LETTER TO SHAREHOLDERS
Dear Shareholder:
The market environment in 1994 was volatile. Losses registered by fixed
income securities during the year were unprecedented. This turmoil resulted
primarily from the series of interest rate hikes precipitated by the Federal
Reserve Board's concern over the prospects of inflation. Within the last 12
months, the Fed has pushed short-term interest rates 300 basis points higher
through a series of seven rate hikes. The resulting decline in the value of
municipal bonds was intensified by other forces as well.
In our view, the Omnibus Budget Reconciliation Act of 1993, requiring the
taxation of market-discount gains as ordinary income (as opposed to capital
gains), accentuated the loss in value of municipals. Furthermore, late in
calendar year 1994, it appears that many investors sold bond mutual fund
shares as well as individual bonds to create year-end tax losses. This was
occurring on the heels of the Orange County, California, municipal bankruptcy
which resulted from leveraged speculation on interest rates. Municipal bond
investors became concerned as the Orange County story unfolded and these
worries intensified amidst speculation about similar problems elsewhere.
These factors combined to aggravate an already tumultuous situation.
Fortunately, the sharp decline in the issuance of new municipal debt during
the year helped mitigate the market's decline.
Late in 1994, the municipal bond market began to find support as market
fears about the economy and rising inflation moderated. What has ensued is a
strong market rally thus far in 1995. Long-term rates have declined by over
50 basis points, reducing a large portion of the prior year's negative market
performance. The Premier California Municipal Bond Fund, for the fiscal year
ended January 31, 1995, registered a total return of -4.26% for Class A
shares and -4.77% for Class B shares.* The average California municipal debt
fund produced a return of -5.41%, for the same period.** While the price of
the Fund's securities generally moved lower during the past fiscal year, the
Fund continued to distribute tax-free income dividends of approximately $.715
per share for Class A shares and approximately $.648 per share for Class B
shares. For Class A shares, this equates to a tax-free distribution rate of
5.54% per share, based on the January 31, 1995 maximum closing offering
price; for Class B shares, to a 5.26% tax-free distribution rate per share,
based on the January 31, 1995 closing net asset value, both adjusted for
capital gain distributions. An investor in the maximum Federal and California
State income tax bracket would have to have earned 10.31% in the case of
Class A shares, or 9.78% in the case of Class B shares, from a comparable
taxable investment to have achieved the same distribution rate.***
While few anticipated the magnitude of the rise in interest rates during
1994, defensive steps were taken by your Fund that were reflected positively
in its performance for most of the year. Larger than normal cash positions
were maintained in order to meet anticipated redemptions and to help reduce
the portfolio's duration, which is a measure of volatility expressed in
years. The Fund's holdings of derivative securities were reduced during the
year as it became apparent that increasing short-term rates were reducing the
benefit of holding these instruments. Additionally, the Fund's investment in
prerefunded bonds helped to dampen volatility, while continuing to provide a
high degree of current income to shareholders. At fiscal year-end, this
position amounted to approximately 8.5% of the Fund's portfolio.
Orange County, California's bankruptcy last December, was a major factor
in the tax-exempt market's performance last year. The Fund was fortunate to
have avoided the fallout. When stories first surfaced last Fall about the
County's finances, we eliminated from the portfolio any bonds that we felt
could possibly be affected. Of course, the entire California market was
tinged to a lesser degree when the rumors became fact. Fortunately, the
California market has stabilized, and its strong performance since then has
benefited the State's credits.
We have always been strong advocates of maintaining a disciplined,
long-term approach to investing. In our opinion, abandoning such a strategy
while attempting to time the market during periods of weakness could be
detrimental should one's timing not be precise. Certainly, the market's
recent behavior underscores this fact: the strong rebound in prices since
last November has benefited those investors who elected to stay the course.
Given our current view of the market, we have lengthened the portfolio's
duration. While we may not have seen the last hike in rates, we believe that
the economy is slowing in certain key sectors such as housing and automobile
sales. Furthermore, our optimism about municipal securities takes comfort
from the dearth of new supply issuance in the tax-exempt market. We believe
that the sharp downtrend of supply experienced in 1994 will continue in the
months ahead.
