Dreyfus Premier Real Estate Mortgage Fund
Investing in real estate and mortgage-related debt and equity securities for
maximum total return
PROSPECTUS March 1, 1999
Revised June 15, 1999
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
The Fund
Dreyfus Premier Real Estate Mortgage Fund
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Ticker Symbols CLASS A: DREMX
CLASS B: N/A
CLASS C: N/A
CLASS R: N/A
CLASS T: N/A
Contents
The Fund
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Goal/Approach INSIDE COVER
Main Risks 1
Past Performance 1
Expenses 2
Management 3
Financial Highlights 4
Your Investment
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Account Policies 5
Distributions and Taxes 7
Services for Fund Investors 8
Instructions for Regular Accounts 9
Instructions for IRAs 10
For More Information
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INFORMATION ON THE FUND'S RECENT STRATEGIES AND HOLDINGS CAN BE FOUND IN THE
CURRENT ANNUAL/SEMIANNUAL REPORT. SEE BACK COVER.
GOAL/APPROACH
The fund seeks to maximize total return, consisting of capital appreciation and
current income. To pursue this goal, it invests at least 65% of total assets in
mortgage-related securities, which include commercial mortgage-backed
securities; the common stock, preferred stock and debt issued by real estate
investment trusts ("REITs"); mortgage pass-through securities issued and/or
guaranteed by U.S. government agencies or instrumentalities, including Ginnie
Maes, Fannie Maes, and Freddie Macs, and collateralized mortgage obligations
("CMOs"), including residential and commercial mortgage-backed securities. The
fund also may invest in asset-backed securities, U.S. Treasury securities, zero
coupon bonds, other corporate debt securities, and the stock of companies that
invest or deal in real estate.
The effective duration of the fund's fixed-income securities typically ranges
from two to six years. The fund typically maintains a portfolio with an
"investment grade" average credit quality (at least BBB/Baa), although the fund
may invest significantly in individual securities of below investment grade
credit quality ("high yield" or "junk" bonds).
The fund has the flexibility to shift among fixed-income and equity investments,
based on an analysis of the long-term real estate environment, and interest rate
and prepayment scenarios. The manager uses a value approach to selecting REITs
and generally seeks to invest across geographic areas and industry sectors.
The fund is non-diversified, which means that a relatively high percentage of
its assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
Concepts to understand
MORTGAGE PASS-THROUGH SECURITIES: pools of residential mortgages with cash flows
"passed through" to the holders of the securities via monthly payments of
interest and principal. CMOS: multi-class bonds backed by pools of mortgage
pass-through securities or mortgage loans; either residential or commercial.
CMOs may be issued by U.S. government agencies or by private entities.
COMMERCIAL MORTGAGE-BACKED SECURITIES: a CMO backed by loans on apartment
buildings, office buildings or shopping centers. REITS: pooled investment
vehicles that invest directly in real estate, mortgages and loans.
<PAGE>
MAIN RISKS
The fund carries the risks generally associated with real estate investments,
such as potential declines in the value of real estate, variations in rental
incomes, risks related to economic conditions, overbuilding and competition,
increases in property taxes, changes in zoning laws, occupancy rates, interest
rates, and liquidity in the market. These factors mainly will affect the fund's
equity and privately issued fixed-income holdings. The value of your investment
in the fund could go up and down, which means that you could lose money.
High yield bonds involve greater credit risk than investment grade bonds. They
tend to be more volatile in price and less liquid, and are considered
speculative. Their prices can fall in response to bad news about the issuer, the
issuer's industry, or the economy in general.
If the market for privately issued securities in which the fund invests becomes
"illiquid," typically when there are many more sellers than buyers for the
securities, the value of those securities, and the fund's share price, may fall
dramatically.
While prices of fixed-income securities tend to move inversely with interest
rate changes, mortgage securities can have a different interest rate sensitivity
than other bonds, because of prepayments and other factors. For example, when
interest rates fall, pass-through securities may be paid off earlier than
expected, and the fund may reinvest those assets at lower rates. This factor
lessens price-appreciation potential from interest rate declines. When rates
rise, prices may decline less, given their generally higher coupon.
