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 | 811-08673 | |||||
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| Dreyfus Investment Portfolios |
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| (Exact name of Registrant as specified in charter) |
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c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 |
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| (Address of principal executive offices) (Zip code) |
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| Bennett A. MacDougall, Esq. 200 Park Avenue New York, New York 10166 |
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| (Name and address of agent for service) |
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Registrant's telephone number, including area code: | (212) 922-6400 | |||||
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Date of fiscal year end:
| 12/31 |
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Date of reporting period: | 06/30/18 |
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FORM N-CSR
Item 1. Reports to Stockholders.
Dreyfus Investment Portfolios, Core Value Portfolio
SEMIANNUAL REPORT |
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 Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment Portfolios, Core Value Portfolio, covering the six-month period from January 1, 2018 through June 30, 2018. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
Volatility returned to the financial markets over the first half of 2018. Although stocks set a series of new record highs in January amid growing corporate earnings, reduced corporate tax rates and synchronized global economic growth, investors later grew nervous about rising interest rates, renewed inflationary pressures, escalating geopolitical tensions and the prospects of more protectionist U.S. trade policies. Consequently, U.S. stocks produced mildly positive returns over the reporting period. Meanwhile, bonds typically lost a degree of value over the first six months of the year due to rising interest rates and inflation concerns.
Despite the return of heightened market volatility, we believe that underlying market fundamentals remain sound. Ongoing economic growth, robust labor markets, rising corporate earnings and strong consumer and business confidence seem likely to support stock and corporate bond prices over the months ahead. Monetary policymakers have indicated that short-term interest rates probably will rise further, but U.S. government bond prices may already reflect those expectations. As always, we encourage you to discuss the risks and opportunities of today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
July 16, 2018
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from January 1, 2018 through June 30, 2018, as provided by Brian Ferguson, Portfolio Manager
Market and Fund Performance Overview
For the six-month period ended June 30, 2018, Dreyfus Investment Portfolios, Core Value Portfolio’s Initial shares produced a total return of -0.91%, and its Service shares returned -1.07%.1 In comparison, the fund’s benchmark, the Russell 1000® Value Index (the “Index”), produced a total return of -1.69% for the same period.2
Value-oriented stocks posted mild losses, on average, during the reporting period amid heightened market volatility, intensifying inflationary pressures, and international trade tensions. The fund outperformed the Index, largely due to relatively good security selections in 7 out of the Index’s 11 market sectors.
The Fund’s Investment Approach
The fund seeks long-term growth of capital, with current income as a secondary objective. To pursue its goals, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks. The fund focuses on stocks of large-cap value companies. The fund typically invests mainly in the stocks of U.S. issuers, and will limit its holdings of foreign stocks to 20% of the value of its total assets.
When choosing stocks, the fund uses a “bottom-up” stock-selection approach, focusing on individual companies, rather than a “top-down” approach that forecasts market trends. A three-step value-screening process is used to select stocks based on value, sound business fundamentals, and positive business momentum.
Stocks Fluctuated Amid Uncertainty
A growing U.S. economy and passage of business-friendly tax reforms drove U.S. stocks sharply higher in January 2018. In February, however, stocks reversed course and volatility soared in response to rising wage pressures, which, along with other indicators, signaled a possible acceleration of inflation. Although the market recovered ground as these concerns eased through the rest of February, March saw another decline sparked by escalating geopolitical tensions stemming from more protectionist U.S. trade policies.
Positive U.S. economic data continued to accrue during the second quarter of 2018. Stocks gradually recouped previous losses, but the market’s advance was constrained by concerns related to tariffs imposed by the United States on steel and aluminum imports, which were followed by retaliation from overseas trading partners, including the threat of higher tariffs on a variety of U.S. exports. The industrials and materials sectors were hit particularly hard by escalating trade tensions, and interest rate-sensitive industry groups also lagged market averages. In contrast, information technology and consumer discretionary stocks fared relatively well.
In this challenging environment, value-oriented stocks generally underperformed their more growth-oriented counterparts.
Individual Stock Selections Drove Fund Outperformance
The fund’s stock selection strategy proved beneficial across a variety of industry groups during the reporting period. In the energy sector, we focused on companies leveraged to rising oil prices, including refiner Valero Energy and exploration-and-production companies Hess, Occidental Petroleum, Phillips 66, and Anadarko Petroleum. Returns from consumer staples holdings benefited from underweighted exposure to relatively weak tobacco and household products companies and overweighted exposure to food producer Kellogg. Among industrials holdings, the fund generally
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
avoided weakness in large conglomerates, focusing instead on better-positioned defense contractors, such as Raytheon and Harris.
In the materials sector, top performers included agricultural chemicals producer CF Industries Holdings, as well as construction materials companies Vulcan Materials and Martin Marietta Materials. Returns from the telecommunication services sector were bolstered by overweighted exposure to Verizon Communications and an underweighted position in AT&T. The fund’s best-performing consumer discretionary holding, Twenty-First Century Fox, rose sharply when companies seeking to acquire the film and television studio engaged in a bidding war. Top technology holdings ranged from communications equipment makers, such as Cisco Systems, to software developers, such as Fortinet, and semiconductor manufacturers, such as Texas Instruments. Health plan provider Humana stood out among health care holdings.
On a more negative note, disappointments in the financials sector included American International Group (AIG), Athene Holding, Goldman Sachs Group, and Capital One Financial. Lack of exposure to the real estate sector, which slightly outperformed the Index, further undermined relative performance. A few holdings in other sectors also lagged market averages, the most notable of which included energy company Marathon Petroleum, food products maker The Kraft Heinz Company, engineering services provider Quanta Services, information technology firm International Business Machines, and pharmaceutical giant Merck & Co.
Positioned for Further Gains
Despite rising interest rates and ongoing trade tensions, we believe the robust U.S. economy and recent changes to the tax code set the stage for stock market advances in the second half of 2018. As of the end of the reporting period, we have positioned the fund to benefit from a constructive market environment through mildly overweighted exposure to carefully selected stocks in the financials, materials, telecommunication services, and industrials sectors. On the other hand, the fund holds relatively little exposure to the real estate, consumer discretionary, utilities, consumer staples, and health care sectors.
July 16, 2018
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2 Source: Lipper Inc. — 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.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of Dreyfus Investment Portfolios, Core Value Portfolio made available through insurance products may be similar to those of other funds managed or advised by Dreyfus. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other Dreyfus fund.
4
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), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Investment Portfolios, Core Value Portfolio from January 1, 2018 to June 30, 2018. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment | |||||||
assuming actual returns for the six months ended June 30, 2018 | |||||||
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| Initial Shares | Service Shares | ||
Expenses paid per $1,000† |
| $7.85 | $9.08 | ||||
Ending value (after expenses) |
| $990.90 | $989.30 |
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 June 30, 2018 | |||||||
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| Initial Shares | Service Shares | ||
Expenses paid per $1,000† | $7.95 | $9.20 | |||||
Ending value (after expenses) | $1,016.91 | $1,015.67 |
† Expenses are equal to the fund’s annualized expense ratio of 1.59% for Initial shares and 1.84% for Service shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
June 30, 2018 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 100.2% | |||||||
Automobiles & Components - .8% | |||||||
General Motors | 3,969 | 156,379 | |||||
Banks - 16.7% | |||||||
Bank of America | 23,037 | 649,413 | |||||
BB&T | 6,568 | 331,290 | |||||
Citigroup | 4,000 | 267,680 | |||||
JPMorgan Chase & Co. | 7,828 | 815,678 | |||||
PNC Financial Services Group | 2,211 | 298,706 | |||||
SunTrust Banks | 4,172 | 275,435 | |||||
U.S. Bancorp | 3,754 | 187,775 | |||||
Wells Fargo & Co. | 6,222 | 344,948 | |||||
3,170,925 | |||||||
Capital Goods - 7.6% | |||||||
Dover | 1,220 | 89,304 | |||||
Harris | 633 | 91,494 | |||||
Honeywell International | 1,658 | 238,835 | |||||
L3 Technologies | 1,048 | 201,551 | |||||
Northrop Grumman | 724 | 222,775 | |||||
Quanta Services | 2,626 | a | 87,708 | ||||
Raytheon | 978 | 188,930 | |||||
United Technologies | 2,643 | 330,454 | |||||
1,451,051 | |||||||
Consumer Services - .5% | |||||||
Las Vegas Sands | 1,205 | 92,014 | |||||
Diversified Financials - 8.9% | |||||||
Ameriprise Financial | 653 | 91,342 | |||||
Berkshire Hathaway, Cl. B | 4,501 | a | 840,112 | ||||
Capital One Financial | 1,030 | 94,657 | |||||
Goldman Sachs Group | 637 | 140,503 | |||||
LPL Financial Holdings | 1,974 | 129,376 | |||||
Raymond James Financial | 1,435 | 128,217 | |||||
Voya Financial | 5,572 | b | 261,884 | ||||
1,686,091 | |||||||
Energy - 13.4% | |||||||
Anadarko Petroleum | 5,213 | 381,852 | |||||
Apergy | 3,524 | b | 147,127 | ||||
EOG Resources | 797 | 99,171 | |||||
Hess | 3,810 | 254,851 | |||||
Marathon Petroleum | 4,656 | 326,665 | |||||
Occidental Petroleum | 5,837 | 488,440 | |||||
Phillips 66 | 3,403 | 382,191 | |||||
Schlumberger | 1,967 | 131,848 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 100.2% (continued) | |||||||
Energy - 13.4% (continued) | |||||||
Valero Energy | 3,052 | 338,253 | |||||
2,550,398 | |||||||
Exchange-Traded Funds - .8% | |||||||
iShares Russell 1000 Value ETF | 1,181 | 143,350 | |||||
Food, Beverage & Tobacco - 5.9% | |||||||
Coca-Cola | 2,063 | 90,483 | |||||
Coca-Cola European Partners | 2,264 | 92,009 | |||||
Conagra Brands | 6,418 | 229,315 | |||||
Kellogg | 5,245 | b | 366,468 | ||||
Kraft Heinz | 2,335 | 146,685 | |||||
Mondelez International, Cl. A | 2,464 | 101,024 | |||||
PepsiCo | 918 | 99,943 | |||||
1,125,927 | |||||||
Health Care Equipment & Services - 6.5% | |||||||
Abbott Laboratories | 3,843 | 234,385 | |||||
Boston Scientific | 3,125 | a | 102,187 | ||||
CVS Health | 2,883 | 185,521 | |||||
DaVita | 1,245 | a | 86,453 | ||||
Humana | 637 | 189,590 | |||||
McKesson | 626 | 83,508 | |||||
Quest Diagnostics | 1,493 | 164,140 | |||||
UnitedHealth Group | 762 | 186,949 | |||||
1,232,733 | |||||||
Insurance - 3.3% | |||||||
American International Group | 3,868 | 205,081 | |||||
Assurant | 1,370 | 141,781 | |||||
Athene Holding, Cl. A | 2,223 | a | 97,456 | ||||
Hartford Financial Services Group | 3,763 | 192,402 | |||||
636,720 | |||||||
Materials - 8.9% | |||||||
CF Industries Holdings | 7,077 | 314,219 | |||||
DowDuPont | 5,665 | 373,437 | |||||
Freeport-McMoRan | 8,318 | 143,569 | |||||
Martin Marietta Materials | 1,257 | 280,726 | |||||
Mosaic | 5,154 | 144,570 | |||||
Newmont Mining | 3,709 | 139,866 | |||||
Vulcan Materials | 2,232 | 288,062 | |||||
1,684,449 | |||||||
Media - 2.0% | |||||||
Comcast, Cl. A | 5,757 | 188,887 | |||||
Omnicom Group | 2,554 | b | 194,794 | ||||
383,681 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 100.2% (continued) | |||||||
Pharmaceuticals, Biotechnology & Life Sciences - 6.0% | |||||||
Biogen | 325 | a | 94,328 | ||||
Bristol-Myers Squibb | 1,678 | 92,861 | |||||
Gilead Sciences | 1,217 | 86,212 | |||||
Merck & Co. | 5,675 | 344,472 | |||||
Mylan | 2,410 | a | 87,097 | ||||
Pfizer | 11,843 | 429,664 | |||||
1,134,634 | |||||||
Retailing - .5% | |||||||
Advance Auto Parts | 692 | 93,904 | |||||
Semiconductors & Semiconductor Equipment - 2.2% | |||||||
Broadcom | 378 | 91,718 | |||||
QUALCOMM | 2,534 | 142,208 | |||||
Texas Instruments | 1,640 | 180,810 | |||||
414,736 | |||||||
Software & Services - 3.7% | |||||||
Alphabet, Cl. A | 83 | a | 93,723 | ||||
International Business Machines | 2,366 | 330,530 | |||||
Oracle | 4,195 | 184,832 | |||||
Teradata | 2,214 | a,b | 88,892 | ||||
697,977 | |||||||
Technology Hardware & Equipment - 4.4% | |||||||
Apple | 770 | 142,535 | |||||
Cisco Systems | 14,385 | 618,987 | |||||
Xerox | 3,097 | 74,328 | |||||
835,850 | |||||||
Telecommunication Services - 5.0% | |||||||
AT&T | 9,171 | 294,481 | |||||
Verizon Communications | 13,125 | 660,319 | |||||
954,800 | |||||||
Transportation - 1.3% | |||||||
Delta Air Lines | 5,002 | 247,799 | |||||
Utilities - 1.8% | |||||||
FirstEnergy | 7,055 | b | 253,345 | ||||
PPL | 3,324 | 94,900 | |||||
348,245 | |||||||
Total Common Stocks (cost $15,734,521) | 19,041,663 |
8
Description | 7-Day | Shares | Value ($) | ||||
Other Investment - .2% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1.83 | 41,154 | c | 41,154 | |||
Total Investments (cost $15,775,675) | 100.4% | 19,082,817 | |||||
Liabilities, Less Cash and Receivables | (.4%) | (69,911) | |||||
Net Assets | 100.0% | 19,012,906 |
ETF—Exchange-Traded Fund
aNon-income producing security.
bSecurity, or portion thereof, on loan. At June 30, 2018, the value of the fund’s securities on loan was $1,011,358 and the value of the collateral held by the fund was $1,189,864, consisting of U.S. Government & Agency securities.
cInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the respective investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Banks | 16.7 |
Energy | 13.4 |
Diversified Financials | 8.9 |
Materials | 8.9 |
Capital Goods | 7.6 |
Health Care Equipment & Services | 6.5 |
Pharmaceuticals, Biotechnology & Life Sciences | 6.0 |
Food, Beverage & Tobacco | 5.9 |
Telecommunication Services | 5.0 |
Technology Hardware & Equipment | 4.4 |
Software & Services | 3.7 |
Insurance | 3.3 |
Semiconductors & Semiconductor Equipment | 2.2 |
Media | 2.0 |
Utilities | 1.8 |
Transportation | 1.3 |
Automobiles & Components | .8 |
Exchange-Traded Funds | .8 |
Retailing | .5 |
Consumer Services | .5 |
Money Market Investment | .2 |
100.4 |
† Based on net assets.
See notes to financial statements.
9
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Registered Investment Companies | Value | Purchases($) | Sales($) | Value | Net | Dividends/ |
Dreyfus Institutional Preferred Government Plus Money Market Fund | 46,300 | 3,288,941 | 3,294,087 | 41,154 | .2 | 506 |
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 201,569 | 433,148 | 634,717 | - | - | - |
Total | 247,869 | 3,722,089 | 3,928,804 | 41,154 | .2 | 506 |
See notes to financial statements.
