Dreyfus GNMA Fund, Inc.
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus GNMA
Fund, Inc. For its semi-annual reporting period ended October 31, 1996, your
Fund produced a total return of 4.54%, which includes share price changes and
interest income.* Income dividends from net investment income of $.472 per
share were paid representing an annualized distribution rate per share of
6.43%.**
THE ECONOMY
The fear of another round of monetary tightening by the Federal Reserve
Board (the "Fed") to ward off a resurgence in inflation has so far proved
unwarranted. Indeed, despite solid economic growth resulting in the creation of
new jobs and an overall tightening in the labor market, inflation has remained
subdued. Both the Consumer and Producer Price Indexes remained at annual rates
in the 3% range. This is the fifth consecutive year of inflation under 3%, the
longest period since the 1960s. Despite the duration of the economic recovery,
most economic reports underscore the tepid nature of the present inflationary
environment.
The increase in long-term interest rates early this year may have
contributed to the recently reported slowdown in the rate of economic growth.
During the third quarter, the growth rate of the Gross Domestic Product cooled
to 2.2%, less than half the second quarter's strong 4.7% pace. Consumers_the
initiators of two thirds of all economic activity_remained cautious throughout
the year. In the third quarter, the pace of consumer spending was at its
slowest in five years. Consumer borrowing has also declined from year-ago
levels. Not surprisingly, retail sales growth has also been modest this year.
Consumers may have been restrained by wages not rising as rapidly as had been
previously suspected, given the strength in the labor market. The Employment
Cost Index, considered to be an important gauge of wage inflation by Federal
Reserve Board Chairman Alan Greenspan, rose just .6% in the third quarter, the
lowest reading in over a year. This brought the growth in wages to 2.8% over
the past twelve months, slightly less than the rate of inflation as measured by
the Consumer Price Index.
The booming housing market also seems to have cooled with both new
housing starts and existing home sales slackening since midyear. Industrial
production has slowed somewhat from its more rapid pace earlier in the year.
Given the level of capacity utilization, there appears to be no sign of
production bottlenecks that could push prices higher. Anecdotal evidence still
supports the assertion that corporations are reluctant to raise prices. The
report that the 1996 Federal budget deficit had shrunk to $107.3 billion_its
lowest level in two decades_provided another favorable sign for inflation. The
final reading of the 1996 deficit marks the fourth straight decline from fiscal
1992's record $290.4 billion.
Despite the relatively benign current environment for inflation, we are
alert for early signs of its potential resurgence. While wage increases so far
have remained modest, workers should eventually expect compensation that at
least matches their cost of living. Furthermore, we are mindful that price
increases in energy and food may not continue to be as restrained as they were
over the past four years.
MARKET ENVIRONMENT
Freed from inflation fears, the U.S. fixed income market has reflected
dramatically declining interest rates. From September 2 to October 31 the yield
on the ten-year Treasury Bill declined by 65 basis points. One of the more
technical aspects propelling interest rates to these low levels has been an
inflow of demand from foreign investors. In particular, Japanese investors have
more than doubled their investment in the U.S. bond markets over the last few
quarters of 1996. With the current Dollar/Yen exchange rates continuing to aid
this flow, we anticipate a continued
trend toward lower interest rates. Assuming that demand from overseas will
continue to push ten- and 30-year Treasury rates lower, it is our expectation
that the yield curve will also flatten. If, as seems likely, the Federal
Reserve remains on the sidelines for the rest of 1996, a reduction in interest
rate volatility may also decline.
This outlook of lower longer term interest rates and lower volatility
has strong implications for the mortgage securities market. Lower interest
rates would raise the level of mortgage refinancing activity by U.S.
homeowners. Homeowner loan refinancing is one of the primary contributors to
mortgage-backed securities prepayments. The early payment of loan principal
will impact the yield earned on a mortgage security. Hence it is our
expectation that the yield spread over Treasuries in the GNMA market will begin
to widen due to this added prepayment uncertainty.
