Dreyfus
100% U.S. Treasury
Money Market Fund
ANNUAL REPORT December 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
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2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
7 Statement of Assets and Liabilities
8 Statement of Operations
9 Statement of Changes in Net Assets
10 Financial Highlights
11 Notes to Financial Statements
14 Report of Independent Auditors
15 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus 100% U.S. Treasury
Money Market Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus 100% U.S. Treasury
Money Market Fund, covering the 12-month period from January 1, 1999 through
December 31, 1999. Inside, you'll find valuable information about how the fund
was managed during the reporting period, including a discussion with the fund's
portfolio manager, Bernard W. Kiernan, Jr.
When the reporting period began, investors were concerned that global economic
weakness might cause a slowdown in the U.S. economy. As it turned out, these
fears were unfounded. In fact, it became apparent early in the year that
international and domestic economies were growing faster than analysts expected,
giving rise to concerns that long-dormant inflationary pressures might
re-emerge. Consumers continued to spend heavily, unemployment levels reached new
lows and the stock market continued to climb. Because unsustainable economic
growth may trigger unwanted inflationary pressures, the Federal Reserve Board
raised key short-term interest rates three times between June 30 and year-end in
an attempt to forestall an acceleration of inflation. In this environment,
yields on money market securities continued to rise.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus 100% U.S. Treasury Money Market Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
January 14, 2000
DISCUSSION OF FUND PERFORMANCE
Bernard W. Kiernan, Jr., Portfolio Manager
How did Dreyfus 100% U.S. Treasury Money Market Fund perform during the period?
For the 12-month period ended December 31, 1999, the fund produced a yield of
4.09% , which, taking into account the effect of compounding, created an
effective yield of 4.17%.(1)
What factors influenced the fund's performance?
As 1999 began the United States economy was marked by fears of an economic
slowdown, largely as a result of the Asian financial crisis. The Federal Reserve
Board, in an attempt to cushion the economy from negative overseas events, had
sharply lowered short-term interest rates. Global markets remained unsettled as
1999 began, but the general atmosphere of crisis lifted. As fears waned, the
focus of monetary policymakers shifted back to the domestic economy, and as the
economy showed no signs of slowing, the Fed began to voice concern over
inflationary pressures.
The performance of the U.S. economy in the first quarter of 1999 was much
stronger than expected. But while the Gross Domestic Product (GDP) grew at a
rate of 4.3%, inflation remained benign. Despite a tight labor market, there was
no evidence of advancing wage pressure. Many economic analysts believed that
advances in technology might make it possible for the economy to grow faster
than previously thought possible without igniting inflation. Notwithstanding
fears that imbalances might eventually derail the nine-year expansion, the U.S.
economy continued to grow as the Fed held steady on rates through the first
quarter of the year.
A surprisingly large jump in the Consumer Price Index in May pushed policymakers
closer to a rate hike. Although the Fed did not immediately raise interest
rates, it did announce a significant shift,
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
adopting a "bias" towards tightening -- that is, raising short-term rates. With
that shift in bias came a resulting shift in market psychology, as participants
began to anticipate higher rates.
That highly anticipated move came in June, when at its Open Market Committee
meeting, the Fed raised short-term rates by 0.25 percentage points. At the same
time, however, it announced that it was shifting its bias back to neutral --
indicating no intention of an immediate further rate increase. The market hoped
that this pre-emptive strike to head off the threat of inflation would signal an
end to Fed tightening.
Such hopes would be short-lived as strong economic growth along with anxiety
over rising wages and benefits renewed inflationary concern. At its August Open
Market Committee meeting, the Fed raised short-term interest rates by an
additional 0.25 percentage points, signaling its added resolve by also raising
the discount rate.
The economy continued to give mixed signals to the money market throughout the
third quarter. GDP growth accelerated back to a rapid 4.8%, but key indicators
of employment costs, job creation and inflation were at lower levels than would
be expected, given such strong economic expansion. These mixed indications led
the Fed to hold off on further tightening until November, when continued fear of
inflationary pressures caused it to increase short-term interest rates by
another 0.25 percentage points.