10
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2018 (Unaudited)
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| Cost |
| Value |
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Assets ($): |
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Investments in securities—See Statement of Investments |
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Unaffiliated issuers | 15,734,521 |
| 19,041,663 |
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Affiliated issuers |
| 41,154 |
| 41,154 |
| |
Cash |
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| 507 |
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Receivable for investment securities sold |
| 210,031 |
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Dividends and securities lending income receivable |
| 15,875 |
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Prepaid expenses |
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| 121 |
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|
|
|
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| 19,309,351 |
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Liabilities ($): |
|
|
|
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Due to The Dreyfus Corporation and affiliates—Note 3(b) |
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| 23,630 |
| |
Payable for investment securities purchased |
| 233,958 |
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Trustees fees and expenses payable |
| 2,177 |
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Payable for shares of Beneficial Interest redeemed |
| 471 |
| |||
Accrued expenses |
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|
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| 36,209 |
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|
|
|
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| 296,445 |
|
Net Assets ($) |
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| 19,012,906 |
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Composition of Net Assets ($): |
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|
|
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Paid-in capital |
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|
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| 14,727,956 |
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Accumulated undistributed investment income—net |
| 53,318 |
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Accumulated net realized gain (loss) on investments |
|
|
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| 924,490 |
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Accumulated net unrealized appreciation (depreciation) |
| 3,307,142 |
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Net Assets ($) |
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| 19,012,906 |
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Net Asset Value Per Share | Initial Shares | Service Shares |
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Net Assets ($) | 18,303,190 | 709,716 |
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Shares Outstanding | 1,255,774 | 47,732 |
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Net Asset Value Per Share ($) | 14.58 | 14.87 |
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See notes to financial statements. |
11
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2018 (Unaudited)
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Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends: |
| |||||
Unaffiliated issuers |
|
| 212,447 |
| ||
Affiliated issuers |
|
| 506 |
| ||
Income from securities lending—Note 1(b) |
|
| 514 |
| ||
Total Income |
|
| 213,467 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 73,917 |
| ||
Professional fees |
|
| 49,186 |
| ||
Custodian fees—Note 3(b) |
|
| 6,321 |
| ||
Prospectus and shareholders’ reports |
|
| 5,581 |
| ||
Trustees’ fees and expenses—Note 3(c) |
|
| 2,208 |
| ||
Distribution fees—Note 3(b) |
|
| 939 |
| ||
Loan commitment fees—Note 2 |
|
| 174 |
| ||
Shareholder servicing costs—Note 3(b) |
|
| 91 |
| ||
Miscellaneous |
|
| 19,357 |
| ||
Total Expenses |
|
| 157,774 |
| ||
Less—reduction in fees due to earnings credits—Note 3(b) |
|
| (7) |
| ||
Net Expenses |
|
| 157,767 |
| ||
Investment Income—Net |
|
| 55,700 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 1,095,327 |
| ||||
Net unrealized appreciation (depreciation) on investments |
|
| (1,356,478) |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| (261,151) |
| ||
Net (Decrease) in Net Assets Resulting from Operations |
| (205,451) |
| |||
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 55,700 |
|
|
| 178,128 |
| |
Net realized gain (loss) on investments |
| 1,095,327 |
|
|
| 3,914,287 |
| ||
Net unrealized appreciation (depreciation) |
| (1,356,478) |
|
|
| (1,068,420) |
| ||
Net Increase (Decrease) in Net Assets | (205,451) |
|
|
| 3,023,995 |
| |||
Distributions to Shareholders from ($): |
| ||||||||
Investment income—net: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (186,977) |
|
|
| (204,693) |
| |
Service Shares |
|
| - |
|
|
| (110,815) |
| |
Net realized gain on investments: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (3,654,058) |
|
|
| (1,140,309) |
| |
Service Shares |
|
| (155,263) |
|
|
| (768,727) |
| |
Total Distributions |
|
| (3,996,298) |
|
|
| (2,224,544) |
| |
Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 1,072,470 |
|
|
| 1,071,739 |
| |
Service Shares |
|
| 205,285 |
|
|
| 509,986 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 3,841,035 |
|
|
| 1,345,002 |
| |
Service Shares |
|
| 155,263 |
|
|
| 879,542 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (1,523,777) |
|
|
| (2,559,148) |
| |
Service Shares |
|
| (247,589) |
|
|
| (12,038,135) |
| |
Increase (Decrease) in Net Assets | 3,502,687 |
|
|
| (10,791,014) |
| |||
Total Increase (Decrease) in Net Assets | (699,062) |
|
|
| (9,991,563) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 19,711,968 |
|
|
| 29,703,531 |
| |
End of Period |
|
| 19,012,906 |
|
|
| 19,711,968 |
| |
Undistributed investment income—net | 53,318 |
|
|
| 184,595 |
| |||
Capital Share Transactions (Shares): |
| ||||||||
Initial Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 59,368 |
|
|
| 63,098 |
| |
Shares issued for distributions reinvested |
|
| 268,042 |
|
|
| 81,073 |
| |
Shares redeemed |
|
| (91,367) |
|
|
| (146,195) |
| |
Net Increase (Decrease) in Shares Outstanding | 236,043 |
|
|
| (2,024) |
| |||
Service Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 12,507 |
|
|
| 28,910 |
| |
Shares issued for distributions reinvested |
|
| 10,613 |
|
|
| 52,479 |
| |
Shares redeemed |
|
| (16,155) |
|
|
| (703,822) |
| |
Net Increase (Decrease) in Shares Outstanding | 6,965 |
|
|
| (622,433) |
| |||
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. 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. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund’s financial statements.
Six Months Ended | Year Ended December 31, | ||||||
Initial Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 18.58 | 17.58 | 17.61 | 20.38 | 19.43 | 14.28 | |
Investment Operations: | |||||||
Investment income—neta | .05 | .13 | .19 | .17 | .15 | .16 | |
Net realized and unrealized gain | (.29) | 2.25 | 2.46 | (.55) | 1.78 | 5.20 | |
Total from Investment Operations | (.24) | 2.38 | 2.65 | (.38) | 1.93 | 5.36 | |
Distributions: | |||||||
Dividends from | (.18) | (.21) | (.18) | (.16) | (.18) | (.21) | |
Dividends from net realized | (3.58) | (1.17) | (2.50) | (2.23) | (.80) | — | |
Total Distributions | (3.76) | (1.38) | (2.68) | (2.39) | (.98) | (.21) | |
Net asset value, end of period | 14.58 | 18.58 | 17.58 | 17.61 | 20.38 | 19.43 | |
Total Return (%) | (.91)b | 14.47 | 18.32 | (2.22) | 10.31 | 37.87 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | 1.59c | 1.17 | 1.07 | 1.07 | 1.03 | 1.02 | |
Ratio of net expenses | 1.59c | 1.17 | 1.07 | 1.07 | 1.03 | .99 | |
Ratio of net investment income | .57c | .75 | 1.20 | .92 | .79 | .95 | |
Portfolio Turnover Rate | 67.33b | 91.07 | 87.64 | 105.48 | 66.78 | 65.33 | |
Net Assets, end of period ($ x 1,000) | 18,303 | 18,949 | 17,958 | 19,216 | 21,637 | 20,605 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
14
Six Months Ended | Year Ended December 31, | ||||||
Service Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 18.71 | 17.71 | 17.71 | 20.48 | 19.51 | 14.34 | |
Investment Operations: | |||||||
Investment income—neta | .03 | .09 | .15 | .12 | .11 | .12 | |
Net realized and unrealized gain | (.29) | 2.25 | 2.48 | (.55) | 1.79 | 5.22 | |
Total from Investment Operations | (.26) | 2.34 | 2.63 | (.43) | 1.90 | 5.34 | |
Distributions: | |||||||
Dividends from | — | (.17) | (.13) | (.11) | (.13) | (.17) | |
Dividends from net realized | (3.58) | (1.17) | (2.50) | (2.23) | (.80) | — | |
Total Distributions | (3.58) | (1.34) | (2.63) | (2.34) | (.93) | (.17) | |
Net asset value, end of period | 14.87 | 18.71 | 17.71 | 17.71 | 20.48 | 19.51 | |
Total Return (%) | (1.07)b | 14.07 | 18.00 | (2.50) | 10.09 | 37.52 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | 1.84c | 1.42 | 1.32 | 1.32 | 1.28 | 1.27 | |
Ratio of net expenses | 1.84c | 1.42 | 1.32 | 1.32 | 1.28 | 1.24 | |
Ratio of net investment income | .32c | .50 | .94 | .67 | .54 | .70 | |
Portfolio Turnover Rate | 67.33b | 91.07 | 87.64 | 105.48 | 66.78 | 65.33 | |
Net Assets, end of period ($ x 1,000) | 710 | 763 | 11,745 | 10,927 | 13,165 | 15,451 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
15
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Core Value Portfolio (the “fund”) is a separate diversified series of Dreyfus Investment Portfolios (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 four series, including the fund. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies.The fund’s investment objective is to seek long-term growth of capital, with current income as a secondary objective. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares, which are sold without a sales charge. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the Distribution Plan, 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 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.
16
(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.
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. 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.
17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 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 Company’s Board of Trustees (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 restricted 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 June 30, 2018 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 - Domestic Common Stocks† | 18,806,304 | - | - | 18,806,304 |
Equity Securities - Foreign Common Stocks† | 92,009 | - | - | 92,009 |
18
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 -Significant Unobservable Inputs | Total | |
Assets ($) | ||||
Exchange-Traded Funds | 143,350 | - | - | 143,350 |
Registered Investment Companies | 41,154 | - | - | 41,154 |
† See Statement of Investments for additional detailed categorizations.
At June 30, 2018, there were no transfers between levels of the fair value hierarchy. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(b) 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 Dreyfus, 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 Dreyfus, 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 June 30, 2018, The Bank of New York Mellon earned $105 from lending portfolio securities, pursuant to the securities lending agreement.
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act.
(d) 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.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2018, 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 June 30, 2018, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2017 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 December 31, 2017 was as follows: ordinary income $315,508 and long-term capital gains $1,909,036. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in an $830 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. 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.
20
During the period ended June 30, 2018, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares’ shareholder accounts and for advertising and marketing for Service shares. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2018, Service shares were charged $939 pursuant to the Distribution 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 Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency and cash management services 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 June 30, 2018, the fund was charged $57 for transfer agency services and $7 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were offset by earnings credits of $7.
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. During the period ended June 30, 2018, the fund was charged $6,321 pursuant to the custody agreement.
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended June 30, 2018, the fund was charged $6,320 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $12,094, Distribution Plan fees $148, custodian fees $5,034, Chief Compliance Officer fees $6,320 and transfer agency fees $34.
(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended June 30, 2018, amounted to $13,279,029 and $13,615,214, respectively.
At June 30, 2018, accumulated net unrealized appreciation on investments was $3,307,142, consisting of $3,657,459 gross unrealized appreciation and $350,317 gross unrealized depreciation.
At June 30, 2018, 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).
22
NOTES
23
NOTES
24
NOTES
25
Dreyfus Investment Portfolios, Core Value Portfolio
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Telephone 1-800-258-4260 or 1-800-258-4261
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 Attn: Institutional Services Department
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.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-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, D.C. 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.
© 2018 MBSC Securities Corporation |
Dreyfus Investment Portfolios, MidCap Stock Portfolio
SEMIANNUAL REPORT |
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 Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment Portfolios, MidCap Stock Portfolio, covering the six-month period from January 1, 2018 through June 30, 2018. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
Volatility returned to the financial markets over the first half of 2018. Although stocks set a series of new record highs in January amid growing corporate earnings, reduced corporate tax rates and synchronized global economic growth, investors later grew nervous about rising interest rates, renewed inflationary pressures, escalating geopolitical tensions and the prospects of more protectionist U.S. trade policies. Consequently, U.S. stocks produced mildly positive returns over the reporting period. Meanwhile, bonds typically lost a degree of value over the first six months of the year due to rising interest rates and inflation concerns.
Despite the return of heightened market volatility, we believe that underlying market fundamentals remain sound. Ongoing economic growth, robust labor markets, rising corporate earnings and strong consumer and business confidence seem likely to support stock and corporate bond prices over the months ahead. Monetary policymakers have indicated that short-term interest rates probably will rise further, but U.S. government bond prices may already reflect those expectations. As always, we encourage you to discuss the risks and opportunities of today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
July 16, 2018
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from January 1, 2018 through June 30, 2018, as provided by C. Wesley Boggs, William S. Cazalet, CAIA, Peter D. Goslin, CFA, and Syed A. Zamil, CFA, Portfolio Managers
Market and Fund Performance Overview
For the six-month period ended June 30, 2018, Dreyfus Investment Portfolios, MidCap Stock Portfolio’s Initial shares produced a total return of -1.51%, and its Service shares produced a total return of -1.61%.1 In comparison, the fund’s benchmark, the S&P MidCap 400® Index (the “Index”), produced a total return of 3.49% for the same period.2
Mid-cap stocks produced moderate gains in a volatile market over the reporting period amid rising corporate earnings, sustained economic growth, and intensifying merger-and-acquisition activity. The fund lagged the Index, mainly due to security selection shortfalls in the consumer discretionary, financials, consumer staples, and health care sectors.
The Fund’s Investment Approach
The fund seeks investment results that are greater than the total return performance of publicly traded common stocks of medium-sized domestic companies in the aggregate, as represented by the Index. To pursue this goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks of mid-cap companies. The fund invests in growth and value stocks, which are chosen through a disciplined investment process that combines computer-modeling techniques, fundamental analysis, and risk management. Consistency of returns compared to the Index is a primary goal of the investment process.
The portfolio managers select stocks through a “bottom-up,” structured approach that seeks to identify undervalued securities using a quantitative ranking process. The process is driven by a proprietary quantitative model that measures a diverse set of corporate characteristics to identify and rank stocks based on valuation, momentum, and sentiment and earnings quality measures.
Next, the fund’s portfolio managers construct the portfolio through a risk-controlled process, focusing on stock selection as opposed to making proactive decisions as to industry and sector exposure. The portfolio managers seek to maintain a portfolio that has exposure to industries and market capitalizations that are generally similar to the fund’s benchmark. Finally, within each sector and style subset, the fund will seek to overweight the most attractive stocks and underweight or not hold the stocks that have been ranked least attractive.
Market Volatility Increased Despite Positive Economic Trends
A positive economic backdrop supported U.S. equity markets at the start of 2018, including sustained GDP growth, robust labor markets, and higher growth forecasts from the Federal Reserve Board (the “Fed”). Enactment of corporate tax cuts as part of major tax reform legislation in late December 2017 sparked additional market gains, driving the Index to new all-time highs in January.
Economic data in January indicated robust levels of consumer spending during the critical year-end shopping season, and long-awaited signs of wage growth began to appear. However, concerns about rising inflationary pressures and prospects for more aggressive interest-rate hikes soon began to weigh on market sentiment, sparking renewed volatility that sent stock prices sharply lower in early February. Political rhetoric regarding potentially protectionist U.S. trade policies also took a toll on many stocks, and rising bond yields further contributed to heightened volatility.
Mid-cap stocks fared better over the second quarter of 2018. Despite an additional interest-rate hike by the Fed, the Index rallied in an environment of persistently strong economic growth, rising corporate earnings, and higher levels of merger-and-acquisition activity. Consequently, the Index again reached new record highs toward the reporting period’s end.
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
Security Selections Constrained Fund Performance
The fund’s performance compared to the Index was mainly the result of stock selection shortfalls across several market sectors. In the consumer discretionary sector, automotive supplier Dana Corp. lagged market averages due in part to disappointing after-tax profit margins. Despite a strong quarterly earnings report, retailer Big Lots issued guidance that fell short of analysts’ expectations. Overweighted exposure to homebuilders in the household durables industry group also hurt relative results. The consumer discretionary sector, however, did provide some bright points. Deckers Outdoor Corporation beat earnings expectations and provided guidance above expectations. Among financial companies, investment manager Federated Investors reported weaker-than-expected quarterly earnings. Results from the health care sector were constrained by lack of exposure to medical devices maker ABIOMED, which more than doubled in value. The fund’s stock selections in the consumer staples sector also undermined relative performance, primarily due to weakness among food products companies.
The fund achieved better results in other areas. Our stock selection strategy identified a number of winners in the industrials sector, where the fund participated in gains posted by some of the sector’s stronger performers and largely avoided weaker stocks. Oil refiner HollyFrontier participated in above-average gains for its industry group in an environment of rising oil prices. Results from the utilities sector were bolstered by a favorable sector allocation as our bottom-up investment process identified relatively few investment candidates at the start of 2018, but more opportunities arose later in the reporting period. Our security selection strategy also proved beneficial in the utilities sector.
A Disciplined Approach to Stock Picking
As of the reporting period’s end, our quantitative models have continued to identify what we believe are attractive investment opportunities across a broad spectrum of mid-cap companies and industry groups. Indeed, recent bouts of volatility have provided opportunities to purchase the stocks of companies ranked highly by our process. When the fund’s holdings reach what we perceive to be fuller valuations, we expect to replace them with high-quality companies that display then-currently attractive valuations in our model. In addition, we continue to maintain a broadly diversified portfolio.
July 16, 2018
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts, which will reduce returns.
2 Source: Lipper Inc. — The S&P MidCap 400® Index provides investors with a benchmark for mid-sized companies. The index measures the performance of mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment. Investors cannot invest directly in any index.
Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
Stocks of mid-cap companies often experience sharper price fluctuations than stocks of large-cap companies.
The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of Dreyfus Investment Portfolios, MidCap Stock Portfolio made available through insurance products may be similar to those of other funds managed by Dreyfus. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other Dreyfus fund.
