N-CSR 1 form250.htm ANNUAL REPORT form250.htm - Generated by SEC Publisher for SEC Filing

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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number                        811- 7123

Advantage Funds, Inc.
(Exact name of Registrant as specified in charter)

c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
(Address of principal executive offices) (Zip code)

Michael A. Rosenberg, Esq.
200 Park Avenue
New York, New York 10166
(Name and address of agent for service)

Registrant's telephone number, including area code:    (212) 922-6000 
Date of fiscal year end:    10/31     
Date of reporting period:    10/31/09     
       

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

ADVANTAGE FUNDS, INC.

-    DREYFUS GLOBAL ABSOLUTE RETURN FUND 
-    DREYFUS TOTAL RETURN ADVANTAGE FUND 
-    GLOBAL ALPHA FUND 


FORM N-CSR

Item 1. Reports to Stockholders.




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

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value


  Contents
 
  THE FUND
 
2      A Letter from the Chairman and CEO
 
3      Discussion of Fund Performance
 
6      Fund Performance
 
8      Understanding Your Fund’s Expenses
 
8      Comparing Your Fund’s Expenses With Those of Other Funds
 
9      Statement of Investments
 
10      Statement of Financial Futures
 
11      Statement of Assets and Liabilities
 
12      Statement of Operations
 
13      Statement of Changes in Net Assets
 
15      Financial Highlights
 
18      Notes to Financial Statements
 
34      Report of Independent Registered Public Accounting Firm
 
35      Important Tax Information
 
36      Board Members Information
 
39      Officers of the Fund
 
  FOR MORE INFORMATION
 
  Back Cover
 

Dreyfus 
Global Absolute 
Return Fund 

The Fund 


A LETTER FROM THE CHAIRMAN AND CEO

Dear Shareholder:

We are pleased to present this annual report for Dreyfus Global Absolute Return Fund, covering the 12-month period from November 1, 2008, through October 31, 2009.

Recent reports of positive economic growth in the United States’, European and Asian markets may have signaled the end of the deep global recession that technically began here in the U.S. in late 2007. Signs that the world economies finally have turned a corner include inventory rebuilding among manufacturers, improvements in domestic housing, and more robust consumer spending. These developments helped fuel a sustained worldwide stock rally since the early spring, with the most beaten-down securities in less developed nations generally leading the rebound. Higher-quality stocks within more developed markets have participated in the rally, but have so far lagged on a relative performance basis.

In our judgment, the global financial markets currently appear poised to enter into a new phase in which underlying fundamentals, such as sound capital and financial structures--and not bargain hunting--are likely to drive investment returns. Of course, the best strategy for your portfolio depends not only on your view of the global economy’s direction, but on your current financial needs, future goals and attitudes toward risk. Your financial advisor can help you decide which investments have the potential to benefit from a recovery while guarding against the risk that may accompany unexpected market developments.

For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance.

Thank you for your continued confidence and support.


Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
November 16, 2009

2



DISCUSSION OF FUND PERFORMANCE

For the period of November 1, 2008, through October 31, 2009, as provided by Helen Potter,Vassilis Dagioglu and James Stavena, Portfolio Managers

Fund and Market Performance Overview

For the 12-month period ended October 31, 2009, Dreyfus Global Absolute Return Fund’s Class A shares produced a total return of 12.52%, Class C shares returned 11.64% and Class I shares returned 12.91%.1 In comparison, the fund’s benchmark, the Citibank 30-Day Treasury Bill Index, produced a total return of 0.10% for the same period.2

A severe recession and banking crisis sent prices of stocks and higher yielding bonds sharply lower in late 2008 and early 2009, but a sustained rally in anticipation of an economic recovery more than offset those losses over the remainder of the reporting period. The fund’s returns were higher than its benchmark, due primarily to the effectiveness of all four of the quantitative factors underlying the fund’s investment process.

The Fund’s Investment Approach

The fund seeks total return through investments in securities and instruments that provide exposure to global stock, bond and currency markets.The strategy utilizes a proprietary, fundamentals-based quantitative model to construct and optimally integrate a diverse set of four alpha-generating signals: stock markets vs. bond markets within each country, country allocation among equity markets, country allocation among sovereign bond markets and currency allocation. Our quantitative investment approach is designed to identify and exploit relative misvaluations across and within major developed capital markets such as the United States, Japan and the larger Western European countries. The fund will use to a significant degree derivative instruments, such as options, futures and options on futures (including those relating to securities, indexes, foreign currencies and interest rates), forward contracts, swaps and hybrid instruments (typically structured notes), as a substitute for investing directly in equities, bonds and currencies in connection with its investment strategy.

The Fund 3


DISCUSSION OF FUND PERFORMANCE (continued)

Volatility Continued as Global Markets Recovered

The world’s financial markets endured a year of extreme volatility. In the final months of 2008, a credit crisis affecting major financial institutions nearly led to the collapse of the global banking system. Meanwhile, rising unemployment, plunging housing prices and depressed consumer confidence in most markets exacerbated the most severe global economic downturn since the 1930s. These influences fueled a bear market that drove some of the world’s financial markets to multi-year lows by the first quarter of 2009.

Global market sentiment began to improve in early March, as massive government-led stimulus measures were enacted around the world.As these measures gained traction, global economic activity rebounded much faster than most analysts expected.All regions of the world produced positive economic growth by the end of the reporting period, and the global financial markets rallied sharply, with the emerging markets leading the way. Conversely, traditional safe havens, such as the sovereign bonds of developed nations, gave back some of the gains they had achieved in a “flight to quality” during the downturn.

Quantitative Process Bolstered Fund Performance

As 2009 unfolded, indiscriminate selling pressure during the financial crisis gave way to more disciplined discrimination by investors among global stock, bond and currency markets. As a result, all four of the alpha-generating signals considered by our investment process contributed positively to the fund’s relative performance during the reporting period.

A generally overweighted allocation to global stocks boosted relative performance for the reporting period, as strong results since March more than offset earlier losses. In addition, results from our country selection models proved favorable. For example, a bias toward bond markets in the United Kingdom and United States added significant alpha over the first half of the reporting period as the Bank of England and the Federal Reserve Board reduced short-term interest rates and enacted emergency liquidity programs. When investors began to re-focus on fundamentals in March, our country equity selection model

4


added value through an overweighted position in U.K. stocks and underweighted exposure to Japanese equities.

Finally, currency decisions added value, particularly when market volatility subsided later in the reporting period. An overweighted position in the Australian dollar proved to be the greatest currency-related contributor to the fund’s relative performance.

Continuing to Seek Relative Value Opportunities

The dramatic mispricing of global stock markets during the downturn was corrected during the subsequent rally, prompting us to reduce the fund’s overall allocation to global stocks. However, as of the reporting period’s end, we have continued to find relative value opportunities in a number of markets. For example, we have reallocated assets from U.K. stocks to German equities. In global bond markets, wider yield differences along the maturity spectrum have created opportunities in government bond markets in the United States, United Kingdom and Euro-area (ex-U.K.) countries. We generally have maintained the fund’s underweighted positions in Japanese stocks and bonds. Finally, a significant drop in risk aversion among investors has led to a more conducive environment to take advantage of relative mispricings in currency markets, and the fund has maintained an overweighted position in the Australian dollar and underweighted allocations to the U.S. dollar and the British pound.

November 16, 2009

    Investing in foreign companies involves special risks, including changes in currency rates, 
    political, economic and social instability, a lack of comprehensive company information, 
    differing auditing and legal standards, and less market liquidity. An investment in this fund 
    should be considered only as a supplement to an overall investment program. 
1    Total return includes reinvestment of dividends and any capital gains paid, and does not take into 
    consideration the maximum initial sales charge in the case of Class A shares, or the applicable 
    contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these 
    charges been reflected, returns would have been lower. Past performance is no guarantee of future 
    results. Share price, yield and investment return fluctuate such that upon redemption, fund shares 
    may be worth more or less than their original cost. Return figures provided reflect the absorption of 
    certain fund expenses by The Dreyfus Corporation pursuant to an agreement in effect until March 
    1, 2010. Had these expenses not been absorbed, the fund’s returns would have been lower. 
2    SOURCE: Citigroup — Citigroup 30-Day Treasury Bill Index is a market value-weighted 
    index of public obligations of the U.S.Treasury with maturities of 30 days. 

The Fund 5


FUND PERFORMANCE


† Source: Bloomberg L.P. 
Past performance is not predictive of future performance. 
The above graph compares a $10,000 investment made in Class A, Class C and Class I shares of Dreyfus Global 
Absolute Return Fund on 12/18/07 (inception date) to a $10,000 investment made in the Citibank 30-Day 
Treasury Bill Index (the “Index”) on that date. All dividends and capital gain distributions are reinvested. For 
comparative purposes, the value of the Index on 12/31/07 is used as the beginning value on 12/18/07. 
The fund’s performance shown in the line graph takes into account the maximum initial sales charge on Class A shares 
and all other applicable fees and expenses on all classes. The Index is a market value-weighted index of public 
obligations of the U. S. Treasury with maturities of 30 days. Unlike a mutual fund, the Index is not subject to charges, 
fees and other expenses. Investors cannot invest directly in any index. 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. 

6


Average Annual Total Returns as of 10/31/09             
 
    Inception        From 
    Date    1 Year    Inception 
  
 
 
Class A shares             
with maximum sales charge (5.75%)    12/18/07    6.02%    –4.79% 
without sales charge    12/18/07    12.52%    –1.74% 
Class C shares             
with applicable redemption charge †    12/18/07    10.64%    –2.50% 
without redemption    12/18/07    11.64%    –2.50% 
Class I shares    12/18/07    12.91%    –1.41% 

Past performance is not predictive of future performance.The fund’s performance shown in the graph and table does not 
reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 
† The maximum contingent deferred sales charge for Class C shares is 1% for shares redeemed within one year of the 
   date of purchase. 

The Fund 7


UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

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

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Global Absolute Return Fund from May 1, 2009 to October 31, 2009. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment         
assuming actual returns for the six months ended October 31, 2009     
    Class A    Class C    Class I 
  
 
 
Expenses paid per $1,000†    $ 7.85    $ 11.75    $ 6.55 
Ending value (after expenses)    $1,075.90    $1,071.80    $1,078.60 

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

Using the SEC’s method to compare expenses

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

Expenses and Value of a $1,000 Investment         
assuming a hypothetical 5% annualized return for the six months ended October 31, 2009 
    Class A    Class C    Class I 
  
 
 
Expenses paid per $1,000†    $ 7.63    $ 11.42    $ 6.36 
Ending value (after expenses)    $1,017.64    $1,013.86    $1,018.90 

† Expenses are equal to the fund’s annualized expense ratio of 1.50% for Class A, 2.25% for Class C and 1.25% for

Class I, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

8


STATEMENT OF INVESTMENTS 
October 31, 2009 

    Principal     
Short-Term Investments—77.3%    Amount ($)    Value ($) 
  
 
U.S. Treasury Bills:         
   0.06%, 1/28/10    1,030,000    1,029,900 
   0.07%, 1/21/10    3,638,000    3,637,782 
   0.10%, 12/24/09    1,500,000    1,499,920 
   0.12%, 12/17/09    565,000 a    564,979 
   0.17%, 11/19/09    2,590,000    2,589,997 
Total Short-Term Investments         
   (cost $9,321,728)        9,322,578 
 
Other Investment—20.2%    Shares    Value ($) 
  
 
Registered Investment Company;         
Dreyfus Institutional Preferred         
   Plus Money Market Fund         
   (cost $2,434,000)    2,434,000 b    2,434,000 
 
Total Investments (cost $11,755,728)    97.5%    11,756,578 
Cash and Receivables (Net)    2.5%    302,966 
Net Assets    100.0%    12,059,544 

a    Held by a broker as collateral for open financial futures positions. 
b    Investment in affiliated money market mutual fund. 

Portfolio Summary (Unaudited)†     
    Value (%) 
  
Short-Term/Money Market Investments    97.5 

† Based on net assets. 
See notes to financial statements. 

The Fund 9


STATEMENT OF FINANCIAL FUTURES 
October 31, 2009 

                Unrealized 
        Market Value        Appreciation 
        Covered by        (Depreciation) 
Contracts    Contracts ($)    Expiration    at 10/31/2009 ($) 
  
 
 
Financial Futures Long                 
10 Year Euro-Bond    22    3,956,858    December 2009    20,089 
British Long Gilt    7    1,367,762    December 2009    14,587 
CAC 40 10 Euro Index    30    1,588,837    November 2009    (103,058) 
Dax Index    2    398,629    December 2009    (25,040) 
FTSE 100 Index    9    741,902    December 2009    (839) 
U.S. Treasury 10 Year Notes    23    2,728,016    December 2009    19,556 
Financial Futures Short                 
S & P 500 Emini    13    (671,450)    December 2009    12,784 
Japanese 10 Year Bond    58    (8,837,119)    December 2009    33,239 
TOPIX Index    19    (1,876,491)    December 2009    88,715 
Gross Unrealized Appreciation                188,970 
Gross Unrealized Depreciation                (128,937) 
 
See notes to financial statements.                 

10


STATEMENT OF ASSETS AND LIABILITIES 
October 31, 2009 

        Cost    Value 
  
 
 
Assets ($):             
Investments in securities—See Statement of Investments:         
   Unaffiliated issuers        9,321,728    9,322,578 
   Affiliated issuers        2,434,000    2,434,000 
Cash            18,027 
Receivable for shares of Common Stock subscribed        264,216 
Unrealized appreciation on forward             
   foreign currency exchange contracts—Note 4            179,624 
Receivable for investment securities sold            66,368 
Dividends and interest receivable            238 
Prepaid expenses            23,953 
            12,309,004 
Liabilities ($):             
Due to The Dreyfus Corporation and affiliates—Note 3(c)        18,961 
Payable for investment securities purchased            100,133 
Unrealized depreciation on forward             
   foreign currency exchange contracts—Note 4            55,634 
Payable for futures variation margin—Note 4            38,431 
Payable for shares of Common Stock redeemed            130 
Accrued expenses            36,171 
            249,460 
Net Assets ($)            12,059,544 
Composition of Net Assets ($):             
Paid-in capital            12,098,898 
Accumulated net realized gain (loss) on investments        (224,227) 
Accumulated net unrealized appreciation (depreciation) on         
   investments and foreign currency transactions (including         
   $60,033 net unrealized appreciation on financial futures)        184,873 
Net Assets ($)            12,059,544 
  
 
 
 
 
Net Asset Value Per Share             
    Class A    Class C    Class I 
  
 
 
Net Assets ($)    8,911,341    1,440,121    1,708,082 
Shares Outstanding    748,409    122,126    143,021 
Net Asset Value Per Share ($)    11.91    11.79    11.94 
 
See notes to financial statements.             

The Fund 11


STATEMENT OF OPERATIONS     
Year Ended October 31, 2009     
  
 
 
 
 
Investment Income ($):     
Income:     
Interest    18,309 
Cash dividends;     
   Affiliated issuers    5,505 
Total Income    23,814 
Expenses:     
Management fee—Note 3(a)    126,776 
Registration fees    86,563 
Shareholder servicing costs—Note 3(c)    29,502 
Auditing fees    24,531 
Distribution fees—Note 3(b)    9,269 
Custodian fees—Note 3(c)    7,070 
Prospectus and shareholders’ reports    6,820 
Directors’ fees and expenses—Note 3(d)    1,328 
Legal fees    579 
Loan commitment fees—Note 2    68 
Interest expense—Note 2    44 
Miscellaneous    19,762 
Total Expenses    312,312 
Less—expense reimbursement from The Dreyfus     
   Corporation due to undertaking—Note 3(a)    (135,894) 
Less—reduction in fees due to earnings credits—Note 1(c)    (203) 
Net Expenses    176,215 
Investment (Loss)—Net    (152,401) 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):     
Net realized gain (loss) on investments and foreign currency transactions    (22,641) 
Net realized gain (loss) on options transactions    288,171 
Net realized gain (loss) on financial futures    727,031 
Net realized gain (loss) on forward foreign currency exchange contracts    34,935 
Net Realized Gain (Loss)    1,027,496 
Net unrealized appreciation (depreciation) on investments, foreign currency     
   transactions, financial futures and options transactions (including $200,299     
   net unrealized appreciation on financial futures, $170,624 net unrealized     
   appreciation on forward foreign currency exchange contracts and     
   $62,941 net unrealized appreciation on options transactions)    432,432 
Net Realized and Unrealized Gain (Loss) on Investments    1,459,928 
Net Increase in Net Assets Resulting from Operations    1,307,527 
 
See notes to financial statements.     

12


STATEMENT OF CHANGES IN NET ASSETS

    Year Ended October 31, 
   
    2009a    2008b 
  
 
Operations ($):         
Investment income (loss)—net    (152,401)    78,964 
Net realized gain (loss) on investments    1,027,496    (1,268,907) 
Net unrealized appreciation         
   (depreciation) on investments    432,432    (247,559) 
Net Increase (Decrease) in Net Assets         
   Resulting from Operations    1,307,527    (1,437,502) 
Dividends to Shareholders from ($):         
Investment income—net:         
Class A Shares    (84,905)    — 
Class C Shares    (11,770)    — 
Class I Shares    (59,541)    — 
Class T Shares    (8,028)    — 
Total Dividends    (164,244)    — 
Capital Stock Transactions ($):         
Net proceeds from shares sold:         
Class A Shares    6,479,947    5,364,489 
Class C Shares    407,275    1,144,813 
Class I Shares    1,402,557    4,606,499 
Class T Shares    119    734,620 
Dividends reinvested:         
Class A Shares    16,538    — 
Class C Shares    3,853    — 
Class I Shares    11,442    — 
Class T Shares    412    — 
Cost of shares redeemed:         
Class A Shares    (3,024,381)    (9,726) 
Class C Shares    (92,410)    (15,000) 
Class I Shares    (3,753,216)    (275,980) 
Class T Shares    (648,088)    — 
Increase (Decrease) in Net Assets from         
   Capital Stock Transactions    804,048    11,549,715 
Total Increase (Decrease) in Net Assets    1,947,331    10,112,213 
Net Assets ($):         
Beginning of Period    10,112,213    — 
End of Period    12,059,544    10,112,213 
Undistributed investment income—net    —    164,191 

The Fund 13


STATEMENT OF CHANGES IN NET ASSETS (continued)

    Year Ended October 31, 
   
    2009a    2008b 
  
 
Capital Share Transactions:         
Class Ac         
Shares sold    588,765    431,580 
Shares issued for dividends reinvested    1,523    — 
Shares redeemed    (272,603)    (856) 
Net Increase (Decrease) in Shares Outstanding    317,685    430,724 
Class C         
Shares sold    36,918    94,769 
Shares issued for dividends reinvested    356    — 
Shares redeemed    (8,506)    (1,411) 
Net Increase (Decrease) in Shares Outstanding    28,768    93,358 
Class I         
Shares sold    126,472    382,830 
Shares issued for dividends reinvested    1,055    — 
Shares redeemed    (341,811)    (25,525) 
Net Increase (Decrease) in Shares Outstanding    (214,284)    357,305 
Class Tc         
Shares sold    11    59,029 
Shares issued for dividends reinvested    38    — 
Shares redeemed    (59,078)    — 
Net Increase (Decrease) in Shares Outstanding    (59,029)    59,029 

a    Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares. 
b    From December 18, 2007 (commencement of operations) to October 31, 2008. 
c    On the close of business on February 4, 2009, 59,078 Class T shares representing $648,088 were converted to 
    59,132 Class A shares. 
See notes to financial statements. 

14


FINANCIAL HIGHLIGHTS

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

    Year Ended October 31, 
   
Class A Shares    2009    2008a 
  
 
Per Share Data ($):         
Net asset value, beginning of period    10.75    12.50 
Investment Operations:         
Investment income (loss)—netb    (.15)    .12 
Net realized and unrealized         
gain (loss) on investments    1.48    (1.87) 
Total from Investment Operations    1.33    (1.75) 
Distributions:         
Dividends from investment income—net    (.17)    — 
Net asset value, end of period    11.91    10.75 
Total Return (%)c    12.52    (14.00)d 
Ratios/Supplemental Data (%):         
Ratio of total expenses to average net assets    2.65    3.04e 
Ratio of net expenses to average net assets    1.50    1.48e 
Ratio of net investment income         
(loss) to average net assets    (1.29)    1.14e 
Portfolio Turnover Rate    —    — 
Net Assets, end of period ($ x 1,000)    8,911    4,630 

a    From December 18, 2007 (commencement of operations) to October 31, 2008. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
See notes to financial statements. 

The Fund 15


  FINANCIAL HIGHLIGHTS (continued)

    Year Ended October 31, 
   
Class C Shares    2009    2008a 
  
 
Per Share Data ($):         
Net asset value, beginning of period    10.68    12.50 
Investment Operations:         
Investment income (loss)—netb    (.22)    .03 
Net realized and unrealized         
gain (loss) on investments    1.45    (1.85) 
Total from Investment Operations    1.23    (1.82) 
Distributions:         
Dividends from investment income—net    (.12)    — 
Net asset value, end of period    11.79    10.68 
Total Return (%)c    11.64    (14.56)d 
Ratios/Supplemental Data (%):         
Ratio of total expenses to average net assets    3.32    4.00e 
Ratio of net expenses to average net assets    2.25    2.23e 
Ratio of net investment income         
(loss) to average net assets    (2.03)    .35e 
Portfolio Turnover Rate    —    — 
Net Assets, end of period ($ x 1,000)    1,440    997 

a    From December 18, 2007 (commencement of operations) to October 31, 2008. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
See notes to financial statements. 

16


    Year Ended October 31, 
   
Class I Shares    2009    2008a 
  
 
Per Share Data ($):         
Net asset value, beginning of period    10.78    12.50 
Investment Operations:         
Investment income (loss)—netb    (.11)    .09 
Net realized and unrealized         
gain (loss) on investments    1.48    (1.81) 
Total from Investment Operations    1.37    (1.72) 
Distributions:         
Dividends from investment income—net    (.21)    — 
Net asset value, end of period    11.94    10.78 
Total Return (%)    12.91    (13.76)c 
Ratios/Supplemental Data (%):         
Ratio of total expenses to average net assets    2.57    3.12d 
Ratio of net expenses to average net assets    1.25    1.23d 
Ratio of net investment income         
(loss) to average net assets    (1.07)    1.03d 
Portfolio Turnover Rate    —    — 
Net Assets, end of period ($ x 1,000)    1,708    3,851 

a    From December 18, 2007 (commencement of operations) to October 31, 2008. 
b    Based on average shares outstanding at each month end. 
c    Not annualized. 
d    Annualized. 
See notes to financial statements. 

The Fund 17


NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Global Absolute Return Fund (the “fund”) is a separate diversified series of Advantage 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 that offers ten series, including the fund.The fund’s investment objective seeks total return by investing in instruments that provide investment exposure to global equity, bond and currency markets, and in fixed-income securities. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Mellon Capital Management Corporation (“Mellon Capital”), a subsidiary of BNY Mellon, serves as the fund’s sub-investment adviser.

At a meeting of the fund’s Board of Directors held on July 15, 2008, the Board approved, effective December 1, 2008, a proposal to change the name of the fund from “Dreyfus Premier Global Absolute Return Fund” to “Dreyfus Global Absolute Return Fund”.

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

18


attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

Effective December 3, 2008, investments for new accounts were no longer permitted in ClassT of the fund, except that participants in certain group retirement plans were able to open a new account in Class T of the fund, provided that the fund was established as an investment option under the plans before December 3, 2008. On February 4, 2009, the fund issued to each holder of its Class T shares, in exchange for said shares, Class A shares of the fund having an aggregate net asset value equal to the aggregate net asset value of the shareholder’s Class T shares. Subsequent investments in the fund’s Class A shares made by prior holders of the fund’s Class T shares who received Class A shares of the fund in exchange for their Class T shares are subject to the front-end sales load schedule that was in effect for Class T shares at the time of the exchange. Otherwise, all other Class A share attributes will be in effect. Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares.

As of October 31, 2009, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held 448,051 Class A and 56,000 Class C and Class I shares of the fund.

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

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) has become the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange

The Fund 19


NOTES TO FINANCIAL STATEMENTS (continued)

Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The ASC has superseded all existing non-SEC accounting and reporting standards. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.

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

(a) Portfolio valuation: Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American

20


Depository Receipts and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers.

Investments in debt securities excluding short-term investments (other than U.S.Treasury Bills), financial futures, options and forward foreign currency exchange contracts (“forward contracts”) are valued each business day by an independent pricing service (the “Service”) approved by the Board of Directors. 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 are valued 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. Restricted securities, as well as securities or other assets for which recent market quotations are not readily available, that are not valued by a pricing service approved by the Board of Directors, or are determined by the fund not to reflect accurately fair value, are valued at fair value as determined in good faith under the direction of the Board of Directors.The factors that may be considered when fair valuing a security include fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Short-term investments, excluding U.S.Treasury Bills, are carried at amortized cost, which approximates value. Financial futures

The Fund 21


NOTES TO FINANCIAL STATEMENTS (continued)

and options, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. Options traded over the-counter are priced at the mean between the bid and asked price. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward contracts are valued at the forward rate.

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

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

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

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

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

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

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

22


The following is a summary of the inputs used as of October 31, 2009 in valuing the fund’s investments:

        Level 2—Other    Level 3—     
    Level 1—    Significant    Significant     
    Unadjusted    Observable    Unobservable     
    Quoted Prices    Inputs    Inputs    Total 
  
 
 
 
Assets ($)                 
Investments in Securities:             
U.S. Treasury                 
Securities    —    9,322,578    —    9,322,578 
Mutual Funds    2,434,000    —    —    2,434,000 
Other Financial                 
   Instruments†    188,970    179,624    —    368,594 
Liabilities ($)                 
Other Financial                 
   Instruments†    (128,937)    (55,634)    —    (184,571) 

† Other financial instruments include derivative instruments, such as futures, forward foreign currency exchange contracts, swap contracts and options contracts. Amounts shown represent unrealized appreciation (depreciation), or in the case of options, market value at period end.

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

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

The Fund 23


NOTES TO FINANCIAL STATEMENTS (continued)

from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

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

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

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

As of and during the period ended October 31, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

24


Each of the tax years in the two-year period ended October 31, 2009 remains subject to examination by the Internal Revenue Service and state taxing authorities.

At October 31, 2009, the components of accumulated earnings on a tax basis were as follows: accumulated capital losses $67,898 and unrealized appreciation $28,544.

The accumulated capital loss carryover is available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2009. If not applied, the carryover expires in fiscal 2016.

The tax character of distributions paid to shareholders during the fiscal periods ended October 31, 2009 and October 31, 2008 were as follows: ordinary income $164,244 and $0.

During the period ended October 31, 2009, as a result of permanent book to tax differences, primarily due to the tax treatment for foreign currency gains and losses and net operating losses, the fund increased accumulated undistributed investment income-net by $152,454, increased accumulated net realized gain (loss) on investments by $100,516 and decreased paid-in capital by $252,970. Net assets and net asset value per share were not affected by this reclassification.

NOTE 2—Bank Lines of Credit:

The fund participated with other Dreyfus-managed funds in a $145 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. Effective October 14, 2009, the $145 million unsecured credit facility with Citibank, N.A., was increased to $215 million and the fund continues participation in the $300 million unsecured credit facility provided by

The Fund 25


NOTES TO FINANCIAL STATEMENTS (continued)

The Bank of New York Mellon. In connection therewith, the fund has agreed to pay its pro rata portion of Facility fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing.

The average amount of borrowings outstanding under the Facilities during the period ended October 31, 2009, was approximately $2,400 with a related weighted average annualized interest rate of 1.79%.

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

(a) Pursuant to a management agreement (“Agreement”) with Dreyfus, the management fee is computed at the annual rate of 1.10% of the value of the fund’s average daily net assets and is payable monthly. Dreyfus has agreed, to waive receipt of its fees and/or assume the expenses of the fund, until March 1, 2010, so that the expenses of none of the classes, exclusive of taxes, brokerage fees, Rule 12b-1 distribution plan fees, interest on borrowings, shareholder services plan fees, commitment fees and extraordinary expenses, exceed an annual rate of 1.25% of the value of the average daily net assets of their class. The expense reimbursement, pursuant to the undertaking, amounted to $135,894 during the period ended October 31, 2009.

Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Mellon Capital, Dreyfus pays Mellon Capital an annual fee of .65% of the value of the fund’s average daily net assets, payable monthly.

During the period ended October 31, 2009, the Distributor retained $672 and $1 from commissions earned on sales of the fund’s Class A and T shares, respectively, and $109 from CDSCs on redemptions of the fund’s Class C shares.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay and Class T shares paid the Distributor for distributing their shares at an annual rate of .75%

26


and .25% of the value of their respective average daily net assets. During the period ended October 31, 2009, Class C and ClassT shares were charged $8,848 and $421, respectively, pursuant to the Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay and Class T shares paid the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended October 31, 2009, Class A, Class C and Class T shares were charged $19,387, $2,949 and $421, respectively, pursuant to the Shareholder Services Plan.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended October 31, 2009, the fund was charged $3,472 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.

The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended October 31, 2009, the fund was charged $203 pursuant to the cash management agreement which is included in Shareholder servicing costs in the Statement of Operations. These fees were offset by earnings credits pursuant to the cash management agreement.

The Fund 27


NOTES TO FINANCIAL STATEMENTS (continued)

The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended October 31, 2009, the fund was charged $7,070 pursuant to the custody agreement.

During the period ended October 31, 2009, the fund was charged $6,397 for services performed by the Chief Compliance Officer.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $10,982, Rule 12b-1 distribution plan fees $927, shareholder services plan fees $2,156,custodian fees $706,chief compliance officer fees $3,897 and transfer agency per account fees $594, which are offset against an expense reimbursement currently in effect in the amount of $301.

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

NOTE 4—Securities Transactions:

During the period ended October 31, 2009, there were no purchases and sales of investment securities, excluding short-term securities, financial futures, options transactions and forward contracts.

