|
|
|
|
|
Common Stocks (continued)
|
Shares
|
|
Value ($)
|
United States (continued)
|
|
|
|
|
Teradata
|
561
|
a
|
38,322
|
Texas Instruments
|
3,585
|
|
100,703
|
Textron
|
976
|
|
24,605
|
Thermo Fisher Scientific
|
1,121
|
|
68,448
|
Tiffany & Co.
|
397
|
|
25,098
|
Time Warner
|
2,958
|
|
128,525
|
Time Warner Cable
|
962
|
|
95,344
|
TJX
|
2,313
|
|
96,290
|
Toll Brothers
|
400
|
a
|
13,204
|
Torchmark
|
249
|
|
12,597
|
Total System Services
|
474
|
|
10,660
|
Tractor Supply
|
210
|
|
20,210
|
TransDigm Group
|
140
|
|
18,649
|
Transocean
|
1,085
|
|
49,386
|
Travelers
|
1,198
|
|
84,986
|
Trimble Navigation
|
369
|
a
|
17,409
|
TRW Automotive Holdings
|
256
|
a
|
11,907
|
Tyco International
|
1,403
|
|
37,699
|
Tyson Foods, Cl. A
|
758
|
|
12,742
|
U.S. Bancorp
|
6,069
|
|
201,551
|
UDR
|
754
|
c
|
18,300
|
Ulta Salon Cosmetics & Fragrance
|
178
|
|
16,415
|
Ultra Petroleum
|
526
|
a
|
11,998
|
Union Pacific
|
1,508
|
|
185,529
|
United Continential Holdings
|
247
|
a
|
4,745
|
United Parcel Service, Cl. B
|
2,235
|
|
163,714
|
United States Steel
|
535
|
|
10,909
|
United Technologies
|
2,771
|
|
216,581
|
UnitedHealth Group
|
3,195
|
|
178,920
|
Unum Group
|
949
|
|
19,246
|
Urban Outfitters
|
444
|
a
|
15,877
|
URS
|
337
|
|
11,283
|
Valero Energy
|
1,627
|
|
47,346
|
Varian Medical Systems
|
398
|
a
|
26,570
|
Ventas
|
973
|
c
|
61,562
|
VeriFone Systems
|
353
|
a
|
10,463
|
STATEMENT OF INVESTMENTS
(continued)
|
|
|
|
Common Stocks (continued)
|
Shares
|
|
Value ($)
|
United States (continued)
|
|
|
|
VeriSign
|
497
|
a
|
18,424
|
Verisk Analytics, Cl. A
|
440
|
a
|
22,440
|
Verizon Communications
|
9,011
|
|
402,251
|
Vertex Pharmaceuticals
|
628
|
a
|
30,295
|
VF
|
260
|
|
40,685
|
Viacom, Cl. B
|
1,490
|
|
76,392
|
Visa, Cl. A
|
1,688
|
|
234,227
|
VMware, Cl. A
|
278
|
a
|
23,566
|
Vornado Realty Trust
|
489
|
c
|
39,223
|
Vulcan Materials
|
342
|
|
15,722
|
W.R. Berkley
|
398
|
|
15,478
|
W.W. Grainger
|
177
|
|
35,650
|
Wal-Mart Stores
|
5,898
|
|
442,468
|
Walgreen
|
2,776
|
|
97,798
|
Walt Disney
|
5,410
|
|
265,469
|
Walter Energy
|
122
|
|
4,265
|
Warner Chilcott, Cl. A
|
597
|
|
6,913
|
Washington Post, Cl. B
|
10
|
|
3,335
|
Waste Management
|
1,285
|
|
42,071
|
Waters
|
284
|
a
|
23,234
|
Watson Pharmaceuticals
|
443
|
a
|
38,076
|
Weatherford
|
|
|
|
International
|
2,132
|
a
|
24,092
|
WellPoint
|
1,108
|
|
67,898
|
Wells Fargo & Co.
|
15,969
|
|
537,996
|
Western Digital
|
704
|
|
24,098
|
Western Union
|
1,747
|
|
22,187
|
Weyerhaeuser
|
1,585
|
c
|
43,889
|
Whirlpool
|
204
|
|
19,927
|
Whiting Petroleum
|
380
|
a
|
15,968
|
Whole Foods Market
|
537
|
|
50,870
|
Williams
|
2,053
|
|
71,834
|
54
|
|
|
|
Common Stocks (continued)
|
Shares
|
|
Value ($)
|
United States (continued)
|
|
|
|
Windstream
|
2,205
|
|
21,036
|
Wisconsin Energy
|
692
|
|
26,621
|
Wyndham Worldwide
|
412
|
|
20,765
|
Wynn Resorts
|
272
|
|
32,928
|
Xcel Energy
|
1,431
|
|
40,426
|
Xerox
|
4,418
|
|
28,452
|
Xilinx
|
804
|
|
26,339
|
XL Group
|
944
|
|
23,355
|
Xylem
|
462
|
|
11,208
|
Yahoo!
|
3,895
|
a
|
65,475
|
Yum! Brands
|
1,394
|
|
97,733
|
Zimmer Holdings
|
502
|
|
32,233
|
|
|
|
41,581,784
|
Total Common Stocks
|
|
|
|
(cost $77,726,251)
|
|
|
77,957,611
|
|
Preferred Stocks—.1%
|
|
|
|
Germany
|
|
|
|
Bayerische Motoren Werke
|
132
|
|
7,306
|
Henkel & Co.
|
549
|
|
43,841
|
Porsche Automobil Holding
|
502
|
|
33,327
|
ProSiebenSat.1 Media
|
436
|
|
12,150
|
RWE
|
68
|
|
2,816
|
Volkswagen
|
445
|
|
92,055
|
Total Preferred Stocks
|
|
|
|
(cost $128,282)
|
|
|
191,495
|
|
|
Number of
|
|
|
Rights—.0%
|
Rights
|
|
Value ($)
|
Spain
|
|
|
|
Banco Santander
|
|
|
|
(cost $6,029)
|
31,413
|
a
|
6,189
|
STATEMENT OF INVESTMENTS
(continued)
|
|
|
|
|
|
|
Face Amount
|
|
|
|
|
Covered by
|
|
|
|
Options Purchased—2.7%
|
Contracts ($)
|
|
Value ($)
|
|
Call Options—2.6%
|
|
|
|
|
U.S. Treasury
|
|
|
|
|
10 Year Note Futures,
|
|
|
|
|
December 2012 @ $115
|
210,000
|
a
|
3,786,563
|
|
|
|
Number of
|
|
|
|
|
Contracts
|
|
Value ($)
|
|
Put Options—.1%
|
|
|
|
|
Swiss Market Index Futures,
|
|
|
|
|
December 2012 @ CHF 6,601
|
300
|
a
|
39,572
|
|
Swiss Market Index Futures,
|
|
|
|
|
December 2012 @ CHF 6,532
|
990
|
a
|
101,152
|
|
|
|
|
140,724
|
|
Total Options Purchased
|
|
|
|
|
(cost $3,823,484)
|
|
|
3,927,287
|
|
|
|
Principal
|
|
|
|
Short-Term Investments—26.8%
|
Amount ($)
|
|
Value ($)
|
|
U.S. Treasury Bills:
|
|
|
|
|
0.09%, 11/23/12
|
7,000,000
|
|
6,999,657
|
|
0.09%, 12/13/12
|
7,000,000
|
|
6,999,286
|
|
0.10%, 11/29/12
|
2,500,000
|
|
2,499,840
|
|
0.10%, 12/6/12
|
2,000,000
|
|
1,999,820
|
|
0.10%, 12/20/12
|
6,170,000
|
d
|
6,169,179
|
|
0.10%, 1/10/13
|
3,350,000
|
|
3,349,477
|
|
0.10%, 1/17/13
|
3,760,000
|
|
3,759,338
|
|
0.11%, 11/15/12
|
6,000,000
|
|
5,999,868
|
|
0.11%, 12/27/12
|
1,270,000
|
|
1,269,807
|
|
Total Short-Term Investments
|
|
|
|
|
(cost $39,045,745)
|
|
|
39,046,272
|
56
|
|
|
|
Other investment—16.8%
|
Shares
|
|
Value ($)
|
Registered Investment Company;
|
|
|
|
Dreyfus Institutional Preferred Plus Money Market Fund
|
|
|
|
(cost $24,483,140)
|
24,483,140
|
e
|
24,483,140
|
|
Total Investments
(cost $145,212,931)
|
99.8
|
%
|
145,611,994
|
Cash and Receivables (Net)
|
.2
|
%
|
273,725
|
Net Assets
|
100.0
|
%
|
145,885,719
|
BR—Bearer Certificate
CDI—Chess Depository Interest
CHF—Swiss Franc
PC—Participation Certificate
REIT—Real Estate Investment Trust
RSP—Risparmio (Savings) Shares
SDR—Swedish Depository Receipts
STRIP—Separate Trading of Registered Interest and Principal of Securities
|
a Non-income producing security.
