIONS: Dividends from investment income-net........................................ (.28) (.27) Dividends from net realized gain on investments............................. (.09) (.73) --- --- TOTAL DISTRIBUTIONS....................................................... (.37) (1.00) --- --- Net asset value, end of year................................................ $11.98 $18.33 --- --- --- --- TOTAL INVESTMENT RETURN......................................................... (1.22%)(2) 61.89% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets..................................... .22%(2) .92% Ratio of net investment income to average net assets........................ 2.25%(2) 2.21% Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation................................................ 1.28%(2) .03% Portfolio Turnover Rate..................................................... 237.09%(2) 255.42% Net assets, end of year (000's Omitted)..................................... $1,040 $71,161 (1) From May 2, 1994 (commencement of operations) to December 31, 1994. (2) Not annualized. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio NOTES TO FINANCIAL STATEMENTS NOTE 1-GENERAL: The Dreyfus Variable Investment Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as an open-end management investment company, operating as a series company currently offering eight series, including the Growth and Income Portfolio series (the "Series") and is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The Series is a non-diversified portfolio. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. NOTE 2-SIGNIFICANT ACCOUNTING POLICIES: (A) PORTFOLIO VALUATION: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. The Series declares and pays dividends from investment income-net quarterly. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that the net realized capital gain can be offset by capital loss carryovers, it is the policy of the Series not to distribute such gain. DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) (D) FEDERAL INCOME TAXES: It is the policy of the Series 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 Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. For Federal income tax purposes, each series is treated as a single entity for the purpose of determining such qualification. NOTE 3-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to the provisions of an Investment Advisory Agreement ("Agreement") with Dreyfus, the investment advisory fee is computed at the annual rate of .75 of 1% of the average daily value of the Series' net assets and is payable monthly. The Agreement further provides that if in any full year the aggregate expenses of the Series, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series, the Series may deduct from the payments to be made to Dreyfus, or Dreyfus will bear the amount of such excess to the extent required by state law. However, Dreyfus had undertaken, from January 1, 1995 through July 5, 1995, to reduce the investment advisory fee paid by the Series, to the extent that the Series' aggregate expenses (exclusive of certain expenses as described above) exceeded specified annual percentages of the Series' average daily net assets. The reduction in investment advisory fee, pursuant to the undertakings amounted to $8,743 for the year ended December 31, 1995. Effective December 1, 1995, the Series compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the Series. Such compensation amounted to $36 for the period from December 1, 1995 through December 31, 1995. (B) Each trustee who is not an "affiliated person," as defined in the Act, receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 4-SECURITIES TRANSACTIONS: (A) The following summarizes the aggregate amount of purchases and sales of investment securities and securities sold short, excluding short-term securities during the year ended December 31, 1995:
PURCHASES SALES --------- -------- Long transactions.................................................... $113,942,466 $ 58,087,517 Short sale transactions.............................................. 1,034,500 809,875 -------- -------- TOTAL.......................................................... $114,976,966 $ 58,897,392 ======== ========
DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) The Series is engaged in short-selling which obligates the Series to replace the security borrowed by purchasing the security at current market value. The Series would incur a loss if the price of the security increases between the date of the short sale and the date on which the Series replaces the borrowed security. The Series would realize a gain if the price of the security declines between those dates. Until the Series replaces the borrowed security, the Series will maintain daily, a segregated account with a broker and custodian of cash and/or U.S. Government securities sufficient to cover its short position. At December 31, 1995, there were no securities sold short outstanding. (B) At December 31, 1995, accumulated net unrealized appreciation on investments was $5,013,463, consisting of $6,536,158 gross unrealized appreciation and $1,522,695 gross unrealized depreciation. At December 31, 1995, 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). DREYFUS VARIABLE INVESTMENT FUND, Growth and Income Portfolio REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS VARIABLE INVESTMENT FUND, GROWTH AND INCOME PORTFOLIO We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, Growth and Income Portfolio (one of the series constituting the Dreyfus Variable Investment Fund), as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Variable Investment Fund, Growth and Income Portfolio at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York February 9, 1996 [Dreyfus lion "d" logo] DREYFUS VARIABLE INVESTMENT FUND, GROWTH AND INCOME PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 108AR9512 [Dreyfus logo] Variable Investment Fund, GROWTH AND INCOME PORTFOLIO Annual Report December 31, 1995 DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio LETTER TO SHAREHOLDERS Dear Shareholder: During the year ended December 31, 1995, the Fund's total return for the International Equity Portfolio amounted to 7.39%,* which can be compared with the 11.21% return for the Morgan Stanley Capital International Europe, Australasia, Far East (EAFE(R)) Index.** In local currency terms, the international regions could not match the 37.53% return from the United States as measured by the Standard & Poor's 500 Composite Stock Price Index.*** Europe returned 18.9% and the Pacific Basin (excluding Japan), 11.1%. The major disappointment was Japan, with a return of -1.3%. European currencies in the main strengthened against the dollar while the Yen weakened, particularly towards the year-end. A number of changes were made in the Portfolio's country allocation - notably an increase in the U.K. content to near 25%. Small and mid-size stocks have been underperforming in this market though dividends have been growing at about 10% a year. The Japanese content was maintained at about 27%. We sold out of the emerging markets of Mexico and South Africa and reduced exposure to Australia. In the Pacific region, the Hong Kong exposure was maintained and property stocks were purchased as the local market recovered. Malaysia has been weak lately due to concern at an overheating economy. We now believe it offers reasonable value. Falling interest rates provide an encouraging background for markets in early 1996. Positive returns, however, could be partly offset if the dollar remains strong. Sincerely, [J.C. Whitaker signature logo] J.C. Whitaker Portfolio Manager Dreyfus International Equity Portfolio, Variable Investment Fund M & G Investment Management, Ltd. January 17, 1996 London, U.K. * Total return includes reinvestment of dividends and any capital gains paid. The Portfolio's performance does not reflect the deduction of additional charges imposed in connection with investing in variable annuity contracts and variable life insurance policies. **SOURCE: LIPPER ANALYTICAL SERVICES, INC. - The Morgan Stanley Capital International Europe, Australasia, Far East (EAFE(R)) Index is an unmanaged index composed of a sample of companies representative of the market structure of European and Pacific Basin countries. The return indicated includes net dividends reinvested. The Index is the property of Morgan Stanley & Co., Incorporated. ***SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of income dividends and, where applicable, capital gain distributions. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of stock market performance. Financial Times, Standard and Poor's Actuaries World Indices. DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio DECEMBER 31, 1995 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS VARIABLE INVESTMENT FUND, INTERNATIONAL EQUITY PORTFOLIO AND THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST (EAFERegistration Mark) INDEX [Exhibit A Dollars $11,110 Morgan Stanley Capital International Europe, Australasia, Far East (EAFERegistration Mark) Index* $10,524 Dreyfus Variable Investment Fund, International Equity *Source: Lipper Analytical Services, Inc.] AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FROM INCEPTION (5/2/94) DECEMBER 31, 1995 TO DECEMBER 31, 1995 ----------- -------------- 7.39% 3.11% Past performance is not predictive of future performance. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARG ES APPLICABLE TO SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES USING THE PORTFOLIO AS AN UNDERLYING INVESTMENT. The above graph compares a $10,000 investment in Dreyfus Variable Investment Fund, International Equity Portfolio on 5/2/94 (Inception Date) to a $10,000 investment made in the Morgan Stanley Capital International Europe, Australasia, Far East (EAFERegistration Mark) Index on that date. For comparative purposes, the value of the Index on 4/30/94 is used as the beginning value on 5/2/94. All dividends and capital gain distributions are reinvested. The Portfolio's performance shown in the line graph takes into account all applicable fees and expenses. The Morgan Stanley Capital International Europe, Australasia, Far East (EAFERegistration Mark) Index, which is the property of Morgan Stanley & Co. Incorporated, is an unmanaged index composed of a sample of companies representative of the market structure of European and Pacific Basin countries and includes net dividends reinvested. The Index does not take into account charges, fees and other expenses. Further information relating to Portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report.
DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio STATEMENT OF INVESTMENTS DECEMBER 31, 1995 COMMON STOCKS-89.6% SHARES VALUE AUSTRALIA-1.6%...Boral 25,000 $ 63,113 Broken Hill Proprietary................ 4,000 56,430 ----- 119,543 ----- DENMARK-1.2% ISS International Service System A/S, Cl. B. ..... 4,000 89,847 ----- FRANCE-4.8%.....BUT S.A. 1,300 70,206 Rhone-Poulenc, Cl.A.................... 5,000 106,888 Roussel-Uclaf.......................... 600 101,488 Sanofi S.A............................. 880 56,293 Vallourec Usines a Tubes de Lorraine Escaut et Vallourec Reunies............... 850 30,141 ----- 365,016 ----- GERMANY-3.9%....Adidas AG 1,825 96,427 BASF AG................................ 250 55,604 Deutsche Bank AG....................... 1,600 75,706 VEBA AG................................ 1,600 67,832 ----- 295,569 ----- HONG KONG-6.0%...... Cheung Kong Holdings 12,000 73,094 HKR International...................... 63,200 58,439 HSBC Holdings PLC...................... 3,600 54,472 Hong Kong Land Holdings................ 33,000 61,050 Lamex Holdings......................... 320,000 79,043 Shun Tak Holdings...................... 102,000 71,891 Swire Pacific, Cl. A................... 8,500 65,955 ----- 463,944 ----- INDONESIA-.5% PT Telekomunikasi Indonesia, A.D.R. 1,400 35,350 ----- ITALY-5.7%.. Bulgari S.P.A. 20,000 170,592 Edison S.P.A........................... 19,700 84,854 Industria Macchine Automatiche............... 9,900 66,707 Safilo S.P.A........................... 9,000 116,467 ----- 438,620 ----- JAPAN-26.4%.... Amway Japan 3,000 126,377 ....DDI 15 115,942 Daiwa House Industry................... 8,000 131,401 East Japan Railway..................... 24 116,406 Hitachi Credit......................... 6,000 108,406 Hokkaido Electric Power................ 2,000 46,377 Kinden................................. 2,000 34,010 Komori................................. 5,000 125,604 Kurimoto............................... 10,000 101,449 Mitsubishi Bank........................ 4,000 93,913 Mitsubishi Chemical.................... 25,000 121,256 Mitsui Fudosan......................... 8,000 98,164 ... NEC 12,000 146,087 DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------ ------ JAPAN (CONTINUED)........NKK 38,000 $ 102,067 Nippon Express......................... 12,000 115,246 Nippon Telegraph & Telephone........... 12 96,811 Nissan Chemical Industries............. 16,000 105,894 ....P.S. 3,000 54,493 Seven Eleven Japan..................... 2,000 140,676 Sumitomo Bank.......................... 2,000 42,319 ----- 2,022,898 ----- MALAYSIA-1.7%........ Hong Leong Credit Berhad 3,000 14,887 Leader Universal Holdings Berhad................ 4,666 10,659 Metacorp Berhad........................ 24,000 62,387 Renong Berhad.......................... 30,000 44,427 ----- 132,360 ----- NETHERLANDS-2.8%........Akzo Nobel N.V. . 400 46,169 OCE-Van Der Grinten N.V................ 1,225 74,353 Philips Electronics N.V................ 2,700 97,388 ----- 217,910 ----- NORWAY-1.0%...... Hafslund Nycomed A/S, Cl. A 3,000 78,014 ----- SINGAPORE-1.0%....... Oversea-Chinese Banking 4,000 50,071 Overseas Union Bank.................... 4,000 27,581 ----- 77,652 ----- SPAIN-3.5% Compania Sevillana de Electricidad 9,300 72,015 Iberdrola S.A.......................... 7,800 71,171 Repsol S.A............................. 2,725 89,041 Uralita S.A............................ 4,300 38,882 ----- 271,109 ----- SWEDEN-1.2%......Lindex AB 7,000 89,501 ----- SWITZERLAND-7.3%.. Alusuisse-Lonza Holding AG 90 71,283 BBC Brown Boveri AG.................... 80 92,894 Compagnie Financiere Michelin................ 300 129,983 Elektrowatt AG......................... 325 118,847 Sulzer AG.............................. 100 57,192 Zellweger Luwa AG.................... 95 92,613 ----- 562,812 ----- UNITED KINGDOM-21.0%.....BAT Industries PLC 15,000 132,029 Booker PLC............................. 17,000 95,712 British Steel PLC...................... 50,000 126,213 British Telecommunications PLC......... 25,000 137,263 Concentric PLC......................... 18,000 49,694 Cookson Group PLC...................... 30,000 142,382 Glaxo Wellcome PLC..................... 8,000 113,533 DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------ ------ UNITED KINGDOM (CONTINUED)... Hammerson PLC 17,500 $ 95,677 Harrisons & Crosfield PLC.............. 50,000 124,080 Lloyds TSB Group PLC................... 21,632 111,055 Lucas Industries PLC................... 50,000 140,365 RTZ PLC................................ 7,000 101,622 Royal Doulton PLC...................... 13,000 49,601 Smith.(W.H.) Group PLC 15,000 98,644 Welsh Water PLC........................ 8,000 96,100 ----- 1,613,970 ----- TOTAL COMMON STOCKS (cost $6,582,033).................... $6,874,115
PREFERRED STOCKS-1.2% GERMANY;...................... Fresenius AG (cost $64,635)....................... 1,000 $ 94,675 ====== PRINCIPAL SHORT-TERM INVESTMENTS-.8% AMOUNT ------ UNITED STATES;.......... U.S. Treasury Bills; 4.84%, 3/28/96 (cost $56,333)....................... $.....57,000 $ 56,304 ====== TOTAL INVESTMENTS (cost $6,703,001)......................................... 91.6% $7,025,094 ==== ====== CASH AND RECEIVABLES (NET).................................................. 8.4% $ 647,044 ==== ====== NET ASSETS.................................................................. 100.0% $7,672,138 ==== ====== NOTE TO STATEMENT OF INVESTMENTS; (a) Non-income producing. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value (cost $6,703,001)-see statement....................................... $7,025,094 Cash.................................................................... 751,876 Receivable for investment securities sold............................... 121,996 Dividends receivable.................................................... 14,234 Prepaid expenses........................................................ 114 Due from The Dreyfus Corporation........................................ 119 ----- 7,913,433 LIABILITIES: Payable for investment securities purchased............................. $219,948 Accrued expenses........................................................ 21,347 241,295 ---- ----- NET ASSETS ................................................................ $7,672,138 ====== REPRESENTED BY: Paid-in capital......................................................... $7,347,744 Accumulated distributions in excess of investment income-net............ (5,480) Accumulated undistributed net realized gain on investments and foreign currency transactions......................................... 7,833 Accumulated net unrealized appreciation on investments and foreign currency transactions......................................... 322,041 ----- NET ASSETS at value applicable to 598,485 shares outstanding (unlimited number of $.001 par value shares of Beneficial Interest authorized).................................................... $7,672,138 ====== NET ASSET VALUE, offering and redemption price per share ($7,672,138 / 598,485 shares)........................................... $12.82 ====== See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INCOME: Cash dividends (net of $9,874 foreign taxes withheld at source)....... $ 69,465 Interest.............................................................. 36,794 ---- TOTAL INCOME...................................................... $106,259 EXPENSES: Investment advisory fee-Note 3(a)..................................... 29,314 Custodian fees........................................................ 24,403 Auditing fees......................................................... 19,809 Prospectus and shareholders' reports.................................. 2,811 Registration fees..................................................... 2,145 Shareholder servicing costs........................................... 225 Trustees' fees and expenses-Note 3(b)................................. 205 Legal fees............................................................ 73 Miscellaneous......................................................... 609 ---- TOTAL EXPENSES.................................................... 79,594 Less-reduction in investment advisory fee due to undertakings-Note 3(a)..................................... 17,393 ---- NET EXPENSES...................................................... 62,201 ---- INVESTMENT INCOME-NET............................................. 44,058 ---- REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments and foreign currency transactions-Note 4(a)................................................ $ 43,734 Net realized (loss) on forward currency exchange contracts.............. (16,802) ---- NET REALIZED GAIN..................................................... 26,932 Net unrealized appreciation on investments and foreign currency transactions.......................................................... 340,358 ---- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 367,290 ---- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $411,348 ====== See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, ------------------------------ 1994* 1995 ------ ------ OPERATIONS: Investment income-net................................................... $ 11,219 $ 44,058 Net realized gain (loss) on investments................................. (12,479) 26,932 Net unrealized appreciation (depreciation) on investments for the year.. (18,317) 340,358 ------ ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... (19,577) 411,348 ------ ------ DIVIDENDS TO SHAREHOLDERS: From investment income-net.............................................. (11,219) (43,430) In excess of investment income-net...................................... (7,247) (5,480) ------ ------ TOTAL DIVIDENDS....................................................... (18,466) (48,910) ------ ------ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold........................................... 1,120,503 8,336,454 Dividends reinvested.................................................... 18,466 48,910 Cost of shares redeemed................................................. (12,347) (2,164,243) ------ ------ INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...................................................... 1,126,622 6,221,121 ------ ------ TOTAL INCREASE IN NET ASSETS...................................... 1,088,579 6,583,559 NET ASSETS: Beginning of year....................................................... _- 1,088,579 ------ ------ End of year [including distributions in excess of investment income-net: $(7,247) in 1994 and $(5,480) in 1995].................... $ 1,088,579 $ 7,672,138 ====== ====== SHARES SHARES ------ ------ CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 90,002 677,022 Shares issued for dividends reinvested.................................. 1,536 3,852 Shares redeemed......................................................... (1,006) (172,921) ------ ------ NET INCREASE IN SHARES OUTSTANDING.................................... 90,532 507,953 ====== ====== * From May 2, 1994 (commencement of operations) to December 31, 1994. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements.
YEAR ENDED DECEMBER 31, ---------------------------- PER SHARE DATA: 1994(1) 1995 ---- ---- Net asset value, beginning of year.......................................... $12.50 $12.02 ---- ---- INVESTMENT OPERATIONS: Investment income-net....................................................... .15 .15 Net realized and unrealized gain (loss) on investments for the year......... (.40) .74 ---- ---- TOTAL FROM INVESTMENT OPERATIONS.......................................... (.25) .89 ---- ---- DISTRIBUTIONS: Dividends from investment income-net........................................ (.14) (.08) Dividends in excess of investment income-net................................ (.09) (.01) ---- ---- TOTAL DISTRIBUTIONS....................................................... (.23) (.09) ---- ---- Net asset value, end of year................................................ $12.02 $12.82 ==== ==== TOTAL INVESTMENT RETURN......................................................... (2.00)%(2) 7.39% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets..................................... .23%(2) 1.59% Ratio of net investment income to average net assets........................ 1.11%(2) 1.13% Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation................................................ 1.70%(2) .45% Portfolio Turnover Rate..................................................... 16.75%(2) 70.22% Net Assets, end of year (000's Omitted)..................................... $1,089 $7,672 (1) From May 2, 1994 (commencement of operations) to December 31, 1994. (2) Not annualized. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio NOTES TO FINANCIAL STATEMENTS NOTE 1-GENERAL: The Dreyfus Variable Investment Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as an open-end management investment company operating as a series company currently offering eight series including the International Equity Portfolio series (the "Series") and is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The Series is a non-diversified portfolio. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. M&G Investment Management Limited ("M&G") serves as the Series' sub-investment adviser. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. NOTE 2-SIGNIFICANT ACCOUNTING POLICIES: (A) PORTFOLIO VALUATION: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (B) FOREIGN CURRENCY TRANSACTIONS: The Series does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series' books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gain are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. This may result in distributions that are in excess of investment income-net and net realized capital gains on a fiscal year basis. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Series not to distribute such gain. The Series had dividends in excess of investment income-net for financial statement purposes resulting from Federal income tax distribution requirements. During the year ended December 31, 1995, the Series reclassified $6,619 charged to undistributed net realized gain (loss) to undistributed investment income-net. (E) FEDERAL INCOME TAXES: It is the policy of the Series 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 Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. For Federal income tax purposes, each series is treated as a single entity for the purpose of determining such qualification. NOTE 3-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACT IONS WITH AFFILIATES: (A) Pursuant to the provisions of an Investment Advisory Agreement ("Agreement") with Dreyfus, the investment advisory fee is computed at the annual rate of .75 of 1% of the average daily value of the Series' net assets and is payable monthly. Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and M&G, the sub-investment advisory fee is computed at an annual rate of .30 of 1% of the average daily value of the Series' net assets and is payable monthly by Dreyfus. The agreements further provide that if in any full year the aggregate expenses of the Series, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series, the Series may deduct from the payments to be made to Dreyfus and M&G, or Dreyfus and M&G will bear the amount of such excess to the extent required by state law. However, Dreyfus had undertaken from January 1, 1995 through September 30, 1995 to reimburse expenses (exclusive of certain expenses as described above) to the extent that such expenses exceeded specified annual percentages of the Series' average daily net assets. The reduction in investment advisory fee, pursuant to the undertakings, amounted to $17,393 for the year ended December 31, 1995. Effective December 1, 1995, the Fund entered into a transfer agency agreement with Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, to provide personnel and facilities to perform transfer agency services for the Series. DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) (B) Each trustee who is not an "affiliated person," as defined in the Act, receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 4-SECURITIES TRANSACTIONS: (A) The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward currency exchange contracts, during the year ended December 31, 1995 amounted to $7,988,241 and $2,317,981, respectively. The Series may enter into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings. When executing forward currency exchange contracts, the Series is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward currency exchange contracts, the Series would incur a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed. The Series realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward currency exchange contracts, the Series would incur a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed. The Series realizes a gain if the value of the contract increases between those dates. The Series' exposure to credit risk associated with counter party nonperformance on these investments is typically limited to the unrealized gains in such contracts that are recognized in the Statement of Assets and Liabilities. There were no forward currency exchange contracts outstanding at December 31, 1995. (B) At December 31, 1995, accumulated net unrealized appreciation on investments was $322,093, consisting of $460,186 gross unrealized appreciation and $138,093 gross unrealized depreciation. At December 31, 1995, 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). DREYFUS VARIABLE INVESTMENT FUND, International Equity Portfolio REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS VARIABLE INVESTMENT FUND, INTERNATIONAL EQUITY PORTFOLIO We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, International Equity Portfolio (one of the series constituting the Dreyfus Variable Investment Fund), as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Variable Investment Fund, International Equity Portfolio at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York February 9, 1996 IMPORTANT TAX INFORMATION (UNAUDITED) In accordance with Federal tax law, the Portfolio elects to provide each shareholder with their portion of the Portfolio's foreign taxes paid and the income sourced from foreign countries. Accordingly, the Portfolio hereby makes the following designations regarding its fiscal year ended December 31, 1995. - the total amount of taxes paid to foreign countries was $9,879. - the total amount of income sourced from foreign countries was $26,954. [Dreyfus lion "d" logo] DREYFUS VARIABLE INVESTMENT FUND, INTERNATIONAL EQUITY PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 SUB-INVESTMENT ADVISER M & G Investment Management Limited Three Quays Tower Hill, London, EC3R 6BQ, England CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 109AR9512 [Dreyfus logo] Variable Investment Fund, INTERNATIONAL EQUITY PORTFOLIO Annual Report December 31, 1995 THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to report that for the fiscal year ended December 31, 1995, The Dreyfus Socially Responsible Growth Fund, Inc., posted a total return of 34.56%,* compared to a total return of 37.53% for the Standard & Poor's 500 Composite Stock Price Index.** This performance placed the Fund in the second quartile of the Lipper growth funds category, out of 98 funds for the one-year period ended December 31, 1995.*** A LOOK AT THE ECONOMY The most salient issue confronting the equity markets in 1995 continued to be the Federal Reserve Board's vigilance in fighting inflation and overly expansive economic growth. The Fed did this by raising interest rates an unprecedented seven times in a 12-month period. The hope was that by doing so, businesses would seek to grow their bottom lines via productivity enhancements and market share growth rather than by simply raising prices, as had been the case in previous economic cycles. The question in investors' minds was, "Will the Fed continue to slay the inflation dragon by raising rates and thereby establish an unprecedented soft landing in the economy?" Investors kept a watchful eye on the economy in making decisions and for the most part the economic reports were consistent with the soft landing theme that we have followed all year. In a soft landing, the economy grows at a reasonably slow to moderate pace with little to no inflation after a period of significant growth, instead of adhering to the usual pattern of cyclical booms and busts. After some decent economic advances in both 1993 and 1994, investors became concerned that the Federal Reserve's vigilance in fighting inflation might have pushed the economy to the brink of recession. However, the economic information released through the third quarter of 1995 supported our belief that the Fed had achieved the elusive economic soft landing. The Fe d even sent the market a very positive signal in early July by cutting interest rates by a quarter of a percent, the first such reduction since the Fed began preemptive rate increases in February 1994. The Fed decreased rates once again in December. PORTFOLIO OVERVIEW In terms of the economic sectors of the Fund, we made several changes in the weightings. The primary areas of focus for the Fund have been Consumer Staples, Technology and Financials. During the last six months, we increased the weightings in carefully selected Technology stocks and Financials and maintained the exposure to Consumer Staples. We also reduced the Fund's weighting in the Industrial sector. These thematic changes are indicative of our overall view of what is driving the current economic environment. The shift in Technology weight represents our belief that this traditional growth sector, in spite of recent market weakness, is experiencing a secular improvement in demand driven by global competition and productivity growth. We also increased the Financials, believing that the Fed would continue to lower interest rates, and that our positions would continue to benefit from the consolidation trend in the industry. We reduced our weighting in industrial stocks due to continued concerns over the strength of the economy as well as valuation, both of which we believed indicated that better opportunities lay elsewhere. INDIVIDUAL ISSUES For the year ended 12/31/95, there were many individual securities that contributed nicely to the positive performance trends of the Fund. In the consumer cyclical sector, Regal Cinemas, Capital Cities ABC, Disney (Walt), Nike Cl.B and Phillips Electronics N.V. had superior performance. Those names represent stocks that we believe can grow whatever the economic environment because of globally oriented, diversified operations. Other stocks in the portfolio that contributed to performance are Coca-Cola, Cordis, Amgen, Medtronic, Becton, Dickinson, Bristol-Myers Squibb and Merck & Co. The food, beverage and household products companies benefited from more positive investor sentiment toward their long-term, globally driven growth rates. The health care stocks benefited from an improved outlook for their operations due to the rising optimism for new drug approvals and investor confidence in the consistency of their growth. Stock selection in the financial area also contributed to the Fund's positive results as did a more benign interest-rate outlook. ADVANTA, Cl.A., a credit card company, banks such as Citicorp, Bank of New York, BayBanks and Midlantic, specialty financial services companies such as Green Tree Financial, a provider of mobile home financing, and Federal National Mortgage Association, performed well for most of the year. In addition, insurers American International Group and Allstate rose on expectations of lower interest rates and possible industry consolidation. Our focus in the technology sector was on stocks of companies which we believed had fairly established market positions, superior technology and outstanding management teams. Individual issues such as 3Com, Applied Materials, Hewlett-Packard, Linear Technology, and Sun Microsystems were all stellar performers. We believe each of these companies stands to benefit not just from demand for a single product, but from a broad, diversified product offering with multiple downstream beneficiaries. We believe these qualities lower the risk profile of the Fund's technology weighting relative to the typical technology stock and lower the general level of volatility in the sector. THE TAKEOVER THEME Overall, from a stock selection standpoint, the Fund has benefited from the rising tide of takeovers this year. Companies are under pressure to make revenues grow in a very competitive environment, and are therefore buying other firms to broaden and deepen their product offerings. Several Fund holdings were taken over this year: Cordis, a medical technology firm; BayBanks, a large regional banking firm; Capital Cities ABC, a broadcasting company; and Scott Paper, a paper manufacturer. There are several other names in the portfolio that we believe could benefit from this theme over the coming years. Going forward, we feel that the Federal Reserve's hold on the market will persist. However, this time the Fed's action may benefit stocks because we believe rates will be further reduced rather than raised, as the economy shows signs of slowing. Our goal, as ever, is to provide superior returns to our shareholders while honoring your socially responsible investment objectives. We are confident in the outlook for the Fund and appreciate your continued support. We take your socially responsible directives seriously as we endeavor to provide attractive returns on shareholder capital. Sincerely, [Maceo K. Sloan, CFA and Diane M. Coffey signature logos] Maceo K. Sloan, CFA Diane M. Coffey Portfolio Manager Portfolio Manager NCM Capital Management Group, Inc The Dreyfus Corporation January 16, 1996 New York, N.Y. * Total return includes reinvestment of dividends and any capital gains paid. The Fund's performance does not reflect the deduction of additional charges applicable to separate accounts of participating insurance companies using the Fund as an underlying investment. **SOURCE: LIPPER ANALYTICAL SERVICES, Inc. - Reflects the reinvestment of income dividends and when applicable, capital gain distributions. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of U.S. stock market performance. *** SOURCE: LIPPER ANALYTICAL SERVICES, INC. THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. DECEMBER 31, 1995 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX [Exhibit A $14,661 Dreyfus Socially Responsible Growth Fund Dollars $14,257 Standard & Poor's 500 Composite Stock Price Index* *Source: Lipper Analytical Services, Inc.] AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FROM INCEPTION (10/7/93) DECEMBER 31, 1995 TO DECEMBER 31, 1995 ----------- -------------- 34.56% 18.63% Past performance is not predictive of future performance. THE FUND'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES AP PLICABLE TO SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES USING THE FUND AS AN UNDERLYING INVESTMENT. The above graph compares a $10,000 investment made in The Dreyfus Socially Responsible Growth Fund, Inc. on 10/7/93 (Inception Date) to a $10,000 investment made in the Standard & Poor's 500 Composite Stock Price Index on that date. For comparative purposes, the value of the Index on 9/30/93 is used as the beginning value on 10/7/93. All dividends and capital gain distributions are reinvested. The Fund's performance shown in the line graph takes into account all applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of overall stock market performance which does not take into account charges, fees and other expenses. Further information relating to Fund performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report. THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1995 COMMON STOCKS-93.8% SHARES VALUE ------- ------ CONSUMER DURABLES-.9%...... Briggs & Stratton 6,500 $ 281,937 ------ CONSUMER NON-DURABLES-8.5%...........Campbell Soup 10,400 624,000 Coca-Cola.............................. 7,800 579,150 Gillette............................... 11,100 578,588 NIKE, Cl. B............................ 4,400 306,350 PepsiCo................................ 11,000 614,625 ------ 2,702,713 ------ CONSUMER SERVICES-7.9%........ Disney (Walt) . . 7,400 . 436,600 Grainger (W.W.)........................ 8,000 530,000 Regal Cinemas........................ 15,450 459,638 Tribune................................ 8,750 534,843 Wendy's International.................. 25,500 541,875 . . ------ 2,502,956 . ------ ELECTRONIC TECHNOLOGY-16.4%........... Applied Materials 15,100 594,562 DSC Communications................... 17,400 641,625 ...EMC 37,450 575,794 Hewlett-Packard........................ 7,970 667,488 Linear Technology...................... 16,600 651,550 Micron Technology...................... 10,900 431,912 Sun Microsystems..................... 15,200 693,500 3Com................................. 19,980 931,568 ------ 5,187,999 ------ ENERGY-2.3%....................Schlumberger . . 10,420 . 721,585 ------ FINANCE-16.5%.................ADVANTA, Cl. A 7,500 286,875 AFLAC.................................. 8,600 373,025 Allstate............................... 7,600 312,550 American International Group........... 4,860 449,550 Bank of New York....................... 14,000 682,500 BankAmerica............................ 6,600 427,350 BayBanks............................... 6,300 618,975 Citicorp............................... 10,200 685,950 Federal National Mortgage Association.. . 6,000 744,750 Green Tree Financial................... 24,000 633,000 ------ 5,214,525 ------ HEALTH SERVICES-.8%....... HealthCare COMPARE 5,500 239,250 ------ HEALTH TECHNOLOGY-14.0%...........Amgen ..... ..... 12,000 712,500 Becton, Dickinson ..................... 8,620 646,500 Bristol-Myers Squibb................... 8,700 747,113 THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------ ------- HEALTH TECHNOLOGY (CONTINUED)..... Johnson & Johnson 7,560 $ 647,325 Medtronic.............................. 15,600 871,650 Merck & Co............................. 12,460 819,245 ------ 4,444,333 ------ NON-ENERGY MINERALS-.6% British Steel, A.D.S. 7,700 197,312 ------ PROCESS INDUSTRIES-4.3%.......Bemis ......... 20,690 530,181 Sigma-Aldrich.......................... 11,500 569,250 Terra Industries....................... 18,300 258,488 ------ 1,357,919 ------ PRODUCER MANUFACTURING-4.3%.............AGCO 13,600 693,600 ....Dover 7,800 287,625 Philips Electronics, N.V............... 10,900 391,038 ------ 1,372,263 ------ RETAIL TRADE-3.0%........ Consolidated Stores 15,800 343,650 Sears, Roebuck & Co.................... 15,200 592,800 ------ 936,450 ------ TECHNOLOGY SERVICES-8.1%... Arrow Electronics 14,600 629,625 BMC Software......................... 17,500 748,125 Computer Associates International...... 11,150 634,156 Oracle................................. 13,000 550,875 ------ 2,562,781 ------ TRANSPORTATION-1.2%.......... Federal Express (a) 5,350 395,231 ------ UTILITIES-5.0%. Century Telephone Enterprises 20,200 641,350 Ericsson (LM) Telephone, Cl. B, A.D.R. 16,500 321,750 .. GTE 14,260 627,440 ------ 1,590,540 ------ TOTAL COMMON STOCKS (cost $25,985,306)................... $29,707,794 ======= PRINCIPAL SHORT-TERM INVESTMENTS-5.8% AMOUNT ------- U.S. TREASURY BILLS:..5.25%, 2/29/96 $.....704,000 $ 698,410 4.90%, 3/7/96.......................... 754,000 747,063 4.83%, 3/14/96......................... 379,000 375,115 ------ TOTAL SHORT-TERM INVESTMENTS (cost $1,820,458).................... $ 1,820,588 ======= THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 VALUE ------- TOTAL INVESTMENTS (cost $27,805,764)........................ 99.6% $31,528,382 ==== ======= CASH AND RECEIVABLES (NET)................. .4% $ 128,850 ==== ======= NET ASSETS.................................................................. 100.0% $31,657,232 ==== ======= NOTE TO STATEMENT OF INVESTMENTS; (a) Non-income producing.