The fund adopted the provisions of ASC Topic 815 “Derivatives and Hedging” which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements distinguish between derivatives, which are accounted for as “hedges” and those that do not qualify for hedge accounting. Because investment companies value their derivatives at fair value and recognize changes in fair value through the Statement of Operations, they do not qualify for such accounting. Accordingly, even though a fund’s investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of this disclosure.The following tables show the fund’s exposure to different types of market risk as it relates to the Statement of

28


Assets and Liabilities and the Statement of Operations, respectively.

Fair value of derivative instruments as of October 31, 2009 is shown below:

    Derivative        Derivative 
    Assets ($)        Liabilities ($) 
  
 
 
Interest rate risk1    87,471    Interest rate risk1    — 
Equity risk1    101,499    Equity risk1    (128,937) 
Foreign exchange risk2    179,624    Foreign exchange risk3    (55,634) 
Gross fair value of             
   derivatives contracts    368,594        (184,571) 

Statement of Assets and Liabilities location:

1      Includes cumulative appreciation (depreciation) of futures contracts as reported in the Statement of Financial Futures, but only the unpaid variation margin is reported in the Statement of Assets and Liabilities.
 
2      Unrealized appreciation on forward foreign currency exchange contracts.
 
3      Unrealized depreciation on forward foreign currency exchange contracts.
 

The effect of derivative instruments in the Statement of Operations during the period ended October 31, 2009 is shown below:

Amount of realized gain or (loss) on derivatives recognized in income ($)
            Forward     
Underlying risk    Futures4    Options5    Contracts6    Total 
  
 
 
 
Interest Rate    308,816    288,171    —    596,987 
Equity    418,215    —    —    418,215 
Foreign exchange    —    —    34,935    34,935 
Total    727,031    288,171    34,935    1,050,137 
 
Change in unrealized appreciation or (depreciation) on derivatives recognized in income ($)7 
            Forward     
Underlying risk    Futures    Options    Contracts    Total 
  
 
 
 
Interest Rate    129,703    62,941    —    192,644 
Equity    70,596    —    —    70,596 
Foreign exchange    —    —    170,624    170,624 
Total    200,299    62,941    170,624    433,864 

Statement of Operations location: 
4    Net realized gain (loss) on financial futures. 
5    Net realized gain (loss) on options transactions. 
6    Net realized gain (loss) on forward foreign currency exchange contracts. 
7    Net unrealized appreciation (depreciation) on investments, financial futures, options transactions, 
    forward foreign currency contracts and swap transactions. 

The Fund 29


NOTES TO FINANCIAL STATEMENTS (continued)

During the period ended October 31, 2009, the average market value of interest rate futures contracts was $14,327,468, which represented 119.42% of average net assets. The average market value of equity futures contracts was $6,429,094, which represented 53.59% of average net assets. The average market value of forward contracts was $9,198,511, which represented 76.67% of average net assets.The average market value of options contracts was $102,380, which represented .85% of average net assets.

Futures Contracts: In the normal course of pursuing its investment objectives, the fund is exposed to market risk, including equity price risk and interest rate risk as a result of changes in value of underlying financial instruments. The fund may invest in financial futures contracts in order to manage its exposure to or protect against changes in the market.A futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a broker, which consist of cash or cash equivalents. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. Futures contracts are valued daily at the last sales price established by the Board of Trade or exchange upon which they are traded.When the contracts are closed, the fund recognizes a realized gain or loss. There is minimal counterparty credit risk to the fund with futures, since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Contracts open at October 31, 2009 are set forth in the Statement of Financial Futures.

30


Options: A call option gives the purchaser of the option the right (but not the obligation) to buy, and obligates the writer to sell, the underlying security or securities at the exercise price at any time during the option period, or at a specified date. Conversely, a put option gives the purchaser of the option the right (but not the obligation) to sell, and obligates the writer to buy the underlying security or securities at the exercise price at any time during the option period, or at a specified date.The fund may purchase and write (sell) put and call options primarily to hedge against changes in security prices, or securities that the fund intends to purchase, or against fluctuations in value caused by changes in prevailing market interest rates or other market conditions. At October 31, 2009, there were no options outstanding.

Forward Foreign Currency Exchange Contracts: The fund may enter into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of an investment strat-egy.When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund 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 of the contract decreases between those dates.With respect to purchases of forward 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 exposed to foreign currency risk as a result of changes in value of underlying financial instruments.The fund is also exposed to credit risk associated with counterparty nonperformance

The Fund 31


NOTES TO FINANCIAL STATEMENTS (continued)

on these forward contracts, which is typically limited to the unrealized gain on each open contract.The following summarizes open forward contracts at October 31, 2009:

    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Cost ($)    Value ($) (Depreciation) ($) 
  
 
 
Purchases:                 
Australian Dollar,                 
   Expiring 12/16/2009    1,958,233    1,679,206    1,754,524    75,318 
Australian Dollar,                 
   Expiring 12/16/2009    1,225,126    1,052,346    1,097,679    45,333 
Australian Dollar,                 
   Expiring 12/16/2009    293,000    258,628    262,520    3,892 
Australian Dollar,                 
   Expiring 12/16/2009    25,600    23,603    22,937    (666) 
Australian Dollar,                 
   Expiring 12/16/2009    102,400    94,415    91,748    (2,667) 
Australian Dollar,                 
   Expiring 12/16/2009    76,200    69,542    68,273    (1,269) 
Australian Dollar,                 
   Expiring 12/16/2009    304,800    278,169    273,092    (5,077) 
Canadian Dollar,                 
   Expiring 12/16/2009    21,448    20,746    19,822    (924) 
Japanese Yen,                 
   Expiring 12/16/2009    116,996,754    1,275,856    1,300,108    24,252 
Japanese Yen,                 
   Expiring 12/16/2009    3,373,000    37,869    37,482    (387) 
Japanese Yen,                 
   Expiring 12/16/2009    11,458,000    127,701    127,325    (376) 
Swiss Franc,                 
   Expiring 12/16/2009    364,129    347,740    355,053    7,313 
Swiss Franc,                 
   Expiring 12/16/2009    3,826    3,716    3,730    14 
Swiss Franc,                 
   Expiring 12/16/2009    95,200    92,485    92,827    342 
Swiss Franc,                 
   Expiring 12/16/2009    1,000    988    975    (13) 
Swiss Franc,                 
   Expiring 12/16/2009    388,000    383,286    378,330    (4,956) 

32


    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Proceeds ($)    Value ($) (Depreciation) ($) 
  
 
 
Sales:                 
British Pound,                 
   Expiring 12/16/2009    1,072,044    1,775,880    1,758,987    16,893 
British Pound,                 
   Expiring 12/16/2009    398,000    632,303    653,030    (20,727) 
British Pound,                 
   Expiring 12/16/2009    299,000    476,244    490,593    (14,349) 
British Pound,                 
   Expiring 12/16/2009    196,800    319,527    322,905    (3,378) 
British Pound,                 
   Expiring 12/16/2009    49,200    79,881    80,726    (845) 
British Pound,                 
   Expiring 12/16/2009    29,250    48,614    47,993    621 
British Pound,                 
   Expiring 12/16/2009    165,750    275,297    271,959    3,338 
Euro,                 
   Expiring 12/16/2009    140,905    209,641    207,333    2,308 
Gross Unrealized Appreciation            179,624 
Gross Unrealized Depreciation            (55,634) 

At October 31, 2009, the cost of investments for federal income tax purposes was $11,755,728; accordingly, accumulated gross unrealized appreciation on investments was $850.

NOTE 5—Subsequent Events Evaluation:

Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through December 29, 2009, the date the financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.

The Fund 33


REPORT OF INDEPENDENT REGISTERED 
       PUBLIC ACCOUNTING FIRM 

  Shareholders and Board of Directors
Dreyfus Global Absolute Return Fund

We have audited the accompanying statement of assets and liabilities, including the statements of investments and financial futures, of Dreyfus Global Absolute Return Fund (one of the series comprising Advantage Funds, Inc.) as of October 31, 2009, and the related statement of operations for the year then ended and the statement of changes in net assets and financial highlights for the year then ended and for the period from December 18, 2007 (commencement of operations) to October 31, 2008. 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 the standards of the Public Company Accounting Oversight Board (United States).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. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2009 by correspondence with the custodian and others. 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 Global Absolute Return Fund at October 31, 2009, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for the year then ended and for the period from December 18, 2007 to October 31, 2008, in conformity with U.S. generally accepted accounting principles.


New York, New York December 29, 2009

34


IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes the fund hereby designates 100% of ordinary income dividends paid during the fiscal year ended October 31, 2009 as qualifying interest related dividends.

The Fund 35








OFFICERS OF THE FUND (Unaudited)

J. DAVID OFFICER, President since December 2006.

Chairman, President and Chief Executive Officer of Founders Asset Management LLC, an affiliate of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. Prior to June 2009, Mr. Officer was Chief Operating Officer,Vice Chairman and a director of the Manager, where he had been employed since April 1998. He is 61 years old.

PHILLIP N. MAISANO, Executive Vice President since July 2007.

Chief Investment Officer,Vice Chair and a director of the Manager, and an officer of 76 investment companies (comprised of 173 portfolios) managed by the Manager. Mr. Maisano also is an officer and/or Board member of certain other investment management subsidiaries of The Bank of New York Mellon Corporation, each of which is an affiliate of the Manager. He is 62 years old and has been an employee of the Manager since November 2006. Prior to joining the Manager, Mr. Maisano served as Chairman and Chief Executive Officer of EACM Advisors, an affiliate of the Manager, since August 2004.

MICHAEL A. ROSENBERG, Vice President and Secretary since August 2005.

Assistant General Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 49 years old and has been an employee of the Manager since October 1991.

JAMES BITETTO, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since December 1996.

JONI LACKS CHARATAN, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. She is 53 years old and has been an employee of the Manager since October 1988.

JOSEPH M. CHIOFFI, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since June 2000.

JANETTE E. FARRAGHER, Vice President and Assistant Secretary since August 2005.

Assistant General Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. She is 46 years old and has been an employee of the Manager since February 1984.

JOHN B. HAMMALIAN, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since February 1991.

ROBERT R. MULLERY, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 57 years old and has been an employee of the Manager since May 1986.

JEFF PRUSNOFSKY, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since October 1990.

The Fund 39


OFFICERS OF THE FUND (Unaudited) (continued)

JAMES WINDELS, Treasurer since November 2001.

Director – Mutual Fund Accounting of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 51 years old and has been an employee of the Manager since April 1985.

RICHARD CASSARO, Assistant Treasurer since January 2008.

Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since September 1982.

GAVIN C. REILLY, Assistant Treasurer since December 2005.

Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 41 years old and has been an employee of the Manager since April 1991.

ROBERT ROBOL, Assistant Treasurer since August 2005.

Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since October 1988.

ROBERT SALVIOLO, Assistant Treasurer since July 2007.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 42 years old and has been an employee of the Manager since June 1989.

ROBERT SVAGNA, Assistant Treasurer since December 2002.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 42 years old and has been an employee of the Manager since November 1990.

JOSEPH W. CONNOLLY, Chief Compliance Officer since October 2004.

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (77 investment companies, comprised of 196 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 52 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

WILLIAM GERMENIS, Anti-Money Laundering Compliance Officer since October 2002.

Vice President and Anti-Money Laundering Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 73 investment companies (comprised of 192 portfolios) managed by the Manager. He is 39 years old and has been an employee of the Distributor since October 1998.

40






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

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value


  Contents
 
  THE FUND
 
2      A Letter from the Chairman and CEO
 
3      Discussion of Fund Performance
 
6      Fund Performance
 
8      Understanding Your Fund’s Expenses
 
8      Comparing Your Fund’s Expenses With Those of Other Funds
 
9      Statement of Investments
 
28      Statement of Financial Futures
 
29      Statement of Securities Sold Short
 
30      Statement of Assets and Liabilities
 
31      Statement of Operations
 
32      Statement of Changes in Net Assets
 
34      Financial Highlights
 
37      Notes to Financial Statements
 
53      Report of Independent Registered Public Accounting Firm
 
54      Important Tax Information
 
55      Board Members Information
 
58      Officers of the Fund
 
  FOR MORE INFORMATION
 
  Back Cover
 

Dreyfus 
Total Return 
Advantage Fund 

The Fund 


A LETTER FROM THE CHAIRMAN AND CEO

Dear Shareholder:

We are pleased to present this annual report for Dreyfus Total Return Advantage Fund, covering the 12-month period from November 1, 2008, through October 31, 2009.

Reports of positive U.S. economic growth over the third quarter of 2009 may have signaled the end of the deep recession that technically began in December 2007. Signs that the economy finally has turned a corner include inventory rebuilding among manufacturers, improvements in home sales and prices, and an increase in consumer spending. These indicators, along with improved investor sentiment, have helped higher-yielding bonds rally during the reporting period, while a weak U.S. dollar has supported currency transactions in other global markets. Short-term securities and higher quality, corporate bond investments have participated in the rally as investors exchanged out of low-yielding cash investments, but they have so far lagged non-investment-grade counterparts. U.S.Treasury securities, still considered to rank among the safest investments in the world, continue to underperform relative to other fixed-income categories.

As the financial markets currently appear poised to enter into a new phase, the best strategy for your portfolio depends not only on your view of the economy’s direction, but on your current financial needs, future goals and attitudes toward risk.Your financial advisor can help you decide which investments have the potential to benefit from a recovery while guarding against the risks that may accompany unexpected market developments.

For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance.

Thank you for your continued confidence and support.


Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
November 16, 2009

2



DISCUSSION OF FUND PERFORMANCE

For the period of November 1, 2008, through October 31, 2009, as provided by David Kwan and Lowell Bennett, Portfolio Managers

Fund and Market Performance Overview

For the 12-month period ended October 31, 2009, DreyfusTotal Return Advantage Fund’s Class A shares achieved a total return of 15.15%, Class C shares returned 14.32% and Class I shares returned 15.38%.1 In comparison, the fund’s benchmark, the Barclays Capital U.S.Aggregate Index (the “Index”), produced a total return of 13.79% for the same period.2

A severe recession and banking crisis sent prices of higher yielding bonds sharply lower early in the reporting period, but a subsequent rally in anticipation of an economic recovery more than offset losses within this market segment. Conversely, traditional safe havens, such as sovereign bonds, gained value in the downturn but gave back many of those gains when investors turned to riskier assets. The fund’s returns were higher than its benchmark Index, due primarily to the success of our global bond strategy. Our core bond and currency strategies also added value.

The Fund’s Investment Approach

The fund seeks to maximize total return from capital appreciation and income.To pursue its goal, the fund normally invests primarily in securities and other instruments that provide exposure to fixed income, including those that provide exposure to currency markets.

We employ an active core bond strategy, which accounts for the bulk of the fund’s returns, in which proprietary quantitative models are implemented to add value and control risk.We overlay the active core bond strategy with a separate, value-oriented global bond strategy. Finally, we employ a currency strategy in which we establish exposure to various currencies based on relative valuations.

Volatility Continued as Global Markets Recovered

In the final months of 2008, a global financial crisis nearly led to the collapse of the world’s banking system. In addition, rising unemployment,

The Fund 3


DISCUSSION OF FUND PERFORMANCE (continued)

plunging housing prices and depressed consumer confidence exacerbated the most severe global economic downturn since the 1930s.These influences drove some of the world’s financial markets to multi-year lows by the first quarter of 2009. Declines were particularly severe among corporate-, asset- and mortgage-backed securities, while sovereign bonds rallied amid a “flight to quality.”

Global market sentiment began to improve in early March, as massive liquidity programs were enacted around the world. As these measures gained traction, the global financial markets rallied sharply. Securities that had been severely punished during the downturn fared particularly well in the rally. Conversely, the sovereign bonds of developed nations gave back some of their previous gains. Although the U.S. dollar strengthened during the flight to quality, it has since suffered a sustained decline relative to other major currencies through most of 2009.

All Three Strategies Supported Fund Performance

Our core bond strategy, which comprises the lion’s share of fund assets and performance drivers, performed well over the reporting period, both in absolute terms and versus the Index. Our conservative investment posture, driven by a quantitative risk-controlled investment process, early in the reporting period helped cushion the extremely negative effects of the global liquidity crisis. In addition, an emphasis on shorter maturity higher-quality bonds mitigated the damage from underperforming non-treasury assets. Also, the fund’s overall long duration treasury exposure helped the fund benefit from falling U.S. Treasury interest rates.When interest rates had fallen to historical lows and it became clear that the bulk of the rally was behind us, we began reducing the core strategy’s average maturity in anticipation of higher yields during an economic recovery.

Although the global bond and currency components of the fund’s strategy comprise a smaller portion of the fund, overall they contributed positively to performance for the reporting period.The global bond strategy actually added significantly to the fund’s performance versus the benchmark, particularly over the first half. An emphasis on U.S.Treasuries and U.K. government bonds fared well as interest rates fell strongly in those countries. An underweight position in Japanese

4


bonds detracted mildly from the global bond strategy’s results over the second half, but it was not nearly enough to offset earlier gains. Our currency strategy added a degree of value over the reporting period’s second half, when results were boosted by an overweight position in the Australian dollar and underweight exposure to the euro.

Relative Value Opportunities Remain

As risks to the global economy have declined we have increased the fund’s allocation to higher yielding market sectors in a risk-controlled manner, while remaining in the investment-grade space.We also put an emphasis on the intermediate part of the yield curve and have adopted a slightly shorter-than-benchmark effective duration. In the global markets we have continued to emphasize the Australian dollar, where higher interest rates may attract investment capital, and we maintain a significant underweight to the Japanese bond market, which remains the lowest yielding among the major global bond markets. In our view, these are prudent strategies in the wake of a robust global fixed-income rally.

November 16, 2009

    Foreign bonds are subject to special risks including exposure to currency fluctuations, 
    changing political and economic conditions, and potentially less liquidity. 
    Investments in foreign currencies are subject to the risk that those currencies will decline in 
    value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will 
    decline relative to the currency being hedged. Currency rates in foreign countries may 
    fluctuate significantly over short periods of time. A decline in the value of foreign currencies 
    relative to the U.S. dollar will reduce the value of securities held by the fund and 
    denominated in those currencies. 
1    Total return includes reinvestment of dividends and any capital gains paid and does not take into 
    consideration the maximum initial sales charge in the case of Class A shares or the applicable 
    contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these 
    charges been reflected, returns would have been lower. Class I shares are not subject to any initial 
    or deferred sales charge. Past performance is no guarantee of future results. Share price and 
    investment return fluctuate such that upon redemption, fund shares may be worth more or less 
    than their original cost. Return figures provided reflect the absorption of certain fund expenses by 
    The Dreyfus Corporation pursuant to an agreement in effect through March 1, 2010, at which 
    time it may be extended, modified or terminated. Had these expenses not been absorbed, the 
    fund’s returns would have been lower. 
2    SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital 
    gain distributions.The Barclays Capital U.S. Aggregate Index is a widely accepted, unmanaged 
    total return index of corporate, U.S. government and U.S. government agency debt instruments, 
    mortgage-backed securities and asset-backed securities with an average maturity of 1-10 years. 
    Index returns do not reflect fees and expenses associated with operating a mutual fund. 

The Fund 5


FUND PERFORMANCE


† Source: Lipper Inc. 
Past performance is not predictive of future performance. 
The above graph compares a $10,000 investment made in Class A, Class C and Class I shares of Dreyfus Total 
Return Advantage Fund on 3/15/06 (inception date) to a $10,000 investment made in the Barclays Capital U.S. 
Aggregate Index (the “Index”) on that date. For comparative purposes, the value of the Index on 2/28/06 is used as 
the beginning value on 3/15/06. All dividends and capital gain distributions are reinvested. 
The fund invests primarily in fixed-income securities and instruments that provide investment exposure to fixed-income 
markets.The fund’s performance shown in the line graph takes into account the maximum initial sales charge on Class A 
shares and all other applicable fees and expenses on all classes.The Index is a widely accepted, unmanaged total return 
index of corporate, U.S. government and U.S. government agency debt instruments, mortgage-backed securities and asset- 
backed securities with an average maturity of 1-10 years. Unlike a mutual fund, the Index is not subject to charges, fees 
and other expenses. Investors cannot invest directly in any index. 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. 

6


Average Annual Total Returns as of 10/31/09             
 
    Inception        From 
    Date    1 Year    Inception 
  
 
 
Class A shares             
with maximum sales charge (4.5%)    3/15/06    9.98%    4.79% 
without sales charge    3/15/06    15.15%    6.13% 
Class C shares             
with applicable redemption charge †    3/15/06    13.32%    5.34% 
without redemption    3/15/06    14.32%    5.34% 
Class I shares    3/15/06    15.38%    6.39% 

Past performance is not predictive of future performance.The fund’s performance shown in the graph and table does not 
reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 
† The maximum contingent deferred sales charge for Class C shares is 1% for shares redeemed within one year of the 
   date of purchase. 

The Fund 7


UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

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

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in DreyfusTotal Return Advantage Fund from May 1, 2009 to October 31, 2009. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment         
assuming actual returns for the six months ended October 31, 2009     
    Class A    Class C    Class I 
  
 
 
Expenses paid per $1,000†    $ 4.65    $ 8.51    $ 3.36 
Ending value (after expenses)    $1,051.50    $1,046.80    $1,052.70 

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

Using the SEC’s method to compare expenses

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

Expenses and Value of a $1,000 Investment         
assuming a hypothetical 5% annualized return for the six months ended October 31, 2009 
    Class A    Class C    Class I 
  
 
 
Expenses paid per $1,000†    $ 4.58    $ 8.39    $ 3.31 
Ending value (after expenses)    $1,020.67    $1,016.89    $1,021.93 

† Expenses are equal to the fund’s annualized expense ratio of .90% for Class A, 1.65% for Class C and .65% for Class I, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

8


STATEMENT OF INVESTMENTS                 
October 31, 2009                     
  
 
 
 
 
 
 
 
    Coupon    Maturity    Principal         
Bonds and Notes—86.9%    Rate (%)    Date    Amount ($)        Value ($) 
  
 
 
 
 
Aerospace & Defense—.3%                     
Northrop Grumman,                     
   Gtd. Notes    7.13    2/15/11    120,000        128,323 
United Technologies,                     
   Notes    6.13    7/15/38    35,000        39,036 
                    167,359 
Agriculture—.3%                     
Altria Group,                     
   Gtd. Notes    9.95    11/10/38    50,000        65,396 
Reynolds American,                     
   Gtd. Notes    7.63    6/1/16    75,000        80,892 
UST,                     
   Sr. Unscd. Notes    6.63    7/15/12    25,000        27,143 
                    173,431 
Asset—Backed Certificates—.9%                     
CNH Equipment Trust,                     
   Ser. 2007-B, Cl. A3B    0.85    10/17/11    474,592    a    474,683 
Asset-Backed Ctfs./                     
   Auto Receivables—1.0%                     
Americredit Automobile Receivables                     
   Trust, Ser. 2007-CM, Cl. A4A    5.55    4/7/14    50,000        51,881 
Americredit Automobile Receivables                     
   Trust, Ser. 2007-DF, Cl. A4A    5.56    6/6/14    65,000        66,794 
Chase Manhattan Auto Owner Trust,                     
   Ser. 2006-B, Cl. A4    5.11    4/15/14    90,237        92,603 
Honda Auto Receivables Owner                     
   Trust, Ser. 2006-2, Cl. A4    5.28    1/23/12    72,703        73,829 
Nissan Auto Receivables Owner                     
   Trust, Ser. 2006-A, Cl. A4    4.77    7/15/11    18,936        19,030 
Nissan Auto Receivables Owner                     
   Trust, Ser. 2007-B, Cl. A4    5.16    3/17/14    250,000        263,948 
                    568,085 
Asset-Backed Ctfs./Credit Cards—3.5%                     
American Express Credit Account                     
   Master Trust, Ser. 2005-5, Cl. A    0.29    2/15/13    200,000    a    199,419 
Bank of America Credit Card Trust,                     
   Ser. 2006-A9, Cl. A9    0.26    2/15/13    750,000    a    746,083 
Capital One Multi-Asset Execution                     
   Trust, Ser. 2006-A10, Cl. A10    5.15    6/16/14    80,000        85,080 

The Fund 9


STATEMENT OF INVESTMENTS (continued)

    Coupon    Maturity    Principal         
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)        Value ($) 
  
 
 
 
 
Asset-Backed Ctfs./                     
   Credit Cards (continued)                     
Chase Issuance Trust,                     
   Ser. 2005-A13, Cl. A13    0.29    2/15/13    300,000    a    299,061 
Chase Issuance Trust,                     
   Ser. 2006-A1, Cl. A    0.29    4/15/13    250,000    a    248,937 
Chase Issuance Trust,                     
   Ser. 2005-A10, Cl. A10    4.65    12/17/12    100,000        103,738 
MBNA Credit Card Master Note                     
   Trust, Ser. 2002-A3, Cl. A3    0.49    9/15/14    200,000    a    197,622 
                    1,879,940 
Asset-Backed Ctfs./                     
   Home Equity Loans—.1%                     
Residential Asset Mortgage                     
   Products, Ser. 2003-RZ4, Cl. A7    4.79    6/25/33    73,053    a    67,934 
Automobile Manufacturers—.2%                     
Daimler Finance North America,                     
   Gtd. Notes    8.50    1/18/31    70,000        85,840 
Automotive, Trucks & Parts—.2%                     
Johnson Controls,                     
   Sr. Unscd. Notes    5.50    1/15/16    100,000        102,564 
Banks—5.9%                     
Bank of America,                     
   Sr. Unscd. Notes, Ser. L    5.65    5/1/18    40,000        40,497 
Bank of America,                     
   Sr. Unscd. Notes    5.75    12/1/17    40,000        40,738 
Bank of Tokyo-Mitsubishi,                     
   Sr. Sub. Notes    8.40    4/15/10    15,000        15,408 
Bank One,                     
   Sub. Notes    7.88    8/1/10    100,000        105,004 
Citigroup,                     
   Sub. Notes    5.00    9/15/14    30,000        29,611 
Citigroup,                     
   Sr. Unscd. Notes    5.13    5/5/14    50,000        50,524 
Citigroup,                     
   Sr. Unscd. Notes    5.50    4/11/13    150,000        156,443 
Citigroup,                     
   Sr. Unscd. Notes    6.00    2/21/12    164,000        174,514 
Citigroup,                     
   Sr. Unscd. Notes    6.00    8/15/17    50,000        50,427 

10


    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Banks (continued)                 
Citigroup,                 
   Sr. Unscd. Notes    6.13    11/21/17    75,000    76,661 
Citigroup,                 
   Sr. Unscd. Notes    6.50    1/18/11    20,000    20,968 
Citigroup,                 
   Sr. Unscd. Notes    6.88    3/5/38    26,000    27,131 
Comerica Bank,                 
   Sub. Notes    5.75    11/21/16    15,000    14,157 
Deutsche Bank                 
   AG London,                 
   Sr. Unscd. Notes    5.38    10/12/12    50,000    54,650 
Deutsche Bank AG London,                 
   Sr. Unscd. Notes    6.00    9/1/17    10,000    10,929 
European Investment Bank,                 
   Notes    2.00    2/10/12    150,000    152,316 
European Investment Bank,                 
   Notes    3.00    4/8/14    150,000    153,478 
Fifth Third Bancorp,                 
   Sr. Unscd. Notes    6.25    5/1/13    30,000    31,181 
Goldman Sachs Group,                 
   Sr. Unscd. Notes    5.70    9/1/12    50,000    54,293 
Goldman Sachs Group,                 
   Sr. Unscd. Notes    5.95    1/18/18    26,000    27,440 
Goldman Sachs Group,                 
   Sr. Unscd. Notes    6.15    4/1/18    65,000    69,379 
Goldman Sachs Group,                 
   Sr. Unscd. Notes    6.60    1/15/12    175,000    190,672 
Goldman Sachs Group,                 
   Sr. Unscd. Notes    7.50    2/15/19    100,000    117,141 
HSBC Bank USA,                 
   Sub. Notes    4.63    4/1/14    100,000    104,603 
HSBC Holdings,                 
   Sub. Notes    5.25    12/12/12    50,000    53,435 
JPMorgan Chase & Co.,                 
   Sr. Unscd. Notes    0.45    1/17/11    100,000 a    99,562 
JPMorgan Chase & Co.,                 
   Sr. Unscd. Notes    6.00    1/15/18    35,000    37,534 
JPMorgan Chase & Co.,                 
   Sr. Unscd. Notes    6.30    4/23/19    50,000    54,974 

The Fund 11


  STATEMENT OF INVESTMENTS (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Banks (continued)                 
JPMorgan Chase & Co.,                 
   Sr. Unscd. Notes    6.40    5/15/38    25,000    27,774 
Key Bank,                 
   Sub. Notes    7.00    2/1/11    50,000    52,179 
Morgan Stanley,                 
   Sub. Notes    4.75    4/1/14    85,000    85,339 
Morgan Stanley,                 
   Sr. Unscd. Notes    5.30    3/1/13    50,000    52,929 
Morgan Stanley,                 
   Sr. Unscd. Notes    6.00    4/28/15    150,000    160,692 
Morgan Stanley,                 
   Sr. Unscd. Notes    6.63    4/1/18    75,000    80,518 
Morgan Stanley,                 
   Sr. Unscd. Notes    6.75    4/15/11    25,000    26,636 
PNC Funding,                 
   Bank Gtd. Notes    5.63    2/1/17    15,000    14,814 
Suntrust Bank,                 
   Sub. Notes    6.38    4/1/11    175,000    183,510 
U.S. Bank,                 
   Sub. Notes    4.95    10/30/14    100,000    107,652 
US Bancorp,                 
   Sr. Unscd. Notes, Ser. P    4.50    7/29/10    10,000    10,297 
Wachovia,                 
   Sub. Notes    5.63    10/15/16    25,000    25,688 
Wells Fargo & Co.,                 
   Sr. Unscd. Notes    4.20    1/15/10    50,000    50,315 
Wells Fargo & Co.,                 
   Sr. Unscd. Notes    5.25    10/23/12    20,000    21,410 
Wells Fargo & Co.,                 
   Sr. Unscd. Notes    5.30    8/26/11    30,000    31,898 
Wells Fargo & Co.,                 
   Sr. Unscd. Notes    5.38    2/7/35    25,000    24,142 
Wells Fargo & Co.,                 
   Sr. Unscd. Notes    5.63    12/11/17    55,000    57,299 
Wells Fargo Bank,                 
   Sub. Notes    6.45    2/1/11    175,000    184,593 
                3,211,355 