4
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), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Investment Portfolios, MidCap Stock Portfolio from January 1, 2018 to June 30, 2018. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment | ||||||||
assuming actual returns for the six months ended June 30, 2018 | ||||||||
Initial Shares | Service Shares | |||||||
Expenses paid per $1,000† |
| $4.23 | $5.46 | |||||
Ending value (after expenses) |
| $984.90 | $983.90 |
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 June 30, 2018 | ||||||||
Initial Shares | Service Shares | |||||||
Expenses paid per $1,000† | $4.31 | $5.56 | ||||||
Ending value (after expenses) | $1,020.53 | $1,019.29 |
† Expenses are equal to the fund’s annualized expense ratio of .86% for Initial shares and 1.11% for Service shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
June 30, 2018 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% | |||||||
Automobiles & Components - 2.3% | |||||||
Dana | 67,950 | 1,371,911 | |||||
Gentex | 11,500 | 264,730 | |||||
Visteon | 16,760 | a | 2,166,062 | ||||
3,802,703 | |||||||
Banks - 6.5% | |||||||
BancorpSouth Bank | 26,300 | b | 866,585 | ||||
Cathay General Bancorp | 63,255 | 2,561,195 | |||||
Comerica | 24,300 | 2,209,356 | |||||
Commerce Bancshares | 4,952 | 320,444 | |||||
East West Bancorp | 17,095 | 1,114,594 | |||||
Synovus Financial | 54,850 | 2,897,725 | |||||
UMB Financial | 2,360 | 179,903 | |||||
Washington Federal | 12,120 | 396,324 | |||||
10,546,126 | |||||||
Capital Goods - 10.4% | |||||||
Curtiss-Wright | 16,680 | 1,985,254 | |||||
EMCOR Group | 32,000 | 2,437,760 | |||||
Granite Construction | 32,700 | b | 1,820,082 | ||||
KBR | 13,600 | 243,712 | |||||
Kennametal | 42,300 | 1,518,570 | |||||
KLX | 23,200 | a | 1,668,080 | ||||
Spirit AeroSystems Holdings, Cl. A | 25,775 | 2,214,330 | |||||
Terex | 57,600 | 2,430,144 | |||||
Toro | 44,670 | 2,691,367 | |||||
17,009,299 | |||||||
Commercial & Professional Services - 2.6% | |||||||
Copart | 32,560 | a,b | 1,841,594 | ||||
Dun & Bradstreet | 20,100 | 2,465,265 | |||||
4,306,859 | |||||||
Consumer Durables & Apparel - 6.9% | |||||||
Brunswick | 28,980 | 1,868,630 | |||||
Deckers Outdoor | 23,200 | a | 2,619,048 | ||||
KB Home | 73,050 | 1,989,882 | |||||
NVR | 640 | a | 1,901,024 | ||||
Toll Brothers | 63,520 | 2,349,605 | |||||
TRI Pointe Group | 30,500 | a,b | 498,980 | ||||
11,227,169 | |||||||
Consumer Services - 1.2% | |||||||
Hyatt Hotels, Cl. A | 2,100 | 162,015 | |||||
Royal Caribbean Cruises | 17,990 | 1,863,764 | |||||
2,025,779 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Diversified Financials - 2.8% | |||||||
Federated Investors, Cl. B | 95,800 | b | 2,234,056 | ||||
Legg Mason | 16,200 | 562,626 | |||||
LPL Financial Holdings | 3,100 | 203,174 | |||||
SEI Investments | 24,470 | 1,529,864 | |||||
4,529,720 | |||||||
Energy - 3.0% | |||||||
HollyFrontier | 33,220 | 2,273,245 | |||||
Marathon Petroleum | 2,500 | 175,400 | |||||
PBF Energy, Cl. A | 56,300 | 2,360,659 | |||||
4,809,304 | |||||||
Food, Beverage & Tobacco - 1.5% | |||||||
Ingredion | 22,740 | 2,517,318 | |||||
Health Care Equipment & Services - 4.5% | |||||||
Haemonetics | 22,800 | a | 2,044,704 | ||||
Masimo | 7,860 | a | 767,529 | ||||
Varian Medical Systems | 6,160 | a | 700,515 | ||||
WellCare Health Plans | 14,450 | a | 3,558,168 | ||||
West Pharmaceutical Services | 1,900 | b | 188,651 | ||||
7,259,567 | |||||||
Household & Personal Products - .6% | |||||||
Edgewell Personal Care | 18,050 | a,b | 910,803 | ||||
Insurance - 6.8% | |||||||
CNO Financial Group | 114,250 | 2,175,320 | |||||
Kemper | 9,300 | b | 703,545 | ||||
Old Republic International | 112,080 | 2,231,513 | |||||
Primerica | 26,915 | b | 2,680,734 | ||||
Reinsurance Group of America | 11,805 | 1,575,731 | |||||
Torchmark | 20,500 | 1,668,905 | |||||
11,035,748 | |||||||
Materials - 7.9% | |||||||
Chemours | 47,420 | 2,103,551 | |||||
Freeport-McMoRan | 103,360 | 1,783,994 | |||||
Greif, Cl. A | 17,960 | 949,904 | |||||
Huntsman | 68,690 | 2,005,748 | |||||
Louisiana-Pacific | 90,690 | 2,468,582 | |||||
Owens-Illinois | 62,160 | a | 1,044,910 | ||||
United States Steel | 4,700 | b | 163,325 | ||||
Westlake Chemical | 20,720 | b | 2,230,094 | ||||
Worthington Industries | 4,045 | b | 169,769 | ||||
12,919,877 | |||||||
Media - .8% | |||||||
John Wiley & Sons, Cl. A | 20,700 | 1,291,680 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Pharmaceuticals, Biotechnology & Life Sciences - 7.2% | |||||||
Agilent Technologies | 11,080 | 685,187 | |||||
Bio-Techne | 4,900 | 724,955 | |||||
Catalent | 63,970 | a | 2,679,703 | ||||
Charles River Laboratories International | 25,140 | a | 2,822,216 | ||||
Mettler-Toledo International | 2,310 | a | 1,336,635 | ||||
United Therapeutics | 9,045 | a | 1,023,442 | ||||
Waters | 2,130 | a | 412,347 | ||||
Zoetis | 24,300 | 2,070,117 | |||||
11,754,602 | |||||||
Real Estate - 6.9% | |||||||
First Industrial Realty Trust | 84,320 | c | 2,811,229 | ||||
Highwoods Properties | 24,600 | c | 1,247,958 | ||||
Hospitality Properties Trust | 16,075 | c | 459,906 | ||||
Kilroy Realty | 15,055 | c | 1,138,760 | ||||
Lamar Advertising, Cl. A | 36,595 | c | 2,499,804 | ||||
Piedmont Office Realty Trust, Cl. A | 17,880 | c | 356,348 | ||||
Tanger Factory Outlet Centers | 7,680 | b,c | 180,403 | ||||
Weingarten Realty Investors | 85,650 | c | 2,638,876 | ||||
11,333,284 | |||||||
Retailing - 1.6% | |||||||
Best Buy | 10,810 | 806,210 | |||||
Big Lots | 43,810 | b | 1,830,382 | ||||
2,636,592 | |||||||
Semiconductors & Semiconductor Equipment - 3.2% | |||||||
First Solar | 6,000 | a,b | 315,960 | ||||
MKS Instruments | 25,200 | 2,411,640 | |||||
ON Semiconductor | 63,770 | a | 1,417,926 | ||||
Skyworks Solutions | 11,220 | 1,084,413 | |||||
5,229,939 | |||||||
Software & Services - 9.3% | |||||||
CDK Global | 43,630 | 2,838,131 | |||||
Convergys | 101,975 | 2,492,269 | |||||
CoreLogic | 44,200 | a | 2,293,980 | ||||
Fair Isaac | 14,580 | a | 2,818,606 | ||||
Manhattan Associates | 47,470 | a,b | 2,231,565 | ||||
MAXIMUS | 40,950 | 2,543,405 | |||||
15,217,956 | |||||||
Technology Hardware & Equipment - 5.3% | |||||||
F5 Networks | 6,750 | a | 1,164,038 | ||||
NCR | 67,335 | a,b | 2,018,703 | ||||
Vishay Intertechnology | 112,260 | 2,604,432 | |||||
Zebra Technologies, Cl. A | 19,940 | a | 2,856,405 | ||||
8,643,578 |
8
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Transportation - .9% | |||||||
Werner Enterprises | 40,800 | b | 1,532,040 | ||||
Utilities - 7.5% | |||||||
IDACORP | 10,000 | b | 922,400 | ||||
MDU Resources Group | 103,280 | 2,962,070 | |||||
New Jersey Resources | 40,580 | b | 1,815,955 | ||||
NorthWestern | 42,000 | 2,404,500 | |||||
NRG Energy | 41,500 | 1,274,050 | |||||
OGE Energy | 79,700 | 2,806,237 | |||||
12,185,212 | |||||||
Total Common Stocks (cost $139,242,443) | 162,725,155 | ||||||
7-Day | |||||||
Other Investment - .5% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1.83 | 857,018 | d | 857,018 | |||
Investment of Cash Collateral for Securities Loaned - 2.1% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 1.85 | 3,381,561 | d | 3,381,561 | |||
Total Investments (cost $143,481,022) | 102.3% | 166,963,734 | |||||
Liabilities, Less Cash and Receivables | (2.3%) | (3,704,104) | |||||
Net Assets | 100.0% | 163,259,630 |
aNon-income producing security.
bSecurity, or portion thereof, on loan. At June 30, 2018, the value of the fund’s securities on loan was $18,913,112 and the value of the collateral held by the fund was $19,721,956, consisting of cash collateral of $3,381,561 and U.S. Government & Agency securities valued at $16,340,395.
cInvestment in real estate investment trust.
dInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the respective investment company’s prospectus.
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Portfolio Summary (Unaudited) † | Value (%) |
Capital Goods | 10.4 |
Software & Services | 9.3 |
Materials | 7.9 |
Utilities | 7.5 |
Pharmaceuticals, Biotechnology & Life Sciences | 7.2 |
Real Estate | 6.9 |
Consumer Durables & Apparel | 6.9 |
Insurance | 6.8 |
Banks | 6.5 |
Technology Hardware & Equipment | 5.3 |
Health Care Equipment & Services | 4.5 |
Semiconductors & Semiconductor Equipment | 3.2 |
Energy | 3.0 |
Diversified Financials | 2.8 |
Commercial & Professional Services | 2.6 |
Money Market Investments | 2.6 |
Automobiles & Components | 2.3 |
Retailing | 1.6 |
Food, Beverage & Tobacco | 1.5 |
Consumer Services | 1.2 |
Transportation | .9 |
Media | .8 |
Household & Personal Products | .6 |
102.3 |
† Based on net assets.
See notes to financial statements.
10
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Registered Investment Companies | Value | Purchases($) | Sales($) | Value | Net | Dividends/ |
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1,813,429 | 7,162,424 | 8,118,835 | 857,018 | .5 | 6,007 |
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 5,638,451 | 24,934,854 | 27,191,744 | 3,381,561 | 2.1 | - |
Total | 7,451,880 | 32,097,278 | 35,310,579 | 4,238,579 | 2.6 | 6,007 |
See notes to financial statements.
11
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 139,242,443 |
| 162,725,155 |
| ||
Affiliated issuers |
| 4,238,579 |
| 4,238,579 |
| |
Cash |
|
|
|
| 18,630 |
|
Dividends and securities lending income receivable |
| 178,519 |
| |||
Prepaid expenses |
|
|
|
| 4,102 |
|
|
|
|
|
| 167,164,985 |
|
Liabilities ($): |
|
|
|
| ||
Due to The Dreyfus Corporation and affiliates—Note 3(b) |
|
|
| 126,506 |
| |
Liability for securities on loan—Note 1(b) |
| 3,381,561 |
| |||
Payable for shares of Beneficial Interest redeemed |
| 348,066 |
| |||
Trustees fees and expenses payable |
| 100 |
| |||
Accrued expenses |
|
|
|
| 49,122 |
|
|
|
|
|
| 3,905,355 |
|
Net Assets ($) |
|
| 163,259,630 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 132,303,300 |
|
Accumulated undistributed investment income—net |
| 452,844 |
| |||
Accumulated net realized gain (loss) on investments |
|
|
|
| 7,020,774 |
|
Accumulated net unrealized appreciation (depreciation) |
| 23,482,712 |
| |||
Net Assets ($) |
|
| 163,259,630 |
|
Net Asset Value Per Share | Initial Shares | Service Shares |
|
Net Assets ($) | 88,334,117 | 74,925,513 |
|
Shares Outstanding | 4,511,781 | 3,842,828 |
|
Net Asset Value Per Share ($) | 19.58 | 19.50 |
|
See notes to financial statements. |
12
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends: |
| |||||
Unaffiliated issuers |
|
| 1,208,224 |
| ||
Affiliated issuers |
|
| 6,007 |
| ||
Income from securities lending—Note 1(b) |
|
| 12,300 |
| ||
Total Income |
|
| 1,226,531 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 623,056 |
| ||
Distribution fees—Note 3(b) |
|
| 94,404 |
| ||
Professional fees |
|
| 41,630 |
| ||
Prospectus and shareholders’ reports |
|
| 16,267 |
| ||
Loan commitment fees—Note 2 |
|
| 4,718 |
| ||
Trustees’ fees and expenses—Note 3(c) |
|
| 3,727 |
| ||
Shareholder servicing costs—Note 3(b) |
|
| 786 |
| ||
Custodian fees—Note 3(b) |
|
| 318 |
| ||
Miscellaneous |
|
| 22,664 |
| ||
Total Expenses |
|
| 807,570 |
| ||
Less—reduction in fees due to earnings credits—Note 3(b) |
|
| (62) |
| ||
Net Expenses |
|
| 807,508 |
| ||
Investment Income—Net |
|
| 419,023 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 7,159,653 |
| ||||
Net unrealized appreciation (depreciation) on investments |
|
| (10,157,120) |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| (2,997,467) |
| ||
Net (Decrease) in Net Assets Resulting from Operations |
| (2,578,444) |
| |||
See notes to financial statements. |
13
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 419,023 |
|
|
| 776,876 |
| |
Net realized gain (loss) on investments |
| 7,159,653 |
|
|
| 19,205,766 |
| ||
Net unrealized appreciation (depreciation) |
| (10,157,120) |
|
|
| 5,929,234 |
| ||
Net Increase (Decrease) in Net Assets | (2,578,444) |
|
|
| 25,911,876 |
| |||
Distributions to Shareholders from ($): |
| ||||||||
Investment income—net: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (510,886) |
|
|
| (1,318,278) |
| |
Service Shares |
|
| (253,530) |
|
|
| (571,428) |
| |
Net realized gain on investments: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (10,475,203) |
|
|
| (1,947,592) |
| |
Service Shares |
|
| (8,781,068) |
|
|
| (1,048,153) |
| |
Total Distributions |
|
| (20,020,687) |
|
|
| (4,885,451) |
| |
Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 3,391,575 |
|
|
| 7,641,567 |
| |
Service Shares |
|
| 6,590,104 |
|
|
| 16,117,819 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 10,986,089 |
|
|
| 3,265,870 |
| |
Service Shares |
|
| 9,034,598 |
|
|
| 1,619,581 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (6,466,279) |
|
|
| (54,096,819) |
| |
Service Shares |
|
| (7,400,600) |
|
|
| (13,049,664) |
| |
Increase (Decrease) in Net Assets | 16,135,487 |
|
|
| (38,501,646) |
| |||
Total Increase (Decrease) in Net Assets | (6,463,644) |
|
|
| (17,475,221) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 169,723,274 |
|
|
| 187,198,495 |
| |
End of Period |
|
| 163,259,630 |
|
|
| 169,723,274 |
| |
Undistributed investment income—net | 452,844 |
|
|
| 798,237 |
| |||
Capital Share Transactions (Shares): |
| ||||||||
Initial Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 157,817 |
|
|
| 360,786 |
| |
Shares issued for distributions reinvested |
|
| 551,234 |
|
|
| 163,702 |
| |
Shares redeemed |
|
| (310,262) |
|
|
| (2,544,770) |
| |
Net Increase (Decrease) in Shares Outstanding | 398,789 |
|
|
| (2,020,282) |
| |||
Service Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 315,781 |
|
|
| 781,309 |
| |
Shares issued for distributions reinvested |
|
| 454,914 |
|
|
| 81,427 |
| |
Shares redeemed |
|
| (355,417) |
|
|
| (633,009) |
| |
Net Increase (Decrease) in Shares Outstanding | 415,278 |
|
|
| 229,727 |
| |||
See notes to financial statements. |
14
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
June 30, 2018 | Year Ended December 31, | |||||
Initial Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 22.56 | 20.09 | 18.95 | 23.03 | 20.87 | 15.68 |
Investment Operations: | ||||||
Investment income—neta | .06 | .10 | .21 | .18 | .14 | .20 |
Net realized and unrealized | (.35) | 2.92 | 2.50 | (.50) | 2.35 | 5.24 |
Total from Investment Operations | (.29) | 3.02 | 2.71 | (.32) | 2.49 | 5.44 |
Distributions: | ||||||
Dividends from | (.13) | (.22) | (.21) | (.14) | (.21) | (.25) |
Dividends from | (2.56) | (.33) | (1.36) | (3.62) | (.12) | - |
Total Distributions | (2.69) | (.55) | (1.57) | (3.76) | (.33) | (.25) |
Net asset value, end of period | 19.58 | 22.56 | 20.09 | 18.95 | 23.03 | 20.87 |
Total Return (%) | (1.51)b | 15.38 | 15.47 | (2.29) | 12.09 | 34.99 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .86c | .87 | .85 | .85 | .85 | .86 |
Ratio of net expenses | .86c | .87 | .85 | .85 | .85 | .86 |
Ratio of net investment income | .62c | .50 | 1.16 | .89 | .64 | 1.11 |
Portfolio Turnover Rate | 35.77b | 64.86 | 65.52 | 80.27 | 83.06 | 68.72 |
Net Assets, end of period ($ x 1,000) | 88,334 | 92,776 | 123,226 | 123,354 | 160,482 | 158,682 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
June 30, 2018 | Year Ended December 31, | |||||
Service Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 22.45 | 20.00 | 18.88 | 22.97 | 20.83 | 15.65 |
Investment Operations: | ||||||
Investment income—neta | .04 | .06 | .17 | .15 | .09 | .16 |
Net realized and unrealized | (.36) | 2.90 | 2.47 | (.52) | 2.34 | 5.23 |
Total from Investment Operations | (.32) | 2.96 | 2.64 | (.37) | 2.43 | 5.39 |
Distributions: | ||||||
Dividends from | (.07) | (.18) | (.16) | (.10) | (.17) | (.21) |
Dividends from | (2.56) | (.33) | (1.36) | (3.62) | (.12) | - |
Total Distributions | (2.63) | (.51) | (1.52) | (3.72) | (.29) | (.21) |
Net asset value, end of period | 19.50 | 22.45 | 20.00 | 18.88 | 22.97 | 20.83 |
Total Return (%) | (1.61)b | 15.04 | 15.20 | (2.52) | 11.76 | 34.70 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.11c | 1.12 | 1.10 | 1.10 | 1.10 | 1.11 |
Ratio of net expenses | 1.11c | 1.12 | 1.10 | 1.10 | 1.10 | 1.11 |
Ratio of net investment income | .37c | .28 | .94 | .72 | .40 | .86 |
Portfolio Turnover Rate | 35.77b | 64.86 | 65.52 | 80.27 | 83.06 | 68.72 |
Net Assets, end of period ($ x 1,000) | 74,926 | 76,948 | 63,972 | 49,363 | 35,213 | 23,838 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
MidCap Stock Portfolio (the “fund”) is a separate diversified series of Dreyfus Investment Portfolios (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 four series, including the fund. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund’s investment objective is to seek investment results that are greater than the total return performance of publicly traded common stocks of medium-size domestic companies in the aggregate, as represented by the Standard & Poor’s MidCap 400® Index. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares, which are sold without a sales charge. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the Distribution Plan, 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 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.
17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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.
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. For open short positions, asked prices are used for valuation purposes. Bid price is
18
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 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 Company’s Board of Trustees (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 restricted 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 June 30, 2018 in valuing the fund’s investments:
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Level 1 - | Level 2 – Other | Level 3 - | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities- | 162,725,155 | - | - | 162,725,155 |
Registered Investment Companies | 4,238,579 | - | - | 4,238,579 |
† See Statement of Investments for additional detailed categorizations.