While the principal and interest payments of some of the fund's securities may
be guaranteed by the U.S. government or its agencies or instrumentalities, this
guarantee does not apply to their market value or the fund's share price.
Other potential risks
Most mortgage and asset-backed securities are a form of derivative. The fund
also may use futures and options, which are derivatives. Derivatives can be
illiquid and highly sensitive to changes in their underlying instrument, and as
a result can be highly volatile. The fund may purchase pass-throughs on a
forward commitment basis, which can enhance volatility. Because the fund's
assets are mainly invested in one area of economic activity, its performance may
be more volatile than a diversified fund.
PAST PERFORMANCE
The tables below show some of the risks of investing in the fund. The first
table shows the fund's Class A performance for the calendar year 1998. The
performance figures do not reflect sales loads, and would be lower if they did.
The second table compares the performance of Class A shares during that time to
that of the Lehman Brothers Aggregate and Standard & Poor's Composite REIT
indexes. These returns include applicable sales loads and the reinvestment of
dividends. Of course, past performance is no guarantee of future results.
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Year-by-year total return AS OF 12/31 EACH YEAR (%)
CLASS A SHARES
[Exhibit A]
BEST QUARTER: Q2 '98 +3.79%
WORST QUARTER: Q4 '98 -6.07%
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<TABLE>
<CAPTION>
Average annual total return AS OF 12/31/98
Inception date 1 Year Since inception
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<S> <C> <C> <C>
CLASS A (9/30/97) -4.56% 0.40%
LEHMAN BROTHERS AGGREGATE
BOND INDEX 8.69% 9.40%*
STANDARD & POOR'S
COMPOSITE REIT INDEX -19.90% -15.45%*
</TABLE>
* FOR COMPARATIVE PURPOSES, THE VALUE OF EACH INDEX ON 9/30/97 IS USED AS THE
BEGINNING VALUE. THE LEHMAN INDEX IS A LEADING MEASURE OF OVERALL BOND MARKET
PERFORMANCE. THE S&P INDEX IS A CAPITALIZATION-WEIGHTED INDEX OF THE 100 LARGEST
REITS. THE FUND'S CLASS B, C, R AND T SHARES WERE NOT OFFERED TO THE PUBLIC
UNTIL DECEMBER 28, 1998.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
The Fund 1
<PAGE 1>
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the tables below.
<TABLE>
<CAPTION>
Fee table
CLASS A CLASS B CLASS C CLASS R CLASS T
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SHAREHOLDER TRANSACTION FEES (FEES PAID FROM YOUR ACCOUNT)
Maximum front-end sales charge on purchases
<S> <C> <C> <C> <C> <C>
AS A % OF OFFERING PRICE 5.75 NONE NONE NONE 4.50
Maximum contingent deferred sales charge (CDSC)
AS A % OF PURCHASE OR SALE PRICE, WHICHEVER IS LESS NONE* 4.00 1.00 NONE NONE*
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ANNUAL FUND OPERATING EXPENSES (EXPENSES PAID FROM FUND ASSETS)
% OF AVERAGE DAILY NET ASSETS
Management fees .65 .65 .65 .65 .65
Rule 12b-1 fees NONE .75 .75 NONE .25
Shareholder services fee .25 .25 .25 NONE .25
Other expenses .71 .71 .71 .71 .71
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TOTAL ANNUAL FUND OPERATING EXPENSES 1.61 2.36 2.36 1.36 1.86
Fee waiver and/or expense reimbursements (.71) (.71) (.71) (.71) (.71)
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NET OPERATING EXPENSES** .90 1.65 1.65 .65 1.15
</TABLE>
* SHARES BOUGHT WITHOUT AN INITIAL SALES CHARGE AS PART OF AN INVESTMENT OF $1
MILLION OR MORE MAY BE CHARGED A CDSC OF 1.00% IF REDEEMED WITHIN ONE YEAR.