See notes to financial statements.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value (cost $27,805,764)-see statement...................................... $31,528,382 Cash.................................................................... 127,477 Dividends receivable.................................................... 33,528 Prepaid expenses........................................................ 38,838 ------ 31,728,225 LIABILITIES: Due to The Dreyfus Corporation and subsidiaries......................... . $20,566 Accrued expenses........................................................ . 50,427 70,993 ---- ------ NET ASSETS.................................................................. $31,657,232 ======= REPRESENTED BY: Paid-in capital......................................................... $27,530,094 Accumulated undistributed investment income-net......................... 1,700 Accumulated undistributed net realized gain on investments.............. 402,820 Accumulated net unrealized appreciation on investments-Note 3........... 3,722,618 ------ NET ASSETS at value applicable to 1,829,227 shares outstanding (150 million shares of $.001 par value Common Stock authorized)......... $31,657,232 ======= NET ASSET VALUE, offering and redemption price per share ($31,657,232 / 1,829,227 shares)........................................ $17.31 =======
See notes to financial statements.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INCOME: Cash dividends (net of $3,898 foreign taxes withheld at source)....... . $ 223,319 Interest.............................................................. 140,920 ----- TOTAL INCOME...................................................... $ 364,239 EXPENSES: Investment advisory fee-Note 2(a)..................................... 138,453 Auditing fees......................................................... 39,288 Directors' fees and expenses-Note 2(c)................................ 14,073 Organization expenses................................................. 14,029 Shareholder servicing costs-Note 2(b)................................. 10,500 Legal fees............................................................ 10,026 Custodian fees........................................................ 7,139 Registration fees..................................................... 6,038 Prospectus and shareholders' reports.................................. 5,487 Miscellaneous......................................................... 1,543 ----- TOTAL EXPENSES.................................................... 246,576 Less-reduction in management fee due to undertaking-Note 2(a)............................................. 11,650 ----- NET EXPENSES...................................................... 234,926 ----- INVESTMENT INCOME-NET............................................. 129,313 REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments-Note 3................................. . $1,186,985 Net unrealized appreciation on investments.............................. . 3,840,201 ----- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 5,027,186 ----- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $5,156,499 =======
See notes to financial statements.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, -------------------------------- 1994 1995 ------ ------- OPERATIONS: Investment income-net................................................... $ 264,288 $ 129,313 Net realized gain (loss) on investments................................. (61,713) 1,186,985 Net unrealized appreciation (depreciation) on investments for the year.. (146,700) 3,840,201 ------ ------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 55,875 5,156,499 ------ ------ DIVIDENDS TO SHAREHOLDERS FROM: Investment income-net................................................... (265,951) (140,970) Net realized gain on investments........................................ _- (722,469) ------ ------ TOTAL DIVIDENDS....................................................... (265,951) (863,439) ------ ------ CAPITAL STOCK TRANSACTIONS: Net proceeds from shares sold........................................... 10,922,467 19,961,839 Dividends reinvested.................................................... 265,951 863,438 Cost of shares redeemed................................................. (1,943,759) (3,867,386) ------ ------ INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................ 9,244,659 16,957,891 ------ ------ TOTAL INCREASE IN NET ASSETS...................................... 9,034,583 21,250,951 NET ASSETS: Beginning of year....................................................... 1,371,698 10,406,281 ------ ------ End of year [including distributions in excess of investment income-net; ($2,009) in 1994 and undistributed investment income-net; $1,700 in 1995]........................................... $10,406,281 $31,657,232 ------ ------ ------ ------ SHARES SHARES ------ ------ CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 808,182 1,237,706 Shares issued for dividends reinvested.................................. 20,087 50,113 Shares redeemed......................................................... (144,061) (245,303) ------ ------ NET INCREASE IN SHARES OUTSTANDING.................................... 684,208 1,042,516 ====== ======
See notes to financial statements. THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Common Stock outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Fund's financial statements.
YEAR ENDED DECEMBER 31, ---------------------------------- PER SHARE DATA: 1993(1) 1994 1995 ---- ---- ---- Net asset value, beginning of year.................................... $12.50 $13.38 $13.23 --- --- --- INVESTMENT OPERATIONS: Investment income-net................................................. .04 .35 .08 Net realized and unrealized gain (loss) on investments................ .88 (.15) 4.49 --- --- --- TOTAL FROM INVESTMENT OPERATIONS.................................... .92 .20 4.57 --- --- --- DISTRIBUTIONS: Dividends from investment income-net.................................. (.04) (.35) (.08) Dividends from net realized gain on investments....................... .- .- (.41) --- --- --- TOTAL DISTRIBUTIONS................................................. (.04) (.35) (.49) --- --- --- Net asset value, end of year.......................................... $13.38 $13.23 $17.31 --- --- --- --- --- --- TOTAL INVESTMENT RETURN................................................... 7.35%(2) 1.49% 34.56% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets............................... .06%(2) .25% 1.27% Ratio of net investment income to average net assets.................. .64%(2) 4.58% .70% Decrease reflected in above expense ratios due to undertakings by Dreyfus and sub-investment adviser............................... 6.19%(2) 2.60% .06% Portfolio Turnover Rate............................................... .- 373.68% 88.52% Net Assets, end of year (000's Omitted)............................... $1,372 $10,406 $31,657 (1) From October 7, 1993 (commencement of operations) to December 31, 1993. (2) Not annualized.
See notes to financial statements. THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1-SIGNIFICANT ACCOUNTING POLICIES: The Fund is registered under the Investment Company Act of 1940 ("Act") as a diversified open-end management investment company. The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. NCM Capital Management Group, Inc. serves as the Fund's sub-investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. (A) PORTFOLIO VALUATION: Investments in securities are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gain are normally declared and paid annually, but the Fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. This may result in distributions that are in excess of investment income-net on a fiscal year basis. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Fund not to distribute such gain. During the year ended December 31, 1995, the Fund reclassified $15,367 from paid-in capital to undistributed investment income-net and net assets were not affected by the change. (D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACT IONS WITH AFFILIATES: (A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment advisory fee is computed at the annual rate of .75 of 1% of the average daily value of the Fund's net assets and is payable monthly. The Investment Advisory Agreement further provides that if in any full year the aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings and extraordinary THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) expenses, exceed the expense limitation of any state having jurisdiction over the Fund, the Fund may deduct from the fee to be paid to Dreyfus, or Dreyfus will bear, such excess expense to the extent required by state law. However, Dreyfus had undertaken from January 1, 1995 through July 10, 1995 to reduce the investment advisory fee paid by the Fund, to the extent that the Fund's aggregate expenses (exclusive of certain expenses as described above) exceeded specified annual percentages of the Fund's average daily net assets. The reduction in management fee, pursuant to the undertaking, amounted to $11,650 for the year ended December 31, 1995. Pursuant to a Sub-Investment Advisory Agreement with NCM Capital Management Group, Inc., the sub-investment advisory fee is computed at an annual rate of .10 of 1% on the first $500 million and .20 of 1% on the excess of the average daily value of the Fund's net assets and is payable monthly by Dreyfus. Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the Fund. Such compensation amounted to $11 for the period from December 1, 1995 through December 31, 1995. (B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus, an amount not to exceed an annual rate of .25 of 1% of the value of the Fund's average daily net assets for certain allocated expenses with respect to servicing and/or maintaining shareholder accounts. During the year ended December 31, 1995, $2,800 was charged to the Fund pursuant to the Shareholder Services Plan. (C) Each director who is not an "affiliated person" as defined in the Act receives from the Fund an annual fee of $2,500. The Chairman of the Board receives an additional 25% of such compensation. NOTE 3-SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the year ended December 31, 1995, amounted to $32,998,822 and $14,121,334, respectively. At December 31, 1995, accumulated net unrealized appreciation on investments was $3,722,618, consisting of $4,326,576 gross unrealized appreciation and $603,958 gross unrealized depreciation. At December 31, 1995, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF DIRECTORS THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. We have audited the accompanying statement of assets and liabilities of The Dreyfus Socially Responsible Growth Fund, Inc., including the statement of investments, as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Dreyfus Socially Responsible Growth Fund, Inc. at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York February 9, 1996 [Dreyfus lion "d" logo] THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 SUB-INVESTMENT ADVISER NCM Capital Management Group, Inc. 103 West Main Street Durham, NC 27701 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 111AR9512 [Dreyfus logo] Socially Responsible Growth Fund, Inc. Annual Report December 31, 1995 CAPITAL APPRECIATION PORTFOLIO Annual Report December 31, 1995 DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to provide you with this annual report on the activity of Dreyfus Variable Investment Fund, Capital Appreciation Portfolio for the 12-month period from January 1, 1995 through December 31, 1995. During that period, the Fund provided a total return of 33.52%.* During the same period, the Standard & Poor's 500 Composite Stock Price Index provided a return of 37.53%.** PORTFOLIO COMPOSITION At the close of the period, the Portfolio had 5.7% of its net assets in short-term securities and the balance in equities. In the equity portion of the Portfolio, industry concentrations were in consumer nondurables and health care. As market conditions permit, we will reduce the position in Treasuries and commit these assets to what we believe are high quality equities. ECONOMIC OUTLOOK In our view, 1995 will prove to have been a bridge to a path of moderate growth, which should extend the economic cycle in an environment of low inflation and declining interest rates. We expect that the average annual Gross Domestic Product growth will weaken to a range of 1.5% - 2.0% in 1996, with inflation near 2.5%, or very likely lower. Long-term interest rates should decline to 5.5% or below in an environment of fiscal restraint and little pricing flexibility. If our outlook is incorrect, it is possible that growth and inflation will fall below our expectations, particularly in the first half of 1996, although we do not expect a recession to develop. In our view, consumer demand will remain weak until late in the year, with any increase in spending continuing to be affected by price sensitivity. The economy's growth should be supported by a moderate increase in capital spending and by growth in U.S. exports, which continues to increase as a percentage of GDP, although from a low base. In spite of weakness among its principal trading partners, the U.S. continues to gain market share in developing markets, particularly in the Pacific Rim and Far East. The above factors, along with cautious but more accommodative monetary policy, should provide enough liquidity to prevent a contraction in economic growth. INVESTMENT OUTLOOK AND STRATEGY In a slowing economy with the prospect of falling corporate profits and earnings disappointments, we do not expect total return on equities to approximate that of 1995. However, we continue to expect equities to outperform fixed income securities and cash equivalents. We believe our strategy of focusing on large capitalization, multinational industry leaders will provide the most upside potential with less exposure to risk. These types of companies will continue to have excess cash available to repurchase shares near the record levels reached in 1995, in spite of weak economies among the G-7 leading industrial nations. We also expect industry consolidations and merger and acquisition activity to be robust, and only marginally lower than the record set in 1995. If the best of all possible developments takes place on the political front, investors could be surprised that equity markets will do better than consensus expectations. INVESTMENT HIGHLIGHTS Rising bond prices, low inflation and the prospect of an extended period of moderate economic growth provided a constructive backdrop for equity markets in 1995. Optimism about the goal of achieving meaningful deficit reduction, and a cyclical trend of fiscal accountability and restraint, also supported equity prices. The rise in the S&P 500 Stock Index was led by health care issues, as had been the case in 1994. The Fund's 15.1% weighting in this sector had the most positive impact on performance relative to the Index. Strong performance in shares of Merck & Co, Pfizer, Johnson & Johnson and American Home Products led this group. The strategy of concentrating the Portfolio's assets in shares of the highest quality global companies in consumer nondurable products also benefitted results. Shares of Philip Morris Cos, Coca-Cola, PepsiCo, Procter & Gamble, Gillette, Kellogg and Eastman Kodak led this group. Performance in the financial services and energy sectors was also quite positive. The Portfolio's underweighting in the retail sector relative to the S&P Index was a positive factor, as this was the weakest group in the Index in 1995. We appreciate your investment in the Capital Appreciation Portfolio and we will continue to seek rewarding returns on your behalf. Sincerely, [Fayez Sarofim signature logo] Fayez Sarofim Portfolio Manager January 16, 1996 New York, N.Y. * Total return includes reinvestment of dividends and any capital gains paid. The Portfolio's performance does not reflect the deduction of additional charges imposed in connection with investing in variable annuity contracts and variable life insurance policies. **SOURCE: LIPPER ANALYTICAL SERVICES, INC. Reflects the reinvestment of income dividends and, where applicable, capital gain distributions. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of stock market performance. DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio DECEMBER 31, 1995 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS VARIABLE INVESTMENT FUND, CAPITAL APPRECIATION PORTFOLIO AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX [Exhibit A $14,694 Standard & Poor's 500 Composite Stock Price Index* Dollars $14,685 Dreyfus Variable Investment Fund, Capital Appreciation Portfolio *Source: Lipper Analytical Services, Inc.] AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FROM INCEPTION (4/5/93) DECEMBER 31, 1995 TO DECEMBER 31, 1995 ----------- -------------- 33.52% 15.05% Past performance is not predictive of future performance. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES APPLICABLE TO SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES USING THE PORTFOLIO AS AN UNDERLYING INVESTMENT. The above graph compares a $10,000 investment made in Dreyfus Variable Investment Fund, Capital Appreciation Portfolio on 4/5/93 (Inception Date) to a $10,000 investment made in the Standard & Poor's 500 Composite Stock Price Index on that date. For comparative purposes, the value of the Index on 3/31/93 is used as the beginning value on 4/5/93. All dividends and capital gain distributions are reinvested. The Portfolio's performance shown in the line graph takes into account all applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of overall stock market performance, which does not take into account charges, fees and other expenses. Further information relating to Portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report.
DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio STATEMENT OF INVESTMENTS DECEMBER 31, 1995 COMMON STOCKS-94.1% SHARES VALUE ------ ------- AEROSPACE & ELECTRONICS-10.5%........... Emerson Electric 6,000 $ 490,500 General Electric....................... 27,050 1,947,600 Intel.................................. 12,500 709,375 Motorola............................... 7,050 401,850 Philips Electronics, N.V. A.D.R. ...... 18,000 645,750 Rockwell International................. 11,000 581,625 Texas Instruments...................... 3,200 165,600 ------ 4,942,300 ------ AUTO RELATED-2.5%.................Chrysler 8,000 443,000 Ford Motor............................. 24,694 716,126 ------ 1,159,126 ------ BANKING-6.9%......................Banc One 1,800 67,950 Chemical Banking....................... 16,000 940,000 Citicorp............................... 22,025 1,481,181 HSBC Holdings, A.D.R. ................. 3,500 528,500 HSBC Holdings PLC...................... 2,400 36,349 Keycorp................................ 1,800 65,250 PNC Bank............................... 3,000 96,750 ------ 3,215,980 ------ CAPITAL GOODS-1.5%.............. AlliedSignal 12,000 570,000 Cooper Industries...................... 3,000 110,250 ------ 680,250 ------ CHEMICALS-3.8%.................. Dow Chemical 9,000 633,375 duPont (E.I.) de Nemours............... 13,500 943,313 Rohm & Haas............................ 3,000 193,125 ------ 1,769,813 ------ ENERGY-9.1%.......................Chevron 18,000 945,000 Exxon.................................. 12,025 963,503 Mobil.................................. 8,525 954,800 Royal Dutch Petroleum ................. 10,000 1,411,250 ------ 4,274,553 ------ FINANCE- MISCELLANEOUS-3.4%.......... American General 22,000 767,250 Federal National Mortgage Association.. 6,500 806,813 ------ 1,574,063 ------ FOOD, BEVERAGE & TOBACCO-16.9%............. Anheuser-Busch Cos 8,000 535,000 Coca-Cola.............................. 32,000 2,376,000 General Mills.......................... 600 34,650
DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------------- FOOD, BEVERAGE & TOBACCO (CONTINUED).............Kellogg 12,000 $ 927,000 Nestle, A.D.R. ........................ 12,000 673,500 PepsiCo................................ 25,000 1,396,875 Philip Morris Cos...................... 18,000 1,629,000 Sara Lee............................... 2,500 79,687 Seagram................................ 8,500 294,313 ------ 7,946,025 ------ HEALTH CARE-15.1%........ Abbott Laboratories 20,000 835,000 American Home Products................. 10,000 970,000 Amgen.................................. 5,000 (a) 296,875 Johnson & Johnson...................... 15,050 1,288,656 Merck & Co............................. 27,000 1,775,250 Pfizer................................. 18,000 1,134,000 Roche Holdings, A.D.S.................. 10,000 792,500 ------ 7,092,281 ------ LEISURE TIME-4.1%.............. Disney (Walt) 10,000 590,000 Eastman Kodak.......................... 10,000 670,000 McDonald's............................. 15,000 676,875 ------ 1,936,875 ------ MEDIA/ENTERTAINMENT-1.6%........ McGraw-Hill 5,000 435,625 News Corp, A.D.S....................... 5,000 106,875 Reader's Digest Association, Cl. A..... 4,000 205,000 ------ 747,500 ------ MULTI INDUSTRY-1.9% Minnesota Mining & Manufacturing 13,500 894,375 ------ OFFICE & BUSINESS EQUIPMENT-2.7%............AT&T 12,000 777,000 Ericsson (LM) Telephone, Cl. B, A.D.R. 3,200 62,400 General Motors, Cl. E.................. 8,500 442,000 ------ 1,281,400 ------ PAPER & FOREST PRODUCTS-1.0%..... International Paper 12,500 473,438 ------ PERSONAL CARE-8.4%....... Estee Lauder, Cl. A 10,000 348,750 Gillette............................... 26,000 1,355,250 International Flavors & Fragrances..... 15,000 720,000 Procter & Gamble....................... 17,500 1,452,500 Unilever, N.V.......................... 500 70,375 ------ 3,946,875 ------ RETAIL-3.0%............ May Department Stores 6,000 253,500 Wal-Mart Stores........................ 22,000 492,250 DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------- ------ RETAIL (CONTINUED)................Walgreen 22,000 $ 657,250 ------ 1,403,000 ------ TRANSPORTATION-1.7%......... Norfolk Southern 7,000 555,625 Union Pacific.......................... 4,000 264,000 ------ 819,625 ------ TOTAL COMMON STOCKS (cost $ 36,415,825).................. $44,157,479 ====== PREFERRED STOCK-.9% MEDIA/ENTERTAINMENTNews Corp, A.D.S., Cum., $.40 (cost $ 434,773)..................... 22,000 $ 423,500 ====== PRINCIPAL SHORT-TERM INVESTMENTS-5.7% AMOUNT ------- U.S. TREASURY BILLS:..6.075%, 3/7/96 (cost $ 2,664,646)................... $ 2,689,000 $ 2,664,261 ====== TOTAL INVESTMENTS (cost $39,515,244) ............................... 100.7% $47,245,240 ===== ====== LIABILITIES, LESS CASH AND RECEIVABLES (.7%). $ (315,140) ===== ====== NET ASSETS.................................................................. 100.0% $46,930,100 ===== ====== NOTE TO STATEMENT OF INVESTMENTS; (a) Non-income producing.
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value (cost $39,515,244)-see statement...................................... $47,245,240 Cash.................................................................... 59,482 Dividends and interest receivable....................................... 73,199 Prepaid expenses and other assets....................................... 138 ------ 47,378,059 LIABILITIES: Due to The Dreyfus Corporation.......................................... $ 31,700 Payable for investment securities purchased............................. 390,060 Accrued expenses and other liabilities.................................. 26,199 447,959 ----- ------ NET ASSETS ................................................................ $46,930,100 ====== REPRESENTED BY: Paid-in capital......................................................... $39,208,271 Accumulated undistributed investment income-net......................... 2,491 Accumulated net realized (loss) on investments and foreign currency transactions......................................... (10,658) Accumulated net unrealized appreciation on investments-Note 4(b)........ 7,729,996 ------ NET ASSETS at value applicable to 2,649,812 shares outstanding (unlimited number of $.001 par value shares of Beneficial Interest authorized).................................................... $46,930,100 ====== NET ASSET VALUE, offering and redemption price per share ($46,930,100 / 2,649,812 shares)........................................ $17.71 ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INCOME: Cash dividends (net of $10,331 foreign taxes withheld at source)...... $ 653,226 Interest.............................................................. 183,873 ----- TOTAL INCOME...................................................... $ 837,099 EXPENSES: Investment advisory fee-Note 3(a)..................................... 157,346 Sub-investment advisory fee-Note 3(a)................................. 57,217 Auditing fees......................................................... 12,053 Registration fees..................................................... 7,932 Custodian fees........................................................ 6,704 Prospectus and shareholders' reports.................................. 4,462 Trustees' fees and expenses-Note 3(b)................................. 2,150 Legal fees............................................................ 1,600 ----- TOTAL EXPENSES.................................................... 249,464 Less-reduction in investment advisory fee due to undertakings-Note 3(a)............................................ 6,445 ----- NET EXPENSES...................................................... 243,019 ----- INVESTMENT INCOME-NET............................................. 594,080 REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized (loss) on investments and foreign currency transactions-Note 4(a)................................................ $ (11,330) Net unrealized appreciation on investments.............................. 7,555,530 ----- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS....................... 7,544,200 ----- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $8,138,280 ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, -------------------------------- 1994 1995 ------ ------ OPERATIONS: Investment income-net................................................... $ 269,727 $ 594,080 Net realized gain (loss) on investments................................. 588 (11,330) Net unrealized appreciation on investments for the year................. 93,162 7,555,530 ------ ------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 363,477 8,138,280 ------ ------ DIVIDENDS TO SHAREHOLDERS FROM: Investment income-net................................................... (269,734) (592,944) ------ ------ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold........................................... 13,455,891 27,535,981 Dividends reinvested.................................................... 269,734 592,943 Cost of shares redeemed................................................. (1,471,097) (4,862,457) ------ ------ INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.......... 12,254,528 23,266,467 ------ ------ TOTAL INCREASE IN NET ASSETS...................................... 12,348,271 30,811,803 NET ASSETS: Beginning of year....................................................... 3,770,026 16,118,297 ------ ------ End of year (including undistributed investment income-net: $1,355 in 1994 and $2,491 in 1995).................................... $16,118,297 $46,930,100 ====== ====== SHARES SHARES ------ ------ CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 1,004,793 1,722,064 Shares issued for dividends reinvested.................................. 20,097 34,096 Shares redeemed......................................................... (110,009) (305,274) ------ ------ NET INCREASE IN SHARES OUTSTANDING.................................... 914,881 1,450,886 ====== ======
See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements.
