100% U.S. Treasury
Long Term Fund
Semi-Annual
Report
June 30, 1997
Dreyfus 100% U.S. Treasury Long Term Fund
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus 100% U.S.
Treasury Long Term Fund. For its semi-annual reporting period ended June 30,
1997, your Fund produced a total return of 10%, which reflects the change in the
Fund's share price and dividends paid by the Fund during the period.* Income
dividends of approximately $ .488 per share were paid during the six-month
period, which is equivalent to an annualized distribution rate per share of
6.96%.**
Economy
Despite recent moderation in the rate of new job creation, the latest
reported unemployment rate was 5% in June. When the unemployment rate was last
at that level, the inflation rate was heading toward double-digit territory.
Now, inflation appears to be subdued; the Consumer Price Index rose at an annual
rate of just 1.4% for the 12-month period through May. Producer prices have
risen a minuscule 0.6% over the same time. It has been unprecedented for the
economy to have seven years of expansion, low unemployment and low inflation at
the same time.
Ever alert for signs of incipient inflation, the Federal Open Market
Committee, the policy-making arm of the Federal Reserve Board, has raised
interest rates just once in more than two years. That hike came in March 1997
when the Federal Funds rate was increased by one quarter of a percentage point
to 5.50%. (The Federal Funds rate is the rate of interest that banks charge one
another for overnight loans.) While there have been some signs that wages are
increasing (an area of particular concern to the Federal Reserve), there have
also been indications that the economy may be slowing from its torrid first
quarter pace when it surged at a 5.9% annual rate, the biggest advance since the
fourth quarter of 1987.
Indicating possible moderation in the rate of economic growth, retail sales
have been in decline all spring despite record levels of consumer optimism about
the economy. The latest report on retail sales for March, April, and May showed
a decline at an annual rate of 5% over the previous three months. This marked
the first three-month decline since the fall of 1981. Yet, despite their
sluggish spending at checkout counters, consumers' confidence in the economy
continues to climb, heavily influenced by increased job security and low
inflation.
Throughout the seven-year economic expansion, the pattern of consumer
spending has been stop-and-go, alternating between spurts of spending and
retrenchment. The 5% decline in retail sales for the three months through May
was preceded by a 15% advance over the previous three-month period. On the
production side of the economy, a survey of corporate buyers compiled by the
National Association of Purchasing Management reported that growth in factory
activity eased slightly during June. The much-observed supplier-delivery
component of the survey, a measure of how quickly orders are being satisfied and
a possible sign of production bottlenecks, also fell modestly. In further
evidence of a slowing economy during the second quarter, the Commerce Department
recently reported that factory orders fell in May.
Rising incomes, low unemployment and quiescent inflation have all contributed
to a feeling of confidence, as measured by the Conference Board's Index of
Consumer Sentiment, that has been unmatched for 28 years. Many economists feel
that the optimistic consumer sentiment indicators provide a floor to economic
growth and will spur consumer spending later in the year, particularly if the
unemployment rate remains low and job security worries recede further. We are
mindful of the potent role that consumers play in the economy -- their spending
accounts for about two thirds of economic output. So we remain alert to signs of
any strain on productive capacity caused by increases in consumer spending that
might, in turn, lead to another tightening in monetary policy by the Federal
Reserve.
Market Environment
At the close of the reporting period, a number of political and technical
factors in the bond market appeared to be quite positive. A balanced budget
amendment looks like an achievable goal. Interest rates in the U.S are currently
higher than in most other developed countries, making our rates attractive
globally, and the dollar continues to remain strong. Last, commodity prices have
been drifting lower.
At the consumer level, the rate outlook has been positive too. Bank lending
criteria, especially in the credit card arena, have become more stringent. The
primary reason for that is the continued rise of consumer delinquencies. Retail
sales have been sluggish, and car sales have also turned sluggish. As just one
example, some of the hottest selling vehicles last year now must offer
incentives to find buyers. Further, some manufacturers are offering financing at
0% interest for two years.
Portfolio Overview
Currently, the maturity of the Fund is at a 19.88 year weighted average life,
with an effective duration of 9.697 years. During the reporting period, we
extended maturity of the fund by moving into the 30-year bonds. The Fund
benefited from this allocation in two ways: the declining rate environment, and
also the flatter curve structure (long maturities outperformed short ones).
Two factors that we feel could change our allocation are consumer behavior
and foreign economies. If consumer spending were to increase significantly or
foreign economies were to appear much stronger, we would seriously consider
readjusting our outlook and strategy. As always, we will be monitoring these
factors, as well as numerous other indicators.