** THE DREYFUS CORPORATION HAS AGREED, UNTIL OCTOBER 31, 1999, TO WAIVE RECEIPT
OF ITS FEES AND/OR ASSUME THE EXPENSES OF THE FUND SO THAT FUND EXPENSES
(EXCLUDING TAXES, BROKERAGE COMMISSIONS, EXTRAORDINARY EXPENSES, INTEREST
EXPENSES, COMMITMENT FEES ON OFFERINGS, SHAREHOLDER SERVICES FEES AND RULE 12B-1
FEES) DO NOT EXCEED .65%.
<TABLE>
<CAPTION>
Expense example
1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
CLASS A $662 $1,054 $1,401 $2,376
CLASS B
WITH REDEMPTION $568 $1,036 $1,460 $2,338***
WITHOUT REDEMPTION $168 $736 $1,260 $2,338***
CLASS C
WITH REDEMPTION $268 $736 $1,260 $2,696
WITHOUT REDEMPTION $168 $736 $1,260 $2,696
CLASS R $66 $431 $745 $1,635
CLASS T $592 $1,008 $1,411 $2,532
</TABLE>
*** ASSUMES CONVERSION OF CLASS B TO CLASS A AT END OF THE SIXTH YEAR FOLLOWING
THE DATE OF PURCHASE.
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. Because actual
return and expenses will be different, the example is for comparison only. The
one-year number is based on net operating expenses. The longer-term numbers are
based on total fund operating expenses.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of its operation.
RULE 12B-1 FEE: the fee paid to Premier Mutual Fund Services, Inc., the fund's
distributor, to finance the sale and distribution of Class B and Class C shares,
and to compensate it for the sale of Class T shares. Because this fee is paid
out of the fund's assets on an ongoing basis, over time it will increase the
cost of your investment and may cost you more than paying other types of sales
charges.
SHAREHOLDER SERVICES FEE: a fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees. These fees are based on
estimated amounts for Classes B, C, R and T.
2
<PAGE 2>
MANAGEMENT
The investment adviser for the fund is The Dreyfus Corporation, 200 Park Avenue,
New York, New York 10166. Founded in 1947, Dreyfus manages more than $120
billion in over 160 mutual fund portfolios. The fund pays Dreyfus an annual
management fee of 0.65% of the fund's average net assets. For the fiscal year
ended October 31, 1998, Dreyfus waived or reimbursed a portion of its management
fee so that the net fee paid by the fund was 0.00%. Dreyfus is the primary
mutual fund business of Mellon Bank Corporation, a broad-based financial
services company with a bank at its core. With more than $389 billion of assets
under management and $1.9 trillion of assets under administration and custody,
Mellon provides a full range of banking, investment and trust products and
services to individuals, businesses and institutions. Mellon is headquartered in
Pittsburgh, Pennsylvania.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, Dreyfus
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
with a distinct, stable identity.
The fund's primary portfolio manager is Michael Hoeh. He has held that position
since the fund's inception and has been employed by Dreyfus since October 1996.
Prior to joining Dreyfus, Mr. Hoeh was vice president of portfolio management at
ARM Capital Advisors, Inc. From 1993 to 1994, Mr. Hoeh was vice president in the
risk management division of Blackrock Financial Management, where he was
employed since January 1992.
Dreyfus has a personal securities trading policy (the "Policy") which restricts
the personal securities transactions of its employees. Its primary purpose is to
ensure that personal trading by Dreyfus employees does not disadvantage any
Dreyfus-managed fund. Dreyfus portfolio managers and other investment personnel
who comply with the Policy's preclearance and disclosure procedures may be
permitted to purchase, sell or hold certain types of securities which also may
be or are held in the fund(s) they advise.
Concepts to understand
YEAR 2000 ISSUES: 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 is working to avoid year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. 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.
The Fund 3
<PAGE 3>
FINANCIAL HIGHLIGHTS
The following table describes the performance of the fund's Class A shares for
the fiscal periods indicated. No information is provided for the fund's other
share classes, which were first offered to the public on December 28, 1998.
