PRESIDENT'S LETTER
Dear Shareholder:
We are pleased to report the results of the Premier California Municipal
Bond Fund Class A shares for the fiscal year ended January 31, 1994.
During the period, Class A shares paid income dividends of approximately
$.77 per share, which equates to a distribution rate per share of 5.33%,
based on the closing maximum offering price on January 31, 1994,
adjusted for capital gain distributions. All income dividends distributed
are exempt from Federal and California State income taxes.* Furthermore,
reflecting the municipal bond market's strong performance over the past
12 months, the net asset value of each Class A share increased by 7.32%.
The Fund's total return for the 12 month period was 13.62%.**
Soon after his inauguration, President Clinton quickly moved to outline
his domestic economic agenda, which called for higher taxes and a
substantial reduction in the Federal budget deficit. In return, it was
expected that the Federal Reserve Board would continue to maintain a
stimulative monetary policy. In fact, Congress approved a budget package
in early August that tilted fiscal policy toward deficit reduction. In
response, interest rates accelerated their downward move during the
summer before finally reaching their low point during the fourth quarter
of 1993. Since that time, the market has surrendered a small portion of
those gains.
For most of the fiscal year, the Fund sought to capitalize on this
movement to lower interest rates. Lengthening the average maturity,
maintaining the duration of the portfolio, and taking advantage of certain
types of derivative securities, which increased in price to a greater
degree as interest rates declined, were of primary importance in deciding
which investments to include in the portfolio. As the year progressed, it
became apparent that the Fund would be vulnerable to the risk of losing
some of its higher-yielding bonds as interest rates fell and issuers
exercised their call options; we acted to maintain the Fund's income level
by purchasing higher-yielding bonds such as some derivative securities.
Special tax bonds (e.g. Mello Roos bonds) continued to regain favor. When
the controversy surrounding these types of bonds erupted two years ago,
we elected to continue holding our positions even though the pricing of
these bonds was adversely affected for some time. The price recovery of
these holdings and the incremental income which they provided enhanced
the Fund's performance last year.
As we stated in our semi-annual letter (7/31/93), it was our intention
to adopt a slightly more defensive portfolio posture in order to reduce the
volatility of the portfolio. We still believe that a more conservative
stance is warranted in view of the heightened degree of uncertainty about
the near-term direction of the economy and inflation. Certainly, the recent
move by the Fed to hike the Federal Funds rate provides enough of an
impetus to maintain a cautious stance on the market. The Fed generally
acts in a series of moves rather than taking a "one-shot approach."
California's economic problems were exacerbated by last month's
earthquake. From the municipal market's perspective, it was fortunate
that the impact was relatively minor and the price of California's bonds
was kept intact. The long-term outlook for municipal credits in southern
California is less certain and will depend, to a large degree, on how taxes
and other sources of revenues which secure municipal bonds are affected.
At the present time the rating agencies anticipate no downgrades due to
the earthquake. We will be closely monitoring this situation.
A still uncertain economic environment on both the National and State
level deserves a cautious approach; our actions regarding the portfolio
will be influenced accordingly.
We appreciate your investment in the Fund, and we want to assure you
that we are at all times working in the Fund's best interest.
Very truly yours,
Richard J. Moynihan
President
February 18, 1994
New York, N.Y.
*Some income may be subject to the Federal alternative minimum tax for
certain investors. Capital gains, if any, are generally subject to Federal,
State and local income taxes.
**Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the
maximum initial sales charge.President's Letter
PREMIER CALIFORNIA MUNICIPAL BOND FUND JANUARY 31, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER
CALIFORNIA MUNICIPAL BOND FUND CLASS A SHARES AND THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX
[Exhibit A]
Past performance is not predictive of future performance.
The above illustration compares a $10,000 investment made in Class A
shares of Premier California Municipal Bond Fund on 11/10/86
(Inception Date) to a $10,000 investment made in the Lehman
Brothers Municipal Bond Index on that date. For comparative purposes
the value of the Index on 10/31/86 is used as the beginning value on
11/10/86. All dividends and capital gain distributions are reinvested.
The Fund invests primarily in California municipal securities and its
performance takes into account the maximum initial sales charge on
Class A shares and all other applicable fees and expenses. Unlike the
Fund, the Lehman Brothers Municipal Bond Index is an unmanaged
total return performance benchmark for the long-term, investment
grade tax exempt bond market, calculated by using municipal bonds
selected to be representative of the market. The Index does not take
into account charges, fees and other expenses. Further information
relating to Fund performance, including expense reimbursements, if
applicable, is contained in the Condensed Financial Information
section of the Prospectus and elsewhere in this report.