At June 30, 2018, there were no transfers between levels of the fair value hierarchy. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(b) 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 Dreyfus, 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 Dreyfus, 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 June 30, 2018, The Bank of New York Mellon earned $2,551 from lending portfolio securities, pursuant to the securities lending agreement.
20
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act.
(d) 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.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2018, 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 June 30, 2018, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2017 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 December 31, 2017 was as follows: ordinary income $1,889,706 and long-term capital gains $2,995,745. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in an $830 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. 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.
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended June 30, 2018, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .75% of the value of the fund's average daily net assets and is payable monthly.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares’ shareholder accounts and for advertising and marketing for Service shares. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2018, Service shares were charged $94,404 pursuant to the Distribution 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 Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency and cash management services 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 June 30, 2018, the fund was charged $432 for transfer agency services and $62 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were offset by earnings credits of $62.
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. During the period ended June 30, 2018, the fund was charged $318 pursuant to the custody agreement.
22
During the period ended June 30, 2018, the fund was charged $6,320 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $103,483, Distribution Plan fees $15,782, custodian fees $665, Chief Compliance Officer fees $6,320 and transfer agency fees $256.
(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended June 30, 2018, amounted to $59,225,791 and $61,528,967, respectively.
At June 30, 2018, accumulated net unrealized appreciation on investments was $23,482,712, consisting of $27,907,487 gross unrealized appreciation and $4,424,775 gross unrealized depreciation.
At June 30, 2018, 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).
23
NOTES
24
NOTES
25
Dreyfus Investment Portfolios, MidCap Stock Portfolio
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Telephone 1-800-258-4260 or 1-800-258-4261
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 Attn: Institutional Services Department
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.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-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, D.C. 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.
© 2018 MBSC Securities Corporation |
Dreyfus Investment Portfolios, Small Cap Stock Index Portfolio
SEMIANNUAL REPORT |
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 Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment Portfolios, Small Cap Stock Index Portfolio, covering the six-month period from January 1, 2018 through June 30, 2018. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
Volatility returned to the financial markets over the first half of 2018. Although stocks set a series of new record highs in January amid growing corporate earnings, reduced corporate tax rates and synchronized global economic growth, investors later grew nervous about rising interest rates, renewed inflationary pressures, escalating geopolitical tensions and the prospects of more protectionist U.S. trade policies. Consequently, U.S. stocks produced mildly positive returns over the reporting period. Meanwhile, bonds typically lost a degree of value over the first six months of the year due to rising interest rates and inflation concerns.
Despite the return of heightened market volatility, we believe that underlying market fundamentals remain sound. Ongoing economic growth, robust labor markets, rising corporate earnings and strong consumer and business confidence seem likely to support stock and corporate bond prices over the months ahead. Monetary policymakers have indicated that short-term interest rates probably will rise further, but U.S. government bond prices may already reflect those expectations. As always, we encourage you to discuss the risks and opportunities of today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
July 16, 2018
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from January 1, 2018 through June 30, 2018, as provided by portfolio managers Thomas J. Durante, CFA, Karen Q. Wong, CFA, and Richard A. Brown, CFA, of BNY Mellon Asset Management North America Corporation, Sub-Investment Adviser
Market and Fund Performance Overview
For the six-month period ended June 30, 2018, Dreyfus Investment Portfolios, Small Cap Stock Index Portfolio produced a total return of 9.10%.1 In comparison, the fund’s benchmark, the S&P SmallCap 600® Index (the “Index”), produced a 9.39% total return for the same period.2,3
Small-cap stocks produced strong gains in a volatile market over the reporting period amid rising corporate earnings, sustained economic growth, higher interest rates, and intensifying merger-and-acquisition activity. The difference in returns between the fund and the Index was primarily the result of transaction costs and operating expenses that are not reflected in the Index’s results.
The Fund’s Investment Approach
The fund seeks to match the performance of the Index. To pursue its goal, the fund generally invests in all of the stocks that comprise the Index. The fund generally invests in all 600 stocks in the Index in proportion to their weighting in the index; however, at times, the fund may invest in a representative sample of stocks included in the Index. Under these circumstances, the fund expects to invest in approximately 500 or more of the stocks in the Index.
Rising Volatility Amid Positive Economic Trends
A positive economic backdrop supported U.S. equity markets at the start of 2018, including moderate GDP growth, robust labor markets, and higher growth forecasts from the Federal Reserve Board (the “Fed”). Enactment of corporate tax cuts as part of major tax reform legislation in late December 2017 sparked additional market gains, driving the Index to new all-time highs in January.
Economic data in January indicated robust levels of consumer spending during the critical year-end shopping season, and long-awaited signs of wage growth began to appear. However, concerns about rising inflationary pressures and prospects for more aggressive interest-rate hikes soon began to weigh on market sentiment, sparking renewed volatility that sent stock prices sharply lower in early February. Political rhetoric regarding potentially protectionist U.S. trade policies also took a toll on stocks with ample exposure to overseas markets, and rising bond yields further contributed to heightened volatility.
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
Small-cap stocks fared particularly well over the second quarter of 2018. Despite an additional interest-rate hike by the Fed, the Index rallied in an environment of persistently strong economic growth, rising corporate earnings, and higher levels of merger-and-acquisition activity. In addition, investors concerned about the impact of trade tariffs on large, multinational companies increasingly turned to more domestically oriented small-cap companies. Consequently, the Index again reached new highs in May and June.
Health Care Stocks Led the Market’s Rise
For the reporting period overall, health care stocks posted the highest returns of the Index’s various market segments. Investors increasingly recognized that a more business-friendly regulatory environment would speed approvals of new drugs, and that an aging global population was likely to support demand for health care products and services over the long term. An increase in merger-and-acquisition activity also bolstered investor sentiment toward small-cap health care companies. The sector’s advance was led by Nektar Therapeutics, whose success with a new product propelled it into the ranks of large-cap indices.
The consumer discretionary sector was bolstered during the reporting period by robust consumer confidence. Specialty retailers rebounded from previous weakness, casual dining chains fared well when tax reform legislation and strong labor markets helped boost consumer spending, and media companies gained value amid elevated levels of merger-and-acquisition activity. In the financials sector, small-cap consumer finance companies and banks benefited from greater credit stability, reduced regulatory burdens, and rising consumer lending volumes.
Laggards for the first half of 2018 included the traditionally defensive utilities and real estate sectors, whose dividend yields became less attractive to investors in the rising interest-rate environment. The utilities sector also was hurt by tax reform legislation that eliminated tax deferrals and reduced cash flows, and the real estate sector encountered higher financing costs and softening demand for retail and office leases. Finally, metals-and-mining companies and concrete producers in the materials sector struggled with the imposition of higher tariffs on steel and aluminum imports, which dampened demand from manufacturers and other industrial companies that were adversely affected by higher raw material costs.
Replicating the Performance of the Index
Although we do not actively manage the fund’s investments in response to macroeconomic trends, it is worth noting that the U.S. and global economic recoveries remain intact, supported by stimulative monetary and fiscal policies that have helped boost corporate earnings. However, the small-cap stock market’s currently constructive conditions could be
4
undermined by escalating trade disputes and rising interest rates as monetary policymakers move away from the aggressively accommodative policies of the past decade. As always, we have continued to monitor the factors considered by the fund’s investment model in light of current market conditions.
July 16, 2018
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts, which will reduce returns. The Dreyfus Corporation has agreed to pay all of the fund’s expenses except management fees, Rule 12b-1 fees, and certain other expenses, including fees and expenses of the non-interested board members and their counsel.
2 Source: Lipper Inc. — The S&P SmallCap 600® Index measures the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable. Investors cannot invest directly in any index.
3 “Standard & Poor’s®,” “S&P®,” and “Standard & Poor’s® SmallCap 600 Index” are trademarks of Standard & Poor’s Financial Services LLC (“Standard & Poor’s”), and have been licensed for use by the fund. The fund is not sponsored, endorsed, sold, or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus. Stocks of small- and/or mid-cap companies often experience sharper price fluctuations than stocks of large-cap companies.
The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of Dreyfus Investment Portfolios, Small Cap Stock Index Portfolio made available through insurance products may be similar to those of other funds managed by Dreyfus. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other Dreyfus fund.
5
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), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Investment Portfolios, Small Cap Stock Index Portfolio from January 1, 2018 to June 30, 2018. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment | |||||||||
assuming actual returns for the six months ended June 30, 2018 | |||||||||
Expenses paid per $1,000† |
| $3.11 | |||||||
Ending value (after expenses) |
| $1,091.00 |
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 June 30, 2018 | |||||||||
Expenses paid per $1,000† | $3.01 | ||||||||
Ending value (after expenses) | $1,021.82 |
† Expenses are equal to the fund’s annualized expense ratio of .60%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS
June 30, 2018 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% | |||||||
Automobiles & Components - 1.9% | |||||||
American Axle & Manufacturing Holdings | 75,201 | a | 1,170,128 | ||||
Cooper Tire & Rubber | 38,294 | b | 1,007,132 | ||||
Cooper-Standard Holdings | 12,162 | a | 1,589,209 | ||||
Dorman Products | 22,423 | a | 1,531,715 | ||||
Fox Factory Holding | 28,501 | a,b | 1,326,722 | ||||
Gentherm | 27,876 | a,b | 1,095,527 | ||||
LCI Industries | 18,859 | 1,700,139 | |||||
Motorcar Parts of America | 13,951 | a,b | 261,023 | ||||
Standard Motor Products | 15,176 | b | 733,608 | ||||
Superior Industries International | 16,941 | 303,244 | |||||
Winnebago Industries | 21,456 | b | 871,114 | ||||
11,589,561 | |||||||
Banks - 10.0% | |||||||
Ameris Bancorp | 30,340 | b | 1,618,639 | ||||
Banc of California | 32,333 | 632,110 | |||||
Banner | 24,455 | 1,470,479 | |||||
Berkshire Hills Bancorp | 27,566 | b | 1,119,180 | ||||
BofI Holding | 41,173 | a | 1,684,387 | ||||
Boston Private Financial Holdings | 62,824 | 998,902 | |||||
Brookline Bancorp | 60,181 | b | 1,119,367 | ||||
Central Pacific Financial | 22,279 | 638,293 | |||||
City Holding | 11,472 | b | 863,039 | ||||
Columbia Banking System | 55,286 | b | 2,261,197 | ||||
Community Bank System | 38,480 | b | 2,273,014 | ||||
Customers Bancorp | 21,996 | a,b | 624,246 | ||||
CVB Financial | 77,468 | 1,736,833 | |||||
Dime Community Bancshares | 23,508 | b | 458,406 | ||||
Fidelity Southern | 16,935 | 430,318 | |||||
First BanCorp | 135,421 | a | 1,035,971 | ||||
First Commonwealth Financial | 75,181 | 1,166,057 | |||||
First Financial Bancorp | 73,833 | 2,262,981 | |||||
First Financial Bankshares | 51,027 | b | 2,597,274 | ||||
First Midwest Bancorp | 77,847 | 1,982,763 | |||||
Franklin Financial Network | 8,841 | a | 332,422 | ||||
Glacier Bancorp | 59,963 | b | 2,319,369 | ||||
Great Western Bancorp | 44,486 | 1,867,967 | |||||
Green Bancorp | 19,469 | b | 420,530 | ||||
Hanmi Financial | 24,188 | 685,730 | |||||
Heritage Financial | 21,494 | 749,066 | |||||
HomeStreet | 20,311 | a | 547,381 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Banks - 10.0% (continued) | |||||||
Hope Bancorp | 96,293 | b | 1,716,904 | ||||
Independent Bank | 20,631 | b | 1,617,470 | ||||
LegacyTexas Financial Group | 31,799 | 1,240,797 | |||||
Meta Financial Group | 6,760 | b | 658,424 | ||||
National Bank Holdings, Cl. A | 20,621 | 795,764 | |||||
NBT Bancorp | 33,010 | b | 1,259,331 | ||||
NMI Holdings, Cl. A | 44,325 | a | 722,497 | ||||
Northfield Bancorp | 35,509 | 590,160 | |||||
Northwest Bancshares | 76,819 | b | 1,335,882 | ||||
OFG Bancorp | 33,551 | 471,392 | |||||
Old National Bancorp | 101,150 | 1,881,390 | |||||
Opus Bank | 13,231 | 379,730 | |||||
Oritani Financial | 29,703 | b | 481,189 | ||||
Pacific Premier Bancorp | 29,585 | a | 1,128,668 | ||||
