N-CSRS 1 lp1-250.htm SEMI-ANNUAL REPORTS lp1-250.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

811-07123

 

 

 

BNY Mellon Advantage Funds, Inc.

 

 

(Exact name of Registrant as specified in charter)

 

 

 

 

 

 

c/o BNY Mellon Investment Adviser, Inc.

240 Greenwich Street

New York, New York  10286

 

 

(Address of principal executive offices)        (Zip code)

 

 

 

 

 

Bennett A. MacDougall, Esq.

240 Greenwich Street

New York, New York  10286

 

 

(Name and address of agent for service)

 

 

Registrant's telephone number, including area code: 

(212) 922-6400

 

 

Date of fiscal year end:

 

08/31

 

Date of reporting period:

02/28/2021

 

 

             

 

The following N-CSR relates only to the Registrant's series listed below and does not relate to any series of the Registrant with a different fiscal year end and, therefore, different N-CSR reporting requirements.  A separate N-CSR will be filed for any series with a different fiscal year end, as appropriate.

 

BNY Mellon Dynamic Value Fund

BNY Mellon Opportunistic Midcap Value Fund

BNY Mellon Opportunistic Small Cap Fund

BNY Mellon Structured Midcap Fund

BNY Mellon Technology Growth Fund

 

 


 

FORM N-CSR

Item 1.          Reports to Stockholders.

 


 

BNY Mellon Dynamic Value Fund

 

SEMIANNUAL REPORT

February 28, 2021

 

 

 

Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes.

 

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

 

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

 

Contents

THE FUND

FOR MORE INFORMATION

 

Back Cover

 

DISCUSSION OF FUND PERFORMANCE (Unaudited)

For the period from September 1, 2020 through February 28, 2021, as provided by Brian C. Ferguson, John C. Bailer and David S. Intoppa, Portfolio Managers

Market and Fund Performance Overview

For the six-month period ended February 28, 2021, BNY Mellon Dynamic Value Fund’s Class A shares produced a total return of 27.54%, Class C shares returned 27.05%, Class I shares returned 27.71% and Class Y shares returned 27.72%.1 The fund’s benchmark, the Russell 1000® Value Index (the “Index”), produced a total return of 19.15% for the same period.2

Stocks gained ground as government-mandated lockdowns were lifted, COVID-19 vaccines were approved, and the global economy continued to recover. The fund outperformed the Index, primarily due to favorable security selections in the materials, information technology and financial sectors.

The Fund’s Investment Approach

The fund seeks capital appreciation. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks. The fund may invest up to 30% of its assets in foreign securities. We identify potential investments through extensive quantitative and fundamental research. We focus on individual stock selection (a “bottom-up” approach), emphasizing three key factors: value, sound business fundamentals and positive business momentum.

Stocks Continued to Rebound

During the reporting period, the economy continued to show signs of recovery as government-mandated lockdowns were eased and COVID-19 vaccines were approved. Retail sales rebounded and the outlook for manufacturing also improved dramatically. Job creation surged, beating economists’ expectations, and unemployment dropped sharply.

Markets continued to rebound as hope for a COVID-19 vaccine took hold. Technology and other growth stocks performed well, benefiting from trends, such as e-commerce and working from home, that accelerated during the pandemic.

With the approval of multiple COVID-19 vaccines late in 2020, performance in the market broadened, and more cyclically-oriented stocks began to perform better. Returns were supported by interest rates, which remained low, while the stimulus package approved by Congress continued to bolster consumers, small businesses and the economy generally.

As the prospect of the end of the pandemic became more likely, businesses became more confident and increased their capital spending. In addition, inventory shortages began to appear, providing another catalyst to economic growth. Investors began to take more notice of value-oriented stocks toward the end of the reporting period, but growth-oriented stocks continued to perform positively.

Growth stocks performed well throughout the period, but rising long-term interest rates late in the period produced some volatility. A pullback occurred among some growth-oriented stocks that had elevated valuations, while value-oriented stocks began to lead the market.

Performance Helped by Stock Selections

The fund’s outperformance versus the Index was helped by stock selections in all but one sector. Selections in the materials, information technology and financial sectors were the primary contributors. In the materials sector, the fund’s position in Freeport McMoRan, a mining company, rose 117% on strong demand for copper. In addition, shares of CF Industries Holdings, a fertilizer company, rose 41% as the economy continued to recover late in the reporting period. In the information technology sector, semiconductor companies Applied Materials and NXP Semiconductors rose 93% and 46%, respectively, on strong demand. In the financial sector, the fund’s large overweight position was

2

 

advantageous, as were holdings of The Goldman Sachs Group and Morgan Stanley, which climbed 57% and 49%, respectively. Both companies benefited from market volatility and from rising interest rates. Capital One Financial, a consumer finance company, also performed well, benefiting from federal COVID-19 relief programs.

On a less positive note, stock selections in the industrial sector detracted from performance. Defense contractors, in particular, lagged during the reporting period, and the primary detractor was Northrop Grumman. Shares were hindered by investor concerns that defense spending could decline under the Biden administration.

Value Stocks Appear Relatively Attractive

The fund engaged in repositioning during the reporting period, adding to the energy and financial sectors. The fund also reduced its holdings in the consumer discretionary and information technology sectors.

We remain optimistic about the prospects for cyclical, income-oriented stocks. We believe that the extraordinary amount of fiscal stimulus that is in the works will benefit the economy and more cyclical, value-oriented stocks, while rising interest rates will continue to hinder “bond proxy” stocks and growth-oriented stocks that have elevated valuations. In 2021, we believe that cyclical stocks, which experienced depressed earnings in 2020, should be well-positioned for a strong earnings recovery.

March 15, 2021

1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN. Investors should note that the fund’s short-term performance is highly unusual, in part to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future.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 charges 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 and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s returns reflect the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an agreement in effect through December 31, 2021, at which time it may be extended, terminated or modified. Had these expenses not been absorbed, the fund’s returns would have been lower.

2 Source: Lipper Inc. — The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies that are considered more value-oriented relative to the overall market, as defined by Russell’s leading style methodology. The Russell 1000® Value Index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The index is completely reconstituted annually to ensure new and growing equities are included, and that the represented companies continue to reflect value characteristics. Investors cannot invest directly in any index.

Equities are subject to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees.

Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.

The securities discussed should not be considered recommendations to buy or sell a particular security.

Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.

3

 

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 BNY Mellon Dynamic Value Fund from September 1, 2020 to February 28, 2021. 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

 

Assume actual returns for the six months ended February 28, 2021

 

 

 

 

 

 

 

 

 

 

Class A

Class C

Class I

Class Y

 

Expense paid per $1,000

$5.25

$9.46

$3.84

$3.67

 

Ending value (after expenses)

$1,275.40

$1,270.50

$1,277.10

$1,277.20

 

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 February 28, 2021

 

 

 

 

 

 

 

 

 

 

Class A

Class C

Class I

Class Y

 

Expense paid per $1,000

$4.66

$8.40

$3.41

$3.26

 

Ending value (after expenses)

$1,020.18

$1,016.46

$1,021.42

$1,021.57

 

†  Expenses are equal to the fund’s annualized expense ratio of .93% for Class A, 1.68% for Class C, .68% for Class I and .65% for Class Y, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

4

 

STATEMENT OF INVESTMENTS
February 28, 2021 (Unaudited)

               
 

Description

     

Shares

 

Value ($)

 

Common Stocks - 98.3%

         

Automobiles & Components - 1.4%

         

General Motors

     

398,285

a

20,443,969

 

Banks - 8.5%

         

Bank of America

     

680,649

 

23,625,327

 

Essent Group

     

204,551

 

8,433,638

 

JPMorgan Chase & Co.

     

436,639

 

64,260,162

 

Truist Financial

     

266,716

 

15,192,143

 

Wells Fargo & Co.

