PREMIER CALIFORNIA MUNICIPAL BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Premier California
Municipal Bond Fund for the semi-annual reporting period ended July 31, 1995.
The Federal Reserve Board relaxed its policy of monetary restraint in July of
1995 when it eased the rate on Fed Funds on July 6th. This reduction ended
the upward pressure on short-term rates prevailing since the beginning of the
reporting period. Despite the monetary restraint that existed, long-term
rates began their decline early in the year. The Fed's policy of restraint
was based on concerns about inflation given the strong economic news then
prevailing. But in July these same reports indicated a significant weakening
trend in the economy. The July decline in the Fed Funds rate signaled that
economic growth issues outweighed, for a time, Fed fears of a resurgence of
inflation.
For its semi-annual reporting period ending July 31, 1995, your Fund
produced a total return, including bond price changes and interest income, of
6.20% for Class A shares and 5.93% for Class B shares.* Income dividends
exempt from Federal and State of California personal income taxes of
approximately $.335 per share for Class A shares and approximately $.303 for
Class B shares were paid.** This is equivalent to an annualized tax-free
distribution rate per share of 5.10% for Class A shares and 4.82% per share
for Class B shares+, comfortably in excess of the annualized inflation rate of
2.95% as measured by the Consumer Price Index for the same period.++
Class C shares had a total return of -1.66% from their inception on June
2, 1995 through July 31, 1995. During this period, income dividends of
approximately $.094 per share were paid, equating to an annualized tax-free
distribution rate of 4.50% per share.
THE ECONOMY
Economic reports about lagging home and auto sales and new home
construction weakened from earlier this year. Furthermore, rising business
inventories (a frequent harbinger of a business slowdown) and weakening
retail sales lent additional credibility to the case for easier credit
conditions. By midyear, jobless claims were also on the rise, a particularly
politically sensitive indicator, made even more so by the coming Presidential
election year.
A word about inflation. Despite strong economic growth at the beginning
of the reporting period, inflation remained in check. We believe a
continuation of this moderating trend for prices appears likely to continue,
particularly if the economy remains sluggish. This is good news for bond
investors since easing inflation often results in falling interest rates.
Declining interest rates, often a corollary to slow business conditions,
cause bond prices to rise. Although we strive to maintain a high level of
current tax-exempt income for the Fund, we are very concerned with credit
quality. Accordingly, we are mindful of the potential erosion in bond quality
if the economy slips into a recession. We follow a policy that stresses
strong credit quality in the portfolio, a policy which seeks to protect bond
values and income streams. As you know, we manage portfolios with a long-term
perspective, aware that market conditions can change rapidly.
MARKET ENVIRONMENT
The municipal bond market, buffeted by six interest rate hikes by the
Federal Reserve Board in 1994, recovered strongly this year. The release of
weaker than expected December sales figures tumbled rates and this decline
persisted throughout the remainder of the reporting period. The recent rate
cut confirmed what declining long-term interest rates had indicated all year
- - that business conditions were weaker than monetary policy makers thought.
If economic conditions remain sluggish, further Fed easing is likely. We
believe this indicates a rather favorable outlook for bond markets in
general. We are certainly pleased and encouraged by the good performance of
late in the bond market and by the Fund; however, we are wary that this bond
market strength may be counting too much on continued low inflation. Thus,
while we remain fully invested in this improving market, we are alert to the
stimulatory effects of easing monetary policy and are watchful for any signs
of rekindling inflation. Our primary task -- to maximize current income
exempt from Federal and State of California personal income taxes to the
extent consistent with the preservation of capital -- continues to underscore
our portfolio management decisions.
While the municipal market and the Fund have each shown nearly
double-digit returns for the past six months, the second calendar quarter
results for municipal securities trailed the other fixed-income markets. The
threat of tax reform appears to be limiting the enthusiasm for tax-exempt
securities. Since April, when serious flat tax and consumption tax proposals
began to surface, the municipal rally has lagged, resulting in an increase in
municipal yields as a percentage of comparable taxable bond yields. Today,
long-term municipal bonds are yielding nearly 90% of U.S. Treasuries, which
is a greater yield ratio than existed prior to the onset of talk regarding
tax reform. While it could be years before an actual change in the law is
adopted, the market's reaction so early in the proposal cycle suggests that
the ultimate legislation, if any, may have a less radical effect on the
market than feared.