Provident Financial Services | 46,132 | b | 1,270,014 | ||||
S&T Bancorp | 26,495 | b | 1,145,644 | ||||
Seacoast Banking Corporation of Florida | 35,566 | a,b | 1,123,174 | ||||
ServisFirst Bancshares | 33,811 | b | 1,410,933 | ||||
Simmons First National, Cl. A | 59,234 | 1,771,097 | |||||
Southside Bancshares | 20,611 | b | 694,178 | ||||
Tompkins Financial | 9,193 | b | 789,495 | ||||
TrustCo Bank | 71,886 | 639,785 | |||||
United Community Banks | 55,594 | 1,705,068 | |||||
Walker & Dunlop | 21,150 | b | 1,176,997 | ||||
Westamerica Bancorporation | 20,153 | b | 1,138,846 | ||||
61,040,750 | |||||||
Capital Goods - 11.3% | |||||||
AAON | 30,038 | 998,763 | |||||
AAR | 24,078 | b | 1,119,386 | ||||
Actuant, Cl. A | 45,465 | b | 1,334,398 | ||||
Aegion | 24,486 | a | 630,514 | ||||
Aerojet Rocketdyne Holdings | 56,476 | a,b | 1,665,477 | ||||
Aerovironment | 16,127 | a,b | 1,151,952 | ||||
Alamo Group | 7,120 | 643,363 | |||||
Albany International, Cl. A | 21,711 | 1,305,917 | |||||
American Woodmark | 10,569 | a,b | 967,592 | ||||
Apogee Enterprises | 21,153 | b | 1,018,940 | ||||
Applied Industrial Technologies | 29,219 | 2,049,713 | |||||
Astec Industries | 14,238 | 851,432 | |||||
Axon Enterprise | 43,382 | a | 2,740,875 | ||||
AZZ | 19,333 | b | 840,019 | ||||
Barnes Group | 36,533 | 2,151,794 | |||||
Briggs & Stratton | 32,110 | 565,457 |
8
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Capital Goods - 11.3% (continued) | |||||||
Chart Industries | 23,175 | a,b | 1,429,434 | ||||
CIRCOR International | 14,668 | b | 542,129 | ||||
Comfort Systems USA | 28,077 | 1,285,927 | |||||
Cubic | 18,960 | 1,217,232 | |||||
DXP Enterprises | 12,055 | a | 460,501 | ||||
Encore Wire | 15,528 | 736,804 | |||||
Engility Holdings | 13,568 | a | 415,724 | ||||
EnPro Industries | 15,945 | b | 1,115,353 | ||||
ESCO Technologies | 19,616 | b | 1,131,843 | ||||
Federal Signal | 44,734 | 1,041,855 | |||||
Franklin Electric | 29,208 | 1,317,281 | |||||
Gibraltar Industries | 23,633 | a | 886,237 | ||||
Griffon | 25,820 | 459,596 | |||||
Harsco | 60,297 | a | 1,332,564 | ||||
Hillenbrand | 47,196 | 2,225,291 | |||||
Insteel Industries | 13,825 | b | 461,755 | ||||
John Bean Technologies | 23,960 | b | 2,130,044 | ||||
Kaman | 20,891 | 1,455,894 | |||||
Lindsay | 8,165 | 791,923 | |||||
Lydall | 12,970 | a | 566,140 | ||||
Mercury Systems | 36,449 | a,b | 1,387,249 | ||||
Moog, Cl. A | 24,506 | 1,910,488 | |||||
Mueller Industries | 43,552 | 1,285,220 | |||||
MYR Group | 12,310 | a | 436,513 | ||||
National Presto Industries | 3,831 | b | 475,044 | ||||
Orion Group Holdings | 20,611 | a | 170,247 | ||||
Patrick Industries | 18,044 | a,b | 1,025,801 | ||||
PGT Innovations | 37,936 | a | 790,966 | ||||
Powell Industries | 6,272 | 218,454 | |||||
Proto Labs | 18,911 | a,b | 2,249,463 | ||||
Quanex Building Products | 26,761 | 480,360 | |||||
Raven Industries | 27,180 | 1,045,071 | |||||
Simpson Manufacturing | 30,848 | 1,918,437 | |||||
SPX | 32,532 | a | 1,140,247 | ||||
SPX FLOW | 31,830 | a | 1,393,199 | ||||
Standex International | 9,547 | 975,703 | |||||
Tennant | 13,621 | b | 1,076,059 | ||||
The Greenbrier Companies | 21,099 | b | 1,112,972 | ||||
Titan International | 37,963 | 407,343 | |||||
Trex | 44,417 | a,b | 2,780,060 | ||||
Triumph Group | 36,987 | b | 724,945 | ||||
Universal Forest Products | 46,032 | 1,685,692 | |||||
Veritiv | 8,631 | a | 343,945 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Capital Goods - 11.3% (continued) | |||||||
Vicor | 12,341 | a,b | 537,451 | ||||
Wabash National | 44,028 | b | 821,562 | ||||
Watts Water Technologies, Cl. A | 20,812 | 1,631,661 | |||||
69,063,271 | |||||||
Commercial & Professional Services - 5.2% | |||||||
ABM Industries | 49,165 | b | 1,434,635 | ||||
ASGN | 37,060 | a | 2,897,721 | ||||
Brady, Cl. A | 36,078 | 1,390,807 | |||||
Essendant | 28,826 | 381,080 | |||||
Exponent | 39,284 | 1,897,417 | |||||
Forrester Research | 7,231 | 303,340 | |||||
FTI Consulting | 28,248 | a | 1,708,439 | ||||
Heidrick & Struggles International | 14,261 | 499,135 | |||||
Insperity | 28,213 | 2,687,288 | |||||
Interface | 45,065 | 1,034,242 | |||||
Kelly Services, Cl. A | 23,175 | 520,279 | |||||
Korn Ferry International | 42,656 | 2,641,686 | |||||
LSC Communications | 25,508 | 399,455 | |||||
Matthews International, Cl. A | 24,035 | 1,413,258 | |||||
Mobile Mini | 33,385 | b | 1,565,756 | ||||
Multi-Color | 10,362 | b | 669,903 | ||||
Navigant Consulting | 34,282 | a | 759,003 | ||||
R.R. Donnelley & Sons | 52,492 | 302,354 | |||||
Resources Connection | 22,668 | 383,089 | |||||
Team | 22,869 | a,b | 528,274 | ||||
Tetra Tech | 41,980 | 2,455,830 | |||||
TrueBlue | 27,954 | a | 753,360 | ||||
UniFirst | 11,644 | 2,059,824 | |||||
US Ecology | 16,614 | 1,058,312 | |||||
Viad | 15,212 | b | 825,251 | ||||
WageWorks | 29,966 | a | 1,498,300 | ||||
32,068,038 | |||||||
Consumer Durables & Apparel - 4.1% | |||||||
Callaway Golf | 71,415 | b | 1,354,743 | ||||
Cavco Industries | 6,432 | a | 1,335,605 | ||||
Crocs | 51,234 | a | 902,231 | ||||
Ethan Allen Interiors | 18,853 | 461,899 | |||||
Fossil Group | 33,199 | a,b | 892,057 | ||||
G-III Apparel Group | 31,589 | a | 1,402,552 | ||||
Installed Building Products | 15,650 | a,b | 885,007 | ||||
iRobot | 21,018 | a,b | 1,592,534 | ||||
La-Z-Boy | 35,086 | 1,073,632 | |||||
LGI Homes | 13,734 | a,b | 792,864 |
10
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Consumer Durables & Apparel - 4.1% (continued) | |||||||
M.D.C. Holdings | 33,478 | 1,030,118 | |||||
M/I Homes | 21,508 | a | 569,532 | ||||
Meritage Homes | 28,607 | a | 1,257,278 | ||||
Movado Group | 11,784 | 569,167 | |||||
Nautilus | 22,452 | a | 352,496 | ||||
Oxford Industries | 12,828 | b | 1,064,467 | ||||
Perry Ellis International | 9,138 | a | 248,279 | ||||
Steven Madden | 39,735 | 2,109,928 | |||||
Sturm Ruger & Co. | 12,963 | b | 725,928 | ||||
TopBuild | 26,923 | a | 2,109,148 | ||||
Unifi | 13,042 | a | 413,431 | ||||
Universal Electronics | 10,467 | a | 345,934 | ||||
Vera Bradley | 13,964 | a | 196,055 | ||||
Vista Outdoor | 43,637 | a,b | 675,937 | ||||
William Lyon Homes, Cl. A | 21,058 | a | 488,546 | ||||
Wolverine World Wide | 71,518 | 2,486,681 | |||||
25,336,049 | |||||||
Consumer Services - 2.8% | |||||||
American Public Education | 12,496 | a | 526,082 | ||||
Belmond, Cl. A | 62,580 | a,b | 697,767 | ||||
BJ's Restaurants | 13,716 | 822,960 | |||||
Capella Education | 8,694 | 858,098 | |||||
Career Education | 50,181 | a | 811,427 | ||||
Chuy's Holdings | 12,942 | a | 397,319 | ||||
Dave & Buster's Entertainment | 30,051 | a | 1,430,428 | ||||
Dine Brands Global | 13,453 | b | 1,006,284 | ||||
El Pollo Loco Holdings | 15,504 | a,b | 176,746 | ||||
Fiesta Restaurant Group | 20,541 | a,b | 589,527 | ||||
Marriott Vacations Worldwide | 17,855 | b | 2,016,901 | ||||
Monarch Casino & Resort | 8,313 | a,b | 366,188 | ||||
Penn National Gaming | 63,810 | a | 2,143,378 | ||||
Red Robin Gourmet Burgers | 9,902 | a | 461,433 | ||||
Regis | 25,577 | a | 423,044 | ||||
Ruth's Hospitality Group | 21,861 | 613,201 | |||||
Shake Shack, Cl. A | 14,520 | a | 960,934 | ||||
Sonic | 28,707 | 988,095 | |||||
Strayer Education | 8,056 | 910,409 | |||||
Wingstop | 22,110 | b | 1,152,373 | ||||
17,352,594 | |||||||
Diversified Financials - 2.8% | |||||||
Donnelley Financial Solutions | 25,893 | a | 449,761 | ||||
Encore Capital Group | 17,652 | a,b | 646,063 | ||||
Enova International | 25,684 | a | 938,750 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Diversified Financials - 2.8% (continued) | |||||||
EZCORP, Cl. A | 39,850 | a,b | 480,193 | ||||
Financial Engines | 48,086 | 2,159,061 | |||||
FirstCash | 34,501 | 3,099,915 | |||||
Green Dot, Cl. A | 35,267 | a | 2,588,245 | ||||
Greenhill & Co. | 17,868 | b | 507,451 | ||||
INTL. FCStone | 11,921 | a | 616,435 | ||||
Investment Technology Group | 25,162 | 526,389 | |||||
Piper Jaffray | 10,644 | 817,991 | |||||
PRA Group | 33,894 | a,b | 1,306,614 | ||||
Virtus Investment Partners | 5,426 | b | 694,257 | ||||
Waddell & Reed Financial, Cl. A | 61,397 | b | 1,103,304 | ||||
WisdomTree Investments | 88,240 | b | 801,219 | ||||
World Acceptance | 4,634 | a | 514,420 | ||||
17,250,068 | |||||||
Energy - 4.2% | |||||||
Archrock | 97,882 | 1,174,584 | |||||
Bristow Group | 24,202 | a,b | 341,490 | ||||
C&J Energy Services | 47,454 | a,b | 1,119,914 | ||||
CARBO Ceramics | 15,708 | a,b | 144,042 | ||||
Carrizo Oil & Gas | 58,328 | a,b | 1,624,435 | ||||
Cloud Peak Energy | 53,988 | a | 188,418 | ||||
Consol Energy | 18,862 | a | 723,358 | ||||
Denbury Resources | 303,295 | a | 1,458,849 | ||||
Era Group | 14,812 | a | 191,815 | ||||
Exterran | 24,185 | a | 605,592 | ||||
Geospace Technologies | 9,575 | a | 134,625 | ||||
Green Plains | 29,280 | 535,824 | |||||
Gulf Island Fabrication | 9,549 | b | 85,941 | ||||
Helix Energy Solutions Group | 103,495 | a | 862,113 | ||||
HighPoint Resources | 76,119 | a,b | 462,804 | ||||
Matrix Service | 19,739 | a | 362,211 | ||||
Newpark Resources | 66,383 | a | 720,256 | ||||
Noble | 184,054 | a,b | 1,165,062 | ||||
Oil States International | 45,338 | a,b | 1,455,350 | ||||
Par Pacific Holdings | 18,441 | a | 320,505 | ||||
PDC Energy | 49,841 | a | 3,012,888 | ||||
Penn Virginia | 10,089 | a | 856,455 | ||||
Pioneer Energy Services | 58,462 | a | 342,003 | ||||
ProPetro Holding | 54,428 | a,b | 853,431 | ||||
Renewable Energy Group | 25,283 | a,b | 451,302 | ||||
REX American Resources | 4,341 | a | 351,491 | ||||
Ring Energy | 40,440 | a,b | 510,353 | ||||
SEACOR Holdings | 12,844 | a | 735,576 |
12
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Energy - 4.2% (continued) | |||||||
SRC Energy | 182,824 | a,b | 2,014,720 | ||||
TETRA Technologies | 96,062 | a | 427,476 | ||||
Unit | 40,548 | a,b | 1,036,407 | ||||
US Silica Holdings | 59,444 | b | 1,527,116 | ||||
25,796,406 | |||||||
Food & Staples Retailing - .3% | |||||||
Andersons | 20,122 | 688,172 | |||||
SpartanNash | 27,010 | 689,295 | |||||
SUPERVALU | 29,212 | a,b | 599,430 | ||||
1,976,897 | |||||||
Food, Beverage & Tobacco - 1.9% | |||||||
B&G Foods | 50,327 | b | 1,504,777 | ||||
Calavo Growers | 11,766 | b | 1,131,301 | ||||
Cal-Maine Foods | 22,564 | a,b | 1,034,559 | ||||
Coca-Cola Bottling Co Consolidated | 3,417 | b | 461,739 | ||||
Darling Ingredients | 124,276 | a | 2,470,607 | ||||
Dean Foods | 68,374 | 718,611 | |||||
J&J Snack Foods | 11,193 | 1,706,597 | |||||
John B. Sanfilippo & Son | 6,671 | 496,656 | |||||
MGP Ingredients | 9,580 | b | 850,800 | ||||
Seneca Foods, Cl. A | 4,933 | a | 133,191 | ||||
Universal | 18,653 | 1,232,031 | |||||
11,740,869 | |||||||
Health Care Equipment & Services - 7.5% | |||||||
Abaxis | 17,119 | 1,421,048 | |||||
Aceto | 24,398 | b | 81,733 | ||||
Amedisys | 21,616 | a | 1,847,303 | ||||
AMN Healthcare Services | 36,134 | a,b | 2,117,452 | ||||
AngioDynamics | 27,611 | a | 614,069 | ||||
Anika Therapeutics | 10,895 | a | 348,640 | ||||
BioTelemetry | 23,595 | a,b | 1,061,775 | ||||
Community Health Systems | 88,237 | a,b | 292,947 | ||||
Computer Programs & Systems | 8,709 | b | 286,526 | ||||
CONMED | 18,873 | 1,381,504 | |||||
CorVel | 7,042 | a | 380,268 | ||||
Cross Country Healthcare | 27,943 | a,b | 314,359 | ||||
CryoLife | 25,598 | a | 712,904 | ||||
Cutera | 10,140 | a | 408,642 | ||||
Diplomat Pharmacy | 36,503 | a,b | 933,017 | ||||
Ensign Group | 36,822 | b | 1,318,964 | ||||
HealthEquity | 39,622 | a,b | 2,975,612 | ||||
HealthStream | 19,467 | 531,644 | |||||
Heska | 5,059 | a,b | 525,074 |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Health Care Equipment & Services - 7.5% (continued) | |||||||
HMS Holdings | 62,295 | a | 1,346,818 | ||||
Inogen | 13,135 | a | 2,447,445 | ||||
Integer Holdings | 21,330 | a | 1,378,984 | ||||
Invacare | 25,069 | b | 466,283 | ||||
Kindred Healthcare | 69,419 | a | 624,771 | ||||
Lantheus Holdings | 23,213 | a | 337,749 | ||||
LeMaitre Vascular | 11,667 | b | 390,611 | ||||
LHC Group | 22,073 | a | 1,889,228 | ||||
Magellan Health | 18,421 | a | 1,767,495 | ||||
Meridian Bioscience | 32,265 | 513,014 | |||||
Merit Medical Systems | 38,077 | a,b | 1,949,542 | ||||
Natus Medical | 25,376 | a,b | 875,472 | ||||
Neogen | 38,911 | a | 3,120,273 | ||||
Omnicell | 29,097 | a,b | 1,526,138 | ||||
OraSure Technologies | 45,425 | a | 748,150 | ||||
Orthofix International | 14,162 | a | 804,685 | ||||
Owens & Minor | 45,854 | b | 766,220 | ||||
Providence Service | 8,176 | a | 642,225 | ||||
Quality Systems | 35,894 | a | 699,933 | ||||
Quorum Health | 20,727 | a | 103,635 | ||||
Select Medical Holdings | 80,267 | a | 1,456,846 | ||||
Surmodics | 9,988 | a | 551,338 | ||||
Tabula Rasa HealthCare | 10,237 | a,b | 653,428 | ||||
Tactile Systems Technology | 11,155 | a | 580,060 | ||||
Tivity Health | 26,001 | a,b | 915,235 | ||||
U.S. Physical Therapy | 9,604 | 921,984 | |||||
Varex Imaging | 28,751 | a | 1,066,375 | ||||
46,097,418 | |||||||
Household & Personal Products - .9% | |||||||
Avon Products | 325,600 | a | 527,472 | ||||
Central Garden & Pet | 7,528 | a | 327,317 | ||||
Central Garden & Pet, Cl. A | 26,642 | a | 1,078,202 | ||||
Inter Parfums | 12,934 | 691,969 | |||||
Medifast | 7,950 | 1,273,272 | |||||
WD-40 | 10,517 | b | 1,538,111 | ||||
5,436,343 | |||||||
Insurance - 3.4% | |||||||
Ambac Financial Group | 34,453 | a | 683,892 | ||||
American Equity Investment Life Holding | 68,003 | 2,448,108 | |||||
AMERISAFE | 14,307 | 826,229 | |||||
eHealth | 12,754 | a | 281,863 | ||||
Employers Holdings | 24,816 | 997,603 |
14
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Insurance - 3.4% (continued) | |||||||
HCI Group | 5,796 | b | 240,940 | ||||
Horace Mann Educators | 30,616 | 1,365,474 | |||||
Infinity Property & Casualty | 8,157 | b | 1,161,149 | ||||
James River Group Holdings | 22,411 | b | 880,528 | ||||
Maiden Holdings | 50,606 | b | 392,197 | ||||
Navigators Group | 17,115 | 975,555 | |||||
ProAssurance | 40,103 | 1,421,651 | |||||
RLI | 29,437 | 1,948,435 | |||||
Safety Insurance Group | 11,582 | b | 989,103 | ||||
Selective Insurance Group | 44,340 | 2,438,700 | |||||
Stewart Information Services | 17,660 | 760,616 | |||||
Third Point Reinsurance | 62,086 | a,b | 776,075 | ||||
United Fire Group | 15,746 | 858,314 | |||||
United Insurance Holdings | 15,159 | b | 296,813 | ||||
Universal Insurance Holdings | 24,229 | 850,438 | |||||
20,593,683 | |||||||
Materials - 5.0% | |||||||
A. Schulman | 22,372 | 995,554 | |||||
AdvanSix | 22,661 | a | 830,072 | ||||
AK Steel Holding | 238,776 | a,b | 1,036,288 | ||||
American Vanguard | 19,814 | 454,731 | |||||
Balchem | 24,237 | 2,378,619 | |||||
Boise Cascade | 29,107 | b | 1,301,083 | ||||
Century Aluminum | 37,238 | a,b | 586,498 | ||||
Clearwater Paper | 12,031 | a,b | 277,916 | ||||
Flotek Industries | 41,285 | a,b | 133,351 | ||||
FutureFuel | 18,551 | 259,900 | |||||
H.B. Fuller | 38,177 | b | 2,049,341 | ||||
Hawkins | 6,888 | 243,491 | |||||
Haynes International | 9,361 | 343,923 | |||||
Ingevity | 31,766 | a | 2,568,599 | ||||
Innophos Holdings | 14,568 | 693,437 | |||||
Innospec | 18,266 | 1,398,262 | |||||
Kaiser Aluminum | 12,547 | b | 1,306,268 | ||||
KapStone Paper and Packaging | 66,441 | 2,292,214 | |||||
Koppers Holdings | 16,064 | a | 616,054 | ||||
Kraton | 24,156 | a | 1,114,558 | ||||
LSB Industries | 14,961 | a | 79,293 | ||||