|
b The valuation of these securities has been determined in good faith by management under the direction of the Board of
|
Directors.At October 31, 2012, the value of these securities amounted to $8 or less than .01% of net assets.
|
c Investment in real estate investment trust.
|
d Held by or on behalf of a counterparty for open financial futures positions.
|
e Investment in affiliated money market mutual fund.
|
|
|
|
|
Portfolio Summary (Unaudited)
†
|
|
|
|
|
Value (%)
|
|
Value (%)
|
Short-Term/
|
|
Industrial
|
5.5
|
Money Market Investments
|
43.6
|
Consumer Staples
|
5.2
|
Financial
|
10.8
|
Materials
|
3.9
|
Consumer Discretionary
|
6.7
|
Options Purchased
|
2.7
|
Energy
|
5.7
|
Telecommunication Services
|
2.5
|
Information Technology
|
5.7
|
Utilities
|
1.9
|
Health Care
|
5.6
|
|
99.8
|
|
† Based on net assets.
|
|
|
|
See notes to financial statements.
|
|
|
|
STATEMENT OF FINANCIAL FUTURES
October 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
Market Value
|
|
|
Appreciation
|
|
|
|
Covered by
|
|
|
(Depreciation)
|
|
|
Contracts
|
Contracts ($)
|
|
Expiration
|
at 10/31/2012
|
($)
|
Financial Futures Long
|
|
|
|
|
|
|
Amsterdam Exchange Index
|
130
|
11,104,054
|
|
November 2012
|
(33,433
|
)
|
ASX SPI 200
|
24
|
2,805,240
|
|
December 2012
|
65,741
|
|
CAC 40 10 EURO
|
105
|
4,661,253
|
|
November 2012
|
(75,543
|
)
|
DAX
|
48
|
11,309,104
|
|
December 2012
|
(112,652
|
)
|
Euro-Bond Options
|
305
|
8,570,614
|
|
November 2012
|
167,519
|
|
FTSE 100
|
19
|
1,767,328
|
|
December 2012
|
(15,754
|
)
|
Japanese 10 Year Bond
|
18
|
32,525,366
|
|
December 2012
|
(4,097
|
)
|
Standard & Poor’s 500 E-mini
|
251
|
17,655,340
|
|
December 2012
|
(410,855
|
)
|
U.S. Treasury 10 Year Notes
|
43
|
5,720,344
|
|
December 2012
|
40,391
|
|
Financial Futures Short
|
|
|
|
|
|
|
Australian 10 Year Bond
|
118
|
(15,349,346
|
)
|
December 2012
|
5,206
|
|
Canadian 10 Year Bond
|
147
|
(20,174,508
|
)
|
December 2012
|
(101,230
|
)
|
Euro-Bond
|
28
|
(5,141,850
|
)
|
December 2012
|
(7,445
|
)
|
Hang Seng
|
76
|
(10,627,183
|
)
|
November 2012
|
(5,017
|
)
|
Japanese 10 Year Mini Bond
|
83
|
(14,992,609
|
)
|
December 2012
|
(41,912
|
)
|
Long Gilt
|
97
|
(18,649,571
|
)
|
December 2012
|
237,884
|
|
S&P/ Toronto Stock
|
|
|
|
|
|
|
Exchange 60 Index
|
18
|
(2,559,199
|
)
|
December 2012
|
(18,793
|
)
|
Topix
|
95
|
(8,818,113
|
)
|
December 2012
|
(10,256
|
)
|
Gross Unrealized Appreciation
|
|
|
|
|
516,741
|
|
Gross Unrealized Depreciation
|
|
|
|
|
(836,987
|
)
|
|
See notes to financial statements.
|
|
|
|
|
|
|
58
STATEMENT OF OPTIONS WRITTEN
October 31, 2012
|
|
|
|
|
|
Number of
|
|
|
|
|
Contracts ($)
|
|
Value ($)
|
|
Call Options:
|
|
|
|
|
Swiss Market Index Futures,
|
|
|
|
|
December 2012 @ CHF 6,601
|
300
|
a
|
(37,462
|
)
|
Swiss Market Index Futures,
|
|
|
|
|
December 2012 @ CHF 6,532
|
990
|
a
|
(167,508
|
)
|
(premiums received $228,996)
|
|
|
(204,970
|
)
|
|
CHF—Swiss Franc
|
|
|
|
|
a Non-income producing security.
|
|
|
|
|
See notes to financial statements.
|
|
|
|
|
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2012
|
|
|
|
|
|
|
Cost
|
Value
|
|
Assets ($):
|
|
|
|
|
Investments in securities—See Statement of Investments:
|
|
|
|
Unaffiliated issuers
|
|
120,729,791
|
121,128,854
|
|
Affiliated issuers
|
|
24,483,140
|
24,483,140
|
|
Cash
|
|
|
150
|
|
Cash on initial margin—Note 4
|
|
|
1,080,000
|
|
Cash denominated in foreign currencies
|
|
812,840
|
800,793
|
|
Receivable for shares of Common Stock subscribed
|
|
|
543,103
|
|
Unrealized appreciation on forward foreign
|
|
|
|
|
currency exchange contracts—Note 4
|
|
|
496,796
|
|
Dividends receivable
|
|
|
180,345
|
|
Prepaid expenses
|
|
|
15,413
|
|
|
|
|
148,728,594
|
|
Liabilities ($):
|
|
|
|
|
Due to The Dreyfus Corporation and affiliates—Note 3(c)
|
|
178,088
|
|
Unrealized depreciation on forward foreign
|
|
|
|
|
currency exchange contracts—Note 4
|
|
|
1,938,899
|
|
Payable for futures variation margin—Note 4
|
|
|
300,416
|
|
Outstanding options written, at value (premiums received
|
|
|
|
$228,996)—See Statement of Options Written—Note 4
|
|
204,970
|
|
Payable for shares of Common Stock redeemed
|
|
|
135,836
|
|
Accrued expenses
|
|
|
84,666
|
|
|
|
|
2,842,875
|
|
Net Assets ($)
|
|
|
145,885,719
|
|
Composition of Net Assets ($):
|
|
|
|
|
Paid-in capital
|
|
|
224,597,468
|
|
Accumulated investment (loss)—net
|
|
|
(79,143
|
)
|
Accumulated net realized gain (loss) on investments
|
|
|
(77,241,668
|
)
|
Accumulated net unrealized appreciation (depreciation) on investments,
|
|
|
options transactions and foreign currency transactions [including
|
|
|
|
($320,246) net unrealized (depreciation) on financial futures]
|
|
(1,390,938
|
)
|
Net Assets ($)
|
|
|
145,885,719
|
|
|
|
Net Asset Value Per Share
|
|
|
|
|
|
Class A
|
Class C
|
Class I
|
|
Net Assets ($)
|
14,912,771
|
7,704,144
|
123,268,804
|
|
Shares Outstanding
|
1,194,240
|
635,703
|
9,745,816
|
|
Net Asset Value Per Share ($)
|
12.49
|
12.12
|
12.65
|
|
|
See notes to financial statements.
|
|
|
|
|
60
STATEMENT OF OPERATIONS
Year Ended October 31, 2012
|
|
|
Investment Income ($):
|
|
|
Income:
|
|
|
Cash dividends (net of $87,263 foreign taxes withheld at source):
|
|
|
Unaffiliated issuers
|
1,577,350
|
|
Affiliated issuers
|
19,085
|
|
Interest
|
20,625
|
|
Total Income
|
1,617,060
|
|
Expenses:
|
|
|
Management fee—Note 3(a)
|
1,105,673
|
|
Shareholder servicing costs—Note 3(c)
|
107,644
|
|
Custodian fees—Note 3(c)
|
96,982
|
|
Professional fees
|
75,038
|
|
Distribution fees—Note 3(b)
|
62,188
|
|
Registration fees
|
48,211
|
|
Prospectus and shareholders’ reports
|
29,868
|
|
Directors’ fees and expenses—Note 3(d)
|
6,835
|
|
Loan commitment fees—Note 2
|
996
|
|
Miscellaneous
|
99,621
|
|
Total Expenses
|
1,633,056
|
|
Less—reduction in fees due to earnings credits—Note 3(c)
|
(31
|
)
|
Net Expenses
|
1,633,025
|
|
Investment (Loss)—Net
|
(15,965
|
)
|
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
|
|
|
Net realized gain (loss) on investments and foreign currency transactions
|
(322,988
|
)
|
Net realized gain (loss) on options transactions
|
194,762
|
|
Net realized gain (loss) on financial futures
|
3,323,831
|
|
Net realized gain (loss) on forward foreign currency exchange contracts
|
51,005
|
|
Net Realized Gain (Loss)
|
3,246,610
|
|
Net unrealized appreciation (depreciation) on
|
|
|
investments and foreign currency transactions
|
4,525,937
|
|
Net unrealized appreciation (depreciation) on options transactions
|
172,687
|
|
Net unrealized appreciation (depreciation) on financial futures
|
(1,034,250
|
)
|
Net unrealized appreciation (depreciation) on
|
|
|
forward foreign currency exchange contracts
|
(1,066,773
|
)
|
Net Unrealized Appreciation (Depreciation)
|
2,597,601
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
5,844,211
|
|
Net Increase in Net Assets Resulting from Operations
|
5,828,246
|
|
|
See notes to financial statements.