12


    Coupon    Maturity    Principal       
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)      Value ($) 
  
 
 
 
Building & Construction—.2%                   
CRH America,                   
   Gtd. Notes    6.00    9/30/16    100,000      103,654 
Chemicals-Fibers &                   
   Diversified—.1%                   
Rohm and Haas,                   
   Sr. Unscd. Notes    6.00    9/15/17    75,000      75,844 
Commercial Mortgage                   
   Pass-Through Ctfs.—5.6%                   
Banc of America Commercial                   
   Mortgage, Ser. 2005-1, Cl. A4    5.14    11/10/42    200,000  a    205,697 
Bear Stearns Commercial Mortgage                   
   Securities, Ser. 2007-PW16,                   
   Cl. A4    5.72    6/11/40    250,000  a    238,535 
Bear Stearns Commercial Mortgage                   
   Securities, Ser. 2002-TOP6,                   
   Cl. A2    6.46    10/15/36    500,000      531,055 
Credit Suisse Mortgage Capital                   
   Certificates, Ser. 2007-C1,                   
   Cl. A3    5.38    2/15/40    250,000      203,937 
Credit Suisse Mortgage Capital                   
   Certificates, Ser. 2007-C2,                   
   Cl. A2    5.45    1/15/49    250,000  a    253,382 
Credit Suisse Mortgage Capital                   
   Certificates, Ser. 2006-C3,                   
   Cl. A3    5.83    6/15/38    100,000  a    88,350 
Goldman Sachs Mortgage Securities                   
   Corporation II, Ser. 2004-GG2,                   
   Cl. A3    4.60    8/10/38    159,830      159,650 
Goldman Sachs Mortgage Securities                   
   Corporation II, Ser. 2005-GG4,                   
   Cl. A4    4.76    7/10/39    450,000      419,292 
JP Morgan Chase Commercial                   
   Mortgage Securities,                   
   Ser. 2005-LDP3, Cl. A4A    4.94    8/15/42    102,000  a    100,961 
JPMorgan Chase Commercial                   
   Mortgage Securities,                   
   Ser. 2004-CB8, Cl. A1A    4.16    1/12/39    261,343  b    252,553 

The Fund 13


STATEMENT OF INVESTMENTS (continued)

    Coupon    Maturity    Principal       
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)      Value ($) 
  
 
 
 
Commercial Mortgage                   
   Pass-Through Ctfs. (continued)                   
Merrill Lynch/Countrywide                   
   Commercial Mortgage Trust,                   
   Ser. 2007-5, Cl. A3    5.36    8/12/48    100,000      88,775 
Merrill Lynch/Countrywide                   
   Commercial Mortgage Trust,                   
   Ser. 2006-2, Cl. A4    5.91    6/12/46    100,000  a    98,139 
Morgan Stanley Capital I,                   
   Ser. 2006-T21, Cl. A3    5.19    10/12/52    110,000  a    110,393 
Morgan Stanley Capital I,                   
   Ser. 2006-HQ8, Cl. AJ    5.47    3/12/44    65,000  a    44,044 
Morgan Stanley Dean Witter Capital                   
   I, Ser. 2003-HQ2, Cl. A1    4.18    3/12/35    93,173      94,791 
Wachovia Bank Commercial Mortgage                   
   Trust, Ser. 2005-C16, Cl. A2    4.38    10/15/41    19,453      19,436 
Wachovia Bank Commercial Mortgage                   
   Trust, Ser. 2003-C8, Cl. A3    4.45    11/15/35    150,000      149,926 
                  3,058,916 
Consumer Discretionary—.5%                   
Clorox,                   
   Sr. Unscd. Notes    4.20    1/15/10    15,000      15,107 
Fortune Brands,                   
   Sr. Unscd. Notes    5.13    1/15/11    65,000      66,876 
Kimberly-Clark,                   
   Sr. Unscd. Notes    6.13    8/1/17    100,000      113,655 
Newell Rubbermaid,                   
   Sr. Unscd. Notes    4.00    5/1/10    15,000      15,150 
Whirlpool,                   
   Sr. Unscd. Notes    8.00    5/1/12    75,000      81,611 
                  292,399 
Diversified Financial Services—3.0%                   
American Express Credit,                   
   Sr. Unscd. Notes, Ser. C    7.30    8/20/13    250,000      281,003 
Ameriprise Financial,                   
   Sr. Unscd. Notes    5.65    11/15/15    15,000      16,016 
Bear Stearns,                   
   Sr. Unscd. Notes    4.50    10/28/10    10,000      10,358 
Bear Stearns,                   
   Sr. Unscd. Notes    5.70    11/15/14    100,000      108,725 

14


    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Diversified Financial                 
   Services (continued)                 
Bear Stearns,                 
   Sr. Unscd. Notes    6.40    10/2/17    10,000    10,947 
Blackrock,                 
   Sr. Unscd. Notes    6.25    9/15/17    10,000    10,952 
Caterpillar Financial Service,                 
   Sr. Unscd. Notes    4.30    6/1/10    50,000    51,060 
Credit Suisse First Boston USA,                 
   Gtd. Notes    4.13    1/15/10    50,000    50,349 
Credit Suisse First                 
   Boston USA,                 
   Sr. Unscd. Notes    4.88    8/15/10    50,000    51,604 
Credit Suisse USA,                 
   Gtd. Notes    4.88    1/15/15    50,000    52,822 
Credit Suisse USA,                 
   Gtd. Notes    6.13    11/15/11    110,000    119,879 
General Electric Capital,                 
   Sr. Unscd. Notes    5.40    2/15/17    50,000    50,902 
General Electric Capital,                 
   Sr. Unscd. Notes, Ser. A    6.00    6/15/12    100,000    108,481 
General Electric Capital,                 
   Sr. Unscd. Notes    6.88    1/10/39    50,000    54,058 
Household Finance,                 
   Sr. Unscd. Notes    8.00    7/15/10    10,000    10,463 
HSBC Finance,                 
   Sr. Unscd. Notes    5.25    4/15/15    50,000    52,777 
HSBC Finance,                 
   Sr. Unscd. Notes    5.50    1/19/16    150,000    156,276 
Lehman Brothers Holdings,                 
   Jr. Sub. Notes    6.50    7/19/17    20,000 c,d    2 
MBNA,                 
   Sr. Unscd. Notes    5.00    6/15/15    50,000    49,962 
Merrill Lynch & Co.,                 
   Sr. Unscd. Notes    5.45    2/5/13    250,000    261,622 
Merrill Lynch & Co.,                 
   Sr. Unscd. Notes    6.40    8/28/17    20,000    20,703 
Merrill Lynch & Co.,                 
   Notes    6.88    4/25/18    100,000    107,844 
                1,636,805 

The Fund 15


STATEMENT OF INVESTMENTS (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Diversified Metals & Mining—.8%                 
Alcoa,                 
   Sr. Unscd. Notes    5.55    2/1/17    29,000    28,686 
Alcoa,                 
   Sr. Unscd. Notes    7.38    8/1/10    25,000    25,972 
BHP Billiton Finance USA,                 
   Gtd. Bonds    5.00    12/15/10    75,000    78,145 
Newmont Mining,                 
   Gtd. Notes    5.13    10/1/19    100,000    100,075 
Rio Tinto Finance USA,                 
   Gtd. Notes    5.88    7/15/13    125,000    134,826 
Vale Overseas,                 
   Gtd. Notes    6.88    11/21/36    50,000    50,430 
                418,134 
Electric Utilities—2.9%                 
Ameren Energy Generating,                 
   Sr. Unscd. Notes, Ser. H    7.00    4/15/18    25,000    25,209 
Consolidated Edison of NY,                 
   Sr. Unscd. Notes, Ser. 05-C    5.38    12/15/15    35,000    38,052 
Constellation Energy Group,                 
   Sr. Unscd. Notes    7.60    4/1/32    50,000    53,594 
Dominion Resources,                 
   Sr. Unscd. Notes, Ser. F    5.25    8/1/33    48,000    49,889 
Dominion Resources,                 
   Sr. Unscd. Notes, Ser. B    5.95    6/15/35    50,000    51,938 
DTE Energy,                 
   Sr. Unscd. Notes    7.05    6/1/11    75,000    79,964 
Duke Energy Carolinas,                 
   Sr. Unscd. Notes    6.25    1/15/12    50,000    54,392 
Duke Energy,                 
   Sr. Unscd. Notes    6.30    2/1/14    100,000    110,676 
Exelon,                 
   Sr. Unscd. Notes    4.90    6/15/15    50,000    51,950 
FirstEnergy,                 
   Sr. Unscd. Notes, Ser. C    7.38    11/15/31    50,000    55,644 
FPL Group Capital,                 
   Gtd. Notes    7.88    12/15/15    100,000    121,650 

16


    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Electric Utilities (continued)                 
Indiana Michigan Power,                 
   Sr. Unscd. Notes    7.00    3/15/19    50,000    56,534 
Nevada Power,                 
   Mortgage Notes    7.13    3/15/19    50,000    57,191 
Pacific Gas & Electric,                 
   Sr. Unscd. Bonds    6.05    3/1/34    50,000    54,647 
Pacificorp,                 
   First Mortgage Bonds    5.65    7/15/18    75,000    82,180 
PG&E,                 
   Sr. Unscd. Notes    5.75    4/1/14    100,000    109,268 
Progress Energy,                 
   Sr. Unscd. Notes    7.10    3/1/11    150,000    159,284 
PSEG Power,                 
   Gtd. Notes    7.75    4/15/11    100,000    107,972 
SCANA,                 
   Sr. Unscd. Notes    6.88    5/15/11    50,000    53,439 
Scottish Power,                 
   Sr. Unscd. Notes    4.91    3/15/10    50,000    50,760 
Southern California Edison,                 
   First Mortgage Bonds, Ser. 05-A    5.00    1/15/16    35,000    37,165 
Southern Power,                 
   Sr. Unscd. Notes, Ser. D    4.88    7/15/15    50,000    52,430 
SouthWestern Public Service,                 
   Sr. Unscd. Notes, Ser. G    8.75    12/1/18    50,000    62,845 
                1,576,673 
Food & Beverages—2.2%                 
Anheuser-Busch,                 
   Sr. Unscd. Notes    6.00    4/15/11    50,000    52,625 
Bottling Group,                 
   Gtd. Notes    6.95    3/15/14    100,000    116,507 
Coca-Cola Enterprises,                 
   Sr. Unscd. Notes    8.50    2/1/22    50,000    66,887 
Coca-Cola,                 
   Sr. Unscd. Notes    5.35    11/15/17    100,000    108,871 
General Mills,                 
   Sr. Unscd. Notes    6.00    2/15/12    90,000    97,992 

The Fund 17


  STATEMENT OF INVESTMENTS (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Food & Beverages (continued)                 
H.J. Heinz,                 
   Gtd. Notes    6.63    7/15/11     50,000 a    54,238 
Kellogg,                 
   Sr. Unscd. Notes    5.13    12/3/12    100,000    108,845 
Kraft Foods,                 
   Sr. Unscd. Notes    5.63    8/11/10    30,000    31,014 
Kraft Foods,                 
   Sr. Unscd. Notes    5.63    11/1/11    120,000    128,118 
Kraft Foods,                 
   Sr. Unscd. Notes    6.13    2/1/18    100,000    106,161 
Kroger,                 
   Gtd. Notes    6.80    4/1/11    60,000    63,944 
Kroger,                 
   Gtd. Notes    8.05    2/1/10    50,000    50,837 
Pepsico,                 
   Sr. Unscd. Notes    5.15    5/15/12    25,000    27,083 
Safeway,                 
   Sr. Unscd. Notes    6.50    3/1/11    70,000    74,196 
Sara Lee,                 
   Sr. Unscd. Notes    6.25    9/15/11    100,000    107,998 
                1,195,316 
Foreign/Governmental—.9%                 
Asian Development Bank,                 
   Notes    2.75    5/21/14    65,000    65,851 
Federal Republic of Brazil,                 
   Sr. Unscd. Bonds    6.00    1/17/17    100,000    107,400 
Federal Republic of Brazil,                 
   Unscd. Bonds    10.13    5/15/27    25,000    36,625 
Province of                 
   Manitoba Canada,                 
   Sr. Unscd. Debs., Ser. FH    4.90    12/6/16    5,000    5,409 
Republic of Italy,                 
   Sr. Unscd. Notes    5.38    6/15/33    50,000    51,104 
Republic of Italy,                 
   Sr. Unscd. Notes    6.88    9/27/23    50,000    59,213 
Republic of Peru,                 
   Sr. Unscd. Bonds    8.38    5/3/16    40,000    48,300 
United Mexican States,                 
   Notes    5.95    3/19/19    56,000    58,800 

18


    Coupon    Maturity    Principal       
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)      Value ($) 
  
 
 
 
Foreign/Governmental (continued)                   
United Mexican States,                   
Sr. Unscd. Notes    6.63    3/3/15    50,000      55,175 
                  487,877 
Health Care—1.3%                   
Abbott Laboratories,                   
Sr. Unscd. Notes    5.60    5/15/11    50,000      53,431 
Abbott Laboratories,                   
Sr. Unscd. Notes    6.15    11/30/37    50,000      56,051 
Aetna,                   
Sr. Unscd. Notes    6.00    6/15/16    15,000      16,079 
Astrazeneca,                   
Sr. Unscd. Notes    5.40    6/1/14    75,000      82,592 
Astrazeneca,                   
Sr. Unscd. Notes    5.90    9/15/17    10,000      11,230 
Bristol-Myers Squibb,                   
Sr. Unscd. Notes    5.88    11/15/36    40,000      43,374 
Merck & Co.,                   
Sr. Unscd. Notes    4.38    2/15/13    100,000      104,570 
Pfizer,                   
Sr. Unscd. Notes    7.20    3/15/39    50,000      63,044 
Schering-Plough,                   
Sr. Unscd. Notes    6.75    12/1/33    50,000  a    57,980 
UnitedHealth Group,                   
Sr. Unscd. Notes    5.25    3/15/11    20,000      20,884 
UnitedHealth Group,                   
Sr. Unscd. Notes    5.38    3/15/16    26,000      26,617 
Wyeth,                   
Sr. Unscd. Notes    5.50    2/1/14    100,000      109,695 
Wyeth,                   
Sr. Unscd. Notes    6.95    3/15/11    50,000  a    53,884 
                  699,431 
Industrial—.3%                   
Honeywell International,                   
Sr. Unscd. Notes    5.00    2/15/19    100,000      105,578 
Honeywell International,                   
Sr. Unscd. Notes    7.50    3/1/10    50,000      51,263 
Waste Management,                   
Sr. Unscd. Notes    7.38    8/1/10    20,000      20,881 
                  177,722 

The Fund 19


STATEMENT OF INVESTMENTS (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Media—1.2%                 
AOL Time Warner,                 
   Gtd. Notes    7.63    4/15/31    20,000    22,430 
Comcast Cable Communications,                 
   Sr. Unscd. Notes    6.75    1/30/11    95,000    100,943 
Comcast Cable Holdings,                 
   Sr. Unscd. Notes    9.80    2/1/12    25,000    28,651 
Comcast,                 
   Gtd. Notes    5.45    11/15/10    50,000    52,182 
Comcast,                 
   Gtd. Notes    6.30    11/15/17    30,000    32,518 
Comcast,                 
   Gtd. Notes    6.95    8/15/37    20,000    21,886 
Grupo Televisa,                 
   Sr. Unscd. Notes    6.63    3/18/25    10,000    9,991 
Time Warner Cable,                 
   Gtd. Notes    6.20    7/1/13    150,000    164,466 
Time Warner,                 
   Gtd. Notes    6.75    4/15/11    100,000    106,866 
Viacom,                 
   Sr. Unscd. Notes    6.25    4/30/16    100,000    108,774 
                648,707 
Oil & Gas—2.1%                 
Anadarko Finance,                 
   Gtd. Notes, Ser. B    6.75    5/1/11    50,000    53,332 
Anadarko Petroleum,                 
   Sr. Unscd. Notes    5.95    9/15/16    100,000    107,401 
ConocoPhillips,                 
   Gtd. Notes    6.50    2/1/39    50,000    56,158 
Devon Financing,                 
   Gtd. Notes    6.88    9/30/11    35,000    38,190 
Encana,                 
   Sr. Unscd. Notes    6.50    2/1/38    25,000    26,971 
Enterprise Products Operating,                 
   Gtd. Notes, Ser. G    5.60    10/15/14    50,000    53,639 
Hess,                 
   Sr. Unscd. Notes    8.13    2/15/19    75,000    91,196 
KeySpan,                 
   Sr. Unscd. Notes    7.63    11/15/10    50,000    52,840 

20


    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Oil & Gas (continued)                 
Marathon Oil,                 
   Sr. Unscd. Notes    6.50    2/15/14    125,000    139,175 
Nabors Industries,                 
   Gtd. Notes    9.25    1/15/19    100,000    121,003 
Nexen,                 
   Sr. Unscd. Notes    6.40    5/15/37    25,000    24,804 
Pemex Project Funding Master                 
   Trust, Gtd. Notes    5.75    3/1/18    35,000    34,825 
Petrobras International Finance,                 
   Gtd. Notes    5.88    3/1/18    25,000    25,480 
Sempra Energy,                 
   Sr. Unscd. Notes    6.15    6/15/18    50,000    54,101 
Shell International Finance,                 
   Gtd. Notes    6.38    12/15/38    50,000    58,249 
Suncor Energy,                 
   Sr. Unscd. Notes    6.50    6/15/38    25,000    26,623 
Transocean,                 
   Sr. Unscd. Notes    6.00    3/15/18    90,000    97,704 
XTO Energy,                 
   Sr. Unscd. Notes    5.90    8/1/12    20,000    21,599 
XTO Energy,                 
   Sr. Unscd. Notes    6.10    4/1/36    50,000    50,889 
                1,134,179 
Paper & Paper Related—.2%                 
International Paper,                 
   Sr. Unscd. Notes    7.95    6/15/18    100,000    111,640 
Pipelines—.8%                 
El Paso Natural Gas,                 
   Sr. Unscd. Notes    5.95    4/15/17    35,000    35,928 
Energy Transfer Partners,                 
   Sr. Unscd. Notes    5.95    2/1/15    100,000    106,193 
Kinder Morgan Energy                 
   Partners, Sr. Unscd. Notes    5.95    2/15/18    50,000    52,613 
ONEOK Partners,                 
   Gtd. Notes    8.63    3/1/19    100,000    119,978 
Trans-Canada Pipelines,                 
   Sr. Unscd. Notes    4.00    6/15/13    50,000    51,038 

The Fund 21


STATEMENT OF INVESTMENTS (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Pipelines (continued)                 
Trans-Canada Pipelines,                 
   Sr. Unscd. Notes    7.63    1/15/39    50,000    64,027 
                429,777 
Property & Casualty Insurance—1.0%                 
Ace INA Holdings,                 
   Gtd. Notes    5.88    6/15/14    15,000    16,503 
Aflac,                 
   Sr. Unscd. Notes    8.50    5/15/19    50,000    58,811 
Allstate,                 
   Sr. Unscd. Notes    5.55    5/9/35    50,000    49,725 
American International Group,                 
   Sr. Unscd. Notes    5.05    10/1/15    50,000    38,766 
Berkshire Hathaway,                 
   Gtd. Notes    4.13    1/15/10    40,000    40,304 
Berkshire Hathaway,                 
   Gtd. Notes    5.40    5/15/18    50,000    53,743 
Chubb,                 
   Sr. Unscd. Notes    6.00    5/11/37    50,000    54,235 
MetLife,                 
   Sr. Unscd. Notes    5.70    6/15/35    50,000    50,579 
MetLife,                 
   Sr. Unscd. Notes    6.75    6/1/16    50,000    55,987 
Progressive,                 
   Sr. Unscd. Notes    6.25    12/1/32    16,000    16,891 
Prudential Financial,                 
   Sr. Unscd. Notes, Ser. B    5.10    9/20/14    20,000    20,627 
Prudential Financial,                 
   Sr. Unscd. Notes    5.70    12/14/36    50,000    45,134 
Travelers,                 
   Sr. Unscd. Notes    5.80    5/15/18    20,000    21,795 
                523,100 
Retail—1.3%                 
CVS Caremark,                 
   Sr. Unscd. Notes    5.75    8/15/11    85,000    91,472 
CVS Caremark,                 
   Sr. Unscd. Notes    5.75    6/1/17    100,000    107,759 
Home Depot,                 
   Sr. Unscd. Notes    4.63    8/15/10    120,000    123,315 

22


    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
  
 
 
 
Retail (continued)                 
Home Depot,                 
   Sr. Unscd. Notes    5.40    3/1/16    100,000    105,675 
Lowe’s Companies,                 
   Sr. Unscd. Notes    8.25    6/1/10    25,000    26,113 
McDonald’s,                 
   Sr. Unscd. Notes    5.35    3/1/18    75,000    82,022 
Staples,                 
   Gtd. Notes    7.75    4/1/11    100,000    107,507 
Target,                 
   Sr. Unscd. Notes    6.50    10/15/37    50,000    55,450 
                699,313 
State/Territory General                 
   Obligations—.1%                 
State of California Build America                 
   Taxable Various Purpose, Bonds    7.55    4/1/39    20,000    20,799 
State of California Taxable                 
   Various Purpose, Bonds    5.45    4/1/15    20,000    20,554 
                41,353 
Technology—.9%                 
Electronic Data Systems,                 
   Sr. Unscd. Notes, Ser. B    6.00    8/1/13    100,000 a    110,875 
IBM,                 
   Sr. Unscd. Notes    4.95    3/22/11    50,000    52,667 
IBM,                 
   Unsub. Notes    5.70    9/14/17    100,000    110,603 
Oracle,                 
   Sr. Unscd. Notes    5.00    1/15/11    50,000    52,364 
Oracle,                 
   Sr. Unscd. Notes    5.75    4/15/18    100,000    110,066 
Xerox,                 
   Sr. Unscd. Notes    7.13    6/15/10    25,000    25,750 
                462,325 
Telecommunications—2.2%                 
America Movil,                 
   Gtd. Notes    6.38    3/1/35    10,000    10,263 
AT & T Wireless,                 
   Sr. Unscd. Notes    7.88    3/1/11    25,000    27,091 

The Fund 23


STATEMENT OF INVESTMENTS (continued)

    Coupon    Maturity    Principal       
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)      Value ($) 
  
 
 
 
Telecommunications (continued)                   
AT & T Wireless,                   
   Gtd. Notes    8.13    5/1/12    25,000      28,582 
AT&T,                   
   Gtd. Notes    8.00    11/15/31    150,000  a    185,104 
BellSouth,                   
   Sr. Unscd. Notes    6.00    10/15/11    100,000      108,349 
British Telecommunications,                   
   Sr. Unscd. Notes    9.13    12/15/10    65,000  a    70,017 
CenturyTel,                   
   Sr. Unscd. Notes, Ser. H    8.38    10/15/10    22,000      23,368 
Cisco Systems,                   
   Sr. Unscd. Notes    5.25    2/22/11    25,000      26,368 
Cisco Systems,                   
   Sr. Unscd. Notes    5.90    2/15/39    50,000      53,383 
Deutsche Telekom International                   
   Finance, Gtd. Bonds    8.50    6/15/10    50,000  a    52,237 
Deutsche Telekom International                   
   Finance, Gtd. Bonds    9.25    6/1/32    20,000      26,724 
Motorola,                   
   Sr. Unscd. Notes    7.63    11/15/10    50,000      52,258 
Telecom Italia Capital,                   
   Gtd. Notes    5.25    11/15/13    100,000      105,317 
Telecom Italia Capital,                   
   Gtd. Notes    6.20    7/18/11    50,000      53,218 
Telefonica Europe,                   
   Gtd. Notes    7.75    9/15/10    50,000      52,816 
Verizon Communications,                   
   Sr. Unscd. Notes    6.40    2/15/38    50,000      53,478 
Verizon Global Funding,                   
   Sr. Unscd. Notes    7.25    12/1/10    50,000      53,089 
Verizon New York,                   
   Sr. Unscd. Notes, Ser. A    6.88    4/1/12    50,000      54,608 
Verizon Wireless Capital,                   
   Sr. Unscd. Notes    5.55    2/1/14    100,000  b    109,064 
Vodafone Group,                   
   Sr. Unscd. Bonds    6.15    2/27/37    50,000      53,447 
                  1,198,781 

24


    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date     Amount ($)    Value ($) 
  
 
 
 
Transportation—.6%                 
Burlington Northern Santa Fe,                 
   Sr. Unscd. Notes    5.75    3/15/18    75,000    81,280 
Burlington Northern Santa Fe,                 
   Sr. Unscd. Notes    7.13    12/15/10    20,000    21,223 
CSX,                 
   Sr. Unscd. Notes    6.75    3/15/11    20,000    21,285 
Norfolk Southern,                 
   Sr. Unscd. Notes    6.75    2/15/11    50,000    53,201 
Norfolk Southern,                 
   Sr. Unscd. Bonds    7.90    5/15/97    50,000    61,054 
Union Pacific,                 
   Sr. Unscd. Bonds    5.45    1/31/13    20,000    21,581 
Union Pacific,                 
   Sr. Unscd. Notes    6.65    1/15/11    50,000    52,786 
                312,410 
U.S. Government Agencies/                 
   Mortgage-Backed—44.7%                 
Federal Home Loan Mortgage Corp.:                 
   4.50%, 12/1/19            547,556 e    578,616 
   5.00%, 11/1/19—7/1/35            1,786,928 e    1,895,923 
   5.50%, 9/1/17—11/1/28            1,712,244 e    1,828,329 
   5.50%, 12/1/27            390,338 e    414,826 
   5.65%, 2/1/37                 40,984 a,e    43,250 
   5.73%, 2/1/37                 62,388 a,e    65,769 
   5.93%, 1/1/37                 59,192 a,e    62,607 
   6.00%, 10/1/19—9/1/34            215,998 e    231,814 
   6.50%, 8/1/12                 39,820 e    41,911 
   6.50%, 8/1/32            676,482 e    733,360 
   7.00%, 1/1/36            134,635 e    145,948 
   Notes, 5.10%, 8/19/19            1,000,000 e    1,018,089 
Federal National Mortgage Association:                 
   4.50%             230,000 e,f    201,796 
   6.00%             410,000 e,f    439,149 
   6.50%             860,000 e,f    923,291 
   4.45%, 12/1/34             136,215 a,e    140,306 
   4.50%, 6/1/29            204,649 e    210,057 
   5.50%, 7/1/17—8/1/35            452,667 e    490,490 
   5.64%, 10/1/37             227,899 a,e    239,899 

The Fund 25


STATEMENT OF INVESTMENTS (continued)

    Principal     
Bonds and Notes (continued)    Amount ($)    Value ($) 
  
 
U.S. Government Agencies/         
   Mortgage-Backed (continued)         
Federal National Mortgage Association (continued):         
   5.77%, 4/1/37         70,476 a,e    74,730 
   5.84%, 9/1/38     278,235 a,e    293,764 
   6.00%, 11/1/16—10/1/33    1,439,120 e    1,550,726 
   6.50%, 7/1/33—8/1/38     623,719 e    671,948 
   7.00%, 4/1/32    63,350 e    70,145 
   Notes, 3.30%, 7/30/14    1,000,000 e    1,002,490 
Government National Mortgage Association I:         
   4.00%     610,000 f    601,231 
   4.50%    1,260,000 f    1,278,113 
   6.50%    1,600,000 f    1,701,251 
   4.50%, 6/15/39    1,988,375    2,021,586 
   5.00%, 11/15/35—5/15/39    2,498,738    2,605,915 
   5.50%, 4/15/38    172,170    184,510 
   6.00%, 6/15/37—8/15/38    2,316,012    2,463,783 
        24,225,622 
U.S. Government Securities—1.6%         
U.S. Treasury Bonds:         
   4.75%, 2/15/37    400,000    433,875 
   6.25%, 5/15/30    295,000    378,291 
U.S. Treasury Notes         
   4.88%, 7/31/11    40,000    42,886 
        855,052 
Total Bonds and Notes         
   (cost $45,664,008)        47,096,221 
 
 
Short-Term Investments—.5%         
  
 
U.S. Treasury Bills;         
   0.13%, 12/17/09         
   (cost $299,951)     300,000 g    299,989 

26


Other Investment—9.7%    Shares    Value ($) 
  
 
Registered Investment Company;         
Dreyfus Institutional Preferred         
Plus Money Market Fund         
   (cost $5,241,000)    5,241,000 h    5,241,000 
 
Total Investments (cost $51,204,959)    97.1%    52,637,210 
Cash and Receivables (Net)    2.9%    1,565,167 
Net Assets    100.0%    54,202,377 

a Variable rate security—interest rate subject to periodic change. 
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 October 31, 2009, these securities 
   had a total market value of $361,617 or .7% of net assets. 
c Issuer filed for bankruptcy. 
d Non-income producing—security in default. 
e On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Federal National Mortgage 
   Association and Federal Home Loan Mortgage Corporation into conservatorship with FHFA as the conservator. As 
   such, the FHFA will oversee the continuing affairs of these companies. 
f Purchased on a forward commitment basis. 
g Held by a broker as collateral for open financial futures positions. 
h Investment in affiliated money market mutual fund. 

Portfolio Summary (Unaudited)†         
 
Value (%)        Value (%) 
  
 
U.S. Government & Agencies    46.3    Foreign/Governmental    .9 
Corporate Bonds    28.5    State/Territory General Obligations    .1 
Asset/Mortgage-Backed    11.1         
Short-Term/Money Market Investments    10.2        97.1 

†    Based on net assets. 
†    Based on net assets. 
See notes to financial statements. 