Materion | 15,320 | 829,578 | |||||
Myers Industries | 20,223 | 388,282 | |||||
Neenah | 12,562 | 1,065,886 | |||||
Olympic Steel | 7,105 | b | 145,013 | ||||
P.H. Glatfelter | 33,229 | b | 650,956 |
15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Materials - 5.0% (continued) | |||||||
Quaker Chemical | 9,969 | b | 1,543,899 | ||||
Rayonier Advanced Materials | 38,513 | b | 658,187 | ||||
Schweitzer-Mauduit International | 22,898 | 1,001,101 | |||||
Stepan | 14,932 | b | 1,164,845 | ||||
SunCoke Energy | 47,971 | a | 642,811 | ||||
TimkenSteel | 29,890 | a,b | 488,702 | ||||
Tredegar | 19,469 | b | 457,522 | ||||
US Concrete | 12,009 | a,b | 630,472 | ||||
30,626,706 | |||||||
Media - 1.0% | |||||||
E.W. Scripps, Cl. A | 41,952 | b | 561,737 | ||||
Gannett Company | 85,619 | b | 916,123 | ||||
Marcus | 14,721 | 478,433 | |||||
New Media Investment Group | 45,266 | b | 836,516 | ||||
Scholastic | 20,539 | 910,083 | |||||
World Wrestling Entertainment, Cl. A | 30,207 | b | 2,199,674 | ||||
5,902,566 | |||||||
Pharmaceuticals, Biotechnology & Life Sciences - 4.6% | |||||||
Acorda Therapeutics | 35,655 | a | 1,023,298 | ||||
AMAG Pharmaceuticals | 25,829 | a | 503,666 | ||||
Amphastar Pharmaceuticals | 27,105 | a,b | 413,622 | ||||
ANI Pharmaceuticals | 6,853 | a,b | 457,780 | ||||
Cambrex | 24,695 | a | 1,291,548 | ||||
Corcept Therapeutics | 72,401 | a,b | 1,138,144 | ||||
Cytokinetics | 37,652 | a,b | 312,512 | ||||
Depomed | 46,456 | a | 309,862 | ||||
Eagle Pharmaceuticals | 6,291 | a,b | 475,977 | ||||
Emergent BioSolutions | 26,475 | a | 1,336,723 | ||||
Enanta Pharmaceuticals | 10,935 | a | 1,267,366 | ||||
Endo International | 152,318 | a | 1,436,359 | ||||
Innoviva | 51,604 | a | 712,135 | ||||
Lannett | 22,703 | a,b | 308,761 | ||||
Ligand Pharmaceuticals | 16,083 | a,b | 3,331,915 | ||||
Luminex | 31,337 | 925,382 | |||||
Medicines | 48,450 | a | 1,778,115 | ||||
MiMedx Group | 78,001 | a,b | 498,426 | ||||
Momenta Pharmaceuticals | 58,092 | a | 1,187,981 | ||||
Myriad Genetics | 52,794 | a,b | 1,972,912 | ||||
Phibro Animal Health, Cl. A | 15,049 | 693,006 | |||||
Progenics Pharmaceuticals | 55,691 | a,b | 447,756 | ||||
REGENXBIO | 20,100 | a | 1,442,175 | ||||
Repligen | 28,427 | a,b | 1,337,206 | ||||
Spectrum Pharmaceuticals | 70,104 | a,b | 1,469,380 |
16
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Pharmaceuticals, Biotechnology & Life Sciences - 4.6% (continued) | |||||||
Supernus Pharmaceuticals | 39,106 | a,b | 2,340,494 | ||||
28,412,501 | |||||||
Real Estate - 6.8% | |||||||
Acadia Realty Trust | 61,796 | b,c | 1,691,357 | ||||
Agree Realty | 23,244 | c | 1,226,586 | ||||
American Assets Trust | 31,436 | c | 1,203,684 | ||||
Apollo Commercial Real Estate Finance | 83,765 | b,c | 1,531,224 | ||||
Armada Hoffler Properties | 34,479 | b,c | 513,737 | ||||
ARMOUR Residential | 31,150 | b,c | 710,531 | ||||
Capstead Mortgage | 70,180 | c | 628,111 | ||||
CareTrust REIT | 57,693 | c | 962,896 | ||||
CBL & Associates Properties | 128,703 | b,c | 716,876 | ||||
Cedar Realty Trust | 56,791 | c | 268,054 | ||||
Chatham Lodging Trust | 34,135 | b,c | 724,345 | ||||
Chesapeake Lodging Trust | 45,198 | c | 1,430,065 | ||||
Community Healthcare Trust | 12,635 | b,c | 377,407 | ||||
DiamondRock Hospitality | 151,510 | c | 1,860,543 | ||||
Easterly Government Properties | 42,252 | c | 834,900 | ||||
EastGroup Properties | 26,374 | b,c | 2,520,299 | ||||
Four Corners Property Trust | 46,480 | c | 1,144,802 | ||||
Franklin Street Properties | 79,985 | c | 684,672 | ||||
Getty Realty | 24,587 | c | 692,616 | ||||
Global Net Lease | 51,008 | b,c | 1,042,093 | ||||
Government Properties Income Trust | 75,059 | b,c | 1,189,685 | ||||
Hersha Hospitality Trust | 27,945 | c | 599,420 | ||||
HFF, Cl. A | 27,869 | b | 957,300 | ||||
Independence Realty Trust | 65,420 | b,c | 674,480 | ||||
Invesco Mortgage Capital | 83,584 | c | 1,328,986 | ||||
Kite Realty Group Trust | 63,361 | b,c | 1,082,206 | ||||
Lexington Realty Trust | 163,317 | b,c | 1,425,757 | ||||
LTC Properties | 29,983 | b,c | 1,281,473 | ||||
National Storage Affiliates Trust | 38,254 | c | 1,178,988 | ||||
New York Mortgage Trust | 85,435 | b,c | 513,464 | ||||
Pennsylvania Real Estate Investment Trust | 53,518 | b,c | 588,163 | ||||
PennyMac Mortgage Investment Trust | 46,170 | c | 876,768 | ||||
PS Business Parks | 15,063 | c | 1,935,595 | ||||
Ramco-Gershenson Properties Trust | 60,122 | c | 794,212 | ||||
RE/MAX Holdings, Cl. A | 13,216 | 693,179 | |||||
Retail Opportunity Investments | 84,344 | b,c | 1,616,031 | ||||
Saul Centers | 9,271 | c | 496,740 | ||||
Summit Hotel Properties | 79,267 | c | 1,134,311 |
17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Real Estate - 6.8% (continued) | |||||||
Universal Health Realty Income Trust | 9,611 | c | 614,912 | ||||
Urstadt Biddle Properties, Cl. A | 22,724 | c | 514,244 | ||||
Washington Prime Group | 140,803 | b,c | 1,141,912 | ||||
Whitestone | 30,225 | b,c | 377,208 | ||||
41,779,832 | |||||||
Retailing - 4.9% | |||||||
Abercrombie & Fitch, Cl. A | 51,337 | 1,256,730 | |||||
Asbury Automotive Group | 13,799 | a | 945,921 | ||||
Ascena Retail Group | 126,393 | a | 503,676 | ||||
Barnes & Noble | 41,498 | b | 263,512 | ||||
Barnes & Noble Education | 27,435 | a | 154,733 | ||||
Big 5 Sporting Goods | 14,166 | b | 107,662 | ||||
Buckle | 21,415 | b | 576,063 | ||||
Caleres | 32,696 | 1,124,415 | |||||
Cato, Cl. A | 17,018 | 418,983 | |||||
Chico's FAS | 97,992 | 797,655 | |||||
Core-Mark Holding | 34,410 | 781,107 | |||||
DSW, Cl. A | 54,806 | b | 1,415,091 | ||||
Express | 58,824 | a,b | 538,240 | ||||
Francesca's Holdings | 26,996 | a,b | 203,820 | ||||
FTD Companies | 13,197 | a | 61,234 | ||||
GameStop, Cl. A | 76,379 | b | 1,112,842 | ||||
Genesco | 14,878 | a,b | 590,657 | ||||
Group 1 Automotive | 14,660 | b | 923,580 | ||||
Guess? | 43,532 | b | 931,585 | ||||
Haverty Furnitures | 15,602 | 337,003 | |||||
Hibbett Sports | 13,965 | a,b | 319,799 | ||||
J.C. Penney | 233,424 | a,b | 546,212 | ||||
Kirkland's | 11,419 | a | 132,917 | ||||
Lithia Motors, Cl. A | 17,908 | b | 1,693,560 | ||||
Lumber Liquidators Holdings | 21,741 | a,b | 529,393 | ||||
MarineMax | 16,137 | a | 305,796 | ||||
Monro | 24,596 | 1,429,028 | |||||
Nutrisystem | 22,471 | b | 865,133 | ||||
Office Depot | 388,657 | 991,075 | |||||
PetMed Express | 15,378 | b | 677,401 | ||||
Rent-A-Center | 40,141 | a | 590,876 | ||||
RH | 14,462 | a,b | 2,020,341 | ||||
Shoe Carnival | 7,788 | b | 252,721 | ||||
Shutterfly | 25,032 | a,b | 2,253,631 | ||||
Sleep Number | 28,398 | a | 824,110 | ||||
Sonic Automotive, Cl. A | 18,500 | b | 381,100 | ||||
Tailored Brands | 37,682 | 961,645 |
18
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Retailing - 4.9% (continued) | |||||||
The Children's Place | 12,450 | 1,503,960 | |||||
Tile Shop Holdings | 26,656 | 205,251 | |||||
Vitamin Shoppe | 17,196 | a,b | 119,512 | ||||
Zumiez | 14,030 | a,b | 351,452 | ||||
29,999,422 | |||||||
Semiconductors & Semiconductor Equipment - 3.4% | |||||||
Advanced Energy Industries | 29,716 | a | 1,726,202 | ||||
Axcelis Technologies | 24,523 | a | 485,555 | ||||
Brooks Automation | 52,759 | b | 1,720,999 | ||||
Cabot Microelectronics | 19,394 | 2,086,019 | |||||
CEVA | 16,936 | a | 511,467 | ||||
Cohu | 21,485 | 526,597 | |||||
Diodes | 29,299 | a | 1,009,937 | ||||
DSP Group | 16,318 | a | 203,159 | ||||
FormFactor | 55,456 | a | 737,565 | ||||
Kopin | 44,532 | a,b | 127,362 | ||||
Kulicke & Soffa Industries | 52,134 | 1,241,832 | |||||
MaxLinear | 46,531 | a,b | 725,418 | ||||
Nanometrics | 17,711 | a | 627,147 | ||||
PDF Solutions | 20,701 | a,b | 247,998 | ||||
Photronics | 51,798 | a | 413,089 | ||||
Power Integrations | 22,354 | b | 1,632,960 | ||||
Rambus | 81,874 | a | 1,026,700 | ||||
Rudolph Technologies | 24,156 | a | 715,018 | ||||
Semtech | 49,957 | a | 2,350,477 | ||||
SolarEdge Technologies | 28,593 | a,b | 1,368,175 | ||||
Ultra Clean Holdings | 29,203 | a,b | 484,770 | ||||
Veeco Instruments | 36,038 | a | 513,541 | ||||
Xperi | 36,733 | 591,401 | |||||
21,073,388 | |||||||
Software & Services - 5.5% | |||||||
8x8 | 69,632 | a | 1,396,122 | ||||
Agilysys | 11,190 | a | 173,445 | ||||
Alarm.com Holdings | 18,610 | a,b | 751,472 | ||||
Blucora | 35,538 | a | 1,314,906 | ||||
Bottomline Technologies | 26,494 | a | 1,320,196 | ||||
CACI International, Cl. A | 18,630 | a | 3,140,086 | ||||
Cardtronics, Cl. A | 34,827 | a | 842,117 | ||||
CSG Systems International | 25,487 | 1,041,654 | |||||
Ebix | 16,665 | b | 1,270,706 | ||||
EVERTEC | 45,662 | 997,715 | |||||
ExlService Holdings | 25,740 | a | 1,457,141 | ||||
Liquidity Services | 18,877 | a | 123,644 |
19
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Software & Services - 5.5% (continued) | |||||||
LivePerson | 41,897 | a | 884,027 | ||||
ManTech International, Cl. A | 19,958 | 1,070,547 | |||||
MicroStrategy, Cl. A | 7,007 | a | 895,144 | ||||
Monotype Imaging Holdings | 32,058 | 650,777 | |||||
NIC | 50,472 | b | 784,840 | ||||
OneSpan | 23,040 | a | 452,736 | ||||
Perficient | 25,962 | a | 684,618 | ||||
Progress Software | 34,525 | 1,340,260 | |||||
Qualys | 24,723 | a,b | 2,084,149 | ||||
QuinStreet | 27,896 | a | 354,279 | ||||
Shutterstock | 13,894 | a | 659,409 | ||||
SPS Commerce | 13,157 | a | 966,776 | ||||
Stamps.com | 12,575 | a,b | 3,182,104 | ||||
Sykes Enterprises | 29,710 | a | 855,054 | ||||
TiVo | 92,062 | 1,238,234 | |||||
Travelport Worldwide | 94,259 | 1,747,562 | |||||
TTEC Holdings | 10,792 | 372,864 | |||||
Virtusa | 20,916 | a | 1,018,191 | ||||
XO Group | 18,527 | a | 592,864 | ||||
33,663,639 | |||||||
Technology Hardware & Equipment - 6.3% | |||||||
3D Systems | 86,137 | a,b | 1,189,552 | ||||
ADTRAN | 35,421 | 526,002 | |||||
Anixter International | 21,774 | a | 1,378,294 | ||||
Applied Optoelectronics | 14,624 | a | 656,618 | ||||
Badger Meter | 21,670 | b | 968,649 | ||||
Bel Fuse, Cl. B | 7,659 | 160,073 | |||||
Benchmark Electronics | 36,194 | 1,055,055 | |||||
CalAmp | 26,393 | a | 618,388 | ||||
Comtech Telecommunications | 17,983 | 573,298 | |||||
Control4 | 15,535 | a,b | 377,656 | ||||
Cray | 30,859 | a | 759,131 | ||||
CTS | 25,035 | b | 901,260 | ||||
Daktronics | 28,616 | b | 243,522 | ||||
Diebold Nixdorf | 57,698 | b | 689,491 | ||||
Digi International | 19,766 | a | 260,911 | ||||
Electro Scientific Industries | 25,978 | b | 409,673 | ||||
Electronics For Imaging | 34,042 | a | 1,108,408 | ||||
ePlus | 10,283 | a | 967,630 | ||||
Extreme Networks | 85,843 | a | 683,310 | ||||
Fabrinet | 27,835 | a,b | 1,026,833 | ||||
FARO Technologies | 12,887 | a | 700,408 | ||||
Finisar | 85,828 | a,b | 1,544,904 |
20
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Technology Hardware & Equipment - 6.3% (continued) | |||||||
Harmonic | 65,068 | a,b | 276,539 | ||||
II-VI | 41,582 | a,b | 1,806,738 | ||||
Insight Enterprises | 26,681 | a | 1,305,501 | ||||
Itron | 25,818 | a,b | 1,550,371 | ||||
KEMET | 36,858 | a,b | 890,121 | ||||
Knowles | 67,428 | a,b | 1,031,648 | ||||
Methode Electronics | 27,460 | 1,106,638 | |||||
MTS Systems | 13,253 | b | 697,770 | ||||
Netgear | 23,610 | a,b | 1,475,625 | ||||
Oclaro | 127,864 | a | 1,141,826 | ||||
OSI Systems | 13,306 | a,b | 1,028,953 | ||||
Park Electrochemical | 13,899 | 322,318 | |||||
Plexus | 24,864 | a | 1,480,403 | ||||
Rogers | 13,739 | a,b | 1,531,349 | ||||
Sanmina | 52,592 | a | 1,540,946 | ||||
ScanSource | 19,054 | a | 767,876 | ||||
Super Micro Computer | 28,314 | a | 669,626 | ||||
TTM Technologies | 69,705 | a,b | 1,228,899 | ||||
Viavi Solutions | 169,305 | a | 1,733,683 | ||||
38,385,896 | |||||||
Telecommunication Services - 1.1% | |||||||
ATN International | 8,304 | b | 438,202 | ||||
Cincinnati Bell | 32,357 | a | 508,005 | ||||
Cogent Communications Holdings | 31,169 | b | 1,664,425 | ||||
Consolidated Communications Holdings | 48,800 | b | 603,168 | ||||
Frontier Communications | 60,610 | b | 324,870 | ||||
Iridium Communications | 63,546 | a | 1,023,091 | ||||
Spok Holdings | 14,757 | 222,093 | |||||
Vonage Holdings | 163,221 | a,b | 2,103,919 | ||||
6,887,773 | |||||||
Transportation - 2.4% | |||||||
Allegiant Travel | 9,429 | b | 1,310,160 | ||||
ArcBest | 19,444 | b | 888,591 | ||||
Atlas Air Worldwide Holdings | 19,333 | a | 1,386,176 | ||||
Echo Global Logistics | 19,807 | a | 579,355 | ||||
Forward Air | 22,019 | 1,300,883 | |||||
Hawaiian Holdings | 38,394 | b | 1,380,264 | ||||
Heartland Express | 37,271 | b | 691,377 | ||||
Hub Group, Cl. A | 25,496 | a | 1,269,701 | ||||
Marten Transport | 29,456 | 690,743 | |||||
Matson | 32,280 | 1,238,906 | |||||
Saia | 19,214 | a | 1,553,452 |
21
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.5% (continued) | |||||||
Transportation - 2.4% (continued) | |||||||
SkyWest | 39,300 | 2,039,670 | |||||
14,329,278 | |||||||
Utilities - 2.2% | |||||||
American States Water | 27,488 | b | 1,571,214 | ||||
Avista | 49,558 | 2,609,724 | |||||
California Water Service Group | 35,987 | b | 1,401,694 | ||||
El Paso Electric | 30,418 | 1,797,704 | |||||
Northwest Natural Gas | 21,557 | 1,375,337 | |||||
South Jersey Industries | 64,558 | b | 2,160,756 | ||||
Spire | 37,998 | 2,684,559 | |||||
13,600,988 | |||||||
Total Common Stocks (cost $425,442,674) | 610,003,936 | ||||||
Principal Amount ($) | |||||||
Short-Term Investments - .0% | |||||||
U.S. Treasury Bills | |||||||
1.88%, 9/6/18 | 250,000 | d,e | 249,142 | ||||
7-Day | Shares | ||||||
Other Investment - .6% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1.83 | 3,884,228 | f | 3,884,228 | |||
Investment of Cash Collateral for Securities Loaned - 4.4% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 1.85 | 26,744,878 | f | 26,744,878 | |||
Total Investments (cost $456,320,903) | 104.5% | 640,882,184 | |||||
Liabilities, Less Cash and Receivables | (4.5%) | (27,560,523) | |||||
Net Assets | 100.0% | 613,321,661 |
aNon-income producing security.
bSecurity, or portion thereof, on loan. At June 30, 2018, the value of the fund’s securities on loan was $170,967,293 and the value of the collateral held by the fund was $181,449,291, consisting of cash collateral of $26,744,878 and U.S. Government & Agency securities valued at $154,704,413.
cInvestment in real estate investment trust.
dHeld by a counterparty for open exchange traded derivative contracts.
eSecurity is a discount security. Income is recognized through the accretion of discount.
fInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the respective investment company’s prospectus.
22
Portfolio Summary (Unaudited) † | Value (%) |
Capital Goods | 11.3 |
Banks | 10.0 |
Health Care Equipment & Services | 7.5 |
Real Estate | 6.8 |
Technology Hardware & Equipment | 6.3 |
Software & Services | 5.5 |
Commercial & Professional Services | 5.2 |
Short-Term/Money Market Investments | 5.0 |
Materials | 5.0 |
Retailing | 4.9 |
Pharmaceuticals, Biotechnology & Life Sciences | 4.6 |
Energy | 4.2 |
Consumer Durables & Apparel | 4.1 |
Semiconductors & Semiconductor Equipment | 3.4 |
Insurance | 3.4 |
Consumer Services | 2.8 |
Diversified Financials | 2.8 |
Transportation | 2.4 |
Utilities | 2.2 |
Food, Beverage & Tobacco | 1.9 |
Automobiles & Components | 1.9 |
Telecommunication Services | 1.1 |
Media | 1.0 |
Household & Personal Products | .9 |
Food & Staples Retailing | .3 |
104.5 |
† Based on net assets.