|
|
|
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
Year Ended October 31,
|
|
|
2012
|
|
2011
|
|
Operations ($):
|
|
|
|
|
Investment (loss)—net
|
(15,965
|
)
|
(195,828
|
)
|
Net realized gain (loss) on investments
|
3,246,610
|
|
2,063,426
|
|
Net unrealized appreciation
|
|
|
|
|
(depreciation) on investments
|
2,597,601
|
|
(31,984
|
)
|
Net Increase (Decrease) in Net Assets
|
|
|
|
|
Resulting from Operations
|
5,828,246
|
|
1,835,614
|
|
Capital Stock Transactions ($):
|
|
|
|
|
Net proceeds from shares sold:
|
|
|
|
|
Class A Shares
|
1,361,750
|
|
1,835,994
|
|
Class C Shares
|
154,884
|
|
228,056
|
|
Class I Shares
|
84,243,260
|
|
33,309,183
|
|
Cost of shares redeemed:
|
|
|
|
|
Class A Shares
|
(6,241,842
|
)
|
(7,852,506
|
)
|
Class C Shares
|
(2,075,851
|
)
|
(3,962,032
|
)
|
Class I Shares
|
(14,762,264
|
)
|
(12,256,698
|
)
|
Increase (Decrease) in Net Assets
|
|
|
|
|
from Capital Stock Transactions
|
62,679,937
|
|
11,301,997
|
|
Total Increase (Decrease) in Net Assets
|
68,508,183
|
|
13,137,611
|
|
Net Assets ($):
|
|
|
|
|
Beginning of Period
|
77,377,536
|
|
64,239,925
|
|
End of Period
|
145,885,719
|
|
77,377,536
|
|
Accumulated investment (loss)—net
|
(79,143
|
)
|
(40,340
|
)
|
Capital Share Transactions (Shares):
|
|
|
|
|
Class A
|
|
|
|
|
Shares sold
|
112,440
|
|
156,682
|
|
Shares redeemed
|
(519,883
|
)
|
(671,148
|
)
|
Net Increase (Decrease) in Shares Outstanding
|
(407,443
|
)
|
(514,466
|
)
|
Class C
|
|
|
|
|
Shares sold
|
13,139
|
|
19,817
|
|
Shares redeemed
|
(177,256
|
)
|
(342,904
|
)
|
Net Increase (Decrease) in Shares Outstanding
|
(164,117
|
)
|
(323,087
|
)
|
Class I
|
|
|
|
|
Shares sold
|
6,779,483
|
|
2,798,559
|
|
Shares redeemed
|
(1,204,891
|
)
|
(1,034,286
|
)
|
Net Increase (Decrease) in Shares Outstanding
|
5,574,592
|
|
1,764,273
|
|
|
See notes to financial statements.
|
|
|
|
|
62
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated.All information (except portfolio turnover rate) reflects financial results for a single fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
|
|
Class A Shares
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
Per Share Data ($):
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
11.74
|
|
11.39
|
|
9.98
|
|
8.48
|
|
14.25
|
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
|
Investment income (loss)—net
a
|
(.03
|
)
|
(.04
|
)
|
(.06
|
)
|
(.01
|
)
|
.13
|
|
Net realized and unrealized
|
|
|
|
|
|
|
|
|
|
|
gain (loss) on investments
|
.78
|
|
.39
|
|
1.47
|
|
1.87
|
|
(5.47
|
)
|
Total from Investment Operations
|
.75
|
|
.35
|
|
1.41
|
|
1.86
|
|
(5.34
|
)
|
Distributions:
|
|
|
|
|
|
|
|
|
|
|
Dividends from investment income—net
|
—
|
|
—
|
|
—
|
|
(.36
|
)
|
(.26
|
)
|
Dividends from net realized
|
|
|
|
|
|
|
|
|
|
|
gain on investments
|
—
|
|
—
|
|
—
|
|
—
|
|
(.17
|
)
|
Total Distributions
|
—
|
|
—
|
|
—
|
|
(.36
|
)
|
(.43
|
)
|
Net asset value, end of period
|
12.49
|
|
11.74
|
|
11.39
|
|
9.98
|
|
8.48
|
|
Total Return (%)
b
|
6.39
|
|
3.07
|
|
14.13
|
|
22.83
|
|
(38.52
|
)
|
Ratios/Supplemental Data (%):
|
|
|
|
|
|
|
|
|
|
|
Ratio of total expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
1.85
|
|
1.88
|
|
2.06
|
|
1.98
|
|
1.61
|
|
Ratio of net expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
1.85
|
|
1.88
|
|
2.06
|
|
1.97
|
|
1.61
|
|
Ratio of net investment income
|
|
|
|
|
|
|
|
|
|
|
(loss) to average net assets
|
(.21
|
)
|
(.38
|
)
|
(.54
|
)
|
(.14
|
)
|
1.09
|
|
Portfolio Turnover Rate
|
1.65
|
|
4.78
|
|
2.91
|
|
14.88
|
|
24.53
|
|
Net Assets, end of period ($ x 1,000)
|
14,913
|
|
18,797
|
|
24,096
|
|
36,670
|
|
74,083
|
|
|
|
a
|
Based on average shares outstanding at each month end.
|
b
|
Exclusive of sales charge.
|
See notes to financial statements.
FINANCIAL HIGHLIGHTS
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
|
|
Class C Shares
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
Per Share Data ($):
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
11.48
|
|
11.22
|
|
9.91
|
|
8.37
|
|
14.10
|
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
|
Investment income (loss)—net
a
|
(.12
|
)
|
(.13
|
)
|
(.15
|
)
|
(.07
|
)
|
.04
|
|
Net realized and unrealized
|
|
|
|
|
|
|
|
|
|
|
gain (loss) on investments
|
.76
|
|
.39
|
|
1.46
|
|
1.86
|
|
(5.40
|
)
|
Total from Investment Operations
|
.64
|
|
.26
|
|
1.31
|
|
1.79
|
|
(5.36
|
)
|
Distributions:
|
|
|
|
|
|
|
|
|
|
|
Dividends from investment income—net
|
—
|
|
—
|
|
—
|
|
(.25
|
)
|
(.20
|
)
|
Dividends from net realized
|
|
|
|
|
|
|
|
|
|
|
gain on investments
|
—
|
|
—
|
|
—
|
|
—
|
|
(.17
|
)
|
Total Distributions
|
—
|
|
—
|
|
—
|
|
(.25
|
)
|
(.37
|
)
|
Net asset value, end of period
|
12.12
|
|
11.48
|
|
11.22
|
|
9.91
|
|
8.37
|
|
Total Return (%)
b
|
5.58
|
|
2.32
|
|
13.22
|
|
21.94
|
|
(38.97
|
)
|
Ratios/Supplemental Data (%):
|
|
|
|
|
|
|
|
|
|
|
Ratio of total expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
2.62
|
|
2.63
|
|
2.81
|
|
2.73
|
|
2.35
|
|
Ratio of net expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
2.62
|
|
2.63
|
|
2.81
|
|
2.72
|
|
2.35
|
|
Ratio of net investment income
|
|
|
|
|
|
|
|
|
|
|
(loss) to average net assets
|
(.98
|
)
|
(1.12
|
)
|
(1.43
|
)
|
(.89
|
)
|
.32
|
|
Portfolio Turnover Rate
|
1.65
|
|
4.78
|
|
2.91
|
|
14.88
|
|
24.53
|
|
Net Assets, end of period ($ x 1,000)
|
7,704
|
|
9,180
|
|
12,600
|
|
17,510
|
|
26,706
|
|
|
|
a
|
Based on average shares outstanding at each month end.
|
b
|
Exclusive of sales charge.
|
See notes to financial statements.
