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The Dreyfus Corporation Launches Two New Funds: Dreyfus Tax Managed Balanced Fund And Dreyfus High Yield Municipal Bond Fund

NEW YORK, September 30, 2005 — The Dreyfus Corporation today announced the introduction of two new funds: Dreyfus Tax Managed Balanced Fund and Dreyfus High Yield Municipal Bond Fund. "We believe that these funds address two critical needs for our customers," said Dreyfus Chairman and Chief Executive Officer Stephen E. Canter. "In a market that has been roiled by volatility, our customers have told us that they require help in diversification, and Dreyfus Tax Managed Balanced Fund provides a vehicle for prudent diversified investing. Dreyfus High Yield Municipal Bond Fund has the potential to offer higher current income than lower-yielding, higher-average credit quality funds, along with the tax benefits of municipal investing."

A vehicle for tax-managed diversification

Dreyfus Tax Managed Balanced Fund seeks to provide investors with tax-efficient diversification across a blend of tax-exempt municipal bonds and blue-chip equities. The fund combines the strength of two management teams: the Dreyfus Municipal Fixed Income Team and Fayez Sarofim & Co., a well-known institutional equity manager with approximately $40.6 billion in assets under management.

Dreyfus' Joseph P. Darcy and Scott Sprauer co-manage the municipal bond portion of the portfolio. They have been part of the Dreyfus municipal bond team since 1994 and 1998 respectively, a team which manages approximately $24 billion in tax-exempt assets and ranks 10th among all mutual fund managers of municipal securities.

Fayez Sarofim & Co. serves as sub-advisor to the fund and manages the equity portion of the portfolio. Fayez Sarofim & Co. specializes in managing large-cap, high-quality stock portfolios and also sub-advises a number of other Dreyfus mutual funds, including Dreyfus Appreciation, Dreyfus Premier Core Equity, Dreyfus Premier Tax-Managed Growth and Dreyfus Premier Worldwide Growth Funds.

Dreyfus Tax Managed Balanced Fund seeks to provide an attractive after-tax total return, consisting of federally tax-exempt income (from bonds) and capital appreciation. The majority of its assets will normally be invested in investment-grade municipal bonds, while the remainder will be allocated to a tax-managed equity strategy focused on "blue-chip" companies with market capitalizations over $5 billion. The fund's portfolio will be rebalanced at least once a quarter, and, if necessary, more often, so that it retains its targeted 55% municipal bond/45% equity weighting.

Potentially higher yields exempt from federal income taxes

As its primary goal, Dreyfus High Yield Municipal Bond Fund will seek high current income exempt from federal income tax. As a secondary goal, the fund may seek capital appreciation to the extent consistent with its primary goal. To pursue its goals, the fund normally will invest at least 80% of its assets in municipal bonds that provide income exempt from federal income tax. The fund will normally invest at least 65% of its assets in municipal bonds rated BBB/Baa or lower by independent rating agencies or the unrated equivalent as determined by Dreyfus. The fund may invest up to 35% of its assets in higher-quality municipal bonds (those rated AAA/Aaa to A or the unrated equivalent as determined by Dreyfus).

The portfolio is co-managed by W. Michael Petty and James Welch. They have been part of the Dreyfus municipal bond team since 1997 and 2001, respectively.

Both funds have a minimum initial investment requirement of $2,500 for regular accounts and $750 for individual retirement accounts. Investors should consider the fees, charges, expenses and risks associated with an investment in Dreyfus Tax Managed Balanced Fund or Dreyfus High Yield Municipal Bond Fund carefully before investing. Investors should contact their financial advisors or call 1-800-DREYFUS for this and other information, and should read the prospectuses carefully before investing.

Income from municipal bonds is subject to state and local taxes and, with respect to Dreyfus Tax Managed Balanced Fund, to the federal alternative minimum tax. Dividend income derived from equities paid by Dreyfus Tax Managed Balanced Fund, and any capital gains, paid by the fund are taxable.

High-yield bonds involve increased credit and liquidity risk compared with investment-grade bonds and are considered speculative as to the continuing ability of an issuer to make interest payments and to repay principal.

The Dreyfus Corporation, established in 1951 and headquartered in New York City, is one of the nation's leading asset management companies, currently managing more than $170 billion in mutual funds, separately managed accounts and institutional portfolios. Dreyfus Service Corporation, each fund's distributor, is a wholly owned subsidiary of The Dreyfus Corporation. Dreyfus is a wholly owned subsidiary of Mellon Financial Corporation (NYSE: MEL), a global financial services company.

Headquartered in Pittsburgh, Mellon is one of the world's leading providers of financial services for institutions, corporations and high-net-worth individuals, providing institutional asset management, mutual funds, private wealth management, asset servicing, payment solutions and investor services, and treasury services. Mellon has approximately $4.2 trillion in assets under management, administration or custody, including $738 billion under management. Its asset management companies also include The Dreyfus Corporation and U.K.-based Newton Investment Management Limited. News and other information about Mellon is available at www.mellon.com.

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