*Source: Lehman Brothers
Dear Shareholder:
We are pleased to report the results of the Premier California
Municipal Bond Fund Class B shares for the fiscal year ended January
31, 1994. During the period, Class B shares paid income dividends of
approximately $.69 per share, which equates to a distribution rate per
share of 5.03%, based on the closing net asset value on January 31,
1994, adjusted for capital gain distributions. All income dividends
distributed are exempt from Federal and California State income
taxes.* Furthermore, reflecting the municipal bond market's strong
performance over the past 12 months, the net asset value of each
Class B share increased by 7.24%. The Fund's total return for the 12-
month period was 12.91%.**
Soon after his inauguration, President Clinton quickly moved to
outline his domestic economic agenda, which called for higher taxes
and a substantial reduction in the Federal budget deficit. In return, it
was expected that the Federal Reserve Board would continue to
maintain a stimulative monetary policy. In fact, Congress approved a
budget package in early August that tilted fiscal policy toward deficit
reduction. In response, interest rates accelerated their downward
move during the summer before finally reaching their low point during
the fourth quarter of 1993. Since that time, the market has
surrendered a small portion of those gains.
For most of the fiscal year, the Fund sought to capitalize on this
movement to lower interest rates. Lengthening the average maturity,
maintaining the duration of the portfolio, and taking advantage of
certain types of derivative securities, which increased in price to a
greater degree as interest rates declined, were of primary
importance in deciding which investments to include in the portfolio.
As the year progressed, it became apparent that the Fund would be
vulnerable to the risk of losing some of its higher-yielding bonds as
interest rates fell and issuers exercised their call options; we acted to
maintain the Fund's income level by purchasing higher-yielding bonds
such as some derivative securities. Special tax bonds (e.g. Mello Roos
bonds) continued to regain favor. When the controversy surrounding
these types of bonds erupted two years ago, we elected to continue
holding our positions even though the pricing of these bonds was
adversely affected for some time. The price recovery of these
holdings and the incremental income which they provided enhanced
the Fund's performance last year.
As we stated in our semi-annual letter (7/31/93), it was our
intention to adopt a slightly more defensive portfolio posture in order
to reduce the volatility of the portfolio. We still believe that a more
conservative stance is warranted in view of the heightened degree of
uncertainty about the near-term direction of the economy and
inflation. Certainly, the recent move by the Fed to hike the Federal
Funds rate provides enough of an impetus to maintain a cautious
stance on the market. The Fed generally acts in a series of moves
rather than taking a "one-shot approach."
California's economic problems were exacerbated by last month's
earthquake. From the municipal market's perspective, it was
fortunate that the impact was relatively minor and the price of
California's bonds was kept intact. The long-term outlook for
municipal credits in southern California is less certain and will depend,
to a large degree, on how taxes and other sources of revenues which
secure municipal bonds are affected. At the present time the rating
agencies anticipate no downgrades due to the earthquake. We will be
closely monitoring this situation.
A still uncertain economic environment on both the National and
State level deserves a cautious approach; our actions regarding the
portfolio will be influenced accordingly.
We appreciate your investment in the Fund, and we want to assure
you that we are at all times working in the Fund's best interest.
Very truly yours,
Richard J. Moynihan
President
February 18, 1994
New York, N.Y.
*Some income may be subject to the Federal alternative minimum tax
for certain investors. Capital gains, if any, are generally subject to
Federal, State and local income taxes.
**Total return represents the change during the period in a
hypothetical account with dividends reinvested, without taking into
account the applicable contingent deferred sales charge imposed on
redemptions.
PREMIER CALIFORNIA MUNICIPAL BOND FUND JANUARY 31, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER
CALIFORNIA MUNICIPAL BOND FUND CLASS B SHARES AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
[Exhibit B]
Past performance is not predictive of future performance.
The above illustration compares a $10,000 investment made in Class B
shares of Premier California Municipal Bond Fund on 1/15/93
(Inception Date) to a $10,000 investment made in the Lehman
Brothers Municipal Bond Index on that date. For comparative purposes
the value of the Index on 12/31/92 is used as the beginning value on
1/15/93. All dividends and capital gain distributions are reinvested.
The Fund invests primarily in California municipal securities and its
performance takes into account the applicable contingent deferred
sales charge on Class B shares and all other applicable fees and
expenses. Unlike the Fund, the Lehman Brothers Municipal Bond Index
is an unmanaged total return performance benchmark for the long-
term, investment grade tax exempt bond market, calculated by using
municipal bonds selected to be representative of the market. The
Index does not take into account charges, fees and other expenses.
Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Condensed Financial
Information section of the Prospectus and elsewhere in this report.