As always, we will strive to maximize tax-exempt current income
consistent with the preservation of capital. A current Statement of
Investments and recent financial statements have been provided for your
review. We greatly appreciate your investment in the Fund and look forward to
serving your investment needs in the future.
Very truly yours,
(logo signature)
Richard J. Moynihan
Director of Municipal Portfolio Management
The Dreyfus Corporation
February 15, 1995
New York, N.Y.
* Total return represents the change during the period in a
hypothetical account with dividends reinvested.
** Source: Lipper Analytical Services, Inc. - Unlike the Fund, the
Lipper California Municipal Debt Fund Average is an
unmanaged index.
*** Some income may be subject to the Federal Alternative Minimum Tax (AMT)
for certain shareholders. Income may be subject
to some state and local taxes for non-California residents. Capital
gains, if any, may be subject to Federal, state and local taxes.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
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
*Source: Lehman Brothers
Exhibit A
AVERAGE ANNUAL TOTAL RETURNS
CLASS A CLASS B
------------------------------------------------------------ -----------------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIODS ENDED 1/31/95 Sales Charge Sales Charge (4.5%) PERIODS ENDED 1/31/95 Redemption Redemption*
-------------------- ------------ -------------- ------------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
1 Year (4.34%) (8.63%) 1 Year (4.77%) (7.46%)
5 Years 7.52 6.53 From Inception (1/15/93) 4.22 3.31
From Inception (11/10/86) 7.06 6.46
</TABLE>
Past performance is not predictive of future performance. Share price and
investment return fluctuate and share price may be more or less than original
cost upon redemption.
The above graph 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. Performance for Class B shares will vary from the results
shown above due to the difference in charges and expenses charged to that
class.
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 municipal 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.
* Maximum contingent deferred sales charge for Class B shares is 3% and is
reduced to 0% after five years.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JANUARY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--99.0% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
CALIFORNIA--93.8%
Alameda, Special Tax (Community Facilities District Number 1) 7.75%, 9/1/2019 $ 2,000,000 $ 2,028,500
Anaheim Public Financing Authority, Tax Allocation Revenue
(Redevelopment Project Alpha) 6.31%, 12/28/2018 (Insured; MBIA)......... 4,000,000 4,003,600
Antelope Valley Hospital District, Insured COP 7.30%, 1/1/2006.............. 2,400,000 2,492,256
Bakersfield, COP (Wastewater Treatment Plant 3 Project)
8%, 1/1/2010 (Prerefunded 1/1/1998) (a)................................. 250,000 270,570
California:
6.90%, 4/1/2005......................................................... 2,000,000 2,149,480
6.125%, 10/1/2011....................................................... 2,875,000 2,864,305
California Department of Water Resources, Revenue (Central Valley Project)
6.385%, 12/1/2026 (b)................................................... 7,800,000 7,613,346
California Educational Facilities Authority, Revenue:
(Refunding - Saint Mary's College) 5%, 10/1/2012........................ 4,000,000 3,297,880
(Santa Clara University) 6.25%, 2/1/201................................. 3,500,000 3,361,855
California Health Facilities Financing Authority, Revenue:
(Eskaton Properties) 7.50%, 5/1/2020 (Insured; California Health
Facilities
Construction Insurance) (Prerefunded 5/1/2000) (a).................... 4,000,000 4,444,400
(Health Dimensions) 7%, 5/1/2020........................................ 6,000,000 5,772,780
(Kaiser Permanente) 5.60%, 5/1/2033.................................... 3,000,000 2,476,620
(Saint Francis Memorial Hospital) 5.875%, 11/1/2023..................... 4,500,000 3,842,010
California Housing Finance Agency, Home Mortgage Revenue:
Zero Coupon, 8/1/2023................................................... 6,570,000 728,810
7.50%, 8/1/2029......................................................... 1,135,000 1,167,200
8%, 8/1/2029............................................................ 525,000 552,043