"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 independently audited by Ernst & Young
LLP, whose report, along with the fund's financial statements, is included in
the annual report.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CLASS A 1998 1997(1)
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PER-SHARE DATA ($)
<S> <C> <C>
Net asset value, beginning of period 12.69 12.50
Investment operations: Investment income -- net 1.03 .06
Net realized and unrealized gain (loss) on investments (.52) .13
Total from investment operations .51 .19
Distributions: Dividends from investment income -- net (.96) --
Dividends from net realized gain on investments (.15) --
Total distributions (1.11) --
Net asset value, end of period 12.09 12.69
Total return (%) 3.82 17.34(2,3)
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RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .90 .90(3)
Ratio of interest expense to average net assets (%) 1.66 --
Ratio of net investment income to average net assets (%) 8.13 5.39(3)
Decrease reflected in above expense ratios due to actions by the manager (%)
.71 2.77(3)
Portfolio turnover rate (%) 752.42 244.61(4)
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Net assets, end of period ($ x 1,000) 12,907 10,396
</TABLE>
(1) FROM SEPTEMBER 30, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1997.
(2) EXCLUSIVE OF REDEMPTION FEE.
(3) ANNUALIZED.
(4) NOT ANNUALIZED.
4
<PAGE 4>
Your Investment
ACCOUNT POLICIES
THE DREYFUS PREMIER FUNDS are designed primarily for people who are investing
through a third party, such as a bank, broker-dealer or financial adviser, or in
a 401(k) or other retirement plan. Third parties with whom you open a fund
account may impose policies, limitations and fees which are different from
those described here.
YOU WILL NEED TO CHOOSE A SHARE CLASS before making your initial investment. In
making your choice, you should weigh the impact of all potential costs over the
length of your investment, including sales charges and annual fees. For example,
in some cases, it can be more economical to pay an initial sales charge than to
choose a class with no initial sales charge but higher annual fees and a CDSC.
* CLASS A shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares, want to
take advantage of the reduced sales charges available on larger investments
and/or have a longer-term investment horizon
* CLASS B shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work immediately
and/or have a longer-term investment horizon
* CLASS C shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work immediately
and/or have a shorter-term investment horizon
* CLASS R shares are designed for eligible institutions on behalf of their
clients; individuals may not purchase these shares directly
* CLASS T shares are an alternative to Class A shares, with a lower
front-end load and a Rule 12b-1 fee
Your financial representative can help you choose the share class that is
appropriate for you.
Share class charges
EACH SHARE CLASS has its own fee structure. In some cases, you may not have to
pay a sales charge to buy or sell shares. Consult your financial representative
or the SAI to see if this may apply to you. Owners of Class A shares on or
prior to December 24, 1998 are not subject to the sales charge.
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Sales charges
<TABLE>
<CAPTION>
CLASS A AND CLASS T -- CHARGED WHEN YOU BUY SHARES
Sales charge Sales charge
deducted as a % as a % of your
Your investment of offering price net investment
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Class Class Class Class
A T A T
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<S> <C> <C> <C> <C>
Up to $49,999 5.75% 4.50% 6.10% 4.70%
$50,000 -- $99,999 4.50% 4.00% 4.70% 4.20%
$100,000 -- $249,999 3.50% 3.00% 3.60% 3.10%
$250,000 -- $499,999 2.50% 2.00% 2.60% 2.00%
$500,000 -- $999,999 2.00% 1.50% 2.00% 1.50%
$1 million or more* 0.00% 0.00% 0.00% 0.00%
</TABLE>
* A 1.00% contingent deferred sales charge may be charged on any shares sold
within one year of purchase (except shares bought through dividend reinvestment
Class T carry an annual Rule 12b-1 fee of 0.25% of the class's average daily net
assets.
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CLASS B -- CHARGED WHEN YOU SELL SHARES
Contingent deferred sales charge
Time since you bought as a % of your initial investment or
the shares you are selling your redemption (whichever is less)
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Up to 2 years 4.00%
2 -- 4 years 3.00%
4 -- 5 years 2.00%
5 -- 6 years 1.00%
More than 6 years Shares will automatically
convert to Class A
Class B shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
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CLASS C -- CHARGED WHEN YOU SELL SHARES
A 1.00% CDSC is imposed on redemptions made within the first year of purchase.