64
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
|
|
Class I Shares
|
2012
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
Per Share Data ($):
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
11.84
|
11.44
|
|
9.99
|
|
8.52
|
|
14.30
|
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
Investment income (loss)—net
a
|
.02
|
.00
|
b
|
(.01
|
)
|
.02
|
|
.17
|
|
Net realized and unrealized gain
|
|
|
|
|
|
|
|
|
|
(loss) on investments
|
.79
|
.40
|
|
1.46
|
|
1.87
|
|
(5.48
|
)
|
Total from Investment Operations
|
.81
|
.40
|
|
1.45
|
|
1.89
|
|
(5.31
|
)
|
Distributions:
|
|
|
|
|
|
|
|
|
|
Dividends from investment income—net
|
—
|
—
|
|
—
|
|
(.42
|
)
|
(.30
|
)
|
Dividends from net realized
|
|
|
|
|
|
|
|
|
|
gain on investments
|
—
|
—
|
|
—
|
|
—
|
|
(.17
|
)
|
Total Distributions
|
—
|
—
|
|
—
|
|
(.42
|
)
|
(.47
|
)
|
Net asset value, end of period
|
12.65
|
11.84
|
|
11.44
|
|
9.99
|
|
8.52
|
|
Total Return (%)
|
6.84
|
3.50
|
|
14.51
|
|
23.29
|
|
(38.29
|
)
|
Ratios/Supplemental Data (%):
|
|
|
|
|
|
|
|
|
|
Ratio of total expenses
|
|
|
|
|
|
|
|
|
|
to average net assets
|
1.47
|
1.49
|
|
1.64
|
|
1.60
|
|
1.26
|
|
Ratio of net expenses
|
|
|
|
|
|
|
|
|
|
to average net assets
|
1.47
|
1.49
|
|
1.64
|
|
1.59
|
|
1.26
|
|
Ratio of net investment income
|
|
|
|
|
|
|
|
|
|
(loss) to average net assets
|
.13
|
.01
|
|
(.12
|
)
|
.23
|
|
1.37
|
|
Portfolio Turnover Rate
|
1.65
|
4.78
|
|
2.91
|
|
14.88
|
|
24.53
|
|
Net Assets, end of period ($ x 1,000)
|
123,269
|
49,400
|
|
27,544
|
|
17,691
|
|
21,124
|
|
|
|
a
|
Based on average shares outstanding at each month end.
|
b
|
Amount represents less than $.01 per share.
|
See notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
NOTE 1—Significant Accounting Policies:
Global Alpha Fund (the “fund”) is a separate non-diversified series of Advantage Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company that offers thirteen series, including the fund. The fund’s investment objective is to seek total return.The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Mellon Capital Management Corporation (“Mellon Capital”), a subsidiary of BNY Mellon, serves as the fund’s sub-investment adviser.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares.The fund is authorized to issue 400 million shares of $.001 par value Common Stock. The fund currently offers three classes of shares: Class A (200 million shares authorized), Class C (100 million shares authorized) and Class I (100 million shares authorized). Class A shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are
66
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 is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
The 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).
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.
NOTES TO FINANCIAL STATEMENTS
(continued)
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1
—unadjusted quoted prices in active markets for identical investments.
Level 2
—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3
—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are categorized within Level 1 of the fair value hierarchy.
U.S. Treasury Bills are valued at the mean price between quoted bid prices and asked prices by an independent pricing service (the “Service”) approved by the Company’s Board of Directors (the “Board”).These securities are generally categorized within Level 2 of the fair value hierarchy.
68
The Service’s procedures are reviewed by Dreyfus under the general supervision of the Board.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and financial futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers.These securities are either categorized as Level 2 or 3 depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.
Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.
Financial futures and options, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. These securities are generally categorized within Level 1 of the fair value hierarchy. Options traded
NOTES TO FINANCIAL STATEMENTS
(continued)
over-the-counter are valued at the mean between the bid and asked price.These securities are generally categorized within Level 2 of the fair value hierarchy. Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate. These securities are generally categorized within Level 2 of the fair value hierarchy.
The following is a summary of the inputs used as of October 31, 2012 in valuing the fund’s investments:
|
|
|
|
|
|
|
|
|
|
|
Level 2—Other
|
|
Level 3—
|
|
|
|
Level 1—
|
|
Significant
|
|
Significant
|
|
|
|
Unadjusted
|
|
Observable
|
|
Unobservable
|
|
|
|
Quoted Prices
|
|
Inputs
|
|
Inputs
|
Total
|
|
Assets ($)
|
|
|
|
|
|
|
|
Investments in Securities:
|
|
|
|
|
|
|
Equity Securities—
|
|
|
|
|
|
|
|
Domestic Common
|
|
|
|
|
|
|
|
Stocks
†
|
41,581,784
|
|
—
|
|
—
|
41,581,784
|
|
Equity Securities—
|
|
|
|
|
|
|
|
Foreign Common
|
|
|
|
|
|
|
|
Stocks
†
|
36,375,819
|
|
—
|
|
8
|
36,375,827
|
|
Mutual Funds
|
24,483,140
|
|
—
|
|
—
|
24,483,140
|
|
Preferred Stocks
†
|
191,495
|
|
—
|
|
—
|
191,495
|
|
U.S. Treasury
|
—
|
|
39,046,272
|
|
—
|
39,046,272
|
|
Rights
†
|
6,189
|
|
—
|
|
—
|
6,189
|
|
Other Financial
|
|
|
|
|
|
|
|
Instruments:
|
|
|
|
|
|
|
|
Forward Foreign
|
|
|
|
|
|
|
|
Currency Exchange
|
|
|
|
|
|
|
|
Contracts
††
|
—
|
|
496,796
|
|
—
|
496,796
|
|
Financial Futures
††
|
516,741
|
|
—
|
|
—
|
516,741
|
|
Options Purchased
|
3,927,287
|
|
—
|
|
—
|
3,927,287
|
|
Liabilities ($)
|
|
|
|
|
|
|
|
Other Financial
|
|
|
|
|
|
|
|
Instruments:
|
|
|
|
|
|
|
|
Forward Foreign
|
|
|
|
|
|
|
|
Currency Exchange
|
|
|
|
|
|
|
|
Contracts
††
|
—
|
|
(1,938,899
|
)
|
—
|
(1,938,899
|
)
|
Financial Futures
††
|
(836,987
|
)
|
—
|
|
—
|
(836,987
|
)
|
Options Written
|
(204,970
|
)
|
—
|
|
—
|
(204,970
|
)
|
|
|
†
|
See Statement of Investments for additional detailed categorizations.
|
††
|
Amount shown represents unrealized appreciation (depreciation) at period end.
|
70
The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
|
|
|
|
Equity Securities—
|
|
|
Foreign Common Stocks ($)
|
|
Balance as of 10/31/2011
|
583
|
|
Realized gain (loss)
|
—
|
|
Change in unrealized appreciation (depreciation)
|
(575
|
)
|
Purchases
|
—
|
|
Sales
|
|
|
Transfers into Level 3
|
—
|
|
Transfers out of Level 3
|
—
|
|
Balance as of 10/31/2012
|
8
|
|
The amount of total gains (losses) for the period
|
|
|
included in earnings attributable to the change
|
|
|
in unrealized gains (losses) relating to
|
|
|
investments still held at 10/31/2012
|
(575
|
)
|
At October 31, 2011, $6,955,959 of exchange traded foreign equity securities were classified within Level 2 of the fair value hierarchy pursuant to the fund’s fair valuation procedures.
(b) Foreign currency transactions:
The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on investments are also included with net realized and unrealized gain or loss on investments.
NOTES TO FINANCIAL STATEMENTS
(continued)
(c) Securities transactions and investment income:
Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
(d) Affiliated issuers:
Investments in other investment companies advised by Dreyfus are defined as “affiliated” in the Act. Investments in affiliated investment companies for the period ended October 31, 2012 were as follows:
|
|
|
|
|
|
|
|
Affiliated
|
|
|
|
|
|
|
|
Investment
|
Value
|
|
|
|
Value
|
|
Net
|
Company
|
10/31/2011
|
($)
|
Purchases ($)
|
Sales ($)
|
10/31/2012
|
($)
|
Assets (%)
|
Dreyfus
|
|
|
|
|
|
|
|
Institutional
|
|
|
|
|
|
|
|
Preferred
|
|
|
|
|
|
|
|
Plus Money
|
|
|
|
|
|
|
|
Market Fund
|
12,607,663
|
|
74,408,645
|
62,533,168
|
24,483,140
|
|
16.8
|
(e) Risk:
Investing in foreign markets may involve special risks and considerations not typically associated with investing in the U.S.These risks include revaluation of currencies, high rates of inflation, repatriation restrictions on income and capital, and adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls and delayed settlements, and their prices may be more volatile than those of comparable securities in the U.S.
