-----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, DLjr+tUU8+X2MzTrPd9Ft2e7q63Seqsu57FcXzg/YBvyT33DmwlRiSqa3drYUNl3 hv3q69/pOYpzafPnUdNJiA== 0000897469-01-000001.txt : 20010129 0000897469-01-000001.hdr.sgml : 20010129 ACCESSION NUMBER: 0000897469-01-000001 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001130 FILED AS OF DATE: 20010126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS INTERNATIONAL FUNDS INC CENTRAL INDEX KEY: 0000897469 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133718039 STATE OF INCORPORATION: MD FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07502 FILM NUMBER: 1516515 BUSINESS ADDRESS: STREET 1: 144 GLENN CURTISS BLVD STREET 2: C/O DREYFUS CORPORATION CITY: UNIONDALE STATE: NY ZIP: 11556-0144 BUSINESS PHONE: 2129226000 MAIL ADDRESS: STREET 1: DREYFUS CORP STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS INTERNATIONAL EQUITY FUND INC DATE OF NAME CHANGE: 19930212 N-30D 1 0001.txt SEMI-ANNUAL REPORT Dreyfus Emerging Markets Fund SEMIANNUAL REPORT November 30, 2000 (reg.tm) The views expressed herein are current to the date of this report. These views and the composition of the fund's portfolio are subject to change at any time based on market and other conditions. * Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value Contents THE FUND - -------------------------------------------------- 2 Letter from the President 3 Discussion of Fund Performance 6 Statement of Investments 12 Statement of Assets and Liabilities 13 Statement of Operations 14 Statement of Changes in Net Assets 15 Financial Highlights 16 Notes to Financial Statements FOR MORE INFORMATION - --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Emerging Markets Fund LETTER FROM THE PRESIDENT Dear Shareholder: We are pleased to present this semiannual report for Dreyfus Emerging Markets Fund, covering the six-month period from June 1, 2000 through November 30, 2000. Inside, you' ll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, D. Kirk Henry. The MSCI EAFE Index, a broad measure of international stock market performance, fell more than 10% over the six-month reporting period in an investment environment marked by dramatic price fluctuations. Emerging markets were particularly hard-hit, losing about 25% of their value during the period as measured by the MSCI Emerging Markets Index. Slowing economic growth in the U.S. and Europe adversely influenced international stocks. In addition to the moderating effects of interest-rate hikes during 1999 and the first half of 2000, global economies have slowed in response to higher energy prices. Since many global markets provided returns well above their historical averages during the second half of the 1990s, some investors may have developed unrealistic expectations in global equities. Recent market volatility has reminded investors of both the risks of investing and the importance of fundamental research and investment selection. For more information about the economy and financial markets, we encourage you to visit the Market Commentary section of our website at www.dreyfus.com. Or, to speak with a customer service representative, call us at 1-800-782-6620. Thank you for investing in Dreyfus Emerging Markets Fund. Sincerely, Stephen E. Canter President and Chief Investment Officer The Dreyfus Corporation December 15, 2000 DISCUSSION OF FUND PERFORMANCE D. Kirk Henry, Portfolio Manager How did Dreyfus Emerging Markets Fund perform relative to its benchmark? For the six-month period ended November 30, 2000, Dreyfus Emerging Markets Fund produced a total return of -13.01%.(1) In comparison, the fund's benchmark, the Morgan Stanley Capital International Emerging Markets Free (MSCI EMF) Index, produced a total return of -23.77% for the same period.(2) We attribute the fund's performance to a difficult investment environment in the emerging markets over the past six months, particularly within the technology and telecommunications industry groups. However, we are pleased that our individual stock selection strategy enabled us to produce higher returns than the MSCI EMF Index. What is the fund's investment approach? We use a value-oriented and research-driven approach to security selection within each market, investing in companies located in emerging market countries as represented in our benchmark, the MSCI EMF Index, or in any other country that we believe has an emerging market or economy. Countries currently represented in the benchmark include Argentina, Brazil, Chile, China, Colombia, the Czech Republic, Greece, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Pakistan, Peru, the Philippines, Poland, Russia, Sri Lanka, South Africa, Taiwan, Thailand, Turkey and Venezuela. When choosing stocks for the fund, we begin by conducting fundamental and quantitative research that focuses on individual companies rather than broad economic and industry trends. More specifically, we look for investment opportunities by focusing on three key factors: VALUE, or how a stock is valued relative to its intrinsic worth based on traditional measures; BUSINESS HEALTH, or a company's overall EFFICIENCY and PROFITABILITY as measured by its return on assets and return The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) on equity; and BUSINESS MOMENTUM, or the presence of a catalyst that potentially will trigger an increase in the stock's price in the near term or midterm. What other factors influenced the fund's performance? The fund was adversely affected by difficulties experienced by many emerging markets during the reporting period. These difficulties were largely the result of rising interest rates and a slowdown in U.S. economic growth. Because many emerging markets export goods to the U.S., the economic slowdown in the U.S. hampered growth in their economies as well. In addition, rising oil prices, lower commodity prices and local currency depreciation further exacerbated these difficult conditions. While most emerging market stocks produced negative returns during the six-month reporting period, many of the fund's holdings fared better than the fund's benchmark. We believe this is because our security selection process evaluates stocks on a company-by-company basis, searching for what we believe are good values with strong business fundamentals. Using that process, the fund performed better than the Index in the technology, telecommunications, financial, and to a lesser degree, utilities industry groups. Within the technology area, we focused primarily on manufacturing companies in Taiwan that produce goods for what we believe are larger U.S.