Class C shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
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CLASS R -- NO SALES LOAD OR RULE 12B-1 FEES
Reduced Class A and Class T sales charge
LETTER OF INTENT: lets you purchase Class A and Class T shares over a 13-month
period and receive the same sales charge as if all shares had been purchased at
once.
RIGHT OF ACCUMULATION: lets you add the value of any Class A, B or C shares in
this fund or any other Dreyfus Premier fund sold with a sales load that you
already own to the amount of your next Class A investment for purposes of
calculating the sales charge.
CONSULT THE STATEMENT OF ADDITIONAL INFORMATION (SAI) OR YOUR FINANCIAL
REPRESENTATIVE FOR MORE DETAILS.
Your Investment 5
<PAGE 5>
ACCOUNT POLICIES (CONTINUED)
Buying shares
THE NET ASSET VALUE (NAV) of each class is generally calculated as of the close
of trading on the New York Stock Exchange ("NYSE") (usually 4:00 p.m. Eastern
time) every day the exchange is open. Your order will be priced at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. The fund's investments are generally valued based on market
value or, where market quotations are not readily available, based on fair value
as determined in good faith by the fund's board.
ORDERS TO BUY AND SELL SHARES RECEIVED BY DEALERS by the close of trading on the
NYSE and transmitted to the distributor or its designee by the close of its
business day (normally 5:15 p.m. Eastern time) will be based on the NAV
determined as of the close of trading on the NYSE that day.
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Minimum investments
Initial Additional
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REGULAR ACCOUNTS $1,000 $100; $500 FOR
TELETRANSFER INVESTMENTS
TRADITIONAL IRAS $750 NO MINIMUM
SPOUSAL IRAS $750 NO MINIMUM
ROTH IRAS $750 NO MINIMUM
EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR
DREYFUS AUTOMATIC $100 $100
INVESTMENT PLANS
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
Concepts to understand
NET ASSET VALUE (NAV): the value of one share, computed by dividing the total
net assets of a fund or class by its shares outstanding. The fund's Class A and
T shares are offered to the public at NAV plus a sales charge. Classes B, C and
R are offered at NAV, but Classes B and C generally are subject to higher annual
operating expenses and a CDSC.
Selling shares
YOU MAY SELL (REDEEM) SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
TO KEEP YOUR CDSC AS LOW AS POSSIBLE, each time you request to sell shares we
will first sell shares that are not subject to a CDSC, and then those subject to
the lowest charge. The CDSC is based on the lesser of the original purchase cost
or the current market value of the shares being sold, and is not charged on
shares you acquired by reinvesting your dividends. There are certain instances
when you may qualify to have the CDSC waived. Consult your financial
representative or the SAI for details.
BEFORE SELLING RECENTLY PURCHASED SHARES, please note that if the fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to eight business days or until it has collected payment.
Written sell orders
Some circumstances require written sell orders along with signature guarantees.
These include:
* amounts of $1,000 or more on accounts whose address has been changed
within the last 30 days
* requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
6
<PAGE 6>
General policies
UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
THE FUND RESERVES THE RIGHT TO:
* refuse any purchase or exchange request that could adversely affect the
fund or its operations, including those from any individual or group who, in the
fund's view, is likely to engage in excessive trading (usually defined as more
than four exchanges out of the fund within a calendar year)
* refuse any purchase or exchange request in excess of 1% of the fund's
total assets
* change or discontinue its exchange privilege, or temporarily suspend
this privilege during unusual market conditions
* change its minimum investment amounts
* delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or during
unusual market conditions)
The fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
Small account policies
To offset the relatively higher costs of servicing smaller accounts, the fund
charges regular accounts with balances below $2,000 an annual fee of $12. The
fee will be imposed during the fourth quarter of each calendar year.
The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; IRA accounts; accounts participating in
automatic investment programs; accounts opened through a financial institution.
If your account falls below $500, the fund may ask you to increase your balance.