     

338,430

 

12,241,013

 
       

123,752,283

 

Capital Goods - 9.1%

         

Carrier Global

     

380,955

 

13,916,286

 

Eaton

     

253,942

 

33,060,709

 

Hubbell

     

85,093

 

15,104,858

 

Ingersoll Rand

     

353,335

a

16,373,544

 

L3Harris Technologies

     

65,637

 

11,940,027

 

Northrop Grumman

     

25,084

 

7,315,999

 

Quanta Services

     

179,120

 

15,019,212

 

The Boeing Company

     

51,453

a

10,908,551

 

Trane Technologies

     

64,259

 

9,847,049

 
       

133,486,235

 

Consumer Durables & Apparel - .7%

         

VF

     

129,875

 

10,277,009

 

Consumer Services - 1.9%

         

Las Vegas Sands

     

444,339

a

27,815,621

 

Diversified Financials - 16.1%

         

Ally Financial

     

413,437

 

17,157,635

 

Ameriprise Financial

     

75,373

 

16,675,523

 

Berkshire Hathaway, Cl. B

     

148,121

a

35,624,582

 

Capital One Financial

     

278,301

 

33,448,997

 

LPL Financial Holdings

     

112,093

 

14,744,713

 

Morgan Stanley

     

486,681

 

37,411,168

 

The Charles Schwab

     

178,151

 

10,995,480

 

The Goldman Sachs Group

     

115,744

 

36,977,893

 

Voya Financial

     

526,629

b

31,745,196

 
       

234,781,187

 

Energy - 7.2%

         

ConocoPhillips

     

308,036

 

16,020,952

 

EQT

     

430,188

a

7,653,045

 

Exxon Mobil

     

340,045

 

18,488,247

 

Hess

     

317,117

 

20,780,677

 

Marathon Petroleum

     

612,411

 

33,449,889

 

5

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

               
 

Description

     

Shares

 

Value ($)

 

Common Stocks - 98.3% (continued)

         

Energy - 7.2% (continued)

         

Valero Energy

     

114,717

 

8,830,915

 
       

105,223,725

 

Food, Beverage & Tobacco - 3.2%

         

Mondelez International, Cl. A

     

277,742

 

14,764,765

 

PepsiCo

     

111,504

 

14,405,202

 

Philip Morris International

     

208,171

 

17,490,527

 
       

46,660,494

 

Health Care Equipment & Services - 10.3%

         

Abbott Laboratories

     

83,851

 

10,043,673

 

Alcon

     

190,367

a

13,021,103

 

Becton Dickinson & Co.

     

77,454

 

18,678,032

 

Centene

     

188,520

a

11,035,961

 

CVS Health

     

90,154

 

6,142,192

 

Danaher

     

72,497

 

15,925,416

 

HCA Healthcare

     

58,019

 

9,981,009

 

Laboratory Corp. of America Holdings

     

42,004

a

10,077,180

 

McKesson

     

37,722

 

6,394,633

 

Medtronic

     

335,626

 

39,258,173

 

Zimmer Biomet Holdings

     

66,185

 

10,792,126

 
       

151,349,498

 

Insurance - 4.9%

         

Assurant

     

223,583

 

27,549,897

 

Chubb

     

214,926

 

34,942,669

 

Reinsurance Group of America

     

72,666

 

8,881,965

 
       

71,374,531

 

Materials - 6.6%

         

CF Industries Holdings

     

643,504

 

29,137,861

 

Freeport-McMoRan

     

815,137

a

27,641,296

 

Newmont

     

195,030

 

10,605,731

 

The Mosaic Company

     

240,356

 

7,066,466

 

Vulcan Materials

     

132,295

 

22,091,942

 
       

96,543,296

 

Media & Entertainment - 3.1%

         

Alphabet, Cl. A

     

22,233

a

44,953,125

 

Pharmaceuticals Biotechnology & Life Sciences - 4.4%

         

AbbVie

     

112,008

 

12,067,742

 

Biogen

     

26,234

a

7,158,734

 

Elanco Animal Health

     

395,654

a

13,001,190

 

Eli Lilly & Co.

     

124,415

 

25,491,389

 

United Therapeutics

     

42,131

a

7,043,461

 
       

64,762,516

 

Real Estate - 1.0%

         

Weyerhaeuser

     

416,804

c

14,117,152

 

6

 

               
 

Description

     

Shares

 

Value ($)

 

Common Stocks - 98.3% (continued)

         

Retailing - 1.0%

         

Booking Holdings

     

6,545

a

15,240,098

 

Semiconductors & Semiconductor Equipment - 4.7%

         

Applied Materials

     

183,749

 

21,717,294

 

Microchip Technology

     

46,508

b

7,098,516

 

Micron Technology

     

214,958

a

19,675,106

 

NXP Semiconductors

     

37,700

 

6,882,135

 

Qualcomm

     

101,771

 

13,860,192

 
       

69,233,243

 

Software & Services - 1.9%

         

Cloudera

     

945,543

a,b

15,261,064

 

Proofpoint

     

100,518

a

12,154,637

 
       

27,415,701

 

Technology Hardware & Equipment - 2.8%

         

Corning

     

484,556

 

18,529,421

 

Dolby Laboratories, Cl. A

     

111,536

 

10,889,260

 

Zebra Technologies, Cl. A

     

22,717

a

11,345,551

 
       

40,764,232

 

Telecommunication Services - .5%

         

Vodafone Group, ADR

     

389,445

b

6,690,665

 

Transportation - 2.4%

         

FedEx

     

40,973

 

10,427,629

 

Union Pacific

     

119,553

 

24,623,136

 
       

35,050,765

 

Utilities - 6.6%

         

Clearway Energy, Cl. C

     

214,842

 

5,899,561

 

Exelon

     

786,850

 

30,372,410

 

NextEra Energy Partners

     

220,703

 

16,031,866

 

PPL

     

1,089,405

 

28,531,517

 

The AES

     

602,331

 

15,997,911

 
       

96,833,265

 

Total Common Stocks (cost $1,067,864,948)

     

1,436,768,610

 
               

Exchange-Traded Funds - 1.3%

         

Registered Investment Companies - 1.3%

         

iShares Russell 1000 Value ETF
(cost $18,611,173)

     

127,062

 

18,241,021

 

7

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

               
 

Description

 

1-Day
Yield (%)

 

Shares

 

Value ($)

 

Investment Companies - .7%

         

Registered Investment Companies - .7%

         

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares
(cost $9,541,600)

 

0.07

 

9,541,600

d

9,541,600

 
               

Investment of Cash Collateral for Securities Loaned - 2.2%

         

Registered Investment Companies - 2.2%

         

Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares
(cost $32,715,465)

 

0.03

 

32,715,465

d

32,715,465

 

Total Investments (cost $1,128,733,186)

 

102.5%

 

1,497,266,696

 

Liabilities, Less Cash and Receivables

 

(2.5%)

 

(35,960,557)

 

Net Assets

 

100.0%

 

1,461,306,139

 


ADR—American Depository Receipt

ETF—Exchange-Traded Fund

aNon-income producing security.

bSecurity, or portion thereof, on loan. At February 28, 2021, the value of the fund’s securities on loan was $59,329,721 and the value of the collateral was $69,007,997, consisting of cash collateral of $32,715,465 and U.S. Government & Agency securities valued at $36,292,532.

cInvestment in real estate investment trust within the United States.

dInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.

 

   

Portfolio Summary (Unaudited)

Value (%)

Financials

29.4

Health Care

14.8

Industrials

11.5

Information Technology

9.4

Energy

7.2

Utilities

6.6

Materials

6.6

Consumer Discretionary

5.1

Investment Companies

4.2

Communication Services

3.5

Consumer Staples

3.2

Real Estate

1.0

 

102.5


 Based on net assets.

See notes to financial statements.