*Source: Lehman Brothers
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JANUARY 31, 1994
PRINCIPAL
MUNICIPAL BONDS-100.0% AMOUNT VALUE
------------ ------------
<S> <C> <C>
CALIFORNIA-92.8%
Alameda, Special Tax (Community Facilities District Number 1) 7.75%, 9/1/2019....... $ 2,000,000 $ 2,123,720
Alameda Housing Authority, Multi-Family Housing Revenue
(Independence Apartment Project) 7.50%, 2/20/2031 (Collateralized; FNMA)........ 1,715,000 1,867,103
Anaheim Public Financing Authority, Tax Allocation Revenue
(Redevelopment Project Alpha) 10.27%, 12/28/2018 (Insured; MBIA) (a)............ 2,000,000 2,570,000
Antelope Valley Hospital District, Insured COP 7.30%, 1/1/2006...................... 2,400,000 2,673,528
Bakersfield, COP (Wastewater Treatment Plant 3 Project) 8%, 1/1/2010................ 250,000 284,340
California Department of Water Resources, Revenue (Central Valley Project)
9.803%, 12/1/2026 (a,b)......................................................... 3,900,000 4,504,500
California Educational Facilities Authority, Revenue:
(Refunding - Saint Mary's College) 5%, 10/1/2012................................ 3,000,000 2,904,270
(Santa Clara University) 6.25%, 2/1/2016........................................ 3,500,000 3,763,970
California Health Facilities Financing Authority, Revenue:
(Children's Hospital of Los Angeles) 7.125%, 6/1/2021........................... 2,000,000 2,399,500
(Eskaton Properties)
7.50%, 5/1/2020 (Insured; California Health Facilities Construction Insurance) 4,000,000 4,825,640
(Health Dimensions):
7%, 5/1/2020................................................................ 6,000,000 6,714,480
Refunding 7.50%, 5/1/2015................................................... 855,000 979,992
(Saint Francis Memorial Hospital) 5.875%, 11/1/2023............................. 4,500,000 4,849,335
California Housing Finance Agency, Home Mortgage Revenue:
8.10%, 8/1/2007................................................................. 300,000 327,984
8.30%, 8/1/2019................................................................. 265,000 278,658
Zero Coupon, 8/1/2023........................................................... 14,450,000 1,569,126
7.50%, 8/1/2029................................................................. 1,425,000 1,555,687
8%, 8/1/2029.................................................................... 860,000 921,060
7.60%, 8/1/2030................................................................. 1,920,000 2,061,120
7.70%, 8/1/2030................................................................. 1,200,000 1,309,476
7.875%, 8/1/2031................................................................ 1,025,000 1,066,430
California Pollution Control Financing Authority:
RRR (Waste Management Inc.) 7.15%, 2/1/2011..................................... 2,000,000 2,267,000
Solid Waste Disposal Revenue (North County Recycling Center)
6.75%, 7/1/2011 (LOC; Union Bank of Switzerland) (c)........................ 2,500,000 2,775,600
California Public Works Board, Lease Revenue:
(Department of Corrections - Madera State Prison) 6%, 6/1/2010.................. 3,000,000 3,240,990
(Secretary of State) 6.75%, 12/1/2012........................................... 2,375,000 2,652,234
(University of California Projects) 5.55%, 6/1/2010............................. 4,000,000 4,103,640
California State:
6.90%, 4/1/2005................................................................. 2,000,000 2,372,940
6.125%, 10/1/2011............................................................... 2,875,000 3,233,139
7.375%, 2/1/2019................................................................ 980,000 996,101
California Statewide Communities Development Authority, COP, Revenue, Refunding:
(Pacific Homes) 5.90%, 4/1/2009................................................. 4,340,000 4,507,915
(Triad Healthcare) 6.25%, 8/1/2006.............................................. 2,000,000 2,114,140
Central Valley Financing Authority, Cogeneration Project Revenue
(Carson Ice - General Project) 6%, 7/1/2009..................................... 4,500,000 4,641,525
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
CALIFORNIA (CONTINUED)
Compton, COP, Refunding 7.50%, 8/1/2015 (LOC; Mitsui Trust and Banking) (c)......... $ 2,000,000 $ 2,253,040
Contra Costa County, Home Mortgage Revenue 8.25%, 6/1/2021 (Collateralized; GNMA)... 350,000 509,849
Fontana Redevelopment Agency:
Multi-Family Housing Mortgage Revenue, Refunding (Village Drive)
7.15%, 5/1/2028 (Insured; FHA).............................................. 2,500,000 2,708,950
Tax Allocation Revenue (North Fontana Redevelopment Project) 7.25%, 9/1/2020.... 4,250,000 4,825,705
Glendora Public Finance Authority, Tax Allocation Revenue 7.625%, 9/1/2010.......... 2,000,000 2,265,580
Huntington Beach, COP, Revenue (Civic Center Project) 7.90%, 8/1/2016............... 250,000 273,110
Irvine Ranch Water District Joint Powers Agency, Local Pool Revenue:
7.875%, 2/15/2023............................................................... 750,000 836,752
8.25%, 8/15/2023................................................................ 2,500,000 2,814,250
Lake Elsinore Public Financing Authority, Local Agency Revenue:
7.50%, 10/1/2010................................................................ 3,000,000 3,203,730
8%, 10/1/2020................................................................... 1,640,000 1,704,698
Los Angeles City, Revenue:
Single Family Home Mortgage 7.55%, 12/1/2023 (Collateralized; GNMA)............. 400,000 434,812
Wastewater Systems:
6.80%, 8/1/1998............................................................. 1,500,000 1,714,530
Refunding 7.10%, 6/1/2018................................................... 3,000,000 3,402,510
Los Angeles Convention and Exhibition Center Authority, COP, Revenue, Refunding:
7.375%, 8/15/2018............................................................... 700,000 830,396
7%, 8/15/2020................................................................... 2,000,000 2,334,800
Los Angeles County:
COP, Revenue
(Civic Center Heating and Refrigeration Project) 8%, 6/1/2010............... 250,000 297,255
Transportation Commission, Sales Tax Revenue:
6.90%, 7/1/2021............................................................. 2,500,000 2,976,200
Refunding 6.50%, 7/1/2013................................................... 5,260,000 5,754,756
Los Angeles County Building Authority, Revenue, Refunding:
5.60%, 5/1/2008................................................................. 4,445,000 4,672,362
5.625%, 5/1/2011................................................................ 5,250,000 5,489,348
Los Angeles Department of Water and Power, Electric Plant Revenue
6.125%, 1/15/2033 (a,b)......................................................... 10,000,000 10,533,400
Los Angeles Harbor Department, Revenue 7.60%, 10/1/2018............................. 750,000 890,858
Los Banos, COP 7.65%, 9/1/2019...................................................... 500,000 600,360
Mount Shasta, HR, COP (Mercy Medical Center) 7.25%, 7/1/2019........................ 1,915,000 2,136,010
Nevada County, COP (Western Nevada Co. Solid Waste) 7.50%, 6/1/2021................. 2,200,000 2,493,304
Northern California Power Agency, Public Power Revenue:
9.73%, 7/1/2018 (a,b)........................................................... 5,000,000 6,462,500
(Refunding - Geothermal Project No. 3):
7%, 7/1/2007................................................................ 1,000,000 1,087,350
5.85%, 7/1/2010............................................................. 4,000,000 4,284,520
(Refunding - Hydroelectric Project No. 1) 7.15%, 7/1/2024....................... 4,475,000 4,996,606
Oakdale Public Finance Authority, Revenue (Center City Redevelopment Project)
7.90%, 7/1/2019................................................................. 1,750,000 1,875,912
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
CALIFORNIA (CONTINUED)
Orange County, Special Tax (Community Facilities District No. 87):
7.75%, 8/15/2014................................................................ $ 2,375,000 $ 2,580,485
7.80%, 8/15/2015................................................................ 2,000,000 2,345,320
Orange County Local Transportation Authority, Sales Tax Revenue
(First Senior - Measure M) 6%, 2/15/2007........................................ 3,000,000 3,302,940
Orange Cove, Irrigation District Revenue, COP (Rehabilitation Project)
7.25%, 2/1/2012................................................................. 3,000,000 3,299,310
Oxnard Union High School District, COP 7.70%, 11/1/2019............................. 750,000 906,000
Richmond Joint Powers Financing Authority, Revenue 7.25%, 5/15/2013................. 1,500,000 1,572,300
Riverside County, SFMR 7.80%, 5/1/2021 (Collateralized; GNMA)....................... 1,250,000 1,743,837
Rosamond Community Services District, Improvement Bond
(Assessment District No. 1) 7.90%, 9/2/2013..................................... 1,795,000 1,859,997
Roseville, Special Tax (Community Facilities District No. 1) 7.70%, 9/1/2020........ 2,000,000 2,096,080
Sacramento County:
SFMR 7.80%, 10/1/2023 (Collateralized: FNMA and GNMA)........................... 385,000 404,442
Special Tax (Community Facilities District No. 1):
8.20%, 12/1/2010............................................................ 2,250,000 2,510,460
8.25%, 12/1/2020............................................................ 2,000,000 2,228,760
Sacramento Schools Insurance Authority, Revenue (Workers Compensation Program)
5.75%, 6/1/2003................................................................. 3,985,000 4,239,044
San Diego City:
Port Facilities Revenue, Refunding
(National Steel and Shipbuilding Co.) 6.60%, 12/1/2002...................... 3,000,000 3,230,580
(Public Safety Communication Project):
6.65%, 7/15/2010............................................................ 2,100,000 2,525,082
6.65%, 7/15/2011............................................................ 2,240,000 2,702,202
San Diego County Water Authority, Water Revenue, COP 8.834%, 5/1/2008 (a)........... 2,000,000 2,295,000
San Francisco City and County Public Utilities Commission, Water Revenue, Refunding
6%, 11/1/2015................................................................... 2,000,000 2,103,940
San Jose Financing Authority, Revenue, Refunding (Convention Center Project)
6.40%, 9/1/2022................................................................. 6,860,000 7,351,656
San Marcos Public Facilities Authority, Revenue, Refunding
(Public Improvement - Civic Center) 6.15%, 8/1/2013............................. 2,320,000 2,338,676
Santa Cruz, HR (Dominican Santa Cruz Hospital) 7%, 12/1/2013........................ 750,000 811,342
Santa Monica, Wastewater Enterprise Revenue 4.75%, 1/1/2010 (Insured; AMBAC)........ 2,895,000 2,794,515
Santa Rosa Wastewater Services Facilities District, Refunding 7.80%, 7/2/2015....... 750,000 867,157
Sequoia Hospital District, Revenue, Refunding:
7.50%, 9/1/2008................................................................. 825,000 952,900
7.60, 9/1/2014.................................................................. 750,000 883,860
Simi Valley, Single Family Residential Mortgage Revenue 7.625%, 8/1/2022 (d)........ 2,000,000 1,000,000
Southern California Home Finance Authority, SFMR
7.625%, 10/1/2023 (Collateralized; GNMA)........................................ 1,085,000 1,202,603
Sulpher Springs Union School District, COP 7.15%, 2/1/2011 (Insured; AMBAC)......... 440,000 513,828
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
CALIFORNIA (CONTINUED)