If it is still below $500 after 45 days, the fund may close your account and
send you the proceeds.
DISTRIBUTIONS AND TAXES
THE FUND GENERALLY PAYS ITS SHAREHOLDERS dividends from its net investment
income quarterly, and distributes any net capital gains it has realized once a
year. Each share class will generate a different dividend because each has
different expenses. Your distributions will be reinvested in the fund unless you
instruct the fund otherwise. There are no fees or sales charges on
reinvestments.
FUND DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE to most investors (unless your
investment is in an IRA or other tax-advantaged account). The tax status of any
distribution is the same regardless of how long you have been in the fund and
whether you reinvest your distributions or take them in cash. In general,
distributions are federally taxable as follows:
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Taxability of distributions
Type of Tax rate for Tax rate for
distribution 15% bracket 28% bracket or above
- --------------------------------------------------------------------------------
INCOME ORDINARY ORDINARY
DIVIDENDS INCOME RATE INCOME RATE
SHORT-TERM ORDINARY ORDINARY
CAPITAL GAINS INCOME RATE INCOME RATE
LONG-TERM
CAPITAL GAINS 10% 20%
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Taxes on transactions
Except for tax-deferred accounts, any sale or exchange of fund shares may
generate a tax liability. Of course, withdrawals or distributions from
tax-deferred accounts are taxable when received.
The table above also can provide a guide for potential tax liability when
selling or exchanging fund shares. "Short-term capital gains" applies to fund
shares sold or exchanged up to 12 months after buying them. "Long-term capital
gains" applies to shares sold or exchanged after 12 months.
Your Investment 7
<PAGE 7>
SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASED fund shares may impose different
restrictions on these services and privileges offered by the fund, or may not
make them available at all. Consult your financial representative for more
information on the availability of these services and privileges.
Automatic services
BUYING OR SELLING SHARES AUTOMATICALLY is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application, or by
calling your financial representative or 1-800-554-4611.
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For investing
DREYFUS AUTOMATIC For making automatic investments
ASSET BUILDER((reg.tm)) from a designated bank account.
DREYFUS PAYROLL For making automatic investments
SAVINGS PLAN through a payroll deduction.
DREYFUS GOVERNMENT For making automatic investments
DIRECT DEPOSIT from your federal employment,
PRIVILEGE Social Security or other regular
federal government check.
DREYFUS DIVIDEND For automatically reinvesting the
SWEEP dividends and distributions from
one Dreyfus fund into another
(not available for IRAs).
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For exchanging shares
DREYFUS AUTO- For making regular exchanges
EXCHANGE PRIVILEGE from one Dreyfus fund into
another.
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For selling shares
DREYFUS AUTOMATIC For making regular withdrawals
WITHDRAWAL PLAN from most Dreyfus funds. There will be no CDSC
on Class B shares, as long as the amounts withdrawn do not exceed 12% annually
of the account value at the time the shareholder elects to participate in the
plan.
Exchange privilege
YOU CAN EXCHANGE SHARES WORTH $500 OR MORE (no minimum for retirement accounts)
from one class of the fund into the same class (or Class A, in the case of Class
T) of another Dreyfus Premier fund. You can request your exchange by contacting
your financial representative. Be sure to read the current prospectus for any
fund into which you are exchanging before investing. Any new account established
through an exchange will generally have the same privileges as your original
account (as long as they are available). There is currently no fee for
exchanges, although you may be charged a sales load when exchanging into any
fund that has a higher one.
TeleTransfer privilege
TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the TeleTransfer privilege. You can set up TeleTransfer on your
account by providing bank account information and following the instructions on
your application, or contact your financial representative.
Reinvestment privilege
UPON WRITTEN REQUEST YOU CAN REINVEST up to the number of Class A, B or T shares
you redeemed within 45 days of selling them at the current net asset value
without any sales charge. If you paid a CDSC, it will be credited back to your
account. This privilege may be used only once.
Account statements
EVERY FUND INVESTOR automatically receives regular account statements. You'll
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
8
<PAGE 8>
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
In Writing
Complete the application.