YEAR ENDED DECEMBER 31, ---------------------------------- PER SHARE DATA: 1993(1) 1994 1995 ---- ---- ---- Net asset value, beginning of year.................................... $12.50 $13.27 $13.44 --- --- --- INVESTMENT OPERATIONS: Investment income-net................................................. .08 .23 .23 Net realized and unrealized gain on investments....................... .76 .17 4.27 --- --- --- TOTAL FROM INVESTMENT OPERATIONS.................................... .84 .40 4.50 --- --- --- DISTRIBUTIONS; Dividends from investment income-net.................................. (.07) (.23) (.23) --- --- --- Net asset value, end of year.......................................... $13.27 $13.44 $17.71 === === === TOTAL INVESTMENT RETURN................................................... 6.74%(2) 3.04% 33.52% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets............................... .28%(2) .25% .85% Ratio of net investment income to average net assets.................. 1.89%(2) 2.99% 2.08% Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation.......................................... 3.67%(2) .86% .02% Portfolio Turnover Rate............................................... .01%(2) .12% 2.81% Net assets, end of year (000's Omitted)............................... $3,770 $16,118 $46,930 (1) From April 5, 1993 (commencement of operations) to December 31, 1993. (2) Not annualized.
See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio NOTES TO FINANCIAL STATEMENTS NOTE 1-GENERAL: The Dreyfus Variable Investment Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as an open-end management investment company, operating as a series company currently offering eight series, including the Capital Appreciation Portfolio series (the "Series") and is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The Series is a diversified portfolio. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. Fayez Sarofim & Co. ("Sarofim") serves as the Series' sub-investment adviser. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. NOTE 2-SIGNIFICANT ACCOUNTING POLICIES: (A) PORTFOLIO VALUATION: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (B) FOREIGN CURRENCY TRANSACTIONS: The Series does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series' books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) (D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gain, if any, are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the Series not to distribute such gain. (E) FEDERAL INCOME TAXES: It is the policy of the Series 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 Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. For Federal income tax purposes, each series is treated as a single entity for the purpose of determining such qualification. The Fund has an unused capital loss carryover of approximately $11,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to December 31, 1995. If not applied, the carryover expires in fiscal 2003. NOTE 3-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to the provisions of an Investment Advisory Agreement with Dreyfus, the investment advisory fee is based on the average daily value of the Series' net assets and is computed at the following annual rates: .55 of 1% of the first $150 million; .50 of 1% of the next $150 million; and .375 of 1% over $300 million. The fee is payable monthly. Pursuant to a Sub-Investment Advisory Agreement with Sarofim, the sub-investment advisory fee is based upon the average daily value of the Series' net assets and is computed at the folllowing annual rates: .20 of 1% of the first $150 million; .25 of 1% of the next $150 million; and .375 of 1% over $300 million. The fee is payable monthly. The agreements further provide that if in any full year the aggregate expenses of the Series, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series, the Series may deduct from the payments to be made to Dreyfus and Sarofim, or Dreyfus and Sarofim will bear the amount of such excess to the extent required by state law. However, Dreyfus had undertaken, from January 1, 1995 through June 30, 1995 to reduce the investment advisory fee paid by the Series, to the extent that the Series' aggregate expenses (exclusive of certain expenses as described above) exceeded specified annual percentages of the Series' average daily net assets. The reduction in investment advisory fee pursuant to the undertakings amounted to $6,445 for the year ended December 31, 1995. Effective December 1, 1995, the Fund entered into a transfer agency agreement with Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, to provide personnel and facilities to perform transfer agency services for the Fund. (B) Each trustee who is not an "affiliated person," as defined in the Act receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 4-SECURITIES TRANSACTIONS: (A) The aggregate amount of purchases and sales of investment securities, excluding short term securities, during the year ended December 31, 1995, amounted to $25,882,151 and $723,554, respectively. (B) At December 31, 1995, accumulated net unrealized appreciation on investments was $7,729,996, consisting of $8,138,575 gross unrealized appreciation and $408,579 gross unrealized depreciation. At December 31, 1995, 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). DREYFUS VARIABLE INVESTMENT FUND, Capital Appreciation Portfolio REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS VARIABLE INVESTMENT FUND, CAPITAL APPRECIATION PORTFOLIO We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, Capital Appreciation Portfolio (one of the series constituting the Dreyfus Variable Investment Fund), as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Variable Investment Fund, Capital Appreciation Portfolio at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York February 9, 1996 [Dreyfus lion "d" logo] DREYFUS VARIABLE INVESTMENT FUND, CAPITAL APPRECIATION PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 SUB-INVESTMENT ADVISER Fayez Sarofim & Co. Two Houston Center, Suite 2907 Houston, TX 77010 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 112AR9512 [Dreyfus logo] Variable Investment Fund, DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to provide you with this report on Dreyfus Variable Investment Fund, Money Market Portfolio. For its annual reporting period ended December 31, 1995, your Fund provided an annualized yield of 5.54%. The annualized effective yield after compounding was 5.68%.* THE ECONOMY Additional evidence that economic activity remained sluggish and that inflation continued to be under control moved the Federal Reserve to further reduce the Federal Funds rate in December. The Federal Funds rate is the rate at which the nation's banks borrow money from each other and is a benchmark for other short-term rates. This was the second reduction for this important short-term rate in 1995, the first occurring in July. The latest 25-basis-point reduction in December put the rate at 5.50%. Major incentives for this additional decrease were the favorable inflation report in November and the generally slow rate of economic growth. As it did in July, the Federal Reserve left unchanged the discount rate _ the rate at which the Federal Reserve lends to member banks. The discount rate remained at 5.25% throughout 1995. Signs of economic slowdown increased during the latter half of the year. Weakening retail sales and very modest industrial production lent credence to fears about the possibility of recession. Consumer spending was inhibited last year by the sluggish growth in wages and salaries and the continued trend of corporate downsizing. The lethargic pace of consumer spending last year culminated in one of the worst holiday sales periods since the business slump in 1990-1991, despite steep price markdowns by retailers. By November, the capacity utilization rate of the nation's factories declined for the third consecutive month. This was a reflection of weakening demand and further evidence of the diminishing pressure to raise prices. Furthermore, inventories built up by year-end, another sign of slackening demand. The political stalemate in Washington over the balanced budget adds additional uncertainty to the economy; ultimately an accord will be reached and fiscal policy will likely be a restraining force on the economy. As we go forward without a budget agreement, reductions in annually appropriated spending will tend to inhibit the economy. With an agreement, the combination of cuts in appropriations and other spending reductions should have the same effect. There are strong indications that inflation is under control. Until mid-year 1995, fear of inflation was the overriding concern of the Federal Reserve. Now, the focus seems to have shifted to actions designed to avoid recession. In an election year, few things are less desirable for political incumbents than recession. MONEY MARKET ENVIRONMENT/PORTFOLIO ACTIVITY In the past twelve months, strong fundamental and positive technical factors influenced interest rate performance. Statistical data consistently revealed weak to modest economic growth with a favorable inflation outlook, prompting interest rates to gradually trend lower. For example, three-month Certificates of Deposit had an average yield of 6.29% for the month of December 1994, compared to 5.62% for the month of December 1995.** In response your Portfolio's average maturity has been extended in an attempt to fully maximize yield potential in a declining interest rate environment. Included in this report is a series of detailed statements about your Portfolio's holdings and its financial condition. We hope they are informative. Please know that we greatly appreciate your continued confidence in the Portfolio and in The Dreyfus Corporation. Very truly yours, [Patricia A. Larkin signature logo] Patricia A. Larkin Portfolio Manager January 15, 1996 New York, N.Y. * Annualized effective yield is based upon dividends declared daily and reinvested monthly. **Source: Federal Reserve Statistical Release.
DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio STATEMENT OF INVESTMENTS DECEMBER 31, 1995 PRINCIPAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-15.5% AMOUNT VALUE ------- ------ Bank of Tokyo, Ltd. (Yankee) 6.06%, 2/5/96........................................................... $ 2,000,000 $2,000,000 Bayerische Vereinsbank AG (Yankee) 5.88%-6.02%, 7/17/96-12/6/96............................................ 2,000,000 2,000,000 Deutsche Bank AG (London) 5.78%, 2/1/96........................................................... 1,000,000 1,000,016 Mitsubishi Bank, Ltd. (Yankee) 6%, 1/10/96............................................................. 1,000,000 1,000,000 Sumitomo Bank, Ltd. (Yankee) 6.12%, 1/29/96.......................................................... 1,000,000 1,000,000 ------ TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT (cost $7,000,016)....................................................... $ 7,000,016 ====== BANKERS' ACCEPTANCES-8.8% Dai-Ichi Kangyo Bank Ltd. (Yankee) 5.80%-5.92%, 2/15/96-3/8/96............................................. $ 2,000,000 $ 1,982,136 Sanwa Bank Ltd. (Yankee) 5.79%-5.90%, 2/26/96-3/13/96............................................ 2,000,000 1,979,647 ------ TOTAL BANKERS' ACCEPTANCES (cost $3,961,783)....................................................... $ 3,961,783 ====== COMMERCIAL PAPER-49.2% AT&T Corp. 5.69%, 3/13/96.......................................................... $ 2,000,000 $1,977,680 Bankers Trust New York Corp. 5.81%, 3/15/96.......................................................... 1,000,000 988,407 Bear Stearns Companies Inc. 5.80%, 7/22/96.......................................................... 1,000,000 968,648 Ciesco L.P. 5.84%, 1/18/96.......................................................... 700,000 698,132 Ford Motor Credit Co. 5.78%-6.33%, 1/9/96-2/28/96............................................. 2,000,000 1,989,521 General Electric Capital Corp. 5.61%, 5/1/96........................................................... 1,500,000 1,472,372 General Electric Capital Services Inc. 5.61%-5.64%, 4/25/96-5/1/96............................................. 2,000,000 1,963,980 General Motors Acceptance Corp. 5.70%, 5/1/96........................................................... 2,000,000 1,962,692 Lehman Brothers Holdings Inc. 5.90%, 1/19/96.......................................................... 2,000,000 1,994,170 DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 PRINCIPAL COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE ------- ------ Merrill Lynch & Co. Inc. 5.57%-5.83%, 1/31/96-3/29/96............................................ $ 2,000,000 $ 1,981,813 Nations Bank Corp 5.61%, 5/28/96.......................................................... 1,000,000 977,553 Sears Roebuck Acceptance Corp. 5.86%, 1/18/96.......................................................... 1,500,000 1,495,948 Spintab AB 5.77%, 1/25/96.......................................................... 1,800,000 1,793,220 Toronto-Dominion Holdings U.S.A. Inc. 5.76%, 1/17/96.......................................................... 1,000,000 997,511 UBS Finance (DE) Inc. 5.90%, 1/2/96........................................................... 1,000,000 999,836 ------ TOTAL COMMERCIAL PAPER (cost $22,261,483)...................................................... $22,261,483 ====== CORPORATE NOTES-1.1% General Electric Capital Corp. 5.85%, 2/9/96 (cost $500,000)....................................................... $ 500,000 $ 500,000 ====== SHORT-TERM BANK NOTES-11.0% Comerica Bank 5.65%, 9/18/96........................................................ $ 2,000,000 $1,999,125 First National Bank of Boston 5.71%, 7/10/96........................................................ 1,000,000 1,000,000 Fleet Bank of New York N.A. 5.80%, 1/8/96........................................................... 1,000,000 1,000,000 Morgan Guaranty Trust Co. 6%, 10/30/96............................................................ 1,000,000 1,000,000 ------ TOTAL SHORT-TERM BANK NOTES (cost $4,999,125)....................................................... $ 4,999,125 ====== U.S. GOVERNMENT AGENCIES-15.4% Federal Farm Credit Banks, Floating Rate Notes 5.58%, 11/7/96........................................................ $ 3,000,000 $ 2,997,541 Federal Home Loan Mortgage Corp., Discount Note 5.50%, 1/2/96........................................................... 1,962,000 1,961,700 Federal National Mortgage Association, Floating Rate Notes 5.86%, 12/16/96....................................................... 2,000,000 1,998,142 ------ TOTAL U.S. GOVERNMENT AGENCIES (cost $6,957,383)....................................................... $ 6,957,383 ======
DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 VALUE ------- TOTAL INVESTMENTS (cost $45,679,790)............................................ 101.0% $45,679,790 ==== ====== LIABILITIES, LESS CASH AND RECEIVABLES............................ (1.0%) $ (430,939) ==== ====== NET ASSETS ................................................. 100.0% $45,248,851 ==== ======
NOTE TO STATEMENT OF INVESTMENTS; (a) Variable interest rate-subject to periodic change. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value-Note 2(a)........................... $45,679,790 Interest receivable..................................................... 183,374 Prepaid expenses and other assets....................................... 707 ------ 45,863,871 LIABILITIES: Due to The Dreyfus Corporation.......................................... $ 18,543 Due to Custodian........................................................ 560,303 Accrued expenses........................................................ 36,174 615,020 ----- ------ NET ASSETS ................................................................ $45,248,851 ====== REPRESENTED BY: Paid-in capital......................................................... $45,237,051 Accumulated undistributed investment income-net......................... 12,579 Accumulated net realized (loss) on investments.......................... (779) ------ NET ASSETS at value applicable to 45,237,051 shares outstanding (unlimited number of $.001 par value shares of Beneficial Interest authorized)..... $45,248,851 ====== NET ASSET VALUE, offering and redemption price per share ($45,248,851 / 45,237,051 shares)....................................... $1.00 ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INTEREST INCOME......................................................... $2,299,161 EXPENSES: Investment advisory fee-Note 3(a)..................................... $187,396 Custodian fees........................................................ 17,735 Prospectus and shareholders' reports.................................. 16,696 Professional fees..................................................... 11,163 Registration fees..................................................... 3,592 Trustees' fees and expenses-Note 3(b)................................. 2,658 Shareholder servicing costs........................................... 549 Miscellaneous......................................................... 3,837 ----- TOTAL EXPENSES.................................................... 243,626 Less-reduction in investment advisory fee due to undertakings-Note 3(a) 10,251 ----- NET EXPENSES...................................................... 233,375 ----- INVESTMENT INCOME-NET....................................................... 2,065,786 NET REALIZED (LOSS) ON INVESTMENTS-Note 2(b)................................ (848) ----- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,064,938 ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, ---------------------------------- 1994 1995 ------- ------ OPERATIONS: Investment income-net................................................... $ 1,006,418 $ 2,065,786 Net realized gain (loss) on investments................................. 40 (848) ------- ------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 1,006,458 2,064,938 ------- ------ DIVIDENDS TO SHAREHOLDERS FROM; Investment income-net................................................... (1,000,523) (2,059,102) ------- ------ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold........................................... 141,994,565 132,951,838 Dividends reinvested.................................................... 1,000,523 2,059,103 Cost of shares redeemed................................................. (115,923,303) (124,496,329) ------- ------ INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.......... 27,071,785 10,514,612 ------- ------ TOTAL INCREASE IN NET ASSETS...................................... 27,077,720 10,520,448 NET ASSETS: Beginning of year....................................................... 7,650,683 34,728,403 ------- ------ End of year (including undistributed investment income-net: $5,895 in 1994 and $12,579 in 1995)................................... $ 34,728,403 $ 45,248,851 ======= ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements. YEAR ENDED DECEMBER 31, -------------------------------------------------------------- PER SHARE DATA: 1991 1992 1993 1994 1995 ---- ---- ---- ---- ---- Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---- ---- ---- ---- ---- INVESTMENT OPERATIONS; Investment income-net........................ .058 .041 .032 .043 .055 ---- ---- ---- ---- ---- DISTRIBUTIONS; Dividends from investment income-net......... (.058) (.041) (.032) (.043) (.055) ---- ---- ---- ---- ---- Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ==== ==== ==== ==== ==== TOTAL INVESTMENT RETURN.......................... 5.99% 4.14% 3.29% 4.37% 5.66% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... .- .- .- .- .62% Ratio of net investment income to average net assets................................. 5.78% 4.10% 3.23% 4.62% 5.51% Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation. 3.94% 4.25% 2.81% .88% .03% Net Assets, end of year (000's Omitted)...... $ 1,619 $790 $ 7,651 $34,728 $45,249
See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio NOTES TO FINANCIAL STATEMENTS NOTE 1-GENERAL: The Dreyfus Variable Investment Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as an open-end management investment company, operating as a series company currently offering eight series, including the Money Market Portfolio (the "Series") and is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The Series is a diversified portfolio. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is the Boston Institutional Group, Inc. It is the Series' policy to maintain a continuous net asset value per share of $1.00; the Series has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the Fund will be able to maintain a stable net asset value of $1.00. The Fund currently functions as the funding vehicle for the Dreyfus Series 2000 Variable Annuity Contract (the "Account") issued by Mutual Benefit Life Insurance Company ("Mutual Benefit Life"). On July 16, 1991, the Superior Court of New Jersey entered an Order (the "Order") appointing the New Jersey Insurance Commissioner as Rehabilitator of Mutual Benefit Life. The Commissioner was granted immediate exclusive possession and control of, and title to, the business and assets of Mutual Benefit Life, including the assets and liabilities of the Account. The Commissioner was empowered by the Order to take such steps as he deemed appropriate toward removing the cause and conditions that made rehabilitation necessary. On January 15, 1993, the Commissioner Filed the First Amended Plan of Rehabilitation ("Plan") with the Court. The Plan stipulated that the assets and liabilities of the Account would be transferred to a separate account of MBL Life Assurance Corporation ("MBLLAC"), a wholly-owned subsidiary of Mutual Benefit Life. The Plan also provided for the transfer of the ownership of stock of MBLLAC to a Trust. The Commissioner was designated as the sole Trustee of the Trust. On August 12, 1993, the Court rendered an opinion approving the Plan with certain modifications. Two subsequent amendments to the Plan were filed and approved by the Court. None of the modifications or amendments affected the status of the Account. On November 10, 1993, the Court issued an order of Confirmation permitting the implementation of the Plan. An order was also issued by the Court on January 28, 1994, approving the form of the Third Amended Plan of Rehabilitation, the Election Materials and related documents. On April 29, 1994, the Plan was implemented. Substantially all of the assets of Mutual Benefit Life were transferred to MBLLAC which assumed and reinsured Mutual Benefit Life's restructured insurance liabilities. The stock of MBLLAC was assigned to the Stock Trust and the Commissioner was designated as Trustee. DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) In view of the terms and conditions of both the Order and the Plan, applications for new contracts and additional purchase payments under existing contracts are currently not being accepted by the Account. The terms of the Order and the Plan permit redemptions from the Account to continue as requested. The proceedings of the New Jersey Insurance Commissioner with respect to Mutual Benefit Life or the Account do not apply to the separate accounts of other life insurance companies that may use the Fund as a funding vehicle for contracts or policies issued by them. NOTE 2-SIGNIFICANT ACCOUNTING POLICIES: (A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which has been determined by the Fund's Board of Trustees to represent the fair value of the Series' investments. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Interest income is recognized on the accrual basis. Cost of investments represents amortized cost. (C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that a net realized capital gain can be offset by a capital loss carryover, if any, such gain will not be distributed. On January 2, 1996, the Fund declared a cash dividend of approximately $.0004 per share from undistributed investment income-net which includes investment income-net for Saturday, December 30, 1995 and Sunday, December 31, 1995. (D) FEDERAL INCOME TAXES: It is the policy of the Series 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 Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. For Federal income tax purposes, each series is treated as a single entity for the purpose of determining such qualification. NOTE 3-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to the provisions of an Investment Advisory Agreement ("Agreement") with Dreyfus, the investment advisory fee is computed at the annual rate of .50 of 1% of the average daily value of the Series' net assets and is payable monthly. The Agreement further provides that if in any full year the aggregate expenses of the Series, exclusive of taxes, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series, the Series may deduct from the payments to be made to Dreyfus, or Dreyfus will bear the amount of such excess to the extent required by state law. DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) However, Dreyfus had undertaken, from January 1, 1995 through February 1, 1995, to reduce the investment advisory fee paid by the Series, to the extent that the Series' aggregate expenses (exclusive of certain expenses as described above) exceeded specified annual percentages of the Series' average daily net assets. The reduction in investment advisory fee, pursuant to the undertakings, amounted to $10,251 for the year ended December 31, 1995. Effective December 1, 1995, the Fund entered into a transfer agency agreement with Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, to provide personnel and facilities to perform transfer agency services for the Fund. (B) Each trustee who is not an "affiliated person" as defined in the Act receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. DREYFUS VARIABLE INVESTMENT FUND, Money Market Portfolio REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, Money Market Portfolio (one of the series constituting the Dreyfus Variable Investment Fund) as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Variable Investment Fund, Money Market Portfolio at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York February 9, 1996 [Dreyfus lion "d" logo] DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 117AR9512 [Dreyfus logo] Variable Investment Fund, MONEY MARKET PORTFOLIO Annual Report December 31, 1995 DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio LETTER TO SHAREHOLDERS Dear Shareholder: For the fiscal year ended December 31, 1995, the Managed Assets Portfolio of Dreyfus Variable Investment Fund posted a total return of -.26% per share,* while the Standard & Poor's 500 Composite Stock Price Index rose 37.53%.** During this past year, the Portfolio was positioned to benefit from a declining stock market and a rising price in gold shares. However, the stock market experienced extraordinary returns, while gold stocks remained essentially unchanged. THE EQUITY MARKET The Portfolio holds index put options and short positions intended to benefit from declines in the equity markets. The value of the options has declined, but the loss has been limited to the premiums paid. The Portfolio has also lost value by selling both stocks and S&P 500 Futures short. Through a discipline of "limiting losses" the Portfolio has exited these positions during certain periods. The bulk of the Portfolio's losses during the last fiscal year can be attributed to these positions. The general stock market has risen sharply during the past year in parallel with long-term Treasury bonds and strong earnings. The stock market remains at what has in the past proven to be very expensive valuation levels, particularly as measured by dividend yields on both an absolute basis and relative to Treasury bill yields. The future direction of the market becomes more complex when one considers that inflation remains tame, earnings continue to be strong, and interest rates are declining. The correction of the overvaluation of financial assets will ultimately be triggered by a change in the direction of any one of these bullish supports for stock prices. GOLD MINING SHARES The Portfolio's gold share position stands at approximately 25% of the total Portfolio. Gold bullion has failed to penetrate the $400 per ounce level significantly for the past 5 years. Each rally approaching $400 per ounce is met by supply from either central banks or gold mining companies selling their production forward. At some point this supply could shift sharply into demand. Forward selling is essentially a short position that producers may scramble to reverse in a rising gold market, while the complacen cy of central banks may be altered should there be a shift in the public's current positive attitude toward financial assets. The gold shares have done little to alter the performance of the Portfolio in the last year with the exception of some net trading profits. We still believe that should the gold market penetrate the $400 per ounce level, the following rise will be quick and sharp, warranting our core position. SPECIAL SITUATIONS We have maintained a 20% position in debt securities denominated in Deutsche Marks, Swiss Francs, and South African Rands. The currency profits have been locked in through hedging after the dollar dropped to 1.42 DM/$. We will continue to monitor this position in the hope that the Portfolio can take advantage of another dollar slide. The Portfolio has purchased securities in a number of emerging markets. These include Venezuelan and Argentine debt securities along with closed-end investment funds that invest in Vietnam and Russia. In total, this asset class has proven to be very profitable for the Portfolio. The Portfolio purchased put options that would benefit if either the Japanese bond market or the Japanese yen declined. Japan, a land mass the size of California, has a Gross Domestic Product in dollars roughly equal to the U.S. This high level, along with recent trade figures, real estate problems and other valuation techniques points to a lower yen and higher interest rates. This position was recently sold at a profit as the yen/$ foreign exchange rate moved from 85 to above 102. The Portfolio has purchased Japanese equities while hedging the currency exposure. The Japanese stock market appears to offer value after declining over 50% from its peak in 1989. Even though Japan is facing a difficult real estate problem, and the stock market still appears expensive relative to earnings, there seem to be some signs of a change. The market is cheap relative to book value and short-term interest rates. Technical indicators such as volatility and volume patterns point to an end to the six-year bear market. Most importantly, earnings are due to rebound as the government provides liquidity to the economy due to its real estate problems, a situation similar to the U.S. in 1991. Additionally, a weaker yen will markedly improve the health of export-oriented Japan by making the price of its goods more competitive. The Portfolio holds Interest Only securities (IOs). After they dropped almost 50% due to lower interest rates, the Fund began purchasing the IOs again. The IO securities are one of the cheapest and most liquid means of benefiting from rising interest rates. Even though rates have continued to decline, the Portfolio is roughly break-even on the IO investment. The Portfolio continues to search for value in the stock market and a few names have surfaced such as Castle & Cooke, Hartmarx, Horsham, PT TriPolyta Indonesia, A.D.R., Duty Free International, and Teledyne. While profits have been realized on a number of equities as they have reached what we feel is a fair valuation, the remaining companies continue to trade substantially below our estimates of their market values. THE OUTLOOK In summary, the Portfolio's positions will generally benefit from stock market declines, interest rate increases, rising gold shares, and a number of special situations both in the U.S. and abroad. In addition, it will continue to hold a significant U.S. Treasury Bill position in anticipation of buying stocks at much cheaper levels. The performance of the Portfolio has been poor over the last fiscal year. While many themes that the Portfolio invested in have worked out well, the primary one, profiting during a bear stock market, has proven to be a disaster of late. The investment committee has always realized the price for being bearish too early is poor performance, both absolute and relative. In an attempt to limit the losses during a rising market and minimize weak absolute returns, the Portfolio has adhered to a policy of buying put options along with a strict discipline of exiting short positions. The markets have surely tested our conviction over the last few years, but we feel more strongly than ever that at present investors should take a cautious and conservative stance toward financial assets. Sincerely, Comstock Partners, Inc. Investment Policy Committee January 15, 1996 Jersey City, New Jersey * Total return includes reinvestment of dividends and any capital gains paid. The Portfolio's performance does not reflect the deduction of additional charges imposed in connection with investing in variable annuity contracts and variable life insurance policies. **SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of income dividends and, where applicable, capital gain distributions. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of stock market performance. DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio DECEMBER 31, 1995 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS VARIABLE INVESTMENT FUND, MANAGED ASSETS PORTFOLIO AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX AND THE DOW JONES INDUSTRIAL AVERAGE [Exhibit A: Dollars $22,924 Dow Jones Industrial Average* $22,306 Standard & Poor's 500 Composite Stock Price Index* $14,385 Dreyfus Variable Investment Fund, Managed Assets Portfolio *Source: Lipper Analytical Services, Inc.] AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FIVE YEARS ENDED FROM INCEPTION (8/31/90) DECEMBER 31, 1995 DECEMBER 31, 1995 TO DECEMBER 31, 1995 ----------- ----------- -------------- (0.26)% 7.14% 7.05% Past performance is not predictive of future performance. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES APPLICABLE TO SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES USING THE PORTFOLIO AS AN UNDERLYING INVESTMENT. The above graph compares a $10,000 investment made in Dreyfus Variable Investment Fund, Managed Assets Portfolio on 8/31/90 (Inception Date) to a $10,000 investment made in the Standard & Poor's 500 Composite Stock Price Index and the Dow Jones Industrial Average on that date. All dividends and capital gain distributions are reinvested. The Portfolio's performance shown in the line graph takes into account all applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price Index and the Dow Jones Industrial Average are widely accepted, unmanaged indices of overall stock market performance, which do not take into account charges, fees and other expenses. Further information relating to Portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report.