7.60%, 8/1/2030......................................................... 1,605,000 1,670,869
7.70%, 8/1/2030......................................................... 1,200,000 1,253,268
California Pollution Control Financing Authority:
RRR (Waste Management, Inc.) 7.15%, 2/1/2011............................ 2,000,000 2,066,900
SWDR (North County Recycling Center)
6.75%, 7/1/2011 (LOC; Union Bank of Switzerland) (c).................. 2,500,000 2,529,275
California Public Works Board, LR:
(Department of Corrections - Madera State Prison) 6%, 6/1/2010.......... 3,000,000 2,912,010
(Department of Corrections - Susanville State Prison)
5.375%, 6/1/2018 (Insured; MBIA)...................................... 6,500,000 5,641,220
(Secretary of State) 6.75%, 12/1/2012................................... 2,375,000 2,400,175
(University of California Projects):
5.55%, 6/1/2010....................................................... 4,000,000 3,623,400
5.50%, 6/1/2019....................................................... 3,000,000 2,548,260
California Statewide Communities Development Authority, COP, Revenue,
Refunding:
(Pacific Homes) 5.90%, 4/1/2009......................................... 4,340,000 4,206,068
(Triad Healthcare) 6.25%, 8/1/2006...................................... 2,000,000 1,944,200
Central Valley Financing Authority, Cogeneration Project Revenue
(Carson Ice - General Project) 6%, 7/1/2009............................. 4,500,000 4,207,410
Compton, COP, Refunding 7.50%, 8/1/2015 (LOC; Mitsui Trust and Banking) (c). 2,000,000 2,044,740
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
CALIFORNIA (CONTINUED)
Contra Costa County, Home Mortgage Revenue
8.25%, 6/1/2021 (Collateralized; GNMA )................................. $ 350,000 $ 429,782
Fontana Redevelopment Agency, Tax Allocation Revenue
(North Fontana Redevelopment Project) 7.25%, 9/1/2020................... 4,250,000 4,336,317
Glendora Public Finance Authority, Tax Allocation Revenue
7.625%, 9/1/2010 (Prerefunded 9/1/1999) (a)............................. 1,815,000 2,004,559
Lake Elsinore Public Financing Authority, Local Agency Revenue:
7.50%, 10/1/2010........................................................ 3,000,000 3,054,900
8%, 10/1/2020........................................................... 1,640,000 1,694,464
Los Angeles Convention and Exhibition Center Authority, COP, Revenue,
Refunding
7.375%, 8/15/2018 (Prerefunded 8/15/1999) (a)........................... 700,000 765,583
Los Angeles County Building Authority, Revenue, Refunding:
5.60%, 5/1/2008......................................................... 4,445,000 4,163,943
5.625%, 5/1/2011........................................................ 5,250,000 4,777,867
Los Angeles Department of Water and Power, Electric Plant Revenue:
4.75%, 11/15/2019....................................................... 5,000,000 3,883,250
5.30%, 2/15/2021........................................................ 2,000,000 1,685,140
5.375%, 9/1/2023........................................................ 5,000,000 4,227,900
Los Angeles Harbor Department, Revenue 7.60%, 10/1/2018..................... 750,000 839,092
Los Banos, COP 7.65%, 9/1/2019 (Prerefunded 9/1/1999) (a)................... 500,000 552,725
Mount Shasta, HR, COP (Mercy Medical Center)
7.25%, 7/1/2019 (Prerefunded 7/1/1999) (a).............................. 1,885,000 2,050,861
Mountain View Shoreline Regional Park Community 5.75%, 8/1/2018............. 4,605,000 3,853,510
Nevada County, COP (Western Nevada Co.- Solid Waste) 7.50%, 6/1/2021........ 2,200,000 2,100,384
Northern California Power Agency, Public Power Revenue:
6.30%, 7/1/2018 (b)..................................................... 6,000,000 5,948,820
(Refunding - Geothermal Project No. 3):
7%, 7/1/2007.......................................................... 1,000,000 1,023,960
5.85%, 7/1/2010....................................................... 4,000,000 3,690,400
(Refunding - Hydroelectric Project No. 1) 7.15%, 7/1/2024............... 4,445,000 4,518,476
Oakdale Public Finance Authority, Revenue (Center City Redevelopment Project)
7.90%, 7/1/2019......................................................... 1,750,000 1,807,120
Orange County, Special Tax (Community Facilities District No. 87):
7.75%, 8/15/2014........................................................ 2,375,000 2,208,750
7.80%, 8/15/2015 (Prerefunded 8/15/2000) (a)............................ 2,000,000 2,259,440