The financial situation in the State of California has not helped bond
prices of in-state municipal securities. The Orange County bankruptcy, the
rejection of its sales tax bailout plan, and predicted budget problems in Los
Angeles County, have been further drags on California municipal issues. Both
counties have proposed diverting portions of county transportation funds to
help close shortfalls. Governor Wilson has not embraced these proposals and,
at this time, a resolution of the dilemma is not apparent.
THE PORTFOLIO
The political fallout from events in Orange and Los Angeles Counties
suggests that we limit exposure to those bonds that might somehow be linked
to these entities. While we are not presently concerned about the general
health of the State, we believe that a conservative approach is warranted
regarding these particular areas and is reflected in our limited exposure to
related credits. Where we thought it was appropriate, individual holdings
were insured in order to protect their value.
As indicated in the last letter to shareholders, we lengthened the
duration of the Fund earlier this year in response to a perceived slowing of
the economy. At this time we have already begun shifting to a more defensive
posture. In our view, market yields have dropped significantly, and further
gains will be limited. While we don't envision a major sell-off, we believe
it prudent to lock in a portion of the returns achieved thus far in 1995; the
risk to this strategy is that future gains are limited should the market
rally further. In summary, management is looking to enhance the Fund's
overall credit quality and limit price volatility.
Our primary tasks -- to protect principal, maintain liquidity and
distribute a high level of current tax-exempt income to you -- continue to
underscore our portfolio management decisions.
Included in this report is a series of detailed statements regarding your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
August 15, 1995
New York, N.Y.
* Total return represents the change during the period with dividends
reinvested.
**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.
+ Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the maximum
offering price per share at the end of the period in the case of Class A
shares, or the net asset value per share at the end of the period in the case
of Class B and Class C shares.
++ Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JULY 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-98.1% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
CALIFORNIA-94.7%
Anaheim Public Financing Authority, Tax Allocation Revenue
(Redevelopment Project Alpha) 6.31%, 12/28/2018 (Insured; MBIA)......... $ 4,000,000 $ 4,076,600
Antelope Valley Hospital District, Insured COP 7.30%, 1/1/2006.............. 2,400,000 2,546,304
California:
6.90%, 4/1/2005......................................................... 2,000,000 2,258,820
6.125%, 10/1/2011....................................................... 2,875,000 3,018,232
California Department of Water Resources, Revenue
(Central Valley Project) 6.40%, 12/1/2026............................... 7,800,000 7,899,450
California Educational Facilities Authority, Revenue, Refunding
(Saint Mary's College) 5%, 10/1/2012.................................... 4,000,000 3,473,960
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 4,544,760
(Kaiser Permanente) 5.60%, 5/1/2033.................................... 3,000,000 2,659,440
(Saint Francis Memorial Hospital) 5.875%, 11/1/2023..................... 4,500,000 4,094,730
California Housing Finance Agency, Home Mortgage Revenue:
6.10%, 8/1/2014......................................................... 4,340,000 4,272,904
Zero Coupon, 8/1/2023................................................... 6,570,000 711,202
6.70%, 8/1/2025......................................................... 2,000,000 2,033,660
7.50%, 8/1/2029......................................................... 1,135,000 1,190,649
8%, 8/1/2029............................................................ 525,000 557,046
7.60%, 8/1/2030......................................................... 1,605,000 1,696,581
7.70%, 8/1/2030......................................................... 1,200,000 1,270,032
California Pollution Control Financing Authority, SWDR (North County
Recycling
Center) 6.75%, 7/1/2011 (LOC; Union Bank of Switzerland) (b)............ 2,500,000 2,592,925
California Public Works Board, LR:
(Department of Corrections - Madera State Prison) 6%, 6/1/2010.......... 3,000,000 3,043,920
(Secretary of State) 6.75%, 12/1/2012................................... 3,475,000 3,606,007
(University of California Projects):
5.55%, 6/1/2010....................................................... 4,000,000 3,843,400
5.50%, 6/1/2019....................................................... 8,000,000 7,315,680