Mail your application and a check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to: Name of Fund
P.O. Box 6587, Providence, RI 02940-6587 Attn: Institutional Processing
By Telephone
WIRE Have your bank send your
investment to The Bank of New York, with these instructions:
* ABA# 021000018
* DDA# 8900336692
* the fund name
* the share class
* your Social Security or tax ID number
* name(s) of investor(s)
* dealer number if applicable
Call us to obtain an account number. Return your application with the account
number on the application.
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* DDA# 8900336692
* the fund name
* the share class
* your account number
* name(s) of investor(s)
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.
Automatically
WITH AN INITIAL INVESTMENT Indicate on your application which automatic
service(s) you want. Return your application with your investment.
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials.
TO SELL SHARES
Write a letter of instruction that includes:
* your name(s) and signature(s)
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see page 6).
Mail your request to: The Dreyfus Family of Funds P.O. Box 6587, Providence, RI
02940-6587 Attn: Institutional Processing
WIRE Call us or your financial representative to request your transaction. Be
sure the fund has your bank account information on file. Proceeds will be wired
to your bank.
TELETRANSFER Call us or your financial representative to request your
transaction. Be sure the fund has your bank account information on file.
Proceeds will be sent to your bank by electronic check.
CHECK Call us or your financial representative to request your transaction. A
check will be sent to the address of record.
AUTOMATIC WITHDRAWAL PLAN Call us or your financial representative to request a
form to add the plan. Complete the form, specifying the amount and frequency of
withdrawals you would like.
Be sure to maintain an account balance of $5,000 or more.
To open an account, make subsequent investments or to sell shares, please
contact your financial representative or call toll free in the U.S.
1-800-554-4611. Make checks payable to: THE DREYFUS FAMILY OF FUNDS.
Concepts to understand
WIRE TRANSFER: for transferring money from one financial institution to another.
Wiring is the fastest way to move money, although your bank may charge a fee to
send or receive wire transfers. Wire redemptions from the fund are subject to a
$1,000 minimum.
ELECTRONIC CHECK: for transferring money out of a bank account. Your transaction
is entered electronically, but may take up to eight business days to clear.
Electronic checks usually are available without a fee at all Automated Clearing
House (ACH) banks.
Your Investment 9
<PAGE 9>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
In Writing
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail in the slip and the check to: The Dreyfus Trust Company, Custodian P.O. Box
6427, Providence, RI 02940-6427 Attn: Institutional Processing
By Telephone
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* DDA# 8900336692
* the fund name
* the share class * your account number
* name of investor
* the contribution year
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
Automatically
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials. All contributions
will count as current year.
TO SELL SHARES
Write a letter of instruction that includes:
* your name and signature
* your account number and fund name
* the dollar amount you want to sell
* how and where to send the proceeds
* whether the distribution is qualified or premature
* whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see page 6).
Mail in your request to: The Dreyfus Trust Company P.O. Box 6427, Providence,
RI 02940-6427 Attn: Institutional Processing
SYSTEMATIC WITHDRAWAL PLAN Call us to request instructions to establish the
plan.
For information and assistance, contact your financial representative or call
toll free in the U.S. 1-800-554-4611. Make checks payable to: THE DREYFUS TRUST
COMPANY, CUSTODIAN.
10
<PAGE 10>
Application p1 here
<PAGE>
Application p2 here
<PAGE>
NOTES
<PAGE>
For More Information
Dreyfus Premier Real Estate Mortgage Fund
- --------------------------------------
SEC file number: 811-4748
More information on this fund is available free upon request, including the
following:
Annual/Semiannual Report
Describes the fund's performance, lists portfolio holdings and contains a letter
from the fund's manager discussing recent market conditions, economic trends
and fund strategies that significantly affected the fund's performance during
the last fiscal year.
Statement of Additional Information (SAI)
Provides more details about the fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (and is legally considered part of this prospectus).
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of fund documents can be viewed online or
downloaded from: http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
(c) 1999 Dreyfus Service Corporation
045P0699
<PAGE>