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio STATEMENT OF INVESTMENTS DECEMBER 31, 1995 COMMON STOCKS-35.4% SHARES VALUE ------- ------ BROADCASTING-1.2% P.T. Telekomunikasi Indonesia, A.D.R. .(a) ..... 6,900 $ 174,225 Tele-Communications Liberty Media, Cl. A.....(a) 1,250 33,594 Tele-Communications - TCI, Cl. A.............(a) 5,000 99,375 ------ 307,194 ------ CHEMICALS-.7% P.T. Tri Polyta Indonesia, A.D.R. 12,500 171,875 ------ CONGLOMERATES-.5%.................. Teledyne 5,300 135,813 ------ CONSUMER GROWTH STAPLES-.6%............. Paragon Trade Brands (a) 6,000 140,250 ------ ELECTRICAL EQUIPMENT-.3%.... Hitachi, A.D.R. 800 80,400 ------ ENERGY-.7%...................... Baker Hughes 5,500 134,062 Basin Exploration.................... (a) 10,500 51,844 ------ 185,906 ------ FINANCE-.3%.................... Pioneer Group 2,800 76,300 ------ FOODS & BEVERAGES-.6%......... Castle & Cooke 1,133 18,983 Dole Food.............................. 3,400 119,000 ------ 137,983 ------ GOLD MINING-21.1%.................Amax Gold (a) 30,000 217,500 Ashanti Goldfields, G.D.R. ..................(b) 14,000 281,750 Bema Gold............................ (a) 87,000 174,000 Buffelsfontein Gold Mining, A.D.R. ..........(a) 13,000 37,375 Canyon Resources..................... (a) 68,000 165,750 Crystallex International............. (a) 16,000 27,429 Dakota Mining........................ (a) 25,000 37,500 Driefontein Consolidated, A.D.R. ...... 16,300 201,713 East Rand Gold & Uranium, A.D.R. ............... 30,000 81,000 El Callao Mining..................... (a) 8,000 3,516 Elandsrand Gold Mining, A.D.R. ................. 25,000 121,875 Firstmiss Gold....................... (a) 11,200 249,200 Free State Consolidated Gold Mines, A.D.R. ..... 9,800 71,050 Goldcorp, Cl. A........................ 15,040 177,670 Golden Shamrock Mines................ (a) 60,000 36,977 Greenstone Resources................. (a) 58,200 168,418 Homestake Mining....................... 3,200 50,000 International Gold Resources.................(a) 80,000 210,989 Kinross Mines, A.D.R. ................. 9,000 84,375 Kloof Gold Mining, A.D.R. ............. 6,300 59,456 MK Gold.............................. (a) 99,000 247,500 Menzies Gold......................... (a) 250,000 83,531 Newmont Mining......................... 5,771 261,138 Pegasus Gold......................... (a) 37,500 520,313 Prime Resource Group................. (a) 26,000 178,571 Randfontein Estates Gold Mining, A.D.R. ........ 7,200 46,420 DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------- ------ GOLD MINING (CONTINUED).. Rio Amarillo Mining (a,b) 80,000 $ 32,234 Royal Oak Mines...................... (a) 118,000 420,375 Santa Fe Pacific Gold.................. 16,000 194,000 Southwestern Gold.................... (a) 18,000 102,198 TVX Gold............................. (a) 59,200 419,647 Vaal Reefs Exploration & Mining, A.D.R......... 28,000 178,500 Vengold.............................. (a) 82,000 66,359 Winkelhaak Mines, A.D.R. .............. 18,000 126,000 ------ 5,334,329 ------ HEALTH CARE-.7%............. Tenet Healthcare (a) 8,500 176,375 ------ HOLDING COMPANIES-.5%........... Horsham 10,000 135,000 ------ INDUSTRIAL-1.3%..................Anglovaal 5,000 213,991 ....ISCOR 103,400 93,046 Johnnies Industrial.................... 1,414 21,336 ------ 328,373 ------ METALS-1.1% Freeport-McMoRan Copper & Gold, Cl. A. ....... 3,800 106,400 Silver Standard Resources (Warrants).........(a,b) 40,000 164,835 ------ 271,235 ------ MINING-1.3%.......................Eldorado (a,b) 57,000 177,473 JCI, A.D.R. ........................... 1,400 11,042 Triton Mining...................... (a,b) 40,000 146,520 ------ 335,035 ------ MISCELLANEOUS-.8% Fleming Russia Securities Fund (a) 15,000 86,250 Lazard Vietnam Fund.................. (a) 10,000 106,250 ------ 192,500 ------ OIL-1.5%........................ Amerada Hess 2,600 137,800 HS Resources......................... (a) 7,700 99,138 Total S.A., A.D.R. .................... 4,000 136,000 ------ 372,938 ------ OIL & GAS EXPLORATION-.5%....... Petro-Canada 11,500 132,692 ------ RETAIL TRADE-1.0%.... Duty Free International 8,200 131,200 Hartmarx............................. (a) 30,000 131,250 ------ 262,450 ------ SEMICONDUCTORS-.7%.................Fujitsu 3,000 33,333 NEC, A.D.R. ........................... 1,600 97,600 OKI Electric Industry................ (a) 3,000 26,899 Toshiba................................ 3,000 23,449 ------ 181,281 ------ TOTAL COMMON STOCKS (cost $9,164,105).................... $ 8,957,929 =======
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 PREFERRED STOCKS-.6% SHARES VALUE ------------- CONGLOMERATES;............ Teledyne, Series E 160 $ 2,300 METALS; Freeport-McMoRan Copper & Gold, Cl. A. 4,500 136,688 ------ TOTAL PREFERRED STOCKS (cost $177,297)...................... $ 138,988 ====== CONTRACTS SUBJECT PUT OPTIONS-3.2% TO PUT ------- AMEX Security Broker/Dealer Index; January `96 @ $355................... 2,600 $ 55,900 Standard & Poor's 500 Index Flex Options; December `96 @ $525.................. 1,300 7,231 Standard & Poor's 500 Index: March `96 @ $453................... (k) 4,546 0 March `96 @ $500..................... 7,500 2,813 March `96 @ $525..................... 7,000 4,375 March `96 @ $625..................... 6,000 97,500 June `96 @ $450...................... 1,600 500 June `96 @ $475...................... 7,600 5,700 June `96 @ $500...................... 5,000 6,250 June `96 @ $550...................... 2,100 8,137 September `96 @ $550................. 12,700 84,138 September `96 @ $575................. 7,500 76,875 December `96 @ $525.................. 1,300 7,962 December `96 @ $550.................. 21,500 190,813 December `96 @ $600.................. 6,000 116,250 June `97 @ $550...................... 6,000 76,125 June `97 @ $600...................... 3,000 69,750 PRINCIPAL AMOUNT SUBJECT TO PUT ------- U.S. Treasury Bond; 7.625%, 2/15/2025; April `96 @ $103.078 (k) $..1,950,000 19 ------ TOTAL PUT OPTIONS (cost $1,608,836).................... $ 810,338 ======
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 PRINCIPAL BONDS & NOTES-22.6% AMOUNT VALUE ------------- BONDS-21.8%.......... Argentinian Securities; Republic of Argentina, ..5%, 3/31/2023 (c,d,e) $.....250,000 $ 142,656 Austrian Securities; Republic of Austria, ..4.50%, 2/12/2000 (f) 1,993,068 2,108,666 German Securities; Bundesrepublik Deutschland, .. 9%, 10/20/2000 (g) 1,740,341 2,027,497 South African Securities; Eskom, . 11%, 6/1/2008 (h) 987,654 804,444 Venezuelan Securities; Republic of Venezuela, ... 6.75%, 3/31/2020 (c,d) 750,000 429,844 ------ 5,513,107 ------ NOTES-.8% Federal National Mortgage Association, Non-Callable Strips, (collateralized by FNMA Strip, 10/1/2024) Cl. 267-2, 8.50%, 10/25/2024 (Interest Only Obligation) 951,427(i) 195,043 ------ TOTAL BONDS AND NOTES (cost $5,028,183).................... $ 5,708,150 ====== SHORT-TERM INVESTMENTS-32.0% U.S. TREASURY BILLS:...5.26%, 1/11/96 (j) $.....574,000 $ 573,099 5.26%, 2/29/96......................... 126,000 124,999 4.89%, 3/7/96.......................... 5,434,000 5,384,007 4.85%, 3/14/96......................... 2,036,000 2,015,131 ------ TOTAL SHORT-TERM INVESTMENTS (cost $8,099,336).................... $ 8,097,236 ====== TOTAL INVESTMENTS (cost $24,077,757)........................................ 93.8% $23,712,641 ===== ====== CASH AND RECEIVABLES (NET).................................................. 6.2% $ 1,559,160 ===== ====== NET ASSETS.................................................................. 100.0% $25,271,801 ===== ======
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio NOTES TO STATEMENT OF INVESTMENTS: (a) Non-income producing. (b) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31,1995, these securities amounted to $802,812 or 3.2% of net assets. (c) Denominated in U.S. Dollars. (d) Secured by U.S. Treasury Securities. (e) Scheduled variable interest rate. (f) Denominated in Swiss Francs. (g) Denominated in German Marks. (h) Denominated in South African Rand. (i) Notional face amount. (j) Partially held by the custodian in a segregated account as collateral for open financial futures positions. (k) Securities restricted as to public resale. Investments in restricted securities, with an aggregate market value of $19 represents approximately 0.00% of net assets:
ACQUISITION PURCHASE PERCENTAGE OF PUT OPTIONS: DATE PRICE NET ASSETS VALUATION* - ------- ------ ----- -------- ------ Standard & Poor's 500 Index March `96 @ $453 ........................ . 12/14/94 $21.99 0.00 fair value U.S. Treasury Bond; 7.625%, 2/15/2025, April `96 @ $103.078.. 4/12/95 $4.72 0.00 fair value *The valuation of these securities has been determined in good faith under the direction of the Board of Trustees.
STATEMENT OF FINANCIAL FUTURES DECEMBER 31, 1995 UNREALIZED MARKET VALUE APPRECIATION NUMBER OF COVERED (DEPRECIATION) FINANCIAL FUTURES PURCHASED; CONTRACTS BY CONTRACTS EXPIRATION AT 12/31/95 ------- ------ ------- ------- Nikkei 225................................... 2 $ 200,600 March `96 $ 300 FINANCIAL FUTURES SOLD SHORT: Hang Seng.................................... 10 $ (655,633) January `96 (4,204) Japanese Yen............................ ...... 2 $ (244,325) March `96 20,600 Standard & Poor's 500........................ 13 $ (4,019,925) March `96 (24,600) ----- $ (7,904) ====== See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value (cost $24,077,757)-see statement...................................... $23,712,641 Cash.................................................................... 1,522,261 Dividends and interest receivable....................................... 148,197 Net unrealized appreciation on forward currency exchange contracts-Note 4(a).......................................... 88,822 Receivable for investment securities sold............................... 73,303 Prepaid expenses........................................................ 143 ------ 25,545,367 LIABILITIES: Due to The Dreyfus Corporation.......................................... $ 8,040 Due to Comstock Partners, Inc. ......................................... 8,040 Payable for investment securities purchased............................. 223,860 Payable for futures variation margin-Note 4(a).......................... 5,341 Accrued expenses........................................................ 28,285 273,566 ---- ------ NET ASSETS.................................................................. $25,271,801 ====== REPRESENTED BY: Paid-in capital......................................................... $26,973,355 Accumulated distributions in excess of investment income-net................................................. (9,863) Accumulated net realized (loss) on investments.......................... (1,407,423) Accumulated net unrealized (depreciation) on investments and foreign currency transactions [including ($7,904) net unrealized (depreciation) on financial futures-Note 4(b)].............................. (284,268) ------ NET ASSETS at value applicable to 2,159,141 shares outstanding (unlimited number of $.001 par value shares of Beneficial Interest authorized)............................................................. $25,271,801 ====== NET ASSET VALUE, offering and redemption price per share ($25,271,801 / 2,159,141 shares)........................................ $11.70 ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INCOME: Interest.............................................................. $1,207,565 Cash dividends (net of $4,177 foreign taxes withheld at source)....... 98,715 ----- TOTAL INCOME.................................................... $ 1,306,280 EXPENSES: Investment advisory fee-Note 3(a)..................................... 108,913 Sub-investment advisory fee-Note 3(a)................................. 108,913 Professional fees..................................................... 18,419 Custodian fees........................................................ 15,533 Prospectus and shareholders' reports.................................. 10,499 Trustees' fees and expenses-Note 3(b)................................. 2,158 Shareholder servicing costs........................................... 422 Registration fees..................................................... 100 Miscellaneous......................................................... 6,832 ----- TOTAL EXPENSES.................................................. 271,789 ----- INVESTMENT INCOME-NET........................................... 1,034,491 ----- REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS: Net realized (loss) on investments, options and foreign currency transactions-Note 4(a)................................................ $ (153,738) Net realized gain (loss) on forward currency exchange contracts-Note 4(a): Long transactions..................................................... (357,372) Short transactions.................................................... 7,883 Net realized gain (loss) on financial futures-Note 4(a): Long transactions..................................................... 15,924 Short transactions.................................................... (767,400) ----- NET REALIZED (LOSS)............................................. (1,254,703) Net unrealized appreciation on investments and foreign currency transactions [including $26,197 net unrealized appreciation on financial futures].................................................... 162,896 ----- NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (1,091,807) ----- NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (57,316) =====
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, ------------------------------- 1994 1995 ------- ------- OPERATIONS: Investment income-net................................................... $ 745,232 $ 1,034,491 Net realized gain (loss) on investments................................. 146,575 (1,254,703) Net unrealized appreciation (depreciation) on investments for the year.. (1,091,304) 162,896 ------ ------ NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................................................ (199,497) (57,316) ------ ------ DIVIDENDS TO SHAREHOLDERS: From investment income-net.............................................. (769,916) (1,307,692) In excess of investment income-net...................................... (48,981) (9,863) ------ ------ TOTAL DIVIDENDS....................................................... (818,897) (1,317,555) ------ ------ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold........................................... 26,699,972 8,040,165 Dividends reinvested.................................................... 818,897 1,317,555 Cost of shares redeemed................................................. (3,947,678) (13,220,570) ------ ------ INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...................................................... 23,571,191 (3,862,850) ------ ------ TOTAL INCREASE (DECREASE) IN NET ASSETS........................... 22,552,797 (5,237,721) NET ASSETS: Beginning of year....................................................... 7,956,725 30,509,522 ------ ------ End of year [including distributions in excess of investment income-net: $(48,981) in 1994 and $(9,863) in 1995]................... $ 30,509,522 $ 25,271,801 ====== ====== SHARES SHARES ------ ------ CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 2,094,088 654,797 Shares issued for dividends reinvested.................................. 67,318 112,098 Shares redeemed......................................................... (310,779) (1,074,101) ------ ------ NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... 1,850,627 (307,206) ====== ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements. YEAR ENDED DECEMBER 31, ------------------------------------------------------------ PER SHARE DATA: 1991 1992 1993 1994 1995 ---- ---- ---- ---- ---- Net asset value, beginning of year........... $10.11 $10.76 $10.14 $12.92 $12.37 ---- ---- ---- ---- ---- INVESTMENT OPERATIONS: Investment income-net........................ .41 .22 .20 .35 .51 Net realized and unrealized gain (loss) on investments .66 (.11) 2.71 (.56) (.54) ---- ---- ---- ---- ---- TOTAL FROM INVESTMENT OPERATIONS........... 1.07 .11 2.91 (.21) (.03) ---- ---- ---- ---- ---- DISTRIBUTIONS: Dividends from investment income-net......... (.42) (.31) (.13) (.32) (.64) Dividends in excess of investment income-net. .- .- .- (.02) .- Dividends from net realized gain on investments .- (.42) .- .- .- ---- ---- ---- ---- ---- TOTAL DISTRIBUTIONS........................ (.42) (.73) (.13) (.34) (.64) ---- ---- ---- ---- ---- Net asset value, end of year................. $10.76 $10.14 $12.92 $12.37 $11.70 ==== ==== ==== ==== ==== TOTAL INVESTMENT RETURN.......................... 10.60% 1.07% 28.59% (1.56%) (.26%) RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... 1.00% .97% .27% .25% .94% Ratio of net investment income to average net assets 4.46% 1.88% 1.87% 3.54% 3.56% Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation and Comstock Partners, Inc. ............... 2.83% 1.70% 2.25% .88% - Portfolio Turnover Rate...................... 91.97% 118.78% 99.08% 25.96% 53.88% Net Assets, end of year (000's Omitted)...... $2,179 $1,865 $7,957 $30,510 $25,272
See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio NOTES TO FINANCIAL STATEMENTS NOTE 1-GENERAL: The Dreyfus Variable Investment Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as an open-end management investment company operating as a series company currently offering eight series, including the Managed Assets Portfolio, (the "Series") and is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The Series is a diversified portfolio. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. Comstock Partners, Inc. ("Comstock Partners") serves as the Series' sub-investment adviser. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. The Fund currently functions as the funding vehicle for the Dreyfus Series 2000 Variable Annuity Contract (the "Account") issued by Mutual Benefit Life Insurance Company ("Mutual Benefit Life"). On July 16, 1991, the Superior Court of New Jersey entered an Order (the "Order") appointing the New Jersey Insurance Commissioner as Rehabilitator of Mutual Benefit Life. The Commissioner was granted immediate exclusive possession and control of, and title to, the business and assets of Mutual Benefit Life, including the assets and liabilities of the Account. The Commissioner was empowered by the Order to take such steps as he deemed appropriate toward removing the cause and conditions that made rehabilitation necessary. On January 15, 1993, the Commissioner filed the First Amended Plan of Rehabilitation ("Plan") with the Court. The Plan stipulated that the assets and liabilities of the Account would be transferred to a separate account of MBL Life Assurance Corporation ("MBLLAC"), a wholly-owned subsidiary of Mutual Benefit Life. The Plan also provided for the transfer of the ownership of the stock of MBLLAC to a Trust. The Commissioner was designated as the sole Trustee of the Trust. On August 12, 1993, the Court rendered an opinion approving the Plan with certain modifications. Two subsequent amendments to the Plan were filed and approved by the Court. None of the modifications or amendments affected the status of the Account. On November 10, 1993, the Court issued an Order of Confirmation permitting the implementation of the Plan. An order was also issued by the Court on January 28, 1994, approving the form of the Third Amended Plan of Rehabilitation, the Election Materials and related documents. On April 29, 1994, the Plan was implemented. Substantially all of the assets of Mutual Benefit Life were transferred to MBLLAC which assumed and reinsured Mutual Benefit Life's restructured insurance liabilities. The stock of MBLLAC was assigned to the Stock Trust and the Commissioner was designated as Trustee. In view of the terms and conditions of both the Order and the Plan, applications for new contracts and additional purchase payments under existing contracts are currently not being accepted by the Account. The terms of the Order and the Plan permit redemptions from the Account to continue as requested. The proceedings of the New Jersey Insurance Commissioner with respect to Mutual Benefit Life or the Account do not apply to the separate accounts of other life insurance companies that may use the Fund as a funding vehicle for contracts or policies issued by them. DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 2-SIGNIFICANT ACCOUNTING POLICIES: (A) PORTFOLIO VALUATION: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (B) FOREIGN CURRENCY TRANSACTIONS: The Series does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series' books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gain are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that the net realized capital gain can be offset by capital loss carryovers, it is the policy of the Series not to distribute such gain. The Series had dividends in excess of investment income-net for financial statement purposes resulting from Federal income tax distribution requirements. During the year ended December 31, 1995, the Series reclassified $27,993 charged to undistributed income-net in prior years to paid-in capital. In addition, the Series reclassified $350,175 charged to net realized gains to undistributed income-net. DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) (E) FEDERAL INCOME TAXES: It is the policy of the Series 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 Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. For Federal income tax purposes, each series is treated as a single entity for the purpose of determining such qualification. The Series has an unused capital loss carryover of approximately $1,782,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to December 31, 1995. The carryover does not include net realized securities losses from November 1, 1995 through December 31, 1995 which are treated, for Federal income tax purposes, as arising in fiscal 1996. If not applied, $5,500 of the carryover expires in fiscal 2001, $364,100 expires in fiscal 2002 and $1,412,400 expires in fiscal 2003. NOTE 3-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEES AND OTHER TRANSAC TIONS WITH AFFILIATES: (A) Pursuant to the provisions of an Investment Advisory Agreement ("Agreement") with Dreyfus, the investment advisory fee is computed at the annual rate of .375 of 1% of the average daily value of the Series' net assets and is payable monthly. Pursuant to a Sub-Investment Advisory Agreement with Comstock Partners, the sub-investment advisory fee is computed at an annual rate of .375 of 1% of the average daily value of the Series' net assets and is payable monthly. The agreements further provide that if in any full year the aggregate expenses of the Series, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series, the Series may deduct from the payments to be made to Dreyfus and Comstock Partners, or Dreyfus and Comstock Partners will bear the amount of such excess to the extent required by state law. There was no expense reimbursement for the year ended December 31, 1995. Effective December 1, 1995, the Fund entered into a transfer agency agreement with Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, to provide personnel and facilities to perform transfer agency services for the Fund. (B) Each trustee who is not an "affiliated person," as defined in the Act receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 4-SECURITIES TRANSACTIONS: (A) The aggregate amount of purchases and sales of investment securities, excluding short-term securities, options and forward currency exchange contracts during the year ended December 31, 1995 amounted to $8,587,045 and $8,299,160, respectively.
DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) The following summarizes open forward currency exchange contracts at December 31, 1995: FOREIGN UNREALIZED CURRENCY U.S. DOLLAR APPRECIATION FORWARD CURRENCY CONTRACTS AMOUNTS PROCEEDS VALUE (DEPRECIATION) - ---------------- ------ ------- ------- ------- SALES: German Deutschemarks, expiring 2/20/96... 2,700,000 $1,935,484 $1,886,133 $49,351 Swiss Francs, expiring 2/20/96........... 2,140,000 1,903,914 1,864,436 39,478 COST ------- PURCHASES; Hong Kong Dollars, expiring 1/2/96....... 180,951 $ 23,408 23,401 (7) ---- TOTAL.................................. $88,822
The Series enters into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings. When executing forward currency exchange contracts, the Series is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward currency exchange contracts, the Series would incur a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed. The Series realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward currency exchange contracts, the Series would incur a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed. The Series realizes a gain if the value of the contract increases between those dates. The Series is also exposed to credit risk associated with counter party nonperformance on these forward currency exchange contracts which is typically limited to the unrealized gains on such contracts that are recognized in the Statement of Assets and Liabilities. The Series may invest in financial futures contracts in order to gain exposure to or protect against changes in the market. The Series is exposed to market risk as a result of changes in the value of the underlying financial instruments (see the Statement of Financial Futures). Investments in financial futures require the Series to "mark to market" on a daily basis, which reflects the change in the market value of the contracts at the close of each day's trading. Typically, variation margin payments are received or made to reflect daily unrealized gains or losses. When the contracts are closed, the Series recognizes a realized gain or loss. These investments require initial margin deposits with a custodian, which consist of cash or cash equivalents, up to approximately 10% of the contract amount. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Contracts open at December 31, 1995, and their related unrealized market appreciation (depreciation) are set forth in the Statement of Financial Futures. The Series may purchase put and call options, including restricted options, which are not exchange traded, in order to gain exposure to or protect against changes in the market. The Series' exposure to credit risk associated with counterparty nonperformance on these investments is typically limited to the market value of such investments that are disclosed in the Statement of Investments. (B) At December 31, 1995, accumulated net unrealized depreciation on investments and forward currency exchange contracts was $284,198, consisting of $1,818,850 gross unrealized appreciation and $2,103,048 gross unrealized depreciation. At December 31, 1995, 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). DREYFUS VARIABLE INVESTMENT FUND, Managed Assets Portfolio REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS VARIABLE INVESTMENT FUND We have audited the accompanying statement of assets and liabilities, including the statements of investments and financial futures of Dreyfus Variable Investment Fund, Managed Assets Portfolio (one of the series constituting the Dreyfus Variable Investment Fund), as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Variable Investment Fund, Managed Assets Portfolio at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York February 9, 1996 [Dreyfus lion "d" logo] DREYFUS VARIABLE INVESTMENT FUND, MANAGED ASSETS PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 SUB-INVESTMENT ADVISER Comstock Partners, Inc. 10 Exchange Place Jersey City, NJ 07302 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 118AR9512 [Dreyfus logo] Variable Investment Fund, MANAGED ASSETS PORTFOLIO Annual Report December 31, 1995 DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to provide you with this report on the Dreyfus Variable Investment Fund, Zero Coupon 2000 Portfolio. For its annual reporting period ended December 31, 1995, your Fund produced a total return of 17.95%* compared with 18.65% for the Merrill Lynch U.S. Treasury Coupon 5-Year Strips Index.** Income dividends of $.688 per share were paid, which represents a distribution rate of 5.42% per share based on the closing net asset value. THE ECONOMY Additional evidence that economic activity remained sluggish and that inflation continued to be under control moved the Federal Reserve Board to further ease the Federal Funds rate in December. (The Federal Funds rate is the rate at which the nation's banks borrow money from each other and which all other short-term rates are based on.) This was the second reduction for this important short-term rate in 1995, the first occurring in July. The latest 25-basis-point reduction in December put the rate at 5.50%. Major incentives for this additional reduction were the inflation report in November -the increase in the Consumer Price Index was flat for the first time in 4 1/2 years - and the generally slow rate of economic growth. As it did in July, the Federal Reserve left unchanged the discount rate - the rate at which the Federal Reserve lends to member banks. The discount rate remained at 5.25% throughout 1995. Signs of economic slowdown increased during the latter half of the year. Weakening retail sales and very modest industrial production lent credence to fears about the possibility of recession. Consumer spending was inhibited last year by the slow rate of new job creation, sluggish growth in wages and salaries, and the continued trend of corporate cost-related layoffs. The lethargic pace of consumer spending last year culminated in one of the worst holiday sales periods since the business slump in 1990-1991, despite steep price markdowns by retailers. Industrial production climbed modestly during the year. By November, the nation's factories operated at only 83.1% of capacity, down for the third consecutive month. This was a reflection of weakening demand and further evidence of the diminishing pressure to raise prices. Furthermore, inventories built up by year-end, another sign of slackening demand. The political stalemate in Washington over the balanced budget adds additional uncertainty to the economy; ultimately an accord will be reached and fiscal policy will likely be a restraining force on the economy. As we go forward without a budget agreement, reductions in annually appropriated spending will tend to retard the economy. With an agreement, the combination of cuts in appropriations and other spending reductions should have the same effect. There are strong indications that inflation is under control. Until midyear 1995, fear of inflation was the overriding concern of the Federal Reserve. Now, the focus seems to have shifted to actions designed to avoid recession. In an election year, few things are less desirable for political incumbents than recession. PORTFOLIO OVERVIEW In a fund with a final maturity of December 31, 2000 the turnover rate tends to be extremely low. This was especially the case for the last year. Because we had a positive view on the market, as we received cash flow into the Fund we invested it within our final maturity parameters. We currently have a small amount of cash and will invest these funds as opportunities present themselves. During the last year, we added $1,000,000 face amount of FICO, 0% due 5/30/00, $4,630,000 face amount of Resolution Trust, 0% due 10/15/00, $1,650,000 face amount American Express, 0% due 12/12/00 and $1,500,000 face amount of Resolution Trust, 0% due 7/15/99. Included in this report is a series of detailed statements about your Fund's holdings and its financial condition. We hope they are informative. Please know that we appreciate greatly your continued confidence in the Fund and in The Dreyfus Corporation. Very truly yours, [Garitt A. Kono signature logo] Garitt A. Kono Portfolio Manager Jauuary 16, 1996 New York, N.Y. * Total return includes reinvestment of dividends and any capital gains paid. The Portfolio's performance does not reflect the deduction of additional charges applicable to separate accounts of participating insurance companies using the Portfolio as an underlying investment. **Source: Merrill Lynch, Pierce,, Fenner and Smith, Inc. Unlike the Portfolio, the Merrill Lynch U.S. Treasury Coupon 5-Year Strips Index is an unmanaged Zero Coupon Index. DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio DECEMBER 31, 1995 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO WITH THE MERRILL LYNCH U.S. TREASURY COUPON 5-YEAR STRIPS INDEX [Exhibit A $18,223 Dreyfus Variable Investment Fund, Zero Coupon 2000 Portfolio Dollars $17,370 Merrill Lynch U.S. Treasury Coupon 5-Year Strips Index* *Source: Merrill Lynch, Pierce, Fenner and Smith Inc.] AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FIVE YEARS ENDED FROM INCEPTION (8/31/90) DECEMBER 31, 1995 DECEMBER 31, 1995 TO DECEMBER 31, 1995 ----------- ----------- -------------- 17.95% 11.26% 11.89% Past performance is not predictive of future performance. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES APPLICABLE TO SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES USING THE PORTFOLIO AS AN UNDERLYING INVESTMENT. The above graph compares a $10,000 investment made in Dreyfus Variable Investment Fund, Zero Coupon 2000 Portfolio on 8/31/90 (Inception Date) to a $10,000 investment made in the Merrill Lynch U.S. Treasury Coupon 5-Year Strips Index on that date. All dividends and capital gain distributions are reinvested. The Portfolio's performance shown in the line graph takes into account all applicable fees and expenses. The Merrill Lynch U.S. Treasury Coupon 5-Year Strips Index is an unmanaged zero coupon index with constant maturity and duration. The Index does not take into account charges, fees and other expenses. Further information relating to Portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report.
DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio STATEMENT OF INVESTMENTS DECEMBER 31, 1995 PRINCIPAL BONDS AND NOTES-83.8% AMOUNT VALUE ------- ------ BANKING-1.7%............. CoreStates Capital, Sub. Notes, 9 5/8%, 2001............. $ 200,000 $ 230,172 J.P. Morgan and Co., Sub. Notes, Zero Coupon, 1998........ 160,000 140,937 ------ 371,109 ------ CONSUMER-.7% News America Holdings (Gtd. by News), Sr. Notes, 7 1/2%, 2000.............. 150,000 157,494 ------ FINANCE-5.6%............... American Express, Gtd. Euro-Bond, Zero Coupon, 2000.... 1,650,000 1,242,450 ------ INSURANCE-.6%...................SunAmerica, Notes, 9%, 1999...................... 130,000 140,728 ------ FOREIGN-.4%............... Kingdom of Sweden, Bonds, Ser. A, Zero Coupon, 1997..... 40,000 37,371 Montreal Urban Community, Deb., 9 1/8%, 2001................... 40,000 45,078 ------ 82,449 ------ OTHER-8.0%............... FICO Coupon Strips: Ser.17, Zero Coupon, 4/5/2000........ 500,000 395,317 Ser. 3, Zero Coupon, 5/30/2000....... 1,000,000 787,730 Zero Coupon, 10/6/2000............... 478,000 367,243 Ser. 1, Zero Coupon, 11/11/2000...... 150,000 114,612 Ser.10, Zero Coupon, 11/30/2000...... 152,000 115,763 ------ 1,780,665 ------ U.S. GOVERNMENT AND AGENCIES-66.8%....... Chattanooga Valley, Secured First Mortgage, Zero Coupon, 1/1/2000............................. 176,000 140,450 Federal National Mortgage Association, Callable Principal Strips, Ser. 1: Zero Coupon, 8/21/1996 (a) 145,000 139,643 Zero Coupon, 10/10/2001 400,000 384,000 Resolution Funding, Coupon Strips: Ser. A, Zero Coupon, 7/15/1999....... 1,500,000 1,242,669 Zero Coupon, 7/15/2000............... 260,000 204,166 Zero Coupon, 10/15/2000.............. 7,460,000 5,769,243 U.S. Treasury Coupon Receipts, Zero Coupon, 11/15/2000.............. 430,355 331,102 U.S. Treasury Notes, 7 3/4%, 12/31/1999................... 1,000,000 1,085,625
DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 PRINCIPAL BONDS AND NOTES (CONTINUED) AMOUNT VALUE ------------- U.S. GOVERNMENT AND AGENCIES (CONTINUED) U.S. Treasury Principal Strips: Zero Coupon, 8/15/2000............... $.....500,000 $ 391,035 Zero Coupon, 11/15/2000.............. 6,750,000 5,208,995 ------ 14,896,928 ------ TOTAL BONDS AND NOTES (cost $17,849,199)................... $18,671,823 ====== SHORT-TERM INVESTMENTS-15.3% AGENCY DISCOUNT NOTE; Federal Home Loan Mortgage Corp., 5 1/2%, 1/2/1996 (cost $3,412,479).................... $ 3,413,000 $ 3,412,479 ====== TOTAL INVESTMENTS (cost $21,261,678) ................................ 99.1% $22,084,302 ===== ====== CASH AND RECEIVABLES (NET).................................................. .9% $ 206,964 ===== ====== NET ASSETS.................................................................. 100.0% $22,291,266 ===== ======
NOTE TO STATEMENT OF INVESTMENTS; (a) Zero coupon until 8/21/1996, date on which a stated coupon rate of 8.40% becomes effective; the stated maturity date is 2001. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value (cost $21,261,678)-see statement...................................... $22,084,302 Cash.................................................................... 202,647 Interest receivable..................................................... 56,492 Prepaid expenses........................................................ 4,043 ------ 22,347,484 LIABILITIES: Due to The Dreyfus Corporation.......................................... $ 8,218 Payable for shares of Beneficial Interest redeemed...................... 26,926 Accrued expenses........................................................ 21,074 56,218 ---- ------ NET ASSETS ................................................................ $22,291,266 ====== REPRESENTED BY: Paid-in capital......................................................... $21,419,473 Accumulated undistributed investment income-net......................... 1,329 Accumulated undistributed net realized gain on investments.............. 47,840 Accumulated net unrealized appreciation on investments-Note 4........... 822,624 ------ NET ASSETS at value, applicable to 1,755,569 shares outstanding (unlimited number of $.001 par value shares of Beneficial Interest authorized).................................................... $22,291,266 ====== NET ASSET VALUE, offering and redemption price per share ($22,291,266 / 1,755,569 shares)........................................ $12.70 ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INTEREST INCOME......................................................... $1,010,113 EXPENSES: Investment advisory fee-Note 3(a)..................................... $ 70,948 Auditing fees......................................................... 12,526 Custodian fees........................................................ 10,690 Registration fees..................................................... 3,389 Prospectus and shareholders' reports.................................. 3,290 Trustees' fees and expenses-Note 3(b)................................. 1,226 Legal fees............................................................ 823 Shareholder servicing costs........................................... 441 Miscellaneous......................................................... 7,599 ----- TOTAL EXPENSES.................................................... 110,932 Less-reduction in investment advisory fee due to undertakings-Note 3(a) 4,371 ----- NET EXPENSES...................................................... 106,561 ----- INVESTMENT INCOME-NET............................................. 903,552 REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments-Note 4................................. $ 48,259 Net unrealized appreciation on investments.............................. 1,503,991 ----- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 1,552,250 ----- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,455,802 ====== See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, -------------------------------- 1994 1995 ------ ------ OPERATIONS: Investment income-net................................................... $ 522,791 $ 903,552 Net realized gain on investments........................................ _- 48,259 Net unrealized appreciation (depreciation) on investments for the year.. (791,423) 1,503,991 ------ ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................... (268,632) 2,455,802 ------ ------ DIVIDENDS TO SHAREHOLDERS FROM: Investment income-net................................................... (519,948) (905,009) Net realized gain on investments........................................ (7,541) _- ------ ------ TOTAL DIVIDENDS....................................................... (527,489) (905,009) ------ ------ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold........................................... 8,129,045 13,035,937 Dividends reinvested.................................................... 479,850 905,009 Cost of shares redeemed................................................. (2,595,464) (4,113,922) ------ ------ INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.......... 6,013,431 9,827,024 ------ ------ TOTAL INCREASE IN NET ASSETS...................................... 5,217,310 11,377,817 NET ASSETS: Beginning of year....................................................... 5,696,139 10,913,449 ------ ------ End of year (including undistributed investment income-net: $2,786 in 1994 and $1,329 in 1995).................................... $10,913,449 $22,291,266 ====== ====== SHARES SHARES ------ ------ CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 683,960 1,061,630 Shares issued for dividends reinvested.................................. 40,904 73,730 Shares redeemed......................................................... (220,025) (337,613) ------ ------ NET INCREASE IN SHARES OUTSTANDING.................................... 504,839 797,747 ====== ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements. YEAR ENDED DECEMBER 31, ------------------------------------------------------------ PER SHARE DATA: 1991 1992 1993 1994 1995 --- --- --- --- --- Net asset value, beginning of year........... $10.45 $11.64 $11.77 $12.57 $11.39 --- --- --- --- --- INVESTMENT OPERATIONS: Investment income-net........................ .76 .83 .79 .69 .69 Net realized and unrealized gain (loss) on investments............................. 1.25 .15 .96 (1.18) 1.31 --- --- --- --- --- TOTAL FROM INVESTMENT OPERATIONS........... 2.01 .98 1.75 (.49) 2.00 --- --- --- --- --- DISTRIBUTIONS: Dividends from investment income-net......... (.76) (.84) (.78) (.68) (.69) Dividends from net realized gain on investments (.06) (.01) (.17) (.01) .- --- --- --- --- --- TOTAL DISTRIBUTIONS........................ (.82) (.85) (.95) (.69) (.69) --- --- --- --- --- Net asset value, end of year................. $11.64 $11.77 $12.57 $11.39 $12.70 === === === === === TOTAL INVESTMENT RETURN.......................... 20.09% 8.87% 15.19% (3.91%) 17.95% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... .72% .64% .- .- .68% Ratio of net investment income to average net assets................................. 7.41% 7.15% 6.21% 6.04% 5.73% Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation 5.04% 2.28% 2.43% 1.05% .03% Portfolio Turnover Rate...................... 42.82% 3.08% 106.35% .- 49.43% Net Assets, end of year (000's Omitted)...... $1,296 $1,362 $5,696 $10,913 $22,291
See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio NOTES TO FINANCIAL STATEMENTS NOTE 1-GENERAL: The Dreyfus Variable Investment Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as an open-end management investment company, operating as a series company currently offering eight series, including the Zero Coupon 2000 Portfolio (the "Series") which is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The Series is a diversified portfolio. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. The Fund currently functions as the funding vehicle for the Dreyfus Series 2000 Variable Annuity Contract (the "Account") issued by Mutual Benefit Life Insurance Company ("Mutual Benefit Life"). On July 16, 1991, the Superior Court of New Jersey entered an Order (the "Order") appointing the New Jersey Insurance Commissioner as Rehabilitator of Mutual Benefit Life. The Commissioner was granted immediate exclusive possession and control of, and title to, the business and assets of Mutual Benefit Life, including the assets and liabilities of the Account. The Commissioner was empowered by the Order to take such steps as he deemed appropriate toward removing the cause and conditions that made rehabilitation necessary. On January 15, 1993, the Commissioner filed the First Amended Plan of Rehabilitation ("Plan") with the Court. The Plan stipulated that the assets and liabilities of the Account would be transferred to a separate account of MBL Life Assurance Corporation ("MBLLAC"), a wholly-owned subsidiary of Mutual Benefit Life. The Plan also provided for the transfer of the ownership of the stock of MBLLAC to a Trust. The Commissioner was designated as the sole Trustee of the Trust. On August 12, 1993, the Court rendered an opinion approving the Plan with certain modifications. Two subsequent amendments to the Plan were filed and approved by the Court. None of the modifications or amendments affected the status of the Account. On November 10, 1993, the Court issued an Order of Confirmation permitting the implementation of the Plan. An order was also issued by the Court on January 28, 1994 approving the form of the Third Amended Plan of Rehabilitation, the Election Materials and related documents. On April 29, 1994 the Plan was implemented. Substantially all of the assets of Mutual Benefit Life were transferred to MBLLAC which assumed and reinsured Mutual Benefit Life's restructured insurance liabilities. The stock of MBLLAC was assigned to the Stock Trust and the Commissioner was designated as Trustee. In view of the terms and conditions of both the Order and the Plan, applications for new contracts and additional purchase payments under existing contracts are currently not being accepted by the Account. The terms of the Order and the Plan permit redemptions from the Account to continue as requested. The proceedings of the New Jersey Insurance Commissioner with respect to Mutual Benefit Life or the Account do not apply to the separate accounts of other life insurance companies that may use the Fund as a funding vehicle for contracts or policies issued by them. DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 2-SIGNIFICANT ACCOUNTING POLICIES: (A) PORTFOLIO VALUATION: Investments (excluding short-term investments and U.S. Government obligations) are valued each business day by an independent pricing service ("Service") approved by the Board of Trustees. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolios' securities) are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Investments in U.S. Government obligations are valued at the mean between quoted bid and asked prices. Short-term investments are carried at amortized cost, which approximates value. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid monthly. Dividends from net realized capital gain are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Series not to distribute such gain. (D) FEDERAL INCOME TAXES: It is the policy of the Series 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 Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. For Federal income tax purposes, each series is treated as a single entity for the purpose of determining such qualification. NOTE 3-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to the provisions of an Investment Advisory Agreement ("Agreement") with Dreyfus, the investment advisory fee is computed at the annual rate of .45 of 1% of the average daily value of the Series' net assets and is payable monthly. The Agreement further provides that if in any full year the aggregate expenses of the Series, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series, the Series may deduct from the payments to be made to Dreyfus, or Dreyfus will bear the amount of such excess to the extent required by state law. DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) However, Dreyfus had undertaken, from January 1, 1995 through June 30, 1995 to reduce the investment advisory fee paid by the Series', to the extent that the Series' aggregate expenses (exclusive of certain expenses as described above) exceeded specified annual percentages of the Series' average daily net assets. The reduction in investment advisory fee, pursuant to the undertakings amounted to $4,371 for the year ended December 31, 1995. Effective December 1, 1995, the Fund entered into a transfer agency agreement with Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, to provide personnel and facilities to perform transfer agency services for the Fund. (B) Each trustee who is not an "affiliated person," as defined in the Act receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 4-SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the year ended December 31, 1995, amounted to $13,898,921 and $6,800,625, respectively. At December 31, 1995, accumulated net unrealized appreciation on investments was $822,624, consisting of $840,022 gross unrealized appreciation and $17,398 gross unrealized depreciation. At December 31, 1995, 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). DREYFUS VARIABLE INVESTMENT FUND, Zero Coupon 2000 Portfolio REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO We have audited the accompanying statement of assets and liabilities, including the statement of investments of Dreyfus Variable Investment Fund, Zero Coupon 2000 Portfolio (one of the series constituting the Dreyfus Variable Investment Fund), as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Variable Investment Fund, Zero Coupon 2000 Portfolio at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York February 9, 1996 [Dreyfus lion "d" logo] DREYFUS VARIABLE INVESTMENT FUND, ZERO COUPON 2000 PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 119AR9512 [Dreyfus logo] Variable Investment Fund, ZERO COUPON 2000 PORTFOLIO Annual Report December 31, 1995 DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to provide you with this report on the Dreyfus Variable Investment Fund, Quality Bond Portfolio. For its annual reporting period ended December 31, 1995, your Fund produced a total return of 20.42% per share,* compared to 18.35% for the Merrill Lynch Domestic Master Index (subindex D010).** Income dividends of $.686 per share were paid during the period representing a distribution rate of 5.75% per share based on the closing net asset value, adjusted for capital gain distributions. THE ECONOMY Additional evidence that economic activity remained sluggish and that inflation continued to be under control moved the Federal Reserve Board to further ease the Federal Funds rate in December. (The Federal Funds rate is the rate at which the nation's banks borrow money from each other and all other short-term rates are based on it.) This was the second reduction for this important short-term rate in 1995, the first occurring in July. The latest 25-basis-point reduction in December put the rate at 5.50%. Major incentives for this additional reduction were the inflation report in November - the increase in the Consumer Price Index was flat for the first time in 4 1/2 years - and the generally slow rate of economic growth. As it did in July, the Federal Reserve left unchanged the discount rate - the rate at which the Federal Reserve lends to member banks. The discount rate remained at 5.25% throughout 1995. Signs of economic slowdown increased during the latter half of the year. Weakening retail sales and very modest industrial production lent credence to fears about the possibility of recession. Consumer spending was inhibited last year by the slow rate of new job creation, sluggish growth in wages and salaries, and the continued trend of corporate cost-related layoffs. The lethargic pace of consumer spending last year culminated in one of the worst holiday sales periods since the business slump in 1990-1991, despite steep price markdowns by retailers. Industrial production climbed modestly during the year. By November, the nation's factories operated at only 83.1% of capacity, down for the third consecutive month. This was a reflection of weakening demand and further evidence of the diminishing pressure to raise prices. Furthermore, inventories built up by year-end, another sign of slackening demand. The political stalemate in Washington over the balanced budget adds additional uncertainty to the economy; ultimately an accord will be reached and fiscal policy will likely be a restraining force on the economy. As we go forward without a budget agreement, reductions in annually appropriated spending will tend to retard the economy. With an agreement, the combination of cuts in appropriations and other spending reductions should have the same effect. There are strong indications that inflation is under control. Until mid-year 1995, fear of inflation was the overriding concern of the Federal Reserve. Now, the focus seems to have shifted to actions designed to avoid recession. In an election year, few things are less desirable for political incumbents than recession. PORTFOLIO OVERVIEW During the course of the year, the Fund's average duration was between 5 3 /4 years and 6 years. Among funds of this type, these durations were somewhat longer than the average fund. As a result of our maintaining these longer durations, our Fund was ranked in the top 1/3 of 116 portfolios in the Corporate Debt A Rated category by Lipper for one year and ranked 1 out of 71 funds for its five-year return***. We have eliminated holdings of USF&G Corp., Rite Aid Corp. and Heller Financial. We have added Commercial Credit, Dresdner Banks, Emerson Electric, and General Motors Acceptance Corp. to the Portfolio. These changes occurred as a result of our attempt at increasing the quality of the Portfolio. The Fund has received a four star overall rating from Morningstar, Inc. out of 258 portfolios in the Fixed Income category. Included in this report is a series of detailed statements about your Fund's holdings and its financial condition. We hope they are informative. Please know that we appreciate greatly your continued confidence in the Fund and in The Dreyfus Corporation. Very truly yours, [Garitt Kono signature logo] Garitt Kono Portfolio Manager Jauuary 15, 1996 New York, N.Y. * Total return includes reinvestment of dividends and any capital gains paid. The Portfolio's performance does not reflect the deduction of additional charges imposed in connection with investing in variable annuity contracts and variable life insurance policies. **Source: Merrill Lynch, Pierce, Fenner and Smith, Inc. - Unlike the Portfolio, the Merrill Lynch Domestic Master Index (subindex D010) is an unmanaged performance benchmark for portfolios that include U.S. Government, mortgage and investment grade securities rated A and better. *** SOURCE: LIPPER ANALYTICAL SERVICES, INC. SOURCE: MORNINGSTAR, INC. - Morningstar proprietary ratings reflect historical risk-adjusted performance as of December 31, 1995 and are subject to change every month. Past performance is no guarantee of future results. Morningstar ratings are calculated from the Portfolio's three-, five- and ten-year average annual returns (as applicable) with appropriate fee adjustments and a risk factor that reflects Portfolio performance relative to three-month Treasury bill monthly returns. 10% of funds in an investment category receive 5 stars; 22.5% receive 4 stars. For the 3-year period, the Portfolio received 4 stars out of 258 portfolios, and for the 5-year period, the Portfolio received 4 stars out of 220 portfolios. DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio DECEMBER 31, 1995 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS VARIABLE INVESTMENT FUND, QUALITY BOND PORTFOLIO AND THE MERRILL LYNCH DOMESTIC MASTER INDEX (SUBINDEX D010) [Exhibit A $17,357 Dreyfus Variable Investment Fund, Quality Bond Portfolio Dollars $16,713 Merrill Lynch Domestic Master Index (Subindex D010)* *Source: Merrill Lynch, Pierce, Fenner and Smith Inc.] AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FIVE YEARS ENDED FROM INCEPTION (8/31/90) DECEMBER 31, 1995 DECEMBER 31, 1995 TO DECEMBER 31, 1995 ----------- ----------- -------------- 20.42% 11.11% 10.88% Past performance is not predictive of future performance. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARG ES APPLICABLE TO SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES USING THE PORTFOLIO AS AN UNDERLYING INVESTMENT. The above graph compares a $10,000 investment made in Dreyfus Variable Investment Fund, Quality Bond Portfolio on 8/31/90 (Inception Date) to a $10,000 investment made in the Merrill Lynch Domestic Master Index (Subindex D010) on that date. All dividends and capital gain distributions are reinvested. The Portfolio's performance shown in the line graph takes into account all applicable fees and expenses. The Merrill Lynch Domestic Master Index (Subindex D010) is an unmanaged performance benchmark for portfolios that include U.S. Government, mortgage and investment-grade corporate securities rated A and better. The Index does not take into account charges, fees and other expenses. Further information relating to Portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report.
DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio STATEMENT OF INVESTMENTS DECEMBER 31, 1995 PRINCIPAL BONDS AND NOTES-76.2% AMOUNT VALUE AEROSPACE-1.2%..................Boeing, Deb., 7 1/4%, 2025................... $.....200,000 $ 216,940 McDonnell Douglas, Notes, 8 1/4%, 2000.................. 200,000 216,815 ------ 433,755 ------ BANKING-3.6%.................... BankAmerica, Sub. Notes, 6 3/4%, 2005............. 1,000,000 1,033,750 First Chicago, Sub. Notes: 8 1/4%, 2002......................... 15,000 16,742 6 7/8%, 2003......................... 100,000 104,313 NationsBank, Sub. Notes, 6 1/2%, 2003............. 175,000 178,141 ------ 1,332,946 ------ CONSUMER-.7% News America Holdings (Gtd. by News): Sr. Deb., 8 1/4%, 2018............... 100,000 109,378 Sr. Notes, 9 1/8%, 1999.............. 25,000 27,564 Time Warner, Deb., 9.15%, 2023.................... 125,000 142,539 ------ 279,481 ------ FINANCE-19.9%....... American Express Credit, Sr. Notes, 6 1/8%, 2001.............. 1,000,000 1,012,940 Avco Financial Services, Sr. Notes, 6.35%, 2000............... 1,000,000 1,020,368 Commercial Credit, Notes, 7 3/4%, 2005.................. 1,000,000 1,106,038 Dresdner Bank AG, Sub. Notes, 6 5/8%, 2005............. 2,000,000 2,071,292 Ford Motor Credit, Notes, 7 1/2%, 2004.................. 1,000,000 1,082,303 General Motors Acceptance, Notes, 8 3/4%, 1997.................. 1,000,000 (a) 1,175,100 ------ 7,468,041 ------ INDUSTRIAL-8.3%............. American Brands, Deb., 8 5/8%, 2021................... 400,000 487,180 Archer-Daniels-Midland, Deb., 10 1/4%, 2006.................. 400,000 523,667 Eastman Kodak, Deb., 9.95%, 2018.................... 400,000 548,778 Emerson Electric, Notes, 6.30%, 2005................... 1,000,000 1,028,404
DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 PRINCIPAL BONDS AND NOTES (CONTINUED) AMOUNT VALUE ------------- INDUSTRIAL (CONTINUED)....Ford Motor, Deb., 8 7/8%, 2022................... $.....400,000 $ 499,648 ------ 3,087,677 ------ INSURANCE-.4%................ SunAmerica: Deb., 9.95%, 2012.................... 13,000 16,801 Notes, 9%, 1999...................... 130,000 140,728 ------ 157,529 ------ FOREIGN-5.5%....... Generalitat de Catalunya, Notes, 6 3/8%, 2007.................. 2,000,000 2,017,382 Kingdom of Sweden, Bonds, Ser. A, Zero Coupon, 1997.............. 60,000 56,057 ------ 2,073,439 ------ OTHER-.3%.................. City of New York, General Obligation Bonds, Ser. D, 10%, 2007 25,000 29,594 FICO Coupon Strips, Ser. 1, Zero Coupon, 5/11/2000................ 95,000 75,048 ------ 104,642 ------ U.S. GOVERNMENT AND AGENCIES-36.3% Federal National Mortgage Association, Callable Principal Strips, Ser. 1, Zero Coupon, 8/21/1996............ 55,000 (b) 52,968 Government National Mortgage Association I: 7 1/2%, 3/15/2008.................... 4,264,086 4,415,974 7 1/2%, 8/15/2008.................... 2,039,383 2,112,026 U.S. Treasury Bonds: 10 3/4%, 8/15/2005................... 100,000 137,500 11 1/4%, 2/15/2015................... 100,000 160,078 7 1/4%, 5/15/2016.................... 1,200,000 1,370,626 U.S. Treasury Notes: 7 1/4%, 8/31/1996.................... 230,000 232,839 7 3/8%, 11/15/1997................... 1,000,000 1,037,969 8 1/2%, 11/15/2000................... 600,000 679,219 7 1/2%, 2/15/2005.................... 3,000,000 3,403,593 ------ 13,602,792 ------ TOTAL BONDS AND NOTES (cost $27,289,775)................... $28,540,302 ======
DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 PRINCIPAL SHORT-TERM INVESTMENTS 22.4% AMOUNT VALUE AGENCY DISCOUNT NOTE;Federal Home Loan Mortgage Corp., 5 1/2%, 1/2/1996 (cost $8,385,719).................... $..8,387,000 $ 8,385,719 ====== TOTAL INVESTMENTS (cost $35,675,494)........................................ 98.6% $36,926,021 ==== ====== CASH AND RECEIVABLES (NET).................................................. 1.4% $ 520,820 ==== ====== NET ASSETS.................................................................. 100.0% $37,446,841 ==== ======
NOTES TO STATEMENT OF INVESTMENTS: (a) Security is subject to repurchase by the issuer at the option of the holder. Final maturity is 7/15/2005. (b) Zero coupon until 8/21/96, date on which a stated coupon rate of 8.40% becomes effective; the stated maturity date is 2001. See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value (cost $35,675,494)-see statement...................................... $36,926,021 Cash.................................................................... 139,573 Interest receivable..................................................... 423,842 Prepaid expenses........................................................ 5,883 ------ 37,495,319 LIABILITIES: Due to The Dreyfus Corporation.......................................... . $19,674 Payable for shares of Beneficial Interest redeemed...................... 1,329 Accrued expenses........................................................ 27,475 48,478 ---- ------ NET ASSETS.................................................................. $37,446,841 ====== REPRESENTED BY: Paid-in capital......................................................... $36,053,663 Accumulated undistributed investment income-net......................... 2,898 Accumulated undistributed net realized gain on investments.............. 139,753 Accumulated net unrealized appreciation on investments-Note 4........... 1,250,527 ------ NET ASSETS at value applicable to 3,170,647 shares outstanding (unlimited number of $.001 par value shares of Beneficial Interest authorized).................................................... $37,446,841 ====== NET ASSET VALUE, offering and redemption price per share ($37,446,841 / 3,170,647 shares)........................................ $11.81 ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INTEREST INCOME......................................................... $1,580,221 EXPENSES: Investment advisory fee-Note 3(a)..................................... $ 147,830 Custodian fees........................................................ 12,957 Auditing fees......................................................... 12,766 Registration fees..................................................... 7,573 Organization expenses................................................. 4,310 Prospectus and shareholders' reports.................................. 2,874 Trustees' fees and expenses-Note 3(b)................................. 1,463 Legal fees............................................................ 608 Shareholder servicing costs........................................... 396 Miscellaneous......................................................... 4,520 ----- TOTAL EXPENSES.................................................... 195,297 Less-reduction in investment advisory fee due to undertakings-Note 3(a) 10,017 ----- NET EXPENSES...................................................... 185,280 ----- INVESTMENT INCOME-NET............................................. 1,394,941 REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments-Note 4................................. $ 628,024 Net unrealized appreciation on investments.............................. 2,002,134 ----- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 2,630,158 ----- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $4,025,099 ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, -------------------------------- 1994 1995 ------- ------ OPERATIONS: Investment income-net................................................... $ 649,784 $ 1,394,941 Net realized gain (loss) on investments................................. (101,063) 628,024 Net unrealized appreciation (depreciation) on investments for the year.. (776,871) 2,002,134 ------ ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................................................ (228,150) 4,025,099 ------ ------ DIVIDENDS TO SHAREHOLDERS FROM: Investment income-net................................................... (645,868) (1,396,840) Net realized gain on investments........................................ (11,191) (387,055) ------ ------ TOTAL DIVIDENDS....................................................... (657,059) (1,783,895) ------ ------ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold........................................... 10,900,540 25,461,134 Dividends reinvested.................................................... 657,134 1,783,895 Cost of shares redeemed................................................. (2,134,797) (5,283,531) ------ ------ INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...................................................... 9,422,877 21,961,498 ------ ------ TOTAL INCREASE IN NET ASSETS...................................... 8,537,668 24,202,702 NET ASSETS: Beginning of year....................................................... 4,706,471 13,244,139 ------ ------ End of year (including undistributed investment income-net: $4,797 in 1994 and $2,898 in 1995).................................... . $13,244,139 $37,446,841 ====== ====== SHARES SHARES ------ ------ CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 991,178 2,224,658 Shares issued for dividends reinvested.................................. 61,022 155,421 Shares redeemed......................................................... (193,286) (466,867) ------ ------ NET INCREASE IN SHARES OUTSTANDING.................................... 858,914 1,913,212 ====== ======
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements. YEAR ENDED DECEMBER 31, ------------------------------------------------------------ PER SHARE DATA: 1991 1992 1993 1994 1995 ---- ---- ---- ---- ---- Net asset value, beginning of year........... $10.01 $10.67 $10.94 $11.81 $10.53 ---- ---- ---- ---- ---- INVESTMENT OPERATIONS: Investment income-net........................ .70 .92 .76 .73 .68 Net realized and unrealized gain (loss) on investments .66 .30 .88 (1.27) 1.42 ---- ---- ---- ---- ---- TOTAL FROM INVESTMENT OPERATIONS........... 1.36 1.22 1.64 (.54) 2.10 ---- ---- ---- ---- ---- DISTRIBUTIONS: Dividends from investment income-net......... (.70) (.92) (.76) (.73) (.69) Dividends from net realized gain on investments .- (.03) (.01) (.01) (.13) ---- ---- ---- ---- ---- TOTAL DISTRIBUTIONS........................ (.70) (.95) (.77) (.74) (.82) ---- ---- ---- ---- ---- Net asset value, end of year................. $10.67 $10.94 $11.81 $10.53 $11.81 ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- TOTAL INVESTMENT RETURN.......................... 14.12% 12.09% 15.33% (4.59%) 20.42% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... - - - - .81% Ratio of net investment income to average net assets 7.52% 8.54% 6.51% 7.03% 6.13% Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation 13.13% 5.33% 3.51% 1.20% .04% Portfolio Turnover Rate...................... - 9.39% 110.62% 64.80% 263.53% Net Assets, end of year (000's Omitted)...... $ 410 $ 405 $4,706 $13,244 $37,447
See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio NOTES TO FINANCIAL STATEMENTS NOTE 1-GENERAL: The Dreyfus Variable Investment Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as an open-end management investment company, operating as a series company currently offering eight series, including the Quality Bond Portfolio series (the "Series") which is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The Series is a diversified portfolio. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. The Fund currently functions as the funding vehicle for the Dreyfus Series 2000 Variable Annuity Contract (the "Account") issued by Mutual Benefit Life Insurance Company ("Mutual Benefit Life"). On July 16, 1991, the Superior Court of New Jersey entered an Order (the "Order") appointing the New Jersey Insurance Commissioner as Rehabilitator of Mutual Benefit Life. The Commissioner was granted immediate exclusive possession and control of, and title to, the business and assets of Mutual Benefit Life, including the assets and liabilities of the Account. The Commissioner was empowered by the Order to take such steps as he deemed appropriate toward removing the cause and conditions that made rehabilitation necessary. On January 15, 1993, the Commissioner filed the First Amended Plan of Rehabilitation ("Plan") with the Court. The Plan stipulated that the assets and liabilities of the Account would be transferred to a separate account of MBL Life Assurance Corporation ("MBLLAC"), a wholly-owned subsidiary of Mutual Benefit Life. The Plan also provided for the transfer of the ownership of the stock of MBLLAC to a Trust. The Commissioner was designated as the sole Trustee of the Trust. On August 12, 1993, the Court rendered an opinion approving the Plan with certain modifications. Two subsequent amendments to the Plan were filed and approved by the Court. None of the modifications or amendments affected the status of the Account. On November 10, 1993, the Court issued an Order of Confirmation permitting the implementation of the Plan. An order was also issued by the Court on January 28, 1994, approving the form of the Third Amended Plan of Rehabilitation, the Election Materials and related documents. On April 29, 1994, the Plan was implemented. Substantially all of the assets of Mutual Benefit Life were transferred to MBLLAC which assumed and reinsured Mutual Benefit's Life's restructured insurance liabilities. The stock of MBLLAC was assigned to the Stock Trust and the Commissioner was designated as Trustee. In view of the terms and conditions of both the Order and the Plan, applications for new contracts and additional purchase payments under existing contracts are currently not being accepted by the Account. The terms of the Order and the Plan permit redemptions from the Account to continue as requested. The proceedings of the New Jersey Insurance Commissioner with respect to Mutual Benefit Life or the Account do not apply to the separate accounts of other life insurance companies that may use the Fund as a funding vehicle for contracts or policies issued by them. DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 2-SIGNIFICANT ACCOUNTING POLICIES: (A) PORTFOLIO VALUATION: Investments (excluding short-term investments and U.S. Government obligations) are valued each business day by an independent pricing service ("Service") approved by the Board of Trustees. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgement of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolios' securities) are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Investments in U.S. Government obligations are valued at the mean between quoted bid and asked prices. Short-term investments are carried at amortized cost, which approximates value. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid monthly. Dividends from net realized capital gain are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Series not to distribute such gain. (D) FEDERAL INCOME TAXES: It is the policy of the Series 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 Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. For Federal income tax purposes, each series is treated as a single entity for the purpose of determining such qualification. NOTE 3-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to the provisions of an Investment Advisory Agreement ("Agreement") with Dreyfus, the investment advisory fee is computed at the annual rate of .65 of 1% of the average daily value of the Series' net assets and is payable monthly. The Agreement further provides that if in any full year the aggregate expenses of the Series, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series, the Series may deduct from the payments to be made to Dreyfus, or Dreyfus will bear the amount of such excess to the extent required by state law. DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) However, Dreyfus had undertaken, from January 1, 1995 through July 5, 1995, to reduce the investment advisory fee paid by the Series, to the extent that the Series' aggregate expenses (exclusive of certain expenses as described above) exceeded specified annual percentages of the Series' average daily net assets. The reduction in investment advisory fee, pursuant to the undertakings amounted to $10,017 for the year ended December 31, 1995. Effective December 1, 1995, the Fund entered into a transfer agency agreement with Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, to provide personnel and facilities to perform transfer agency services for the Series. (B) Each trustee who is not an "affiliated person," as defined in the Act, receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 4-SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the year ended December 31, 1995, amounted to $61,453,426 and $47,766,543, respectively. At December 31, 1995, accumulated net unrealized appreciation on investments was $1,250,527, consisting of $1,300,586 gross unrealized appreciation and $50,059 gross unrealized depreciation. At December 31, 1995, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see Statement of Investments). DREYFUS VARIABLE INVESTMENT FUND, Quality Bond Portfolio REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS VARIABLE INVESTMENT FUND, QUALITY BOND PORTFOLIO We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, Quality Bond Portfolio (one of the series constituting the Dreyfus Variable Investment Fund), as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Variable Investment Fund, Quality Bond Portfolio at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York February 9, 1996 [Dreyfus lion "d" logo] DREYFUS VARIABLE INVESTMENT FUND, QUALITY BOND PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 120AR9512 [Dreyfus logo] Variable Investment Fund, QUALITY BOND PORTFOLIO Annual Report December 31, 1995 DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to report the performance results for Dreyfus Variable Investment Fund, Small Cap Portfolio for the fiscal year ended December 31, 1995, as shown in the following table:
SMALL CAP RUSSELL S&P YEAR-TO-DATE TOTAL RETURN** PORTFOLIO 2000* 500* - ---------------------------- ------- ------- ------- 12/31/94-12/31/95....................................... 29.38% 28.44% 37.53% INCEPTION-TO-DATE TOTAL RETURN** - ------------------------------- 8/31/90-12/31/95........................................ 965.81% 148.28% 123.06%
The Fund's average annual total returns were 29.38% for the one-year period, 59.71% for the five-year period and 55.76% for the period since inception, each ended December 31, 1995. On the basis of this record, the Portfolio was awarded Morningstar's Five Star Overall ranking among 702 annuity portfolios in the equity category.*** The year can only be characterized as a terrific year in the equity market. Small capitalization stocks, which are of course the feature of the Small Cap Portfolio, had dramatic returns as well. It should not be surprising, however, that in this environment, the small company universe represented by the Russell 2000 Index underperformed the more widely followed S&P 500. This represented the second year in a row of underperformance for small stocks. The fundamentals of smaller companies are sound in the U.S.; however, investors in a hurry to deploy huge sums of money quickly in a bull market are using larger capitalization stocks as that investment vehicle. These companies are generally the large U.S.-based multinationals that benefit from the weakened dollar. The valuation gap is intriguingly wide between the firms in which we like to invest and the so-called "nifty-fifty" stocks that have been leading the market. This valuation gap has produced a fertile climate in which to seek out relative and real values among small caps. Your Portfolio participates in the global investment theme by seeking out small companies with large foreign sales, whose products hold a dominant worldwide position. In this vein, we continue to hold OM Group, a cobalt refiner and metallurgist; and Bush Boake Allen, a multinational specialized flavors and fragrance company. We have accumulated positions in Keystone International, a manufacturer of valves; Stewart & Stevenson Services, a packager of industrial gas turbine systems; Titan Wheel International, a producer of agricultural equipment wheels; and Cambrex,which sells bulk actives to the pharmaceutical industry worldwide. With an eye towards global markets, a major theme continues to be commercial aerospace, where the suppliers to the largest U.S. export company, Boeing, are small cap firms. The Portfolio continues to own Rohr industries and Precision Castparts, and has recently added Thiokol and Crane. Capital goods stocks have outperformed consumer stocks for the past two years. Your Portfolio has benefitted from this development. The low value of the U.S. dollar coupled with increases in American productivity should extend this trend. Although we continued to underweight the consumer sector, there are some notable exceptions. We have substantial positions in Tiffany & Co, Tootsie Roll Industries, Canandaigua Wine, Cl. A. and Meredith, which is a less recognized but powerful publisher and broadcaster. We have high confidence in the fundamentals and management of these firms. As was widely reported, the technology sector propelled the market for the first three quarters of 1995. You may remember we indicated in our last shareholder letter that if this sector continued its unsustainable advance, we would reduce our weighting. We did just that. The remaining technology holdings, in our opinion, represent niche companies at what we believe to be bargain prices. These include Security Dynamics Technologies, a maker of security identification cards for remote access, Aspect Telecommunications, a producer of call processing equipment, and Auspex Systems, a manufacturer of network file servers for the movement and storage of data. We deployed the proceeds from our technology sales into the health care industry. We view health care as exhibiting many of the same exciting growth characteristics as technology stocks, but with more compelling valuations. The two largest holdings in the Fund are Mentor, a plastic surgery products company, and Guidant, a manufacturer of cardiology equipment. As we peer into 1996, we want to assure our shareholders that we will only invest their funds in stocks of companies we believe in and management we trust. We again thank you for your interest and loyalty. Sincerely, [Thomas A. Frank signature logo] Thomas A. Frank Portfolio Manager January 16, 1996 New York, N.Y. * Sources: The Russell Company; Lipper Analytical Services, Inc. All performance figures assume the reinvestment of dividends. The Russell 2000 Index and The Standard & Poor's 500 Composite Stock Price Index are widely accepted unmanaged indices of stock market performance. **Total return includes reinvestment of dividends and any capital gains paid. The Portfolio's performance does not reflect the deduction of additional charges imposed in connection with investing in variable annuity contracts and variable life insurance policies. ***Source: Morningstar, Inc. Morningstar proprietary ratings reflect historical risk-adjusted performance as of 12//31/95. The ratings are subject to change every month. Past performance is no guarantee of future results. Morningstar ratings are calculated from the Portfolio's three-year, five- and ten-year average annual returns (as applicable) with appropriate fee adjustments and a risk factor that reflects portfolio performance relative to three-month Treasury bill monthly returns. Ten percent of the portfolios in an investment category receive 5 stars. For three years, the portfolio received 5 stars out of 702 portfolios and for five years, 5 stars out of 548 portfolios in the equity category. DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio DECEMBER 31, 1995 [Exhibit A] COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS VARIABLE INVESTMENT FUND, SMALL CAP PORTFOLIO AND THE RUSSELL 2000 INDEX Dollars $106,579 Dreyfus Variable Investment Fund, Small Cap Portfolio $24,828 Russell 2000 Index* *Source: Lipper Analytical Services, Inc. [Exhibit A] AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FIVE YEARS ENDED FROM INCEPTION (8/31/90) DECEMBER 31, 1995 DECEMBER 31, 1995 TO DECEMBER 31, 1995 --------------- ------------------- -------------------------- 29.38% 59.71% 55.76% Past performance is not predictive of future performance. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES APPLICABLE TO SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES USING THE PORTFOLIO AS AN UNDERLYING INVESTMENT. The above graph compares a $10,000 investment made in Dreyfus Variable Investment Fund, Small Cap Portfolio on 8/31/90 (Inception Date) to a $10,000 investment made in the Russell 2000 Index on that date. All dividends and capital gain distributions are reinvested. The Portfolio's performance shown in the line graph takes into account all applicable fees and expenses. The Russell 2000 Index is an unmanaged index and is composed of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index is composed of 3,000 of the largest U.S. companies by market capitalization. The Index does not take into account charges, fees and other expenses. Further information relating to Portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report.
DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio STATEMENT OF INVESTMENTS DECEMBER 31, 1995 COMMON STOCKS-90.1% SHARES VALUE --------- ----------- CONSUMER- 16.4% Boise Cascade Office Products 130,000 $ 5,557,500 Bush Boake Allen..................... (a) 122,500 3,353,437 Canandaigua Wine, Cl. A ................(a) 190,000 6,198,750 Central Tractor Farm & Country .........(a) 127,000 1,301,750 Eskimo Pie............................. 58,500 1,067,625 Genovese Drug Stores, Cl. A............ 77,000 866,250 MSC Industrial Direct.................. 100,000 2,750,000 Mentor................................. 550,000 12,650,000 Meredith............................... 150,000 6,281,250 Metromedia International Group....... (a) 228,900 3,204,600 Norton McNaughton.................... (a) 225,000 2,503,125 Pepsi-Cola Puerto Rico Bottling, Cl. B. 105,000 1,207,500 Pete's Brewing......................... 90,100 1,261,400 Spelling Entertainment Group ...........(a) 150,000 1,875,000 Station Casinos...................... (a) 370,000 5,411,250 Stein Mart........................... (a) 175,000 1,925,000 TCA Cable TV........................... 190,000 5,248,750 Talbots................................ 190,000 5,462,500 Thermedics........................... (a) 190,000 5,272,500 Thomas Nelson.......................... 300,000 3,900,000 Tiffany & Co........................... 110,000 5,541,250 Tootsie Roll Industries................ 153,000 6,062,625 ---------- 88,902,062 ---------- ENERGY-7.4%... Abacan Resource 750,000 2,015,625 Benton Oil & Gas..................... (a) 340,000 5,100,000 Cairn Energy USA..................... (a) 350,000 4,900,000 Coda Energy.......................... (a) 350,000 2,603,125 Core Laboratories, N.V. ................. 400,000 4,800,000 Devon Energy........................... 235,000 5,992,500 Falcon Drilling........................ 45,000 675,000 Global Industries.................... (a) 142,500 4,275,000 Parker & Parsley Petroleum............. 170,000 3,740,000 Stewart & Stevenson Services........... 110,000 2,777,500 Tide West Oil........................ (a) 190,000 2,541,250 Unit (a) 237,500 1,128,125 ---------- 40,548,125 ---------- FINANCIAL SERVICES-16.8%.... ACE 250,000 9,937,500 Amerin................................. 150,000 4,012,500 Center Financial....................... 205,000 3,587,500 Charter One Financial.................. 170,000 5,206,250 Commerce Group......................... 150,000 3,093,750 Dime Bancorp......................... (a) 200,000 2,325,000 Duff & Phelps Credit Rating ............(b) 317,500 4,564,063 Executive Risk......................... 175,000 5,075,000
DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------- ------- FINANCIAL SERVICES (CONTINUED) FINOVA Group 125,000 $6,031,250 Frontier Insurance Group............... 150,000 4,800,000 GCR Holdings........................... 150,000 3,375,000 Hibernia, Cl. A........................ 475,000 5,106,250 National Re............................ 147,500 5,605,000 Presidential Life...................... 375,000 3,703,125 Reliance Group Holdings................ 762,500 6,576,562 Standard Federal Bancorporation........ 185,000 7,284,375 USLIFE................................. 150,000 4,481,250 Western National....................... 425,000 6,853,125 ---------- 91,617,500 ---------- HEALTH CARE-9.0% ARV Assisted Living 125,000 1,468,750 AmeriSource Health, Cl. A.............. 135,000 4,455,000 Apria Healthcare Group .................(a) 75,000 2,118,750 Ballard Medical Products............... 190,000 3,396,250 Circon (a) 225,000 4,556,250 CorVel............................... (a) 145,000 5,528,125 DepoTech............................... 80,000 1,540,000 Guidant................................ 260,000 10,985,000 ICU Medical.......................... (a) 125,000 2,125,000 ONCOR................................ (a) 560,200 2,520,900 Quantum Health Resources ...............(a) 200,000 1,962,500 Staff Builders, Cl. A. .................(a) 485,000 1,424,688 Universal Health Services, Cl. B .......(a) 150,000 6,656,250 ---------- 48,737,463 ---------- MATERIALS & PROCESSING-12.3% Amax Gold (a) 500,000 3,625,000 BJ Services.......................... (a) 125,000 3,625,000 Cambrex................................ 174,900 7,236,488 Crane 125,000 4,609,375 Culligan Water Technologies............ 164,200 3,981,850 Ferro 180,000 4,185,000 Freeport McMoRan....................... 119,998 4,439,926 IMCO Recycling......................... 130,500 3,197,250 International Specialty Products .......(a) 300,000 3,262,500 Jacobs Engineering Group ...............(a) 110,000 2,750,000 Longview Fibre......................... 225,000 3,656,250 Minerals Technologies.................. 150,000 5,475,000 OM Group............................... 165,000 5,465,625 Reliance Steel & Aluminum.............. 90,000 1,867,500 Santa Fe Pacific Gold.................. 350,000 4,243,750 Sterling Chemicals................... (a) 245,000 1,990,625 USA Waste Services................... (a) 74,000 1,396,750 Uniroyal Chemical...................... 205,000 1,691,250 ---------- 66,699,139 ---------- DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------- ------- PRODUCER DURABLES-8.5% Albany International, Cl. A 275,000 $ 4,984,375 Applied Power, Cl. A................... 75,000 2,250,000 Huntco, Cl. A.......................... 250,000 3,843,750 Keystone International. ................. 215,000 4,300,000 Manitowoc.............................. 95,000 2,909,375 Precision Castparts.................... 150,000 5,962,500 Rohr Industries...................... (a) 375,000 5,390,625 Roper Industries....................... 90,000 3,307,500 Titan Wheel International. .............. 225,000 3,656,250 Watts Industries, Cl. A. ................ 175,000 4,068,750 Wolverine Tube....................... (a) 149,500 5,606,250 ---------- 46,279,375 ---------- TECHNOLOGY-19.0%.... Aspect Telecommunication ......(a)......... 170,000 5,695,000 Auspex Systems....................... (a) 350,000 6,387,500 Celeritek.............................. 220,000 2,337,500 Cheyenne Software.................... (a) 110,000 2,873,750 Cooper & Chyan Technology. .............. 190,000 2,992,500 C.P. Clare............................. 40,000 820,000 DST Systems............................ 175,000 4,987,500 Elcom International.................... 370,000 5,642,500 FSI International...................... 230,000 4,657,500 FTP Software......................... (a) 150,000 4,350,000 Franklin Electronic Publishing .........(a) 90,000 2,655,000 GT Interactive Software. ................ 225,000 3,150,000 Glenayre Technologies ..................(a) 25,000 1,556,250 IDX Systems............................ 177,500 6,168,125 IMNET Systems.......................... 127,000 3,048,000 Intergraph........................... (a) 210,000 3,307,500 International Rectifier ...............(a) 50,000 1,250,000 Learning Tree International............ 185,000 2,890,625 Madge Networks, N.V. ................ (a) 130,000 5,817,500 Micrografx........................... (a) 150,000 1,987,500 P-COM.................................. 190,000 3,800,000 Renaissance Solutions. .................. 75,000 1,068,750 Security Dynamics Technologies .........(a) 115,000 6,267,500 Sierra On-Line....................... (a) 190,000 5,462,500 Softkey International ..................(a) 65,000 1,503,125 Software Artistry...................... 10,000 150,000 StrataCom............................ (a) 45,000 3,307,500 Thiokol................................ 150,000 5,081,250 Veeco Instruments.................... (a) 167,500 2,428,750 VideoServer............................ 50,000 1,575,000 ---------- 103,218,625 ---------- DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995 COMMON STOCKS (CONTINUED) SHARES VALUE ------- ------- TRANSPORT & AUTOS-.7% Kansas City Southern Industries ........ 85,000 $3,888,750 ---------- TOTAL COMMON STOCKS (cost $413,396,621).................. $489,891,039 ============ PRINCIPAL BOND-.2% AMOUNT ------- TECHNOLOGY; Individual, 12%, 11/29/2000, Conv. (cost $1,000,000)................ (c,d) $1,000,000 $1,000,000 ============ SHORT-TERM INVESTMENTS- 9.5% U.S. TREASURY BILLS: 5.28%, 1/11/96 $9,418,000 $9,403,213 5.31%, 1/25/96......................... 13,183,000 13,140,551 5.34%, 2/8/96.......................... 10,801,000 10,744,295 5.09%, 3/7/96.......................... 15,859,000 15,713,097 4.84%, 3/28/96......................... 2,529,000 2,498,121 ---------- TOTAL SHORT-TERM INVESTMENTS (cost $51,491,154). $51,499,277 ============ TOTAL INVESTMENTS (cost $465,887,775)....................................... 99.8% $542,390,316 ====== ============ CASH AND RECEIVABLES (NET).................................................. .2% $ 890,848 ====== ============ NET ASSETS.................................................................. 100.0% $543,281,164
NOTES TO STATEMENT OF INVESTMENTS: (a) Non-income producing. (b) Investment in non-controlled affiliates (cost $3,882,726)-see Note 2(d). (c) With 16,000 warrants to purchase Common Stock. (d) Security restricted as to public resale. Investment in restricted security, with a market value of $1,000,000, represents approximately .18% of net assets.
ACQUISITION PURCHASE PERCENTAGE OF ISSUER DATE PRICE NET ASSETS VALUATION* - --- --------- -------- -------------- ------------ Individual, 12%, 11/29/2000, Conv. 11/29/95 $100 .18% Cost *The valuation of this security has been determined in good faith under the direction of the Board of Trustees.
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995 ASSETS: Investments in securities, at value (cost $465,887,775)-see statement..................................... $542,390,316 Cash.................................................................... 2,342,311 Receivable for investment securities sold............................... 12,533,278 Dividends and interest receivable....................................... 314,907 Prepaid expenses........................................................ 291 --------- 557,581,103 LIABILITIES: Due to The Dreyfus Corporation.......................................... $329,835 Payable for investment securities purchased............................. 13,794,995 Accrued expenses........................................................ 175,109 14,299,939 ---------- ---------- NET ASSETS.................................................................. $543,281,164 ============ REPRESENTED BY: Paid-in capital......................................................... $463,117,504 Accumulated distributions in excess of investment income-net............ (33,132) Accumulated undistributed net realized gain on investments and foreign currency transactions...................... 3,694,251 Accumulated net unrealized appreciation on investments-Note 4(b)........ 76,502,541 --------- NET ASSETS at value applicable to 11,778,323 shares outstanding (unlimited number of $.001 par value shares of Beneficial Interest authorized)........................................................ $543,281,164 ============ NET ASSET VALUE, offering and redemption price per share ($543,281,164 / 11,778,323 shares)...................................... $46.13 ====== See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 INVESTMENT INCOME: INCOME: Cash dividends: Unaffiliated issuers.............................................. $ 2,082,377 Affiliated issuers................................................ 27,975 $2,110,352 Interest.............................................................. 2,678,433 ---------- TOTAL INCOME.................................................... 4,788,785 EXPENSES: Investment advisory fee-Note 3(a)..................................... 2,610,562 Registration fees..................................................... 101,542 Custodian fees........................................................ 71,358 Prospectus and shareholders' reports.................................. 47,113 Trustees' fees and expenses-Note 3(b)................................. 24,672 Professional fees..................................................... 23,523 Dividends on securities sold short.................................... 10,800 Shareholder servicing costs........................................... 761 Miscellaneous......................................................... 7,508 ------- TOTAL EXPENSES.................................................. 2,897,839 ---------- INVESTMENT INCOME-NET........................................... 1,890,946 ---------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain (loss) on investments-Note 4(a): Long transactions (including foreign currency transactions): Unaffiliated issuers.............................................. $15,845,305 Affiliated issuers................................................ (299,018) Short sale transactions............................................... (192,297) ------- NET REALIZED GAIN..................................................... 15,353,990 ---------- Net unrealized appreciation on investments: Unaffiliated issuers.............................................. 70,078,430 Affiliated issuers................................................ 681,337 70,759,767 ----------- ---------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 86,113,757 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $88,004,703 ----------
See notes to financial statements.
DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, ----------------------------------- 1994 1995 ------------ ---------- OPERATIONS: Investment income-net................................................... $765,642 $1,890,946 Net realized gain (loss) on investments................................. (812,026) 15,353,990 Net unrealized appreciation on investments for the year................. 3,743,892 70,759,767 ------------ ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 3,697,508 88,004,703 ------------ ---------- DIVIDENDS TO SHAREHOLDERS: From investment income-net.............................................. (727,613) (1,926,351) In excess of investment income-net...................................... _- (33,132) From net realized gain on investments................................... (720,564) (10,361,085) In excess of net realized gain on investments........................... (481,344) _- ------------ ---------- TOTAL DIVIDENDS....................................................... (1,929,521) (12,320,568) ------------ ---------- BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold........................................... 158,015,337 299,512,811 Dividends reinvested.................................................... 1,929,521 12,320,568 Cost of shares redeemed................................................. (6,835,267) (17,451,351) ------------ ---------- INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.......... 153,109,591 294,382,028 ------------ ---------- TOTAL INCREASE IN NET ASSETS...................................... 154,877,578 370,066,163 NET ASSETS: Beginning of year....................................................... 18,337,423 173,215,001 ------------ ---------- End of year [including undistributed investment income-net; $35,405 in 1994 and distributions in excess of investment income-net; $(33,132) in 1995].......................................................... $173,215,001 $543,281,164 =============== ============== SHARES SHARES ------- ------- CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 4,347,955 7,174,006 Shares issued for dividends reinvested.................................. 52,997 274,387 Shares redeemed......................................................... (190,260) (413,128) ------------ ---------- NET INCREASE IN SHARES OUTSTANDING.................................... 4,210,692 7,035,265 ============ ============
See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements.