California Statewide Communities Development Authority, COP, Revenue,
Refunding
(Pacific Homes) 5.90%, 4/1/2009......................................... 4,340,000 4,368,167
Central Valley Financing Authority, Cogeneration Project Revenue
(Carson Ice - General Project) 6%, 7/1/2009............................. 4,500,000 4,437,180
Compton, COP, Refunding 7.50%, 8/1/2015 (LOC; Mitsui Trust and Banking) (b). 2,000,000 2,096,820
Contra Costa County, Water District Revenue 6%, 10/1/2011 (Insured; MBIA)... 1,725,000 1,731,779
Eureka Public Financing Authority, Tax Allocation Revenue, Refunding
(Eureka Redevelopment Projects) 6.25%, 11/1/2011 (Insured; CGIC)........ 2,000,000 2,067,020
Fontana Redevelopment Agency, Tax Allocation Revenue
(North Fontana Redevelopment Project) 7.25%, 9/1/2020................... 4,250,000 4,472,573
JULY 31, 1995 (UNAUDITED)
Premier California Municipal Bond Fund PRINCIPAL
Statement of Investments (continued) AMOUNT VALUE
Long-Term Municipal Investments (continued)
California (continued) ------------- ------------
Lake Elsinore Public Financing Authority, Local Agency Revenue:
7.50%, 10/1/2010........................................................ $ 3,000,000 $ 2,894,520
8%, 10/1/2020........................................................... 1,640,000 1,644,559
Los Angeles Convention and Exhibition Center Authority, COP, Revenue,
Refunding
7.375%, 8/15/2018 (Prerefunded 8/15/1999) (a)........................... 700,000 790,076
Los Angeles County Building Authority, Revenue, Refunding
5.60%, 5/1/2008......................................................... 4,445,000 4,333,964
Los Angeles Harbor Department, Revenue 7.60%, 10/1/2018..................... 750,000 828,750
Los Banos, COP 7.65%, 9/1/2019 (Prerefunded 9/1/1999) (a)................... 500,000 570,695
Madera County, COP (Valley Children's Hospital):
6.25%, 3/15/2006 (Insured; MBIA)........................................ 2,250,000 2,406,645
6.50%, 3/15/2009 (Insured; MBIA)........................................ 3,370,000 3,639,364
Menlo Park Community Development Agency, Tax Allocation, Refunding
(Las Pulgas Community Development Project) 6.55%, 10/1/2011 (Insured; AMBAC). 2,000,000 2,136,060
Metropolitan Water District, Water Works Revenue 5.60%, 7/1/2010 (Insured; MBIA). 3,260,000 3,233,790
Monrovia Redevelopment Agency, Tax Allocation Refunding
(Central Redevelopment Project) 6.70%, 5/1/2021 (Insured; AMBAC)........ 2,000,000 2,127,460
Mount Shasta, HR, COP (Mercy Medical Center)
7.25%, 7/1/2019 (Prerefunded 7/1/1999) (a).............................. 1,855,000 2,082,349
Mountain View Shoreline Regional Park Community 5.75%, 8/1/2018............. 4,605,000 4,429,089
Nevada County, COP (Western Nevada Co. Solid Waste-McCourtney Road Landfill)
7.50%, 6/1/2021......................................................... 2,200,000 2,212,562
Northern California Power Agency, Public Power Revenue, Refunding:
(Geothermal Project No. 3) 7%, 7/1/2007................................. 1,000,000 1,029,340
(Hydroelectric Project No. 1):
6.30%, 7/1/2018....................................................... 6,000,000 6,353,700
7.15%, 7/1/2024....................................................... 4,415,000 4,691,467
Orange County, Special Tax (Community Facilities District No. 87):
7.75%, 8/15/2014........................................................ 2,375,000 2,375,000
7.80%, 8/15/2015 (Prerefunded 8/15/2000) (a)............................ 2,000,000 2,325,520
Orange Cove, Irrigation District Revenue, COP (Rehabilitation Project)
7.25%, 2/1/2012......................................................... 3,000,000 3,097,800
Richmond Joint Powers Financing Authority, Revenue 7.25%, 5/15/2013......... 1,500,000 1,564,080
Riverside County, COP (Master Refunding Project) 5.75%, 11/1/2012).......... 3,000,000 2,848,740
Riverside County, SFMR 7.80%, 5/1/2021 (Collateralized; GNMA)............... 1,250,000 1,541,075
Roseville, Special Tax (Community Facilities District No. 1) 7.70%, 9/1/2020 2,000,000 2,044,300
Sacramento County, Special Tax (Community Facilities District No. 1):
8.20%, 12/1/2010........................................................ 2,250,000 2,392,065
8.25%, 12/1/2020........................................................ 2,000,000 2,125,600
Premier California Municipal Bond Fund (continued)
Statement of Investments (continued)
Long-Term Municipal Investments (continued)
California (continued) JULY 31, 1995 (UNAUDITED)
PRINCIPAL
Sacramento Schools Insurance Authority, Revenue (Workers Compensation AMOUNT VALUE
Program) -------------- --------------
5.75%, 6/1/2003......................................................... $ 3,945,000 $ 4,024,334
San Diego, IDR (San Diego Electric and Gas) 5.90%, 6/1/2018................. 2,000,000 1,953,260
San Diego County Water Authority, Water Revenue, COP 5.607%, 4/23/2008...... 4,000,000 4,010,360
San Francisco City and County Sewer Revenue, Refunding