The Fund 27


STATEMENT OF FINANCIAL FUTURES 
October 31, 2009 

                Unrealized 
        Market Value        Appreciation 
        Covered by        (Depreciation) 
Contracts    Contracts ($)    Expiration    at 10/31/2009 ($) 
  
 
 
Financial Futures Long                 
5 Year Swap Future    56    5,921,125    December 2009    55,348 
10 Year Euro-Bond    15    2,697,858    December 2009    16,617 
10 Year Long Gilt    2    390,789    December 2009    4,446 
Australian 10 Year Bonds    19    1,771,542    December 2009    (20,229) 
Canadian 10 Year Bonds    12    1,342,926    December 2009    4,589 
Euro-Bobl    42    7,164,837    December 2009    3,638 
Euro Dollar    1    249,200    December 2009    372 
Euro Dollar    1    248,737    March 2010    334 
Euro Dollar    1    247,125    September 2010    1,033 
Euro Dollar    2    492,300    December 2010    2,468 
Euro Dollar    15    3,678,562    March 2011    11,724 
Euro Dollar    1    244,350    June 2011    1,158 
Euro Dollar    1    243,575    September 2011    1,147 
U.S. Treasury 2 year Notes    4    870,438    December 2009    347 
U.S. Treasury 5 year Notes    50    5,822,657    December 2009    28,296 
U.S. Treasury 10 year Notes    42    4,981,594    December 2009    38,231 
U.S. Treasury 30 year Bond    23    2,763,594    December 2009    10,882 
Financial Futures Short                 
10 Year Euro-Bond    2    (359,715)    December 2009    402 
Euro Dollar    12    (2,976,150)    June 2010    (5,592) 
Euro-Schatz    43    (6,864,672)    December 2009    (10,750) 
Japanese 10 Year Bond    52    (7,922,934)    December 2009    30,544 
U.S. Treasury 2 year Notes    5    (1,088,047)    December 2009    (3,046) 
U.S. Treasury 5 year Notes    32    (3,726,500)    December 2009    (27,315) 
U.S. Treasury 10 year Notes    40    (4,744,375)    December 2009    (25,191) 
Gross Unrealized Appreciation                211,576 
Gross Unrealized Depreciation                (92,123) 
 
See notes to financial statements.                 

28


STATEMENT OF SECURITIES SOLD SHORT 
October 31, 2009 

    Principal     
Bonds and Notes    Amount ($)    Value ($) 
  
 
Federal National Mortgage Association:         
   4.00%     130,850 a    95,825 
   5.00%    2,263,642 a    2,339,962 
Total Securities Sold Short         
   (proceeds $2,492,970)        2,435,787 

a    On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Federal National Mortgage 
    Association and Federal Home Loan Mortgage Corporation into conservatorship with FHFA as the conservator. As 
    such, the FHFA will oversee the continuing affairs of these companies. 
See notes to financial statements. 

The Fund 29


STATEMENT OF ASSETS AND LIABILITIES 
October 31, 2009 

        Cost    Value 
  
 
 
Assets ($):             
Investments in securities—See Statement of Investments:         
   Unaffiliated issuers        45,963,959    47,396,210 
   Affiliated issuers        5,241,000    5,241,000 
Cash            185,307 
Cash on initial margin—Note 4            498,495 
Receivable for investment securities sold            7,946,312 
Receivable from broker for proceeds on securities sold short        2,492,970 
Receivable for shares of Common Stock subscribed            1,500,326 
Dividends and interest receivable            385,339 
Unrealized appreciation on forward foreign             
   currency exchange contracts—Note 4            116,855 
Receivable for futures variation margin—Note 4            116,263 
Prepaid expenses            19,081 
            65,898,158 
Liabilities ($):             
Due to The Dreyfus Corporation and affiliates—Note 3(c)        31,138 
Payable for open mortgage-backed dollar rolls—Note 4        6,358,475 
Payable for investment securities purchased            2,661,590 
Securities sold short, at value (proceeds $2,492,970)         
   —See Statement of Securities Sold Short            2,435,787 
Payable for shares of Common Stock redeemed            77,138 
Unrealized depreciation on forward foreign             
   currency exchange contracts—Note 4            59,003 
Accrued expenses            72,650 
            11,695,781 
Net Assets ($)            54,202,377 
Composition of Net Assets ($):             
Paid-in capital            51,400,500 
Accumulated undistributed investment income—net            502,380 
Accumulated net realized gain (loss) on investments            632,942 
Accumulated net unrealized appreciation (depreciation)         
   on investments and securities sold short (including         
   $119,453 net unrealized appreciation on financial futures)        1,666,555 
Net Assets ($)            54,202,377 
  
 
 
 
 
Net Asset Value Per Share             
    Class A    Class C    Class I 
  
 
 
Net Assets ($)    45,046,035    7,255,613    1,900,729 
Shares Outstanding    3,313,971    536,064    139,697 
Net Asset Value Per Share ($)    13.59    13.53    13.61 
 
See notes to financial statements.             

30


STATEMENT OF OPERATIONS     
Year Ended October 31, 2009     
  
 
 
 
 
Investment Income ($):     
Income:     
Interest    1,225,606 
Dividends;     
   Affiliated issuers    9,920 
Total Income    1,235,526 
Expenses:     
Management fee—Note 3(a)    180,374 
Shareholder servicing costs—Note 3(c)    102,949 
Auditing fees    47,464 
Registration fees    39,923 
Distribution fees—Note 3(b)    37,006 
Prospectus and shareholders’ reports    15,211 
Custodian fees—Note 3(c)    13,730 
Directors’ fees and expenses—Note 3(d)    3,041 
Legal fees    1,141 
Loan commitment fees—Note 2    304 
Miscellaneous    54,946 
Total Expenses    496,089 
Less—reduction in management fee due to undertaking—Note 3(a)    (165,310) 
Less—reduction in fees due to earnings credits—Note 1(c)    (649) 
Net Expenses    330,130 
Investment Income—Net    905,396 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):     
Net realized gain (loss) on investments and foreign currency transactions:     
   Long transactions    536,749 
   Short sale transactions    (335,063) 
Net realized gain (loss) on options transactions    67,741 
Net realized gain (loss) on financial futures    616,417 
Net realized gain (loss) on forward foreign currency exchange contracts    14,714 
Net Realized Gain (Loss)    900,558 
Net unrealized appreciation (depreciation) on investments, foreign currency     
   transactions, financial futures, options transactions, securities sold short     
   and forward foreign currency exchange contracts [including $166,998     
   net unrealized appreciation on financial futures, $108,683 net unrealized     
   appreciation on forward foreign currency exchange contracts, ($7,471)     
   net unrealized (depreciation) on options transactions and $57,183 net     
   unrealized appreciation on securities sold short]    2,245,403 
Net Realized and Unrealized Gain (Loss) on Investments    3,145,961 
Net Increase in Net Assets Resulting from Operations    4,051,357 
 
See notes to financial statements.     

The Fund 31


STATEMENT OF CHANGES IN NET ASSETS

    Year Ended October 31, 
   
    2009    2008 
  
 
Operations ($):         
Investment income—net    905,396    554,593 
Net realized gain (loss) on investments    900,558    (80,513) 
Net unrealized appreciation         
   (depreciation) on investments    2,245,403    (597,632) 
Net Increase (Decrease) in Net Assets         
   Resulting from Operations    4,051,357    (123,552) 
Dividends to Shareholders from ($):         
Investment income—net:         
Class A Shares    (577,992)    (469,586) 
Class C Shares    (81,570)    (44,118) 
Class I Shares    (22,042)    (27,499) 
Total Dividends    (681,604)    (541,203) 
Capital Stock Transactions ($):         
Net proceeds from shares sold:         
Class A Shares    35,110,709    4,351,598 
Class C Shares    6,345,254    2,103,219 
Class I Shares    1,280,370    — 
Dividends reinvested:         
Class A Shares    530,469    463,316 
Class C Shares    38,540    24,140 
Class I Shares    21,855    27,499 
Cost of shares redeemed:         
Class A Shares    (7,378,938)    (753,563) 
Class C Shares    (2,366,851)    (352,499) 
Class I Shares    (102,447)    — 
Increase (Decrease) in Net Assets         
from Capital Stock Transactions    33,478,961    5,863,710 
Total Increase (Decrease) in Net Assets    36,848,714    5,198,955 
Net Assets ($):         
Beginning of Period    17,353,663    12,154,708 
End of Period    54,202,377    17,353,663 
Undistributed investment income—net    502,380    147,078 

32


    Year Ended October 31, 
   
    2009    2008 
  
 
Capital Share Transactions:         
Class A         
Shares sold    2,679,081    347,091 
Shares issued for dividends reinvested    41,507    36,791 
Shares redeemed    (563,973)    (59,754) 
Net Increase (Decrease) in Shares Outstanding    2,156,615    324,128 
Class C         
Shares sold    488,329    168,780 
Shares issued for dividends reinvested    3,029    1,917 
Shares redeemed    (180,866)    (28,074) 
Net Increase (Decrease) in Shares Outstanding    310,492    142,623 
Class I         
Shares sold    96,039    — 
Shares issued for dividends reinvested    1,716    2,183 
Shares redeemed    (7,669)    — 
Net Increase (Decrease) in Shares Outstanding    90,086    2,183 
 
See notes to financial statements.         

The Fund 33


FINANCIAL HIGHLIGHTS

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

        Year Ended October 31,     
   
 
 
Class A Shares    2009    2008    2007    2006a 
  
 
 
 
Per Share Data ($):                 
Net asset value, beginning of period    12.12    12.62    12.79    12.50 
Investment Operations:                 
Investment income—netb    .37    .52    .56    .32 
Net realized and unrealized                 
   gain (loss) on investments    1.44    (.48)    (.11)    .16 
Total from Investment Operations    1.81    .04    .45    .48 
Distributions:                 
Dividends from investment income—net    (.34)    (.54)    (.53)    (.19) 
Dividends from net realized                 
gain on investments    —    —    (.09)    — 
Total Distributions    (.34)    (.54)    (.62)    (.19) 
Net asset value, end of period    13.59    12.12    12.62    12.79 
Total Return (%)c    15.15    .21    3.57    3.86d 
Ratios/Supplemental Data (%):                 
Ratio of total expenses to average net assets    1.40    1.90    2.01    3.32e 
Ratio of net expenses to average net assets    .90    .90    .89    .88e 
Ratio of net investment income                 
to average net assets    2.87    4.16    4.45    3.99e 
Portfolio Turnover Ratef    377.79    120.92    75.04    104.30d 
Net Assets, end of period ($ x 1,000)    45,046    14,026    10,512    10,006 

a    From March 15, 2006 (commencement of operations) to October 31, 2006. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
f    The portfolio turnover rates excluding mortgage dollar roll transactions for the periods ended October 31, 2009, 
    2008, 2007 and 2006, were 211.99%, 87.59%, 51.54% and 101.24%, respectively. 
See notes to financial statements. 

34


        Year Ended October 31,     
   
 
 
Class C Shares    2009    2008    2007    2006a 
  
 
 
 
Per Share Data ($):                 
Net asset value, beginning of period    12.08    12.58    12.77    12.50 
Investment Operations:                 
Investment income—netb    .27    .41    .47    .25 
Net realized and unrealized                 
   gain (loss) on investments    1.44    (.47)    (.13)    .17 
Total from Investment Operations    1.71    (.06)    .34    .42 
Distributions:                 
Dividends from investment income—net    (.26)    (.44)    (.44)    (.15) 
Dividends from net realized                 
gain on investments    —    —    (.09)    — 
Total Distributions    (.26)    (.44)    (.53)    (.15) 
Net asset value, end of period    13.53    12.08    12.58    12.77 
Total Return (%)c    14.32    (.55)    2.73    3.41d 
Ratios/Supplemental Data (%):                 
Ratio of total expenses to average net assets    2.20    2.75    2.79    4.12e 
Ratio of net expenses to average net assets    1.65    1.65    1.64    1.61e 
Ratio of net investment income                 
to average net assets    2.11    3.40    3.71    3.28e 
Portfolio Turnover Ratef    377.79    120.92    75.04    104.30d 
Net Assets, end of period ($ x 1,000)    7,256    2,726    1,044    985 

a    From March 15, 2006 (commencement of operations) to October 31, 2006. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
f    The portfolio turnover rates excluding mortgage dollar roll transactions for the periods ended October 31, 2009, 
    2008, 2007 and 2006, were 211.99%, 87.59%, 51.54% and 101.24%, respectively. 
See notes to financial statements. 

The Fund 35


  FINANCIAL HIGHLIGHTS (continued)

        Year Ended October 31,     
   
 
 
Class I Shares    2009    2008    2007a    2006b 
  
 
 
 
Per Share Data ($):                 
Net asset value, beginning of period    12.13    12.62    12.80    12.50 
Investment Operations:                 
Investment income—netc    .40    .56    .59    .33 
Net realized and unrealized                 
   gain (loss) on investments    1.44    (.48)    (.12)    .17 
Total from Investment Operations    1.84    .08    .47    .50 
Distributions:                 
Dividends from investment income—net    (.36)    (.57)    (.56)    (.20) 
Dividends from net realized                 
gain on investments    —    —    (.09)    — 
Total Distributions    (.36)    (.57)    (.65)    (.20) 
Net asset value, end of period    13.61    12.13    12.62    12.80 
Total Return (%)    15.38    .54    3.75    4.04d 
Ratios/Supplemental Data (%):                 
Ratio of total expenses to average net assets    1.13    1.64    1.78    3.08e 
Ratio of net expenses to average net assets    .65    .65    .64    .63e 
Ratio of net investment income                 
   to average net assets    3.12    4.41    4.70    4.25e 
Portfolio Turnover Ratef    377.79    120.92    75.04    104.30d 
Net Assets, end of period ($ x 1,000)    1,901    602    599    577 

a    Effective June 1, 2007, Class R shares were redesignated as Class I shares. 
b    From March 15, 2006 (commencement of operations) to October 31, 2006. 
c    Based on average shares outstanding at each month end. 
d    Not annualized. 
e    Annualized. 
f    The portfolio turnover rates excluding mortgage dollar roll transactions for the periods ended October 31, 2009, 
    2008, 2007 and 2006, were 211.99%, 87.59%, 51.54% and 101.24%, respectively. 
See notes to financial statements. 

36


NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Total Return Advantage Fund (the “fund”) is a separate diversified series of Advantage 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 ten series, including the fund.The fund’s investment objective seeks to maximize total return through capital appreciation and income. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.

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

As of October 31, 2009, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held 821,979 Class A, 44,635 Class C and 46,034 Class I shares of the fund.

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 37


NOTES TO FINANCIAL STATEMENTS (continued)

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

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

(a) Portfolio valuation: Investments in securities excluding short-term investments (other than U.S. Treasury Bills), financial futures, options and forward foreign currency exchange contracts (“forward contracts”) are valued each business day by an independent pricing service (the “Service”) approved by the Board of Directors. 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 portfolio securities) are valued 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. Restricted securities, as well as securities or other assets for which recent market quotations are not readily available, that are not valued by a pricing service approved by the Board of

38


Directors, or are determined by the fund not to reflect accurately fair value, are valued at fair value as determined in good faith under the direction of the Board of Directors.The factors that may be considered when fair valuing a security include fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Short-term investments, excluding U.S.Treasury Bills, are carried at amortized cost, which approximates value. Registered investment companies that are not traded on an exchange are valued at their net asset value. Financial futures and options, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. Options traded over the counter are priced at the mean between the bid and asked price. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward contracts are valued at the forward rate.

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

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

The Fund 39


NOTES TO FINANCIAL STATEMENTS (continued)

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

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

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

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

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

The following is a summary of the inputs used as of October 31, 2009 in valuing the fund’s investments:

        Level 2—Other    Level 3—     
    Level 1—    Significant    Significant     
    Unadjusted    Observable    Unobservable     
Quoted Prices    Inputs    Inputs    Total 
  
 
 
Assets ($)                 
Investments in Securities:             
U.S. Treasury                 
   Securities    —    1,155,041    —    1,155,041 
Asset-Backed    —    2,990,642    —    2,990,642 
Corporate Bonds    —    15,436,759    —    15,436,759 
Foreign Government    —    487,877    —    487,877 
Municipal Bonds    —    41,353    —    41,353 
U.S. Government                 
   Agencies/                 
   Mortgage-Backed    —    24,225,622    —    24,225,622 
Commercial                 
   Mortgage-Backed    —    3,058,916    —    3,058,916 
Mutual Funds    5,241,000    —    —    5,241,000 
Other Financial                 
   Instruments†    211,576    116,855    —    328,431 
Liabilities ($)                 
Investments in                 
   Securities Sold,                 
   Not Yet Purchased    —    (2,435,787)    —    (2,435,787) 
Other Financial                 
   Instruments†    (92,123)    (59,003)    —    (151,126) 

† Other financial instruments include derivative instruments, such as futures, forward foreign currency exchange contracts, swap contracts and options contracts. Amounts shown represent unrealized appreciation (depreciation), or in the case of options, market value at period end.

40


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

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on investments 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 gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

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

(d) Affiliated issuers: Investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(e) Dividends to shareholders: It is the policy of the fund to declare and pay dividends from investment income-net, quarterly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net real-

The Fund 41


NOTES TO FINANCIAL STATEMENTS (continued)

ized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

On October 30, 2009, the Board of Directors declared a cash dividend of $.103, $.079 and $.111 per share from undistributed investment income-net for Class A, Class C and Class I shares, respectively, payable on November 2, 2009 (ex-dividend date), to shareholders of record as of the close of business on October 30, 2009.

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

As of and during the period ended October 31, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

Each of the tax years in the four-year period ended October 31, 2009 remains subject to examination by the Internal Revenue Service and state taxing authorities.

At October 31, 2009, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $884,889, undistributed capital gains $555,775 and unrealized appreciation $1,361,213.

The tax character of distributions paid to shareholders during the fiscal periods ended October 31, 2009 and October 31, 2008 were as follows: ordinary income $681,604 and $541,203, respectively.

During the period ended October 31, 2009, as a result of permanent book to tax differences, primarily due to the tax treatment for amortization of premiums, paydown gains and losses on mortgage-backed securities and foreign currency gains and losses, the fund increased accumulated undistributed investment income-net by $131,510 and

42


decreased accumulated net realized gain (loss) on investments by the same amount. Net assets and net asset value per share were not affected by this reclassification.

NOTE 2—Bank Lines of Credit:

The fund participated with other Dreyfus-managed funds in a $145 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. Effective October 14, 2009, the $145 million unsecured credit facility with Citibank, N.A., was increased to $215 million and the fund continues participation in the $300 million unsecured credit facility provided by The Bank of NewYork Mellon. In connection therewith, the fund has agreed to pay its pro rata portion of Facility fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended October 31, 2009, the fund did not borrow under the Facilities.

NOTE 3—Management Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement (“Agreement”) with the Manager, the management fee is computed at the annual rate of .55% of the value of the fund’s average daily net assets and is payable monthly. The Manager has undertaken from November 1, 2008 through March 1, 2010, that, if the fund’s aggregate expenses, exclusive of taxes, brokerage fees, Rule 12b-1 distribution plan fees, interest expense, commitment fees, shareholder services plan fees and extraordinary expenses, exceed an annual rate of .65% of the value of the fund’s average daily net assets, the fund may deduct from the payment to be made to the Manager under the Agreement, or the Manager will bear, such excess expense.The reduction in management fee, pursuant to the undertaking, amounted to $165,310 during the period ended October 31, 2009.

The Fund 43


NOTES TO FINANCIAL STATEMENTS (continued)

During the period ended October 31, 2009, the Distributor retained $8,999 from commissions earned on sales of the fund’s Class A shares and $40 from CDSCs on redemptions of the fund’s Class C shares.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of the average daily net assets of Class C shares. During the period ended October 31, 2009, Class C shares were charged $37,006 pursuant to the Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended October 31, 2009, Class A and Class C shares were charged $67,317 and $12,335, respectively, 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 October 31, 2009, the fund was charged $5,377 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.

The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended October 31,

44


2009, the fund was charged $649 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were offset by earnings credits pursuant to the cash management agreement.

The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended October 31, 2009, the fund was charged $13,730 pursuant to the custody agreement.

During the period ended October 31, 2009, the fund was charged $6,397 for services performed by the Chief Compliance Officer.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $23,890, Rule 12b-1 distribution plan fees $4,410, shareholder services plan fees $10,511, custodian fees $6,058, chief compliance officer fees $3,897 and transfer agency per account fees $1,193, which are offset against an expense reimbursement currently in effect in the amount of $18,821.

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

NOTE 4—Securities Transactions:

The following summarizes the aggregate amount of purchases and sales (including paydowns) of investment securities and securities sold short, excluding short-term securities, financial futures, options transactions and forward contracts during the period ended October 31, 2009, of which $54,605,577 in purchases and $54,761,895 in sales were from mortgage dollar roll transactions:

    Purchases ($)    Sales ($) 
  
 
Long transactions    160,900,428    124,784,231 
Short sale transactions    67,574,124    69,732,031 
Total    228,474,552    194,516,262 

The Fund 45


NOTES TO FINANCIAL STATEMENTS (continued)

The fund adopted the provisions of ASC Topic 815 “Derivatives and Hedging” which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements distinguish between derivatives, which are accounted for as “hedges” and those that do not qualify for hedge accounting. Because investment companies value their derivatives at fair value and recognize changes in fair value through the Statement of Operations, they do not qualify for such accounting.Accordingly, even though a fund’s investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of this disclosure.The following tables show the fund’s exposure to different types of market risk as it relates to the Statement of Assets and Liabilities and the Statement of Operations, respectively.

Fair value of derivative instruments as of October 31, 2009 is shown below:

        Derivative            Derivative 
        Assets ($)            Liabilities ($) 
  
 
 
 
 
Interest rate risk 1    211,576    Interest rate risk 1    92,123 
Foreign exchange risk 2    116,855    Foreign exchange risk 3    59,003 
Gross fair value of                 
derivatives contracts    328,431            (151,126) 
 
Statement of Assets and Liabilities location:             
1    Includes cumulative appreciation (depreciation) on futures contracts as reported in the Statement of 
    Financial Futures, but only the unpaid variation margin is reported in the Statement of Assets 
    and Liabilities.                 
2    Unrealized appreciation on forward foreign currency exchange contracts.     
3    Unrealized depreciation on forward foreign currency exchange contracts.     
 
The effect of derivative instruments in the Statement of Operations 
during the period ended October 31, 2009 is shown below: 
 
Amount of realized gain or (loss) on derivatives recognized in income ($)
                Forward     
Underlying risk    Futures4    Options5    Contracts6    Total 
  
 
 
 
Interest rate    616,417    67,741    —    684,158 
Foreign exchange    —    —    14,714    14,714 
Total    616,417    67,741    14,714    698,872 

46


Change in unrealized appreciation or (depreciation) on derivatives recognized in income ($)7 
                Forward     
Underlying risk    Futures    Options    Contracts    Total 
  
 
 
 
Interest rate    166,998    (7,471)    —    159,527 
Foreign exchange    —             —    108,683    108,683 
Total    166,998    (7,471)    108,683    268,210 
 
Statement of Operations location:                 
4    Net realized gain (loss) on financial futures.             
5    Net realized gain (loss) on options transactions.             
6    Net realized gain (loss) on forward foreign currency exchange contracts.     
7    Net unrealized appreciation (depreciation) on investments, financial futures, options transactions, 
    forward foreign currency exchange contracts and swap transactions.         

During the period ended October 31, 2009, the average market value of interest rate contracts was $25,509,535, which represented 77.78% of average net assets.The average market value of options contracts was $16,551, which represented .05% of average net assets. The average market value of forward contracts was $4,142,231, which represented 12.63% of average net assets.

Short Sales: The fund is engaged in short-selling which obligates the fund to replace the security borrowed by purchasing the security at current market value.The fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the fund replaces the borrowed security.The fund would realize a gain if the price of the security declines between those dates. Until the fund replaces the borrowed security, the fund will maintain daily a segregated account with a broker or custodian, of permissible liquid assets sufficient to cover its short position.At October 31, 2009, securities sold short and their related market values and proceeds are set forth in the Statement of Securities Sold Short.

Mortgage Dollar Rolls: A mortgage dollar roll transaction involves a sale by the fund of mortgage related securities that it holds with an agreement by the fund to repurchase similar securities at an agreed upon price and date.The securities purchased will bear the same interest rate as those sold, but generally will be collateralized by pools of mortgages with different prepayment histories than those securities sold.

The Fund 47


NOTES TO FINANCIAL STATEMENTS (continued)

Futures Contracts: In the normal course of pursuing its investment objectives, the fund is exposed to market risk, including interest rate risk as a result of changes in value of underlying financial instruments. The fund may invest in financial futures contracts in order to manage its exposure to or protect against changes in the market.A futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a broker, which consist of cash or cash equivalents.The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change.Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. Futures contracts are valued daily at the last sales price established by the Board of Trade or exchange upon which they are traded.When the contracts are closed, the fund recognizes a realized gain or loss.There is minimal counterparty credit risk to the fund with futures, since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Contracts open at October 31, 2009 are set forth in the Statement of Financial Futures.

Options: A call option gives the purchaser of the option the right (but not the obligation) to buy, and obligates the writer to sell, the underlying security or securities at the exercise price at any time during the option period, or at a specified date. Conversely, a put option gives the purchaser of the option the right (but not the obligation) to sell, and obligates the writer to buy the underlying security or securities at the exercise price at any time during the option period, or at a specified date.The fund may purchase and write (sell) put and call options primarily to hedge against changes in security prices, or securities that the fund intends to purchase, or against fluctuations in value caused by changes in prevailing market interest rates or other market conditions.

As a writer of call options, the fund receives a premium at the outset and then bears the market risk of unfavorable changes in the price of the financial instrument underlying the option. Generally, the fund

48


would incur a gain, to the extent of the premium, if the price of the underlying financial instrument decreases between the date the option is written and the date on which the option is terminated. Generally, the fund would realize a loss, if the price of the financial instrument increases between those dates.

As a writer of put options, the fund receives a premium at the outset and then bears the market risk of unfavorable changes in the price of the financial instrument underlying the option. Generally, the fund would incur a gain, to the extent of the premium, if the price of the underlying financial instrument increases between the date the option is written and the date on which the option is terminated. Generally, the fund would realize a loss, if the price of the financial instrument decreases between those dates. As a writer of an option, the fund may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. One risk of holding a put or a call option is that if the option is not sold or exercised prior to its expiration, it becomes worthless. However, this risk is limited to the premium paid by the fund. Upon the expiration or closing of the option transaction, a gain or loss is reported in the Statement of Operations.

The following summarizes the fund’s call/put options written for the period ended October 31, 2009:

    Face Amount        Options Terminated 
           
    Covered by    Premiums        Net Realized 
Options Written:    Contracts ($)    Received ($)    Cost ($)    Gain ($) 
  
 
 
 
Contracts outstanding                 
   October 31, 2008    20,000    29,815         
Contracts written    24,000    66,303         
Contracts terminated:                 
   Closed    30,000    58,582    28,377    30,205 
   Expired    14,000    37,536    —    37,536 
Total contracts terminated    44,000    96,118    28,377    67,741 
Contracts Outstanding                 
   October 31, 2009    —    —         

The Fund 49


NOTES TO FINANCIAL STATEMENTS (continued)

Forward Foreign Currency Exchange Contracts: The fund may enter into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of an investment strat-egy.When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund 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 of the contract decreases between those dates.With respect to purchases of forward 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 exposed to foreign currency risk as a result of changes in value of underlying financial instruments.The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract.The following summarizes open forward contracts at October 31, 2009:

    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Cost ($)    Value ($) (Depreciation) ($) 
  
 
 
Purchases:                 
Australian Dollar,                 
   expiring 12/16/2009    1,263,315    1,083,305    1,131,896    48,591 
Australian Dollar,                 
   expiring 12/16/2009    680,247    584,311    609,482    25,171 
Australian Dollar,                 
   expiring 12/16/2009    55,000    47,459    49,278    1,819 
Australian Dollar,                 
   expiring 12/16/2009    144,000    129,528    129,020    (508) 
Australian Dollar,                 
   expiring 12/16/2009    24,800    22,866    22,220    (646) 
Australian Dollar,                 
   expiring 12/16/2009    99,200    91,464    88,880    (2,584) 
Australian Dollar,                 
   expiring 12/16/2009    160,800    146,750    144,072    (2,678) 
Australian Dollar,                 
   expiring 12/16/2009    40,200    36,688    36,018    (670) 

50


    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Cost ($)    Value ($) (Depreciation) ($) 
  
 
 
Purchases (continued):                 
Euro,                 
   expiring 12/16/2009    22,650    34,063    33,328    (735) 
Japanese Yen,                 
   expiring 12/16/2009    57,342,089    625,319    637,205    11,886 
Japanese Yen,                 
   expiring 12/16/2009    27,927,000    313,539    310,334    (3,205) 
New Zealand Dollar,                 
   expiring 12/16/2009    339,354    235,504    242,666    7,162 
New Zealand Dollar,                 
   expiring 12/16/2009    113,000    82,522    80,804    (1,718) 
New Zealand Dollar,                 
   expiring 12/16/2009    183,200    137,538    131,003    (6,535) 
New Zealand Dollar,                 
   expiring 12/16/2009    45,800    34,385    32,751    (1,634) 
New Zealand Dollar,                 
   expiring 12/16/2009    68,400    51,013    48,912    (2,101) 
New Zealand Dollar,                 
   expiring 12/16/2009    273,600    204,050    195,647    (8,403) 
Norwegian Krone,                 
   expiring 12/16/2009    1,079,182    181,924    188,127    6,203 
Swiss Franc,                 
   expiring 12/16/2009    35,258    34,829    34,379    (450) 
Sales:        Proceeds ($)         
British Pound,                 
   expiring 12/16/2009    741,242    1,227,895    1,216,214    11,681 
British Pound,                 
   expiring 12/16/2009    135,000    215,026    221,505    (6,479) 
British Pound,                 
   expiring 12/16/2009    63,000    100,170    103,369    (3,199) 
British Pound,                 
   expiring 12/16/2009    51,200    83,129    84,008    (879) 
British Pound,                 
   expiring 12/16/2009    204,800    332,516    336,032    (3,516) 
British Pound,                 
   expiring 12/16/2009    52,000    85,102    85,320    (218) 
British Pound,                 
   expiring 12/16/2009    13,000    21,275    21,330    (55) 
British Pound,                 
   expiring 12/16/2009    9,200    15,127    15,095    32 
British Pound,                 
   expiring 12/16/2009    36,800    60,507    60,380    127 
Canadian Dollar,                 
   expiring 12/16/2009    28,400    26,678    26,247    431 

The Fund 51


NOTES TO FINANCIAL STATEMENTS (continued)

    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Proceeds ($)    Value ($)            (Depreciation) ($) 
  
 
 
Sales (continued):                 
Canadian Dollar,                 
   expiring 12/16/2009    19,484    18,303    18,007    296 
Euro,                 
   expiring 12/16/2009    958,360    1,397,381    1,410,171    (12,790) 
Norwegian Krone,                 
   expiring 12/16/2009    122,400    22,082    21,337    745 
Swedish Krona,                 
   expiring 12/16/2009    569,690    83,056    80,345    2,711 
Gross Unrealized Appreciation            116,855 
Gross Unrealized Depreciation            (59,003) 

At October 31, 2009, the cost of investments for federal income tax purposes was $51,312,748; accordingly, accumulated net unrealized appreciation on investments was $1,324,462, consisting of $1,529,828 gross unrealized appreciation and $205,366 gross unrealized depreciation.