-based technology companies. The fund's telecommunications holdings included cellular phone companies located in Korea and Brazil. When technology and telecom stock prices began to fall earlier in the year, we had already begun trimming positions that no longer fit our investment parameters. These reductions proved beneficial for the fund. The fund's financial services holdings also produced higher returns than the financial services securities in the fund's benchmark. Within this area, several of the fund's bank stocks performed relatively well, including two banks in Korea, one in South Africa and a Turkish bank that is currently in discussions with a major Western bank regarding a possible acquisition. The utilities industry group is another area in which we outperformed the MSCI EMF Index, primarily because of our holdings in a Chilean electricity distribution company that was taken over by a company based in Spain On the other hand, our holdings within the consumer staples and consumer discretionary industry groups produced disappointing returns both on an absolute basis and relative to the MSCI EMF Index. However, because these areas represent only a small percentage of the overall portfolio, the adverse effects on overall performance were limited. What is the fund's current strategy? As stock prices have come down to what we believe are more reasonable valuations, we have recently begun to increase our exposure to the technology and telecommunications areas, although overall we remain underweighted versus the fund's benchmark. However, we are looking to make very selective choices; that is, we are looking for companies that must not only be what we believe to be reasonably priced, but we also believe possess strong fundamentals. We have also continued to increase the fund's exposure to Asia, most notably to a varied group of stocks in China. These stocks are primarily companies within the Chinese domestic marketplace, including pharmaceutical, electric utility, consumer goods, automobile and oil services firms. We believe that many of these companies possess strong fundamentals and offer excellent investment opportunities. December 15, 2000 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF GROSS DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE (MSCI EMF) INDEX IS A MARKET CAPITALIZATION-WEIGHTED INDEX COMPOSED OF COMPANIES REPRESENTATIVE OF THE MARKET STRUCTURE OF 26 EMERGING MARKET COUNTRIES IN EUROPE, LATIN AMERICA AND THE PACIFIC BASIN. The Fund STATEMENT OF INVESTMENTS November 30, 2000 (Unaudited) STATEMENT OF INVESTMENTS COMMON STOCKS--94.1% Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ ARGENTINA--1.5% Banco Hipotecario 215,790 (a) 1,597,165 Telecom Argentina Stet--France Telecom, ADR 119,000 1,762,687 3,359,852 BRAZIL--4.4% Companhia Vale do Rio Doce 10,500 196,510 Companhia Vale do Rio Doce, ADS 116,400 2,298,900 Embraer--Empresa Brasileira de Aeronautica, ADR 22,600 622,912 Tele Celular Sul Participacoes, ADS 44,100 882,000 Tele Norte Leste Participacoes, ADS 67,889 1,230,488 Telecomunicacoes Brasileiras, ADS (PFD Block) 57,400 3,311,263 Ultrapar Participacoes, ADS 138,000 1,242,000 9,784,073 CHILE--2.8% Administradora de Fondos de Pensiones Provida, ADS 41,900 864,187 Chilectra, ADR 123,100 1,877,275 Compania de Telecomunicaciones de Chile, ADS 7,000 100,625 Cristalerias de Chile, ADS 80,600 1,269,450 Quinenco, ADS 272,800 2,114,200 6,225,737 CHINA--5.6% Beijing Datang Power Generation, Cl. H 4,043,000 860,455 Guangdong Kelon Electrical, Cl. H 5,605,000 1,034,796 Guangshen Railway, Cl. H 20,375,000 2,351,022 Guangshen Railway, ADS 109,700 617,062 PetroChina, ADR 132,000 2,260,500 Qingling Motors, Cl. H 12,344,000 1,424,344 Shandong International Power Development, Cl. H 10,247,000 1,523,952 Shenzhen Expressway, Cl. H 9,674,000 1,116,259 Zhejiang Expressway, Cl. H 9,240,000 1,350,496 12,538,886 CROATIA--1.6% Pliva d.d., GDR 305,300 (b) 3,465,155 CZECH REPUBLIC--.5% Komercni Banka 16,368 (a) 302,974 Komercni Banka, GDR 2 (a) 12 COMMON STOCKS (CONTINUED) Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ CZECH REPUBLIC (CONTINUED) Philip Morris CR 6,481 889,530 1,192,516 EGYPT--2.9% Commercial International Bank, GDR 268,600 (a,b) 2,410,685 Misr International Bank, GDR 156,600 (a,b) 786,915 Paints & Chemical Industries, GDR 673,200 (b) 1,363,230 Suez Cement, GDR 202,470 (a,b) 1,857,662 6,418,492 GREECE--1.7% Hellenic Telecommunications Organization 595 8,553 Hellenic Telecommunications Organization, ADS 541,655 3,723,878 3,732,431 HONG KONG--2.0% China Pharmaceutical Enterprise and Investment 13,385,000 1,218,409 Hengan International 5,987,000 1,397,002 Mandarin Oriental International 2,353,000 1,552,980 Yizheng Chemical Fibre 1,622,400 278,727 4,447,118 HUNGARY--1.5% MOL Magyar Olaj-es Gazipari 39,300 517,241 Magyar Tavkozlesi 233,900 770,380 OTP Bank 32,450 1,441,416 Pick Szeged 30,832 (a) 659,410 3,388,447 INDIA--12.2% Bajaj Auto, GDR 402,500 (b) 2,465,313 Gas Authority of India, GDR 486,600 (b) 2,615,475 Grasim Industries, GDR 89,900 (b) 595,587 Hindalco Industries, GDR 62,000 (b) 1,007,500 Hindustan Petroleum 326,500 861,613 ICICI, ADR 109,300 1,079,337 Indian Hotels, GDR 433,900 (b) 1,854,923 Mahanagar Telephone Nigam, GDR 656,000 (b) 4,756,000 Mahindra & Mahindra, GDR 454,400 (b) 1,374,560 Pentamedia Graphics, GDR 50,300 (b) 364,675 State Bank of India, GDR 416,300 (b) 3,163,880 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ INDIA (CONTINUED) Tata Engineering & Locomotive, GDR 944,600 (b) 1,653,050 Videsh Sanchar Nigam, ADR 616,650 (b) 5,511,316 27,303,229 INDONESIA--2.0% PT Indah Kiat Pulp & Paper 18,096,000 (a) 1,614,866 PT Indosat, ADR 181,600 1,657,100 PT Indo-Rama Synthetics 500 42 PT Telekomunikasi Indonesia, ADR 223,600 1,104,025 4,376,033 ISRAEL--2.9% Bank Hapoalim 1,465,700 3,860,118 Blue Square-Israel, ADS 193,950 2,327,400 Tecnomatix Technologies 60,500 (a) 302,500 6,490,018 MALAYSIA--2.9% Berjaya Sports Toto 1,675,000 1,963,905 Petronas Dagangan 728,000 574,148 Petronas Gas 830,000 1,483,740 Sime Darby 