DREYFUS INDEX FUNDS INC Form N-CSRS Filed 2017-07-06
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SECURITIES AND EXCHANGE COMMISSION FORM N-CSRS Certified semi-annual shareholder report of registered management investment companies filed on Form N-CSR Filing Date: 2017-07-06 | Period of Report: 2017-04-30 SEC Accession No. 0000857114-17-000018 (HTML Version on secdatabase.com) FILER DREYFUS INDEX FUNDS INC Mailing Address Business Address C/O DREYFUS CORP THE DREYFUS CIK:857114| IRS No.: 133554128 | Fiscal Year End: 1031 200 PARK AVENUE, 8TH CORPORATION Type: N-CSRS | Act: 40 | File No.: 811-05883 | Film No.: 17952664 FLOOR 200 PARK AVENUE NEW YORK NY 10166 NEW YORK NY 10166 2129226400 Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 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 811-05883 Dreyfus Index Funds, Inc. (Exact name of Registrant as specified in charter) c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 (Address of principal executive offices) (Zip code) Bennett A. MacDougall, Esq. 200 Park Avenue New York, New York 10166 (Name and address of agent for service) Registrant's telephone number, including area code: (212) 922-6400 Date of fiscal year end: 10/31 Date of reporting period: 04/30/17 Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document FORM N-CSR Item 1. Reports to Stockholders. Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Dreyfus International Stock Index Fund SEMIANNUAL REPORT April 30, 2017 Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes. The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of 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 A Letter from the CEO of Dreyfus 2 Discussion of Fund Performance 3 Understanding Your Fund’s Expenses 5 Comparing Your Fund’s Expenses With Those of Other Funds 5 Statement of Investments 6 Statement of Futures 33 Statement of Assets and Liabilities 34 Statement of Operations 35 Statement of Changes in Net Assets 36 Financial Highlights 37 Notes to Financial Statements 39 Information About the Renewal of the Fund’s Management Agreement 48 FOR MORE INFORMATION Back Cover Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Dreyfus International Stock Index Fund The Fund A LETTER FROM THE CEO OF DREYFUS Dear Shareholder: We are pleased to present this semiannual report for Dreyfus International Stock Index Fund, covering the six-month period from November 1, 2016 through April 30, 2017. 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. Stocks advanced solidly but higher-quality bonds lost a degree of value over the reporting period amid heightened market volatility stemming from various economic and political developments. After giving back a portion of their previous gains due to uncertainty in advance of U.S. elections, equity markets rallied to a series of new highs in the wake of the election’s unexpected outcome as investors revised their expectations for U.S. fiscal, regulatory, and tax policies. Generally strong economic data and corporate earnings continued to support stock prices over the first four months of 2017. In the bond market, yields of U.S. government securities moved higher and prices fell in response to two short-term interest-rate hikes and rising longer-term rates, while lower-rated corporate-backed bonds continued to advance in anticipation of a more business-friendly market environment. Some asset classes and industry groups seem likely to continue to benefit from a changing economic and geopolitical landscape, while others probably will face challenges as conditions evolve. Consequently, selectivity seems likely to be an important determinant of investment success in the months ahead. As always, we encourage you to discuss the implications of our observations with your financial advisor. Thank you for your continued confidence and support. Sincerely, Mark D. Santero Chief Executive Officer The Dreyfus Corporation May 15, 2017 2 DISCUSSION OF FUND PERFORMANCE For the period from November 1, 2016 through April 30, 2017, as provided by Thomas J. Durante, CFA, Karen Q. Wong, CFA, and Richard A. Brown, CFA, Portfolio Managers Market and Fund Performance Overview For the six-month period ended April 30, 2017, Dreyfus International Stock Index Fund’s Class I shares produced a total return of 11.30%, and its Investor shares returned 11.13%.1 This compares with an 11.47% total return for the fund’s benchmark, the MSCI EAFE Index (the “Index”), during the same period.2 International stocks gained ground due to improving global economic data and expectations of more business-friendly policies from a new presidential administration in the United States. 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. As of August 31, 2016, existing fund shares were renamed Investor shares and Class I shares were added as a new share class of the fund. The Fund’s Investment Approach The fund seeks to match the performance of the Index and to pursue its goal, the fund is generally fully invested in stocks included in the Index and in futures whose performance is tied to certain countries included in the Index. The fund generally invests in all stocks included in the Index. The fund's investments are selected to match the benchmark composition along individual name, country and industry weighting, and other benchmark characteristics. Under these circumstances, the fund maintains approximately the same weighting for each stock as the Index. The Index is an unmanaged, free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. Each stock in the Index is weighted by its float-adjusted market capitalization. Improved Economic Outlook Bolstered International Stocks Despite the eroding effects of weakening foreign currencies against the U.S. dollar over much of the reporting period, international equities generally fared well in anticipation of higher levels of global economic growth stemming in part from more business-friendly fiscal, regulatory, and tax policies under a newly elected U.S. government. Although the Index declined relatively mildly in the immediate wake of the election’s widely unexpected outcome in November, improved investor sentiment and expectations of improved global economic growth later sparked a market rally that persisted through the end of the reporting period. In addition, central banks in Europe and Japan have maintained accommodative monetary policies, which are expected to provide further support to international economies that already have shown signs of recovering from an extended period of sluggishness. In Europe, financial markets were further buoyed in the spring by reassuringly mainstream election results in the Netherlands. Japanese equities benefited from a return to positive bond yields, which supported earnings for the country’s financial institutions. 3 Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document DISCUSSION OF FUND PERFORMANCE (continued) Financial and Industrial Stocks Led Markets Higher The Index’s gains over the reporting period were driven by especially strong results from the financial sector, as higher interest rates supported lending margins in Japan; Australian banks benefited from a rebounding housing market and higher commodity prices; and banks in the United Kingdom, Spain, and France recovered from previous weakness. Insurance and capital markets companies gained value amid rising financial markets, and investment banks profited from rising bond issuance volumes. The industrials sector also fared quite well, as machinery producers and diversified conglomerates climbed due to expectations of greater global economic growth. In addition, automobile manufacturers and shipbuilders advanced in anticipation of rising demand from rebounding emerging markets, and aerospace companies saw increased global demand for aircraft. In the consumer discretionary sector, textile and luxury goods purveyors rose amid optimism regarding economic conditions in the United States, Europe, and the emerging markets, while hotels, restaurants, and leisure companies benefited from higher consumer confidence and spending. From a country perspective, the United