NOTE 5—Subsequent Events Evaluation:

Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through December 29, 2009, the date the financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.

52


REPORT OF INDEPENDENT REGISTERED 
       PUBLIC ACCOUNTING FIRM 

Shareholders and Board of Directors 
Dreyfus Total Return Advantage Fund 

We have audited the accompanying statement of assets and liabilities, including the statements of investments, financial futures and securities sold short, of Dreyfus Total Return Advantage Fund (one of the series comprising Advantage Funds, Inc.) as of October 31, 2009, 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 periods 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 the standards of the Public Company Accounting Oversight Board (United States).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.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2009 by correspondence with the custodian and others. 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 DreyfusTotal Return Advantage Fund at October 31, 2009, 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 periods, in conformity with U.S. generally accepted accounting principles.


New York, New York 
December 29, 2009 

The Fund 53


IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes the fund hereby designates 96.98% of ordinary income dividends paid during the fiscal year ended October 31, 2009 as qualifying interest related dividends.

54








OFFICERS OF THE FUND (Unaudited)

J. DAVID OFFICER, President since December 2006.

Chairman, President and Chief Executive Officer of Founders Asset Management LLC, an affiliate of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. Prior to June 2009, Mr. Officer was Chief Operating Officer,Vice Chairman and a director of the Manager, where he had been employed since April 1998. He is 61 years old.

PHILLIP N. MAISANO, Executive Vice President since July 2007.

Chief Investment Officer,Vice Chair and a director of the Manager, and an officer of 76 investment companies (comprised of 173 portfolios) managed by the Manager. Mr. Maisano also is an officer and/or Board member of certain other investment management subsidiaries of The Bank of New York Mellon Corporation, each of which is an affiliate of the Manager. He is 62 years old and has been an employee of the Manager since November 2006. Prior to joining the Manager, Mr. Maisano served as Chairman and Chief Executive Officer of EACM Advisors, an affiliate of the Manager, since August 2004.

MICHAEL A. ROSENBERG, Vice President and Secretary since August 2005.

Assistant General Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 49 years old and has been an employee of the Manager since October 1991.

JAMES BITETTO, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since December 1996.

JONI LACKS CHARATAN, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. She is 53 years old and has been an employee of the Manager since October 1988.

JOSEPH M. CHIOFFI, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since June 2000.

JANETTE E. FARRAGHER, Vice President and Assistant Secretary since August 2005.

Assistant General Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. She is 46 years old and has been an employee of the Manager since February 1984.

JOHN B. HAMMALIAN, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since February 1991.

ROBERT R. MULLERY, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 57 years old and has been an employee of the Manager since May 1986.

JEFF PRUSNOFSKY, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since October 1990.

58


JAMES WINDELS, Treasurer since November 2001.

Director – Mutual Fund Accounting of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 51 years old and has been an employee of the Manager since April 1985.

RICHARD CASSARO, Assistant Treasurer since January 2008.

Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since September 1982.

GAVIN C. REILLY, Assistant Treasurer since December 2005.

Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 41 years old and has been an employee of the Manager since April 1991.

ROBERT ROBOL, Assistant Treasurer since August 2005.

Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since October 1988.

ROBERT SALVIOLO, Assistant Treasurer since July 2007.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 42 years old and has been an employee of the Manager since June 1989.

ROBERT SVAGNA, Assistant Treasurer since December 2002.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 42 years old and has been an employee of the Manager since November 1990.

JOSEPH W. CONNOLLY, Chief Compliance Officer since October 2004.

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (77 investment companies, comprised of 196 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 52 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

WILLIAM GERMENIS, Anti-Money Laundering Compliance Officer since October 2002.

Vice President and Anti-Money Laundering Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 73 investment companies (comprised of 192 portfolios) managed by the Manager. He is 39 years old and has been an employee of the Distributor since October 1998.

The Fund 59


NOTES






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

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value


  Contents
 
  THE FUND
 
2      A Letter from the Chairman and CEO
 
3      Discussion of Fund Performance
 
6      Fund Performance
 
8      Understanding Your Fund’s Expenses
 
8      Comparing Your Fund’s Expenses With Those of Other Funds
 
9      Statement of Investments
 
52      Statement of Financial Futures
 
53      Statement of Assets and Liabilities
 
54      Statement of Operations
 
55      Statement of Changes in Net Assets
 
57      Financial Highlights
 
60      Notes to Financial Statements
 
77      Report of Independent Registered Public Accounting Firm
 
78      Important Tax Information
 
79      Board Members Information
 
82      Officers of the Fund
 
  FOR MORE INFORMATION
 
  Back Cover
 

Global Alpha Fund

The Fund


A LETTER FROM THE CHAIRMAN AND CEO

Dear Shareholder:

We are pleased to present this annual report for Global Alpha Fund, covering the 12-month period from November 1, 2008, through October 31, 2009.

Recent reports of positive economic growth in the United States’, European and Asian markets may have signaled the end of the deep global recession that technically began here in the U.S. in late 2007. Signs that the world economies finally have turned a corner include inventory rebuilding among manufacturers, improvements in domestic housing, and more robust consumer spending. These developments helped fuel a sustained worldwide stock rally since the early spring, with the most beaten-down securities in less developed nations generally leading the rebound. Higher-quality stocks within more developed markets have participated in the rally, but have so far lagged on a relative performance basis.

In our judgment, the global financial markets currently appear poised to enter into a new phase in which underlying fundamentals, such as sound capital and financial structures--and not bargain hunting--are likely to drive investment returns. Of course, the best strategy for your portfolio depends not only on your view of the global economy’s direction, but on your current financial needs, future goals and attitudes toward risk. Your financial advisor can help you decide which investments have the potential to benefit from a recovery while guarding against the risk that may accompany unexpected market developments.

For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance.

Thank you for your continued confidence and support.


Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
November 16, 2009

2



DISCUSSION OF FUND PERFORMANCE

For the period of November 1, 2008, through October 31, 2009, as provided by Helen Potter, Portfolio Manager

Fund and Market Performance Overview

For the 12-month period ended October 31, 2009, Global Alpha Fund’s Class A shares produced a total return of 22.83%, Class C shares returned 21.94% and Class I shares returned 23.29%.1 In comparison, the fund’s benchmark, a hybrid index comprised of 60% Morgan Stanley Capital International World Index (half-hedged) and 40% Citigroup World Government Bond Index 1+ World Index (half-hedged), produced a total return of 14.36% for the same period.2 Separately, the Morgan Stanley Capital International World Index (half-hedged) produced a total return of 15.37%, and the Citigroup World Government Bond Index 1+ World Index (half-hedged) produced a 11.41% total return for the same period.

A severe recession and banking crisis sent prices of stocks and higher yielding bonds sharply lower in late 2008 and early 2009, but a sustained rally in anticipation of an economic recovery more than offset those losses over the remainder of the reporting period. The fund’s returns were higher than its benchmark, due primarily to overweighted exposure to global stocks and the effectiveness of all four of the quantitative factors underlying the fund’s investment process.

The Fund’s Investment Approach

The fund seeks total return through investments in securities and instruments that provide exposure to global stock, bond and currency markets.The strategy utilizes a proprietary, fundamentals-based quantitative model to construct and optimally integrate a diverse set of four alpha-generating signals: stock markets vs. bond markets within each country, country allocation among equity markets, country allocation among sovereign bond markets and currency allocation. Our quantitative investment approach is designed to identify and exploit relative misvaluations across and within major developed capital markets such as the United States, Canada, Japan, Australia and many Western European countries.

The Fund 3


DISCUSSION OF FUND PERFORMANCE (continued)

Volatility Continued as Global Markets Recovered

The world’s financial markets endured a year of extreme volatility. In the final months of 2008, a credit crisis affecting major financial institutions nearly led to the collapse of the global banking system. Meanwhile, rising unemployment, plunging housing prices and depressed consumer confidence in most markets exacerbated the most severe global economic downturn since the 1930s. These influences fueled a bear market that drove some financial markets to multi-year lows by the first quarter of 2009.

Market sentiment began to improve in early March, as massive government-led stimulus measures were enacted across the globe. As these measures gained traction, global economic activity rebounded much faster than expected. All regions of the world produced positive economic growth by the end of the reporting period, and global financial markets rallied sharply, with the emerging markets leading the way. Conversely, traditional safe havens, such as the sovereign bonds of developed nations, gave back some of the gains they had achieved in a “flight to quality” during the downturn.

Quantitative Process Bolstered Fund Performance

As 2009 unfolded, indiscriminate selling pressure during the financial crisis gave way to more disciplined discrimination by investors among global stock, bond and currency markets. As a result, all four of the alpha-generating signals considered by our investment process contributed positively to the fund’s relative performance.

A generally overweighted allocation to global stocks boosted relative performance for the reporting period, as strong results since March more than offset earlier losses. In addition, results from our country selection models proved favorable. For example, a bias toward bond markets in the United Kingdom and United States added significant alpha over the first half of the reporting period as the Bank of England and the Federal Reserve Board reduced short-term interest rates and enacted emergency liquidity programs. When investors began to re-focus on fundamentals in March, our country equity selection model added value through an overweighted position in Spanish stocks and underweighted exposure to Japanese equities.

4


Finally, currency decisions added value during the reporting period, particularly when market volatility subsided later in the reporting period. An overweighted position in the Australian dollar was the greatest currency-related contributor to the fund’s relative performance.

Continuing to Seek Relative Value Opportunities

The dramatic mispricing of global stock markets during the downturn was corrected during the subsequent rally, prompting us to reduce the fund’s overall allocation to global stocks toward a position that is roughly in line with the benchmark. However, as of the reporting period’s end, we have continued to find relative value opportunities in certain markets. For example, we have reallocated assets from Spanish stocks to other European equity markets, such as France and Germany. In global bond markets, wider yield differences along the maturity spectrum have created opportunities in government bond markets in the United States,Australia and Euro-area (ex-U.K.) countries.We have generally maintained the fund’s underweighted positions in Japanese stocks and bonds.A significant drop in risk aversion has led to a more conducive environment to take advantage of relative mispricings in currency markets, and the fund has maintained an overweighted position in the Australian dollar and underweighted allocations to the U.S. dollar and the British pound.

November 16, 2009

    Investing in foreign companies involves special risks, including changes in currency rates, 
    political, economic and social instability, a lack of comprehensive company information, 
    differing auditing and legal standards, and less market liquidity. An investment in this fund 
    should be considered only as a supplement to an overall investment program. 
1    Total return includes reinvestment of dividends and any capital gains paid, and does not take into 
    consideration the maximum initial sales charge in the case of Class A shares, or the applicable 
    contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these 
    charges been reflected, returns would have been lower. Past performance is no guarantee of future 
    results. Share price, yield and investment return fluctuate such that upon redemption, fund shares 
    may be worth more or less than their original cost. 
2    SOURCES: Morgan Stanley Capital International and Citigroup — Reflects reinvestment of 
    net dividends and, where applicable, capital gain distributions.The Morgan Stanley Capital 
    International (MSCI) World Index is an unmanaged index of global stock market performance, 
    including the United States, Canada, Europe,Australia, New Zealand and the Far East.The 
    Citigroup World Government Bond Index includes the 22 government bond markets. 

The Fund 5


FUND PERFORMANCE


† Source: FactSet 
Past performance is not predictive of future performance. 
The above graph compares a $10,000 investment made in Class A, Class C and Class I shares of Global Alpha Fund 
on May 2, 2006 (inception date) to a $10,000 investment made on that date in each of the following: the Morgan 
Stanley Capital International World Index (the “MSCI Index”) (half-hedged); the Citigroup World Government Bond 
Index 1 + World Index (the “CWGB Index”) (half-hedged); and an unmanaged hybrid index composed of 60% 
MSCI Index and 40% CWGB Index (the “Hybrid Index”) (half-hedged). Returns assume all dividends and capital 
gain distributions are reinvested. 
The fund invests primarily in instruments that provide exposure to global equity, bond and currency markets.The fund’s 
performance shown in the line graph takes into account the maximum initial sales charge on Class A shares and all other 
applicable fees and expenses on all classes.The MSCI Index (half-hedged) is an unmanaged index of global stock market 
performance, including the United States, Canada,Australia, New Zealand and the Far East and includes net dividends 
reinvested.The CWGB Index (half-hedged) is an unmanaged index that tracks the performance of 22 government bond 
markets. Unlike a mutual fund, the indices are not subject to charges, fees and other expenses. Investors cannot invest 
directly in any index. 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. 

6


Average Annual Total Returns as of 10/31/09             
 
    Inception        From 
    Date    1 Year    Inception 
  
 
 
Class A shares             
with maximum sales charge (5.75%)    5/2/06    15.73%    –5.34% 
without sales charge    5/2/06    22.83%    –3.73% 
Class C shares             
with applicable redemption charge †    5/2/06    20.94%    –4.44% 
without redemption    5/2/06    21.94%    –4.44% 
Class I shares    5/2/06    23.29%    –3.42% 

Past performance is not predictive of future performance.The fund’s performance shown in the graph and table does not 
reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 
† The maximum contingent deferred sales charge for Class C shares is 1% for shares redeemed within one year of the 
   date of purchase. 

The Fund 7


UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

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

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Global Alpha Fund from May 1, 2009 to October 31, 2009. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment         
assuming actual returns for the six months ended October 31, 2009     
    Class A    Class C    Class I 
 
 
 
Expenses paid per $1,000†    $ 11.26    $ 15.01    $ 9.16 
Ending value (after expenses)    $1,201.00    $1,196.90    $1,203.60 

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

Using the SEC’s method to compare expenses

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

Expenses and Value of a $1,000 Investment         
assuming a hypothetical 5% annualized return for the six months ended October 31, 2009 
    Class A    Class C    Class I 
 
 
 
Expenses paid per $1,000†    $ 10.31    $ 13.74    $ 8.39 
Ending value (after expenses)    $1,014.97    $1,011.54    $1,016.89 

† Expenses are equal to the fund’s annualized expense ratio of 2.03% for Class A, 2.71% for Class C and 1.65% for 
Class I, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). 

8


STATEMENT OF INVESTMENTS 
October 31, 2009 

Common Stocks—59.6%    Shares    Value ($) 
  
 
Australia—2.5%         
AGL Energy    1,165    14,421 
Alumina     6,059 a    8,862 
Amcor    1,623    8,373 
AMP    5,155    27,030 
Asciano Group     5,000 a    6,775 
ASX    507    15,245 
Australia & New Zealand Banking Group    5,416    110,584 
AXA Asia Pacific Holdings    2,444    9,136 
Bendigo and Adelaide Bank    1,460    11,819 
BHP Billiton    7,722    254,542 
BlueScope Steel    4,602    12,135 
Brambles    3,602    22,630 
CFS Retail Property Trust    2,267    3,882 
Coca-Cola Amatil    754    7,179 
Cochlear    74    4,257 
Commonwealth Bank of Australia    3,509    162,153 
Computershare    633    6,151 
Crown    1,748    12,669 
CSL    1,444    40,750 
Dexus Property Group    10,980    7,812 
Fortescue Metals Group     1,686 a    5,658 
Foster’s Group    4,781    23,382 
Goodman Group    11,621    6,390 
GPT Group    14,123    7,323 
Incitec Pivot    2,270    5,294 
Insurance Australia Group    5,073    17,022 
Leighton Holdings    197    6,239 
Lend Lease    1,279    10,562 
Macquarie Group    778    33,925 
Macquarie Infrastructure Group    6,011    7,760 
Metcash    3,159    13,353 
National Australia Bank    4,452    117,387 
Newcrest Mining    1,163    33,218 
OneSteel    3,419    9,299 
Orica    953    20,329 
Origin Energy    2,128    30,336 

The Fund 9


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
Australia (continued)         
OZ Minerals     7,338 a    7,730 
Paladin Energy     1,333 a    4,862 
QBE Insurance Group    2,375    47,985 
Rio Tinto    1,029    57,362 
Santos    2,009    26,779 
Sims Metal Management    204    3,629 
Sonic Healthcare    1,046    13,001 
Stockland    5,538    18,451 
Suncorp-Metway    3,099    24,204 
TABCORP Holdings    2,151    13,711 
Tatts Group    1,524    3,383 
Telstra    11,208    33,519 
Toll Holdings    1,882    14,268 
Transurban Group    1,655    6,744 
Wesfarmers    2,380    58,865 
Wesfarmers-PPS    190    4,778 
Westfield Group    5,055    54,319 
Westpac Banking    6,732    157,369 
Woodside Petroleum    1,176    49,600 
Woolworths    2,881    73,973 
WorleyParsons    465    10,842 
        1,779,256 
Austria—.1%         
Erste Group Bank    423    17,163 
OMV    364    15,097 
Raiffeisen International Bank Holding    116    6,867 
Telekom Austria    797    13,112 
Verbund-Oesterreichische Elektrizitaetswirtschafts, Cl. A    172    7,763 
Vienna Insurance Group    90    5,098 
Voestalpine    272    9,371 
        74,471 
Belgium—.3%         
Anheuser-Busch InBev    1,642    77,538 
Anheuser-Busch InBev (STRIP)     1,224 a    9 
Belgacom    367    13,808 
Colruyt    37    8,836 

10


Common Stocks (continued)    Shares    Value ($) 
  
 
Belgium (continued)         
Compagnie Nationale a Portefeuille    78    4,092 
Delhaize Group    215    14,656 
Dexia    1,226 a    10,275 
Fortis    5,032 a    21,917 
Fortis (Rights)    12,089 a    0 
Groupe Bruxelles Lambert    201    17,809 
Groupe Bruxelles Lambert (STRIP)    31 a    0 
KBC Groep    373 a    16,136 
Mobistar    79    5,452 
Solvay    146    14,401 
UCB    236    10,122 
Umicore    272    8,327 
        223,378 
Canada—.0%         
Tim Hortons    370    10,534 
Denmark—.3%         
AP Moller—Maersk, Cl. A    1    6,721 
AP Moller—Maersk, Cl. B    3    20,697 
Carlsberg, Cl. B    253    17,906 
Coloplast, Cl. B    81    6,656 
Danske Bank    1,018 a    23,663 
DSV    645 a    10,140 
Novo Nordisk, Cl. B    1,017    63,511 
Novozymes, Cl. B    109    10,059 
Topdanmark    63 a    9,130 
TrygVesta    63    4,571 
Vestas Wind Systems    460 a    32,694 
William Demant Holding    89 a    6,378 
        212,126 
Finland—.4%         
Elisa    488    9,497 
Fortum    994    23,656 
Kesko, Cl. B    220    7,362 
Kone, Cl. B    373    14,006 
Metso    304    8,545 
Neste Oil    313    5,569 

The Fund 11


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
Finland (continued)         
Nokia    8,533    108,652 
Nokian Renkaat    388    8,324 
Orion, Cl. B    345    6,582 
Outokumpu    298    4,964 
Pohjola Bank    426    4,764 
Rautaruukki    329    6,757 
Sampo, Cl. A    1,022    24,609 
Sanoma    347    6,441 
Stora Enso, Cl. R    1,381 a    10,514 
UPM-Kymmene    1,315    15,871 
Wartsila    212    7,723 
        273,836 
France—3.2%         
Accor    347    16,729 
Aeroports de Paris    60    4,580 
Air France    457 a    7,053 
Air Liquide    568    61,513 
Alcatel-Lucent    5,602 a    21,242 
Alstom    455    31,771 
Atos Origin    175 a    8,247 
AXA    3,568    89,574 
BioMerieux    15    1,674 
BNP Paribas    2,098    159,263 
Bouygues    500    23,718 
Bureau Veritas    111    6,142 
Cap Gemini    312    14,551 
Carrefour    1,442    62,275 
Casino Guichard Perrachon    120    9,593 
Christian Dior    151    15,145 
Cie de Saint-Gobain    835    41,032 
Cie Generale d’Optique Essilor International    490    27,581 
Cie Generale de Geophysique-Veritas    458 a    9,126 
CNP Assurances    100    9,704 
Compagnie Generale des Etablissements Michelin, Cl. B    357    26,626 
Credit Agricole    2,020    39,058 
Dassault Systemes    153    8,875 

12


Common Stocks (continued)    Shares    Value ($) 
  
 
France (continued)         
EDF    536    30,052 
Eiffage    95    5,206 
Eramet    10    3,142 
Eurazeo    68    4,303 
Eutelsat Communications    231 a    7,379 
France Telecom    4,169    103,708 
GDF Suez    2,749    115,617 
Gecina    42    4,496 
Groupe Danone    1,251    75,594 
Hermes International    129    18,042 
ICADE    48    5,076 
Iliad    42    4,567 
Imerys    92    5,077 
Ipsen    26    1,330 
JC Decaux    159 a    3,230 
Klepierre    207    8,620 
L’Oreal    544    55,920 
Lafarge    440    35,998 
Lagardere    273    12,408 
Legrand    238    6,496 
LVMH Moet Hennessy Louis Vuitton    557    58,062 
M6-Metropole Television    334    8,089 
Natixis    1,937 a    10,975 
Neopost    109    9,588 
PagesJaunes Groupe    318    3,915 
Pernod-Ricard    436    36,533 
Peugeot    316 a    10,376 
PPR    181    19,858 
Publicis Groupe    265    10,127 
Renault    442 a    19,956 
Safran    407    6,606 
Sanofi-Aventis    2,400    176,151 
Schneider Electric    530    55,529 
SCOR    394    10,071 
Societe BIC    95    6,629 
Societe Des Autoroutes Paris-Rhin-Rhone    58 a    4,377 

The Fund 13


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
France (continued)         
Societe Generale    1,043    69,835 
Societe Generale (Rights)    1,125 a    4,946 
Societe Television Francaise 1    424    6,697 
Sodexo    215    12,343 
Suez Environnement    614    13,711 
Technip    247    15,609 
Thales    233    11,352 
Total    4,871    292,040 
Unibail-Rodamco    184    40,980 
Vallourec    135    21,452 
Veolia Environnement    852    28,002 
Vinci    961    50,520 
Vivendi    2,664    74,347 
        2,290,009 
Germany—2.3%         
Adidas    445    20,682 
Allianz    1,037    119,404 
BASF    2,114    113,847 
Bayer    1,750    121,950 
Bayerische Motoren Werke    762    37,433 
Beiersdorf    210    12,982 
Celesio    112    2,791 
Commerzbank    1,701 a    17,819 
Daimler    2,065    100,788 
Deutsche Bank    1,356    99,145 
Deutsche Boerse    447    36,353 
Deutsche Lufthansa    309    4,787 
Deutsche Post    1,972    33,446 
Deutsche Telekom    6,496    89,040 
E.ON    4,349    167,412 
Fresenius Medical Care & Co.    441    21,440 
GEA Group    380    7,193 
Hannover Rueckversicherung    81 a    3,662 
HeidelbergCement    342    20,553 
Henkel & Co.    177    6,957 
Infineon Technologies    2,147 a    9,709 

14


Common Stocks (continued)    Shares    Value ($) 
  
 
Germany (continued)         
K+S    342    18,761 
Linde    346    36,445 
MAN    245    20,236 
Merck    171    16,125 
Metro    273    15,210 
Muenchener Rueckversicherungs    473    75,121 
RWE    959    84,473 
Salzgitter    53    4,789 
SAP    1,965    89,297 
Siemens    1,882    170,690 
Solarworld    192    4,170 
Suedzucker    90    1,867 
ThyssenKrupp    765    24,719 
Volkswagen    215    35,097 
        1,644,393 
Greece—.2%         
Alpha Bank    864 a    16,942 
Bank of Cyprus Public    1,364    10,968 
Coca-Cola Hellenic Bottling    449    11,858 
EFG Eurobank Ergasias    769 a    12,367 
Hellenic Petroleum    240    2,939 
Hellenic Telecommunications Organization    542    9,196 
Marfin Investment Group    1,947 a    7,871 
National Bank of Greece    1,379 a    51,456 
OPAP    554    14,223 
Piraeus Bank    700 a    12,239 
Public Power    384 a    7,904 
Titan Cement    222    7,760 
        165,723 
Hong Kong—.7%         
Bank of East Asia    3,540    12,363 
BOC Hong Kong Holdings    8,500    19,569 
Cheung Kong Holdings    3,000    38,008 
Cheung Kong Infrastructure Holdings    1,000    3,565 
CLP Holdings    4,500    30,142 
Esprit Holdings    2,500    16,366 

The Fund 15


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares     Value ($) 
  
 
Hong Kong (continued)         
Hang Lung Group    1,000    5,017 
Hang Lung Properties    5,000    18,845 
Hang Seng Bank    1,900    26,960 
Henderson Land Development    3,000    21,151 
Hong Kong & China Gas    9,000    21,457 
Hong Kong Exchanges & Clearing    2,500    43,949 
HongKong Electric Holdings    3,500    18,699 
Hopewell Holdings    1,000    3,156 
Hutchison Whampoa    5,000    35,004 
Kerry Properties    1,500    8,421 
Li & Fung    6,000    24,846 
Link REIT    5,500 c    12,461 
MTR    2,000    7,065 
New World Development    6,000    12,860 
Shangri-La Asia    2,000    3,838 
Sino Land    4,000    7,626 
Sun Hung Kai Properties    3,000    45,498 
Swire Pacific, Cl. A    2,000    24,417 
Wharf Holdings    3,000    16,129 
Wheelock & Co.    3,000    9,566 
        486,978 
Ireland—.1%         
Anglo Irish Bank    3,069 a,b    1,719 
CRH    1,563    38,395 
Elan    1,537 a    8,187 
Kerry Group, Cl. A    333    9,900 
        58,201 
Italy—1.1%         
A2A    1,653    3,066 
ACEA    123    1,446 
Assicurazioni Generali    2,741    69,393 
Atlantia    677    16,082 
Banca Carige    966    2,738 
Banca Monte dei Paschi di Siena    5,510    10,520 
Banca Popolare di Milano Scarl    1,286    9,620 
Banco Popolare    1,686 a    14,752 

16


Common Stocks (continued)    Shares    Value ($) 
  
 
Italy (continued)         
Enel    14,988    89,672 
ENI    5,936    148,102 
Fiat    1,721 a    25,799 
Finmeccanica    1,035    17,470 
Intesa Sanpaolo    17,529 a    74,357 
Intesa Sanpaolo-RSP    2,967    9,740 
Luxottica Group    184 a    4,488 
Mediaset    1,052    6,872 
Mediobanca    1,059    13,566 
Mediobanca (Warrants 3/18/11)    1,274 a    0 
Parmalat    4,031    11,223 
Saipem    594    17,651 
Snam Rete Gas    3,831    18,653 
Telecom Italia    22,753    36,357 
Telecom Italia-RSP    14,376    15,919 
Terna Rete Elettrica Nazionale    2,691    10,710 
UniCredit    32,457 a    109,665 
Unione di Banche Italiane    1,363    19,577 
        757,438 
Japan—6.5%         
77 Bank    1,000    5,762 
Acom    9    113 
Advantest    400    8,726 
Aeon    1,500    13,297 
Aioi Insurance    1,000    4,369 
Aisin Seiki    400    10,016 
Ajinomoto    2,000    18,630 
All Nippon Airways    2,000    5,511 
Amada    1,000    6,100 
Asahi Breweries    900    15,900 
Asahi Glass    2,000    16,566 
Ashai Kasei    3,000    14,714 
Astellas Pharma    1,000    36,407 
Bank of Kyoto    1,000    9,071 
Bank of Yokohama    3,000    14,479 
Benesse Holdings    200    8,820 

The Fund 17


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
Japan (continued)         
Bridgestone    1,400    22,821 
Brother Industries    800    8,992 
Canon    2,400    89,560 
Casio Computer    900    6,503 
Central Japan Railway    3    19,918 
Chiba Bank    2,000    12,167 
Chubu Electric Power    1,500    33,443 
Chugai Pharmaceutical    500    9,788 
Chugoku Electric Power    700    14,139 
Chuo Mitsui Trust Holdings    3,000    10,801 
Citizen Holdings    400    2,247 
Cosmo Oil    1,000    2,593 
Credit Saison    600    6,707 
Dai Nippon Printing    1,000    12,375 
Daicel Chemical Industries    1,000    6,000 
Daido Steel    1,000    3,388 
Daiichi Sankyo    1,500    29,518 
Daikin Industries    500    16,945 
Daito Trust Construction    200    8,315 
Daiwa House Industry    1,000    10,548 
Daiwa Securities Group    4,000    21,140 
Denki Kagaku Kogyo Kabushiki Kaisha    2,000    7,301 
Denso    1,100    29,880 
Dentsu    500    10,557 
DIC    3,000    4,898 
Dowa Holdings    1,000    5,710 
East Japan Railway    800    50,988 
Eisai    600    21,143 
Electric Power Development    300    9,309 
Elpida Memory     500 a    6,412 
FamilyMart    200    5,922 
Fanuc    400    33,411 
Fast Retailing    100    16,438 
Fuji Electric Holdings    2,000    3,671 
Fuji Heavy Industries    1,000    3,842 
FUJIFILM Holdings    1,100    31,435 

18


Common Stocks (continued)    Shares    Value ($) 
  