Orange Cove, Irrigation District Revenue, COP (Rehabilitation Project)
7.25%, 2/1/2012......................................................... 3,000,000 3,032,550
Richmond Joint Powers Financing Authority, Revenue 7.25%, 5/15/2013......... 1,500,000 1,536,330
Riverside County, SFMR 7.80%, 5/1/2021 (Collateralized; GNMA)............... 1,250,000 1,465,563
Roseville, Special Tax (Community Facilities District No. 1) 7.70%, 9/1/2020 2,000,000 2,028,660
Sacramento County, Special Tax (Community Facilities District No. 1):
8.20%, 12/1/2010........................................................ 2,250,000 2,386,710
8.25%, 12/1/2020........................................................ 2,000,000 2,098,160
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
CALIFORNIA (CONTINUED)
Sacramento Schools Insurance Authority, Revenue (Workers Compensation
Program)
5.75%, 6/1/2003......................................................... $ 3,955,000 $ 3,944,282
San Diego, IDR (San Diego Electric and Gas)
5.90%, 6/1/2018......................................................... 5,000,000 4,665,000
San Diego County Water Authority, Water Revenue, COP 5.607%, 4/23/2008...... 4,000,000 3,820,760
San Francisco City and County Public Utilities Commission, Water Revenue,
Refunding
6%, 11/1/2015........................................................... 2,000,000 1,933,060
San Jose Financing Authority, Revenue, Refunding (Convention Center Project)
6.40%, 9/1/2022......................................................... 4,000,000 3,874,040
San Marcos Public Facilities Authority, Revenue, Refunding
(Public Improvement - Civic Center) 6.15%, 8/1/2013..................... 2,320,000 2,081,782
Santa Monica, Wastewater Enterprise Revenue 4.75%, 1/1/2010 (Insured; AMBAC) 2,895,000 2,446,275
Sequoia Hospital District, Revenue, Refunding:
7.50%, 9/1/2008 (Prerefunded 9/1/1998) (a).............................. 795,000 865,890
7.60, 9/1/2014 (Prerefunded 9/1/1998) (a)............................... 750,000 819,038
Simi Valley, Single Family Residential Mortgage Revenue 7.625%, 8/1/2022 (d) 2,000,000 1,000,000
University of California, COP (UCLA Central Chiller/Cogeneration)
7%, 11/1/2018 (Prerefunded 11/1/1999) (a)............................... 3,340,000 3,615,684
Upland, HR, COP (San Antonio Community Hospital) 7.125%, 1/1/2011........... 1,000,000 1,021,860
Vista, MFHR (Vista Hacienda Project) 6.95%, 4/1/2017........................ 3,000,000 3,052,410
Waterford Public Financing Authority, Revenue 8.20%, 9/15/2020.............. 3,505,000 3,597,918
U.S. RELATED--5.2%
Puerto Rico Electric Power Authority, Power Revenue, Refunding:
7.125%, 7/1/1999........................................................ 3,500,000 3,809,050
7.125%, 7/1/2014........................................................ 2,000,000 2,072,900
Virgin Islands Territory (Hugo Insurance Claims Fund Program) 7.75%, 10/1/2006. 1,770,000 1,869,014
Virgin Islands Water and Power Authority, Electric Systems Revenue 7.40%, 7/1/2011 3,000,000 3,080,820
--------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $206,689,074)................... $206,108,449
============
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL INVESTMENTS--1.0%
California Pollution Control Financing Authority, SWDR, VRDN
<S> <C> <C>
3.30%, (cost $2,000,000) (e)............................................ $ 2,000,000 $ 2,000,000
------------
TOTAL INVESTMENTS--100.0% (cost $208,689,074)............................... $208,108,449
============
</TABLE>
<TABLE>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation MFHR Multi - Family Housing Revenue
GNMA Government National Mortgage Association RRR Resources Recovery Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Note
LR Lease Revenue
</TABLE>
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (F) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
--------- --------- -------------------- -----------------------
<S> <C> <C> <C>
AAA Aaa AAA 18.9%
AA Aa AA 18.2
A A A 36.4
BBB Baa BBB 10.7
D D D .5
F1+ & F1 MIG1,VMIG1 & P1 SP1 & A1 1.0
Not Rated (g) Not Rated (g) Not Rated (g) 14.3
-------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Bonds which are prerefunded are collateralized by U.S. Government
Securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(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,
1995, these securities amounted to $13,562,166 or 6.4% of net assets.