8

 

STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)

             

Investment Companies

Value
8/31/20 ($)

Purchases ($)

Sales ($)

Value
2/28/21 ($)

Net
Assets (%)

Dividends/
Distributions ($)

Registered Investment Companies;

       

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares

-

119,202,913

(109,661,313)

9,541,600

.7

939

Investment of Cash Collateral for Securities Loaned:††

     

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares

20,489,252

12,329,559

(32,818,811)

-

-

5,114†††

Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares

-

37,517,490

(4,802,025)

32,715,465

2.2

10,529†††

Total

20,489,252

169,049,962

(147,282,149)

42,257,065

2.9

16,582

 Includes reinvested dividends/distributions.
†† Effective November 9, 2020, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares.
††† Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.
See notes to financial statements.

9

 

STATEMENT OF ASSETS AND LIABILITIES
February 28, 2021 (Unaudited)

             

 

 

 

 

 

 

 

 

 

 

Cost

 

Value

 

Assets ($):

 

 

 

 

Investments in securities—See Statement of Investments
(including securities on loan, valued at $59,329,721)—Note 1(c):

 

 

 

Unaffiliated issuers

1,086,476,121

 

1,455,009,631

 

Affiliated issuers

 

42,257,065

 

42,257,065

 

Receivable for investment securities sold

 

9,476,201

 

Dividends and securities lending income receivable

 

2,105,152

 

Receivable for shares of Common Stock subscribed

 

1,065,663

 

Prepaid expenses

 

 

 

 

39,626

 

 

 

 

 

 

1,509,953,338

 

Liabilities ($):

 

 

 

 

Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c)

 

838,345

 

Liability for securities on loan—Note 1(c)

 

32,715,465

 

Payable for investment securities purchased

 

13,882,666

 

Payable for shares of Common Stock redeemed

 

972,237

 

Directors’ fees and expenses payable

 

36,084

 

Interest payable—Note 2

 

108

 

Other accrued expenses

 

 

 

 

202,294

 

 

 

 

 

 

48,647,199

 

Net Assets ($)

 

 

1,461,306,139

 

Composition of Net Assets ($):

 

 

 

 

Paid-in capital

 

 

 

 

1,037,227,935

 

Total distributable earnings (loss)

 

 

 

 

424,078,204

 

Net Assets ($)

 

 

1,461,306,139

 

           

Net Asset Value Per Share

Class A

Class C

Class I

Class Y

 

Net Assets ($)

781,817,660

6,654,772

406,863,039

265,970,668

 

Shares Outstanding

18,913,742

175,175

9,795,558

6,416,366

 

Net Asset Value Per Share ($)

41.34

37.99

41.54

41.45

 

 

 

 

 

 

 

See notes to financial statements.

 

 

 

 

 

10

 

STATEMENT OF OPERATIONS
Six Months Ended February 28, 2021 (Unaudited)

             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income ($):

 

 

 

 

Income:

 

 

 

 

Cash dividends (net of $14,033 foreign taxes withheld at source):

 

Unaffiliated issuers

 

 

11,627,431

 

Affiliated issuers

 

 

939

 

Income from securities lending—Note 1(c)

 

 

15,643

 

Total Income

 

 

11,644,013

 

Expenses:

 

 

 

 

Management fee—Note 3(a)

 

 

3,892,194

 

Shareholder servicing costs—Note 3(c)

 

 

1,281,797

 

Professional fees

 

 

54,825

 

Directors’ fees and expenses—Note 3(d)

 

 

48,339

 

Registration fees

 

 

36,439

 

Prospectus and shareholders’ reports

 

 

34,753

 

Distribution fees—Note 3(b)

 

 

31,791

 

Loan commitment fees—Note 2

 

 

28,957

 

Custodian fees—Note 3(c)

 

 

14,506

 

Chief Compliance Officer fees—Note 3(c)

 

 

7,299

 

Interest expense—Note 2

 

 

1,082

 

Miscellaneous

 

 

24,864

 

Total Expenses

 

 

5,456,846

 

Less—reduction in expenses due to undertaking—Note 3(a)

 

 

(161,068)

 

Net Expenses

 

 

5,295,778

 

Investment Income—Net

 

 

6,348,235

 

Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):

 

 

Net realized gain (loss) on investments

84,177,888

 

Net change in unrealized appreciation (depreciation) on investments

231,108,882

 

Net Realized and Unrealized Gain (Loss) on Investments

 

 

315,286,770

 

Net Increase in Net Assets Resulting from Operations

 

321,635,005

 

 

 

 

 

 

 

 

See notes to financial statements.

         

11

 

STATEMENT OF CHANGES IN NET ASSETS

                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
February 28, 2021 (Unaudited)

 

Year Ended
August 31, 2020

 

Operations ($):

 

 

 

 

 

 

 

 

Investment income—net

 

 

6,348,235

 

 

 

20,060,398

 

Net realized gain (loss) on investments

 

84,177,888

 

 

 

34,853,067

 

Net change in unrealized appreciation
(depreciation) on investments

 

231,108,882

 

 

 

(69,024,430)

 

Net Increase (Decrease) in Net Assets
Resulting from Operations

321,635,005

 

 

 

(14,110,965)

 

Distributions ($):

 

Distributions to shareholders:

 

 

 

 

 

 

 

 

Class A

 

 

(19,041,891)

 

 

 

(25,395,218)

 

Class C

 

 

(200,903)

 

 

 

(440,390)

 

Class I

 

 

(10,550,171)

 

 

 

(16,654,035)

 

Class Y

 

 

(7,275,644)

 

 

 

(8,883,603)

 

Total Distributions

 

 

(37,068,609)

 

 

 

(51,373,246)

 

Capital Stock Transactions ($):

 

Net proceeds from shares sold:

 

 

 

 

 

 

 

 

Class A

 

 

18,865,001

 

 

 

23,294,794

 

Class C

 

 

209,446

 

 

 

692,588

 

Class I

 

 

41,509,715

 

 

 

98,524,788

 

Class Y

 

 

39,030,621

 

 

 

41,059,106

 

Distributions reinvested:

 

 

 

 

 

 

 

 

Class A

 

 

17,758,659

 

 

 

23,607,957

 

Class C

 

 

181,276

 

 

 

334,420

 

Class I

 

 

9,954,922

 

 

 

15,707,496

 

Class Y

 

 

3,943,365

 

 

 

5,418,388

 

Cost of shares redeemed:

 

 

 

 

 

 

 

 

Class A

 

 

(57,027,997)

 

 

 

(96,480,564)

 

Class C

 

 

(4,893,710)

 

 

 

(7,613,430)

 

Class I

 

 

(65,392,937)

 

 

 

(196,500,842)

 

Class Y

 

 

(32,724,547)

 

 

 

(74,590,633)

 

Increase (Decrease) in Net Assets
from Capital Stock Transactions

(28,586,186)

 

 

 

(166,545,932)

 

Total Increase (Decrease) in Net Assets

255,980,210

 

 

 

(232,030,143)

 

Net Assets ($):

 

Beginning of Period

 

 

1,205,325,929

 

 

 

1,437,356,072

 

End of Period

 

 

1,461,306,139

 

 

 

1,205,325,929

 

12

 

                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
February 28, 2021 (Unaudited)

 

Year Ended
August 31, 2020

 

Capital Share Transactions (Shares):

 

Class Aa,b

 

 

 

 

 

 

 

 

Shares sold

 

 

491,072

 

 

 

713,315

 

Shares issued for distributions reinvested

 

 

474,450

 

 

 

651,629

 

Shares redeemed

 

 

(1,540,748)

 

 

 

(2,915,370)

 

Net Increase (Decrease) in Shares Outstanding

(575,226)

 

 

 

(1,550,426)

 

Class Cb

 

 

 

 

 

 

 

 

Shares sold

 

 

5,727

 

 

 

21,874

 

Shares issued for distributions reinvested

 

 

5,260

 

 

 

9,995

 

Shares redeemed

 

 

(142,322)

 

 

 

(247,262)

 

Net Increase (Decrease) in Shares Outstanding

(131,335)

 

 

 

(215,393)

 

Class Ia

 

 

 

 

 

 

 

 

Shares sold

 

 

1,076,925

 

 

 

3,063,057

 

Shares issued for distributions reinvested

 