THE PORTFOLIO
Applying our current economic outlook and market environment analysis
to managing the portfolio, at this time, we have made a number of adjustments
to the Fund. The most significant change was increasing the portfolio's
duration. This was accomplished by lowering the Fund's exposure to 30-year GNMA
7.0% securities issued in 1994 and 1993, while increasing our exposure to
30-year U.S. Treasury bonds. The duration of the Fund was increased to one
quarter of a year longer than the Salomon Brothers GNMA Index. This has had the
effect of lowering the percentage of GNMA securities in the Fund. If yield
spreads on GNMA securities begin to widen due to increased prepayment
uncertainty, we expect Treasuries to outperform mortgage securities during such
time.
Another significant change in the portfolio has been the addition of
GNMA II adjustable rate mortgage-backed securities, better known as ARMs. In
particular, the Fund now holds a 10% weighting in GNMA II 5.50% ARMs and a 3%
weighting in GNMA II 6.00% ARMs. The coupon on these discount dollar-priced
securities adjusts annually based on the level of the one-year,
constant-maturity Treasury note plus a 150 basis-point margin. For a
low-duration product, GNMA II ARMs offer a very attractive yield. Short
duration poses less interest rate risk to the investor. Additionally, GNMA
ARMs increase in value when interest rate volatility declines and the yield
curve flattens.
It is hoped that this strategy will result in strong total returns for
our shareholders. Of course, we will adjust the portfolio as circumstances
warrant.
Very truly yours,
[Garitt A. Kono signature logo]
Garitt A. Kono
Portfolio Manager
[Michael Hoeh signature logo]
Michael Hoeh
Portfolio Manager
November 22, 1996
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the net asset
value per share at the end of the period.
Dreyfus GNMA Fund, Inc.
Statement of Investments October 31, 1996 (Unaudited)
Principal
Bonds_105.7% Amount Value
_______________________ _____________ _____________
Mortgage-Backed Securities_102.2%
Government National Mortgage Association I:
7%, 6/15/2008-11/15/2024................... $ 162,210,231 $ 161,507,892
71/2%, 8/15/2000-8/15/2025................. 376,016,388 380,621,701
8%, 4/15/2017-2/15/2025.................... 213,111,793 219,860,356
81/2%, 2/15/2006-12/15/2022................ 82,516,670 86,185,984
9%, 7/15/2001-12/15/2022................... 76,047,051 81,210,018
91/2%, 1/15/2016-11/15/2024................ 56,619,385 61,471,256
10%, 11/15/2009-10/15/2020................. 36,127,412 39,864,070
101/2%, 11/15/2013-6/15/2021............... 26,628,577 29,649,057
11%, 7/15/1999-9/15/2019................... 37,660,582 42,106,118
111/2%, 3/15/2010-7/15/2019................ 15,082,889 17,071,232
12%, 2/15/2015............................. 38,382 43,827
______________
1,119,591,511
______________
Government National Mortgage Association II:
51/2% (a,b)................................ 146,739,566 145,407,171
6% (a,b)................................... 41,850,000 41,928,260
9%, 3/20/2016.............................. 2,271,419 2,411,952
91/2%, 2/20/2016-2/20/2025................. 7,899,538 8,488,787
101/2%, 7/20/2013-9/20/2018................ 4,793,226 5,226,103
12%, 9/20/2013-12/20/2015.................. 1,096,440 1,230,754
131/2%, 7/20/2014-6/20/2015................ 777,701 888,274
______________
205,581,301
______________
Government National Mortgage Association I,
Graduated Payment Mortgage:
101/4%, 7/15/2018-10/15/2018............... 239,705 264,498
103/4%, 3/15/2010-4/15/2016................ 649,836 718,881
11%, 9/15/2010-3/15/2011................... 378,852 416,025
111/4%, 7/15/2015-12/15/2015............... 1,393,644 1,540,408
121/4%, 2/15/2014-3/15/2015................ 68,770 76,979
______________
3,016,791
______________
Government National Mortgage Association II,
Graduated Payment Mortgage:
111/4%, 4/20/2014-1/20/2016................ 401,036 442,266
113/4%, 6/20/2015-1/20/2016................ 261,006 289,064
______________
731,330
______________
Government National Mortgage Association I,
Project Loan:
71/2%, 1/15/2030........................... 17,337,202 17,429,262
75/8%, 12/15/2030.......................... 7,467,700 7,539,987
8%, 1/15/2032.............................. 6,000,685 6,165,704
91/4%, 10/15/2023.......................... 6,939,600 7,408,023
______________
38,542,976
______________
Total Mortgage-Backed Securities............. 1,367,463,909
===============
Dreyfus GNMA Fund, Inc.