1,895,000 2,331,449 6,353,242 MEXICO--10.2% ALFA, Ser. A 1,529,500 2,353,950 Apasco 309,400 1,606,847 Cemex 356,800 1,410,561 Consorcio ARA 883,600 (a) 1,076,990 Controladora Comercial Mexicana, GDS 65,400 1,258,950 Desc, Ser. B 5,005,900 2,122,268 Grupo Continental 1,753,000 1,969,454 Kimberly Clark de Mexico, Cl. A 1,432,100 3,566,969 Pepsi-Gemex, GDR 513,100 (a) 2,276,881 Telefonos de Mexico, ADS 109,600 5,137,500 22,780,370 PANAMA--1.3% Banco Latinoamericano de Exportaciones, Cl. E 103,100 2,815,919 PHILIPPINES--3.7% Bank of the Philippine Islands 1,184,125 1,276,588 First Philippine 882,860 386,946 COMMON STOCKS (CONTINUED) Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ PHILIPPINES (CONTINUED) La Tondena Distillers 1,887,400 1,121,981 Manila Electric, Cl. B 3,626,764 3,252,212 Philippine Long Distance Telephone, ADS 100,700 1,630,081 Universal Robina 7,115,600 616,566 8,284,374 POLAND--1.3% Bank Polska Kasa Opieki 121,200 (a) 1,515,675 Polski Koncern Naftowy Orlen 180,000 762,372 Polski Koncern Naftowy Orlen, GDR 62,200 (b) 552,025 2,830,072 SINGAPORE--1.4% Del Monte Pacific 5,054,000 1,124,713 Elec & Eltek International 411,000 1,216,560 Golden Agri-Resources 6,728,000 (a) 882,990 3,224,263 SOUTH AFRICA--7.3% ABSA 1,128,082 3,539,366 Barloworld, ADR 40 215 Comparex 465,300 (a) 468,604 Computer Configurations 1,298,400 (a) 452,638 Del Monte Royal Foods 1,159,700 (a) 568,994 Edgars Consolidated Stores 950 2,882 Foschini 457,300 433,977 Illovo Sugar 1,777,500 1,140,629 Iscor 752,600 (a) 986,300 Metro Cash and Carry 4,274,900 971,443 Murray & Roberts 1,886,500 (a) 755,087 Nampak 1,506,900 2,042,924 Pretoria Portland Cement 199,043 1,310,677 Sage 426,828 551,101 Tiger Brands 328,100 2,329,955 Woolworths 1,790,587 702,826 16,257,618 SOUTH KOREA--14.2% Cheil Jedang 40,390 1,051,702 H&CB, GDR 209,872 (a,b) 2,138,071 Hyundai Electronics Industries 85,490 (a) 481,079 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH KOREA (CONTINUED) Hyundai Motor 105,000 1,122,995 Kookmin Bank, GDR 188,513 (b) 2,125,484 Korea Electric Power 254,900 4,823,283 Korea Electric Power, ADR 39,700 397,000 Korea Fine Chemical 77,831 1,408,706 Pohang Iron & Steel 22,440 1,344,000 Pohang Iron & Steel, ADS 254,900 3,680,119 SK 430,339 4,124,598 SK Telecom, ADR 95,900 2,043,869 Samsung 398,030 1,915,652 Samsung Electronics 20,500 2,732,209 Samsung Electronics, ADR 5,200 330,980 Samsung SDI 52,000 1,946,524 31,666,271 TAIWAN--5.5% Acer Communications & Multimedia 361,000 460,130 Asustek Computer 510,800 2,157,330 China Steel 778,000 419,267 China Steel, ADR 97,700 (b) 1,057,602 Compal Electronics 1,703,500 2,656,078 D-Link 1,794,000 2,297,493 Standard Foods Taiwan 3,176,400 (a) 1,105,922 Standard Foods Taiwan, GDR 20,000 (a) 35,500 Taiwan Semiconductor 123,400 (a) 2,078,562 12,267,884 THAILAND--1.1% Saha-Union 3,149,000 791,296 Thai Farmers Bank 3,333,600 (a) 1,675,367 2,466,663 TURKEY--2.6% Akbank 210,597,000 987,047 Akcansa Cimento 138,531,200 1,602,917 Tupras-Tukiye Petro Refinerileri 32,417,000 1,127,650 Turk Ekonomi Bankasi, GDR 393,825 (a,b) 1,388,233 Uzel Makina Sanayii, GDR 260,050 (a,b) 591,614 5,697,461 COMMON STOCKS (CONTINUED) Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ UNITED KINGDOM--1.0% South African Breweries 364,600 2,208,574 TOTAL COMMON STOCKS (cost $281,272,674 ) 209,574,698 - ------------------------------------------------------------------------------------------------------------------------------------ PREFERRED STOCKS--2.9% - ------------------------------------------------------------------------------------------------------------------------------------ BRAZIL--2.7% Banco do Estado de Sao Paulo 24,900 850,152 Companhia Energetica de Minas Gerais 216,617 2,761,132 Petroleo Brasileiro 97,000 2,330,551 5,941,835 THAILAND--.2% Siam Commercial Bank 915,000 (a) 418,047 TOTAL PREFERRED STOCKS (cost $7,579,992 ) 6,359,882 - ------------------------------------------------------------------------------------------------------------------------------------ Principal SHORT-TERM INVESTMENTS--1.8% Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ U.S. TREASURY BILLS; 5.95%, 12/21/00 (cost $4,127,386) 4,142,000 4,127,379 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (cost $292,980,052) 98.8% 220,061,959 CASH AND RECEIVABLES (NET) 1.2% 2,587,836 NET ASSETS 100.0% 222,649,795 (A) NON-INCOME PRODUCING. (B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT NOVEMBER 30, 2000, THESE SECURITIES AMOUNTED TO $43,098,955 OR APPROXIMATELY 19.4% OF NET ASSETS. SEE NOTES TO FINANCIAL STATEMENTS.
The Fund STATEMENT OF ASSETS AND LIABILITIES November 30, 2000 (Unaudited) Cost Value - -------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 292,980,052 220,061,959 Cash denominated in foreign currencies 7,606,988 7,425,908 Receivable for investment securities sold 3,553,842 Dividends receivable 596,641 Receivable for shares of Common Stock subscribed 73,716 Prepaid expenses 17,266 231,729,332 - -------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 290,361 Cash overdraft due to Custodian 543,972 Payable for investment securities purchased 7,601,457 Payable for shares of Common Stock redeemed 488,283 Accrued expenses 155,464 9,079,537 - -------------------------------------------------------------------------------- NET ASSETS ($) 222,649,795 - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 270,052,891 Accumulated undistributed investment income--net 2,455,149 Accumulated net realized gain (loss) on investments and foreign currency transactions 23,255,800 Accumulated net unrealized appreciation (depreciation) on investments and foreign currency transactions (73,114,045) - -------------------------------------------------------------------------------- NET ASSETS ($) 222,649,795 - -------------------------------------------------------------------------------- SHARES OUTSTANDING (100 million shares of $.001 par value Common Stock authorized) 18,803,829 NET ASSET VALUE, offering and redemption price per share-Note 3(d) ($) 11.8 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Six Months Ended November 30, 2000 (Unaudited) - -------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of 163,385 foreign taxes withheld at source) 2,213,536 Interest 360,197 TOTAL INCOME 2,573,733 EXPENSES: Management fee--Note 3(a) 1,569,483 