See notes to financial statements.
23
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Registered Investment Companies | Value | Purchases ($) | Sales ($) | Value | Net | Dividends/ |
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 37,211,810 | 72,501,332 | 82,968,264 | 26,744,878 | 4.4 | — |
Dreyfus Institutional Preferred Government Plus Money Market Fund | 4,448,090 | 39,490,923 | 40,054,785 | 3,884,228 | .6 | 37,335 |
Total | 41,659,900 | 111,992,255 | 123,023,049 | 30,629,106 | 5.0 | 37,335 |
See notes to financial statements.
24
STATEMENT OF FUTURES
June 30, 2018 (Unaudited)
Description | Number of | Expiration | Notional | Value ($) | Unrealized (Depreciation) ($) | |
Futures Long | ||||||
E-mini Russell 2000 | 54 | 9/2018 | 4,534,616 | 4,448,250 | (86,366) | |
Gross Unrealized Depreciation | (86,366) |
See notes to financial statements.
25
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2018 (Unaudited)
|
|
|
|
|
|
| ||
|
|
| Cost |
| Value |
| ||
Assets ($): |
|
|
|
| ||||
Investments in securities—See Statement of Investments |
|
|
| |||||
Unaffiliated issuers | 425,691,797 |
| 610,253,078 |
| ||||
Affiliated issuers |
| 30,629,106 |
| 30,629,106 |
| |||
Cash |
|
|
|
| 86,907 |
| ||
Dividends and securities lending income receivable |
| 672,940 |
| |||||
Other assets |
|
|
|
| 13,708 |
| ||
|
|
|
|
| 641,655,739 |
| ||
Liabilities ($): |
|
|
|
| ||||
Due to The Dreyfus Corporation and affiliates—Note 3(b) |
|
|
| 306,035 |
| |||
Liability for securities on loan—Note 1(b) |
| 26,744,878 |
| |||||
Payable for investment securities purchased |
| 791,195 |
| |||||
Payable for shares of Beneficial Interest redeemed |
| 454,219 |
| |||||
Payable for futures variation margin—Note 4 |
| 8,076 |
| |||||
Accrued expenses |
|
|
|
| 29,675 |
| ||
|
|
|
|
| 28,334,078 |
| ||
Net Assets ($) |
|
| 613,321,661 |
| ||||
Composition of Net Assets ($): |
|
|
|
| ||||
Paid-in capital |
|
|
|
| 398,693,321 |
| ||
Accumulated undistributed investment income—net |
| 2,559,475 |
| |||||
Accumulated net realized gain (loss) on investments |
|
|
|
| 27,593,950 |
| ||
Accumulated net unrealized appreciation (depreciation) |
| 184,474,915 |
| |||||
Net Assets ($) |
|
| 613,321,661 |
| ||||
Shares Outstanding |
|
| ||||||
(unlimited number of $.001 par value shares of Beneficial Interest authorized) | 29,798,905 |
| ||||||
Net Asset Value Per Share ($) |
| 20.58 |
| |||||
See notes to financial statements. |
26
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $394 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 3,790,289 |
| ||
Affiliated issuers |
|
| 37,335 |
| ||
Income from securities lending—Note 1(b) |
|
| 297,836 |
| ||
Interest |
|
| 2,226 |
| ||
Total Income |
|
| 4,127,686 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 1,006,771 |
| ||
Distribution fees—Note 3(b) |
|
| 719,122 |
| ||
Trustees’ fees—Note 3(a,c) |
|
| 40,862 |
| ||
Loan commitment fees—Note 2 |
|
| 6,106 |
| ||
Total Expenses |
|
| 1,772,861 |
| ||
Less—Trustees’ fees reimbursed by Dreyfus—Note 3(a) |
|
| (40,862) |
| ||
Net Expenses |
|
| 1,731,999 |
| ||
Investment Income—Net |
|
| 2,395,687 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 32,715,148 |
| ||||
Net realized gain (loss) on futures | 415,492 |
| ||||
Net Realized Gain (Loss) |
|
| 33,130,640 |
| ||
Net unrealized appreciation (depreciation) on investments |
|
| 15,419,831 |
| ||
Net unrealized appreciation (depreciation) on futures |
|
| (115,710) |
| ||
Net Unrealized Appreciation (Depreciation) |
|
| 15,304,121 |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 48,434,761 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 50,830,448 |
| |||
See notes to financial statements. |
27
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 2,395,687 |
|
|
| 4,719,653 |
| |
Net realized gain (loss) on investments |
| 33,130,640 |
|
|
| 31,498,969 |
| ||
Net unrealized appreciation (depreciation) |
| 15,304,121 |
|
|
| 27,374,247 |
| ||
Net Increase (Decrease) in Net Assets | 50,830,448 |
|
|
| 63,592,869 |
| |||
Distributions to Shareholders from ($): |
| ||||||||
Investment income—net |
|
| (4,650,208) |
|
|
| (3,553,050) |
| |
Net realized gain on investments |
|
| (31,098,781) |
|
|
| (23,252,519) |
| |
Total Distributions |
|
| (35,748,989) |
|
|
| (26,805,569) |
| |
Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold |
|
| 42,751,752 |
|
|
| 68,204,179 |
| |
Distributions reinvested |
|
| 35,748,989 |
|
|
| 26,805,569 |
| |
Cost of shares redeemed |
|
| (42,274,122) |
|
|
| (105,386,821) |
| |
Increase (Decrease) in Net Assets | 36,226,619 |
|
|
| (10,377,073) |
| |||
Total Increase (Decrease) in Net Assets | 51,308,078 |
|
|
| 26,410,227 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 562,013,583 |
|
|
| 535,603,356 |
| |
End of Period |
|
| 613,321,661 |
|
|
| 562,013,583 |
| |
Undistributed investment income—net | 2,559,475 |
|
|
| 4,813,996 |
| |||
Capital Share Transactions (Shares): |
| ||||||||
Shares sold |
|
| 2,131,961 |
|
|
| 3,640,107 |
| |
Shares issued for distributions reinvested |
|
| 1,837,050 |
|
|
| 1,528,253 |
| |
Shares redeemed |
|
| (2,102,088) |
|
|
| (5,599,734) |
| |
Net Increase (Decrease) in Shares Outstanding | 1,866,923 |
|
|
| (431,374) |
| |||
See notes to financial statements. |
28
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||
Per Share Data ($): | ||||||||||
Net asset value, beginning of period | 20.12 | 18.88 | 16.71 | 18.40 | 18.60 | 13.56 | ||||
Investment Operations: | ||||||||||
Investment income—neta | .08 | .16 | .16 | .16 | .13 | .11 | ||||
Net realized and unrealized | 1.68 | 2.04 | 3.69 | (.53) | .79 | 5.31 | ||||
Total from Investment Operations | 1.76 | 2.20 | 3.85 | (.37) | .92 | 5.42 | ||||
Distributions: | ||||||||||
Dividends from | (.17) | (.13) | (.16) | (.13) | (.11) | (.17) | ||||
Dividends from net realized | (1.13) | (.83) | (1.52) | (1.19) | (1.01) | (.21) | ||||
Total Distributions | (1.30) | (.96) | (1.68) | (1.32) | (1.12) | (.38) | ||||
Net asset value, end of period | 20.58 | 20.12 | 18.88 | 16.71 | 18.40 | 18.60 | ||||
Total Return (%) | 9.10b | 12.40 | 25.73 | (2.33) | 5.12 | 40.72 | ||||
Ratios/Supplemental Data (%): | ||||||||||
Ratio of total expenses | .62c | .63 | .63 | .63 | .63 | .60 | ||||
Ratio of net expenses | .60c | .60 | .60 | .60 | .60 | .60 | ||||
Ratio of net investment income | .83c | .88 | .95 | .90 | .73 | .70 | ||||
Portfolio Turnover Rate | 12.31b | 16.90 | 24.24 | 19.72 | 14.30 | 16.76 | ||||
Net Assets, end of period ($ x 1,000) | 613,322 | 562,014 | 535,603 | 307,701 | 337,652 | 331,995 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
29
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Small Cap Stock Index Portfolio (the “fund”) is a separate diversified series of Dreyfus Investment Portfolios (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 four series, including the fund. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund’s investment objective is to seek to match the performance of the S&P SmallCap 600® Index. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares, which are sold without a sales charge.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The 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).
30
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 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. 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 Trustees (the “Board”). These securities are generally categorized within Level 2 of the fair value hierarchy.
The Service is engaged under the general supervision of the Board.
31
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. 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 restricted 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.
Futures, 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 and are generally categorized within Level 1 of the fair value hierarchy.
The following is a summary of the inputs used as of June 30, 2018 in valuing the fund’s investments:
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 -Significant Unobservable Inputs | Total | ||
Assets ($) | |||||
Investments in Securities: | |||||
Equity Securities— | 602,821,333 | – | – | 602,821,333 | |
Equity Securities— | 7,182,603 | – | – | 7,182,603 |
32
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 -Significant Unobservable Inputs | Total | ||
Assets ($) | |||||
Registered | 30,629,106 | – | – | 30,629,106 | |
U.S. Treasury | – | 249,142 | – | 249,142 | |
Liabilities ($) | |||||
Other Financial Instruments: | |||||
Futures†† | (86,366) | – | – | (86,366) |
† See Statement of Investments for additional detailed categorizations.
†† Amount shown represents unrealized depreciation at period end.
At June 30, 2018, there were no transfers between levels of the fair value hierarchy. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(b) 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 Dreyfus, 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 Dreyfus, 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 June 30, 2018, The Bank of New York Mellon
33
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
earned $62,751 from lending portfolio securities, pursuant to the securities lending agreement.
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act.
(d) 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.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2018, 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 June 30, 2018, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2017 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 December 31, 2017 was as follows: ordinary income $4,242,448 and long-term capital gains $22,563,121. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in an $830 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. 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
34
pursuant to the terms of the respective Facility at the time of borrowing. During the period ended June 30, 2018, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement (the “Agreement”) with Dreyfus, the management fee is computed at the annual rate of .35% of the value of the fund’s average daily net assets and is payable monthly. Under the terms of the Agreement, Dreyfus has agreed to pay all of the fund’s direct expenses, except management fees, Rule 12b-1 Distribution Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings, fees and expenses of non-interested Trustees (including counsel fees), and extraordinary expenses. Dreyfus has also agreed to reduce its management fee in an amount equal to the fund’s allocable portion of the accrued fees and expenses of the non-interested Trustees (including counsel fees). During the period ended June 30, 2018, fees reimbursed by Dreyfus amounted to $40,862.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, the fund pays the Distributor for distributing its shares, for servicing and/or maintaining shareholder accounts and for advertising and marketing. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the fund’s average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2018, the fund was charged $719,122 pursuant to the Distribution Plan.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $179,024 and Distribution Plan fees $127,874, which are offset against an expense reimbursement currently in effect in the amount of $863.
(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and futures, during the period ended June 30, 2018, amounted to $77,822,317 and $70,173,427, respectively.
35
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. Each type of derivative instrument that was held by the fund during the period ended June 30, 2018 is discussed below.
Futures: In the normal course of pursuing its investment objective, the fund is exposed to market risk, including equity price risk, as a result of changes in value of underlying financial instruments. The fund invests in futures in order to manage its exposure to or protect against changes in the market. A futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a counterparty, which consist of cash or cash equivalents. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. When the contracts are closed, the fund recognizes a realized gain or loss which is reflected in the Statement of Operations. There is minimal counterparty credit risk to the fund with futures since they are exchange traded, and the exchange guarantees the futures against default. Futures open at June 30, 2018 are set forth in the Statement of Futures.
The following summarizes the average market value of derivatives outstanding during the period ended June 30, 2018:
|
| Average Market Value ($) |
Equity futures | 4,816,789 | |
At June 30, 2018, accumulated net unrealized appreciation on investments inclusive of derivative contracts was $184,474,915, consisting of $207,179,595 gross unrealized appreciation and $22,704,680 gross unrealized depreciation.
At June 30, 2018, the cost of investments inclusive of derivative contracts for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
36
NOTES
37
Dreyfus Investment Portfolios, Small Cap Stock Index Portfolio
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Telephone 1-800-258-4260 or 1-800-258-4261
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 Attn: Institutional Services Department
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.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-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, D.C. 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.
© 2018 MBSC Securities Corporation |
Dreyfus Investment Portfolios, Technology Growth Portfolio
SEMIANNUAL REPORT |
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 Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment Portfolios, Technology Growth Portfolio, covering the six-month period from January 1, 2018 through June 30, 2018. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
Volatility returned to the financial markets over the first half of 2018. Although stocks set a series of new record highs in January amid growing corporate earnings, reduced corporate tax rates and synchronized global economic growth, investors later grew nervous about rising interest rates, renewed inflationary pressures, escalating geopolitical tensions and the prospects of more protectionist U.S. trade policies. Consequently, U.S. stocks produced mildly positive returns over the reporting period. Meanwhile, bonds typically lost a degree of value over the first six months of the year due to rising interest rates and inflation concerns.
Despite the return of heightened market volatility, we believe that underlying market fundamentals remain sound. Ongoing economic growth, robust labor markets, rising corporate earnings and strong consumer and business confidence seem likely to support stock and corporate bond prices over the months ahead. Monetary policymakers have indicated that short-term interest rates probably will rise further, but U.S. government bond prices may already reflect those expectations. As always, we encourage you to discuss the risks and opportunities of today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
July 16, 2018
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from January 1, 2018 through June 30, 2018, as provided by Barry K. Mills, CFA, Portfolio Manager
Market and Fund Performance Overview
For the six-month period ended June 30, 2018, Dreyfus Investment Portfolios, Technology Growth Portfolio’s Initial shares produced a total return of 13.72%, and its Service shares produced a total return of 13.60%.1 The fund’s benchmarks, the NYSE® Technology Index and the S&P 500® Index, produced total returns of 11.88% and 2.65%, respectively, over the same period.2,3
Technology stocks gained ground despite inflation-related concerns in the United States and international trade tensions, which constrained the performance of broad market averages. The fund outperformed its benchmarks on the strength of favorable individual stock selections.
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 in the stocks of growth companies of any size that Dreyfus believes to be leading producers or beneficiaries of technological innovation. Up to 25% of the fund’s assets may be invested in foreign securities.
In choosing stocks, the fund looks for technology companies with the potential for strong earnings or revenue growth rates, although some of the fund’s investments may currently be experiencing losses. The fund’s investment process centers on a multi-dimensional approach that looks for opportunities across emerging growth, cyclical, or stable growth companies. The fund’s investment approach seeks companies that appear to have strong earnings momentum, positive earnings revisions, favorable growth, product, or market cycles, and/or favorable valuations.
Information Technology Outperformed Other Sectors
Stocks encountered heightened levels of volatility during the reporting period in response to rapidly shifting investor sentiment. January started on a strong note, with equities rising broadly in response to domestic economic expansion and passage of major, business-friendly tax reforms. In February, stocks plunged and volatility soared in response to rising wage pressures, which, along with other indicators, signaled a possible uptick in inflation. Markets recovered ground as these concerns eased through the rest of February, with information technology stocks far outpacing other market sectors. March saw another broad-based market decline amid escalating trade tensions stemming from higher U.S. tariffs.
Stocks gradually advanced during the second half of the reporting period when positive U.S. economic data continued to accrue, and information technology stocks once more led the way. However, the market’s advance was limited by concerns related to tariffs imposed by the U.S. government on Chinese imports, followed by Chinese retaliation and the threat of additional tariffs. The industrials and materials sectors were hit particularly hard by escalating trade tensions, and interest rate-sensitive sectors lagged as well. In contrast, information technology continued to outperform.
Stock Selections Enhanced Returns
The fund bolstered performance compared to its benchmarks by allocating relatively few assets to lagging semiconductor companies. Instead, we emphasized holdings in the more robust Internet and software industries, where strong individual stock selections further enhanced returns. Top performers included payment processor Square, which further expanded into a global platform for small businesses to manage inventories and borrow capital; streaming media content provider Netflix, which reported rising profitability and growing global subscribership; cloud-based service management solutions company ServiceNow, which generated increasing earnings while continuing to invest for future growth; and electronic gaming company Activision Blizzard, which demonstrated solid year-over-year revenue growth with attractive new product releases scheduled for later in 2018. Another
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
leading holding, Internet retailer Amazon.com, continued its ongoing pattern of gaining market share in its established markets while making progress toward establishing footholds in new ones, such as grocery and pharmaceutical sales.
Of course, a few holdings fared less well over the first half of 2018. Most notably, social media company Weibo and diversified Internet services provider Tencent, both based in China, were hurt by a broader decline in Chinese stocks prompted by fears of a trade war. The fund’s position in communications giant Verizon Communications, prompted by the stock’s defensive investment characteristics as well as the company’s leading position in the deployment of next-generation 5G mobile service, proved premature. Lack of exposure to a few of the sector’s highest-flying names—such as electronic gaming company Electronic Arts—also undercut relative returns.
Positioning the Fund for Slower Growth
With many corporate balance sheets flush with cash and chief information officers predicting higher rates of corporate spending on productivity and efficiency enhancements, we believe conditions remain positive for further gains among information technology stocks. However, we remain wary of escalating trade tensions between the United States and its trading partners, particularly China, and watchful of U.S. inflation trends. These concerns have prompted us to increase the fund’s exposure to more defensive technology stocks, while continuing to position the fund to benefit from long-term, secular technological trends.
July 16, 2018
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts, which will reduce returns.
2 Source: Bloomberg L.P. — The NYSE® Technology Index is an equal-dollar weighted index designed to objectively represent the technology sector by holding 35 of the leading U.S. technology-related companies. Investors cannot invest directly in any index.
3 Source: Lipper Inc. — The S&P 500® Index is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. Investors cannot invest directly in any index.