Statement of Investments (continued) October 31, 1996 (Unaudited)
Principal
Bonds (continued) Amount Value
_______________________ __________ __________
U.S. Treasury Bonds_3.5%
6%, 2/15/2026.............................. $ 51,000,000 $ 46,545,471
______________
TOTAL BONDS
(cost $1,384,539,515)...................... $1,414,009,380
===============
Short-Term Investment_4.0%
_______________________
Repurchase Agreement;
Lanston (Aubrey G.) & Co. Inc., 5.60%
dated 10/31/1996, due 11/1/1996 in the amount
of $54,408,462 (fully collateralized by
$56,438,000 U.S. Treasury Bills
due 4/24/1997, value $55,056,351)
(cost $54,400,000)......................... $ 54,400,000(c) $ 54,400,000
===============
TOTAL INVESTMENTS
(cost $1,438,939,515)...................... 109.7% $1,468,409,380
======= ===============
LIABILITIES, LESS CASH AND RECEIVABLES....... (9.7%) $ (130,248,669)
======= ===============
NET ASSETS................................... 100.0% $1,338,160,711
======= ===============
Notes to Statement of Investments:
(a) Purchased on a forward commitment basis.
(b) Adjustable rate mortgage-interest rate subject to change periodically.
(c) Held by the custodian in a segregated account as collateral for securities
purchased on a forward commitment basis.
See notes to financial statements.
<TABLE>
<CAPTION>
Dreyfus GNMA Fund, Inc.
Statement of Assets and Liabilities October 31, 1996 (Unaudited)
Cost Value
_______________ _____________
<S> <C> <C>
ASSETS: Investments in securities_See Statement of
Investments_Note 1(a, b).................................. $1,438,939,515 $1,468,409,380
Cash......................................................... 1,021,042
Receivable for investment securities sold.................... 49,478,015
Interest Receivable.......................................... 9,231,955
Receivable from subscriptions to Common Stock................ 50,676
Paydowns receivable.......................................... 16,015
Prepaid expenses............................................. 17,135
_____________
1,528,224,218
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates................ 1,052,698
Due to Distributor........................................... 28,050
Payable for investment securities purchased.................. 187,652,780
Payable for Common Stock redeemed............................ 989,582
Accrued expenses............................................. 340,397
_____________
190,063,507
_____________
NET ASSETS....................................................................... $1,338,160,711
===============
REPRESENTED BY: Paid-in capital.............................................. $1,393,582,407
Accumulated undistributed investment income_net............. 10,598,815
Accumulated net realized gain (loss) on investments.......... (95,490,376)
Accumulated net unrealized appreciation (depreciation)
on investments_Note 4..................................... 29,469,865
_____________
NET ASSETS....................................................................... $1,338,160,711
===============
SHARES OUTSTANDING
(1.1 billion shares of $.01 par value Common Stock authorized)................... 91,221,234
NET ASSET VALUE, offering and redemption price per share......................... $14.67
========
See notes to financial statements.
Dreyfus GNMA Fund, Inc.
Statement of Operations Six Months Ended October 31, 1996 (Unaudited)
INVESTMENT INCOME
INCOME
Interest Income......................................... $50,670,253
EXPENSES: Management fee_Note 3(a)............................... $ 4,062,252
Shareholder servicing costs_Note 3(b).................. 2,008,468
Custodian fees.......................................... 161,824
Professional fees....................................... 48,992
Directors' fees and expenses_Note 3(c)................. 27,493
Prospectus and shareholders' reports_Note 3(b)......... 18,931
Registration fees....................................... 14,798
Miscellaneous........................................... 156,081
____________
Total Expenses.................................... 6,498,839
____________
INVESTMENT INCOME_NET............................................... 44,171,414
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments................. $ (5,704,257)
Net unrealized appreciation (depreciation) on investments 20,969,292
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 15,265,035
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. $59,436,449
============
See notes to financial statements.