Shareholder servicing costs--Note 3(b) 365,752 Custodian fees 206,729 Registration fees 21,261 Directors' fees and expenses--Note 3(c) 15,800 Professional fees 10,125 Prospectus and shareholders' reports 10,061 Loan commitment fees--Note 2 986 Miscellaneous 6,501 TOTAL EXPENSES 2,206,698 INVESTMENT INCOME--NET 367,035 - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments and foreign currency transactions (1,140,091) Net realized gain (loss) on forward currency exchange contracts (198,934) NET REALIZED GAIN (LOSS) (1,339,025) Net unrealized appreciation (depreciation) on investments and foreign currency transactions (34,250,599) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (35,589,624) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (35,222,589) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Six Months Ended November 30, 2000 Year Ended (Unaudited) May 31, 2000 - -------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 367,035 2,546,649 Net realized gain (loss) on investments (1,339,025) 40,705,669 Net unrealized appreciation (depreciation) on investments (34,250,599) (35,771,590) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (35,222,589) 7,480,728 - -------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Investment income--net -- (1,238,179) Net realized gain on investments -- (11,391,249) TOTAL DIVIDENDS -- (12,629,428) - -------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold 137,595,537 213,538,027 Dividends reinvested -- 10,020,271 Cost of shares redeemed (105,767,961) (86,801,624) Redemption fee 13,407 69,298 INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 31,840,983 136,825,972 TOTAL INCREASE (DECREASE) IN NET ASSETS (3,381,606) 131,677,272 - -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 226,031,401 94,354,129 END OF PERIOD 222,649,795 226,031,401 Undistributed investment income--net 2,455,149 2,088,114 - -------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): Shares sold 9,806,389 14,299,234 Shares issued for dividends reinvested -- 674,312 Shares redeemed (7,604,224) (5,888,072) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 2,202,165 9,085,474 SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL HIGHLIGHTS The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements. Six Months Ended November 30, 2000 Year Ended May 31, --------------------------------------------- (Unaudited) 2000 1999 1998 1997(a) - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 13.61 12.55 11.18 14.21 12.50 Investment Operations: Investment income--net .02(b) .22(b) .14 .04 .05 Net realized and unrealized gain (loss) on investments (1.79) 1.95 1.33 (2.62) 1.70 Total from Investment Operations (1.77) 2.17 1.47 (2.58) 1.75 Distributions: Dividends from investment income--net -- (.11) (.09) (.02) (.02) Dividends from net realized gain on investments -- (1.01) (.02) (.24) (.02) Dividends in excess of net realized gain on investments -- -- -- (.20) -- Total Distributions -- (1.12) (.11) (.46) (.04) Redemption fee added to paid-in capital .00(c) .01 .01 .01 -- Net asset value, end of period 11.84 13.61 12.55 11.18 14.21 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) (13.01)(d) 16.54 13.56 (18.11) 14.07(d) - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .88(d) 1.85 1.88 1.94 1.85(d) Ratio of net investment income to average net assets .15(d) 1.48 1.42 .54 .70(d) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- -- .00(e) .36(d) Portfolio Turnover Rate 37.79(d) 105.84 87.81 87.46 52.52(d) - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets, end of period ($ x 1,000) 222,650 226,031 94,354 74,828 50,382 (A) FROM JUNE 28, 1996 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1997. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE. (D) NOT ANNUALIZED. (E) REPRESENTS LESS THAN .01% SEE NOTES TO FINANCIAL STATEMENTS.
The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1--Significant Accounting Policies: Dreyfus Emerging Markets Fund (the "fund") is a separate non-diversified series of Dreyfus International Funds, Inc. (the "Company"), which is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company and operates as a series company currently offering two series, including the fund. The fund's investment objective is long-term capital appreciation. The Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A, which is a wholly-owned subsidiary of Mellon Financial Corporation. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the Distributor of the fund's shares, which are sold o the public without a sales charge. The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. The fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States, which may require the use of management estimates and assumptions. Actual results could differ from those estimates. (a) Portfolio valuation: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. (b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amount of dividends, interest and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. Under the terms of the custody agreement, the fund received net earnings credits of $14,378 based on available cash balances left on deposit. Interest earned ynder this arrangement is included in interest income. (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 fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent that net realized cap The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) ital gain can be offset by capital loss carryovers, if any, it is the policy of the fund not to distribute such gain. (e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. NOTE 2--Bank Line of Credit: The fund participates with other Dreyfus-managed funds in a $500 million redemption credit facility (the "Facility" ) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund at rates based on prevailing market rates in effect at the time of borrowings. During the period ended November 30, 2000, the fund did not borrow under the Facility. NOTE 3--Management Fee and Other Transactions With Affiliates: (a) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of 1.25% of the value of the fund's average daily net assets and is payable monthly. (b) Under the Shareholder Services Plan, the fund pays the Distributor at an annual rate of .25 of 1% of the value of the fund's average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended November 30, 2000, the fund was charged $313,897 pursuant to the Shareholder Services Plan. 