(f) Dividends to shareholders:
Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund
72
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 sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended October 31, 2012, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the four-year period ended October 31, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.
At October 31, 2012, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $37,549, accumulated capital losses $78,546,781 and unrealized depreciation $202,517.
Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Furthermore, post-enactment capital loss carryovers retain their character as either short-term or long-term capital losses rather than short-term as they were under previous statute.The 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years prior to the effective date of the 2010 Act (“pre-enactment losses”).As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.
NOTES TO FINANCIAL STATEMENTS
(continued)
The accumulated capital loss carryover is available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to October 31, 2012. If not applied, $60,210,328 of the carryover expires in fiscal year 2016 and $18,336,453 expires in fiscal year 2017.
During the period ended October 31, 2012, as a result of permanent book to tax differences, primarily due to the tax treatment for foreign currency transactions and real estate investment trusts, the fund decreased accumulated undistributed investment income-net by $22,838, increased accumulated net realized gain (loss) on investments by $22,918 and decreased paid-in capital by $80. Net assets and net asset value per share were not affected by this reclassification.
(h) New Accounting Pronouncement:
In December 2011, FASB issued Accounting Standards Update No. 2011-11 “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). These disclosure requirements are intended to help investors and other financial statement users to better assess the effect or potential effect of offsetting arrangements on a company’s financial position.They also improve transparency in the reporting of how companies mitigate credit risk, including disclosure of related collateral pledged or received. In addition,ASU 2011-11 facilitates comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards (“IFRS”).ASU 2011-11 requires entities to: disclose both gross and net information about both instruments and transactions eligible for offset in the financial statements; and disclose instruments and transactions subject to an agreement similar to a master netting agreement. ASU 2011-11 is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. At this time, management is evaluating the implications of ASU 2011-11 and its impact on the fund’s financial statement disclosures.
74
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. Effective October 10, 2012, the $225 million unsecured credit facility with Citibank, N.A., was decreased to $210 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended on October 31, 2012, the fund did not borrow under the Facilities.
NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:
(a)
Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of 1.10% of the value of the fund’s average daily net assets and is payable monthly.
Dreyfus has contractually agreed, from November 1, 2012 to March 1, 2014, to waive receipt of its fees and/or assume the 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 1.25% of the value of the fund’s average daily net assets.
Pursuant to a sub-investment advisory agreement between Dreyfus and Mellon Capital, Dreyfus pays Mellon Capital an annual fee of .65% of the value of the fund’s average daily net assets, payable monthly.
NOTES TO FINANCIAL STATEMENTS
(continued)
During the period ended October 31, 2012, the Distributor retained $166 from commissions earned on sales of the fund’s Class A shares and $37 from CDSCs on redemptions of the fund’s Class C shares.
(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 the average daily net assets of Class C shares. During the period ended October 31, 2012, Class C shares were charged $62,188 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) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended October 31, 2012, Class A and Class C shares were charged $41,407 and $20,729, respectively, pursuant to the Shareholder Services Plan.
The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
The fund compensates DreyfusTransfer, Inc. (“DTI”), a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency services for the fund and, since May 29, 2012, cash management services related to fund subscriptions and redemptions.
76
During the period ended October 31, 2012, the fund was charged $7,753 for transfer agency services and $112 for cash management services. Cash management fees were partially offset by earnings credits of $13. 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. During the period ended October 31, 2012, the fund was charged $96,982 pursuant to the custody agreement.
Prior to May 29, 2012, the fund compensated The Bank of NewYork Mellon under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended October 31, 2012, the fund was charged $543 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $18.
During the period ended October 31, 2012, the fund was charged $8,517 for services performed by the Chief Compliance Officer and his staff.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $135,638, Distribution Plan fees $4,955, Shareholder Services Plan fees $4,838, custodian fees $28,003, Chief Compliance Officer fees $2,654 and transfer agency fees $2,000.
(d)
Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, financial futures, options transactions and forward contracts, during the period ended October 31, 2012, amounted to $28,547,494 and $947,197, respectively.
Derivatives:
A derivative is a financial instrument whose performance is derived from the performance of another asset. Each type of derivative instrument that was held by the fund during the period ended October 31, 2012 is discussed below.
The following tables show the fund’s exposure to different types of market risk as it relates to the Statement of Assets and Liabilities and the Statement of Operations, respectively.
Fair value of derivative instruments as of October 31, 2012 is shown below:
|
|
|
|
|
|
Derivative
|
|
Derivative
|
|
|
Assets ($)
|
|
Liabilities ($)
|
|
Equity risk
1,2
|
206,465
|
Equity risk
1,3
|
(887,273
|
)
|
Interest rate risk
1,2
|
4,237,563
|
Interest rate risk
1
|
(154,684
|
)
|
Foreign exchange risk
4
|
496,796
|
Foreign exchange risk
5
|
(1,938,899
|
)
|
Gross fair value of
|
|
|
|
|
derivative contracts
|
4,940,824
|
|
(2,980,856
|
)
|
Statement of Assets and Liabilities location:
|
|
1
|
Includes cumulative appreciation (depreciation) on financial futures as reported in the Statement of
|
|
Financial Futures, but only the unpaid variation margin is reported in the Statement of Assets
|
|
and Liabilities.
|
2
|
Options purchased are included in investments in securities – Unaffiliated issuers, at value.
|
3
|
Outstanding options written, at value.
|
4
|
Unrealized appreciation on forward foreign currency exchange contracts.
|
5
|
Unrealized depreciation on forward foreign currency exchange contracts.
|
The effect of derivative instruments in the Statement of Operations during the period ended October 31, 2012 is shown below:
Amount of realized gain or (loss) on derivatives recognized in income ($)
|
|
|
|
|
|
|
Financial
|
Options
|
|
Forward
|
|
Underlying risk
|
Futures
6
|
Transactions
7
|
|
Contracts
8
|
Total
|
Equity
|
2,422,935
|
(1,002,336
|
)
|
—
|
1,420,599
|
Interest rate
|
900,896
|
1,197,098
|
|
—
|
2,097,994
|
Foreign exchange
|
—
|
—
|
|
51,005
|
51,005
|
Total
|
3,323,831
|
194,762
|
|
51,005
|
3,569,598
|
78
Change in unrealized appreciation or (depreciation) on derivatives recognized in income ($)
|
|
|
|
|
|
|
|
|
|
Financial
|
|
Options
|
|
Forward
|
|
|
|
Underlying risk
|
Futures
9
Transactions
10
|
|
Contracts
11
|
|
Total
|
|
Equity
|
(1,219,289
|
)
|
(26,424
|
)
|
—
|
|
(1,245,713
|
)
|
Interest rate
|
185,039
|
|
199,111
|
|
—
|
|
384,150
|
|
Foreign exchange
|
—
|
|
—
|
|
(1,066,773
|
)
|
(1,066,773
|
)
|
Total
|
(1,034,250
|
)
|
172,687
|
|
(1,066,773
|
)
|
(1,928,336
|
)
|
Statement of Operations location:
|
|
6
|
Net realized gain (loss) on financial futures.
|
7
|
Net realized gain (loss) on options transactions.
|
8
|
Net realized gain (loss) on forward foreign currency exchange contracts.
|
9
|
Net unrealized appreciation (depreciation) on financial futures.
|
10
Net unrealized appreciation (depreciation) on options transactions.
|
11
Net unrealized appreciation (depreciation) on forward foreign currency exchange contracts.
|
Financial Futures:
In the normal course of pursuing its investment objective, the fund is exposed to market risk, including equity price risk and interest rate risk as a result of changes in value of underlying financial instruments.The fund invests in financial futures in order to manage its exposure to or protect against changes in the market. A financial futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a counterparty, which consist of cash or cash equivalents.The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change.Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. When the contracts are closed, the fund recognizes a realized gain or loss which is reflected in the Statement of Operations.There is minimal counterparty credit risk to the fund with financial futures since they are exchange traded, and the exchange’s clearinghouse guarantees the financial futures against default. Financial futures open at October 31, 2012 are set forth in the Statement of Financial Futures.
Options Transactions:
The fund purchases and writes (sells) put and call options to hedge against changes in interest rates, the values of equities or as a substitute for an investment. The fund is subject to
NOTES TO FINANCIAL STATEMENTS
(continued)
interest rate risk and market risk in the course of pursuing its investment objectives through its investments in options contracts. A call option gives the purchaser of the option the right (but not the obligation) to buy, and obligates the writer to sell, the underlying security or securities at the exercise price at any time during the option period, or at a specified date. Conversely, a put option gives the purchaser of the option the right (but not the obligation) to sell, and obligates the writer to buy the underlying security or securities at the exercise price at any time during the option period, or at a specified date.