 
Japan (continued)         
Fujitsu    4,000    23,128 
Fukuoka Financial Group    2,000    7,215 
Furukawa Electric    2,000    7,503 
Gunma Bank    1,000    5,174 
Hachijuni Bank    1,000    5,827 
Hankyu Hashin Holdings    3,000    13,322 
Hirose Electric    100    10,305 
Hiroshima Bank    1,000    3,799 
Hisamitsu Pharmaceutical    100    3,407 
Hitachi    8,000    25,657 
Hitachi Construction Machinery    300    6,921 
Hokkaido Electric Power    400    7,681 
Hokuhoku Financial Group    3,000    6,401 
Hokuriku Electric Power    500    11,395 
Honda Motor    3,800    116,930 
HOYA    1,000    21,778 
Ibiden    300    10,604 
IHI    4,000 a    7,463 
INPEX    2    16,273 
Isetan Mitsukoshi Holdings    880    8,304 
Isuzu Motors    4,000    8,273 
ITOCHU    3,000    18,638 
J Front Retailing    1,200    5,633 
Jafco    100    2,659 
Japan Real Estate Investment    1    7,975 
Japan Retail Fund Investment    1    4,720 
Japan Steel Works    1,000    10,926 
Japan Tobacco    11    30,489 
JFE Holdings    1,100    35,225 
JGC    1,000    19,098 
Joyo Bank    2,000    8,703 
JS Group    600    9,757 
JSR    500    9,679 
JTEKT    500    5,257 
Jupiter Telecommunications    3    2,741 
Kajima    3,000    7,011 

The Fund 19


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
Japan (continued)         
Kaneka    1,000    6,481 
Kansai Electric Power    1,700    36,744 
Kao    1,000    22,336 
Kawasaki Heavy Industries    4,000    9,868 
Kawasaki Kisen Kaisha    2,000 a    7,252 
KDDI    7    36,988 
Keihin Electric Express Railway    1,000    7,928 
Keio    1,000    6,274 
Keyence    110    21,704 
Kintetsu    4,000    14,082 
Kirin Holdings    2,000    32,629 
Kobe Steel    6,000    10,785 
Komatsu    2,100    40,581 
Konami    400    7,179 
Konica Minolta Holdings    1,000    9,275 
Kubota    2,000    15,429 
Kuraray    1,000    10,266 
Kurita Water Industries    300    9,225 
Kyocera    400    33,289 
Kyowa Hakko Kirin    371    4,278 
Kyushu Electric Power    800    16,271 
Lawson    200    8,880 
Leopalace21    500    2,675 
Makita    300    9,974 
Marubeni    4,000    19,834 
Marui Group    900    5,101 
Mazda Motor    3,000    6,659 
Medipal Holdings    500    7,006 
MEIJI Holdings    117    4,744 
Minebea    1,000    4,156 
Mitsubishi    3,100    65,856 
Mitsubishi Chemical Holdings    3,000    11,097 
Mitsubishi Electric    4,000    30,000 
Mitsubishi Estate    3,000    45,297 
Mitsubishi Gas Chemical    1,000    4,538 
Mitsubishi Heavy Industries    7,000    24,479 

20


Common Stocks (continued)    Shares     Value ($) 
  
 
Japan (continued)         
Mitsubishi Materials    3,000    7,890 
Mitsubishi Motors     8,000 a    11,651 
Mitsubishi Rayon    2,000    6,920 
Mitsubishi Tanabe Pharma    1,000    12,780 
Mitsubishi UFJ Financial Group    21,260    112,858 
Mitsui & Co.    4,000    51,337 
Mitsui Chemicals    2,000    6,831 
Mitsui Engineering & Shipbuilding    3,000    7,672 
Mitsui Fudosan    2,000    31,931 
Mitsui Mining & Smelting     2,000 a    5,136 
Mitsui OSK Lines    3,000    17,299 
Mitsui Sumitomo Insurance Group Holdings    900    21,188 
Mizuho Financial Group    28,600    56,540 
Murata Manufacturing    500    24,505 
Namco Bandai Holdings    700    7,174 
NEC    5,000    13,969 
NGK Insulators    1,000    22,360 
NGK Spark Plug    1,000    11,252 
Nidec    200    16,964 
Nikon    1,000    18,562 
Nintendo    200    50,716 
Nippon Building Fund    1    8,210 
Nippon Electric Glass    1,000    10,839 
Nippon Express    2,000    8,059 
Nippon Meat Packers    1,000    11,677 
Nippon Mining Holdings    2,500    10,971 
Nippon Oil    3,000    14,570 
Nippon Paper Group    300    7,915 
Nippon Sheet Glass    1,000    2,919 
Nippon Steel    12,000    44,940 
Nippon Telegraph & Telephone    1,200    49,300 
Nippon Yusen    3,000    11,132 
Nipponkoa Insurance    2,000    10,807 
Nishi-Nippon City Bank    2,000    4,972 
Nissan Motor     5,600 a    39,599 
Nisshin Seifun Group    500    6,595 

The Fund 21


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
Japan (continued)         
Nisshin Steel    3,000    4,895 
Nissin Foods Holdings    200    7,032 
Nitori    50    4,054 
Nitto Denko    400    11,859 
Nomura Holdings    8,100    56,365 
Nomura Real Estate Office Fund    1    6,155 
Nomura Research Institute    300    6,472 
NSK    1,000    5,699 
NTN    2,000    7,424 
NTT Data    3    8,552 
NTT DoCoMo    35    50,701 
Obayashi    2,000    7,438 
Odakyu Electric Railway    2,000    16,247 
OJI Paper    2,000    8,691 
Olympus    1,000    30,959 
Omron    600    10,103 
Ono Pharmaceutical    200    9,532 
Oriental Land    100    6,748 
ORIX    270    17,502 
Osaka Gas    4,000    13,388 
Panasonic    4,000    55,144 
Panasonic Electric Works    1,000    12,423 
Promise    300    1,913 
Rakuten    18    12,259 
Resona Holdings    1,300    15,417 
Ricoh    2,000    27,445 
Rohm    200    13,098 
Sankyo    100    5,666 
Santen Pharmaceutical    100    3,434 
Sanyo Electric    5,000 a    12,041 
Sapporo Hokuyo Holdings    1,300    4,334 
SBI Holdings    44    7,917 
Secom    500    23,254 
Sega Sammy Holdings    600    8,473 
Seiko Epson    500    7,773 
Sekisui Chemical    1,000    5,918 

22


Common Stocks (continued)    Shares    Value ($) 
  
 
Japan (continued)         
Sekisui House    1,000    8,533 
Seven & I Holdings    1,700    37,062 
Seven Bank    1    2,429 
Sharp    2,000    21,067 
Shikoku Electric Power    500    14,039 
Shimamura    100    9,505 
Shimano    100    3,808 
Shimizu    2,000    7,570 
Shin-Etsu Chemical    900    47,148 
Shinsei Bank    4,000 a    5,130 
Shionogi & Co.    1,000    21,465 
Shiseido    1,000    18,217 
Shizuoka Bank    1,000    9,872 
Showa Denko    4,000    7,577 
Showa Shell Sekiyu    500    4,884 
SMC    100    11,427 
Softbank    1,700    39,681 
Sojitz    4,300    7,879 
Sompo Japan Insurance    2,000    11,867 
Sony    2,300    67,219 
Sony Financial Holdings    2    5,684 
Stanley Electric    300    5,808 
SUMCO    400    7,566 
Sumitomo    2,500    24,206 
Sumitomo Chemical    4,000    15,734 
Sumitomo Electric Industries    1,700    20,327 
Sumitomo Heavy Industries    1,000    4,478 
Sumitomo Metal Industries    8,000    20,185 
Sumitomo Metal Mining    1,000    15,559 
Sumitomo Mitsui Financial Group    2,100    71,731 
Sumitomo Realty & Development    1,000    18,686 
Sumitomo Rubber Industries    600    5,499 
Sumitomo Trust & Banking    3,000    15,397 
Suruga Bank    1,000    8,988 
Suzuken    200    7,116 
Suzuki Motor    900    21,804 

The Fund 23


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
Japan (continued)         
T & D Holdings    550    14,029 
Taiheiyo Cement    3,000    3,461 
Taisei    3,000    5,853 
Taiyo Nippon Sanso    1,000    11,119 
Takashimaya    1,000    6,643 
Takeda Pharmaceutical    1,700    67,982 
TDK    200    11,313 
Teijin    3,000    8,749 
Terumo    400    20,786 
THK    200    3,404 
Tobu Railway    2,000    10,881 
Toho    200    3,007 
Toho Gas    1,000    5,173 
Tohoku Electric Power    1,100    22,548 
Tokio Marine Holdings    1,600    40,939 
Tokuyama    1,000    6,174 
Tokyo Electric Power    2,800    68,724 
Tokyo Electron    400    22,112 
Tokyo Gas    5,000    19,683 
Tokyo Tatemono    1,000    4,691 
Tokyu    3,000    13,035 
Tokyu Land    2,000    8,076 
TonenGeneral Sekiyu    1,000    9,063 
Toppan Printing    1,000    8,842 
Toray Industries    3,000    16,912 
Toshiba    9,000    50,551 
Tosoh    2,000    5,342 
TOTO    1,000    5,839 
Toyo Seikan Kaisha    500    8,277 
Toyota Industries    400    10,679 
Toyota Motor    6,300    247,901 
Toyota Tsusho    600    8,548 
Trend Micro    500    17,361 
Tsumura & Co.    100    3,417 
Ube Industries    4,000    10,256 
UNICHARM    100    9,527 

24


Common Stocks (continued)    Shares         Value ($) 
  
 
Japan (continued)         
UNY    1,000    7,362 
Ushio    200    3,086 
West Japan Railway    4    14,139 
Yahoo! Japan    39    11,858 
Yakult Honsha    300    7,680 
Yamada Denki    220    13,332 
Yamaha    600    6,196 
Yamaha Motor    600    7,046 
Yamato Holdings    1,000    14,788 
Yokogawa Electric    400    3,205 
        4,661,438 
Luxembourg—.2%         
ArcelorMittal    1,953    66,218 
Millicom International Cellular, SDR    158 a    10,383 
SES    600    13,062 
Tenaris    1,063    18,962 
        108,625 
Netherlands—.8%         
Aegon    3,551 a    25,563 
Akzo Nobel    523    31,082 
ASML Holding    973    26,387 
Corio    58    3,956 
European Aeronautic Defence and Space    875    16,506 
Fugro    169    9,477 
Heineken    548    24,349 
Heineken Holding    149    5,827 
ING Groep    4,460 a    58,803 
Koninklijke Ahold    2,691    34,066 
Koninklijke DSM    328    14,441 
KONINKLIJKE KPN    3,899    71,047 
Koninklijke Philips Electronics    2,210    55,873 
QIAGEN    506 a    10,527 
Randstad Holding    243 a    9,286 
Reed Elsevier    1,649    19,318 
SBM Offshore    479    9,237 
STMicroelectronics    1,559    12,626 

The Fund 25


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
Netherlands (continued)         
TNT    845    22,541 
Unilever    3,711    115,011 
Wolters Kluwer    674    15,111 
        591,034 
New Zealand—.1%         
Auckland International Airport    3,880    5,610 
Contact Energy    1,211 a    5,463 
Fletcher Building    2,057    12,233 
Sky City Entertainment Group    1,940    4,804 
Telecom Corporation of New Zealand    4,764    8,691 
        36,801 
Norway—.2%         
DNB NOR    1,746 a    20,209 
Norsk Hydro    1,535 a    10,170 
Orkla    1,913    17,861 
Renewable Energy    600 a    3,620 
SeaDrill    686 a    14,399 
StatoilHydro    2,553    60,891 
Telenor    1,877 a    24,426 
Yara International    470    15,722 
        167,298 
Portugal—.1%         
Banco Comercial Portugues, Cl. R    5,445    7,793 
Banco Espirito Santo    1,244    9,212 
Brisa Auto-Estradas de Portugal    656    6,495 
Cimpor-Cimentos de Portugal    565    4,419 
Energias de Portugal    4,560    20,231 
Galp Energia, Cl. B    365    6,161 
Jeronimo Martins    521    4,651 
Portugal Telecom    1,448    16,632 
        75,594 
Singapore—.4%         
Ascendas Real Estate Investment Trust    6,400    8,340 
CapitaLand    6,500    18,820 
CapitaMall Trust    7,000    7,850 
City Developments    1,000    6,983 

26


Common Stocks (continued)    Shares    Value ($) 
  
 
Singapore (continued)         
ComfortDelgro    7,000    7,600 
Cosco Singapore    4,000    3,153 
DBS Group Holdings    3,500    32,007 
Flextronics International    1,658 a    10,744 
Fraser and Neave    3,000    8,161 
Genting Singapore    12,000 a    8,978 
Golden Agri-Resources    16,640 a    4,988 
Keppel    3,000    17,252 
Noble Group    3,000    5,485 
Oversea-Chinese Banking    6,000    32,292 
SembCorp Industries    3,000    7,025 
SembCorp Marine    3,000    7,314 
Singapore Airlines    866    8,316 
Singapore Exchange    2,000    11,369 
Singapore Press Holdings    4,000    10,909 
Singapore Technologies Engineering    3,000    6,066 
Singapore Telecommunications    18,000    37,372 
United Overseas Bank    3,000    35,930 
UOL Group    2,000    4,755 
Wilmar International    3,000    13,229 
        314,938 
Spain—1.4%         
Abertis Infraestructuras    744    15,906 
Acciona    39    4,782 
Acerinox    312    6,240 
ACS Actividades de Construccion y Servicios    361    17,428 
Banco Bilbao Vizcaya Argentaria    8,117    146,349 
Banco de Sabadell    1,905    12,915 
Banco de Valencia    276    2,350 
Banco Popular Espanol    2,056    18,447 
Banco Santander    18,612    301,934 
Banco Santander (Rights)    19,921 a    3,527 
Bankinter    353    3,740 
Criteria Caixacorp    1,132    5,545 
EDP Renovaveis    522 a    5,222 
Enagas    243    5,027 

The Fund 27


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares         Value ($) 
  
 
Spain (continued)         
Gamesa Tecnologica    464    8,544 
Gas Natural SDG    566    11,437 
Grifols    170    2,760 
Iberdrola    8,367    76,293 
Iberdrola Renovables    2,143    9,581 
Inditex    493    29,096 
Indra Sistemas    130    3,071 
Mapfre    1,575    6,786 
Red Electrica    276    14,338 
Repsol    1,662    44,544 
Telefonica    9,662    271,288 
Zardoya Otis    178    3,590 
        1,030,740 
Sweden—.8%         
Alfa Laval    818    10,258 
Assa Abloy, Cl. B    733    13,126 
Atlas Copco, Cl. A    1,623    22,436 
Atlas Copco, Cl. B    924    11,352 
Electrolux, Ser. B    586 a    14,399 
Getinge, Cl. B    518    9,827 
Hennes & Mauritz, Cl. B    1,163    67,277 
Holmen, Cl. B    205    5,653 
Husqvarna, Cl. B    1,032 a    6,643 
Investor, Cl. B    1,065    19,237 
Lundin Petroleum    806 a    7,017 
Nordea Bank    7,349    81,118 
Sandvik    2,451    27,871 
Scania, Cl. B    919    12,066 
Securitas, Cl. B    960    9,154 
Skandinaviska Enskilda Banken, Cl. A    3,571 a    22,480 
Skanska, Cl. B    979    14,714 
SKF, Cl. B    919    14,919 
SSAB, Cl. A    601    9,459 
SSAB, Cl. B    264    3,807 
Svenska Cellulosa, Cl. B    1,313    18,421 
Svenska Handelsbanken, Cl. A    1,191    31,612 

28


Common Stocks (continued)    Shares    Value ($) 
  
 
Sweden (continued)         
Swedbank, Cl. A    1,143    10,202 
Swedish Match    627    13,113 
Tele2, Cl. B    743    11,072 
Telefonaktiebolaget LM Ericsson, Cl. B    6,789    73,252 
TeliaSonera    5,083    34,240 
Volvo, Cl. A    1,066    10,127 
Volvo, Cl. B    2,632    25,619 
        610,471 
Switzerland—2.5%         
ABB    5,027 a    94,380 
Actelion    230 a    12,721 
Adecco    288    12,934 
Aryzta    289 a    11,399 
Baloise Holding    118    10,155 
BKW FMB Energie    35    2,887 
Compagnie Financiere Richemont, Cl. A    1,178    33,192 
Credit Suisse Group    2,566    138,916 
GAM Holding    528    6,480 
Geberit    98    16,285 
Givaudan    21    15,623 
Holcim    556 a    35,583 
Julius Baer Group    454    17,118 
Kuehne & Nagel International    133    12,102 
Lindt & Spruengli-PC    4    8,451 
Logitech International    573 a    9,852 
Lonza Group    112    8,742 
Nestle    8,304    387,696 
Nobel Biocare Holding    297    8,467 
Novartis    4,825    253,204 
Pargesa Holding    64    5,142 
Roche Holding    1,603    257,763 
Schindler Holding    161    11,050 
SGS    11    14,767 
Sonova Holding    113    11,672 
Straumann Holding    19    4,600 
Swatch Group    115    5,187 

The Fund 29


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
Switzerland (continued)         
Swatch Group-BR    76    17,845 
Swiss Life Holding    77 a    9,277 
Swiss Reinsurance    780    32,000 
Swisscom    60    21,748 
Syngenta    220    52,366 
Synthes    144    17,152 
UBS    8,112 a    137,015 
Zurich Financial Services    335    77,155 
        1,770,926 
United Kingdom—6.6%         
3i Group    2,323    10,097 
Admiral Group    435    7,364 
AMEC    800    10,635 
Anglo American    2,992 a    109,240 
Antofagasta    985    12,526 
Associated British Foods    767    10,462 
AstraZeneca    3,295    148,926 
Autonomy    488 a    10,803 
Aviva    6,153    38,906 
BAE Systems    7,928    41,099 
Balfour Beatty    1,187    5,199 
Barclays    25,117 a    133,313 
Berkeley Group Holdings    359 a    5,048 
BG Group    7,646    132,964 
BHP Billiton    5,023    136,076 
BP    42,745    403,233 
British Airways    2,242 a    6,719 
British American Tobacco    4,544    145,532 
British Land    2,011    15,653 
British Sky Broadcasting Group    2,775    24,380 
BT Group    17,393    37,643 
Bunzl    1,080    11,830 
Burberry Group    1,034    9,187 
Cable & Wireless    6,603    15,782 
Cadbury    3,070    38,990 
Cairn Energy    316 a    13,762 

30


Common Stocks (continued)    Shares     Value ($) 
  
 
United Kingdom (continued)         
Capita Group    1,402    17,633 
Carnival    369    11,538 
Carphone Warehouse Group    1,573    4,773 
Centrica    11,495    47,047 
Cobham    2,739    9,915 
Compass Group    4,467    28,569 
Diageo    5,676    93,186 
Drax Group    1,182    9,060 
Eurasian Natural Resources    551    7,570 
Experian    2,474    22,796 
Firstgroup    1,660    10,294 
Friends Provident Group    7,807    10,501 
G4S    3,474    14,488 
GlaxoSmithKline    11,826    243,666 
Hammerson    1,670    11,182 
Home Retail Group    2,492    11,966 
HSBC Holdings    39,505    438,698 
ICAP    1,300    8,717 
Imperial Tobacco Group    2,304    68,360 
Intercontinental Hotels Group    599    7,751 
International Power    3,620    15,156 
Invensys    1,914    8,928 
Investec    1,384    9,972 
J Sainsbury    2,973    16,167 
Johnson Matthey    600    13,965 
Kazakhmys    454 a    8,150 
Kingfisher    5,397    19,892 
Ladbrokes    2,194    4,401 
Land Securities Group    1,790    19,533 
Legal & General Group    13,542    17,523 
Liberty International    1,079    8,023 
Lloyds Banking Group    36,879 a    52,905 
London Stock Exchange Group    518    7,266 
Lonmin    314 a    7,572 
Man Group    3,889    19,872 
Marks & Spencer Group    3,827    21,606 

The Fund 31


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
United Kingdom (continued)         
National Grid    5,501    54,995 
Next    448    13,255 
Old Mutual    12,045    21,085 
Pearson    1,961    26,910 
Petrofac    403    6,254 
Prudential    5,713    52,406 
Randgold Resources    201    13,120 
Reckitt Benckiser Group    1,373    68,687 
Reed Elsevier    2,675    20,380 
Rexam    1,726    7,881 
Rio Tinto    3,120    138,496 
Rolls-Royce Group       4,168 a    31,040 
Royal Bank of Scotland Group    39,810 a    27,508 
Royal Dutch Shell, Cl. A    8,081    240,697 
Royal Dutch Shell, Cl. B    6,140    178,126 
RSA Insurance Group    7,521    15,025 
SABMiller    2,131    56,307 
Sage Group    3,713    13,067 
Schroders    426    7,724 
Scottish & Southern Energy    2,066    36,745 
Segro    1,674    9,740 
Serco Group    1,169    9,741 
Severn Trent    670    10,508 
Shire    1,354    23,925 
Smith & Nephew    1,999    17,810 
Smiths Group    929    13,675 
Standard Chartered    4,579    113,254 
Standard Life    4,919    17,676 
Tesco    17,960    120,593 
Thomas Cook Group    1,084    3,658 
Tomkins    3,173    8,792 
Tui Travel    1,371    5,268 
Tullow Oil    1,799    35,199 
Unilever    2,914    87,852 
United Utilities Group    1,526    11,080 
Vedanta Resources    317    10,936 
Vodafone Group    119,653    265,372 

32


Common Stocks (continued)    Shares         Value ($) 
  
 
United Kingdom (continued)         
Whitbread     532    11,163 
WM Morrison Supermarkets    5,031    23,220 
Wolseley     667 a    13,611 
WPP    2,801    25,324 
Xstrata    4,322 a    62,871 
        4,794,986 
United States—28.8%         
Abbott Laboratories    3,309    167,336 
Abercrombie & Fitch, Cl. A     160    5,251 
Accenture, Cl. A    1,311    48,612 
ACE     718 a    36,876 
Activision Blizzard    1,235 a    13,375 
Adobe Systems    1,120 a    36,893 
Advance Auto Parts     242    9,017 
Advanced Micro Devices    1,469 a    6,757 
AES    1,423 a    18,599 
Aetna     955    24,859 
Affiliated Computer         
Services, Cl. A     185 a    9,637 
Aflac     999    41,449 
AGCO     223 a    6,269 
Agilent Technologies     737 a    18,233 
Air Products & Chemicals     448    34,554 
Airgas     137    6,077 
Akamai Technologies     324 a    7,128 
Alcoa    2,082    25,858 
Allegheny Energy     325    7,417 
Allegheny Technologies     214    6,604 
Allergan     651    36,619 
Alliance Data Systems     107 a    5,883 
Alliant Energy     201    5,339 
Allstate    1,089    32,202 
Alpha Natural Resources     230 a    7,813 
Altera     603    11,933 
Altria Group    4,424    80,119 
Amazon.com     735 a    87,325 
AMB Property     339 c    7,451 

The Fund 33


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)     Shares    Value ($) 
  
 
United States (continued)         
Ameren         544    13,241 
American Eagle Outfitters         450    7,871 
American Electric Power     1,019    30,794 
American Express     2,277    79,331 
American International Group         244 a    8,203 
American Tower, Cl. A         850 a    31,297 
Ameriprise Financial         572    19,831 
AmerisourceBergen         643    14,242 
AMETEK         272    9,490 
Amgen     2,167 a    116,433 
Amphenol, Cl. A         365    14,644 
Anadarko Petroleum     1,072    65,317 
Analog Devices         622    15,942 
Annaly Capital Management     1,162 c    19,649 
AON         532    20,487 
Apache         720    67,766 
Apollo Group, Cl. A         291 a    16,616 
Apple     1,911 a    360,224 
Applied Materials     2,842    34,672 
Aqua America         230    3,554 
Arch Capital Group         103 a    6,939 
Arch Coal         388    8,404 
Archer-Daniels-Midland     1,236    37,228 
Arrow Electronics         221 a    5,600 
Assurant         287    8,590 
AT & T    12,635    324,340 
Autodesk         459 a    11,443 
Automatic Data Processing     1,072    42,666 
AutoNation         293 a    5,051 
AutoZone           70 a    9,472 
AvalonBay Communities         164 c    11,280 
Avery Dennison         191    6,809 
Avnet         372 a    9,218 
Avon Products         912    29,230 
Axis Capital Holdings         257    7,425 
Baker Hughes         662    27,850 

34


Common Stocks (continued)     Shares     Value ($) 
  
 
United States (continued)         
Ball         228    11,247 
Bank of America    18,570    270,751 
Baxter International     1,300    70,278 
BB & T     1,457    34,837 
Beckman Coulter         138    8,878 
Becton, Dickinson & Co.         512    35,000 
Bed Bath & Beyond         557 a    19,612 
Berkshire Hathaway, Cl. B           24 a    78,792 
Best Buy         756    28,864 
Biogen Idec         617 a    25,994 
BJ Services         600    11,520 
Black & Decker         109    5,147 
BlackRock    49    10,608 
BMC Software         394 a    14,641 
Boeing     1,482    70,840 
BorgWarner         295    8,944 
Boston Properties         291 c    17,684 
Boston Scientific     3,218 a    26,130 
Bristol-Myers Squibb     4,240    92,432 
Broadcom, Cl. A         919 a    24,455 
Brown-Forman, Cl. B         205    10,006 
Bunge         312    17,803 
Burlington Northern Santa Fe         726    54,682 
C.H. Robinson Worldwide         362    19,950 
C.R. Bard         212    15,915 
CA         886    18,535 
Cablevision Systems (NY Group), Cl. A         507    11,641 
Cabot Oil & Gas         255    9,810 
Calpine         686 a    7,711 
Cameron International         463 a    17,117 
Campbell Soup         452    14,351 
Capital One Financial         991    36,271 
Cardinal Health         769    21,793 
CareFusion         462 a    10,335 
Carmax         542 a    10,661 
Carnival         936    27,256 

The Fund 35


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
United States (continued)         
Caterpillar    1,293    71,193 
CBS, Cl. B    1,260    14,830 
Celanese, Ser. A    352    9,662 
Celgene    985 a    50,284 
CenterPoint Energy    843    10,622 
CenturyTel    633    20,547 
Cephalon    140 a    7,641 
Cerner    146 a    11,102 
CF Industries Holdings    113    9,407 
Charles River Laboratories International    116 a    4,236 
Charles Schwab    2,164    37,524 
Chesapeake Energy    1,272    31,164 
Chevron    4,293    328,586 
Chubb    753    36,536 
Church & Dwight    132    7,508 
CIGNA    582    16,203 
Cimarex Energy    155    6,070 
Cincinnati Financial    381    9,662 
Cintas    337    9,332 
Cisco Systems    12,351 a    282,220 
Citigroup    34,524    141,203 
Citrix Systems    386 a    14,189 
Cliffs Natural Resources    261    9,284 
Clorox    297    17,591 
CME Group    131    39,642 
Coach    678    22,354 
Coca-Cola    4,461    237,816 
Coca-Cola Enterprises    624    11,900 
Cognizant Technology Solutions, Cl. A    624 a    24,118 
Colgate-Palmolive    1,069    84,055 
Comcast, Cl. A    4,213    61,089 
Comcast, Cl. A (Special)    1,730    24,255 
Comerica    306    8,492 
Computer Sciences    323 a    16,379 
ConAgra Foods    955    20,055 
ConocoPhillips    3,014    151,243 

36


Common Stocks (continued)    Shares     Value ($) 
  
 
United States (continued)         
Consol Energy     386    16,525 
Consolidated Edison     586    23,838 
Constellation Brands, Cl. A     362 a    5,727 
Constellation Energy Group     459    14,192 
Cooper Industries, Cl. A     355    13,735 
Corning    3,324    48,564 
Costco Wholesale     929    52,814 
Covance     119 a    6,150 
Coventry Health Care     385 a    7,635 
Covidien    1,078    45,405 
Crown Castle International     621 a    18,767 
Crown Holdings     306 a    8,155 
CSX     836    35,262 
Cummins     410    17,655 
CVS Caremark    3,116    109,995 
D.R. Horton     694    7,606 
Danaher     579    39,505 
Darden Restaurants     332    10,063 
DaVita     211 a    11,189 
Dean Foods     332 a    6,052 
Deere & Co.     904    41,177 
Dell    3,757 a    54,439 
Delta Air Lines     279 a    1,992 
Denbury Resources     471 a    6,877 
Dentsply International     288    9,492 
Devon Energy     906    58,627 
DeVry     158    8,736 
Diamond Offshore Drilling     148    14,097 
DIRECTV Group    1,077 a    28,325 
Discover Financial Services    1,213    17,152 
Discovery Communications, Cl. A     326 a    8,965 
Discovery Communications, Cl. C     344 a    8,263 
DISH Network, Cl. A     512 a    8,909 
Dolby Laboratories, Cl. A     134 a    5,620 
Dollar Tree     172 a    7,762 
Dominion Resources    1,262    43,022 

The Fund 37


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares     Value ($) 
  
 
United States (continued)         
Dover    396    14,921 
Dow Chemical    2,301    54,027 
Dr. Pepper Snapple Group    542 a    14,775 
DST Systems    83 a    3,462 
DTE Energy    349    12,906 
Duke Energy    2,753    43,552 
Duke Realty    396 c    4,451 
Dun & Bradstreet    102    7,809 
E.I. du Pont de Nemours & Co.    1,933    61,508 
Eastman Chemical    177    9,294 
Eaton    336    20,311 
Eaton Vance    238    6,757 
eBay    2,339 a    52,090 
Ecolab    506    22,244 
Edison International    661    21,033 
Edwards Lifesciences    107 a    8,233 
El Paso    1,495    14,666 
Electronic Arts    665 a    12,130 
Eli Lilly & Co.    2,213    75,264 
EMC    4,324 a    71,216 
Emerson Electric    1,607    60,664 
Energen    165    7,240 
Energizer Holdings    160 a    9,739 
ENSCO International    303    13,874 
Entergy    419    32,146 
EOG Resources    535    43,688 
EQT    254    10,632 
Equifax    311    8,515 
Equity Residential    585 c    16,895 
Estee Lauder, Cl. A    228    9,690 
Everest Re Group    126    11,024 
Exelon    1,415    66,448 
Expedia    419 a    9,499 
Expeditors International Washington    453    14,596 
Express Scripts    551 a    44,036 
Exxon Mobil    10,450    748,952 