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. During the period ended November 30, 2000, the fund was charged $31,785 pursuant to the transfer agency agreement. (c) Each Board member also serves as a Board member of other funds within the Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not an "affiliated person" as defined in the Act receives an annual fee of $40,000 and an attendance fee of $6,000 for each in person meeting and $500 for telephone meetings. These fees are allocated among the funds in the Fund Group. The Chairman of the Board receives an additional 25% of such compensation. Subject to the fund's Emeritus Program Guidelines, Emeritus Boards members, if any, receive 50% of the Company's annual retainer fee and per meeting fee paid at the time the Board member achieves emeritus status. (d) A 1% redemption fee is charged and retained by the fund on shares redeemed within six months following the date of issuance, including redemptions made through the use of the fund's exchange privilege. 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 period ended November 30, 2000, amounted to $118,461,706 and $86,512,273, respectively. The fund enters into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings and to settle foreign currency transactions. When executing forward currency exchange contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward currency exchange contracts, the fund 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 fund realizes a gain if the value The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) of the contract decreases between those dates. With respect to purchases of forward currency exchange contracts, the fund 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 fund realizes a gain if the value of the contract increases between those dates. The fund is also exposed to credit risk associated with counter party nonperformance on these forward currency exchange contracts which is typically limited to the unrealized gain on each open contract. At November 30, 2000, there were no open forward currency exchange contracts. (b) At November 30, 2000, accumulated net unrealized depreciation on investments was $72,918,093, consisting of $2,754,137 gross unrealized appreciation and $75,672,230 gross unrealized depreciation. At November 30, 2000, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). For More Information Dreyfus Emerging Markets Fund 200 Park Avenue New York, NY 10166 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Custodian The Bank of New York 100 Church Street New York, NY 10286 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9671 Providence, RI 02940 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call 1-800-645-6561 BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 BY E-MAIL Send your request to info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 327SA0011 ================================================================================ Dreyfus International Growth Fund SEMIANNUAL REPORT November 30, 2000 (reg.tm) The views expressed herein are current to the date of this report. These views and the composition of the fund's portfolio are subject to change at any time based on market and other conditions. * Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value Contents THE FUND - -------------------------------------------------- 2 Letter from the President 3 Discussion of Fund Performance 6 Statement of Investments 9 Statement of Assets and Liabilities 10 Statement of Operations 11 Statement of Changes in Net Assets 12 Financial Highlights 13 Notes to Financial Statements FOR MORE INFORMATION - --------------------------------------------------------------------------- Back Cover The Fund Dreyfus International Growth Fund LETTER FROM THE PRESIDENT Dear Shareholder: This is the semiannual report for Dreyfus International Growth Fund, covering the six-month period from June 1, 2000 through November 30, 2000. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund' s portfolio manager, Douglas Loeffler, CFA. The MSCI EAFE Index, a broad measure of international stock market performance, fell more than 10% over the six-month reporting period in an investment environment marked by dramatic price fluctuations. Emerging markets were particularly hard-hit, losing about 25% of their value during the period as measured by the MSCI Emerging Markets Index. Slowing economic growth in the U.S. and Europe adversely influenced international stocks. In addition to the moderating effects of interest-rate hikes during 1999 and the first half of 2000, global economies have slowed in response to higher energy prices. Since many global markets provided returns well above their historical averages during the second half of the 1990s, some investors may have developed unrealistic expectations in global equities. Recent market volatility has reminded investors of both the risks of investing and the importance of fundamental research and investment selection. For more information about the economy and financial markets, we encourage you to visit the Market Commentary section of our website at www.dreyfus.com. Or, to speak with a customer service representative, call us at 1-800-782-6620. Thank you for investing in Dreyfus International Growth Fund. Sincerely, Stephen E. Canter President and Chief Investment Officer The Dreyfus Corporation December 15, 2000 DISCUSSION OF FUND PERFORMANCE Douglas Loeffler, CFA, Portfolio Manager How did Dreyfus International Growth Fund perform relative to its benchmark? For the six-month period ended November 30, 2000, the fund produced a total return of -17.12%.(1) This compares with a -10.03% total return produced by the fund' s benchmark, the Morgan Stanley Capital International (MSCI) World ex U.S. Index, for the same period.