As a writer of call options, the fund receives a premium at the outset and then bears the market risk of unfavorable changes in the price of the financial instrument underlying the option. Generally, the fund realizes a gain, to the extent of the premium, if the price of the underlying financial instrument decreases between the date the option is written and the date on which the option is terminated. Generally, the fund incurs a loss if the price of the financial instrument increases between those dates.
As a writer of put options, the fund receives a premium at the outset and then bears the market risk of unfavorable changes in the price of the financial instrument underlying the option. Generally, the fund realizes a gain, to the extent of the premium, if the price of the underlying financial instrument increases between the date the option is written and the date on which the option is terminated. Generally, the fund incurs a loss if the price of the financial instrument decreases between those dates.
As a writer of an option, the fund has no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option.There is a risk of loss from a change in value of such options which may exceed the related premiums received. The Statement of Operations reflects the following:
80
any unrealized gains or losses which occurred during the period as well as any realized gains or losses which occurred upon the expiration or closing of the option transaction.
The following summarizes the fund’s call/put options written during the period ended October 31, 2012:
|
|
|
|
|
|
|
|
|
Options Terminated
|
|
|
Number of
|
Premiums
|
|
Net Realized
|
|
Options Written:
|
Contracts
|
Received ($)
|
Cost ($)
|
(Loss) ($)
|
|
Contracts outstanding
|
|
|
|
|
|
October 31, 2011
|
200
|
63,604
|
|
|
|
Contracts written
|
4,720
|
787,007
|
|
|
|
Contracts terminated:
|
|
|
|
|
|
Contracts closed
|
3,630
|
621,615
|
1,288,770
|
(667,155
|
)
|
Contracts Outstanding
|
|
|
|
|
|
October 31, 2012
|
1,290
|
228,996
|
|
|
|
Forward Foreign Currency Exchange Contracts:
The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates.With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments.The fund is also exposed to credit risk associated
NOTES TO FINANCIAL STATEMENTS
(continued)
with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract.The following summarizes open forward contracts at October 31, 2012:
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
Unrealized
|
|
Forward Foreign Currency
|
|
Currency
|
|
|
Appreciation
|
|
Exchange Contracts
|
|
Amounts
|
Cost ($)
|
Value ($) (Depreciation) ($)
|
|
Purchases:
|
|
|
|
|
|
|
Australian Dollar,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
a
|
|
1,335,150
|
1,376,446
|
1,380,360
|
3,914
|
|
12/19/2012
b
|
|
4,233,112
|
4,351,211
|
4,376,451
|
25,240
|
|
12/19/2012
c
|
|
1,954,800
|
2,024,134
|
2,020,992
|
(3,142
|
)
|
12/19/2012
d
|
|
4,259,415
|
4,369,006
|
4,403,645
|
34,639
|
|
12/19/2012
e
|
|
4,790,631
|
4,953,846
|
4,952,849
|
(997
|
)
|
12/19/2012
f
|
|
649,530
|
669,815
|
671,524
|
1,709
|
|
12/19/2012
g
|
|
410,631
|
421,700
|
424,536
|
2,836
|
|
British Pound,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
b
|
|
2,101,620
|
3,404,494
|
3,390,959
|
(13,535
|
)
|
12/19/2012
c
|
|
3,400,860
|
5,473,716
|
5,487,279
|
13,563
|
|
12/19/2012
d
|
|
1,433,120
|
2,327,244
|
2,312,335
|
(14,909
|
)
|
12/19/2012
e
|
|
324,480
|
527,630
|
523,548
|
(4,082
|
)
|
12/19/2012
g
|
|
135,200
|
219,799
|
218,145
|
(1,654
|
)
|
Canadian Dollar,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
b
|
|
7,688,778
|
7,861,719
|
7,690,206
|
(171,513
|
)
|
12/19/2012
c
|
|
1,148,580
|
1,175,234
|
1,148,793
|
(26,441
|
)
|
12/19/2012
d
|
|
15,470,947
|
15,815,407
|
15,473,820
|
(341,587
|
)
|
12/19/2012
e
|
|
4,032,643
|
4,096,735
|
4,033,392
|
(63,343
|
)
|
12/19/2012
g
|
|
736,840
|
753,595
|
736,977
|
(16,618
|
)
|
Euro,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
b
|
|
233,050
|
299,927
|
302,220
|
2,293
|
|
12/19/2012
c
|
|
1,605,420
|
2,073,602
|
2,081,916
|
8,314
|
|
12/19/2012
d
|
|
740,960
|
957,173
|
960,880
|
3,707
|
|
12/19/2012
e
|
|
147,350
|
190,146
|
191,084
|
938
|
|
12/19/2012
f
|
|
162,085
|
209,278
|
210,193
|
915
|
|
12/19/2012
g
|
|
2,403,005
|
3,112,494
|
3,116,227
|
3,733
|
|
Japanese Yen,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
a
|
|
133,548,900
|
1,683,866
|
1,673,796
|
(10,070
|
)
|
12/19/2012
b
|
|
782,673,024
|
10,012,797
|
9,809,406
|
(203,391
|
)
|
12/19/2012
c
|
|
6,605,160
|
82,764
|
82,784
|
20
|
|
12/19/2012
d
|
|
669,597,950
|
8,596,560
|
8,392,212
|
(204,348
|
)
|
12/19/2012
e
|
|
117,113,740
|
1,474,980
|
1,467,811
|
(7,169
|
)
|
12/19/2012
f
|
|
62,699,500
|
789,690
|
785,826
|
(3,864
|
)
|
12/19/2012
g
|
|
161,790,660
|
2,066,028
|
2,027,756
|
(38,272
|
)
|
82
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
Unrealized
|
|
Forward Foreign Currency
|
|
Currency
|
|
|
Appreciation
|
|
Exchange Contracts
|
|
Amounts
|
Cost ($)
|
Value ($) (Depreciation) ($)
|
|
Purchases (continued):
|
|
|
|
|
|
|
New Zealand Dollar,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
b
|
|
5,020,349
|
4,046,770
|
4,115,153
|
68,383
|
|
12/19/2012
d
|
|
433,664
|
357,578
|
355,472
|
(2,106
|
)
|
12/19/2012
e
|
|
2,067,840
|
1,691,581
|
1,694,997
|
3,416
|
|
12/19/2012
f
|
|
94,864
|
78,220
|
77,760
|
(460
|
)
|
12/19/2012
g
|
|
6,343,983
|
5,134,697
|
5,200,129
|
65,432
|
|
Norwegian Krone,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
a
|
|
7,513,200
|
1,332,005
|
1,315,443
|
(16,562
|
)
|
12/19/2012
b
|
|
6,542,680
|
1,144,000
|
1,145,520
|
1,520
|
|
12/19/2012
c
|
|
15,791,200
|
2,764,682
|
2,764,791
|
109
|
|
12/19/2012
d
|
|
2,903,966
|
500,805
|
508,439
|
7,634
|
|
12/19/2012
e
|
|
23,601,514
|
4,104,858
|
4,132,254
|
27,396
|
|
12/19/2012
f
|
|
3,318,330
|
588,377
|
580,987
|
(7,390
|
)
|
12/19/2012
g
|
|
18,788,820
|
3,297,348
|
3,289,627
|
(7,721
|
)
|
Swedish Krona,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
a
|
|
6,304,200
|
959,307
|
949,049
|
(10,258
|
)
|
12/19/2012n
d
|
|
31,146,945
|
4,693,208
|
4,688,934
|
(4,274
|
)
|
12/19/2012
e
|
|
17,907,341
|
2,711,331
|
2,695,813
|
(15,518
|
)
|
12/19/2012
f
|
|
2,784,355
|
424,262
|
419,163
|
(5,099
|
)
|
12/19/2012
g
|
|
46,526,237
|
7,008,851
|
7,004,169
|
(4,682
|
)
|
Sales:
|
|
|
Proceeds ($)
|
|
|
Australian Dollar,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
b
|
|
113,520
|
115,432
|
117,364
|
(1,932
|
)
|
12/19/2012
e
|
|
359,480
|
365,879
|
371,653
|
(5,774
|
)
|
12/19/2012
g
|
|
94,600
|
96,123
|
97,803
|
(1,680
|
)
|
British Pound,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
a
|
|
652,800
|
1,052,889
|
1,053,291
|
(402
|
)
|
12/19/2012
b
|
|
334,480
|
537,916
|
539,683
|
(1,767
|
)
|
12/19/2012
d
|
|
3,815,351
|
6,145,873
|
6,156,059
|
(10,186
|
)
|
12/19/2012
e
|
|
7,743,953
|
12,373,766
|
12,494,848
|
(121,082
|
)
|
12/19/2012
f
|
|
577,224
|
931,111
|
931,349
|
(238
|
)
|
12/19/2012
g
|
|
9,782,461
|
15,664,874
|
15,783,976
|
(119,102
|
)
|
Canadian Dollar,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
a
|
|
2,161,200
|
2,199,804
|
2,161,601
|
38,203
|
|
12/19/2012
d
|
|
490,100
|
502,578
|
490,191
|
12,387
|
|
12/19/2012
e
|
|
3,119,629
|
3,147,347
|
3,120,208
|
27,139
|
|
12/19/2012
f
|
|
954,530
|
972,304
|
954,707
|
17,597
|
|
12/19/2012
g
|
|
37,700
|
38,678
|
37,707
|
971
|
|
NOTES TO FINANCIAL STATEMENTS
(continued)
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
Unrealized
|
|
Forward Foreign Currency
|
|
Currency
|
|
|
Appreciation
|
|
Exchange Contracts
|
|
Amounts
|
Proceeds ($)
|
Value ($) (Depreciation) ($)
|
|
|
Sales (continued):
|
|
|
|
|
|
|
Euro,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
a
|
|