When the Fed took no action at its December meeting, many analysts considered it
to be an attempt to quiet markets that were concerned about potential Y2K
disruption. The Fed also added significant reserves to the banking system over
year-end to quell liquidity concerns, leading to temporary irregularities and
wide fluctuations in short-term interest rates. Despite the temporary drop in
rates over year-end due to the added reserves, many believe, now that Y2K issues
have been successfully navigated, that the issue of managing sustainable growth
should take center stage again.
What is the fund's current strategy?
In response to a market environment marked by rising interest rates, the fund
took on a somewhat defensive strategy. We took two steps to position the fund in
the current market: we shortened the fund's average maturity and increased cash.
Shorter maturities and a higher level of cash are designed to enable the fund to
take advantage of a possible further rise in interest rates.
January 14, 2000
(1) EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND REINVESTED
MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS FLUCTUATE.
AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER
GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
FUND.
The Fund
STATEMENT OF INVESTMENTS
December 31, 1999
<TABLE>
Annualized
Yield on
Date of Principal
U.S. TREASURY BILLS--30.5% Purchase (%) Amount ($) Value ($)
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<S> <C> <C> <C>
1/6/2000 4.54 3,215,000 3,213,056
1/13/2000 5.17 64,771,000 64,659,880
1/20/2000 5.25 197,664,000 197,120,646
2/3/2000 4.94 7,020,000 6,989,090
2/17/2000 4.83 16,041,000 15,940,476
3/2/2000 4.69 13,818,000 13,712,984
3/30/2000 4.62 6,062,000 5,995,863
4/27/2000 4.76 11,272,000 11,105,352
5/25/2000 5.06 2,734,000 2,680,915
6/8/2000 5.51 4,328,000 4,225,255
6/22/2000 5.32 11,580,000 11,293,875
TOTAL U.S. TREASURY BILLS
(cost $336,937,392) 336,937,392
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U.S. TREASURY NOTES--67.8%
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7.75%, 1/31/2000 5.10 150,000,000 150,294,566
8.50%, 2/15/2000 5.01 40,000,000 40,159,477
5.50%, 2/29/2000 5.15 113,415,000 113,465,280
7.125%, 2/29/2000 5.11 150,000,000 150,439,689
6.875%, 3/31/2000 4.80 50,000,000 50,233,414
5.50%, 4/15/2000 4.70 25,000,000 25,043,353
5.625%, 4/30/2000 5.44 100,000,000 100,024,498
6.75%, 4/30/2000 5.46 100,000,000 100,371,606
5.375%, 6/30/2000 5.15 20,000,000 20,005,985
TOTAL U.S. TREASURY NOTES
(cost $750,037,868) 750,037,868
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TOTAL INVESTMENTS (cost $1,086,975,260) 98.3% 1,086,975,260
CASH AND RECEIVABLES (NET) 1.7% 19,152,864
NET ASSETS 100.0% 1,106,128,124
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
Cost Value
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ASSETS ($):
Investments in securities--See Statement of
Investments 1,086,975,260 1,086,975,260
Cash 4,448,531
Interest receivable 15,140,105
Prepaid expenses 50,678
1,106,614,574
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 402,887
Accrued expenses 83,563
486,450
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NET ASSETS ($) 1,106,128,124
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 1,106,535,292
Accumulated net realized gain (loss) on investments (407,168)
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NET ASSETS ($) 1,106,128,124
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SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
1,106,246,518
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
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INVESTMENT INCOME ($):
INTEREST INCOME 52,649,096
EXPENSES:
Management fee--Note 2(a) 5,474,734
Shareholder servicing costs--Note 2(b) 1,965,774
Custodian fees 83,288
Registration fees 82,229
Trustees' fees and expenses--Note 2(c) 74,310
Prospectus and shareholders' reports 68,119
Professional fees 41,067
Miscellaneous 14,377
TOTAL EXPENSES 7,803,898
INVESTMENT INCOME--NET 44,845,198
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NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($): (61,191)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 44,784,007
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended December 31,
----------------------------
1999 1998
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OPERATIONS ($):
Investment income--net 44,845,198 49,685,105
Net realized gain (loss) from investments (61,191) (153,399)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 44,784,007 49,531,706
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DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (44,845,198) (49,685,105)
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BENEFICIAL INTEREST TRANSACTIONS ($1.00 PER SHARE):
Net proceeds from shares sold 1,066,213,178 1,045,848,980
Dividends reinvested 42,769,116 47,140,240
Cost of shares redeemed (1,145,375,828) (1,154,200,701)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (36,393,534) (61,211,481)
TOTAL INCREASE (DECREASE) IN NET ASSETS (36,454,725) (61,364,880)
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NET ASSETS ($):
Beginning of period 1,142,582,849 1,203,947,729
END OF PERIOD 1,106,128,124 1,142,582,849
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
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. These figures have been derived from the fund's financial
statements.