YEAR ENDED DECEMBER 31, ---------------------------------------------------------- PER SHARE DATA: 1991 1992 1993 1994 1995 ---- ---- ---- ---- ---- Net asset value, beginning of year........... $10.21 $20.60 $22.71 $34.45 $36.52 ---- ---- ---- ---- ---- INVESTMENT OPERATIONS: Investment income-net........................ .14* .18* .14 .17 .16 Net realized and unrealized gain on investments 15.85* 13.10* 14.93 2.50 10.54 ---- ---- ---- ---- ---- TOTAL FROM INVESTMENT OPERATIONS........... 15.99* 13.28* 15.07 2.67 10.70 ---- ---- ---- ---- ---- DISTRIBUTIONS: Dividends from investment income-net......... (.15) (.15) (.14) (.16) (.18) Dividends in excess of investment income-net. .- .- (.01) .- .- Dividends from net realized gain on investments (5.45) (11.02) (3.18) (.33) (.91) Dividends in excess of net realized gain on investments............................. .- .- .- (.11) .- ---- ---- ---- ---- ---- TOTAL DISTRIBUTIONS........................ (5.60) (11.17) (3.33) (.60) (1.09) ---- ---- ---- ---- ---- Net asset value, end of year................. $20.60 $22.71 $34.45 $36.52 $46.13 ====== ====== ======== ====== ======== TOTAL INVESTMENT RETURN.......................... 159.73% 71.28% 68.31% 7.75% 29.38% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... 1.16% .94% .25% .55% .83% Ratio of net investment income to average net assets .77% .76% .89% 1.18% .54% Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation.... 3.64% 2.29% 1.79% .52% .- Portfolio Turnover Rate...................... 388.70% 358.27% 244.59% 106.00% 99.02% Net Assets, end of year (000's Omitted)...... $1,554 $2,679 $18,337 $173,215 $543,281 * Based on average shares outstanding.
See notes to financial statements. DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio NOTES TO FINANCIAL STATEMENTS NOTE 1-GENERAL: The Dreyfus Variable Investment Fund (the `Fund") is registered under the Investment Company Act of 1940 ("Act") as an open-end management investment company, operating as a series company currently offering eight series, including the Small Cap Portfolio series (the "Series") and is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The Series is a diversified portfolio. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. The Fund currently functions as the funding vehicle for the Dreyfus Series 2000 Variable Annuity Contract (the "Account") issued by Mutual Benefit Life Insurance Company ("Mutual Benefit Life"). On July 16, 1991, the Superior Court of New Jersey entered an Order (the "Order") appointing the New Jersey Insurance Commissioner as Rehabilitator of Mutual Benefit Life. The Commissioner was granted immediate exclusive possession and control of, and title to, the business and assets of Mutual Benefit Life, including the assets and liabilities of the Account. The Commissioner was empowered by the Order to take such steps as he deemed appropriate toward removing the cause and conditions that made rehabilitation necessary. On January 15, 1993, the Commissioner filed the First Amended Plan of Rehabilitation ("Plan") with the Court. The Plan stipulated that the assets and liabilities of the Account will be transferred to a separate account of MBL Life Assurance Corporation ("MBLLAC"), a wholly-owned subsidiary of Mutual Benefit Life. The Plan also provided for the transfer of the ownership of the stock of MBLLAC to a Trust. The Commissioner was designated as the sole Trustee of the Trust. On August 12, 1993, the Court rendered an opinion approving the Plan with certain modifications. Two subsequent amendments to the Plan were filed and approved by the Court. None of the modifications or amendments affected the status of the Account. On November 10, 1993, the Court issued an Order of Confirmation permitting the implementation of the Plan. An order was also issued by the Court on January 28, 1994, approving the form of the Third Amended Plan of Rehabilitation, the Election Materials and related documents. On April 29, 1994, the Plan was implemented. Substantially all of the assets of Mutual Benefit Life were transferred to MBLLAC and MBLLAC assumed and reinsured Mutual Benefit Life's restructured insurance liabilities. The stock of MBLLAC was assigned to the Stock Trust and the Commissioner was designated as Trustee. In view of the terms and conditions of both the Order and the Plan, applications for new contracts and additional purchase payments under existing contracts are currently not being accepted by the Account. The terms of the Order and the Plan permit redemptions from the Account to continue as requested. The proceedings of the New Jersey Insurance Commissioner with respect to Mutual Benefit Life or the Account do not apply to the separate accounts of other life insurance companies that may use the Fund as a funding vehicle for contracts or policies issued by them. DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 2-SIGNIFICANT ACCOUNTING POLICIES: (A) PORTFOLIO VALUATION: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Trustees. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (B) FOREIGN CURRENCY TRANSACTIONS: The Series does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series' books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (D) AFFILIATED ISSUERS: Issuers in which the Series held 5% or more of the outstanding voting securities are defined as defined as "affiliated" in the Act. (E) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gain are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. This may result in distributions that are in excess of investment income-net and net realized gain on a fiscal year basis. To the extent that the net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Series not to distribute such gain. (F) FEDERAL INCOME TAXES: It is the policy of the Series 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 Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. For Federal income tax purposes, each series is treated as a single entity for the purpose of determining such qualification. DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 3-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to the provisions of an Investment Advisory Agreement (the "Agreement") with Dreyfus, the investment advisory fee is computed at the annual rate of .75 of 1% of the average daily value of the Series' net assets and is payable monthly. There was no expense reimbursement for the year ended December 31, 1995. The Agreement further provides that if in any full year the aggregate expenses of the series, exclusive of taxes, brokerage, interest on borrowings (which in the view of Strook & Strook & Lavan, counsel to the Fund, also contemplates dividends on securities sold short), brokerage and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series, the Series may deduct from the payments to be made to Dreyfus, or Dreyfus will bear the amount of such excess to the extent required by state law. Effective December 1, 1995, the Fund entered into a transfer agency agreement with Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, to provide personnel and facilities to perform transfer agency services for the Fund. (B) Each trustee who is not an "affiliated person," as defined in the Act, receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 4-SECURITIES TRANSACTIONS: (A) The following summarizes the aggregate amount of purchases and sales of investment securities and securities sold short, excluding short-term securities, options and forward currency exchange contracts, during the year ended December 31, 1995: PURCHASES SALES ------------ ------------ Long transactions: Unaffiliated issuers............... $583,929,707 $301,384,934 Affiliated issuers................. 1,108,725 656,638 Short sale transactions.............. 10,745,304 10,553,007 ------------ ------------ TOTAL.......................... $595,783,736 $312,594,579 ============== ============ The Series is engaged in short-selling which obligates the Series to replace the security borrowed by purchasing the security at current market value. The Series would incur a loss if the price of the security increases between the date of the short sale and the date on which the Series replaces the borrowed security. The Series would realize a gain if the price of the security declines between those dates. Until the Series replaces the borrowed security, the Series will maintain daily, a segregated account with a broker and custodian; of cash and/or U.S. Government securities sufficient to cover its short position. At December 31, 1995, there were no securities sold short outstanding. (B) At December 31, 1995, accumulated net unrealized appreciation on investments was $76,502,541, consisting of $90,047,870 gross unrealized appreciation and $13,545,329 gross unrealized depreciation. At December 31, 1995, 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). DREYFUS VARIABLE INVESTMENT FUND, Small Cap Portfolio REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS VARIABLE INVESTMENT FUND, SMALL CAP PORTFOLIO We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, Small Cap Portfolio (one of the series constituting the Dreyfus Variable Investment Fund), as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Variable Investment Fund, Small Cap Portfolio at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst & Young LLP signature logo] New York, New York February 9, 1996 IMPORTANT TAX INFORMATION (UNAUDITED) For Federal tax purposes the Portfolio hereby designates $.22 per share as a long-term capital gain distribution of the $1.08 per share paid on December 21, 1995. [Dreyfus lion "d" logo] DREYFUS VARIABLE INVESTMENT FUND, SMALL CAP PORTFOLIO 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 121AR9512 [Dreyfus logo] Variable Investment Fund, SMALL CAP PORTFOLIO Annual Report December 31, 1995 Dreyfus Stock Index Fund - ---------------------------------------- Letter to Shareholders Dear Shareholder: We are pleased to report that the Dreyfus Stock Index Fund achieved a total return of 36.78% for the fiscal year ended December 31, 1995.* As you know, the Fund's goal is to track, as closely as possible, the performance of the Standard & Poor's 500 Composite Stock Price Index,** which had a total return of 37.53%*** for the same period. The difference is accounted for by the costs of operating your Fund. ECONOMIC ENVIRONMENT The dominant influence on the U.S. economy in 1995 was the policy of the Federal Reserve Board's Open Market Committee, led by Federal Reserve Board Chairman Alan Greenspan. By deft handling of credit controls, the Fed managed to keep the U.S. economy growing at a moderate rate throughout the year. At the start of 1995, the central bank was still fighting inflation, culminating a year-long strategy of raising interest rates to prevent overheating of the economy. This approach appeared to work. The economy began to slow down, even raising some fear that the Fed might have caused a recession. Yet by midsummer, the Fed switched gears, and began a very modest lowering of interest rates. Its purpose was to maintain the growth of the economy and to place the Fed in a position to avoid blame for causing a business turndown, if one should come. By fall, the economic indicators confirmed that growth was indeed slowing. Construction activity was cooling off. Business inventories were creeping up. Creation of new jobs slowed, and unemployment inched upward. However, other sectors of the economy remained strong. U.S. merchandise exports were growing at 15 percent a year in constant dollars, reflecting the tremendous competitiveness of U.S. manufacturers on world markets. Fixed investments by business continued to grow. Orders for nondefense capital goods, after a slump in early summer, appeared to be picking up. Low interest rates sustained a good level of housing sales. Retail sales were weak. The economy was no longer being led by consumer spending. Yet, a sizable portion of the slowdown in consumer spending reflected lower retail prices rather than a drop in numbers of transactions. The consumer was very cautious and was looking for bargains, but still had money to spend - carefully. To be sure, consumers took on a lot of debt, but their assets rose in value, particularly investment assets. Thus they were in position to carry more debt. In December, the Federal Reserve lowered interest rates once again, but by the smallest amount possible. Other steps to reduce interest rates are expected in 1996 to deal with a continued slowing of the economy. MARKET OVERVIEW As one would expect from the key role played by the Federal Reserve, the stock market was heavily influenced during the year by the cost of money, and hence by the bond market. The 1995 economic climate was ideal for bonds - slow growth, no worrisome inflation, and pressure in Washington to reduce the Federal deficit, cutting back the Government's need to borrow money. The stock market took its cue from the rising prices of fixed income investments. As indicated by the performance of your index Fund, stocks enjoyed a very strong year. Of course, the rising tide did not lift all the boats, even though the Dow Jones Industrials broke through the 4000 and 5000 point levels during the year. Technology stocks, especially computer issues, rose stunningly until late in the year, when many investors concluded that their prices may have outrun their profit potential, at least for a while. Interest-sensitive stocks, such as financial companies and utilities, did well. As the year wore on, however, some manufacturing and retailing sectors, where profit margins were being squeezed by competition, reflected investor concern about future profit potential. Few analysts believe that market conditions will be as favorable this year as they were in 1995. Indeed, the market stumbled in early January. However, stock prices may not as yet fully reflect the possibilities for dramatically lower interest rates if the Federal Government does actually set its course toward eliminating the budget deficit in seven years. If that means that long-term Government borrowing will decline and perhaps eventually stop, the market environment could change dramatically. We thank you for your interest in the Dreyfus Stock Index Fund and wish you the best for the coming year. Sincerely, [Steven Falci signature logo] Steven Falci Portfolio Manager January 11, 1996 New York, N.Y. * Total return includes reinvestment of dividends and any capital gains paid. Figures do not reflect the deduction of any additional charges applicable to separate accounts of participating insurance companies which use the Fund as an underlying investment. ** The Fund is not sponsored, sold, endorsed or promoted by Standard & Poor's Corporation. *** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of income dividends and, where applicable, capital gain distributions. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of stock market performance. Dreyfus Stock Index Fund December 31, 1995 - ---------------------------------------- COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS STOCK INDEX FUND AND THE STANDARD AND POOR'S 500 COMPOSITE STOCK PRICE INDEX Standard & Poor's 500 Composite Stock Dreyfus Stock Price Index * Index Fund ----------------------------- 9/29/89 10,000 10,000 12/31/89 10,205 10,216 12/31/90 9,888 9,860 12/31/91 12,893 12,803 12/31/92 13,875 13,713 12/31/93 15,270 14,993 12/31/94 15,471 15,125 12/31/95 21,278 20,688 ----------------------------- *Source: Lipper Analytical Services, Inc. [Exhibit A: ]
Average Annual Total Returns - -------------------------------------------------------- One Year Ended Five Years Ended From Inception (9/29/89) December 31, 1995 December 31, 1995 to December 31, 1995 ------------ ------------ --------------- 36.78% 15.94% 12.31%
Past performance is not predictive of future performance. The Fund's performance does not reflect the deduction of additional charges applicable to separate accounts of participating insurance companies using the Fund as an underlying investment. The above graph compares a $10,000 investment in Dreyfus Stock Index Fund on 9/29/89 (Inception Date) to a $10,000 investment made in the Standard & Poor's 500 Composite Stock Price Index on that date. For comparative purposes, the value of the Index on 9/30/89 is used as the beginning value on 9/29/89. All dividends and capital gain distributions are reinvested. The Fund's performance shown in the line graph takes into account all applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of overall stock market performance which does not take into account charges, fees and other expenses. Further information relating to Fund performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report. Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments December 31, 1995
Common Stocks-90.2% Shares Value ------ ------ Aerospace-1.9% Allied-Signal................................... 17,330 $ 823,175 Boeing.......................................... 21,047 1,649,559 General Dynamics................................ 3,828 226,331 Lockheed Martin................................. 12,245 967,355 McDonnell Douglas............................... 6,901 634,892 Northrop Grumman................................ 2,987 191,168 Rockwell International.......................... 13,361 706,463 Teledyne........................................ 3,425 87,772 United Technologies ............................ 7,445 706,344 ------ 5,993,059 ------ Agriculture & Food-2.8% Archer Daniels Midland ......................... 32,558 586,062 CPC International .............................. 8,981 616,321 Campbell Soup................................... 15,320 919,200 Conagra ........................................ 14,680 605,550 General Mills .................................. 9,776 564,564 Heinz (H.J.) ................................... 22,701 751,987 Hershey Foods................................... 4,702 305,630 Kellogg ........................................ 13,368 1,032,678 Pioneer Hi-Bred International................... 5,098 283,576 Quaker Oats..................................... 8,272 285,384 Sara Lee ....................................... 29,692 946,432 Unilever, N.V................................... 9,866 1,388,639 Wrigley (Wm) Jr. ............................... 7,089 372,172 ------ 8,658,195 ------ Air Transport-.3% AMR..........................................(a) 4,728 351,055 Delta Air Lines................................. 3,166 233,888 Federal Express..............................(a) 3,451 254,943 Southwest Airlines.............................. 8,824 205,158 USAir Group..................................(a) 3,803 50,390 ------ 1,095,434 ------ Aluminum-.4% Alcan Aluminium................................. 13,869 431,673 Aluminum Co. of America......................... 10,915 577,131 Reynolds Metals................................. 3,870 219,139 ------ 1,227,943 ------ Apparel & Textiles-.4% Brown Group..................................... 1,146 16,331 Fruit of the Loom, Cl. A.....................(a) 4,675 113,953 Liz Claiborne................................... 4,577 127,012 NIKE, Cl. B..................................... 8,766 610,333 Reebok International............................ 4,667 131,843 Russell......................................... 2,368 65,712 Springs Industries.............................. 1,147 47,457 Stride Rite..................................... 3,017 22,627 V.F. ........................................... 3,894 205,408 ------ 1,340,676 ------
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Automotive-2.0% Chrysler........................................ 23,524 $ 1,302,642 Dana............................................ 6,222 181,994 Echlin.......................................... 3,680 134,320 Fleetwood Enterprises........................... 2,797 72,023 Ford Motor...................................... 65,874 1,910,346 General Motors.................................. 45,852 2,424,425 NACCO Industries, Cl. A ........................ 533 29,581 Navistar International.......................(a) 4,634 48,657 PACCAR.......................................... 2,423 102,069 ------ 6,206,057 ------ Banking-5.8% Banc One........................................ 24,061 908,303 Bank of Boston.................................. 6,883 318,339 Bank of New York................................ 12,269 598,114 BankAmerica..................................... 22,724 1,471,379 Bankers Trust New York.......................... 4,857 322,991 Barnett Banks................................... 5,959 351,581 Boatmens Bancshares............................. 7,951 324,997 Chase Manhattan................................. 11,015 667,784 Chemical Banking................................ 15,339 901,166 Citicorp........................................ 26,093 1,754,754 Comerica........................................ 7,000 280,875 CoreStates Financial............................ 8,576 324,816 First Bank Systems.............................. 7,984 396,206 First Chicago................................... 19,733 779,454 First Fidelity Bancorp.......................... 4,972 374,765 First Interstate Bancorp........................ 4,653 635,135 First Union..................................... 10,467 582,227 Fleet Financial Group........................... 15,766 642,465 KeyCorp......................................... 14,491 525,299 Mellon Bank..................................... 8,099 435,321 Morgan (J.P.) & Co.............................. 11,499 922,795 National City................................... 9,023 298,887 NationsBank..................................... 16,614 1,156,750 Norwest......................................... 21,648 714,384 PNC Financial................................... 16,267 524,611 Republic New York............................... 3,450 214,331 SunTrust Banks.................................. 7,041 482,308 U.S. Bancorp.................................... 6,009 202,052 Wachovia........................................ 10,496 480,192 Wells Fargo & Co................................ 2,887 623,592 ------ 18,215,873 ------ Beverages-3.4% Anheuser-Busch Cos.............................. 15,594 1,042,849 Brown-Forman, Cl. B............................. 4,252 155,198 Coca-Cola....................................... 77,029 5,719,403 Coors (Adolph), Cl. B........................... 2,283 50,511 PepsiCo......................................... 48,375 2,702,953 Seagram......................................... 22,856 791,389
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Beverages (continued) Whitman......................................... 6,448 $ 149,916 ------ 10,612,219 ------ Capital Goods-5.3% Amdahl.......................................(a) 7,351 62,484 Briggs & Stratton............................... 1,815 78,726 Caterpillar..................................... 12,117 711,874 Cincinnati Milacron............................. 2,054 53,918 Crane........................................... 1,900 70,063 Cummins Engine.................................. 2,498 92,426 DSC Communications...........................(a) 7,057 260,227 Deere & Co...................................... 16,102 567,596 Dover........................................... 7,010 258,494 Dresser Industries.............................. 11,185 272,634 Eaton........................................... 4,802 257,507 Foster Wheeler.................................. 2,509 106,633 General Electric................................ 102,517 7,381,224 General Signal.................................. 2,931 94,891 Genuine Parts................................... 7,530 308,730 Giddings & Lewis................................ 2,144 35,376 Grainger (W.W.)................................. 3,171 210,079 Harnischfeger Industries........................ 2,968 98,686 Illinois Tool Works............................. 7,192 424,328 Ingersoll-Rand.................................. 6,653 233,687 Johnson Controls................................ 2,483 170,706 Mallinckrodt Group.............................. 4,752 172,854 McDermott International......................... 3,356 73,832 Minnesota Mining & Manufacturing................ 25,724 1,704,215 National Service Industries..................... 2,997 97,028 Owens-Corning Fiberglas......................(a) 3,112 139,651 Pall............................................ 7,060 189,764 Parker-Hannifin................................. 4,565 156,351 Perkin-Elmer.................................... 2,611 98,565 Premark International........................... 3,799 192,324 Raychem......................................... 2,683 152,596 Snap-On Tools................................... 2,483 112,356 Stanley Works................................... 2,722 140,183 3Com............................................ 6,600 307,725 Textron......................................... 5,221 352,417 Timken.......................................... 1,929 73,784 TRINOVA......................................... 1,775 50,809 TRW............................................. 4,009 310,697 Tyco Laboratories............................... 9,348 333,022 Varity.......................................(a) 2,556 94,891 ------ 16,503,353 ------ Chemicals-3.0%. Air Products & Chemicals........................ 6,817 359,597 Ashland Oil..................................... 3,922 137,760 Avery Dennison.................................. 3,261 163,458
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Chemicals (continued) Dow Chemical.................................... 16,092 $ 1,132,475 du Pont (E.I.) de Nemours....................... 34,130 2,384,834 Eastman Chemical................................ 4,924 308,366 Engelhard....................................... 8,823 191,900 FMC..........................................(a) 2,214 149,722 Goodrich (B.F.)................................. 1,595 108,659 Grace (W.R.) & Co............................... 5,925 350,316 Great Lakes Chemical............................ 3,934 283,248 Hercules........................................ 6,838 385,492 Monsanto........................................ 7,086 868,035 Morton International............................ 9,121 327,216 Nalco Chemical.................................. 4,139 124,687 Occidental Petroleum............................ 19,570 418,309 PPG Industries.................................. 12,031 550,418 Praxair......................................... 8,611 289,545 Rohm & Haas..................................... 4,109 264,517 Sigma Aldrich................................... 3,107 153,796 Union Carbide................................... 8,471 317,662 ------ 9,270,012 ------ Consumer Durables-.3% Black & Decker.................................. 5,296 186,684 Masco........................................... 9,834 308,542 Maytag.......................................... 6,643 134,521 Whirlpool....................................... 4,508 240,051 Zenith Electronics...........................(a) 2,492 17,132 ------ 886,930 ------ Construction-.2% Armstrong World Industries...................... 2,283 141,546 Centex.......................................... 1,600 55,600 Fluor........................................... 5,112 337,392 Sherwin-Williams................................ 5,206 212,144 ------ 746,682 ------ Containers-.2% Ball............................................ 1,850 50,875 Bemis........................................... 3,281 84,076 Crown Cork & Seal............................(a) 5,555 231,921 Temple-Inland................................... 3,446 152,055 ------ 518,927 ------ Cosmetics-1.2% Alberto Culver, Cl. B........................... 1,725 59,297 Avon Products................................... 4,198 316,424 Procter & Gamble................................ 42,079 3,492,557 ------ 3,868,278 ------ Drugs-7.3% ALZA.........................................(a) 5,080 125,730 Abbott Laboratories............................. 48,547 2,026,837 Allergan........................................ 3,909 127,043 American Home Products.......................... 19,209 1,863,273
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Drugs (continued) Amgen........................................(a) 16,338 $ 970,069 Bristol-Myers Squibb............................ 31,095 2,670,283 Johnson & Johnson............................... 39,773 3,405,563 Lilly (Eli) & Co................................ 33,860 1,904,625 Merck & Co...................................... 75,805 4,984,179 Pfizer.......................................... 38,936 2,452,968 Pharmacia & Upjohn.............................. 30,920 1,198,171 Schering-Plough................................. 22,574 1,235,926 ------ 22,964,667 ------ Electronics-3.6% AMP............................................. 13,310 510,771 Advanced Micro Devices.......................(a) 6,443 106,310 Andrew.......................................(a) 2,427 92,833 Cooper Industries............................... 6,621 243,322 Emerson Electric................................ 13,745 1,123,654 Harris.......................................... 2,438 133,176 Honeywell....................................... 7,794 378,983 Intel........................................... 50,566 2,869,620 LSI Logic....................................(a) 7,900 258,725 Loral........................................... 10,620 375,683 Micron Technology............................... 12,710 503,634 Motorola........................................ 36,213 2,064,141 National Semiconductor.......................(a) 7,560 168,210 Northern Telecom................................ 15,560 669,080 Raytheon........................................ 14,914 704,686 Scientific-Atlanta.............................. 4,773 71,595 Tektronix....................................... 2,015 98,987 Tellabs......................................(a) 5,414 200,318 Texas Instruments............................... 11,606 600,610 Thomas & Betts.................................. 1,096 80,830 ------ 11,255,168 ------ Finance-2.7% Ahmanson (H.F.) & Co............................ 7,201 190,827 American Express................................ 29,727 1,229,955 Beneficial...................................... 3,217 149,993 Dean Witter, Discover & Co...................... 10,363 487,107 Federal Home Loan Mortgage...................... 11,046 922,341 Federal National Mortgage Association........... 16,736 2,077,356 Golden West Financial........................... 3,610 199,453 Great Western Financial......................... 8,369 213,410 Household International......................... 6,019 355,873 MBNA............................................ 9,121 336,337 Merrill Lynch & Co.............................. 10,788 550,188 Morgan Stanley Group............................ 4,791 386,274 Salomon......................................... 6,578 233,519 Travelers Group................................. 19,572 1,230,589 ------ 8,563,222 ------
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Forest & Paper Products-1.6% Alco Standard................................... 6,894 $ 314,539 Boise Cascade................................... 2,913 100,863 Champion International.......................... 5,900 247,800 Federal Paper Board............................. 2,863 148,518 Georgia-Pacific................................. 5,622 385,810 International Paper............................. 15,596 590,698 James River..................................... 5,077 122,483 Kimberly-Clark.................................. 17,106 1,415,594 Louisiana-Pacific............................... 6,602 160,099 Mead............................................ 3,300 172,425 Potlatch........................................ 1,820 72,800 Stone Container................................. 5,905 84,884 Union Camp...................................... 4,298 204,692 Westvaco........................................ 6,233 172,966 Weyerhaeuser.................................... 12,347 534,008 Willamette Industries........................... 3,363 189,169 ------ 4,917,348 ------ Health Care-2.4% Bard (C.R.)..................................... 3,496 112,746 Bausch & Lomb................................... 3,551 140,708 Baxter International............................ 16,645 697,009 Becton Dickinson & Co........................... 4,088 306,600 Beverly Enterprises..........................(a) 6,031 64,079 Biomet.......................................(a) 7,042 125,876 Boston Scientific............................(a) 9,965 488,285 Columbia/HCA Healthcare......................... 27,369 1,388,977 Community Psychiatric Centers................(a) 2,663 32,622 Corning......................................... 14,070 450,240 Humana.......................................(a) 9,900 271,013 Manor Care...................................... 3,870 135,450 Medtronic....................................... 14,294 798,677 Millipore....................................... 2,780 114,327 St. Jude Medical.............................(a) 4,273 183,739 Tenet Healthcare.............................(a) 12,290 255,017 U.S. HealthCare................................. 9,455 439,657 U.S. Surgical................................... 3,460 73,957 United Healthcare............................... 10,728 702,684 Warner-Lambert.................................. 8,303 806,429 ------ 7,588,092 ------ Hotels & Restaurants-.9% Bally Entertainment..........................(a) 2,867 40,138 Darden Restaurants.............................. 9,776 116,090 Harrah's Entertainment.......................(a) 6,337 153,672 Hilton Hotels................................... 2,966 182,409 Luby's Cafeterias............................... 1,305 29,036 McDonald's...................................... 42,563 1,920,655 Marriott International.......................... 7,693 294,257 Ryan's Family Steak House....................(a) 3,261 22,827