Dreyfus GNMA Fund, Inc.
Statement of Changes in Net Assets
Six Months Ended
October 31, 1996 Year Ended
(Unaudited) April 30, 1996
_____________ _____________
OPERATIONS:
Investment income_net...................................................... $ 44,171,414 $ 94,419,978
Net realized gain (loss) on investments..................................... (5,704,257) 37,350,721
Net unrealized appreciation (depreciation) on investments................... 20,969,292 (18,977,802)
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations........... 59,436,449 112,792,897
_____________ _____________
NET EQUALIZATION (DEBITS)_Note 1(e).......................................... (330,589) (542,312)
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net...................................................... (43,998,057) (94,057,379)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................... 32,347,034 94,687,640
Dividends reinvested........................................................ 33,598,346 71,629,184
Cost of shares redeemed..................................................... (116,510,654) (246,765,286)
_____________ _____________
Increase ( Decrease) in Net Assets from Capital Stock Transactions........ (50,565,274) (80,448,462)
_____________ _____________
Total Increase (Decrease) in Net Assets................................. (35,457,471) (62,255,256)
NET ASSETS:
Beginning of Period......................................................... 1,373,618,182 1,435,873,438
_____________ _____________
End of Period............................................................... $1,338,160,711 $1,373,618,182
============== ===============
Undistributed investment income_net.......................................... $ 10,598,815 $ 10,756,047
_____________ _____________
CAPITAL SHARE TRANSACTIONS: Shares Shares
_____________ _____________
Shares sold................................................................. 2,253,169 6,485,788
Shares issued for dividends reinvested...................................... 2,342,795 4,914,131
Shares redeemed............................................................. (8,119,612) (16,918,960)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding............................. (3,523,648) (5,519,041)
============== ===============
See notes to financial statements.
</TABLE>
Dreyfus GNMA Fund, Inc.
Financial Highlights
Contained below is per share operating performance data
for a share of Common Stock outstanding, total investment return,
ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the
Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended Year Ended April 30,
October 31, 1996 ___________________________________________________
PER SHARE DATA: (Unaudited) 1996 1995 1994 1993 1992
__________ _____ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $14.50 $14.32 $14.48 $15.35 $14.90 $14.74
_______ ______ ______ ______ ______ ______
Investment Operations:
Investment income_net.......................... .47 .96 .98 .99 1.10 1.20
Net realized and unrealized gain (loss)
on investments............................... .17 .18 (.18) (.87) .46 .17
_______ ______ ______ ______ ______ ______
Total from Investment Operations............... .64 1.14 .80 .12 1.56 1.37
_______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income_net........... (.47) (.96) (.96) (.99) (1.11) (1.21)
_______ ______ ______ ______ ______ ______
Net asset value, end of period.................. $14.67 $14.50 $14.32 $14.48 $15.35 $14.90
======== ======= ======= ====== ======= ======
TOTAL INVESTMENT RETURN......................... 9.01%(1) 8.11% 5.81% .71% 10.80% 9.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets....... .96%(1) .96% .97% .95% .94% .95%
Ratio of net investment income
to average net assets....................... 6.52%(1) 6.57% 6.90% 6.54% 7.20% 8.05%
Portfolio Turnover Rate....................... 50.10%(2) 144.43% 362.70% 211.40% 155.90% 61.00%
Net Assets, end of period (000's Omitted)......$1,338,161 $1,373,618 $1,435,873 $1,601,947 $1,857,468 $1,756,776
(1) Annualized.
(2) Not annualized.
</TABLE>
See notes to financial statements.
Dreyfus GNMA Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1_Significant Accounting Policies:
Dreyfus GNMA Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 ("Act") as a diversified open-end management investment
company. The Fund's investment objective is to provide an investor with as high
a level of current income as is consistent with the preservation of capital by
investing principally in instruments issued by the Government National Mortgage
Association. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon"). Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares, which are sold to the public without a sales
load.
The Fund's financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: The Fund's investments (excluding U.S.