University of California, COP (UCLA Central Chiller/Cogeneration)
7%, 11/1/2018................................................................... $ 3,340,000 $ 3,921,227
Upland, HR, COP (San Antonio Community Hospital):
7.125%, 1/1/2011................................................................ 1,000,000 1,076,540
7.80%, 1/1/2018................................................................. 750,000 890,790
Vista, Multi-Family Housing Revenue (Vista Hacienda Project) 6.95%, 4/1/2017........ 3,000,000 3,257,670
Waterford Public Financing Authority, Revenue 8.20%, 9/15/2020...................... 3,800,000 4,145,686
Watsonville Mammoth Lakes, COP 7.50%, 6/1/1999...................................... 110,000 110,164
U.S. RELATED-7.2%
Commonwealth of Puerto Rico 7.70%, 7/1/2020......................................... 3,750,000 4,590,450
Puerto Rico Electric Power Authority, Power Revenue, Refunding:
7%, 7/1/2007.................................................................... 2,000,000 2,271,940
7.125%, 7/1/2014................................................................ 5,500,000 6,252,125
Virgin Islands Territory (Hugo Insurance Claims Fund Program) 7.75%, 10/1/2006...... 1,830,000 2,151,988
Virgin Islands Water and Power Authority, Electric Systems Revenue 7.40%, 7/1/2011.. 3,000,000 3,485,850
------------
TOTAL INVESTMENTS (cost $233,413,201) $259,935,342
============
</TABLE>
<TABLE>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation HR Hospital Revenue
COP Certificate of Participation LOC Letter of Credit
FHA Federal Housing Administration MBIA Municipal Bond Insurance Association
FNMA Federal National Mortgage Association RRR Resources Recovery Revenue
GNMA Government National Mortgage Association SFMR Single Family Mortgage Revenue
</TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (E) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
AAA Aaa AAA 19.2%
AA Aa AA 16.3
A A A 41.1
BBB Baa BBB 9.5
D D D .3
Not Rated(f) Not Rated(f) Not Rated(f) 13.6
------
100.0%
======
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse floater security - the interest rate is subject to change
periodically.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At January 31,
1994, these securities amounted to $ 21,500,400 or 8.2% of net assets.
(c) Secured by letters of credit.
(d) Non-income producing security; interest payments in default.
(e) Fitch currently provides creditworthiness information for a limited amount
of investments.
(f) Securities which, while not rated by Fitch, Moody's or Standard & Poor's
have been determined by the Fund's Board of Trustees to be of comparable
quality to those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $233,413,201)-see statement...................................... $259,935,342
Interest receivable........................................................ 4,089,671
Receivable for shares of Beneficial Interest subscribed.................... 480,168
Prepaid expenses........................................................... 32,439
------------
264,537,620
LIABILITIES:
Due to The Dreyfus Corporation............................................. $ 165,342
Payable for shares of Beneficial Interest redeemed......................... 358,738
Accrued expenses and other liabilities..................................... 1,672,438 2,196,518
------------ ------------
NET ASSETS..................................................................... $262,341,102
============
REPRESENTED BY:
Paid-in capital............................................................ $235,315,239
Accumulated undistributed net realized gain on investments................. 503,722
Accumulated net unrealized appreciation on investments-Note 3.............. 26,522,141
------------
NET ASSETS at value............................................................ $262,341,102
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)................ 17,995,923
============
Class B Shares
(unlimited number of $.001 par value shares authorized)................ 1,239,186
============
NET ASSET VALUE per share:
Class A Shares
($245,435,214 / 17,995,923 shares)..................................... $13.64
======
Class B Shares
($16,905,888 / 1,239,186 shares)....................................... $13.64
======
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME............................................................ $ 16,103,166
EXPENSES:
Management fee-Note 2(a)............................................... $ 1,365,438
Shareholder servicing costs-Note 2(c).................................. 722,143
Professional fees...................................................... 66,975
Prospectus and shareholders' reports................................... 55,628
Distribution fees (Class B Shares)-Note 2(b)........................... 45,448
Custodian fees......................................................... 27,256
Trustees' fees and expenses-Note 2(d).................................. 12,695
Registration fees...................................................... 10,672
Miscellaneous.......................................................... 43,207
------------
2,349,462
Less-reduction in management fee due to
undertakings-Note 2(a)............................................. 362,893
------------
TOTAL EXPENSES................................................. 1,986,569
------------
INVESTMENT INCOME-NET.......................................... 14,116,597
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3.................................... $ 1,865,591
Net unrealized appreciation on investments................................. 15,121,644
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................ 16,987,235
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 31,103,832
============
</TABLE>
See notes to financial statements.
<TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
----------------------------
OPERATIONS: 1993 1994
------------ ------------
<S> <C> <C>
Investment income-net...................................................... $ 13,846,190 $ 14,116,597
Net realized gain on investments........................................... 2,702,691 1,865,591
Net unrealized appreciation on investments for the year.................... 4,081,950 15,121,644
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 20,630,831 31,103,832
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares......................................................... (13,845,857) (13,671,122)
Class B shares......................................................... (333) (445,475)
Net realized gain on investments:
Class A shares......................................................... (2,888,295) (1,751,692)
Class B shares......................................................... __ (106,093)
------------ ------------
TOTAL DIVIDENDS.................................................... (16,734,485) (15,974,382)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares......................................................... 29,849,236 26,262,438
Class B shares......................................................... 323,478 17,148,970
Dividends reinvested:
Class A shares......................................................... 7,602,581 7,074,547
Class B shares......................................................... 430 366,127
Cost of shares redeemed:
Class A shares......................................................... (35,494,819) (27,275,575)
Class B shares......................................................... __ (1,244,937)
------------ ------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS....... 2,280,906 22,331,570
------------ ------------
TOTAL INCREASE IN NET ASSETS................................... 6,177,252 37,461,020
NET ASSETS:
Beginning of year.......................................................... 218,702,830 224,880,082
------------ ------------
End of year................................................................ $224,880,082 $262,341,102
============ ============
</TABLE>
<TABLE>
SHARES
--------------------------------------------------------------
CLASS A CLASS B
---------------------------- ----------------------------
YEAR ENDED JANUARY 31, YEAR ENDED JANUARY 31,
---------------------------- ----------------------------
CAPITAL SHARE TRANSACTIONS: 1993 1994 1993* 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold.................................... 2,356,783 1,965,588 25,385 1,279,001
Shares issued for dividends reinvested......... 600,089 526,710 34 27,085
Shares redeemed................................ (2,799,253) (2,036,874) __ (92,319)
------------ ------------ ------------ ------------
NET INCREASE IN SHARES OUTSTANDING..... 157,619 455,424 25,419 1,213,767
============ ============ ============ ============
</TABLE>
- ------------------------
* From January 15, 1993 (commencement of initial offering) through January
31, 1993.
See notes to financial statements.
<TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
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 year indicated. This information has been
derived from information provided in the Fund's financial statements.
CLASS A SHARES CLASS B SHARES
--------------------------------------------------- -----------------
YEAR ENDED
YEAR ENDED JANUARY 31, JANUARY 31,
--------------------------------------------------- -----------------
PER SHARE DATA: 1990 1991 1992 1993 1994 1993(1) 1994
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.................. $12.00 $12.02 $12.23 $12.58 $12.80 $12.69 $12.81
------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net............................... .89 .89 .82 .80 .77 .03 .69
Net realized and unrealized gain on investments..... .02 .21 .36 .39 .94 .12 .93
------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS................ .91 1.10 1.18 1.19 1.71 .15 1.62
------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net................ (.89) (.89) (.82) (.80) (.77) (.03) (.69)
Dividends from net realized gain on investments..... -- -- (.01) (.17) (.10) -- (.10)
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS............................. (.89) (.89) (.83) (.97) (.87) (.03) (.79)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of year........................ $12.02 $12.23 $12.58 $12.80 $13.64 $12.81 $13.64
====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 7.82% 9.45% 10.02% 9.78% 13.62% 25.98%(2) 12.91%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............. -- .11% .47% .65% .78% 1.07%(2) 1.31%
Ratio of net investment income to average net assets 7.20% 7.19% 6.62% 6.30% 5.71% 4.92%(2) 4.90%
Decrease reflected in above expense ratios due to
undertakings by the Manager..................... 1.26% .91% .48% .28% .15% .13%(2) .13%
Portfolio Turnover Rate............................. 28.64% 5.95% 10.29% 36.54% 26.69% 36.54% 26.69%
Net Assets, end of year (000's Omitted)............. $58,714 $166,095 $218,703 $224,555 $245,435 $325 $16,906
- -------------------------
(1) From January 15, 1993 (commencement of initial offering) to January 31, 1993.
(2) Annualized.
</TABLE>
See notes to financial statements.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified, open-end management investment company.
Dreyfus Service Corporation ("Distributor") acts as the distributor of
the Fund's shares. The Distributor is a wholly-owned subsidiary of The
Dreyfus Corporation ("Manager").
The Fund offers both Class A and Class B shares. Class A shares are
subject to a sales charge imposed at the time of purchase and Class B
shares are subject to a contingent deferred sales charge imposed at
the time of redemption on redemptions made within five years of
purchase. Other differences between the two Classes include the
services offered to and the expenses borne by each Class and certain
voting rights.