38


Common Stocks (continued)     Shares     Value ($) 
  
 
United States (continued)         
Family Dollar Stores         252    7,132 
Fastenal         272    9,384 
Federal Realty Investment Trust         145 c    8,559 
FedEx         633    46,013 
Fidelity National Financial, Cl. A         408    5,537 
Fidelity National Information Services         672    14,623 
Fifth Third Bancorp     1,611    14,402 
First American         139    4,224 
First Solar         115 a    14,022 
FirstEnergy         652    28,219 
Fiserv         332 a    15,229 
FLIR Systems         304 a    8,454 
Flowserve         115    11,294 
Fluor         384    17,057 
FMC         130    6,643 
FMC Technologies         264 a    13,886 
Ford Motor     5,971 a    41,797 
Forest Laboratories         644 a    17,819 
Fortune Brands         309    12,036 
Foster Wheeler         307 a    8,593 
FPL Group         835    40,999 
Franklin Resources         356    37,248 
Freeport-McMoRan Copper & Gold         885 a    64,924 
FTI Consulting         124 a    5,060 
GameStop, Cl. A         383 a    9,303 
Gap     1,040    22,194 
Garmin         255    7,716 
General Dynamics         700    43,890 
General Electric    22,677    323,374 
General Mills         704    46,408 
Genuine Parts         327    11,442 
Genzyme         577 a    29,196 
Gilead Sciences     1,940 a    82,547 
Goldman Sachs Group     1,029    175,105 
Goodrich         264    14,348 
Goodyear Tire & Rubber         559 a    7,200 

The Fund 39


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)     Shares    Value ($) 
  
 
United States (continued)         
Google, Cl. A         516 a    276,638 
H & R Block         724    13,278 
H.J. Heinz         672    27,041 
Halliburton     1,919    56,054 
Hansen Natural         190 a    6,869 
Harley-Davidson         500    12,460 
Harris         272    11,348 
Harsco         144    4,535 
Hartford Financial Services Group         694    17,017 
Hasbro         307    8,372 
HCP         697    20,624 
Health Care REIT         277 c    12,290 
Helmerich & Payne         259    9,847 
Henry Schein         229 a    12,098 
Hershey         336    12,697 
Hess         629    34,431 
Hewlett-Packard     5,121    243,043 
Hologic         632 a    9,341 
Home Depot     3,631    91,102 
Honeywell International     1,512    54,266 
Hormel Foods         188    6,854 
Hospira         343 a    15,312 
Host Hotels & Resorts     1,263 c    12,769 
Hudson City Bancorp     1,000    13,140 
Humana         361 a    13,566 
IHS, Cl. A           90 a    4,658 
Illinois Tool Works         908    41,695 
Illumina         309 a    9,919 
IMS Health         332    5,441 
Ingersoll-Rand         681    21,513 
Integrys Energy         184    6,366 
Intel    11,959    228,536 
IntercontinentalExchange         142 a    14,227 
International Business Machines     2,829    341,206 
International Flavors & Fragrances         179    6,818 
International Game Technology         608    10,847 

40


Common Stocks (continued)    Shares     Value ($) 
  
 
United States (continued)         
International Paper     876    19,544 
Interpublic Group of Cos.    1,154 a    6,947 
Intuit     652 a    18,954 
Intuitive Surgical         81 a    19,954 
Invesco     925    19,564 
Iron Mountain     370 a    9,039 
ITT     369    18,708 
ITT Educational Services         96 a    8,674 
J.C. Penney     451    14,942 
J.M. Smucker     253    13,341 
Jacobs Engineering Group     253 a    10,699 
JB Hunt Transport Services     158    4,749 
Jefferies Group     299 a    7,804 
Johnson & Johnson    5,901    348,454 
Johnson Controls    1,524    36,454 
Joy Global     209    10,536 
JPMorgan Chase & Co.    8,072    337,167 
Juniper Networks    1,119 a    28,546 
KBR     301    6,161 
Kellogg     573    29,532 
KeyCorp    1,737    9,362 
Kimberly-Clark     886    54,188 
Kimco Realty     726 c    9,177 
Kinder Morgan Management     142 a    6,648 
KLA-Tencor     349    11,346 
Kohl’s     619 a    35,419 
Kraft Foods, Cl. A    3,152    86,743 
Kroger    1,324    30,624 
L-3 Communications Holdings     249    18,000 
Laboratory Corp. of America Holdings     231 a    15,914 
Lam Research     310 a    10,453 
Las Vegas Sands     702 a    10,593 
Legg Mason     319    9,286 
Leggett & Platt     272    5,258 
Lender Processing Services     182    7,244 
Leucadia National     430 a    9,662 

The Fund 41


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares     Value ($) 
  
 
United States (continued)         
Level 3 Communications    2,769 a    3,267 
Liberty Global, Cl. A     247 a    5,071 
Liberty Global, Ser. C     300 a    6,174 
Liberty Media-Entertainment, Ser. A    1,057 a    32,577 
Liberty Media-Interactive, Cl. A    1,387 a    15,729 
Liberty Property Trust     187 c    5,492 
Life Technologies     373 a    17,594 
Limited Brands     555    9,768 
Lincoln National     631    15,037 
Linear Technology     457    11,827 
Lockheed Martin     717    49,322 
Loews     744    24,626 
Lorillard     359    27,901 
Lowe’s Cos.    3,154    61,724 
LSI    1,584 a    8,110 
Lubrizol     156    10,383 
M & T Bank     162    10,182 
Macy’s     898    15,778 
Manpower     192    9,103 
Marathon Oil    1,514    48,403 
Marriott International, Cl. A     644    16,139 
Marsh & McLennan Cos.    1,116    26,181 
Marshall & Ilsley     712    3,788 
Martin Marietta Materials     101    8,415 
Marvell Technology Group    1,122 a    15,394 
Masco     885    10,399 
MasterCard, Cl. A     190    41,614 
Mattel     765    14,481 
Maxim Integrated Products     624    10,402 
McAfee     332 a    13,904 
McCormick & Co.     225    7,877 
McDermott International     468 a    10,404 
McDonald’s    2,362    138,437 
McGraw-Hill     672    19,340 
McKesson     580    34,063 
MDU Resources Group     429    8,902 

42


Common Stocks (continued)     Shares     Value ($) 
  
 
United States (continued)         
MeadWestvaco         418    9,543 
Medco Health Solutions     1,032 a    57,916 
Medtronic     2,395    85,502 
MEMC Electronic Materials         574 a    7,129 
Merck & Co.     4,514    139,618 
MetLife     1,751    59,587 
Metropcs Communications         645 a    4,018 
Microchip Technology         466    11,165 
Micron Technology     1,721 a    11,686 
Microsoft    17,153    475,653 
Millipore         105 a    7,036 
Mirant         379 a    5,298 
Mohawk Industries         104 a    4,454 
Molson Coors Brewing, Cl. B         323    15,817 
Monsanto     1,168    78,466 
Moody’s         448    10,609 
Morgan Stanley     2,548    81,842 
Mosaic         332    15,514 
Motorola     4,902    42,010 
Murphy Oil         387    23,661 
Mylan         621 a    10,085 
Myriad Genetics         266 a    6,458 
Nabors Industries         603 a    12,560 
Nasdaq OMX Group         423 a    7,639 
National Oilwell Varco         895 a    36,686 
National Semiconductor         419    5,422 
NetApp         711 a    19,233 
New York Community Bancorp         837    9,031 
Newell Rubbermaid         529    7,676 
Newfield Exploration         273 a    11,198 
Newmont Mining     1,025    44,547 
News, Cl. A     3,883    44,732 
News, Cl. B         936    12,730 
NII Holdings         337 a    9,075 
NIKE, Cl. B         790    49,122 
NiSource         516    6,667 

The Fund 43


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
  
 
United States (continued)         
Noble     559    22,774 
Noble Energy     370    24,283 
Nordstrom     412    13,093 
Norfolk Southern     785    36,597 
Northeast Utilities     332    7,653 
Northern Trust     478    24,020 
Northrop Grumman     657    32,935 
NRG Energy     566 a    13,012 
NSTAR     263    8,140 
Nuance Communications     530 a    6,948 
Nucor     671    26,739 
NVIDIA    1,165 a    13,933 
NYSE Euronext     591    15,277 
O’Reilly Automotive     346 a    12,899 
Occidental Petroleum    1,735    131,652 
Old Republic International     426    4,550 
Omnicare     291    6,306 
Omnicom Group     664    22,762 
ONEOK     245    8,871 
Oracle    8,536    180,110 
Owens-Illinois     345 a    10,999 
Paccar     737    27,571 
Pactiv     242 a    5,588 
Pall     290    9,205 
Parker Hannifin     343    18,165 
PartnerRe     144    11,013 
Patterson Cos.     217 a    5,540 
Patterson-UTI Energy     366    5,702 
Paychex     694    19,717 
Peabody Energy     571    22,606 
Pentair     248    7,217 
People’s United Financial     715    11,461 
Pepco Holdings     529    7,898 
Pepsi Bottling Group     379    14,190 
PepsiAmericas     158    4,620 
PepsiCo    3,333    201,813 

44


Common Stocks (continued)     Shares    Value ($) 
  
 
United States (continued)         
Perrigo         188    6,992 
PetroHawk Energy         702 a    16,511 
PetSmart         229    5,388 
Pfizer    17,269    294,086 
PG & E         787    32,180 
Pharmaceutical Product Development         185    3,987 
Philip Morris International     4,200    198,912 
Pinnacle West Capital         248    7,767 
Pioneer Natural Resources         282    11,593 
Pitney Bowes         421    10,315 
Plains Exploration & Production         294 a    7,791 
Plum Creek Timber         333 c    10,420 
PNC Financial Services Group         952    46,591 
Polo Ralph Lauren         107    7,963 
PPG Industries         351    19,807 
PPL         803    23,640 
Praxair         658    52,272 
Precision Castparts         299    28,563 
Priceline.com           85 a    13,412 
Pride International         356 a    10,523 
Principal Financial Group         663    16,602 
Procter & Gamble     6,242    362,036 
Progress Energy         596    22,368 
Progressive     1,382 a    22,112 
ProLogis         906 c    10,265 
Prudential Financial         976    44,144 
Public Service Enterprise Group     1,082    32,244 
Public Storage         269 c    19,798 
Pulte Homes         844    7,604 
QUALCOMM     3,543    146,716 
Quanta Services         378 a    8,014 
Quest Diagnostics         336    18,792 
Questar         371    14,781 
Qwest Communications International     3,167    11,370 
R.R. Donnelley & Sons         415    8,333 
Ralcorp Holdings         139 a    7,464 

The Fund 45


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares     Value ($) 
  
 
United States (continued)         
Range Resources     334    16,717 
Rayonier     146 c    5,633 
Raytheon     843    38,171 
Red Hat     386 a    9,963 
Regency Centers     206 c    6,911 
Regions Financial    2,243    10,856 
RenaissanceRe Holdings     159    8,348 
Republic Services     809    20,961 
Reynolds American     373    18,083 
Robert Half International     354    8,213 
Rockwell Automation     292    11,957 
Rockwell Collins     338    17,028 
Roper Industries     230    11,627 
Ross Stores     260    11,443 
Rowan     271    6,301 
Royal Caribbean Cruises     330 a    6,676 
Safeway     909    20,298 
SAIC     500 a    8,855 
Salesforce.com     237 a    13,450 
SanDisk     558 a    11,428 
Sara Lee    1,409    15,908 
SBA Communications, Cl. A     191 a    5,388 
SCANA     286    9,678 
Schering-Plough    3,481    98,164 
Schlumberger    2,561    159,294 
Scripps Networks Interactive, Cl. A     179    6,759 
Seagate Technology    1,049    14,634 
Sealed Air     291    5,596 
Sears Holdings     118 a    8,007 
SEI Investments     337    5,887 
Sempra Energy     496    25,519 
Sherwin-Williams     255    14,545 
Sigma-Aldrich     260    13,502 
Simon Property Group     605 c    41,073 
SLM    1,047 a    10,156 
Smith International     468    12,978 

46


Common Stocks (continued)    Shares    Value ($) 
  
 
United States (continued)         
Southern    1,674    52,212 
Southwest Airlines    599    5,032 
Southwestern Energy    735 a    32,031 
Spectra Energy    1,378    26,347 
Sprint Nextel    5,969 a    17,668 
SPX    89    4,697 
St. Jude Medical    740 a    25,219 
Stanley Works    131    5,925 
Staples    1,529    33,179 
Starbucks    1,573 a    29,856 
Starwood Hotels & Resorts Worldwide    383 c    11,130 
State Street    1,063    44,625 
Stericycle    207 a    10,841 
Stryker    637    29,302 
Sun Microsystems    1,594 a    13,039 
Sunoco    284    8,747 
SunPower, Cl. A    123 a    3,052 
SunPower, Cl. B    153 a    3,314 
SunTrust Banks    993    18,976 
SUPERVALU    516    8,189 
Symantec    1,754 a    30,835 
Synopsys    266 a    5,852 
SYSCO    1,261    33,353 
T. Rowe Price Group    565    27,532 
Target    1,534    74,292 
TD Ameritrade Holding    691 a    13,336 
Telephone & Data Systems    80    2,370 
Teradata    352 a    9,814 
Texas Instruments    2,736    64,159 
Textron    542    9,637 
TFS Financial    198    2,309 
Thermo Fisher Scientific    895 a    40,275 
Tiffany & Co.    303    11,905 
Time Warner    2,570    77,408 
Time Warner Cable    753    29,698 
TJX Cos.    883    32,980 

The Fund 47


STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares     Value ($) 
  
 
United States (continued)         
Toll Brothers     239 a    4,139 
Torchmark     209    8,485 
Total System Services     300    4,791 
Transocean     686 a    57,562 
Travelers Cos.    1,253    62,387 
Tyco Electronics     978    20,782 
Tyco International    1,012    33,953 
Tyson Foods, Cl. A     547    6,848 
U.S. Bancorp    4,061    94,296 
Ultra Petroleum     323 a    15,682 
Union Pacific    1,079    59,496 
United Parcel Service, Cl. B    1,497    80,359 
United States Steel     357    12,313 
United Technologies    1,916    117,738 
UnitedHealth Group    2,556    66,328 
Unum Group     707    14,105 
Urban Outfitters     254 a    7,971 
URS     153 a    5,946 
Valero Energy    1,189    21,521 
Validus Holdings     240    6,072 
Varian Medical Systems     256 a    10,491 
Ventas     333 c    13,363 
VeriSign     489 a    11,154 
Verizon Communications    6,082    179,966 
Vertex Pharmaceuticals     412 a    13,827 
VF     189    13,427 
Viacom, Cl. B    1,174 a    32,391 
Virgin Media     681    9,514 
Visa, Cl. A     965    73,108 
VMware, Cl. A     115 a    4,419 
Vornado Realty Trust     339 c    20,191 
Vulcan Materials     250    11,508 
W.R. Berkley     357    8,825 
W.W. Grainger     132    12,372 

48


Common Stocks (continued)    Shares    Value ($) 
  
 
United States (continued)         
Wal-Mart Stores    5,027    249,741 
Walgreen    2,122    80,275 
Walt Disney    3,776    103,349 
Warner Chilcott, Cl. A    230 a    5,095 
Washington Post, Cl. B    16    6,912 
Waste Management    999    29,850 
Waters    197 a    11,314 
Watson Pharmaceuticals    186 a    6,402 
Weatherford International    1,492 a    26,155 
WellPoint    1,037 a    48,490 
Wells Fargo & Co.    9,368    257,807 
Western Digital    475 a    15,998 
Western Union    1,499    27,237 
Weyerhaeuser    451    16,389 
Whirlpool    182    13,029 
White Mountains         
Insurance Group    14    4,332 
Whole Foods Market    343 a    10,997 
Williams Cos.    1,239    23,355 
Willis Group Holdings    426    11,502 
Windstream    1,088    10,488 
Wisconsin Energy    238    10,393 
Wynn Resorts    157 a    8,513 
Xcel Energy    973    18,351 
Xerox    1,844    13,867 
Xilinx    584    12,702 
XL Capital, Cl. A    791    12,980 
XTO Energy    1,179    48,999 
Yahoo!    2,836 a    45,092 
Yum! Brands    987    32,522 
Zimmer Holdings    460 a    24,182 
        20,736,409 
Total Common Stocks         
(cost $52,076,068)        42,875,603 

The Fund 49


STATEMENT OF INVESTMENTS (continued)

Preferred Stocks—.1%    Shares    Value ($) 
  
 
Germany         
Fresenius    208    12,125 
Henkel & Co.    396    18,089 
Porsche Automobil Holding    194    14,902 
RWE    126    9,927 
Volkswagen    242    24,162 
Total Preferred Stocks         
   (cost $56,925)        79,205 
    Principal     
Short-Term Investments—23.7%    Amount ($)    Value ($) 
  
 
U.S. Government Agencies—14.3%         
Federal Home Loan Mortgage Corp.         
   0.06%, 12/28/09    500,000 d    499,989 
Federal Home Loan Mortgage Corp.         
   0.08%, 12/22/09    2,000,000 d    1,999,773 
Federal Home Loan Mortgage Corp.         
   0.13%, 12/14/09    2,000,000 d    1,999,689 
Federal Home Loan Mortgage Corp.         
   0.16%, 11/16/09    1,000,000 d    999,998 
Federal Home Loan Mortgage Corp.         
   0.17%, 11/2/09    500,000 d    499,998 
Federal National Mortgage Association         
   0.10%, 12/24/09    500,000 d    499,926 
Federal National Mortgage Association         
   0.11%, 1/13/10    500,000 d    499,888 
Federal National Mortgage Association         
   0.16%, 11/18/09    1,000,000 d    999,922 
Federal National Mortgage Association         
   0.17%, 11/12/09    2,240,000 d    2,239,885 
        10,239,068 
U.S. Treasury Bills—9.4%         
   0.06%, 1/28/10    1,500,000    1,499,855 
   0.14%, 12/17/09    3,005,000 e    3,004,886 
   0.17%, 11/19/09    2,260,000    2,259,998 
        6,764,739 
Total Short-Term Investments         
   (cost $17,003,003)        17,003,807 

50


    Face Amount     
    Covered by     
Options—1.5%    Contracts ($)    Value ($) 
  
 
Call Options         
Euro Bond,         
   November 2009 @ 113         
   (cost $992,684)           80,000 a    1,050,520 
 
Other Investment—11.5%    Shares    Value ($) 
  
 
Registered Investment Company;         
Dreyfus Institutional Preferred Plus Money Market Fund         
   (cost $8,258,000)    8,258,000 f    8,258,000 
 
Total Investments (cost $78,386,680)    96.4%    69,267,135 
Cash and Receivables (Net)    3.6%    2,603,792 
Net Assets    100.0%    71,870,927 

BR—Bearer Certificate 
PC—Participation Certificate 
PPS—Price Protected Shares 
REIT—Real Estate Investment Trust 
RSP—Risparmio (Savings) Shares 
SDR—Swedish Depository Receipts 
STRIP—Separate Trading of Registered Interest and Principal of Securities 
a Non-income producing security. 
b The value of this security has been determined in good faith under the direction of the Board of Directors. 
c Investment in Real Estate Investment Trust. 
d On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Federal National Mortgage 
   Association and Federal Home Loan Mortgage Corporation into conservatorship with FHFA as the conservator.As 
   such, the FHFA will oversee the continuing affairs of these companies. 
e Held by a broker as collateral for open financial futures positions. 
f Investment in affiliated money market mutual fund. 

Portfolio Summary (Unaudited)†         
 
    Value (%)        Value (%) 
  
 
 
Short-Term/        Consumer Discretionary    6.0 
   Money Market Investments    35.2    Energy    5.1 
Financial    12.2    Utilities    4.4 
Information Technology    6.9    Materials    3.8 
Consumer Staples    6.3    Telecommunication Services    2.7 
Industrial    6.2    Options    1.5 
Health Care    6.1        96.4 

† Based on net assets. 
See notes to financial statements. 

The Fund 51


STATEMENT OF FINANCIAL FUTURES 
October 31, 2009 

                Unrealized 
        Market Value        Appreciation 
        Covered by        (Depreciation) 
Contracts    Contracts ($)    Expiration    at 10/31/2009 ($) 
  
 
 
Financial Futures Long                 
10 Year Long Gilt    13    2,540,129    December 2009    29,883 
Amsterdam Exchanges Index    2    177,939    November 2009    (10,426) 
Australian 10 Year Bond    105    9,790,101    December 2009    (81,504) 
CAC 40 10 Euro Index    95    5,031,316    November 2009    (299,381) 
Canadian 10 Year Bond    39    4,364,510    December 2009    22,632 
Dax Index    3    597,944    December 2009    (37,285) 
Euro-Bond 10 Year    30    5,395,715    December 2009    46,223 
FTSE 100 Index    18    1,483,805    December 2009    (5,255) 
FTSE/MIB Index    4    649,345    December 2009    (35,491) 
IBEX 35 Index    12    2,008,233    November 2009    (69,686) 
Japanese 10 Year Mini Bond    5    761,821    December 2009    (2,574) 
S & P/Toronto Stock                 
Exchange 60 Index    20    2,397,698    December 2009    (95,169) 
U.S. Treasury 10 Year Notes    122    14,470,343    December 2009    92,691 
Financial Futures Short                 
Hang Seng Index    7    (976,807)    November 2009    15,485 
Japanese 10 Year Bond    18    (27,439,461)    December 2009    112,693 
S & P 500 Emini    31    (1,601,150)    December 2009    34,799 
SPI 200 Index    15    (1,566,849)    December 2009    27,063 
Topix Index    77    (7,604,728)    December 2009    378,602 
Gross Unrealized Appreciation                760,071 
Gross Unrealized Depreciation                (636,771) 
 
See notes to financial statements.                 

52


STATEMENT OF ASSETS AND LIABILITIES 
October 31, 2009 

        Cost    Value 
  
 
 
Assets ($):             
Investments in securities—See Statement of Investments:         
   Unaffiliated issuers        70,128,680    61,009,135 
   Affiliated issuers        8,258,000    8,258,000 
Cash denominated in foreign currencies    232,457    233,194 
Receivable for investment securities sold        4,297,714 
Unrealized appreciation on forward foreign         
   currency exchange contracts—Note 4        899,933 
Dividends and interest receivable            107,213 
Receivable for shares of Common Stock subscribed        5,875 
Prepaid expenses            21,437 
            74,832,501 
Liabilities ($):             
Due to The Dreyfus Corporation and affiliates—Note 3(c)        162,385 
Cash overdraft due to Custodian            84,271 
Payable for investment securities purchased        1,485,023 
Unrealized depreciation on forward foreign         
   currency exchange contracts—Note 4        699,476 
Payable for futures variation margin—Note 4        268,545 
Payable for shares of Common Stock redeemed        203,006 
Accrued expenses            58,868 
            2,961,574 
Net Assets ($)            71,870,927 
Composition of Net Assets ($):             
Paid-in capital            167,299,895 
Accumulated distributions in excess of Investment income—net    (40,589) 
Accumulated net realized gain (loss) on investments        (86,595,984) 
Accumulated net unrealized appreciation (depreciation) on         
   investments and foreign currency transactions (including         
   $123,300 net unrealized appreciation on financial futures)        (8,792,395) 
Net Assets ($)            71,870,927 
  
 
 
 
 
Net Asset Value Per Share             
    Class A    Class C    Class I 
  
 
 
Net Assets ($)    36,669,884    17,510,087    17,690,956 
Shares Outstanding    3,674,439    1,767,131    1,771,381 
Net Asset Value Per Share ($)    9.98    9.91    9.99 
 
See notes to financial statements.             

The Fund 53


STATEMENT OF OPERATIONS     
Year Ended October 31, 2009     
  
 
 
 
 
Investment Income ($):     
Income:     
Cash dividends (net of $86,722 foreign taxes withheld at source):     
   Unaffiliated issuers    1,458,217 
   Affiliated issuers    29,940 
Interest    51,606 
Total Income    1,539,763 
Expenses:     
Management fee—Note 3(a)    927,273 
Shareholder servicing costs—Note 3(c)    299,631 
Custodian fees—Note 3(c)    174,727 
Distribution fees—Note 3(b)    148,730 
Professional fees    53,857 
Registration fees    43,912 
Prospectus and shareholders’ reports    16,352 
Directors’ fees and expenses—Note 3(d)    5,783 
Loan commitment fees—Note 2    2,458 
Interest expense—Note 2    878 
Miscellaneous    76,818 
Total Expenses    1,750,419 
Less—reduction in fees due to earnings credits—Note 1(c)    (4,827) 
Net Expenses    1,745,592 
Investment (Loss)—Net    (205,829) 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):     
Net realized gain (loss) on investments and foreign currency transactions    (28,004,254) 
Net realized gain (loss) on options transactions    (134,012) 
Net realized gain (loss) on financial futures    11,148,659 
Net realized gain (loss) on forward foreign currency exchange contracts    (1,289,219) 
Net Realized Gain (Loss)    (18,278,826) 
Net unrealized appreciation (depreciation) on investments, options     
   transactions, financial futures and foreign currency transactions     
   [including ($2,029,132) net unrealized (depreciation) on     
   financial futures, $57,836 net unrealized appreciation on options     
   transactions and $1,958,695 net unrealized appreciation on forward     
   foreign currency exchange contracts]    32,102,839 
Net Realized and Unrealized Gain (Loss) on Investments    13,824,013 
Net Increase in Net Assets Resulting from Operations    13,618,184 
 
See notes to financial statements.     

54


STATEMENT OF CHANGES IN NET ASSETS

    Year Ended October 31, 
   
    2009a    2008 
  
 
Operations ($):         
Investment income (loss)—net    (205,829)    2,869,862 
Net realized gain (loss) on investments    (18,278,826)    (67,653,001) 
Net unrealized appreciation         
   (depreciation) on investments    32,102,839    (50,198,987) 
Net Increase (Decrease) in Net Assets         
   Resulting from Operations    13,618,184    (114,982,126) 
Dividends to Shareholders from ($):         
Investment income—net:         
Class A Shares    (2,642,752)    (4,956,583) 
Class C Shares    (673,036)    (1,154,809) 
Class I Shares    (827,785)    (1,322,029) 
Class T Shares    —    (61,142) 
Net realized gain on investments:         
Class A Shares    —    (3,164,732) 
Class C Shares    —    (996,907) 
Class I Shares    —    (743,147) 
Class T Shares    —    (43,650) 
Total Dividends    (4,143,573)    (12,442,999) 
Capital Stock Transactions ($):         
Net proceeds from shares sold:         
Class A Shares    3,279,282    42,670,237 
Class C Shares    622,890    9,555,407 
Class I Shares    2,740,880    7,557,864 
Class T Shares    —    358,239 
Dividends reinvested:         
Class A Shares    2,345,416    7,059,564 
Class C Shares    391,057    1,084,715 
Class I Shares    454,669    1,295,526 
Class T Shares    —    104,679 
Cost of shares redeemed:         
Class A Shares    (47,500,085)    (194,329,875) 
Class C Shares    (12,833,466)    (42,873,923) 
Class I Shares    (9,021,965)    (28,968,411) 
Class T Shares    (122,959)    (3,225,890) 
Increase (Decrease) in Net Assets         
   from Capital Stock Transactions    (59,644,281)    (199,711,868) 
Total Increase (Decrease) in Net Assets    (50,169,670)    (327,136,993) 
Net Assets ($):         
Beginning of Period    122,040,597    449,177,590 
End of Period    71,870,927    122,040,597 
Undistributed (distributions in excess of)         
   investment income—net    (40,589)    4,142,140 

The Fund 55


STATEMENT OF CHANGES IN NET ASSETS (continued)

    Year Ended October 31, 
   
    2009a    2008 
  
 
Capital Share Transactions:         
Class Ab         
Shares sold    398,236    3,345,543 
Shares issued for dividends reinvested    284,638    538,898 
Shares redeemed    (5,741,131)    (16,084,298) 
Net Increase (Decrease) in Shares Outstanding    (5,058,257)    (12,199,857) 
Class C         
Shares sold    73,472    745,966 
Shares issued for dividends reinvested    47,549    83,314 
Shares redeemed    (1,543,686)    (3,643,679) 
Net Increase (Decrease) in Shares Outstanding    (1,422,665)    (2,814,399) 
Class I         
Shares sold    334,439    601,651 
Shares issued for dividends reinvested    55,313    98,744 
Shares redeemed    (1,097,706)    (2,607,302) 
Net Increase (Decrease) in Shares Outstanding    (707,954)    (1,906,907) 
Class Tb         
Shares sold    —    26,835 
Shares issued for dividends reinvested    —    7,997 
Shares redeemed    (15,094)    (267,559) 
Net Increase (Decrease) in Shares Outstanding    (15,094)    (232,727) 

a    Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares. 
b    On the close of business on February 4, 2009, 13,233 Class T shares representing $107,984 were converted to 
    13,738 Class A shares. 
See notes to financial statements. 

56


FINANCIAL HIGHLIGHTS

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

        Year Ended October 31,     
   
 
 
Class A Shares    2009    2008    2007    2006a 
  
 
 
 
Per Share Data ($):                 
Net asset value, beginning of period    8.48    14.25    13.23    12.50 
Investment Operations:                 
Investment income (loss)—netb    (.01)    .13    .32    .12 
Net realized and unrealized                 
   gain (loss) on investments    1.87    (5.47)    .93    .61 
Total from Investment Operations    1.86    (5.34)    1.25    .73 
Distributions:                 
Dividends from investment income—net    (.36)    (.26)    (.07)    — 
Dividends from net realized                 
   gain on investments    —    (.17)    (.16)    — 
Total Distributions    (.36)    (.43)    (.23)    — 
Net asset value, end of period    9.98    8.48    14.25    13.23 
Total Return (%)c    22.83    (38.52)    9.53    5.84d 
Ratios/Supplemental Data (%):                 
Ratio of total expenses to average net assets    1.98    1.61    1.52    2.67e 
Ratio of net expenses to average net assets    1.97    1.61f    1.44    1.54e 
Ratio of net investment income (loss)                 
   to average net assets    (.14)    1.09    2.31    2.09e 
Portfolio Turnover Rate    14.88    24.53    3.05    — 
Net Assets, end of period ($ x 1,000)    36,670    74,083    298,284    47,215 

a    From May 2, 2006 (commencement of operations) to October 31, 2006. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
f    Expense waivers and/or reimbursements amounted to less than .01%. 
See notes to financial statements. 