(c) Secured by letters of credit.
(d) Non-income producing security; interest payments in default.
(e) Security payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates of an index of market interest
rates.
(f) Fitch currently provides creditworthiness information for a limited
number of investments.
(g) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Fund's Manager 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, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $208,689,074)--see statement.................................... $208,108,449
Cash.................................................................... 238,093
Receivable for investment securities sold............................... 12,841,148
Interest receivable..................................................... 3,625,638
Receivable for shares of Beneficial Interest subscribed................. 75,515
Prepaid expenses........................................................ 10,244
--------------
224,899,087
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 97,428
Due to Distributor...................................................... 52,264
Payable for investment securities purchased............................. 13,496,145
Payable for shares of Beneficial Interest redeemed...................... 261,212
Accrued expenses........................................................ 72,348 13,979,397
---------- ------------
NET ASSETS ................................................................ $210,919,690
============
REPRESENTED BY:
Paid-in capital......................................................... $210,682,786
Accumulated undistributed net realized gain on investments.............. 817,529
Accumulated net unrealized (depreciation) on investments-Note 3(b)...... (580,625)
--------------
NET ASSETS at value......................................................... $210,919,690
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 15,678,009
============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 1,549,730
============
NET ASSET VALUE per share:
Class A Shares
($191,939,038 / 15,678,009 shares).................................... $12.24
=======
Class B Shares
($18,980,652 / 1,549,730 shares)...................................... $12.25
=======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 15,224,028
EXPENSES:
Management fee--Note 2(a)............................................. $ 1,264,646
Shareholder servicing costs-Note 2(c)................................. 711,937
Distribution fees (Class B Shares)-Note 2(b).......................... 95,246
Professional fees..................................................... 41,348
Prospectus and shareholders' reports.................................. 24,345
Custodian fees........................................................ 24,113
Trustees' fees and expenses-Note 2(d)................................. 20,846
Registration fees..................................................... 10,658
Miscellaneous......................................................... 30,358
-----------
2,223,497
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 51,429
--------------
TOTAL EXPENSES.................................................. 2,172,068
--------------
INVESTMENT INCOME--NET.......................................... 13,051,960
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments--Note 3(a)............................. $ 1,747,587
Net realized gain on financial futures-Note 3(a)........................ 11,431
--------------
NET REALIZED GAIN................................................. 1,759,018
Net unrealized (depreciation) on investments............................ (27,102,766)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (25,343,748)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(12,291,788)
=============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
--------------------------------
1994 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................................. $ 14,116,597 $ 13,051,960
Net realized gain on investments........................................ 1,865,591 1,759,018
Net unrealized appreciation (depreciation) on investments for the year.. 15,121,644 (27,102,766)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... 31,103,832 (12,291,788)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares........................................................ (13,671,122) (12,067,054)
Class B shares........................................................ (445,475) (984,906)
Net realized gain on investments:
Class A shares........................................................ (1,751,692) (1,316,480)
Class B shares........................................................ (106,093) (128,731)
-------------- --------------
TOTAL DIVIDENDS................................................... (15,974,382) (14,497,171)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 26,262,438 12,980,330