(2) We attribute the fund' s underperformance to a strong shift in investor preference towards value-oriented investments and away from the types of growth stocks in which the fund invests. What is the fund's investment approach? The fund focuses on individual stock selection. We do not attempt to predict interest rates or market movements, nor do we have country allocation models or targets. Rather, we choose investments on a company-by-company basis, searching to find what we believe are well-managed, well-positioned growth companies, wherever they may be. Starting with roughly 1,000 of the largest companies outside the United States, we perform rigorous stock-by-stock analyses. Our goal is to identify companies that we believe have achieved and can sustain growth through a dominant brand name, growing market share, high barriers to entry or untapped market opportunities. In our view, these factors are marks of companies whose growth, in both revenues and earnings, will exceed that of global industry peers as well as that of its local market. The fund will typically hold 60-80 stocks, broadly invested across countries and industries, representing what we believe to be the best growth ideas in the world. We generally sell a stock when it reaches its target price or when we determine that circumstances have changed and it will most likely not reach the previously set target sale price. The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) What other factors influenced the fund's performance? The fund was affected by a global retreat from the growth stocks in which the fund invests. A strong shift in investor sentiment brought what had been lofty growth stock valuations back to earth. While earnings held relatively steady, the price investors were willing to pay for such earnings dropped sharply, causing growth stock prices to fall. Weakness was particularly evident in the technology and telecommunications sectors, in which the fund had made a significant commitment. In Japan, a continuing recession and an oversupply of stocks put downward pressure on prices. European markets were weak as well, despite relatively strong underlying economic activity. Towards the end of the reporting period, higher energy prices had dampened both consumer confidence and business spending plans, further weakening the performance of growth stocks. Perhaps the most significant factor affecting fund performance, however, was the strength of the U.S. dollar. Because a strong dollar erodes the value of international investments for U.S. residents, gains measured in local currencies were significantly greater than in U.S. dollar terms. Conversely, losses in local currency terms were amplified by the rise of the U.S. dollar. What is the fund's current strategy? As growth stock prices declined, we selectively added some new investments that we believed represented attractive investment opportunities. We trimmed our exposure to the telecommunications industry group and reduced our technology position, particularly in companies manufacturing telecommunications equipment and semiconductors. On the other hand, we increased our exposure in business services, software and selected utilities. We made these changes across the board, emphasizing valuations and the potential for profitability. Geographic balance remains an important strategy. Japan, which continues to be our largest single country exposure, is a market where, in our view, growth stocks are most reasonably priced. Continental Europe is an attractive area in terms of its underlying economic conditions and earnings environment. We have limited exposure to the European telecommunications sector and have reduced our investment in manufacturers of wireless equipment after some negative earnings surprises. We have added to investment in media stocks, which in our opinion, had become oversold. Our de-emphasis on the United Kingdom enabled us to avoid the near collapse of prices in its financial services sector. While the relative strength of the pound has made most British manufacturers uncompetitive, we continue to favor companies in the U.K. that have a dominant global position and strong international market share. Finally, our emerging markets exposure has increased incrementally. Investments are concentrated in Latin American stocks while we also focused on Asian manufacturers with industry-leading technology. December 15, 2000 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF NET DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD EX U.S. INDEX IS AN UNMANAGED INDEX OF GLOBAL STOCK MARKET PERFORMANCE, EXCLUDING THE U.S., CONSISTING SOLELY OF EQUITY SECURITIES. The Fund STATEMENT OF INVESTMENTS November 30, 2000 (Unaudited) STATEMENT OF INVESTMENTS COMMON STOCKS--91.9% Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ BRAZIL--4.1% Aracruz Celulose, ADR 4,125 47,953 Embraer-Empresa Brasileira de Aeronautica, ADR 33,225 915,765 Petroleo Brasileiro, ADR 14,600 (a) 375,951 Tele Norte Leste Participaceos, ADR 36,950 669,719 2,009,388 CANADA--2.2% Ballard Power Systems 2,625 (a) 181,453 Nortel Networks 23,400 883,351 1,064,804 DENMARK--3.7% ISS 12,425 (a) 770,611 Novo Nordisk, Cl. B 5,325 1,034,404 1,805,015 FINLAND--4.5% Nokia, ADR 26,775 1,144,631 Perlos 55,200 1,020,098 2,164,729 FRANCE--10.3% Accor 20,725 782,257 Alcatel 16,625 826,044 Altran Technologies 3,075 589,706 Business Objects 9,475 (a) 595,912 Dassault Systemes 9,100 649,273 STMicroelectronics 10,475 442,399 Total Fina Elf 7,550 1,081,313 4,966,904 GERMANY--2.9% Direkt Anlage Bank 11,575 (a) 343,058 Epcos 7,000 540,018 Ergo Versicherungs Gruppe 3,600 502,099 1,385,175 HONG KONG--1.7% China Mobile(Hong Kong) 155,500 (a) 849,292 ISRAEL--1.5% Check Point Software Technologies 7,125 (a) 731,203 ITALY--6.5% Alleanza Assicurazioni 91,125 1,409,947 COMMON STOCKS (CONTINUED) Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ ITALY (CONTINUED) Saipem 147,825 747,382 San Paolo-IMI 62,525 964,704 3,122,033 JAPAN--16.6% Ajinomoto 90,000 1,092,787 FAST RETAILING 3,900 955,563 Furukawa Electric 23,000 554,368 MURATA MANUFACTURING 5,331 714,923 NEC 46,000 869,064 NIPPON TELEGRAPH & TELEPHONE 70 605,744 PIONEER 21,000 673,614 TOKYO GAS 430,000 1,215,658 TOYODA GOSEI 6,000 194,092 Taiyo Yuden 12,000 476,259 Takeda Chemical Industries 11,000 683,762 8,035,834 LUXEMBOURG--1.7% Societe Europeenne des Satellites 6,375 833,563 MEXICO--1.2% Cemex, ADR 30,550 589,998 NETHERLANDS--8.2% Heineken 16,050 868,128 Koninklijke (Royal) Philips Electronics, ADR 44,112 1,447,425 TNT Post 37,125 891,569 VNU 17,900 783,293 3,990,415 SINGAPORE--2.9% Flextronics International 25,850 (a) 647,866 Singapore Press 49,000 763,309 1,411,175 SOUTH KOREA--1.4% Samsung