1,867,800
|
2,447,296
|
2,422,171
|
25,125
|
|
12/19/2012
b
|
|
3,968,448
|
5,056,597
|
5,146,301
|
(89,704
|
)
|
12/19/2012
c
|
|
4,288,803
|
5,554,475
|
5,561,739
|
(7,264
|
)
|
12/19/2012
e
|
|
10,564,921
|
13,563,481
|
13,700,636
|
(137,155
|
)
|
12/19/2012
f
|
|
824,945
|
1,080,975
|
1,069,792
|
11,183
|
|
12/19/2012
g
|
|
15,200,555
|
19,567,446
|
19,712,147
|
(144,701
|
)
|
Japanese Yen,
|
|
|
|
|
|
|
Expiring
|
|
|
|
|
|
|
12/19/2012
e
|
|
187,518,400
|
2,412,029
|
2,350,208
|
61,821
|
|
New Zealand Dollar,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
a
|
|
823,350
|
668,503
|
674,896
|
(6,393
|
)
|
12/19/2012
b
|
|
392,500
|
317,768
|
321,730
|
(3,962
|
)
|
12/19/2012
c
|
|
1,724,280
|
1,408,298
|
1,413,383
|
(5,085
|
)
|
12/19/2012
d
|
|
255,125
|
206,383
|
209,125
|
(2,742
|
)
|
12/19/2012
e
|
|
3,513,118
|
2,851,917
|
2,879,684
|
(27,767
|
)
|
12/19/2012
f
|
|
496,115
|
402,374
|
406,663
|
(4,289
|
)
|
12/19/2012
g
|
|
137,375
|
111,333
|
112,606
|
(1,273
|
)
|
Norwegian Krone,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
b
|
|
5,586,390
|
974,153
|
978,089
|
(3,936
|
)
|
12/19/2012
c
|
|
4,205,520
|
724,740
|
736,320
|
(11,580
|
)
|
12/19/2012
g
|
|
9,105,600
|
1,567,931
|
1,594,247
|
(26,316
|
)
|
Swedish Krona,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
b
|
|
5,969,130
|
906,819
|
898,607
|
8,212
|
|
12/19/2012
c
|
|
9,948,420
|
1,497,752
|
1,497,658
|
94
|
|
12/19/2012
d
|
|
2,238,720
|
339,627
|
337,022
|
2,605
|
|
12/19/2012
e
|
|
3,090,000
|
464,106
|
465,176
|
(1,070
|
)
|
12/19/2012
f
|
|
489,720
|
74,242
|
73,724
|
518
|
|
12/19/2012
g
|
|
13,781,250
|
2,088,764
|
2,074,662
|
14,102
|
|
Swiss Franc,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
12/19/2012
b
|
|
699,755
|
747,929
|
751,950
|
(4,021
|
)
|
12/19/2012
d
|
|
439,410
|
471,713
|
472,186
|
(473
|
)
|
12/19/2012
g
|
|
325,740
|
351,165
|
350,037
|
1,128
|
|
Gross Unrealized
|
|
|
|
|
|
|
Appreciation
|
|
|
|
|
496,796
|
|
Gross Unrealized
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
(1,938,899
|
)
|
Counterparties:
|
|
a
|
BNP Paribas
|
b
|
Citigroup
|
c
|
Credit Suisse First Boston
|
d
|
Goldman Sachs
|
e
|
HSBC
|
f
|
Standard Chartered Bank of Australia
|
g
|
UBS
|
84
The following summarizes the average market value of derivatives outstanding during the period ended October 31, 2012:
|
|
|
Average Market Value ($)
|
Interest rate financial futures
|
73,326,011
|
Equity financial futures
|
41,595,325
|
Equity options contracts
|
172,593
|
Interest rate options contracts
|
3,424,417
|
Forward contracts
|
87,757,751
|
At October 31, 2012, the cost of investments for federal income tax purposes was $145,421,545; accordingly, accumulated net unrealized appreciation on investments was $190,449, consisting of $9,908,328 gross unrealized appreciation and $9,717,879 gross unrealized depreciation.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Global Alpha Fund
We have audited the accompanying statement of assets and liabilities, including the statements of investments, financial futures and options written, of Global Alpha Fund (one of the series comprising Advantage Funds, Inc.) as of October 31, 2012, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2012 by correspondence with the custodian and others.We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Global Alpha Fund at October 31, 2012, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
New York, New York
December 27, 2012
86
PROXY RESULTS
(Unaudited)
The Company held a special meeting of shareholders on August 3, 2012.The proposal considered at the meeting, and the results, are as follows:
|
|
|
|
|
|
Shares
|
|
|
Votes For
|
|
Authority Withheld
|
To elect additional Board Members:
|
|
|
|
Lynn Martin
†
|
90,334,756
|
|
3,252,629
|
Robin A. Melvin
†
|
90,449,622
|
|
3,137,763
|
Philip L. Toia
†
|
90,229,928
|
|
3,357,457
|
|
† Each new Board Member’s term commenced on September 1, 2012.
|
In addition Peggy C. Davis, Joseph S. DiMartino, David P. Feldman, Ehud Houminer and Dr. Martin Peretz continue
|
as Board Members of the Company.
|
BOARD MEMBERS INFORMATION
(Unaudited)
|
Joseph S. DiMartino (69)
|
Chairman of the Board (1995)
|
Principal Occupation During Past 5Years:
|
• Corporate Director and Trustee
|
Other Public Company Board Memberships During Past 5Years:
|
• CBIZ (formerly, Century Business Services, Inc.), a provider of outsourcing functions for small
|
and medium size companies, Director (1997-present)
|
• Sunair Services Corporation, a provider of certain outdoor-related services to homes and
|
businesses, Director (2005-2009)
|
• The Newark Group, a provider of a national market of paper recovery facilities, paperboard
|
mills and paperboard converting plants, Director (2000-2010)
|
No. of Portfolios for which Board Member Serves:
157
|
———————
|
Peggy C. Davis (69)
|
Board Member (2006)
|
Principal Occupation During Past 5Years:
|
• Shad Professor of Law, New York University School of Law (1983-present)
|
No. of Portfolios for which Board Member Serves:
63
|
———————
|
David P. Feldman (72)
|
Board Member (1996)
|
Principal Occupation During Past 5Years:
|
• Corporate Director and Trustee
|
Other Public Company Board Memberships During Past 5Years:
|
• BBH Mutual Funds Group (4 registered mutual funds), Director (1992-present)
|
• QMed, Inc. a healthcare company, Director (1999-2007)
|
No. of Portfolios for which Board Member Serves:
46
|
———————
|
Ehud Houminer (72)
|
Board Member (1993)
|
Principal Occupation During Past 5Years:
|
• Executive-in-Residence at the Columbia Business School, Columbia University (1992-present)
|
Other Public Company Board Memberships During Past 5Years:
|
• Avnet Inc., an electronics distributor, Director (1993-2012)
|
No. of Portfolios for which Board Member Serves:
73
|
88
|
Lynn Martin (72)
|
Board Member (2012)
|
Principal Occupation During Past 5Years:
|
• President of The Martin Hall Group LLC, a human resources consulting firm, from January
|
2005-present
|
Other Public Company Board Memberships During Past 5Years:
|
• AT&T Inc., a telecommunications company, Director (1999-2012)
|
• Ryder System, Inc., a supply chain and transportation management company, Director (1993-2012)
|
• The Proctor & Gamble Co., a consumer products company, Director (1994-2009)
|
• Constellation Energy Group Inc., Director (2003-2009)
|
No. of Portfolios for which Board Member Serves:
46
|
———————
|
Robin A. Melvin (49)
|
Board Member (2012)
|
Principal Occupation During Past 5Years:
|
• Director, Boisi Family Foundation, a private family foundation that supports youth-serving orga-
|
nizations that promote the self sufficiency of youth from disadvantaged circumstances (1995-2012)
|
No. of Portfolios for which Board Member Serves:
83
|
———————
|
Dr. Martin Peretz (73)
|
Board Member (2006)
|
Principal Occupation During Past 5Years:
|
• Editor-in-Chief Emeritus of The New Republic Magazine (2010-present) (previously,
|
Editor-in-Chief, 1974-2010)
|
• Director of TheStreet.com, a financial information service on the web (1996-present)
|
No. of Portfolios for which Board Member Serves:
46
|
———————
|
Philip L. Toia (79)
|
Board Member (2012)
|
Principal Occupation During Past 5Years:
|
• Private Investor
|
No. of Portfolios for which Board Member Serves:
56
|
———————
|
Once elected all Board Members serve for an indefinite term, but achieve Emeritus status upon reaching age 80.The address of the Board Members and Officers is c/o The Dreyfus Corporation, 200 Park Avenue, NewYork, NewYork 10166.Additional information about the Board Members is available in the fund’s Statement of Additional Information which can be obtained from Dreyfus free of charge by calling this toll free number: 1-800-DREYFUS.