Sincerely,
[GRAPHIC OMITTED]
Gerald E. Thunelius
Portfolio Manager
July 17, 1997 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.
<TABLE>
Dreyfus 100% U.S. Treasury Long Term Fund
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Statement of Investments June 30, 1997 (Unaudited)
Principal
Bonds and Notes--98.0% Amount Value
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Bonds--80.1%
11 3/4%, 2/15/2001........................................................ $ 5,000,000 $ 5,875,781
13 3/4%, 8/15/2004........................................................ 4,950,000 6,974,859
13 7/8%, 5/15/2011........................................................ 14,000,000 20,720,000
11 1/4%, 2/15/2015........................................................ 20,400,000 29,669,250
6 5/8%, 2/15/2027......................................................... 36,500,000 35,764,299
-------------
99,004,189
-------------
U.S. Treasury Inflation Protection Securities--2.0%
3 3/8%, 1/15/2007......................................................... 2,500,000 (a) 2,468,998
-------------
U.S. Treasury Notes--15.9%
9 1/8%, 5/15/1999......................................................... 1,975,000 2,080,231
6 1/2%, 5/31/2002......................................................... 17,500,000 17,579,298
-------------
19,659,529
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TOTAL BONDS AND NOTES
(cost $120,780,721)....................................................... $121,132,716
=============
Short-Term Investments--.1%
- ----------------------------------------------------------------------------------------------------
U.S. Treasury Bills;
5.10%, 9/18/97
(cost $197,762)........................................................... $ 200,000 $ 197,772
=============
TOTAL INVESTMENTS
(cost $120,978,483)....................................................... 98.1% $121,330,488
======= =============
CASH AND RECEIVABLES (NET)................................................... 1.9% $ 2,305,618
======= =============
NET ASSETS................................................................... 100.0% $123,636,106
======= =============
Notes to Statement of Investments:
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(a) Interest rate changes based on principal adjustments linked to changes in
the Consumer Price Index.
See notes to financial statements.
</TABLE>
<TABLE>
Dreyfus 100% U.S. Treasury Long Term Fund
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Statement of Assets and Liabilities June 30, 1997 (Unaudited)
<S> <C> <C>
Cost Value
------------- -------------
ASSETS: Investments in securities--See Statement of Investments $120,978,483 $121,330,488
Cash................................................... 60,689
Interest receivable.................................... 2,647,571
Receivable for shares of Beneficial Interest subscribed 21,339
Prepaid expenses and other assets...................... 18,202
--------------
124,078,289
--------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.......... 39,080
Payable for shares of Beneficial Interest redeemed..... 372,004
Accrued expenses....................................... 31,099
--------------
442,183
--------------
NET ASSETS ................................................................... $123,636,106
==============
REPRESENTED BY: Paid-in capital........................................ $144,653,230
Accumulated net realized gain (loss) on investments.... (21,369,129)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 ................................ 352,005
--------------
NET ASSETS ................................................................... $123,636,106
==============
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized). 8,749,560
NET ASSET VALUE, offering and redemption price per share....................... $14.13
=======
See notes to financial statements.
</TABLE>
<TABLE>
Dreyfus 100% U.S. Treasury Long Term Fund
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Statement of Operations Six Months Ended June 30, 1997 (Unaudited)
<S> <C> <C>
INVESTMENT INCOME
INCOME Interest Income........................................ $4,920,451
EXPENSES: Management fee--Note 3(a)............................... $ 381,969
Shareholder servicing costs--Note 3(b).................. 214,214
Registration fees...................................... 25,428
Professional fees...................................... 20,728
Trustees' fees and expenses--Note 3(c)................. 19,561
Custodian fees--Note 3(b)............................... 8,454
Prospectus and shareholders' reports.................. 5,156
Loan commitment fees--Note 2............................ 839
Miscellaneous.......................................... 4,786
------------
Total Expenses................................... 681,135
Less--reduction in management fee due
to undertaking--Note 3(a)............................ (171,843)
------------
Net Expenses..................................... 509,292
------------
INVESTMENT INCOME--NET.......................................................... 4,411,159
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments................ $(5,530,892)
Net unrealized appreciation (depreciation) on investments 1,144,283
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... (4,386,609)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $ 24,550
============
See notes to financial statements.