 

264,829

 

 

 

431,877

 

Shares redeemed

 

 

(1,779,801)

 

 

 

(6,262,171)

 

Net Increase (Decrease) in Shares Outstanding

(438,047)

 

 

 

(2,767,237)

 

Class Ya

 

 

 

 

 

 

 

 

Shares sold

 

 

1,057,793

 

 

 

1,400,714

 

Shares issued for distributions reinvested

 

 

105,128

 

 

 

149,267

 

Shares redeemed

 

 

(879,493)

 

 

 

(2,329,883)

 

Net Increase (Decrease) in Shares Outstanding

283,428

 

 

 

(779,902)

 

 

 

 

 

 

 

 

 

 

 

During the period ended February 28, 2021, 2,071 Class Y shares representing $78,874 were exchanged for 2,081 Class A shares and 11,035 Class Y shares representing $406,142 were exchanged for 11,015 Class I shares. During the period ended August 31, 2020, 32,083 Class Y shares representing $1,118,637 were exchanged for 32,028 Class I shares, 8,359 Class A shares representing $258,938 were exchanged for 8,318 Class I shares, and 1,512 Class A shares representing $54,664 were exchanged for 1,506 Class Y shares.

 

During the period ended February 28, 2021, 2,383 Class C shares representing $85,033 were automatically converted to 2,191 Class A shares and during the period ended August 31, 2020, 3,386 Class C shares representing $103,287 were automatically converted to 3,116 Class A shares.

 

See notes to financial statements.

               

13

 

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. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.

               

Six Months Ended

Year Ended August 31,

February 28, 2021

Class A Shares

(Unaudited)

2020

2019

2018

2017

2016

Per Share Data ($):

           

Net asset value, beginning of period

33.28

34.61

42.18

40.12

36.08

38.49

Investment Operations:

           

Investment income—neta

.16

.47

.57

.49

.37

.50

Net realized and unrealized gain
(loss) on investments

8.90

(.56)

(2.67)

5.86

4.72

2.41

Total from Investment Operations

9.06

(.09)

(2.10)

6.35

5.09

2.91

Distributions:

           

Dividends from investment
income—net

(.22)

(.57)

(.63)

(.39)

(.49)

(.39)

Dividends from net realized gain
on investments

(.78)

(.67)

(4.84)

(3.90)

(.56)

(4.93)

Total Distributions

(1.00)

(1.24)

(5.47)

(4.29)

(1.05)

(5.32)

Net asset value, end of period

41.34

33.28

34.61

42.18

40.12

36.08

Total Return (%)b

27.54c

(.55)

(4.40)

16.68

14.26

8.26

Ratios/Supplemental Data (%):

           

Ratio of total expenses to
average net assets

.96d

.97

.96

.95

1.07

1.12

Ratio of net expenses to
average net assets

.93d

.93

.93

.93

.97

.98

Ratio of net investment income to
average net assets

.86d

1.42

1.58

1.19

.95

1.42

Portfolio Turnover Rate

52.04c

103.12

97.03

105.82

96.39

80.82

Net Assets, end of period ($ x 1,000)

781,818

648,545

728,146

856,213

818,085

842,532

 

a Based on average shares outstanding.

b Exclusive of sales charge.

c Not annualized.

d Annualized.

See notes to financial statements.

14

 

                     

Six Months Ended

         

February 28, 2021

Year Ended August 31,

Class C Shares

(Unaudited)

2020

2019

2018

2017

2016

Per Share Data ($):

           

Net asset value, beginning of period

30.58

31.84

39.20

37.52

33.81

36.35

Investment Operations:

 

 

 

 

 

 

Investment income—neta

.01

.20

.27

.17

.07

.22

Net realized and unrealized gain
(loss) on investments

8.18

(.53)

(2.48)

5.48

4.42

2.26

Total from Investment Operations

8.19

(.33)

(2.21)

5.65

4.49

2.48

Distributions:

     

 

 

 

Dividends from investment
income—net

-

(.26)

(.31)

(.07)

(.22)

(.09)

Dividends from net realized gain
on investments

(.78)

(.67)

(4.84)

(3.90)

(.56)

(4.93)

Total Distributions

(.78)

(.93)

(5.15)

(3.97)

(.78)

(5.02)

Net asset value, end of period

37.99

30.58

31.84

39.20

37.52

33.81

Total Return (%)b

27.05c

(1.29)

(5.12)

15.86

13.39

7.46

Ratios/Supplemental Data (%):

     

 

 

 

Ratio of total expenses to
average net assets

1.74d

1.73

1.71

1.71

1.84

1.89

Ratio of net expenses to
average net assets

1.68d

1.68

1.68

1.68

1.72

1.73

Ratio of net investment income to
average net assets

.08d

.66

.83

.45

.20

.67

Portfolio Turnover Rate

52.04c

103.12

97.03

105.82

96.39

80.82

Net Assets, end of period ($ x 1,000)

6,655

9,372

16,615

29,482

42,611

47,696

 

a Based on average shares outstanding.

b Exclusive of sales charge.

c Not annualized.

d Annualized.

See notes to financial statements.

15

 

FINANCIAL HIGHLIGHTS (continued)

                 

Six Months Ended

     

February 28, 2021

Year Ended August 31,

Class I Shares

(Unaudited)

2020

2019

2018

2017

2016

Per Share Data ($):

           

Net asset value, beginning of period

33.47

34.80

42.33

40.25

36.16

38.58

Investment Operations:

   

 

 

 

 

Investment income—neta

.20

.56

.66

.59

.48

.58

Net realized and unrealized gain
(loss) on investments

8.96

(.56)

(2.68)

5.88

4.73

2.42

Total from Investment Operations

9.16

(.00)b

(2.02)

6.47

5.21

3.00

Distributions:

     

 

 

 

Dividends from investment
income—net

(.31)

(.66)

(.67)

(.49)

(.56)

(.49)

Dividends from net realized gain
on investments

(.78)

(.67)

(4.84)

(3.90)

(.56)

(4.93)

Total Distributions

(1.09)

(1.33)

(5.51)

(4.39)

(1.12)

(5.42)

Net asset value, end of period

41.54

33.47

34.80

42.33

40.25

36.16

Total Return (%)

27.71c

(.30)

(4.16)

16.99

14.58

8.52

Ratios/Supplemental Data (%):

     

 

 

 

Ratio of total expenses to
average net assets

.71d

.71

.71

.72

.84

.89

Ratio of net expenses to
average net assets

.68d

.68

.68

.68

.72

.73

Ratio of net investment income to
average net assets

1.11d

1.67

1.83

1.44

1.21

1.67

Portfolio Turnover Rate

52.04c

103.12

97.03

105.82

96.39

80.82

Net Assets, end of period ($ x 1,000)

406,863

342,508

452,432

510,020

751,934

509,485

 

a Based on average shares outstanding.

b Amount represents less than $.01 per share.

c Not annualized.

d Annualized.

See notes to financial statements.

16

 

                   
 

Six Months Ended

   

February 28, 2021

Year Ended August 31,

Class Y Shares

(Unaudited)

2020

2019

2018

2017

2016

Per Share Data ($):

           

Net asset value, beginning of period

33.41

34.74

42.35

40.25

36.16

38.58

Investment Operations:

           

Investment income—neta

.21

.57

.67

.62

.48

.59

Net realized and unrealized gain
(loss) on investments

8.93

(.56)

(2.68)

5.87

4.73

2.41

Total from Investment Operations

9.14

.01

(2.01)

6.49

5.21

3.00

Distributions:

     

 

 

 

Dividends from investment
income—net

(.32)

(.67)

(.76)

(.49)

(.56)

(.49)

Dividends from net realized gain
on investments

(.78)

(.67)

(4.84)

(3.90)

(.56)

(4.93)

Total Distributions

(1.10)

(1.34)

(5.60)

(4.39)

(1.12)

(5.42)

Net asset value, end of period

41.45

33.41

34.74

42.35

40.25

36.16

Total Return (%)

27.72b

(.27)

(4.13)

17.05

14.58

8.52

Ratios/Supplemental Data (%):

     

 

 

 

Ratio of total expenses to
average net assets

.65c

.65

.65

.64

.75

.79

Ratio of net expenses to
average net assets

.65c

.65

.65

.64

.71

.73

Ratio of net investment income to
average net assets

1.15c

1.70

1.84

1.50

1.22

1.67

Portfolio Turnover Rate

52.04b

103.12

97.03

105.82

96.39

80.82

Net Assets, end of period ($ x 1,000)

265,971

204,901

240,163

529,206

177,876

179,629

 

a Based on average shares outstanding.

b Not annualized.

c Annualized.