<TABLE>
Year Ended December 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .041 .045 .046 .046 .051
Distributions:
Dividends from investment income--net (.041) (.045) (.046) (.046) (.051)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
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TOTAL RETURN (%) 4.17 4.55 4.74 4.67 5.19
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .71 .75 .71 .73 .69
Ratio of net investment income
to average net assets 4.10 4.46 4.64 4.55 5.09
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Net Assets, end of period ($ x 1,000) 1,106,128 1,142,583 1,203,948 1,286,854 1,310,691
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus 100% U.S. Treasury Money Market Fund (the "fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The fund's investment objective is to
provide investors with as high a level of current income as is consistent with
the preservation of capital and the maintenance of liquidity by investing in
obligations of the U.S. Treasury that provide interest income exempt from state
and local income taxes. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A, which is a wholly-owned subsidiary of Mellon Financial Corporation. Premier
Mutual Fund Services, Inc. is the distributor of the fund's shares, which are
sold to the public without a sales charge.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00; the fund has adopted certain investment, portfolio valuation and dividend
and distribution policies to enable it to do so. There is no assurance, however,
that the fund will be able to maintain a stable net asset value per share of
$1.00.
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: Investments in securities are valued at amortized cost,
which has been determined by the fund's Board of Trustees to represent the fair
value of the fund's investments.
(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 is
recognized on the accrual basis. Cost of investments represents amortized cost.
Under the terms of the custody agreement, the fund receives net earnings credits
based on available cash balances left on deposit.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain, 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 the net realized capital gain can be offset by
capital loss carryovers, it is the policy of the fund not to distribute such
gain.
(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 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 $403,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1999. This
amount is calculated based on Federal income tax regulations which may differ
from financial reporting in accordance with generally accepted accounting
principles. If not applied, $13,000 of the carryover expires in fiscal 2003,
$153,000 expires in fiscal 2004, $23,000 expires in fiscal 2005, $75,000 expires
in fiscal 2006 and $139,000 expires in fiscal 2007.
At December 31, 1999, 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).
NOTE 2--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .50 of 1% of the value of the fund's average
daily net assets and is payable monthly.
(B) Under the Shareholder Services Plan, the fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiaryof the Manager, an amount not to
exceed an annual rate of .25 of 1% of the value of the fund's average daily net
assets for certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. During the period
ended December 31, 1999, the fund was charged $1,368,871 pursuant to the
Shareholder Services 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. During the period
ended December 31, 1999, the fund was charged $417,652 pursuant to the transfer
agency agreement.
(C) Each trustee 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 and the Trustee Emeritus receives 50% of such compensation.
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus 100% U.S. Treasury Money Market Fund
We have audited the accompanying statement of assets and liabilities of Dreyfus
100% U.S. Treasury Money Market Fund, including the statement of investments, as
of December 31, 1999, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the years indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund' s management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of December 31, 1999 by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus 100% U.S. Treasury Money Market Fund at December 31, 1999, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights for
each of the indicated years, in conformity with accounting principles generally
accepted in the United States.
[Ernst and Young LLP signatgure logo]
New York, New York
February 4, 2000
IMPORTANT TAX INFORMATION (Unaudited)
For State individual income tax purposes, the fund hereby designates 100% of the
ordinary income dividends paid during its fiscal year ended December 31, 1999 as
attributable to interest income from direct obligations of the United States.
Such dividends are currently exempt from taxation for individual income tax
purposes in most states, including New York, California and the District of
Columbia.
The Fund
NOTES
For More Information
Dreyfus 100% U.S. Treasury
Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 071AR9912