6%, 10/1/2011 (Insured; AMBAC).......................................... 4,500,000 4,518,405
San Marcos Public Facilities Authority, Revenue, Refunding
(Public Improvement - Civic Center) 6.15%, 8/1/2013..................... 2,320,000 2,225,089
Santa Barbara County, COP 5.70%, 3/1/2011................................... 4,000,000 3,830,600
Santa Fe Springs Redevelopment Agency, Tax Allocation Revenue
(Consolidated Redevelopment Project) 6.40%, 9/1/2022.................... 7,275,000 7,481,101
Santa Monica, Wastewater Enterprise Revenue 4.75%, 1/1/2010 (Insured; AMBAC) 2,895,000 2,592,762
Sequoia Hospital District, Revenue, Refunding
7.50%, 9/1/2008 (Prerefunded 9/1/1998) (a).............................. 795,000 887,268
Southern California Public Power Authority, Power Revenue, Refunding 5%, 7/1/2015 3,000,000 2,594,370
Southern California Rapid Transit District, COP
(Worker's Compensation Fund) 6%, 7/1/2010............................... 2,045,000 2,054,305
Simi Valley, Single Family Residential Mortgage Revenue 7.625%, 8/1/2022 (c) 2,000,000 240,000
Upland, HR, COP (San Antonio Community Hospital) 7.125%, 1/1/2011........... 1,000,000 1,028,480
Vista, MFHR (Vista Hacienda Project) 6.95%, 4/1/2017........................ 3,000,000 3,148,740
Waterford Public Financing Authority, Revenue 8.20%, 9/15/2020.............. 3,505,000 3,723,887
West Sacramento Redevelopment Agency, Tax Allocation Revenue
(West Sacramento Redevelopment Project) 6.25%, 9/1/2021 (Insured; MBIA). 4,000,000 4,047,720
U.S. RELATED-3.4%
Puerto Rico Electric Power Authority, Power Revenue, Refunding 7.125%, 7/1/2014 2,000,000 2,139,420
Virgin Islands Territory (Hugo Insurance Claims Fund Program) 7.75%, 10/1/2006 1,770,000 1,922,450
Virgin Islands Water and Power Authority, Electric Systems Revenue 7.40%, 7/1/2011 3,000,000 3,176,190
-------------
TOTAL LONG TERM MUNICIPAL INVESTMENTS (cost $203,598,526)................... $207,197,152
=============
SHORT TERM MUNICIPAL INVESTMENTS-1.9%
CALIFORNIA;
California Statewide Communities Development Authority, Apartment Development
Revenue, VRDN 5.10% (cost $4,000,000) (d)............................... $ 4,000,000 $ 4,000,000
=============
TOTAL INVESTMENTS-100.0% (cost $207,598,526)................................ $211,197,152
=============
</TABLE>
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
CGIC Capital Guaranty Insurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
GNMA Government National Mortgage Association MFHR Multi - Family Housing 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
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (E) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- -------- ------------------ --------------------
<S> <C> <S> <C>
AAA Aaa AAA 35.5%
AA Aa AA 9.8
A A A 32.0
BBB Baa BBB 8.2
D D D .1
F1+ & F1 MIG1,VMIG1 & P1 SP1 & A1 1.9
Not Rated (f) Not Rated (f) Not Rated (f) 12.5
-------
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) Secured by letters of credit.
(c) Non-income producing security; interest payments in default.
(d) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(e) Fitch currently provides creditworthiness information for a limited
number of investments.
(f) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the fund may invest.
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $207,598,526)-see statement..................................... $211,197,152
Interest receivable..................................................... 3,349,697
Receivable for shares of Beneficial Interest subscribed................. 72,138
Prepaid expenses........................................................ 16,811
-------------
214,635,798
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 96,885
Due to the Distributor.................................................. 52,584
Payable for investment securities purchased............................. 8,122,059
Payable for shares of Beneficial Interest redeemed...................... 40,049
Accrued expenses and other liabilities.................................. 229,368 8,540,945
------------ -------------
NET ASSETS.................................................................. $206,094,853
=============
REPRESENTED BY:
Paid-in capital......................................................... $198,545,288
Accumulated undistributed net realized gain on investments.............. 3,950,939
Accumulated net unrealized appreciation on investments-Note 3........... 3,598,626
-------------
NET ASSETS at value......................................................... $206,094,853
=============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 14,684,073
=============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 1,590,233
=============
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 77
=============
NET ASSET VALUE per share:
Class A Shares
($185,948,787 / 14,684,073 shares)....................................