See notes to financial statements.

17

 

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

BNY Mellon Dynamic Value Fund (the “fund”) is a separate diversified series of BNY Mellon 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 nine series, including the fund. The fund’s investment objective is to seek capital appreciation. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.

On February 10, 2021, BNY Mellon Investment Management announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”), portfolio managers responsible for managing the fund’s investments who are employees of Mellon Investments Corporation (“Mellon”) in a dual employment arrangement with the Adviser, will become employees of Newton Investment Management North America, LLC (“Newton”), which, like Mellon, will be an affiliate of the Adviser, and will no longer be employees of Mellon. Consequently, effective as of the Effective Date and subject to the approval of the Company’s Board of Directors (the “Board”), the Adviser will engage Newton to serve as the fund’s sub-adviser, pursuant to a sub-investment advisory agreement between the Adviser and Newton. As the fund’s sub-adviser, Newton will provide the day-to-day management of the fund’s investments, subject to the Adviser’s supervision and approval. It is currently anticipated that the fund’s portfolio managers who are responsible for the day-to-day management of the fund’s investments will continue to manage the fund’s investments as of the Effective Date. It is also currently anticipated that there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increase in the management fee payable by the fund as a result of the engagement of Newton as the fund’s sub-adviser. The Adviser (and not the fund) will pay Newton for its sub-advisory services.

BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares. The fund is authorized to issue 800 million shares of $.001 par value Common Stock. The fund currently has authorized four classes of shares: Class A (300 million shares authorized), Class C (100 million shares authorized), Class I (250 million shares authorized), and Class Y (150 million shares authorized). Class A shares generally are subject to a sales charge imposed

18

 

at the time of purchase. Class A shares bought without an initial sales charge as part of an investment of $1 million or more may be charged a contingent deferred sales charge (“CDSC”) of 1.00% if redeemed within one year. Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares eight years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, 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.

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”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. 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 Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement 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).

19

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

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

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

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

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

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

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

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

Investments in 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. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.

Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.

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. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.

For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.

The following is a summary of the inputs used as of February 28, 2021 in valuing the fund’s investments:

             
 

Level 1-Unadjusted Quoted Prices

Level 2- Other Significant Observable Inputs

 

Level 3-Significant Unobservable Inputs

Total

 

Assets ($)

   

Investments In Securities:

   

Equity Securities - Common Stocks

1,436,768,610

-

 

-

1,436,768,610

 

Exchange-Traded Funds

18,241,021

-

 

-

18,241,021

 

Investment Companies

42,257,065

-

 

-

42,257,065

 

 See Statement of Investments for additional detailed categorizations, if any.

(b) Foreign taxes: The fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, realized and unrealized capital gains on investments or certain foreign currency transactions. Foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the fund invests. These foreign taxes, if any, are paid by the fund

21

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

and are reflected in the Statement of Operations, if applicable. Foreign taxes payable or deferred or those subject to reclaims as of February 28, 2021, if any, are disclosed in the fund’s Statement of Assets and Liabilities.

(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.

Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended February 28, 2021, The Bank of New York Mellon earned $2,277 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.

(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.

(e) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different

22

 

country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.

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

(g) 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 and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.

As of and during the period ended February 28, 2021, 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 ended February 28, 2021, the fund did not incur any interest or penalties.

Each tax year in the three-year period ended August 31, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.

The tax character of distributions paid to shareholders during the fiscal year ended August 31, 2020 was as follows: ordinary income $28,709,302 and long-term capital gains $22,663,944. The tax character of current year distributions will be determined at the end of the current fiscal year.

23

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

NOTE 2—Bank Lines of Credit:

The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. Prior to September 30, 2020, the Citibank Credit Facility was $927 million with Tranche A available in an amount equal to $747 million and Tranche B available in an amount equal to $180 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit 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 February 28, 2021 was approximately $176,243 with a related weighted average annualized interest rate of 1.24%.

NOTE 3—Management Fee and Other Transactions with Affiliates:

(a) Pursuant to a management agreement with the Adviser the management fee is computed at the annual rate of .60% of the value of the fund’s average daily net assets and is payable monthly. The Adviser has contractually agreed, from September 1, 2020 through December 31, 2021, to waive receipt of its fees and/or assume the direct expenses of the fund, so that the direct expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .68% of the value of the fund’s average daily net assets. On or after December 31, 2021, the Adviser may terminate this expense limitation agreement at any time. The reduction in expenses, pursuant to the undertaking amounted to $161,068 during the period ended February 28, 2021.

During the period ended February 28, 2021, the Distributor retained $3,321 from commissions earned on sales of the fund’s Class A shares and $52 from CDSC fees on redemptions of the fund’s Class C shares.

24

 

(b) Under the Distribution 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 its average daily net assets. During the period ended February 28, 2021, Class C shares were charged $31,791 pursuant to the Distribution 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 (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended February 28, 2021, Class A and Class C shares were charged $870,521 and $10,597, respectively, pursuant to the Shareholder Services Plan.

The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. For financial reporting purposes, the fund includes net earnings credits, if any, as shareholder servicing costs in the Statement of Operations.

The fund has an arrangement with the custodian whereby the fund will receive interest income or be charged an overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.

The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services inclusive of earnings credits, if any, for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended February 28, 2021, the fund was charged $87,832 for transfer agency services, inclusive of earnings credit, if any. These fees are included in Shareholder servicing costs in the Statement of Operations.

The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity.

25

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

During the period ended February 28, 2021, the fund was charged $14,506 pursuant to the custody agreement.

During the period ended February 28, 2021, the fund was charged $7,299 for services performed by the Chief Compliance Officer and his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.

The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $668,191, Distribution Plan fees of $3,873, Shareholder Services Plan fees of $150,067, custodian fees of $10,267, Chief Compliance Officer fees of $2,621 and transfer agency fees of $33,285, which are offset against an expense reimbursement currently in effect in the amount of $29,959.

(d) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds 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, during the period ended February 28, 2021, amounted to $668,196,213 and $732,587,025, respectively.

At February 28, 2021, accumulated net unrealized appreciation on investments was $368,533,510, consisting of $380,902,151 gross unrealized appreciation and $12,368,641 gross unrealized depreciation.

At February 28, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).

26

 

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29

 

For More Information

BNY Mellon Dynamic Value Fund
240 Greenwich Street
New York, NY 10286

Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286

Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286

Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286

Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286

   

Ticker Symbols:

Class A:DAGVX     Class C:DCGVX     Class I:DRGVX     Class Y:DRGYX

Telephone Call your financial representative or 1-800-373-9387

Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144

E-mail Send your request to info@bnymellon.com

Internet Information can be viewed online or downloaded at www.im.bnymellon.com

The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.

   

© 2021 BNY Mellon Securities Corporation
0257SA0221

 


 

BNY Mellon Opportunistic Midcap Value Fund

 

SEMIANNUAL REPORT

February 28, 2021

 

 

 

Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes.

 

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

 

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

 

Contents

THE FUND

FOR MORE INFORMATION

 

Back Cover

 

DISCUSSION OF FUND PERFORMANCE (Unaudited)

For the period from September 1, 2020 through February 28, 2021, as provided by R. Patrick Kent, lead portfolio manager, and James Boyd, portfolio manager.