(A) PORTFOLIO VALUATION: The Fund's investments are valued each
business day by an independent pricing service ("Service") approved
by the Board of Trustees. Investments for which quoted bid prices in
the judgment of the Service are readily available and are
representative of the bid side of the market 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
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions.
(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, adjusted for amortization of premiums and,
when appropriate, discounts on investments, is earned from
settlement date and recognized on the accrual basis. Securities
purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in
municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect
the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Fund.
(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 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, if any, 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, which can distribute tax
exempt dividends, by complying with the provisions available to
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of income and net
realized capital gain sufficient to relieve it from all, or substantially
all, Federal income taxes.
NOTE 2-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 .55
of 1% of the average daily value of the Fund's net assets and is
payable monthly. The Agreement provides for an expense
reimbursement from the Manager should the Fund's aggregate
expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state
having jurisdiction over the Fund for any full fiscal year. The most
stringent state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full fiscal year that such
expenses (exclusive of distribution expenses and certain expenses as
described above) exceed 2 1/2% of the first $30 million, 2% of the
next $70 million and 1 1/2% of the excess over $100 million of the
average value of the Fund's net assets in accordance with California
"blue sky" regulations. However, the Manager had undertaken from
February 1, 1993 through January 19, 1994, to
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
reduce the management fee paid by the Fund to the extent that the
Fund's aggregate expenses (excluding certain expenses as described
above) exceeded specified annual percentages of the Fund's average
daily net assets. The Manager has currently undertaken from January
20, 1994 through July 1, 1994, to waive receipt of the management
fee payable to it by the Fund in excess of an annual rate of .50 of 1%
of the average daily value of the Fund's net assets. The reduction in
management fee, pursuant to the undertakings, amounted to
$362,893 for the year ended January 31, 1994.
The undertaking may be modified by the Manager from time to
time, provided that the resulting expense reimbursement would not
be less than the amount required pursuant to the Agreement.
The Distributor retained $60,338 during the year ended January 31,
1994 from commissions earned on sales of Fund's Class A shares.
The Distributor retained $17,606 during the year ended January 31,
1994 from contingent deferred sales charges imposed upon
redemptions of the Fund's Class B shares.
(B) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, the Fund pays the Distributor, at
an annual rate of .50 of 1% of the value of the Fund's Class B shares
average daily net assets, for costs and expenses in connection with
advertising, marketing and distributing the Fund's Class B shares. The
Distributor may make payments to one or more Service Agents (a
securities dealer, financial institution, or other industry professional)
based on the value of the Fund's Class B shares owned by clients of
the Service Agent.
During the year ended January 31, 1994, $45,448 was charged to
the Fund pursuant to the Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Fund pays the
Distributor, at an annual rate of .25 of 1 % of the value of the average
daily net assets of Class A and Class B shares for servicing
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. The Distributor may make payments to Service
Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. For the year ended January 31,
1994, $597,930 and $22,724 were charged to the Class A and Class B
shares, respectively, pursuant to the Shareholder Services Plan.
(D) Certain officers and trustees of the Fund are "affiliated
persons," as defined in the Act, of the Manager and/or the Distributor.
Each trustee who is not an "affiliated person" receives an annual fee
of $1,000 and an attendance fee of $250 per meeting.
(E) On December 5, 1993, the Manager entered into an agreement
and Plan of Merger providing for the merger of the Manager with a
subsidiary of Mellon Bank Corporation ("Mellon").
Following the Merger, it is planned that the Manager will be a
direct subsidiary of Mellon Bank, N.A. Closing of this merger is subject
to a number of contingencies, including the receipt of certain
regulatory approvals and the approvals of the stockholders of the
Manager and of Mellon. The merger is expected to occur in mid-1994,
but could occur later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with the Manager under the Investment
Company Act of 1940, and thus a termination of such Agreement, the
Manager will seek prior approval from the Fund's Board and
shareholders.
NOTE 3-SECURITIES TRANSACTIONS:
Purchases and sales of securities amounted to $138,335,408 and
$118,413,717, respectively, for the year ended January 31, 1994, and
consisted entirely of municipal bonds and short-term municipal
investments.
At January 31, 1994, accumulated net unrealized appreciation on
investments was $26,522,141, consisting of $27,574,379 gross
unrealized appreciation and $1,052,238 gross unrealized depreciation.
At January 31, 1994, 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).
PREMIER CALIFORNIA MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER CALIFORNIA MUNICIPAL BOND FUND
We have audited the accompanying statement of assets and
liabilities of Premier California Municipal Bond Fund, including the
statement of investments, as of January 31, 1994, 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 generally accepted
auditing standards. 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.
Our procedures included confirmation of securities owned as of
January 31, 1994 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 Premier California Municipal Bond Fund at January 31,
1994, 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 generally accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
March 7, 1994
PREMIER CALIFORNIA MUNICIPAL BOND FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the
following designations regarding its fiscal year ended January 31,
1994:
All the dividends paid from investment income-net are "exempt-
interest dividends" (not subject to regular Federal and, for individuals
who are California residents, California personal income taxes).
The Fund hereby designates $.0235 per share as a long-term capital
gain distribution of the $.0264 per share paid on September 30, 1993.