Electronics, GDR 10,400 (b) 661,960 SPAIN--3.5% Altadis 60,525 880,558 Banco Santander Central Hispano 92,050 817,645 1,698,203 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ SWEDEN--3.8% Assa Abloy, Cl.B 44,525 795,676 ForeningsSparbanken 76,175 1,030,461 1,826,137 SWITZERLAND--3.9% Swatch 825 953,042 Synthes-Stratec 1,525 (b) 924,882 1,877,924 TAIWAN--.7% Taiwan Semiconductors Manufacturing, ADR 20,125 (a) 338,352 UNITED KINGDOM--10.6% Aegis 124,500 229,797 BP Amoco, ADR 17,175 814,739 Energis 47,550 (a) 304,640 Glaxo Wellcome 32,550 954,314 Reckitt Benckiser 57,050 728,567 Sage 102,625 567,533 Vodafone 266,194 915,318 WPP 54,475 594,747 5,109,655 TOTAL COMMON STOCKS (cost $43,697,779) 44,471,759 - ------------------------------------------------------------------------------------------------------------------------------------ PREFERRED STOCKS--1.2% - ------------------------------------------------------------------------------------------------------------------------------------ GERMANY; Henkel KGaA (cost $588,722) 9,350 569,712 - ------------------------------------------------------------------------------------------------------------------------------------ Principal SHORT-TERM INVESTMENTS--2.9% Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ COMMERCIAL PAPER; McDonald's, 6.50% 12/1/00 (cost $1,400,000) 1,400,000 1,400,000 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (cost $45,686,501) 96.0% 46,441,471 CASH AND RECEIVABLES (NET) 4.0% 1,935,020 NET ASSETS 100.0% 48,376,491 (A) NON-INCOME PRODUCING. (B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF SECURITIES ACT OF 1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT NOVEMBER 30, 2000, THESE SECURITIES AMOUNTED TO $1,586,842 OR APPROXIAMATELY 3.3% OF NET ASSETS. SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES November 30, 2000 (Unaudited) Cost Value - -------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 45,686,501 46,441,471 Cash 118,949 Receivable for investment securities sold 2,426,052 Dividends receivable 74,628 Prepaid expenses 7,106 49,068,206 - -------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 64,233 Payable for investment securities purchased 370,859 Payable for shares of Common Stock redeemed 181,211 Accrued expenses 75,412 691,715 - -------------------------------------------------------------------------------- NET ASSETS ($) 48,376,491 - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 36,443,143 Accumulated investment (loss) (310,972) Accumulated net realized gain (loss) on investments and foreign currency transactions 11,495,608 Accumulated net unrealized appreciation (depreciation) on investments and foreign currency transactions 748,712 - -------------------------------------------------------------------------------- NET ASSETS ($) 48,376,491 - -------------------------------------------------------------------------------- SHARES OUTSTANDING (300 million shares of $.001 par value Common Stock authorized) 3,402,778 NET ASSET VALUE, offering and redemption price per share ($)--Note 3(e) 14.22 SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF OPERATIONS Six Months Ended November 30, 2000 (Unaudited) - -------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $29,878 foreign taxes withheld at source) 232,920 Interest 46,395 TOTAL INCOME 279,315 EXPENSES: Management fee--Note 3(a) 228,735 Distribution fee--Note 3(b) 152,490 Shareholder servicing costs--Note 3(c) 111,960 Custodian fees 41,745 Professional fees 19,307 Registration fees 13,401 Prospectus and shareholders' reports--Note 3(b) 9,877 Directors' fees and expenses--Note 3(d) 5,181 Loan commitment fees--Note 2 264 Miscellaneous 7,327 TOTAL EXPENSES 590,287 INVESTMENT (LOSS) (310,972) - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments and foreign currency transactions (2,748,485) Net unrealized appreciation (depreciation) on investments and foreign currency transactions (6,559,117) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (9,307,602) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (9,618,574) SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF CHANGES IN NET ASSETS Six Months Ended November 30, 2000 Year Ended (Unaudited) May 31, 2000 - -------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss)--net (310,972) (712,449) Net realized gain (loss) on investments (2,748,485) 16,892,328 Net unrealized appreciation (depreciation) on investments (6,559,117) 4,395,105 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (9,618,574) 20,574,984 - -------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): NET REALIZED GAIN ON INVESTMENTS -- (317,368) - -------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold 72,846,388 135,975,248 Dividends reinvested -- 303,148 Cost of shares redeemed (81,018,924) (138,740,420) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS (8,172,536) (2,462,024) TOTAL INCREASE (DECREASE) IN NET ASSETS (17,791,110) 17,795,592 - -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 66,167,601 48,372,009 END OF PERIOD 48,376,491 66,167,601 - -------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): Shares sold 4,186,321 7,847,581 Shares issued for dividends reinvested -- 17,604 Shares redeemed (4,636,539) (7,988,409) NET INCREASE (DECREASE) IN SHARES OUTSTANDING (450,218) (123,224) SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements. Six Months Ended November 30, 2000 Year Ended May 31, ----------------------------------------------------------------- (Unaudited) 2000 1999 1998 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 17.17 12.17 14.97 15.83 15.49 13.74 Investment Operations: Investment income (loss)--net (.09)(a) (.19)(a) .00(a,b) (.12) (.02) .09 Net realized and unrealized gain (loss) on investments (2.86) 5.28 (2.39) 1.17 1.11 1.66 Total from Investment Operations (2.95) 5.09 (2.39) 1.05 1.09 1.75 Distributions: Dividends from investment income--net -- -- -- (.01) (.09) -- Dividends in excess of investment income--net -- -- -- -- (.03) -- Dividends from net realized gain on investments -- (.09) (.41) (1.90) (.63) -- Total Distributions -- (.09) (.41) (1.91) (.75) -- Net asset value, end of period 14.22 17.17 12.17 14.97 15.83 15.49 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) (17.12)(c) 41.81 (16.02) 8.42 7.36 12.74 - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .97(c) 1.98 2.01 1.92 1.98 2.04 Ratio of interest expense and loan commitment fees to average net assets .00(c,d) .00(d) .00(d) .27 -- -- Ratio of net investment income (loss) to average net assets (.51)(c) (1.18) .02 (.70) (.18) .62 Portfolio Turnover Rate 65.29 236.78 232.68 167.19 158.04 96.45 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets, end of period ($ x 1,000) 48,376 66,168 48,372 77,927 88,694 102,710 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE. (C) NOT ANNUALIZED. (D) AMOUNT REPRESENTS LESS THAN .01%. SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1--Significant Accounting Policies: Dreyfus International Growth Fund (the "fund") is a separate non-diversified series of Dreyfus International Funds, Inc. (the "Company") which is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company and operates as a series company currently offering two series including the fund. The fund's investment objective is to provide investors with capital growth. The Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the Distributor of the funds shares, which are sold to the public without a sales charge. The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each fund are charged to that series' operation; expenses which are applicable to all funds are allocated among them on a pro rata basis. The fund' s financial statements are prepared in accordance with accounting principles generally accepted in the United States, which may require the use of management estimates and assumptions. Actual results could differ from those estimates. (a) Portfolio valuation: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. 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 (b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amount of dividends, interest, and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. Under the terms of the custody agreement, the fund receives net earnings credits based on available cash balances left on deposit. (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 fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the fund not to distribute such gain. (e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. NOTE 2--Bank Line of Credit: The fund participates with other Dreyfus-managed funds in a $500 million redemption credit facility (the "Facility" ) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund at rates based on prevailing market rates in effect at the time of borrowings. During the period ended November 30, 2000, the fund did not borrow under the Facility. NOTE 3--Management Fee and Other Transactions With Affiliates: (a) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of .75 of 1% of the value of the fund's average daily net assets and is payable monthly. (b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, the fund pays the Distributor for distributing the fund's shares, for servicing shareholder accounts and for advertising and marketing relating to the fund. The Plan provides for payments to be made at an aggregate annual rate of .50 of 1% of the value of the fund' s average daily net assets. The Distributor may pay one or more Service Agents (a securities dealer, financial institution or industry professional) in respect of distribution services. The Distributor determines the amounts, if any, to be paid to Service Agents under the Plan and the basis on which such payments are made. The fees payable under the The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) Plan are payable without regard to actual expenses incurred. The Plan also separately provides for the fund to bear the costs of preparing, printing and distributing certain of the fund's prospectuses and statements of additional information and costs associated with implementing and operating the Plan, not to exceed the greater of $100,000 or .005 of 1% of the value of the fund's average daily net assets for any full fiscal year. During the period ended November 30, 2000, the fund was charged $153,971 pursuant to the Plan. (c) Under the Shareholder Services Plan, the fund pays the Distributor at an annual rate of .25 of 1% of the value of the fund's average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended November 30, 2000, the fund was charged $76,245 pursuant to the Shareholder Services Plan. 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. During the period ended November 30, 2000, the fund was charged $24,899 pursuant to the transfer agency agreement. (d) Each Board member also serves as a Board member of other funds within the Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not an "affiliated person" as defined in the act receives an annual fee of $40,000 and an attendance fee of $6,000 for each in person meeting and $500 for telephone meetings. These fees are allocated among the funds in the Fund Group. The Chairman of the Board receives an additional 25% of such compensation. Subject to the Company's Emeritus Program Guidelines, Emeritus Boards members, if any, receive 50% of the Company's annual retainer fee and per meeting fee paid at the time the Board member achieves emeritus status. (e) A 1% redemption fee is charged and retained by the fund on shares redeemed within six months following the date of issuance, including on redemptions made through the use of the fund's exchange privilege. NOTE 4--Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended November 30, 2000, amounted to $37,924,084 and $43,699,608, respectively. At November 30, 2000, accumulated net unrealized appreciation on investments was $754,970, consisting of $4,858,067 gross unrealized appreciation and $4,103,097 gross unrealized depreciation. At November 30, 2000, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). The Fund For More Information Dreyfus International Growth Fund 200 Park Avenue New York, NY 10166 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Custodian The Bank of New York 100 Church Street New York, NY 10286 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9671 Providence, RI 02940 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call 1-800-645-6561 BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 BY E-MAIL Send your request to info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 095SA0011 -----END PRIVACY-ENHANCED MESSAGE-----