Market and Fund Performance Overview

For the six-month period ended February 28, 2021, BNY Mellon Opportunistic Midcap Value Fund’s Class A shares produced a total return of 25.13%, Class C shares returned 24.63%, Class I shares returned 25.25% and Class Y shares returned 25.34%.1 In comparison, the fund’s benchmark, the Russell Midcap® Value Index (the “Index”), produced a 26.53% total return for the same period.2

Mid-cap stocks gained ground over the reporting period as government-mandated lockdowns were lifted, and the economy continued to recover. The fund lagged the Index due to unfavorable asset allocation and security selection.

The Fund’s Investment Approach

The fund seeks to surpass the performance of the Index. The fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of mid-cap companies. The fund currently considers mid-cap companies to be those with market capitalizations, at the time of purchase, within the market capitalization range of companies comprising the Index. As of November 30, 2020, the market capitalizations of the largest and smallest companies included in the index were approximately $48 billion and $654 million, respectively, and the weighted average and median market capitalizations of the index were approximately $17 billion and $8 billion, respectively.

The fund’s portfolio managers identify potential investments through extensive fundamental and quantitative research. The fund focuses on individual stock selection (a “bottom-up” approach), emphasizing three key factors: relative value, business health and business momentum.

The fund’s portfolio managers use an opportunistic value approach to identify stocks whose current market prices trade at a large discount to their intrinsic value, as calculated by the portfolio managers. The opportunistic value style attempts to benefit from valuation inefficiencies and underappreciated, fundamental prospects present in the marketplace. The portfolio managers use mid-cycle estimates, growth prospects, the identification of a revaluation catalyst and competitive advantages as some of the factors in the valuation assessment.

Stocks Continued to Rebound

During the reporting period, the economy continued to show signs of recovery as government-mandated lockdowns were eased, and COVID-19 vaccines were approved. Retail sales rebounded, and the outlook for manufacturing also improved dramatically. Job creation surged, beating economists’ expectations, and unemployment dropped sharply. Technology and other growth stocks performed particularly well, benefiting from trends, such as e-commerce and working from home, that accelerated during the pandemic.

With the approval of multiple COVID-19 vaccines late in November 2020, performance in the market broadened, and more cyclically oriented stocks began to perform better. Returns were supported by interest rates, which remained low, while the stimulus package approved by Congress continued to bolster consumers, small businesses and the economy generally.

As the prospect of the end of the pandemic became more likely, businesses became more confident and increased their capital spending. In addition, inventory shortages began to appear, providing another catalyst to economic growth. Investors began to take more notice of value-oriented stocks toward the end of the reporting period, but growth-oriented stocks continued to perform positively.

2

 

Asset Allocation and Security Selection Hampered Performance

The fund underperformed the Index over the reporting period as a result of unfavorable asset allocation and security selection. The primary asset allocation decision that detracted from performance was an overweight position in the health care sector, which lagged the Index. In addition, certain shares that had performed well early in 2020 lagged in this reporting period as the prospects of a reopening economy failed to provide much support. These included shares of Clarivate, a provider of data related to intellectual property, and shares of Digital Realty Trust, a data center real estate investment trust. In addition, a position in Newmont, a gold mining company, detracted as weak gold prices weighed on the stock’s price.

On a more positive note, an overweight position in the information technology sector contributed positively to performance, as did an underweight position in the utilities sector, which lagged the Index. Stock selections in the information technology sector also were advantageous. These included Nuance Communications, a voice recognition company, and Slack Technologies, which was acquired by Salesforce. Selections in the consumer finance industry, including Capital One Financial and TCF Financial, were beneficial, and these stocks performed well when COVID-19 vaccine approvals were announced and also due to better-than-expected write-downs of consumer loans. In the semiconductor industry, ON Semiconductor, which supplies the auto industry, performed well, while in the materials sector, Freeport McMoRan, a copper mining company, was supported by higher copper prices.

Seeking Value in Certain Sectors

The fund continues to pivot toward companies that are likely to benefit from the full reopening of the global economy that is expected in 2021. Fiscal and monetary policy remains supportive of markets, but with higher inflation possible, rising interest rates bear watching. The fund will continue to look for stocks that offer discounts to their intrinsic value and are likely to perform well over a 12- to 18-month period. These include stocks in cyclical industries as well as in industries that have been especially hard-hit by the pandemic.

March 15, 2021

1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN.Investors should note that the fund’s short-term performance is highly unusual, in part to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future.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 and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.

2 Source: Lipper Inc. — The Russell Midcap® Value Index measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap® Index companies that are considered more value-oriented relative to the overall market, as defined by Russell’s leading style methodology. The Index is constructed to provide a comprehensive and unbiased barometer of the mid-cap value market. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap value market. Investors cannot invest directly in any index.

Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.

Equities are subject to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees.

Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.

Small and midsized company stocks tend to be more volatile and less liquid than larger company stocks as these companies are less established and have more volatile earnings histories. A significant overweight or underweight of companies, industries, or market sectors could cause performance to be more or less sensitive to developments affecting those sectors.

The securities discussed should not be considered recommendations to buy or sell a particular security.

Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.

3

 

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 BNY Mellon Opportunistic Midcap Value Fund from September 1, 2020 to February 28, 2021. 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

 

Assume actual returns for the six months ended February 28, 2021

 

 

 

 

 

 

 

 

 

 

Class A

Class C

Class I

Class Y

 

Expense paid per $1,000

$6.42

$10.92

$5.36

$4.69

 

Ending value (after expenses)

$1,251.30

$1,246.30

$1,252.50

$1,253.40

 

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 February 28, 2021

 

 

 

 

 

 

 

 

 

 

Class A

Class C

Class I

Class Y

 

Expense paid per $1,000

$5.76

$9.79

$4.81

$4.21

 

Ending value (after expenses)

$1,019.09

$1,015.08

$1,020.03

$1,020.63

 

†  Expenses are equal to the fund’s annualized expense ratio of 1.15% for Class A, 1.96% for Class C, .96% for Class I and .84% for Class Y, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

4

 

STATEMENT OF INVESTMENTS
February 28, 2021 (Unaudited)

               
 

Description

     

Shares

 

Value ($)

 

Common Stocks - 97.2%

         

Automobiles & Components - 1.2%

         

Thor Industries

     

52,076

a

6,096,017

 

Banks - 4.0%

         

Popular

     

155,541

 

10,393,250

 

TCF Financial

     

224,811

 

10,076,029

 
       

20,469,279

 

Capital Goods - 3.7%

         

CNH Industrial

     

711,778

b

10,562,785

 

Quanta Services

     

99,591

 

8,350,705

 
       

18,913,490

 

Commercial & Professional Services - 3.3%

         

Clarivate

     

378,154

b

8,603,003

 

Ritchie Bros Auctioneers

     

145,375

 

7,896,770

 
       

16,499,773

 

Consumer Durables & Apparel - 4.5%

         

Hasbro

     

92,816

 

8,697,787

 

Newell Brands

     

232,062

 

5,376,877

 

Skechers USA, CI. A

     

241,015

b

8,821,149

 
       

22,895,813

 

Consumer Services - 3.3%

         

Aramark

     

237,851

 

8,829,029

 

Norwegian Cruise Line Holdings

     

268,511

a,b

7,937,185

 
       

16,766,214

 

Diversified Financials - 7.6%

         

Ares Management, Cl. A

     

124,962

 

6,495,525

 

Capital One Financial

     

108,551

 

13,046,745

 

LPL Financial Holdings

     

57,496

 

7,563,024

 

Voya Financial

     

188,139

a

11,341,019

 
       

38,446,313

 

Energy - 4.4%

         

Cabot Oil & Gas

     

386,150

a

7,147,636

 

Pioneer Natural Resources

     

56,829

 

8,443,085

 

Valero Energy

     

83,897

 

6,458,391

 
       

22,049,112

 

Food, Beverage & Tobacco - 1.6%

         

Conagra Brands

     

241,521

 

8,194,808

 