The Fund 57


  FINANCIAL HIGHLIGHTS (continued)

        Year Ended October 31,     
   
 
 
Class C Shares    2009    2008    2007    2006a 
  
 
 
 
Per Share Data ($):                 
Net asset value, beginning of period    8.37    14.10    13.18    12.50 
Investment Operations:                 
Investment income (loss)—netb    (.07)    .04    .21    .08 
Net realized and unrealized                 
gain (loss) on investments    1.86    (5.40)    .93    .60 
Total from Investment Operations    1.79    (5.36)    1.14    .68 
Distributions:                 
Dividends from investment income—net    (.25)    (.20)    (.06)    — 
Dividends from net realized                 
   gain on investments    —    (.17)    (.16)    — 
Total Distributions    (.25)    (.37)    (.22)    — 
Net asset value, end of period    9.91    8.37    14.10    13.18 
Total Return (%)c    21.94    (38.97)    8.80    5.36d 
Ratios/Supplemental Data (%):                 
Ratio of total expenses to average net assets    2.73    2.35    2.28    3.49e 
Ratio of net expenses to average net assets    2.72    2.35f    2.19    2.29e 
Ratio of net investment income                 
(loss) to average net assets    (.89)    .32    1.53    1.33e 
Portfolio Turnover Rate    14.88    24.53    3.05    — 
Net Assets, end of period ($ x 1,000)    17,510    26,706    84,660    3,501 

a    From May 2, 2006 (commencement of operations) to October 31, 2006. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
f    Expense waivers and/or reimbursements amounted to less than .01%. 
See notes to financial statements. 

58


        Year Ended October 31,     
   
 
 
Class I Shares    2009    2008         2007a    2006b 
  
 
 
 
Per Share Data ($):                 
Net asset value, beginning of period    8.52    14.30    13.24    12.50 
Investment Operations:                 
Investment income—netc    .02    .17    .36    .13 
Net realized and unrealized                 
   gain (loss) on investments    1.87    (5.48)    .93    .61 
Total from Investment Operations    1.89    (5.31)    1.29    .74 
Distributions:                 
Dividends from investment income—net    (.42)    (.30)    (.07)    — 
Dividends from net realized                 
gain on investments    —    (.17)    (.16)    — 
Total Distributions    (.42)    (.47)    (.23)    — 
Net asset value, end of period    9.99    8.52    14.30    13.24 
Total Return (%)    23.29    (38.29)    9.86    5.92d 
Ratios/Supplemental Data (%):                 
Ratio of total expenses to average net assets    1.60    1.26    1.23    2.51e 
Ratio of net expenses to average net assets    1.59    1.26f    1.17    1.27e 
Ratio of net investment income                 
   to average net assets    .23    1.37    2.58    2.31e 
Portfolio Turnover Rate    14.88    24.53    3.05    — 
Net Assets, end of period ($ x 1,000)    17,691    21,124    62,712    7,705 

a    Effective June 1, 2007, Class R shares were redesignated as Class I shares. 
b    From May 2, 2006 (commencement of operations) to October 31, 2006. 
c    Based on average shares outstanding at each month end. 
d    Not annualized. 
e    Annualized. 
f    Expense waivers and/or reimbursements amounted to less than .01%. 
See notes to financial statements. 

The Fund 59


NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Global Alpha Fund (the “fund”) is a separate diversified series of Advantage 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 that offers ten series, including the fund.The fund’s investment objective seeks total return by investing in instruments that provide investment exposure to global equity, bond and currency markets, and in fixed-income securities. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Mellon Capital Management Corporation (“Mellon Capital”), a subsidiary of BNY Mellon, serves as the fund’s sub-investment adviser.

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

Effective December 3, 2008, investments for new accounts were no longer permitted in Class T shares of the fund, except that participants in certain group retirement plans were able to open a new account in Class T shares of the fund, provided that the fund was established as an investment option under the plans before December 3, 2008. On

60


February 4, 2009, the fund issued to each holder of its Class T shares, in exchange for said shares, Class A shares of the fund having an aggregate net asset value equal to the aggregate net asset value of the shareholder’s Class T shares. Subsequent investments in the fund’s Class A shares made by prior holders of the fund’s Class T shares who received Class A shares of the fund in exchange for their Class T shares are subject to the front-end sales load schedule that was in effect for Class T shares at the time of the exchange. Otherwise, all other Class A share attributes will be in effect. Effective as of the close of business on February 4, 2009, the fund no longer offers Class T shares.

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

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

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

(a) Portfolio valuation: Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are

The Fund 61


NOTES TO FINANCIAL STATEMENTS (continued)

valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market),but before the fund calculates its net asset value,the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts. For other securities that are fair valued by the Board of Directors, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers.

Investments in debt securities excluding short-term investments (other than U.S.Treasury Bills), financial futures, options and forward foreign currency exchange contracts (“forward contracts”) are valued each business day by an independent pricing service (the “Service”) approved by the Board of Directors. 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 are valued as determined by the Service, based on methods which include

62


consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Restricted securities, as well as securities or other assets for which recent market quotations are not readily available, that are not valued by a pricing service approved by the Board of Directors, or are determined by the fund not to reflect accurately fair value, are valued at fair value as determined in good faith under the direction of the Board of Directors.The factors that may be considered when fair valuing a security include fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Short-term investments, excluding U.S.Treasury Bills, are carried at amortized cost, which approximates value. Financial futures and options, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. Options traded over-the-counter are priced at the mean between the bid and asked price. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward contracts are valued at the forward rate.

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

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

The Fund 63


NOTES TO FINANCIAL STATEMENTS (continued)

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

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

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

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

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

The following is a summary of the inputs used as of October 31, 2009 in valuing the fund’s investments:

        Level 2—Other    Level 3—     
    Level 1—    Significant    Significant     
    Unadjusted    Observable    Unobservable     
    Quoted Prices    Inputs    Inputs    Total 
  
 
 
 
Assets ($)                 
Investments in Securities:             
Equity Securities—                 
   Domestic†    20,736,409    —    —    20,736,409 
Equity Securities—                 
   Foreign†    14,948,013    7,270,386    —    22,218,399 
U.S. Treasury                 
   Securities    —    6,764,739    —    6,764,739 
U.S. Government                 
   Agencies/                 
   Mortgage-Backed    —    10,239,068    —    10,239,068 
Mutual Funds    8,258,000    —    —    8,258,000 
Other Financial                 
   Instruments††    1,810,591    899,933    —    2,710,524 
Liabilities ($)                 
Other Financial                 
   Instruments††    (636,771)    (699,476)    —    (1,336,247) 

†    See Statement of Investments for country classification. 
††    Other financial instruments include derivative instruments, such as futures, forward foreign currency 
    exchange contracts, swap contracts and options contracts.Amounts shown represent unrealized 
    appreciation (depreciation), or in the case of options, market value at period end. 

64


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

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on investments 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 gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

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

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

The Fund 65


NOTES TO FINANCIAL STATEMENTS (continued)

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

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

As of and during the period ended October 31, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

Each of the tax years in the four-year period ended October 31, 2009 remains subject to examination by the Internal Revenue Service and state taxing authorities.

At October 31, 2009, the components of accumulated earnings on a tax basis were as follows: accumulated capital losses $86,083,084 and unrealized depreciation $9,345,884.

The accumulated capital loss carryover is available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2009. If not applied, $67,747,556 of the carryover expires in fiscal 2016 and $18,335,528 expires in fiscal 2017.

66


The tax character of distributions paid to shareholders during the fiscal periods ended October 31, 2009 and October 31, 2008 were as follows: ordinary income $4,143,573 and $11,774,361 and long-term capital gains $0 and $668,638, respectively.

During the period ended October 31, 2009, as a result of permanent book to tax differences, primarily due to the tax treatment for foreign currency transactions, passive foreign investment companies, net operating losses and real estate investment trusts, the fund increased accumulated undistributed investment income-net by $166,673, increased accumulated net realized gain (loss) on investments by $163,184 and decreased paid-in capital by $329,857. Net assets and net asset value per share were not affected by this reclassification.

NOTE 2—Bank Lines of Credit:

The fund participated with other Dreyfus-managed funds in a $145 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. Effective October 14, 2009, the $145 million unsecured credit facility with Citibank, N.A., was increased to $215 million and the fund continues participation in the $300 million unsecured credit facility provided by The Bank of NewYork Mellon. In connection therewith, the fund has agreed to pay its pro rata portion of Facility fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended October 31, 2009, the fund did not borrow under the Facilities.

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

(a) Pursuant to a management agreement (“Agreement”) with Dreyfus, the management fee is computed at the annual rate of 1.10% of the value of the fund’s average daily net assets and is payable monthly.

The Fund 67


NOTES TO FINANCIAL STATEMENTS (continued)

Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Mellon Capital, Dreyfus pays Mellon Capital an annual fee of .65% of the value of the fund’s average daily net assets, payable monthly.

During the period ended October 31, 2009, the Distributor retained $3,518 from commissions earned on sales of the fund’s Class A shares and $23,614 from CDSCs on redemptions of the fund’s Class C shares.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C shares pay and Class T shares paid the Distributor for distributing their shares at an annual rate of .75% and .25% of the value of their respective average daily net assets. During the period ended October 31, 2009, Class C and Class T shares were charged $148,656 and $74, respectively, pursuant to the Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay and Class T shares paid the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended October 31, 2009, Class A, Class C and Class T shares were charged $120,228, $49,552 and $74, respectively, pursuant to the Shareholder Services Plan.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended October 31, 2009, the fund was charged $31,582 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.

68


The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended October 31, 2009, the fund was charged $4,494 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were offset by earnings credits pursuant to the cash management agreement.

The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended October 31, 2009, the fund was charged $174,727 pursuant to the custody agreement.

During the period ended October 31, 2009, the fund was charged $6,397 for services performed by the Chief Compliance Officer.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $70,409, Rule 12b-1 distribution plan fees $11,716, shareholder services plan fees $12,143, custodian fees $60,000, chief compliance officer fees $3,897 and transfer agency per account fees $4,220.

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

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, financial futures, options transactions and forward contracts during the period ended October 31, 2009, amounted to $8,139,620 and $51,635,708, respectively.

The fund adopted the provisions of ASC Topic 815 “Derivatives and Hedging” which requires qualitative disclosures about objectives and

The Fund 69


NOTES TO FINANCIAL STATEMENTS (continued)

strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements distinguish between derivatives, which are accounted for as “hedges” and those that do not qualify for hedge accounting. Because investment companies value their derivatives at fair value and recognize changes in fair value through the Statement of Operations, they do not qualify for such accounting. Accordingly, even though a fund’s investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of this disclosure.The following tables show the fund’s exposure to different types of market risk as it relates to the Statement of Assets and Liabilities and the Statement of Operations, respectively.

Fair value of derivative instruments as of October 31, 2009 is shown below:

    Derivative        Derivative 
    Assets ($)        Liabilities ($) 
  
 
 
Interest rate risk1    304,122    Interest rate risk1    (84,078) 
Equity risk1    455,949    Equity risk1    (552,693) 
Foreign exchange risk2    899,933    Foreign exchange risk3    (699,476) 
Gross fair value of             
derivatives contracts    1,660,004        (1,336,247) 

Statement of Assets and Liabilities location: 
1    Includes cumulative appreciation (depreciation) of futures contracts as reported in the Statement of 
    Financial Futures, but only the unpaid variation margin is reported in the Statement of Assets 
    and Liabilities. 
2    Unrealized appreciation on forward foreign currency exchange contracts. 
3    Unrealized depreciation on forward foreign currency exchange contracts. 

The effect of derivative instruments in the Statement of Operations during the period ended October 31, 2009 is shown below:

Amount of realized gain or (loss) on derivatives recognized in income ($)
            Forward     
Underlying risk    Futures4    Options5    Contracts6    Total 
  
 
 
 
Interest rate    4,951,473    (134,012)    —    4,817,461 
Equity    6,197,186    —    —    6,197,186 
Foreign exchange    —    —    (1,289,219)    (1,289,219) 
Total    11,148,659    (134,012) (1,289,219)    9,725,428 

70


Change in unrealized appreciation or (depreciation) on derivatives recognized in income ($)7 
            Forward     
Underlying risk    Futures    Options    Contracts    Total 
  
 
 
 
Interest rate    1,195,328    57,836    —    1,253,164 
Equity    (3,224,460)    —    —    (3,224,460) 
Foreign exchange    —    —    1,958,695    1,958,695 
Total    (2,029,132)    57,836    1,958,695    (12,601) 

Statement of Operations location: 
4    Net realized gain (loss) on financial futures. 
5    Net realized gain (loss) on options transactions. 
6    Net realized gain (loss) on forward foreign currency exchange contracts. 
7    Net unrealized appreciation (depreciation) on investments, financial futures, options transactions 
    and forward foreign currency exchange contracts. 

During the period ended October 31, 2009, the average market value of interest rate futures contracts was $73,007,174, which represented 86.54% of average net assets.The average market value of equity futures contracts was $46,828,902, which represented 55.51% of average net assets.The average market value of forward contracts was $44,551,204, which represented 52.81% of average net assets. The average market value of options contracts was $130,528, which represented .15% of average net assets.

Futures Contracts: In the normal course of pursuing its investment objectives, the fund is exposed to market risk, including equity price risk and interest rate risk as a result of changes in value of underlying financial instruments.The fund may invest in financial futures contracts in order to manage its exposure to or protect against changes in the market.A futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a broker, which consist of cash or cash equivalents. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. Futures contracts are valued daily at the last sales price established by the Board

The Fund 71


NOTES TO FINANCIAL STATEMENTS (continued)

of Trade or exchange upon which they are traded.When the contracts are closed, the fund recognizes a realized gain or loss.There is minimal counterparty credit risk to the fund with futures, since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Contracts open at October 31, 2009 are set forth in the Statement of Financial Futures.

Options: A call option gives the purchaser of the option the right (but not the obligation) to buy, and obligates the writer to sell, the underlying security or securities at the exercise price at any time during the option period, or at a specified date. Conversely, a put option gives the purchaser of the option the right (but not the obligation) to sell, and obligates the writer to buy the underlying security or securities at the exercise price at any time during the option period, or at a specified date.The fund may purchase and write (sell) put and call options primarily to hedge against changes in security prices, or securities that the fund intends to purchase, or against fluctuations in value caused by changes in prevailing market interest rates or other market conditions.

Forward Foreign Currency Exchange Contracts: The fund may enter into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of an investment strat-egy.When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund 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 of the contract decreases between those dates.With respect to purchases of forward 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 exposed to foreign currency risk as a result of changes in value of underlying financial instruments.The fund is also exposed to credit risk associated with counterparty nonperformance

72


on these forward contracts, which is typically limited to the unrealized gain on each open contract.The following summarizes open forward contracts at October 31, 2009:

    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Cost ($)    Value ($) (Depreciation) ($) 
  
 
 
Purchases:                 
Australian Dollar,                 
   expiring 12/16/2009    275,200    237,468    246,572    9,104 
Australian Dollar,                 
   expiring 12/16/2009    511,000    467,915    457,842    (10,073) 
Australian Dollar,                 
   expiring 12/16/2009    102,200    93,583    91,568    (2,015) 
Australian Dollar,                 
   expiring 12/16/2009    51,100    46,635    45,784    (851) 
Australian Dollar,                 
   expiring 12/16/2009    306,600    280,572    274,705    (5,867) 
Australian Dollar,                 
   expiring 12/16/2009    51,100    46,762    45,784    (978) 
Australian Dollar,                 
   expiring 12/16/2009    5,118,708    4,386,732    4,586,222    199,490 
Australian Dollar,                 
   expiring 12/16/2009    6,320,066    5,428,558    5,662,607    234,049 
British Pound,                 
   expiring 12/16/2009    533,400    847,016    875,191    28,175 
Canadian Dollar,                 
   expiring 12/16/2009    53,750    49,271    49,676    405 
Canadian Dollar,                 
   expiring 12/16/2009    159,600    150,680    147,502    (3,178) 
Canadian Dollar,                 
   expiring 12/16/2009    377,650    356,576    349,024    (7,552) 
Canadian Dollar,                 
   expiring 12/16/2009    1,421,000    1,377,045    1,313,286    (63,759) 
Euro,                 
   expiring 12/16/2009    1,201,450    1,757,577    1,767,864    10,287 
Euro,                 
   expiring 12/16/2009    163,400    239,607    240,434    827 
Euro,                 
   expiring 12/16/2009    306,750    450,058    451,365    1,307 
Euro,                 
   expiring 12/16/2009    959,900    1,416,761    1,412,437    (4,324) 
Euro,                 
   expiring 12/16/2009    532,500    790,045    783,543    (6,502) 
Euro,                 
   expiring 12/16/2009    1,248,800    1,865,320    1,837,537    (27,783) 

The Fund 73


NOTES TO FINANCIAL STATEMENTS (continued)

    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Cost ($)    Value ($) (Depreciation) ($) 
  
 
 
Purchases (continued):                 
Euro,                 
   expiring 12/16/2009    312,200    466,330    459,384    (6,946) 
Euro,                 
   expiring 12/16/2009    732,000    1,094,523    1,077,096    (17,427) 
Euro,                 
   expiring 12/16/2009    183,000    273,631    269,274    (4,357) 
Euro,                 
   expiring 12/16/2009    1,737,400    2,607,883    2,556,484    (51,399) 
Euro,                 
   expiring 12/16/2009    306,600    460,994    451,144    (9,850) 
Euro,                 
   expiring 12/16/2009    1,341,600    1,988,922    1,974,087    (14,835) 
Euro,                 
   expiring 12/16/2009    335,400    497,938    493,522    (4,416) 
Euro,                 
   expiring 12/16/2009    1,150,400    1,695,235    1,692,747    (2,488) 
Euro,                 
   expiring 12/16/2009    287,600    423,801    423,187    (614) 
Japanese Yen,                 
   expiring 12/16/2009    664,559,473    7,247,262    7,384,813    137,551 
New Zealand Dollar,                 
   expiring 12/16/2009    1,081,600    812,016    773,434    (38,582) 
New Zealand Dollar,                 
   expiring 12/16/2009    270,400    203,004    193,358    (9,646) 
New Zealand Dollar,                 
   expiring 12/16/2009    82,950    61,864    59,316    (2,548) 
New Zealand Dollar,                 
   expiring 12/16/2009    497,700    371,857    355,897    (15,960) 
New Zealand Dollar,                 
   expiring 12/16/2009    165,900    124,098    118,632    (5,466) 
New Zealand Dollar,                 
   expiring 12/16/2009    829,500    620,491    593,162    (27,329) 
New Zealand Dollar,                 
   expiring 12/16/2009    82,950    61,976    59,316    (2,660) 
New Zealand Dollar,                 
   expiring 12/16/2009    2,594,428    1,800,533    1,855,233    54,700 
Norwegian Krone,                 
   expiring 12/16/2009    10,896,450    1,844,152    1,899,514    55,362 
Swiss Franc,                 
   expiring 12/16/2009    2,578,648    2,481,497    2,514,378    32,881 

74


    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Proceeds ($)    Value ($) (Depreciation) ($) 
  
 
 
Sales:                 
British Pound,                 
   expiring 12/16/2009    950,400    1,509,254    1,559,396    (50,142) 
British Pound,                 
   expiring 12/16/2009    1,202,000    1,921,231    1,972,216    (50,985) 
British Pound,                 
   expiring 12/16/2009    1,166,400    1,895,771    1,913,804    (18,033) 
British Pound,                 
   expiring 12/16/2009    291,600    473,943    478,451    (4,508) 
British Pound,                 
   expiring 12/16/2009    4,650,771    7,678,422    7,630,886    47,536 
British Pound,                 
   expiring 12/16/2009    1,993,187    3,301,934    3,270,380    31,554 
Canadian Dollar,                 
   expiring 12/16/2009    340,000    326,301    314,227    12,074 
Canadian Dollar,                 
   expiring 12/16/2009    787,010    731,578    727,353    4,225 
Euro,                 
   expiring 12/16/2009    8,147,188    11,821,569    11,988,116    (166,547) 
Euro,                 
   expiring 12/16/2009    3,450,232    5,030,784    5,076,818    (46,034) 
Japanese Yen,                 
   expiring 12/16/2009    5,194,800    57,090    57,726    (636) 
Japanese Yen,                 
   expiring 12/16/2009    29,437,200    323,397    327,116    (3,719) 
Norwegian Krone,                 
   expiring 12/16/2009    1,811,350    326,348    315,762    10,586 
Norwegian Krone,                 
   expiring 12/16/2009    319,650    57,634    55,723    1,911 
Norwegian Krone,                 
   expiring 12/16/2009    2,611,200    456,859    455,195    1,664 
Norwegian Krone,                 
   expiring 12/16/2009    652,800    114,189    113,799    390 
Norwegian Krone,                 
   expiring 12/16/2009    905,200    154,354    157,798    (3,444) 
Norwegian Krone,                 
   expiring 12/16/2009    2,036,700    347,298    355,046    (7,748) 
Swedish Krona,                 
   expiring 12/16/2009    2,392,000    342,488    337,351    5,137 
Swedish Krona,                 
   expiring 12/16/2009    598,000    85,880    84,338    1,542 

The Fund 75


NOTES TO FINANCIAL STATEMENTS (continued)

    Foreign            Unrealized 
Forward Foreign Currency    Currency            Appreciation 
   Exchange Contracts    Amounts    Proceeds ($)    Value ($) (Depreciation) ($) 
  
 
 
Sales (continued):                 
Swedish Krona,                 
   expiring 12/16/2009    6,327,214    904,055    892,347    11,708 
Swiss Franc,                 
   expiring 12/16/2009    328,950    327,041    320,751    6,290 
Swiss Franc,                 
   expiring 12/16/2009    58,050    57,781    56,603    1,178 
Swiss Franc,                 
   expiring 12/16/2009    109,800    107,027    107,063    (36) 
Swiss Franc,                 
   expiring 12/16/2009    439,200    428,014    428,253    (239) 
Gross Unrealized Appreciation            899,933 
Gross Unrealized Depreciation            (699,476) 

At October 31, 2009, the cost of investments for federal income tax purposes was $78,612,222; accordingly, accumulated net unrealized depreciation on investments was $9,345,087, consisting of $3,370,386 gross unrealized appreciation and $12,715,473 gross unrealized depreciation.

NOTE 5—Subsequent Events Evaluation:

Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through December 29, 2009, the date the financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.

76


REPORT OF INDEPENDENT REGISTERED 
       PUBLIC ACCOUNTING FIRM 

  Shareholders and Board of Directors
Global Alpha Fund

We have audited the accompanying statement of assets and liabilities, including the statements of investments and financial futures, of Global Alpha Fund (one of the series comprising Advantage Funds, Inc.) as of October 31, 2009, 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 periods 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 the standards of the Public Company Accounting Oversight Board (United States). 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. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2009 by correspondence with the custodian and others. 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 Global Alpha Fund at October 31, 2009, 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 periods, in conformity with U.S. generally accepted accounting principles.


New York, New York 
December 29, 2009 

The Fund 77


IMPORTANT TAX INFORMATION (Unaudited)

In accordance with federal tax law, the fund hereby designates 17.90% of the ordinary dividends paid during the fiscal year ended October 31, 2009 as qualifying for the corporate dividends received deduction. For the fiscal year ended October 31, 2009, certain dividends paid by the fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid during the fiscal year, $882 represents the maximum amount that may be considered qualified dividend income. Shareholders will receive notification in early 2010 of the percentage applicable to the preparation of their 2009 income tax returns.Also, the fund hereby designates 1.94% of ordinary income dividends paid during the fiscal year ended October 31, 2009 as qualifying interest related dividends.

78








OFFICERS OF THE FUND (Unaudited)

J. DAVID OFFICER, President since December 2006.

Chairman, President and Chief Executive Officer of Founders Asset Management LLC, an affiliate of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. Prior to June 2009, Mr. Officer was Chief Operating Officer,Vice Chairman and a director of the Manager, where he had been employed since April 1998. He is 61 years old.

PHILLIP N. MAISANO, Executive Vice President since July 2007.

Chief Investment Officer,Vice Chair and a director of the Manager, and an officer of 76 investment companies (comprised of 173 portfolios) managed by the Manager. Mr. Maisano also is an officer and/or Board member of certain other investment management subsidiaries of The Bank of New York Mellon Corporation, each of which is an affiliate of the Manager. He is 62 years old and has been an employee of the Manager since November 2006. Prior to joining the Manager, Mr. Maisano served as Chairman and Chief Executive Officer of EACM Advisors, an affiliate of the Manager, since August 2004.

MICHAEL A. ROSENBERG, Vice President and Secretary since August 2005.

Assistant General Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 49 years old and has been an employee of the Manager since October 1991.

JAMES BITETTO, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since December 1996.

JONI LACKS CHARATAN, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. She is 53 years old and has been an employee of the Manager since October 1988.

JOSEPH M. CHIOFFI, Vice President and Assistant Secretary since August 2005.

Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since June 2000.

JANETTE E. FARRAGHER, Vice President and Assistant Secretary since August 2005.

Assistant General Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. She is 46 years old and has been an employee of the Manager since February 1984.

JOHN B. HAMMALIAN, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since February 1991.

ROBERT R. MULLERY, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 57 years old and has been an employee of the Manager since May 1986.

JEFF PRUSNOFSKY, Vice President and Assistant Secretary since August 2005.

Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since October 1990.

82


JAMES WINDELS, Treasurer since November 2001.

Director – Mutual Fund Accounting of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 51 years old and has been an employee of the Manager since April 1985.

RICHARD CASSARO, Assistant Treasurer since January 2008.

Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since September 1982.

GAVIN C. REILLY, Assistant Treasurer since December 2005.

Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 41 years old and has been an employee of the Manager since April 1991.

ROBERT ROBOL, Assistant Treasurer since August 2005.

Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since October 1988.

ROBERT SALVIOLO, Assistant Treasurer since July 2007.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 42 years old and has been an employee of the Manager since June 1989.

ROBERT SVAGNA, Assistant Treasurer since December 2002.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 77 investment companies (comprised of 196 portfolios) managed by the Manager. He is 42 years old and has been an employee of the Manager since November 1990.

JOSEPH W. CONNOLLY, Chief Compliance Officer since October 2004.

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (77 investment companies, comprised of 196 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 52 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

WILLIAM GERMENIS, Anti-Money Laundering Compliance Officer since October 2002.

Vice President and Anti-Money Laundering Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 73 investment companies (comprised of 192 portfolios) managed by the Manager. He is 39 years old and has been an employee of the Distributor since October 1998.

The Fund 83


NOTES




Item 2. Code of Ethics.

The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There have been no amendments to, or waivers in connection with, the Code of Ethics during the period covered by this Report.

Item 3. Audit Committee Financial Expert.

The Registrant's Board has determined that David P. Feldman, a member of the Audit Committee of the Board, is an audit committee financial expert as defined by the Securities and Exchange Commission (the "SEC"). David P. Feldman is "independent" as defined by the SEC for purposes of audit committee financial expert determinations.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $90,668 in 2008 and $88,390 in 2009.

(b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this Item 4 were $20,796 in 2008 and $15,828 in 2009. These services consisted of security counts required by Rule 17f-2 under the Investment Company Act of 1940, as amended.

The aggregate fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor to the Registrant's investment adviser (not including any sub-investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant ("Service Affiliates"), that were reasonably related to the performance of the annual audit of the Service Affiliate, which required pre-approval by the Audit Committee were $-0- in 2008 and $-0- in 2009.

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice, and tax planning ("Tax Services") were $18,527 in 2008 and $23,611 in 2009. These services consisted of: (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments; (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held, and (iv) determination of Passive Foreign Investment Companies.

The aggregate fees billed in the Reporting Periods for Tax Services by the Auditor to Service Affiliates, which required pre-approval by the Audit Committee were $-0- in 2008 and $-0- in 2009.

(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, were $160 in 2008 and $40 in 2009. These services consisted of a review of the Registrant's anti-money laundering program.


The aggregate fees billed in the Reporting Periods for Non-Audit Services by the Auditor to Service Affiliates, other than the services reported in paragraphs (b) through (c) of this Item, which required pre-approval by the Audit Committee, were $-0- in 2008 and $-0- in 2009.

Note: In each of (b) through (d) of this Item 4, 100% of all services provided by the Auditor were pre-approved as required.

Audit Committee Pre-Approval Policies and Procedures. The Registrant's Audit Committee has established policies and procedures (the "Policy") for pre-approval (within specified fee limits) of the Auditor's engagements for non-audit services to the Registrant and Service Affiliates without specific case-by-case consideration. Pre-approval considerations include whether the proposed services are compatible with maintaining the Auditor's independence. Pre-approvals pursuant to the Policy are considered annually.

Non-Audit Fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered to Service Affiliates, for the Reporting Periods were $7,879,835 in 2008 and $25,383,429 in 2009.

Auditor Independence. The Registrant's Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence.

Item 5. Audit Committee of Listed Registrants.

Not applicable. [CLOSED-END FUNDS ONLY]

Item 6. Investments.

(a) Not applicable.

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

Not applicable. [CLOSED-END FUNDS ONLY]

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

Not applicable. [CLOSED-END FUNDS ONLY, beginning with reports for periods ended on and after December 31, 2005]

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

Not applicable. [CLOSED-END FUNDS ONLY]

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

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

Item 11. Controls and Procedures.


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

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

Item 12. Exhibits.

(a)(1) Code of ethics referred to in Item 2.

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

(a)(3) Not applicable.

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


SIGNATURES

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

Advantage Funds, Inc.

By:    /s/ J. David Officer 
    J. David Officer, 
    President
 
Date:    December 23, 2009 

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

By:    /s/ J. David Officer 
    J. David Officer, 
    President
 
Date:    December 23, 2009 
 
By:    /s/ James Windels 
    James Windels,
    Treasurer
 
Date:    December 23, 2009 

EXHIBIT INDEX

(a)(1) Code of ethics referred to in Item 2.

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

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