Class B shares........................................................ 17,148,970 6,515,990
Dividends reinvested:
Class A shares........................................................ 7,074,547 6,079,502
Class B shares........................................................ 366,127 709,931
Cost of shares redeemed:
Class A shares........................................................ (27,275,575) (47,805,009)
Class B shares........................................................ (1,244,937) (3,113,197)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS................................ 22,331,570 (24,632,453)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 37,461,020 (51,421,412)
NET ASSETS:
Beginning of year....................................................... 224,880,082 262,341,102
-------------- --------------
End of year............................................................. $262,341,102 $210,919,690
============== =============
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------------------------------------------------------------------
CLASS A CLASS B
-------------------------------- --------------------------------
YEAR ENDED JANUARY 31, YEAR ENDED JANUARY 31,
-------------------------------- --------------------------------
1994 1995 1994 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 1,965,588 1,040,833 1,279,001 506,103
Shares issued for dividends reinvested. 526,710 489,182 27,085 57,245
Shares redeemed........................ (2,036,874) (3,847,929) (92,319) (252,804)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING............. 455,424 (2,317,914) 1,213,767 310,544
=============== ============ ============= =============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
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 the Fund's financial statements.
CLASS A SHARES CLASS B SHARES
----------------------------------------------- ---------------------------
YEAR ENDED YEAR ENDED
JANUARY 31, JANUARY 31,
----------------------------------------------- ---------------------------
PER SHARE DATA: 1991 1992 1993 1994 1995 1993(1) 1994 1995
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.02 $12.23 $12.58 $12.80 $13.64 $12.69 $12.81 $13.64
------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income--net........... .89 .82 .80 .77 .72 .03 .69 .65
Net realized and unrealized gain (loss)
on investments................. .21 .36 .39 .94 (.80) .12 .93 (.79)
------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.10 1.18 1.19 1.71 (.08) .15 1.62 (.14)
------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income--net (.89) (.82) (.80) (.77) (.72) (.03) (.69) (.65)
Dividends from net realized gain
on investments................. -- (.01) (.17) (.10) (.60) -- (.10) (.60)
------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS............ (.89) (.83) (.97) (.87) (1.32) (.03) (.79) (1.25)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year..... $12.23 $12.58 $12.80 $13.64 $12.24 $12.81 $13.64 $12.25
====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2) 9.45% 10.02% 9.78% 13.62% (4.34%) 25.98%(3) 12.91% (4.77%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .11% .47% .65% .78% .90% 1.07%(3) 1.31% 1.42%
Ratio of net investment income to
average net assets............. 7.19% 6.62% 6.30% 5.71% 5.72% 4.92%(3) 4.90% 5.17%
Decrease reflected in above expense ratios
due to undertakings by the Manager .91% .48% .28% .15% .02% .13%(2) .13% .02%
Portfolio Turnover Rate.......... 5.95% 10.29% 36.54% 26.69% 37.39% 36.54% 26.69% 37.39%
Net Assets, end of year (000's Omitted) $166,095 $218,703 $224,555 $245,435 $191,939 $325 $16,906 $18,981
(1) From January 15, 1993 (commencement of initial offering) to January 31, 1993.
(2) Exclusive of sales load.
(3) Annualized.
See notes to financial statements.
</TABLE>
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, until August 24, 1994, acted as the distributor of the Fund's
shares. Dreyfus Service Corporation is a wholly-owned subsidiary of The
Dreyfus Corporation ("Manager"). Effective August 24, 1994, the Manager
became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
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 (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(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 original issue 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
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise 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, 1994 through July 7, 1994, to 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 reduction in
management fee, pursuant to the undertaking, amounted to $51,429 for the
year ended January 31, 1995.
Dreyfus Service Corporation retained $17,596 during the year ended
January 31, 1995 from commissions earned on sales of the Fund's Class A
shares.