Health Care Equipment & Services - 7.8%

         

Alcon

     

116,377

a,b

7,960,187

 

Centene

     

98,199

b

5,748,569

 

Encompass Health

     

61,156

 

4,919,389

 

Laboratory Corp. of America Holdings

     

33,423

b

8,018,512

 

5

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

               
 

Description

     

Shares

 

Value ($)

 

Common Stocks - 97.2% (continued)

         

Health Care Equipment & Services - 7.8% (continued)

         

Zimmer Biomet Holdings

     

78,113

 

12,737,106

 
       

39,383,763

 

Insurance - 3.0%

         

Arch Capital Group

     

171,034

b

6,126,438

 

Reinsurance Group of America

     

75,892

 

9,276,279

 
       

15,402,717

 

Materials - 10.5%

         

Crown Holdings

     

65,107

 

6,221,625

 

Eagle Materials

     

57,047

b

7,152,553

 

Freeport-McMoRan

     

342,227

b

11,604,918

 

Louisiana-Pacific

     

148,482

 

7,069,228

 

Newmont

     

159,744

 

8,686,879

 

The Mosaic Company

     

414,234

 

12,178,480

 
       

52,913,683

 

Media & Entertainment - 4.1%

         

Activision Blizzard

     

125,055

 

11,956,509

 

Zillow Group, Cl. C

     

52,826

b

8,522,419

 
       

20,478,928

 

Pharmaceuticals Biotechnology & Life Sciences - 6.9%

         

Elanco Animal Health

     

249,624

b

8,202,645

 

Neurocrine Biosciences

     

69,903

b

7,655,078

 

Sarepta Therapeutics

     

36,400

a,b

3,168,984

 

Syneos Health

     

126,682

b

9,798,853

 

Viatris

     

396,771

b

5,892,049

 
       

34,717,609

 

Real Estate - 6.2%

         

Alexandria Real Estate Equities

     

41,810

c

6,676,639

 

CBRE Group, Cl. A

     

107,330

b

8,132,394

 

Digital Realty Trust

     

60,625

a,c

8,168,006

 

Equity Residential

     

125,854

c

8,232,110

 
       

31,209,149

 

Retailing - 3.7%

         

Dollar General

     

46,842

 

8,852,670

 

Expedia Group

     

61,497

b

9,901,017

 
       

18,753,687

 

Semiconductors & Semiconductor Equipment - 4.5%

         

First Solar

     

47,623

a,b

3,858,415

 

ON Semiconductor

     

241,039

a,b

9,706,640

 

Skyworks Solutions

     

50,664

 

9,009,072

 
       

22,574,127

 

Software & Services - 8.5%

         

Euronet Worldwide

     

73,639

b

11,068,678

 

Global Payments

     

46,548

 

9,216,038

 

6

 

               
 

Description

     

Shares

 

Value ($)

 

Common Stocks - 97.2% (continued)

         

Software & Services - 8.5% (continued)

         

Nuance Communications

     

353,870

a,b

15,782,602

 

Proofpoint

     

55,802

b

6,747,578

 
       

42,814,896

 

Technology Hardware & Equipment - 2.2%

         

Western Digital

     

159,033

b

10,898,531

 

Transportation - 1.8%

         

Lyft, Cl. A

     

167,759

b

9,344,176

 

Utilities - 4.4%

         

Edison International

     

131,456

 

7,097,309

 

Exelon

     

184,715

 

7,129,999

 

PPL

     

299,636

 

7,847,467

 
       

22,074,775

 

Total Common Stocks (cost $364,902,768)

     

490,896,860

 
   

1-Day
Yield (%)

         

Investment Companies - 2.5%

         

Registered Investment Companies - 2.5%

         

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares
(cost $12,451,836)

 

0.07

 

12,451,836

d

12,451,836

 
               

Investment of Cash Collateral for Securities Loaned - 1.9%

         

Registered Investment Companies - 1.9%

         

Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares
(cost $9,635,105)

 

0.03

 

9,635,105

d

9,635,105

 

Total Investments (cost $386,989,709)

 

101.6%

 

512,983,801

 

Liabilities, Less Cash and Receivables

 

(1.6%)

 

(7,883,385)

 

Net Assets

 

100.0%

 

505,100,416

 


a
Security, or portion thereof, on loan. At February 28, 2021, the value of the fund’s securities on loan was $62,638,359 and the value of the collateral was $63,466,625, consisting of cash collateral of $9,635,105 and U.S. Government & Agency securities valued at $53,831,520.

bNon-income producing security.

cInvestment in real estate investment trust within the United States.

dInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.

7

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

   

Portfolio Summary (Unaudited)

Value (%)

Information Technology

15.1

Financials

14.7

Health Care

14.7

Consumer Discretionary

12.8

Materials

10.5

Industrials

8.8

Real Estate

6.2

Investment Companies

4.4

Utilities

4.4

Energy

4.4

Communication Services

4.0

Consumer Staples

1.6

 

101.6

 Based on net assets.
See notes to financial statements.

8

 

STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)

             

Investment Companies

Value
8/31/20 ($)

Purchases ($)

Sales ($)

Value
2/28/21 ($)

Net
Assets (%)

Dividends/
Distributions ($)

Registered Investment Companies:

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Class

7,687,707

76,477,417

(71,713,288)

12,451,836

2.5

3,907

Investment of Cash Collateral for Securities Loaned:††

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares

11,305,965

24,555,592

(35,861,557)

-

-

8,364†††

Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares

-

35,024,850

(25,389,745)

9,635,105

1.9

19,241†††

Total

18,993,672

136,057,859

(132,964,589)

22,086,941

4.4

31,512


 Includes reinvested dividends/distributions.

†† Effective November 9, 2020, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares.

††† Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

See notes to financial statements.

9

 

STATEMENT OF ASSETS AND LIABILITIES
February 28, 2021 (Unaudited)

             

 

 

 

 

 

 

 

 

 

 

Cost

 

Value

 

Assets ($):

 

 

 

 

Investments in securities—See Statement of Investments
(including securities on loan, valued at $62,638,359)—Note 1(c):

 

 

 

Unaffiliated issuers

364,902,768

 

490,896,860

 

Affiliated issuers

 

22,086,941

 

22,086,941

 

Cash

 

 

 

 

514,753

 

Receivable for investment securities sold

 

2,583,160

 

Dividends and securities lending income receivable

 

514,441

 

Receivable for shares of Common Stock subscribed

 

182,295

 

Prepaid expenses

 

 

 

 

31,651

 

 

 

 

 

 

516,810,101

 

Liabilities ($):

 

 

 

 

Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c)

 

390,891

 

Liability for securities on loan—Note 1(c)

 

9,635,105

 

Payable for investment securities purchased

 

1,122,125

 

Payable for shares of Common Stock redeemed

 

415,682

 

Directors’ fees and expenses payable

 

11,279

 

Other accrued expenses

 

 

 

 

134,603

 

 

 

 

 

 

11,709,685

 

Net Assets ($)

 

 

505,100,416

 

Composition of Net Assets ($):

 

 

 

 

Paid-in capital

 

 

 

 

376,280,411

 

Total distributable earnings (loss)

 

 

 

 

128,820,005

 

Net Assets ($)

 

 

505,100,416

 

           

Net Asset Value Per Share

Class A

Class C

Class I

Class Y

 

Net Assets ($)

338,261,296

17,112,335

143,964,433

5,762,352

 

Shares Outstanding

10,113,687

624,963

4,325,921

173,012

 

Net Asset Value Per Share ($)

33.45

27.38

33.28

33.31

 

 

 

 

 

 

 

See notes to financial statements.