</TABLE>
<TABLE>
Dreyfus 100% U.S. Treasury Long Term Fund
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Statement of Changes in Net Assets
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
---------------- ------------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................ $4,411,159 $ 9,186,815
Net realized gain (loss) on investments.............................. (5,530,892) (4,046,518)
Net unrealized appreciation (depreciation) on investments............ 1,144,283 (4,328,970)
---------------- -----------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 24,550 811,327
---------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net................................................ (4,411,159) (9,238,211)
---------------- -----------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................ 37,964,850 44,268,429
Dividends reinvested................................................. 2,659,698 5,804,264
Cost of shares redeemed.............................................. (47,970,038) (52,722,888)
---------------- -----------------
Increase (Decrease) in Net Assets from Beneficial Interest
Transactions (7,345,490) (2,650,195)
---------------- -----------------
Total Increase (Decrease) in Net Assets........................ (11,732,099) (11,077,079)
NET ASSETS:
Beginning of Period.................................................. 135,368,205 146,445,284
---------------- -----------------
End of Period........................................................ $123,636,106 $135,368,205
================ =================
Shares Shares
---------------- -----------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................................................... 2,671,603 3,020,450
Shares issued for dividends reinvested............................... 188,053 398,509
Shares redeemed...................................................... (3,373,059) (3,600,328)
---------------- -----------------
Net Increase (Decrease) in Shares Outstanding.................... (513,403) (181,369)
================ =================
See notes to financial statements.
</TABLE>
<TABLE>
Dreyfus 100% U.S. Treasury Long Term Fund
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Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest 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.
Six Months Ended Year Ended December 31,
June 30, 1997 ______________________________________________________
PER SHARE DATA: (Unaudited) 1996 1995 1994 1993 1992
---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.61 $15.51 $13.26 $15.68 $14.37 $14.42
------- ------- ------- ------- ------- -------
Investment Operations:
Investment Income--net............... .49 .98 .96 1.01 1.03 1.08
Net realized and unrealized gain (loss)
on investments.................... (.48) (.89) 2.25 (2.42) 1.31 (.05)
------- ------- ------- ------- ------- -------
Total from Investment Operations.... .01 .09 3.21 (1.41) 2.34 1.03
------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment income--net (.49) (.99) (.96) (1.01) (1.03) (1.08)
------- ------- ------- ------- ------- -------
Net asset value, end of period...... $14.13 $14.61 $15.51 $13.26 $15.68 $14.37
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN................ .20%(1) .87% 24.91% (9.18%) 16.59% 7.55%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .80%(1) .80% .87% .98% .78% .56%
Ratio of net investment income
to average net assets............. 6.93%(1) 6.74% 6.69% 7.08% 6.65% 7.63%
Decrease reflected in above expense ratios
due to undertakings by the Manager .27%(1) .19% .05% -- .09% .39%
Portfolio Turnover Rate............. 516.45%(2) 765.13% 634.38% 1,213.04% 420.68% 97.46%
Net Assets, end of period (000's Omitted) $123,636 $135,368 $146,445 $123,403 $215,157 $238,839
- ----------------
(1)Annualized.
(2)Not annualized.
See notes to financial statements.
</TABLE>
Dreyfus 100% U.S. Treasury Long Term Fund
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NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus 100% U.S. Treasury Long Term Fund (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 investors with
as high a level of current income as is consistent with the preservation of
capital. 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. is the distributor of the Fund's shares,
which are sold to the public without a sales charge.
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 the mean
between the quoted bid and asked prices.
(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
investments, is recognized on the accrual basis.
(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. 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.
(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 $15,838,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1996. If not
applied, $11,792,000 of the carryover expires in fiscal 2002 and $4,046,000
expires in fiscal 2004.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended June 30,
1997, the Fund did not borrow under the Facility.
NOTE 3--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 .60 of 1% of the value of the Fund's average
daily net assets and is payable monthly. The Manager has undertaken from January
1, 1997 through December 31, 1997 to reduce the management fee paid by the Fund,
to the extent that the Fund's aggregate annual expenses (exclusive of taxes,
brokerage, interest on borrowings, commitment fees and
Dreyfus 100% U.S. Treasury Long Term Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
extraordinary expenses) exceed an annual rate of .80 of 1% of the value of the
Fund's average daily net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $171,843 during the period ended June 30, 1997.
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of 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 June 30, 1997, the Fund was charged an aggregate of $159,678 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. Such compensation
amounted to $40,239 during the period ended June 30, 1997.
The Fund compensates Mellon under a custody agreement to provide custodial
services for the Fund. During the period ended June 30, 1997, $8,454 was charged
by Mellon pursuant to the custody agreement.
(c) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Trustee Emeritus receives 50% of such compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended June 30, 1997, amounted
to $716,443,017 and $734,795,922, respectively.
At June 30, 1997, accumulated net unrealized appreciation on investments
was $352,005, consisting of $720,477 gross unrealized appreciation and $368,472
gross unrealized depreciation.
At June 30, 1997, 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 100% U.S. Treasury
Long Term Fund
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. 073SA976