Government obligations and short-term investments) are valued each business day
by an independent pricing service ("Service") approved by the Board of
Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the
Service from dealers in such securities) and asked prices (as calculated by the
Service based upon its evaluation of the market for such securities). Other
investments (which constitute a majority of the portfolio securities) are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of securities of comparable quality,
coupon, maturity and type; indications as to values from dealers; and general
market conditions. Investments in U.S. Government obligations are valued at the
mean between quoted bid and asked prices. Short-term investments are carried at
amortized cost, which approximates value.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income (including, where applicable, amortization of discount on short-term
investments) is recognized on the accrual basis.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant to
the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(c) Dividends to shareholders: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net are declared and paid
monthly. Dividends from net realized capital gain 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. To the
extent that net realized capital gain can be offset by capital loss carryovers,
it is the policy of the Fund not to distribute such gain.
Dreyfus GNMA Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
On October 31, 1996, the Board of Directors declared a cash dividend of
$.081 per share from undistributed investment income-net, payable on November
1, 1996 (ex-dividend date) to shareholders of record as of the close of
business on October 31, 1996.
(d) 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 Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise
taxes.
The Fund has an unused capital loss carryover of approximately
$89,768,000 available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to April 30, 1996.
If not applied, $20,521,000 of the carryover expires in fiscal 1998 and
$69,247,000 expires in fiscal 2003.
(e) Equalization: The Fund follows the accounting practice known as
"equalization" by which a portion of the amounts received on issuances and the
amounts paid on redemptions of Fund shares (equivalent, on a per share basis,
to the amount of distributable investment income-net on the date of the
transaction) is allocated to undistributed investment income-net so that
undistributed investment income-net per share is unaffected by Fund shares
issued or redeemed.
NOTE 2_Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100
million unsecured line of credit primarily to be utilized for temporary or
emergency purposes, including the financing of redemptions. Interest is charged
to the Fund at rates which are related to the Federal Funds rate in effect at
the time of borrowings. For the period ended October 31, 1996, the Fund did not
borrow under the line of credit.
NOTE 3_Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .60 of 1% of the value of
the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full year the aggregate expenses of the Fund, exclusive
of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed
11/2% of the average daily value of the Fund's net assets, the Fund may deduct
from payments to be made to the Manager, or the Manager will bear the amount of
such excess to the extent required by state law. No expense reimbursement was
required for the period ended October 31, 1996.
(b) Under the Service Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, the Fund (a) reimburses the Distributor for payments to certain
Service Agents (a securities dealer, financial institution or other industry
professional) for distributing the Fund's shares and servicing shareholder
accounts ("Servicing") and (b) pays the Manager, Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager, and any affiliate or either of them
(collectively "Dreyfus") for advertising and marketing relating to the Fund and
for Servicing, at an aggregate annual rate of .20 of 1% of the value of the
Fund's average daily net assets. Both the Distributor and Dreyfus may pay one
or more Service Agents a fee in respect of the Fund's shares owned by
shareholders with whom the Service Agent has a Servicing relationship or for
whom the Service Agent is the dealer or holder of record. Both the Distributor
and Dreyfus determine the amounts, if any, to be paid to Service Agents to
which it will make payments and the basis on which such payments are made. The
Plan also separately provides for the Fund to bear
Dreyfus GNMA Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
the costs of preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs associated with
implementing and operating the Plan, not to exceed the greater of $100,000 or
.005 of 1% of the value of the Fund's average daily net assets for any full
fiscal year. During the period ended October 31, 1996, $1,359,288 was charged
to the Fund pursuant to the Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary
of the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $420,036 during the period ended October 31, 1996.
Effective May 29, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. During the period ended
October 31, 1996, $130,469 was charged by Mellon pursuant to the custody
agreement.
(c) Each director who is not an "affiliated person" as defined in the
Act receives from the Fund an annual fee of $4,500 and an attendance fee of
$500 per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4_Securities Transactions:
The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the period ended
October 31, 1996, amounted to $737,763,031 and $661,107,676, respectively.
At October 31, 1996, accumulated net unrealized appreciation on
investments was $29,469,865, consisting of $35,260,915 gross unrealized
appreciation and $5,791,050 gross unrealized depreciation.
At October 31, 1996, 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).
[Dreyfus lion "d" logo]
Dreyfus GNMA Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 265SA9610
[Dreyfus logo]
GNMA
Fund, Inc.
Semi-Annual
Report
October 31, 1996