Prior to August 24, 1994, Dreyfus Service Corporation retained $33,555
during the year ended January 31, 1995 from contingent deferred sales charges
imposed upon redemptions of the Fund's Class B shares.
(B) On August 3, 1994, the Fund's shareholders approved a revised
Distribution Plan with respect to Class B shares only (the "Class B
Distribution Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the
Class B Distribution Plan, effective August 24, 1994, the Fund pays the
Distributor for distributing the Fund's Class B shares at an annual rate of
.50 of 1% of the value of the average daily net assets of Class B shares.
Prior to August 24, 1994, the Distribution Plan ("prior Class B
Distribution Plan") provided that the Fund pay Dreyfus Service Corporation 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. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's Class B shares owned by clients of the Service Agent.
During the year ended January 31, 1995, $42,473 was charged to the Fund
pursuant to the Class B Distribution Plan and $52,773 was charged to the Fund
pursuant to the prior 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
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. From February 1, 1994 through August
23, 1994, $309,651 and $26,386 were charged to Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
January 31, 1995, $217,565 and $21,237 were charged to Class A and B shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
(D) Prior to August 24, 1994, certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each trustee who is not an "affiliated person"
receives an annual fee of $2,500 and an attendance fee of $500 per meeting.
Prior to April 20, 1994 the annual fee was $400 and the attendance fee
was $250 per meeting.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities
amounted to $171,195,785 and $197,790,045, respectively, for the year ended
January 31, 1995, and consisted entirely of long-term and short-term municipal
investments. The Fund is engaged in trading financial future contracts. The
Fund is exposed to market risk as a result of changes in the value of underlying
financial instruments. Investments in financial futures require the Fund to
"mark to market" on a daily basis, which reflects the change in the market
value of the contract at the close of each day's trading. Accordingly,
variation margin payments are made or received to reflect daily unrealized
gains or losses. When the contracts are closed, the Fund recognizes a
realized gain or loss. These investments require initial margin deposits
which consist of cash or cash equivalents, up to approximately 10% of the
contract amount. The amount of these deposits is determined by the exchange
or Board of Trade on which the contract is traded and is subject to change
At January 31, 1995, there were no financial futures contracts outstanding.
(B) At January 31, 1995 accumulated net unrealized depreciation on
investments was $580,625, consisting of $4,975,986 gross unrealized
appreciation and $5,556,611 gross unrealized depreciation.
At January 31, 1995 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 LLP, 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, 1995, 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, 1995 by correspondence with the custodian
and brokers. 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, 1995, 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.
(logo signature)
New York, New York
March 7, 1995
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended January 31, 1995.
_ 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), and
_ the Fund hereby designates $.0277 per share as a long-term
capital gain distribution paid on October 3, 1994. The Fund also
designates $.0532 per share as a long-term capital gain distribution
of the $.0533 per share paid on December 7, 1994.
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 1995 calendar year
on Form 1099-DIV which will be mailed by January 31, 1996.
In Dollars
$18,066
Lehman Brothers
Municipal Bond Index*
$16,735
Premier California
Municipal Bond Fund
(Class A Shares)
Annual Report
PREMIER CALIFORNIA
MUNICIPAL BOND FUND
JANUARY 31, 1995
PREMIER CALIFORNIA
MUNICIPAL BOND FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 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. 023/613AR951
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 FUND |
| | BOND INDEX * | (CLASS A SHARES) |
|--------------|-------------------|----------------------|
| 11/10/86 | 10,000 | 9,549 |
| 1/31/87 | 10,476 | 10,025 |
| 1/31/88 | 10,691 | 9,864 |
| 1/31/89 | 11,607 | 10,803 |
| 1/31/90 | 12,540 | 11,648 |
| 1/31/91 | 13,699 | 12,749 |
| 1/31/92 | 15,193 | 14,026 |
| 1/31/93 | 16,687 | 15,397 |
| 1/31/94 | 18,733 | 17,494 |
| 1/31/95 | 18,066 | 16,735 |
|---------------------------------------------------------|
* Source: Lehman Brothers