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Hotels & Restaurants (continued) Shoney's.....................................(a) 2,508 $ 25,707 Wendy's International........................... 6,329 134,491 ------ 2,919,282 ------ Household Products-1.2% Clorox.......................................... 3,251 232,853 Colgate-Palmolive............................... 8,899 625,155 Dial ........................................... 5,770 170,936 Ecolab.......................................... 3,984 119,520 Gillette........................................ 27,200 1,417,800 International Flavors & Fragrances.............. 6,802 326,496 Newell.......................................... 9,694 250,832 Ralston-Purina Group............................ 6,481 404,252 Rubbermaid...................................... 9,674 246,687 ------ 3,794,531 ------ Insurance-3.3% Aetna Life & Casualty........................... 7,042 487,659 Allstate........................................ 27,508 1,131,271 American General................................ 12,522 436,705 American International Group.................... 29,051 2,687,218 CIGNA........................................... 4,623 477,325 Chubb........................................... 5,361 518,677 General Re...................................... 4,992 773,760 ITT............................................. 7,151 379,003 ITT Hartford Group.............................. 7,151 345,930 ITT Industries.................................. 7,151 171,624 Jefferson-Pilot................................. 4,338 201,717 Lincoln National................................ 6,390 343,463 Loews........................................... 7,194 563,830 Providian....................................... 5,869 239,162 SAFECO.......................................... 7,770 268,065 St. Paul Cos.................................... 5,171 287,637 Torchmark....................................... 4,435 200,684 Transamerica.................................... 4,219 307,460 UNUM............................................ 4,498 247,390 USF&G........................................... 6,900 116,437 USLIFE.......................................... 2,071 61,871 ------ 10,246,888 ------ Iron & Steel-.3% Armco........................................(a) 6,523 38,323 Bethlehem Steel..............................(a) 6,906 96,684 Inland Steel Industries......................... 3,007 75,551 Nucor........................................... 5,396 308,246 USX-U.S. Steel Group............................ 5,107 157,040 Worthington Industries.......................... 5,617 116,904 ------ 792,748 ------ Leisure-.2% Brunswick....................................... 5,890 141,360 Hasbro.......................................... 5,406 167,586
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Leisure (continued) Mattel.......................................... 13,574 $ 417,401 Outboard Marine................................. 1,141 23,248 ------ 749,595 ------ Media-2.2% Capital Cities/ABC.............................. 9,430 1,163,426 Comcast, Cl. A.................................. 14,686 267,102 Disney (Walt)................................... 32,076 1,892,484 Handleman....................................... 2,109 12,127 King World Productions.......................(a) 2,219 86,264 Tele-Communications, Cl. A...................(a) 40,089 796,769 Time Warner..................................... 23,705 897,827 Tribune......................................... 3,869 236,493 US West Media Group............................. 28,953 550,107 Viacom, Cl. B (non-voting)...................(a) 22,190 1,051,298 ------ 6,953,897 ------ Mining-.4% ASARCO.......................................... 2,653 84,896 Cyprus Amax Minerals............................ 5,685 148,521 Freeport-McMoran Copper, Cl.B................... 12,443 349,959 Inco............................................ 7,311 243,091 Phelps Dodge.................................... 4,238 263,815 ------ 1,090,282 ------ Oil-International-3.9% Chevron......................................... 40,057 2,102,993 Exxon........................................... 76,212 6,106,487 Mobil........................................... 24,317 2,723,504 Oryx Energy..................................(a) 6,424 85,921 Texaco.......................................... 16,214 1,272,799 ------ 12,291,704 ------ Oil-Petroleum Reserves-.8% Atlantic Richfield.............................. 9,909 1,097,422 Burlington Resources............................ 7,810 306,543 Kerr-McGee...................................... 3,192 202,692 Louisiana Land & Exploration.................... 2,029 86,993 Pennzoil........................................ 2,797 118,173 Phillips Petroleum.............................. 16,063 548,150 Santa Fe Energy Resources....................(a) 5,578 53,688 ------ 2,413,661 ------ Oil-Refining & Distribution-2.7% Amerada Hess.................................... 5,688 301,464 Amoco........................................... 30,484 2,191,038 Coastal......................................... 6,438 239,816 Royal Dutch Petroleum........................... 32,881 4,640,331 Sun............................................. 4,606 126,089 Unocal.......................................... 15,186 442,292 USX-Marathon Group.............................. 17,649 344,155 ------ 8,285,185 ------
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Oil-Service-.6% Baker Hughes.................................... 8,672 $ 211,380 Halliburton..................................... 6,993 354,021 Helmerich & Payne............................... 1,520 45,220 Rowan Cos....................................(a) 5,196 51,310 Schlumberger.................................... 14,836 1,027,393 Western Atlas................................(a) 3,217 162,458 ------ 1,851,782 ------ Photography-.5% Eastman Kodak................................... 21,006 1,407,402 Polaroid........................................ 2,812 133,218 ------ 1,540,620 ------ Pollution Control-.5% Browning-Ferris Industries...................... 13,073 385,654 Laidlaw Cl.B.................................... 18,056 185,074 Safety-Kleen.................................... 3,600 56,250 WMX Technologies................................ 29,841 891,500 ------ 1,518,478 ------ Precious Metals-.5% Barrick Gold.................................... 21,692 572,127 Echo Bay Mines.................................. 7,742 80,323 Homestake Mining................................ 8,437 131,828 Newmont Mining.................................. 5,757 260,549 Placer Dome..................................... 14,697 354,565 Santa Fe Pacific Gold........................... 8,103 98,261 ------ 1,497,653 ------ Producer Goods-3.8% Apple Computer.................................. 7,561 241,007 Applied Materials............................(a) 10,958 431,471 Cabletron Systems............................(a) 4,452 360,612 cisco Systems................................(a) 16,758 1,250,566 Compaq Computer..............................(a) 16,270 780,960 Cray Research................................(a) 1,435 35,516 Data General.................................(a) 2,274 31,268 Digital Equipment............................(a) 9,267 594,246 Hewlett-Packard................................. 31,391 2,628,996 International Business Machines................. 34,939 3,205,653 Pitney Bowes.................................... 9,290 436,630 Silicon Graphics.............................(a) 9,841 270,627 Sun Microsystems.............................(a) 11,670 532,444 Tandem Computers.............................(a) 7,166 76,139 Unisys.......................................(a) 10,477 58,933 Xerox........................................... 6,581 901,597 ------ 11,836,665 ------ Publishing-.7% American Greetings.............................. 4,543 125,500 Donnelley (R R) & Sons.......................... 9,465 372,684 Gannett......................................... 8,597 527,641
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Publishing (continued) Harland (John H.)............................... 1,925 $ 40,184 Jostens......................................... 2,292 55,581 Knight-Ridder................................... 3,056 191,000 McGraw-Hill..................................... 3,099 270,000 Meredith........................................ 1,714 71,774 Moore........................................... 6,154 114,618 New York Times, Cl. A........................... 5,944 176,091 Times Mirror, Cl. A............................. 6,898 233,670 ------ 2,178,743 ------ Railroads & Transit-1.1% Burlington Northern............................. 8,679 676,962 CSX............................................. 12,866 587,011 Conrail......................................... 5,082 355,740 Consolidated Freightways........................ 2,699 71,524 Norfolk Southern................................ 7,988 634,047 Roadway Services................................ 2,438 119,157 Union Pacific................................... 12,642 834,372 Yellow.......................................... 1,720 21,285 ------ 3,300,098 ------ Real Estate-0% Kaufman & Broad Home............................ 1,989 29,586 Pulte........................................... 1,660 55,817 ------ 85,403 ------ Retail-4.3% Albertson's..................................... 15,470 508,576 American Stores................................. 9,040 241,820 Charming Shoppes................................ 6,373 18,322 Circuit City Stores............................. 6,014 166,137 Dayton-Hudson................................... 4,368 327,600 Dillard Department Stores, Cl. A................ 6,947 197,990 Federated Department Stores..................(a) 12,400 341,000 Fleming Cos..................................... 2,268 46,778 Gap............................................. 8,821 370,482 Giant Food, Cl. A............................... 3,685 116,078 Great Atlantic & Pacific Tea.................... 2,388 54,924 Harcourt General................................ 4,472 187,265 Home Depot...................................... 29,281 1,401,828 K mart.......................................... 28,144 204,044 Kroger.......................................(a) 7,566 283,725 Limited......................................... 21,998 382,215 Longs Drug Stores............................... 1,142 54,673 Lowes Cos....................................... 9,824 329,104 May Department Stores........................... 15,290 646,003 Melville........................................ 6,455 198,491 Mercantile Stores............................... 2,234 103,322 Nordstrom....................................... 4,968 201,204 Penney (J.C.)................................... 13,872 660,654 Pep Boys-Manny, Moe & Jack...................... 3,840 98,400
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Retail (continued) Price/Costco.................................(a) 11,932 $ 181,963 Rite Aid........................................ 5,144 176,182 Sears, Roebuck & Co............................. 23,938 933,582 Supervalu....................................... 4,203 132,394 Sysco........................................... 11,160 362,700 TJX Cos......................................... 4,453 84,050 Tandy........................................... 3,863 160,314 Toys R Us....................................(a) 16,759 364,508 Wal-Mart Stores................................. 140,786 3,150,087 Walgreen........................................ 15,060 449,917 Winn-Dixie Stores............................... 9,276 342,052 Woolworth (F.W.)................................ 8,174 106,262 ------ 13,584,646 ------ Services-3.5% Alexander & Alexander Services.................. 2,697 51,243 Autodesk........................................ 2,912 99,736 Automatic Data Processing....................... 8,827 655,405 Block (H&R)..................................... 6,423 260,132 Ceridian.....................................(a) 4,062 167,558 Computer Associates International............... 14,796 841,523 Computer Sciences............................(a) 3,421 240,325 CUC International............................(a) 10,986 374,897 Deluxe.......................................... 5,101 147,929 Dow Jones & Co.................................. 5,909 235,621 Dun & Bradstreet................................ 10,348 670,033 EG&G............................................ 3,191 77,382 First Data...................................... 13,644 912,443 Intergraph...................................(a) 2,842 44,761 Interpublic Group of Cos........................ 4,762 206,552 Marsh & McLennan Cos............................ 4,447 394,671 Microsoft....................................(a) 36,311 3,186,290 Novell.......................................(a) 22,713 323,660 Ogden........................................... 2,969 63,462 Oracle.......................................(a) 26,644 1,129,039 Pittston........................................ 2,548 79,943 Ryder System.................................... 4,902 121,324 Service Corporation International............... 6,446 283,624 Shared Medical Systems.......................... 1,426 77,539 Westinghouse Electric........................... 25,522 421,113 ------ 11,066,205 ------ Tire & Rubber-.2% Cooper Tire and Rubber.......................... 5,146 126,720 Goodyear Tire & Rubber.......................... 9,353 424,392 ------ 551,112 ------ Tobacco-1.8% American Brands................................. 11,172 498,551 Philip Morris Cos............................... 51,523 4,662,831
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Tobacco (contined) Schweitzer-Mauduit International................ 883 $ 20,433 UST............................................. 11,873 396,261 ------ 5,578,076 ------ Utilities-Electric-3.4% American Electric Power......................... 11,438 463,239 Baltimore Gas & Electric........................ 9,018 257,013 Carolina Power & Light.......................... 9,404 324,438 Central & South West............................ 11,844 330,152 Cinergy......................................... 9,679 296,419 Consolidated Edison Co. of New York............. 14,457 462,624 Detroit Edison.................................. 8,911 307,430 Dominion Resources.............................. 10,617 437,951 Duke Power...................................... 12,617 597,730 Entergy......................................... 14,027 410,290 FPL Group....................................... 11,315 524,733 General Public Utilities........................ 7,141 242,794 Houston Industries.............................. 16,078 389,892 Niagara Mohawk Power............................ 8,887 85,537 Northern States Power........................... 4,184 205,539 Ohio Edison..................................... 9,410 221,135 PacifiCorp...................................... 17,465 371,131 Pacific Gas & Electric.......................... 26,071 739,765 PECO Energy..................................... 13,643 410,995 PP&L Resources.................................. 9,800 245,000 Public Service Enterprise Group................. 15,051 460,937 SCEcorp......................................... 27,289 484,380 Southern........................................ 40,891 1,006,941 Texas Utilities................................. 13,874 570,568 UniCom.......................................... 13,146 430,531 Union Electric.................................. 6,218 259,601 ------ 10,536,765 ------ Utilities-Gas-.9% Columbia Gas System..........................(a) 3,066 134,521 Consolidated Natural Gas........................ 5,695 258,411 Eastern Enterprises............................. 1,271 44,803 ENSERCH......................................... 4,239 68,884 Enron........................................... 15,455 589,222 NICOR........................................... 3,131 86,102 Noram Energy.................................... 7,595 67,406 ONEOK........................................... 1,675 38,316 Pacific Enterprises............................. 5,203 146,985 Panhandle Eastern............................... 9,166 255,502 Peoples Energy.................................. 2,164 68,707 Sonat........................................... 5,296 188,670 Tenneco......................................... 10,969 544,337 Williams Cos.................................... 6,227 273,210 ------ 2,765,076 ------
Dreyfus Stock Index Fund - ---------------------------------------- Statement of Investments (continued) December 31, 1995
Common Stocks (continued) Shares Value ------ ------ Utilities-Telephone-7.7% ALLTEL.......................................... 11,556 $ 340,902 AT&T............................................ 97,720 6,327,370 AirTouch Communications......................(a) 30,439 859,902 Ameritech....................................... 33,987 2,005,233 Bell Atlantic................................... 26,835 1,794,591 BellSouth....................................... 61,022 2,654,457 GTE............................................. 59,452 2,615,888 MCI Communications.............................. 41,583 1,086,356 NYNEX........................................... 26,249 1,417,446 Pacific Telesis Group........................... 26,262 883,060 SBC Communications.............................. 37,355 2,147,912 Sprint.......................................... 21,359 851,690 US West......................................... 28,853 1,031,495 ------ 24,016,302 ------ TOTAL COMMON STOCKS (cost $235,303,221)........................... $281,877,532 ====== Preferred Stocks - -------------------------------------- Teledyne, Ser. E (cost $446)................................... 30 $ 435 ====== Principal Short-Term Investments-9.1% Amount - -------------------------------------- ----- U.S. Treasury Bills: 4.50%, 1/4/1996................................. $ 301,000 $ 300,904 5.28%, 1/11/1996................................ 8,400,000 8,386,812 5.25%, 1/18/1996.............................(b) 5,662,000 5,648,355 5.33%, 1/25/1996................................ 6,809,000 6,787,075 5.27%, 2/29/1996................................ 4,456,000 4,420,619 4.82%, 3/7/1996................................. 1,211,000 1,199,859 4.80%, 3/14/1996................................ 909,000 899,683 4.82%, 3/28/1996................................ 911,000 899,876 ------ TOTAL SHORT-TERM INVESTMENTS (cost $28,540,044) $ 28,543,183 ====== TOTAL INVESTMENTS (cost $263,843,711)....................................... 99.3% $310,421,150 ===== ====== CASH AND RECEIVABLES (NET).................................................. .7% $ 2,265,310 ===== ====== NET ASSETS.................................................................. 100.0% $312,686,460 ===== ======
Notes to Statement of Investments: - ---------------------------------------- (a) Non-income producing. (b) Partially held by the custodian in a segregated account as collateral for open financial futures positions. See notes to financial statements. Dreyfus Stock Index Fund - ---------------------------------------- Statement of Financial Futures December 31, 1995 Financial Futures Purchased; - ----------------------------------------
Market Value Unrealized Number of Covered (Depreciation) Issuer Contracts by Contracts Expiration at 12/31/95 - ---- ------ ------- ------- ------- Standard & Poor's 500........................ 94 $29,067,150 March 1996 ($234,815) ======
See notes to financial statements. Dreyfus Stock Index Fund - ---------------------------------------- Statement of Assets and Liabilities December 31, 1995 ASSETS: Investments in securities, at value (cost $263,843,711)-see statement..................................... $310,421,150 Cash.................................................................... 6,369,576 Dividends receivable.................................................... 612,437 Receivable for futures variation margin-Note 3(a)....................... 31,780 Prepaid expenses........................................................ 437 ------ 317,435,380 LIABILITIES: Due to The Dreyfus Corporation.......................................... $ 133,785 Dividends payable....................................................... 3,921,624 Payable for investment securities purchased............................. 460,307 Accrued expenses........................................................ 233,204 4,748,920 ----- ------ NET ASSETS.................................................................. $312,686,460 ====== REPRESENTED BY: Paid-in capital......................................................... $261,474,826 Accumulated undistributed investment income-net......................... 14,894 Accumulated undistributed net realized gain on investments.............. 4,854,116 Accumulated net unrealized appreciation on investments [including ($234,815) net unrealized (depreciation) on financial futures]-Note 3(b).................................................... 46,342,624 ------ NET ASSETS at value applicable to 18,177,360 shares outstanding (200 million shares of $.001 par value Common Stock authorized)...................... $312,686,460 ====== NET ASSET VALUE, per share ($312,686,460 / 18,177,360 shares)...................................... $17.20 ======
See notes to financial statements. Dreyfus Stock Index Fund - ---------------------------------------- Statement of Operations year ended December 31, 1995 INVESTMENT INCOME: Income: Cash dividends (net of foreign taxes witheld at source of $18,048).... $4,429,014 Interest.............................................................. 763,272 ------ Total Income...................................................... $ 5,192,286 Expenses: Index management fee-Note 2(a)........................................ $223,935 Administration fee-Note 2(a).......................................... 318,306 Custodian fees-Note 2(c).............................................. 74,016 Professional fees..................................................... 58,508 Registration fees..................................................... 57,806 Directors' fees and expenses-Note 2(d)................................ 25,709 Prospectus and shareholders' reports.................................. 16,003 Shareholder servicing costs-Note 2(b)................................. 5,453 Miscellaneous......................................................... 4,722 ------ Total Expenses.................................................... 784,458 Less-reduction in index management fee and administration fee due to undertaking-Note 2(a)...................................... 57,945 ------ Net Expenses...................................................... 726,513 ------ INVESTMENT INCOME-NET............................................. 4,465,773 ------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments-Note 3(a).............................. $5,260,106 Net realized gain on financial futures-Note 3(a)........................ 2,814,896 ------ Net Realized Gain................................................. 8,075,002 Net unrealized appreciation on investments [including ($335,265) net unrealized (depreciation) on financial futures]....................... 43,128,888 ------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS.................. 51,203,890 ------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $55,669,663 ======
See notes to financial statements. Dreyfus Stock Index Fund - ---------------------------------------- Statement of Changes in Net Assets
Year Ended December 31, ---------------------------- 1994 1995 -------- ------ OPERATIONS: Investment income-net................................................ $ 1,991,399 $ 4,465,773 Net realized gain on investments..................................... 199,553 8,075,002 Net unrealized appreciation (depreciation) on investments for the year (1,356,172) 43,128,888 ------ ------ Net Increase In Net Assets Resulting From Operations............... 834,780 55,669,663 ------ ------ DIVIDENDS TO SHAREHOLDERS: From investment income-net........................................... (1,968,656) (4,476,568) From net realized gain on investments................................ - (2,357,447) In excess of net realized gain on investments........................ (429,123) - ------ ------ Total Dividends.................................................... (2,397,779) (6,834,015) ------ ------ CAPITAL STOCK TRANSACTIONS: Net proceeds from shares sold........................................ 47,033,174 219,772,239 Dividends reinvested................................................. 2,397,779 6,834,015 Cost of shares redeemed.............................................. (12,380,738) (59,561,665) ------ ------ Increase In Net Assets From Capital Stock Transactions............. 37,050,215 167,044,589 ------ ------ Total Increase In Net Assets..................................... 35,487,216 215,880,237 NET ASSETS: Beginning of year.................................................... 61,319,007 96,806,223 ------ ------ End of year (including undistributed investment income-net: $25,689 in 1994 and $14,894 in 1995)............................... $ 96,806,223 $312,686,460 ====== ====== Shares Shares ------- ------ CAPITAL SHARE TRANSACTIONS: Shares sold.......................................................... 3,593,641 14,313,682 Shares issued for dividends reinvested............................... 186,922 417,105 Shares redeemed...................................................... (945,685) (4,033,543) ------ ------ Net Increase In Shares Outstanding................................. 2,834,878 10,697,244 ====== ======
See notes to financial statements. Dreyfus Stock Index Fund - ---------------------------------------- Financial Highlights Contained below is per share operating performance data for a share of Common Stock outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Fund's financial statements.
Year Ended Four Months August 31, Ended Year Ended December 31, _________- December 31, _______________________________ 1991 1992 1992 1993 1994 1995 ---- --- ---- --- --- --- PER SHARE DATA: Net asset value, beginning of year $11.62 $14.20 $14.87 $15.32 $13.20 $12.94 ---- --- ---- --- --- --- Investment Operations: Investment income-net............ .39 .37 .13 .37 .32 .33 Net realized and unrealized gain (loss) on investments......... 2.60 .68 .77 1.04 (.21) 4.39 ---- --- ---- --- --- --- Total from Investment Operations 2.99 1.05 .90 1.41 .11 4.72 ---- --- ---- --- --- --- Distributions: Dividends from investment income-net (.39) (.38) (.21) (.34) (.31) (.33) Dividends in excess of investment income-net..................... - - - (.03) - - Dividends from net realized gain on investments................. (.02) - (.24) (3.00) - (.13) Dividends in excess of net realized gain on investments... - - - (.16) (.06) - ---- --- ---- --- --- --- Total Distributions............ (.41) (.38) (.45) (3.53) (.37) (.46) ---- --- ---- --- --- --- Net asset value, end of year..... $14.20 $14.87 $15.32 $13.20 $12.94 $17.20 ==== === ==== === === === TOTAL INVESTMENT RETURN.............. 26.26% 7.49% 6.05%(1) 9.33% .88% 36.78% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets .40% .40% .13%(1) .40% .40% .39% Ratio of net investment income to average net assets............. 3.05% 2.63% .85%(1) 2.38% 2.57% 2.38% Decrease reflected in above expense ratios due to undertakings by WFNIA and Dreyfus.............. .11% .13% .03%(1) .27% .16% .03% Portfolio Turnover Rate.......... 1.02% 7.66% 6.94%(1) 71.71% 2.82% 11.95% Net Assets, end of year (000's Omitted) $62,400 $74,446 $70,072 $61,319 $96,806 $312,686 - ----------- (1) Not annualized.
See notes to financial statements. Dreyfus Stock Index Fund - ---------------------------------------- NOTES TO FINANCIAL STATEMENTS NOTE 1-Significant Accounting Policies: The Fund is registered under the Investment Company Act of 1940 ("Act") as a non-diversified open-end management investment company, that is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. Effective November 13, 1995, The Dreyfus Corporation ("Dreyfus") serves as the Fund's manager and Mellon Equity Associates, an affiliate of Dreyfus ("Mellon Equity"), serves as the Fund's index manager. Boston Safe Deposit and Trust Company, an affiliate of Dreyfus, became the Fund's custodian. Dreyfus is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares, which are sold to the public without a sales charge. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. Prior to November 13, 1995, Wells Fargo Nikko Investment Advisor ("WFNIA") served as the Fund's index manager. In addition, Wells Fargo Institutional Trust Company, N.A. ("WFITC"), an affiliate of WFNIA, was the custodian of the Fund's investments. The Dreyfus Corporation ("Dreyfus") served as the Fund's administrator. (a) Portfolio valuation: Investments in securities (including financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange 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. Bid price is used when no asked price is available. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. (b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (c) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. Dividends from net realized capital gain are normally declared and paid annually, but the Fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. This may result in distributions that are in excess of net realized gains on a fiscal year basis. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Fund not to distribute such gain. (d) Federal income taxes: It is the policy of the Fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. Dreyfus Stock Index Fund - ---------------------------------------- NOTES TO FINANCIAL STATEMENTS (continued) NOTE 2-Management Fee, Administration Fee and Other Transactions With Affiliates: (a) Effective November 13, 1995, pursuant to an Investment Advisory Agreement with Dreyfus, the investment advisory fee is computed at the annual rate of .245 of 1% of the average daily value of the Fund's net assets, and is payable monthly. Dreyfus has agreed to pay Mellon Equity, an affiliate of Dreyfus, a fee of .095 of 1% of the average daily value of the Fund's net assets. Prior to November 13, 1995, the Fund had an Index Management Agreement with WFNIA and an Administration Agreement with Dreyfus whereby, WFNIA and Dreyfus each received annual fees of .15 of 1% of the average daily value of the Fund's net assets. The most stringent state expense limitation applicable to the Fund presently requires reimbursement of expenses in any full year that such expenses exceed 2-1/2% of the first $30 million, 2% of the next $70 million and 1-1/2% of the excess over $100 million of the average value of the Fund's net assets in accordance with California "blue sky" regulations. The Dreyfus Corporation (and WFNIA through November 12, 1995) has currently undertaken from January 1, 1995 until December 31, 1995 and thereafter until such a time as they give shareholders at least 180 days notice to the contrary that if the Fund's aggregate expenses (exclusive of brokerage commissions, transaction fees and extraordinary expenses) exceed an annual rate of .40 of 1% of the average daily value of the Fund's net assets, the Fund may deduct from the payments to be made to Dreyfus. Pursuant to an undertaking, WFNIA and Dreyfus reduced the index management fee and the administration fee during the period January 1, 1995 to November 13, 1995, by $28,973 and $28,972, respectively. Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the Fund. Such compensation amounted to $21 for the period from December 1, 1995 through December 31, 1995. (b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed an annual rate of .25 of 1% of the value of the Fund's average daily net assets for certain allocated expenses with respect to servicing and/or maintaining shareholder accounts. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the Fund and providing reports and other information, and services related to the maintenance of shareholder accounts. During the year ended December 31, 1995, the Fund was charged an aggregate of $9,048 pursuant to the Shareholder Services Plan. (c) During the year ended December 31, 1995, Wells Fargo Institutional Trust Company, N.A. earned $74,016 for custodian services provided to the Fund. (d) Each director who is not an "affiliated person" as defined in the Act receives from the Fund an annual fee of $2,500 and an attendance fee of $500 per meeting. The Chairman of the Board receives an additional 25% of such compensation. Dreyfus Stock Index Fund - ---------------------------------------- NOTES TO FINANCIAL STATEMENTS (continued) NOTE 3-Securities Transactions: (a) The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the year ended December 31, 1995 amounted to $166,667,593 and $21,149,100, respectively. The Fund may invest in trading financial futures contracts in order to gain exposure to or protect against changes in the market. The Fund is exposed to market risk as a result of changes in the value of the underlying financial instruments (see the Statement of Financial Futures). Investments in financial futures require the Fund to "mark to market" on a daily basis, which reflects the change in the market value of the contract at the close of each day's trading. Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses. When the contracts are closed, the Fund recognizes a realized gain or loss. These investments require initial margin deposits with a custodian, which consist of cash or cash equivalents, up to approximately 10% of the contract amount. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Contracts open at December 31, 1995 and their related unrealized market depreciation are set forth in the Statement of Financial Futures. (b) At December 31, 1995, accumulated net unrealized appreciation on investments was $46,342,624, consisting of $49,269,498 gross unrealized appreciation and $2,926,874 gross unrealized depreciation. At December 31, 1995, the costs of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). Dreyfus Stock Index Fund - ---------------------------------------- Report of Independent Accountants To the Shareholders and Board of Directors of Dreyfus Stock Index Fund: We have audited the accompanying statement of assets and liabilities of Dreyfus Stock Index Fund, including the statements of investments and financial futures, as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the three years in the period then ended, for the period September 1, 1992 to December 31, 1992, and the years ended August 31, 1992 and 1991. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Stock Index Fund as of December 31, 1995, the results of its operations, the changes in its net assets, and the financial highlights for the periods referred to above, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. New York, New York February 13, 1996 Dreyfus Stock Index Fund - ---------------------------------------- Important Tax Information (Unaudited) For Federal tax purposes the Fund hereby designates $.001 per share as a long-term capital gain distribution of the $.003 per share paid on August 30, 1995. The Fund also designates $.10 per share as a long-term capital gain distribution of the $.22 per share paid on December 29, 1995. Dreyfus Stock Index Fund - ---------------------------------------- Proxy Results (Unaudited) A special meeting of stockholders of the Fund was held on November 3, 1995, at which shareholders approved a new management agreement between the Fund and Dreyfus by a vote of 10,816,873 shares in favor of, and 167,119 shares against the agreement, with 888,457 shares abstaining (including broker non-votes). Also approved at the meeting was a new index management agreement between Dreyfus and Mellon Equity Associates, by a vote of 10,633,940 shares in favor of, and 227,309 shares against the agreement, with 1,011,199 shares abstaining (including broker non-votes). [Dreyfus lion "d" logo] Dreyfus Stock Index Fund 200 Park Avenue New York, NY 10166 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Custodian Boston Safe Deposit and Trust Company One Boston Place Boston, MA 02108 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 763AR9512 [Dreyfus logo] Dreyfus Stock Index Fund Annual Report December 31, 1995 -----END PRIVACY-ENHANCED MESSAGE-----