 

 

 

 

 

10

 

STATEMENT OF OPERATIONS
Six Months Ended February 28, 2021 (Unaudited)

             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income ($):

 

 

 

 

Income:

 

 

 

 

Cash dividends (net of $15,472 foreign taxes withheld at source):

 

Unaffiliated issuers

 

 

2,743,546

 

Affiliated issuers

 

 

3,907

 

Income from securities lending—Note 1(c)

 

 

27,605

 

Interest

 

 

2,001

 

Total Income

 

 

2,777,059

 

Expenses:

 

 

 

 

Management fee—Note 3(a)

 

 

1,722,288

 

Shareholder servicing costs—Note 3(c)

 

 

624,556

 

Distribution fees—Note 3(b)

 

 

67,683

 

Professional fees

 

 

53,266

 

Registration fees

 

 

33,727

 

Prospectus and shareholders’ reports

 

 

26,356

 

Directors’ fees and expenses—Note 3(d)

 

 

17,368

 

Loan commitment fees—Note 2

 

 

10,032

 

Chief Compliance Officer fees—Note 3(c)

 

 

7,299

 

Custodian fees—Note 3(c)

 

 

5,845

 

Miscellaneous

 

 

12,505

 

Total Expenses

 

 

2,580,925

 

Investment Income—Net

 

 

196,134

 

Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):

 

 

Net realized gain (loss) on investments

38,989,475

 

Net change in unrealized appreciation (depreciation) on investments

65,288,826

 

Net Realized and Unrealized Gain (Loss) on Investments

 

 

104,278,301

 

Net Increase in Net Assets Resulting from Operations

 

104,474,435

 

 

 

 

 

 

 

 

See notes to financial statements.

         

11

 

STATEMENT OF CHANGES IN NET ASSETS

                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
February 28, 2021 (Unaudited)

 

Year Ended
August 31, 2020

 

Operations ($):

 

 

 

 

 

 

 

 

Investment income—net

 

 

196,134

 

 

 

769,249

 

Net realized gain (loss) on investments

 

38,989,475

 

 

 

13,720,130

 

Net change in unrealized appreciation
(depreciation) on investments

 

65,288,826

 

 

 

35,147,037

 

Net Increase (Decrease) in Net Assets
Resulting from Operations

104,474,435

 

 

 

49,636,416

 

Distributions ($):

 

Distributions to shareholders:

 

 

 

 

 

 

 

 

Class A

 

 

(335,026)

 

 

 

(901,623)

 

Class C

 

 

-

 

 

 

(238)

 

Class I

 

 

(401,771)

 

 

 

(732,913)

 

Class Y

 

 

(23,223)

 

 

 

(48,476)

 

Total Distributions

 

 

(760,020)

 

 

 

(1,683,250)

 

Capital Stock Transactions ($):

 

Net proceeds from shares sold:

 

 

 

 

 

 

 

 

Class A

 

 

9,461,079

 

 

 

17,711,916

 

Class C

 

 

163,422

 

 

 

715,583

 

Class I

 

 

11,997,210

 

 

 

20,935,087

 

Class Y

 

 

213,570

 

 

 

941,882

 

Distributions reinvested:

 

 

 

 

 

 

 

 

Class A

 

 

314,931

 

 

 

847,239

 

Class C

 

 

-

 

 

 

210

 

Class I

 

 

385,156

 

 

 

700,605

 

Class Y

 

 

19,430

 

 

 

36,142

 

Cost of shares redeemed:

 

 

 

 

 

 

 

 

Class A

 

 

(29,365,008)

 

 

 

(104,233,826)

 

Class C

 

 

(5,501,440)

 

 

 

(14,341,047)

 

Class I

 

 

(19,517,600)

 

 

 

(111,672,519)

 

Class Y

 

 

(859,753)

 

 

 

(5,550,332)

 

Increase (Decrease) in Net Assets
from Capital Stock Transactions

(32,689,003)

 

 

 

(193,909,060)

 

Total Increase (Decrease) in Net Assets

71,025,412

 

 

 

(145,955,894)

 

Net Assets ($):

 

Beginning of Period

 

 

434,075,004

 

 

 

580,030,898

 

End of Period

 

 

505,100,416

 

 

 

434,075,004

 

12

 

                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
February 28, 2021 (Unaudited)

 

Year Ended
August 31, 2020

 

Capital Share Transactions (Shares):

 

Class Aa,b

 

 

 

 

 

 

 

 

Shares sold

 

 

313,971

 

 

 

726,839

 

Shares issued for distributions reinvested

 

 

10,265

 

 

 

33,185

 

Shares redeemed

 

 

(1,001,251)

 

 

 

(4,229,157)

 

Net Increase (Decrease) in Shares Outstanding

(677,015)

 

 

 

(3,469,133)

 

Class Ca,b

 

 

 

 

 

 

 

 

Shares sold

 

 

6,936

 

 

 

38,096

 

Shares issued for distributions reinvested

 

 

-

 

 

 

13

 

Shares redeemed

 

 

(220,916)

 

 

 

(701,770)

 

Net Increase (Decrease) in Shares Outstanding

(213,980)

 

 

 

(663,661)

 

Class Ib

 

 

 

 

 

 

 

 

Shares sold

 

 

413,900

 

 

 

912,034

 

Shares issued for distributions reinvested

 

 

12,620

 

 

 

27,583

 

Shares redeemed

 

 

(667,959)

 

 

 

(4,593,325)

 

Net Increase (Decrease) in Shares Outstanding

(241,439)

 

 

 

(3,653,708)

 

Class Y

 

 

 

 

 

 

 

 

Shares sold

 

 

7,545

 

 

 

39,010

 

Shares issued for distributions reinvested

 

 

637

 

 

 

1,422

 

Shares redeemed

 

 

(30,555)

 

 

 

(226,571)

 

Net Increase (Decrease) in Shares Outstanding

(22,373)

 

 

 

(186,139)

 

 

 

 

 

 

 

 

 

 

 

During the period ended February 28, 2021, 3,680 Class C shares representing $97,484 were automatically converted to 3,015 Class A shares and during the period ended August 31, 2020, 3,983 Class C shares representing $78,518 were automatically converted to 3,287 Class A shares.

 

During the period ended February 28, 2021, 1,375 Class Y shares representing $41,097 were exchanged for 1,373 Class A shares. During the period ended August 31, 2020, 22,839 Class A shares representing $506,750 were exchanged to 22,943 Class I shares and 1,066 Class C shares representing $23,892 were exchanged to 883 Class I shares.

 

See notes to financial statements.

               

13

 

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. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.

               
   

Six Months Ended

 

February 28, 2021

Year Ended August 31,

Class A Shares

(Unaudited)

2020

2019

2018

2017

2016

Per Share Data ($):

           

Net asset value,
beginning of period

26.76

24.10

35.32

34.37

31.72

36.97

Investment Operations:

           

Investment income (loss)—neta

.01

.03

.03

(.03)

.03

.03

Net realized and unrealized gain
(loss) on investments

6.71

2.70

(4.32)

5.35

4.13

.82

Total from Investment Operations

6.72

2.73

(4.29)

5.32

4.16

.85

Distributions:

           

Dividends from investment
income—net

(.03)

(.07)

-

-

(.01)

-

Dividends from net realized gain
on investments

-

-

(6.93)

(4.37)

(1.50)

(6.10)

Total Distributions

(.03)

(.07)

(6.93)

(4.37)

(1.51)

(6.10)

Net asset value, end of period

33.45

26.76

24.10

35.32

34.37

31.72

Total Return (%)b

25.13c

11.34

(10.64)

16.44

13.28

3.95

Ratios/Supplemental Data (%):

           

Ratio of total expenses to
average net assets

1.15d

1.18

1.15

1.16

1.17

1.21

Ratio of net investment income
(loss) to average net assets

.06d

.13

.12

(.08)

.10

.11

Portfolio Turnover Rate

33.57c

91.55

98.59

100.55

104.51

101.68

Net Assets, end of period
($ x 1,000)

338,261

288,719

343,673

484,169

509,761

796,686

 

a Based on average shares outstanding.

b Exclusive of sales charge.

c Not annualized.

d Annualized.

See notes to financial statements.

14

 

                 
   

Six Months Ended

 

February 28, 2021

Year Ended August 31,

Class C Shares

(Unaudited)

2020

2