James F. Henry, Emeritus Board Member
Dr. Paul A. Marks, Emeritus Board Member
Gloria Messinger, Emeritus Board Member
OFFICERS OF THE FUND
(Unaudited)
BRADLEY J. SKAPYAK, President since January 2010.
Chief Operating Officer and a director of the Manager since June 2009; from April 2003 to June 2009, Mr. Skapyak was the head of the Investment Accounting and Support Department of the Manager. He is an officer of 72 investment companies (comprised of 156 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since February 1988.
JANETTE E. FARRAGHER, Vice President and Secretary since December 2011.
Assistant General Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 49 years old and has been an employee of the Manager since February 1984.
KIESHA ASTWOOD, Vice President and Assistant Secretary since January 2010.
Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 39 years old and has been an employee of the Manager since July 1995.
JAMES BITETTO, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since December 1996.
JONI LACKS CHARATAN, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 56 years old and has been an employee of the Manager since October 1988.
JOSEPH M. CHIOFFI, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since June 2000.
JOHN B. HAMMALIAN, Vice President and Assistant Secretary since August 2005.
Senior Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 49 years old and has been an employee of the Manager since February 1991.
ROBERT R. MULLERY, Vice President and Assistant Secretary since August 2005.
Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 60 years old and has been an employee of the Manager since May 1986.
JEFF PRUSNOFSKY, Vice President and Assistant Secretary since August 2005.
Senior Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since October 1990.
JAMES WINDELS, Treasurer since November 2001.
Director – Mutual Fund Accounting of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 54 years old and has been an employee of the Manager since April 1985.
90
RICHARD CASSARO, Assistant Treasurer since January 2008.
Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since September 1982.
GAVIN C. REILLY, Assistant Treasurer since December 2005.
Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since April 1991.
ROBERT S. ROBOL, Assistant Treasurer since August 2005.
Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 48 years old and has been an employee of the Manager since October 1988.
ROBERT SALVIOLO, Assistant Treasurer since July 2007.
Senior Accounting Manager – Equity Funds of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since June 1989.
ROBERT SVAGNA, Assistant Treasurer since December 2002.
Senior Accounting Manager – Equity Funds of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since November 1990.
JOSEPH W. CONNOLLY, Chief Compliance Officer since October 2004.
Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (73 investment companies, comprised of 183 portfolios). He is 55 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.
MATTHEW D. CONNOLLY, Anti-Money Laundering Compliance Officer since April 2012.
Anti-Money Laundering Compliance Officer of the Distributor since October 2011; from March 2010 to September 2011, Global Head, KYC Reviews and Director, UBS Investment Bank; until March 2010,AML Compliance Officer and Senior Vice President, Citi Global Wealth Management. He is an officer of 69 investment companies (comprised of 179 portfolios) managed by the Manager. He is 40 years old and has been an employee of the Distributor since October 2011.
For More Information
Telephone
Call your financial representative or 1-800-DREYFUS
Mail
The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
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 http://www.dreyfus.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-DREYFUS.
Item 2. Code of Ethics.
The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There have been no amendments to, or waivers in connection with, the Code of Ethics during the period covered by this Report.
Item 3. Audit Committee Financial Expert.
The Registrant's Board has determined that David P. Feldman, a member of the Audit Committee of the Board, is an audit committee financial expert as defined by the Securities and Exchange Commission (the "SEC"). David P. Feldman is "independent" as defined by the SEC for purposes of audit committee financial expert determinations.
Item 4. Principal Accountant Fees and Services.
(a)
Audit Fees
. The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $220,020 in 2011 and $225,816 in 2012.
(b)
Audit-Related Fees
. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this Item 4 were $24,000 in 2011 and $36,000 in 2012. These services consisted of one or more of the following: (i) agreed upon procedures related to compliance with Internal Revenue Code section 817(h), (ii) security counts required by Rule 17f-2 under the Investment Company Act of 1940, as amended, (iii) advisory services as to the accounting or disclosure treatment of Registrant transactions or events and (iv) advisory services to the accounting or disclosure treatment of the actual or potential impact to the Registrant of final or proposed rules, standards or interpretations by the Securities and Exchange Commission, the Financial Accounting Standards Boards or other regulatory or standard-setting bodies.
The aggregate fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor to the Registrant's investment adviser (not including any sub-investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant ("Service Affiliates"), that were reasonably related to the performance of the annual audit of the Service Affiliate, which required pre-approval by the Audit Committee were $-0- in 2011 and $-0- in 2012.
(c)
Tax Fees
. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice, and tax planning ("Tax Services") were $30,288 in 2011 and $43,947 in 2012. These services consisted of: (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments; (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held, and (iv) determination of Passive Foreign Investment Companies. The aggregate fees billed in the Reporting Periods for Tax Services by the Auditor to Service Affiliates, which required pre-approval by the Audit Committee were $-0- in 2011 and $-0- in 2012.
(d)
All Other Fees
. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, were $58 in 2011 and $112 in 2012. These services consisted of a review of the Registrant's anti-money laundering program.
The aggregate fees billed in the Reporting Periods for Non-Audit Services by the Auditor to Service Affiliates, other than the services reported in paragraphs (b) through (c) of this Item, which required pre-approval by the Audit Committee, were $-0- in 2011 and $200,000 in 2012.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
. The Registrant's Audit Committee has established policies and procedures (the "Policy") for pre-approval (within specified fee limits) of the Auditor's engagements for non-audit services to the Registrant and Service Affiliates without specific case-by-case consideration. The pre-approved services in the Policy can include pre-approved audit services, pre-approved audit-related services, pre-approved tax services and pre-approved all other services. Pre-approval considerations include whether the proposed services are compatible with maintaining the Auditor's independence. Pre-approvals pursuant to the Policy are considered annually.
(e)(2) Note: None of the services described in paragraphs (b) through (d) of this Item 4 were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) None of the hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal account's full-time, permanent employees.
Non-Audit Fees
. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered to Service Affiliates, for the Reporting Periods were $18,299,198 in 2011 and $47,346,640 in 2012.
Auditor Independence
. The Registrant's Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable. [CLOSED-END FUNDS ONLY]
Item 6. Investments.
(a)
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable. [CLOSED-END FUNDS ONLY]
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable. [CLOSED-END FUNDS ONLY, beginning with reports for periods ended on and after December 31, 2005]
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable. [CLOSED-END FUNDS ONLY]
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures applicable to Item 10.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of ethics referred to in Item 2.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Advantage Funds, Inc.
By:
/s/ Bradley J. Skapyak
|
Bradley J. Skapyak,
President
|
Date:
|
December 19, 2012
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
|
|
By:
/s/ Bradley J. Skapyak
|
Bradley J. Skapyak,
President
|
Date:
|
December 19, 2012
|
|
By:
/s/ James Windels
|
James Windels,
Treasurer
|
Date:
|
December 19, 2012
|
|
EXHIBIT INDEX
(a)(1) Code of ethics referred to in Item 2.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)
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