The Fund also designates $.0364 per share as a long-term capital gain
distribution of the $.0711 per share paid on December 14, 1993.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends
(if any) and capital gain distributions (if any) paid for the 1994
calendar year on Form 1099-DIV which will be mailed by January 31,
1994.
PREMIER CALIFORNIA
MUNICIPAL BOND FUND
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
DISTRIBUTOR
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 023AR941
023AR941 BKR
613AR941
613AR941 BKR
ANNUAL REPORT
PREMIER CALIFORNIA
MUNICIPAL BOND FUND
JANUARY 31, 1994
(Dreyfus Lion Logo)
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER CALIFORNIA MUNICIPAL BOND FUND CLASS A SHARES
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
__________________________________________________
| | |
| | | |
| PERIOD | LEHMAN BROTHERS |PREMIER CALIFORNIA |
| | MUNICIPAL | MUNICIPAL BOND |
| | BOND INDEX * | FUND, CLASS A |
|-----------|-----------------|-------------------|
| 11/10/86 | 10,000 | 9,549 |
| 1/31/87 | 10,476 | 10,025 |
| 4/30/87 | 9,893 | 9,168 |
| 7/31/87 | 10,237 | 9,293 |
| 10/31/87 | 9,916 | 8,885 |
| 1/31/88 | 10,691 | 9,864 |
| 4/30/88 | 10,759 | 9,708 |
| 7/31/88 | 10,956 | 10,001 |
| 10/31/88 | 11,361 | 10,610 |
| 1/31/89 | 11,607 | 10,803 |
| 4/30/89 | 11,719 | 10,993 |
| 7/31/89 | 12,290 | 11,505 |
| 10/31/89 | 12,282 | 11,519 |
| 1/31/90 | 12,540 | 11,648 |
| 4/30/90 | 12,564 | 11,735 |
| 7/31/90 | 13,142 | 12,363 |
| 10/31/90 | 13,194 | 12,368 |
| 1/31/91 | 13,699 | 12,749 |
| 4/30/91 | 14,007 | 13,017 |
| 7/31/91 | 14,290 | 13,272 |
| 10/31/91 | 14,799 | 13,776 |
| 1/31/92 | 15,193 | 14,026 |
| 4/30/92 | 15,339 | 14,166 |
| 7/31/92 | 16,253 | 15,081 |
| 10/31/92 | 16,040 | 14,654 |
| 1/31/93 | 16,687 | 15,397 |
| 4/30/93 | 17,280 | 16,085 |
| 7/31/93 | 17,690 | 16,472 |
| 10/31/93 | 18,300 | 17,202 |
| 1/31/94 | 18,733 | 17,494 |
|-------------------------------------------------|
|--------------------------------------------------------|
| PREMIER CALIFORNIA MUNICIPAL BOND FUND, CLASS A |
|--------------------------------------------------------|
| AVERAGE ANNUAL TOTAL RETURNS ENDED ON 1/31/94 |
| REFLECTS MAXIMUM SALES CHARGE |
|--------------------------------------------------------|
| | | SINCE INCEPTION |
| 1 YEAR | 5 YEAR | (11/10/86) |
|-----------|-----------------|--------------------------|
| 8.54%| 9.10%| 8.05% |
|--------------------------------------------------------|
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER CALIFORNIA MUNICIPAL BOND FUND CLASS B SHARES
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
__________________________________________________
| | |
| | | |
| PERIOD | LEHMAN BROTHERS |PREMIER CALIFORNIA |
| | MUNICIPAL | MUNICIPAL BOND |
| | BOND INDEX * | FUND, CLASS B |
|-----------|-----------------|-------------------|
| 1/15/93 | 10,000 | 10,000 |
| 1/31/93 | 10,116 | 10,121 |
| 2/28/93 | 10,482 | 10,567 |
| 3/31/93 | 10,371 | 10,425 |
| 4/30/93 | 10,476 | 10,552 |
| 5/31/93 | 10,535 | 10,600 |
| 6/30/93 | 10,711 | 10,799 |
| 7/31/93 | 10,725 | 10,791 |
| 8/31/93 | 10,948 | 11,066 |
| 9/30/93 | 11,073 | 11,240 |
| 10/31/93 | 11,094 | 11,262 |
| 11/30/93 | 10,996 | 11,101 |
| 12/31/93 | 11,228 | 11,297 |
| 1/31/94 | 11,357 | 11,127 |
|-------------------------------------------------|
|-------------------------------------------------------|
| PREMIER CALIFORNIA MUNICIPAL BOND FUND, CLASS B |
|-------------------------------------------------------|
| AVERAGE ANNUAL TOTAL RETURNS ENDED ON 1/31/94 |
| REFLECTS CONTINGENT DEFERRED SALES CHARGE |
|-------------------------------------------------------|
| | SINCE INCEPTION |
| 1 YEAR | (1/15/93) |
|-----------------------------|-------------------------|
| 9.91% | 10.75% |
|-------------------------------------------------------|