The technology sector has been among the most volatile sectors of the stock market. Technology companies involve greater risk because their revenue and/or earnings tend to be less predictable, and some companies may be experiencing significant losses.
Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of Dreyfus Investment Portfolios, Technology Growth Portfolio made available through insurance products may be similar to those of other funds managed or advised by Dreyfus. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other Dreyfus fund.
4
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), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Investment Portfolios, Technology Growth Portfolio from January 1, 2018 to June 30, 2018. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment | |||||||
assuming actual returns for the six months ended June 30, 2018 | |||||||
|
|
|
| Initial Shares | Service Shares | ||
Expenses paid per $1,000† |
| $4.19 | $5.51 | ||||
Ending value (after expenses) |
| $1,137.20 | $1,136.00 |
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 June 30, 2018 | |||||||
|
|
|
| Initial Shares | Service Shares | ||
Expenses paid per $1,000† | $3.96 | $5.21 | |||||
Ending value (after expenses) | $1,020.88 | $1,019.64 |
† Expenses are equal to the fund’s annualized expense ratio of .79% for Initial shares and 1.04% for Service shares, multiplied by the average account value over the period, multiplied by 181/365(to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
June 30, 2018 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 96.2% | |||||||
Application Software - 9.8% | |||||||
Adobe Systems | 103,887 | a | 25,328,689 | ||||
salesforce.com | 184,683 | a | 25,190,761 | ||||
Splunk | 71,042 | a | 7,040,973 | ||||
57,560,423 | |||||||
Automobile Manufacturers - 2.1% | |||||||
Tesla | 36,924 | a,b | 12,663,086 | ||||
Communications Equipment - 6.7% | |||||||
Cisco Systems | 542,809 | 23,357,071 | |||||
Lumentum Holdings | 75,657 | a,b | 4,380,540 | ||||
Palo Alto Networks | 57,679 | a | 11,851,304 | ||||
39,588,915 | |||||||
Data Processing & Outsourced Services - 7.3% | |||||||
PayPal Holdings | 200,844 | a | 16,724,280 | ||||
Square, Cl. A | 129,707 | a,b | 7,995,139 | ||||
Visa, Cl. A | 138,162 | 18,299,557 | |||||
43,018,976 | |||||||
Electronic Components - 1.3% | |||||||
Amphenol, Cl. A | 87,914 | 7,661,705 | |||||
Health Care Equipment - 1.3% | |||||||
Intuitive Surgical | 15,899 | a | 7,607,354 | ||||
Home Entertainment Software - 3.6% | |||||||
Activision Blizzard | 277,936 | 21,212,076 | |||||
Integrated Telecommunication Services - 3.1% | |||||||
Verizon Communications | 358,724 | 18,047,404 | |||||
Internet & Direct Marketing Retail - 12.1% | |||||||
Amazon.com | 20,893 | a | 35,513,921 | ||||
Netflix | 91,886 | a | 35,966,937 | ||||
71,480,858 | |||||||
Internet Software & Services - 13.6% | |||||||
Alibaba Group Holding, ADR | 111,238 | a,b | 20,637,986 | ||||
Alphabet, Cl. C | 11,805 | a | 13,170,248 | ||||
Facebook, Cl. A | 124,274 | a | 24,148,924 | ||||
Tencent Holdings | 280,600 | 14,084,363 | |||||
Weibo, ADR | 90,152 | a,b | 8,001,892 | ||||
80,043,413 | |||||||
IT Consulting & Other Services - 2.8% | |||||||
International Business Machines | 119,185 | 16,650,145 | |||||
Research & Consulting Services - 1.0% | |||||||
CoStar Group | 14,926 | a | 6,158,915 | ||||
Semiconductor Equipment - 2.9% | |||||||
Applied Materials | 186,094 | 8,595,682 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 96.2% (continued) | |||||||
Semiconductor Equipment - 2.9% (continued) | |||||||
Lam Research | 51,088 | b | 8,830,561 | ||||
17,426,243 | |||||||
Semiconductors - 13.2% | |||||||
Broadcom | 63,972 | 15,522,166 | |||||
Microchip Technology | 126,162 | b | 11,474,434 | ||||
Micron Technology | 208,408 | a | 10,928,916 | ||||
NVIDIA | 104,465 | 24,747,758 | |||||
Texas Instruments | 136,680 | 15,068,970 | |||||
77,742,244 | |||||||
Systems Software - 10.2% | |||||||
Microsoft | 339,782 | 33,505,903 | |||||
Oracle | 344,695 | 15,187,262 | |||||
ServiceNow | 66,041 | a | 11,390,091 | ||||
60,083,256 | |||||||
Technology Hardware Storage & Peripherals - 5.2% | |||||||
Apple | 164,541 | 30,458,185 | |||||
Total Common Stocks (cost $354,022,664) | 567,403,198 | ||||||
7-Day | |||||||
Other Investment - 3.4% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1.83 | 19,802,642 | c | 19,802,642 | |||
Investment of Cash Collateral for Securities Loaned - 4.3% | |||||||
Registered Investment Company; | |||||||
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 1.85 | 25,331,473 | c | 25,331,473 | |||
Total Investments (cost $399,156,779) | 103.9% | 612,537,313 | |||||
Liabilities, Less Cash and Receivables | (3.9%) | (22,970,633) | |||||
Net Assets | 100.0% | 589,566,680 |
ADR—American Depository Receipt
aNon-income producing security.
bSecurity, or portion thereof, on loan. At June 30, 2018, the value of the fund’s securities on loan was $59,309,518 and the value of the collateral held by the fund was $74,931,948, consisting of cash collateral of $25,331,473 and U.S. Government & Agency securities valued at $49,600,475.
cInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the respective investment company’s prospectus.
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Portfolio Summary (Unaudited) † | Value (%) |
Application Software | 13.6 |
Internet Software & Services | 13.6 |
Semiconductors | 13.2 |
Internet & Direct Marketing Retail | 12.1 |
Systems Software | 10.2 |
Money Market Investments | 7.7 |
Data Processing & Outsourced Services | 7.3 |
Communications Equipment | 6.7 |
Technology Hardware Storage & Peripherals | 5.2 |
Home Entertainment Software | 3.6 |
Integrated Telecommunication Services | 3.1 |
Semiconductor Equipment | 2.9 |
Automobile Manufacturers | 2.1 |
Electronic Components | 1.3 |
Healthcare-Products | 1.3 |
103.9 |
† Based on net assets.
See notes to financial statements.
8
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Registered Investment Companies | Value | Purchases($) | Sales($) | Value | Net | Dividends/ |
Dreyfus Institutional Preferred Government Plus Money Market Fund | 9,767,983 | 69,111,828 | 59,077,169 | 19,802,642 | 3.4 | 100,316 |
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 17,229,167 | 110,693,745 | 102,591,439 | 25,331,473 | 4.3 | - |
Total | 26,997,150 | 179,805,573 | 161,668,608 | 45,134,115 | 7.7 | 100,316 |
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 354,022,664 |
| 567,403,198 |
| ||
Affiliated issuers |
| 45,134,115 |
| 45,134,115 |
| |
Cash |
|
|
|
| 2,813,001 |
|
Dividends and securities lending income receivable |
| 65,390 |
| |||
Prepaid expenses |
|
|
|
| 4,021 |
|
|
|
|
|
| 615,419,725 |
|
Liabilities ($): |
|
|
|
| ||
Due to The Dreyfus Corporation and affiliates—Note 3(b) |
|
|
| 471,063 |
| |
Liability for securities on loan—Note 1(b) |
| 25,331,473 |
| |||
Payable for shares of Beneficial Interest redeemed |
| 16,383 |
| |||
Accrued expenses |
|
|
|
| 34,126 |
|
|
|
|
|
| 25,853,045 |
|
Net Assets ($) |
|
| 589,566,680 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 355,081,239 |
|
Accumulated investment (loss)—net |
| (202,345) |
| |||
Accumulated net realized gain (loss) on investments |
|
|
|
| 21,307,252 |
|
Accumulated net unrealized appreciation (depreciation) |
| 213,380,534 |
| |||
Net Assets ($) |
|
| 589,566,680 |
|
Net Asset Value Per Share | Initial Shares | Service Shares |
|
Net Assets ($) | 141,047,500 | 448,519,180 |
|
Shares Outstanding | 5,442,822 | 18,293,709 |
|
Net Asset Value Per Share ($) | 25.91 | 24.52 |
|
See notes to financial statements. |
10
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends: |
| |||||
Unaffiliated issuers |
|
| 2,275,610 |
| ||
Affiliated issuers |
|
| 100,316 |
| ||
Income from securities lending—Note 1(b) |
|
| 112,630 |
| ||
Total Income |
|
| 2,488,556 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 2,069,684 |
| ||
Distribution fees—Note 3(b) |
|
| 521,310 |
| ||
Professional fees |
|
| 49,575 |
| ||
Prospectus and shareholders’ reports |
|
| 13,039 |
| ||
Trustees’ fees and expenses—Note 3(c) |
|
| 8,805 |
| ||
Loan commitment fees—Note 2 |
|
| 6,388 |
| ||
Custodian fees—Note 3(b) |
|
| 3,038 |
| ||
Shareholder servicing costs—Note 3(b) |
|
| 450 |
| ||
Miscellaneous |
|
| 18,669 |
| ||
Total Expenses |
|
| 2,690,958 |
| ||
Less—reduction in fees due to earnings credits—Note 3(b) |
|
| (57) |
| ||
Net Expenses |
|
| 2,690,901 |
| ||
Investment (Loss)—Net |
|
| (202,345) |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 21,333,567 |
| ||||
Net unrealized appreciation (depreciation) on investments |
|
| 45,819,706 |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 67,153,273 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 66,950,928 |
| |||
See notes to financial statements. |
11
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment (loss)—net |
|
| (202,345) |
|
|
| (951,137) |
| |
Net realized gain (loss) on investments |
| 21,333,567 |
|
|
| 30,839,567 |
| ||
Net unrealized appreciation (depreciation) |
| 45,819,706 |
|
|
| 107,857,056 |
| ||
Net Increase (Decrease) in Net Assets | 66,950,928 |
|
|
| 137,745,486 |
| |||
Distributions to Shareholders from ($): |
| ||||||||
Net realized gain on investments: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (6,797,939) |
|
|
| (4,962,679) |
| |
Service Shares |
|
| (22,491,966) |
|
|
| (14,008,431) |
| |
Total Distributions |
|
| (29,289,905) |
|
|
| (18,971,110) |
| |
Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 6,457,871 |
|
|
| 8,829,083 |
| |
Service Shares |
|
| 65,233,527 |
|
|
| 71,523,776 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 6,797,939 |
|
|
| 4,962,679 |
| |
Service Shares |
|
| 22,491,966 |
|
|
| 14,008,431 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (4,876,769) |
|
|
| (10,261,805) |
| |
Service Shares |
|
| (32,099,263) |
|
|
| (32,979,833) |
| |
Increase (Decrease) in Net Assets | 64,005,271 |
|
|
| 56,082,331 |
| |||
Total Increase (Decrease) in Net Assets | 101,666,294 |
|
|
| 174,856,707 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 487,900,386 |
|
|
| 313,043,679 |
| |
End of Period |
|
| 589,566,680 |
|
|
| 487,900,386 |
| |
Accumulated investment (loss)—net | (202,345) |
|
|
| - |
| |||
Capital Share Transactions (Shares): |
| ||||||||
Initial Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 248,527 |
|
|
| 414,443 |
| |
Shares issued for distributions reinvested |
|
| 263,180 |
|
|
| 261,607 |
| |
Shares redeemed |
|
| (190,213) |
|
|
| (487,724) |
| |
Net Increase (Decrease) in Shares Outstanding | 321,494 |
|
|
| 188,326 |
| |||
Service Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 2,640,131 |
|
|
| 3,549,112 |
| |
Shares issued for distributions reinvested |
|
| 919,541 |
|
|
| 775,661 |
| |
Shares redeemed |
|
| (1,318,794) |
|
|
| (1,645,634) |
| |
Net Increase (Decrease) in Shares Outstanding | 2,240,878 |
|
|
| 2,679,139 |
| |||
See notes to financial statements. |
12
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. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund’s financial statements.
Six Months Ended | Year Ended December 31, | ||||||
Initial Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |
Per Share Data ($): | |||||||
Net asset value, | 23.95 | 17.69 | 17.78 | 18.65 | 18.38 | 13.84 | |
Investment Operations: | |||||||
Investment income (loss)—neta | .01 | (.01) | .01 | (.04) | (.01) | (.01) | |
Net realized and unrealized gain | 3.27 | 7.29 | .77 | 1.12 | 1.26 | 4.55 | |
Total from Investment Operations | 3.28 | 7.28 | .78 | 1.08 | 1.25 | 4.54 | |
Distributions: | |||||||
Dividends from net realized | (1.32) | (1.02) | (.87) | (1.95) | (.98) | — | |
Net asset value, end of period | 25.91 | 23.95 | 17.69 | 17.78 | 18.65 | 18.38 | |
Total Return (%) | 13.72b | 42.64 | 4.72 | 6.16 | 6.82 | 32.80 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | .79c | .82 | .83 | .83 | .83 | .85 | |
Ratio of net expenses | .79c | .82 | .83 | .83 | .83 | .85 | |
Ratio of net investment income | .12c | (.05) | .07 | (.22) | (.05) | (.05) | |
Portfolio Turnover Rate | 21.99b | 42.07 | 64.26 | 70.33 | 72.20 | 68.73 | |
Net Assets, end of period ($ x 1,000) | 141,048 | 122,670 | 87,243 | 96,422 | 96,320 | 96,786 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
13
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | Year Ended December 31, | ||||||
Service Shares | (Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 22.75 | 16.88 | 17.06 | 18.01 | 17.82 | 13.45 | |
Investment Operations: | |||||||
Investment (loss)—neta | (.02) | (.06) | (.03) | (.08) | (.05) | (.04) | |
Net realized and unrealized gain | 3.11 | 6.95 | .72 | 1.08 | 1.22 | 4.41 | |
Total from Investment Operations | 3.09 | 6.89 | .69 | 1.00 | 1.17 | 4.37 | |
Distributions: | |||||||
Dividends from net realized | (1.32) | (1.02) | (.87) | (1.95) | (.98) | — | |
Net asset value, end of period | 24.52 | 22.75 | 16.88 | 17.06 | 18.01 | 17.82 | |
Total Return (%) | 13.60b | 42.36 | 4.38 | 5.92 | 6.58 | 32.49 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | 1.04c | 1.07 | 1.08 | 1.08 | 1.08 | 1.10 | |
Ratio of net expenses | 1.04c | 1.07 | 1.08 | 1.08 | 1.08 | 1.10 | |
Ratio of net investment (loss) | (.13)c | (.30) | (.18) | (.47) | (.30) | (.30) | |
Portfolio Turnover Rate | 21.99b | 42.07 | 64.26 | 70.33 | 72.20 | 68.73 | |
Net Assets, end of period ($ x 1,000) | 448,519 | 365,231 | 225,801 | 217,006 | 187,957 | 184,493 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
14
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Technology Growth Portfolio (the “fund”) is a separate diversified series of Dreyfus Investment Portfolios (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 four series, including the fund. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund’s investment objective is to seek capital appreciation. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares, which are sold without a sales charge. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the Distribution Plan, 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 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.
15
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(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.
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. 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.
16
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 ADRs 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 Company’s Board of Trustees (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 restricted 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 June 30, 2018 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 - Domestic Common Stocks† | 524,678,957 | - | - | 524,678,957 |
Equity Securities - Foreign Common Stocks† | 42,724,241 | - | - | 42,724,241 |
17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 -Significant Unobservable Inputs | Total | |
Assets ($) | ||||
Registered Investment Companies | 45,134,115 | - | - | 45,134,115 |
† See Statement of Investments for additional detailed categorizations.
At December 31, 2017, $19,589,010 of exchange traded foreign equity securities were classified within Level 2 of the fair value hierarchy pursuant to the fund’s fair valuation procedures. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(b) 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 Dreyfus, 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 Dreyfus, 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 June 30, 2018, The Bank of New York Mellon earned $22,345 from lending portfolio securities, pursuant to the securities lending agreement.
18
(c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as “affiliated” under the Act.
(d) 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.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2018, 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 June 30, 2018, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2017 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 December 31, 2017 was as follows: long-term capital gains $18,971,110. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in an $830 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. 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.
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended June 30, 2018, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with Dreyfus, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares’ shareholder accounts and for advertising and marketing for Service shares. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2018, Service shares were charged $521,310 pursuant to the Distribution 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 Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency and cash management services 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 June 30, 2018, the fund was charged $270 for transfer agency services and $39 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were offset by earnings credits of $39.
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. During the period ended June 30, 2018, the fund was charged $3,038 pursuant to the custody agreement. These fees were partially offset by earnings credits of $18.
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During the period ended June 30, 2018, the fund was charged $6,320 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $366,196, Distribution Plan fees $92,385, custodian fees $6,012, Chief Compliance Officer fees $6,320 and transfer agency fees $150.
(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended June 30, 2018, amounted to $139,977,242 and $117,638,839, respectively.
At June 30, 2018, accumulated net unrealized appreciation on investments was $213,380,534, consisting of $219,221,985 gross unrealized appreciation and $5,841,451 gross unrealized depreciation.
At June 30, 2018, 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).
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Dreyfus Investment Portfolios, Technology Growth Portfolio
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
Telephone 1-800-258-4260 or 1-800-258-4261
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 Attn: Institutional Services Department
E-mail Send your request to info@dreyfus.com
Internet Information can be viewed online or downloaded at www.dreyfus.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-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, D.C. 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.
© 2018 MBSC Securities Corporation |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable.
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) Not applicable.
(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.
Dreyfus Investment Portfolios
By: /s/ Bradley J. Skapyak
Bradley J. Skapyak
President
Date: August 8, 2018
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: August 8, 2018
By: /s/ James Windels
James Windels
Treasurer
Date: August 8, 2018
EXHIBIT INDEX
(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)