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BNY Mellon's Dreyfus Launches Three Innovative Multi-Factor Smart Beta Equity Funds

llon Capital's New Strategic Beta Solution Provides Cost-Effective, Transparent, Rules-Based Approach Designed to Offer Improved Market Exposure

The Dreyfus Corporation, (Dreyfus), a BNY Mellon company, announced today that it has launched three new mutual funds that seek to improve market exposure by pursuing consistent benchmark outperformance and downside protection potential relative to traditional market-weighted  index products.   

Mellon Capital's proprietary systematic investment approach selects and weights stocks by economic size as well as quality and growth of earnings to focus on companies with more attractive valuations.  By combining these complementary performance factors into a single transparent investment process, the new mutual funds look to overcome some of the potential pitfalls Mellon Capital believes are inherent in traditional cap weighted approaches and single market factor strategies.   The three "Dreyfus Strategic Beta" funds are:

Dreyfus Strategic Beta Emerging Markets Equity Fund– Class A (DOFAX), Class C (DOFCX), Class I (DOFIX), Class Y (DOFYX)
Dreyfus Strategic Beta Global Equity Fund – Class A (DBGAX), Class C (DBGCX), Class I (DBGIX), Class Y (DBGYX)
Dreyfus Strategic Beta U.S. Equity Fund  – Class A (DOUAX), Class C (DOUCX), Class I (DOUIX), Class Y (DOUYX)

"The addition of Strategic Beta portfolios from Dreyfus creates a suite of innovative offerings that provide investors with alternative means of gaining market class exposure that can complement passive and active approaches," said Curtis Arledge, Chief Executive Officer of BNY Mellon Investment Management.  "Successful active equity managers have been exploiting these inefficiencies for decades. A smart beta approach can provide an alternative option for investors who appreciate the rules-based, transparent nature of passive products such as index funds but believe that there are limitations to capitalization-weighted index strategies," Arledge continued.

Dreyfus is the funds' investment adviser and Mellon Capital Management Corporation, an affiliate of Dreyfus, is the funds' sub-adviser. 

"Mellon Capital's strategic beta approach is a fundamentally weighted, quality focused strategy that seeks to deliver consistent outperformance versus its benchmark by focusing on market inefficiencies," said Warren Chiang, CFA, and one of the lead portfolio managers for these three funds.  Mr. Chiang is Head of Active Equity Strategies for Mellon Capital and an 18-year veteran of the firm.

By combining what Mellon Capital believes are complementary exposures into one portfolio, the Strategic Beta funds seek to improve risk-adjusted performance relative to each fund's respective benchmark.  The funds' portfolio holdings are weighted by economic size, as well as quality and growth of earnings.  Mellon Capital de-emphasizes the respective benchmark's most expensive and lowest quality stocks.  Risk is managed by diversifying across companies and industries, seeking to limit the potential adverse impact from any one stock or industry.  The fund portfolios are rebalanced semi-annually.

"Single-factor smart beta approaches may result in extended periods of underperformance or increased risk," Chiang continued. "By combining complementary factor exposures into one approach, the Dreyfus Strategic Beta portfolios can potentially enhance risk-adjusted performance, seeking to provide a smoother stream of performance results. Our 30-year history in managing both factor-based active strategies and cap-weighted passive strategies provides Mellon Capital with a unique perspective in managing strategic beta portfolios."

Main Risks

Asset allocation and diversification cannot ensure a profit or protect against loss of principal.

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

Investing internationally involves special risks, including changes in currency exchange rates, political, economic and social instability, a lack of comprehensive company information, differing auditing and legal standards and less market liquidity. These risks are generally greater with emerging market countries than with more economically and politically established foreign countries.

The use of derivative instruments, such as options, futures and options on futures, forward contracts, swaps, options on swaps, and other credit derivatives, involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. A small investment in derivatives could have a potentially large impact on the fund's performance.

For each Fund, there can be no guarantee that any particular level of return, or the fund's investment objective, will be achieved, or that Mellon Capital's investment strategy will succeed

Investors should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. To obtain a prospectus, or a summary prospectus, if available, that contains this and other information about the fund, investors should contact their financial advisors or visit Read the prospectus carefully before investing.