$12.66
======
Class B Shares
($20,145,090 / 1,590,233 shares)...................................... $12.67
======
Class C Shares
($976 / 77 shares)....................................................
$12.67
======
See independent accountants' review report and notes to financial statements.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED JULY 31, 1995 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 6,644,845
EXPENSES:
Management fee-Note 2(a).............................................. $ 581,049
Shareholder servicing costs-Note 2(c)................................. 339,699
Distribution fees-Note 2(b)........................................... 49,521
Professional fees..................................................... 32,109
Trustees' fees and expenses-Note 2(d)................................. 18,092
Custodian fees........................................................ 12,841
Registration fees..................................................... 4,901
Prospectus and shareholders' reports.................................. 3,924
Miscellaneous......................................................... 11,822
----------
TOTAL EXPENSES.................................................. 1,053,958
-----------
INVESTMENT INCOME-NET........................................... 5,590,887
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $3,133,410
Net unrealized appreciation on investments.............................. 4,179,251
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 7,312,661
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $12,903,548
=============
See independent accountants' review report and notes to financial statements.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
JANUARY 31, JULY 31, 1995
1995 (UNAUDITED)
------------- -------------
OPERATIONS:
Investment income-net.................................................. $ 13,051,960 $ 5,590,887
Net realized gain on investments....................................... 1,759,018 3,133,410
Net unrealized appreciation (depreciation) on investments for the period (27,102,766) 4,179,251
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.. (12,291,788) 12,903,548
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares....................................................... (12,067,054) (5,114,390)
Class B shares....................................................... (984,906) (476,490)
Class C shares....................................................... - (7)
Net realized gain on investments:
Class A shares....................................................... (1,316,480) -
Class B shares....................................................... (128,731) -
Class C shares....................................................... - -
------------- -------------
TOTAL DIVIDENDS.................................................. (14,497,171) (5,590,887)
------------- -------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares....................................................... 12,980,330 3,512,952
Class B shares....................................................... 6,515,990 1,442,588
Class C shares....................................................... - 1,000
Dividends reinvested:
Class A shares....................................................... 6,079,502 2,283,109
Class B shares....................................................... 709,931 303,390
Class C shares....................................................... - 7
Cost of shares redeemed:
Class A shares....................................................... (47,805,009) (18,442,864)
Class B shares....................................................... (3,113,197) (1,237,680)
Class C shares....................................................... - -
------------- -------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS... (24,632,453) (12,137,498)
------------- -------------
TOTAL (DECREASE) IN NET ASSETS................................. (51,421,412) (4,824,837)
NET ASSETS:
Beginning of period.................................................... 262,341,102 210,919,690
------------- -------------
End of period.......................................................... $210,919,690 $206,094,853
============= =============
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
-------------------------------- ----------------------------------------- ------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
JANUARY 31, JULY 31, 1995 JANUARY 31, JULY 31, 1995 JULY 31, 1995
1995 (UNAUDITED) 1995 (UNAUDITED) (UNAUDITED)*
------------ ---------------- ----------- ------------------- ----------------
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE
TRANSACTIONS:
Shares sold........ 1,040,833 275,517 506,103 114,322 76
Shares issued for
dividends reinvested 489,182 180,451 57,245 23,973 1
Shares redeemed.... (3,847,929) (1,449,904) (252,804) (97,792) -
------------ ------------- ----------- -------------- ------------
NET INCREASE
(DECREASE)
IN SHARES
OUTSTANDING (2,317,914) (993,936) 310,544 40,503 77
=========== ============= =========== ============= ===========
* From June 2, 1995 (commencement of initial offering) to July 31, 1995.
See independent accountants' review report and notes to financial statements.
</TABLE>
<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 period indicated. This
information has been derived from the Fund's financial statements.
CLASS A SHARES
--------------------------------------------------------------------------
YEAR ENDED JANUARY 31, SIX MONTHS ENDED
-------------------------------------------------- JULY 31, 1995
PER SHARE DATA: 1991 1992 1993 1994 1995 (UNAUDITED)
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $12.02 $12.23 $12.58 $12.80 $13.64 $12.24
------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net................. .89 .82 .80 .77 .72 .34
Net realized and unrealized gain
(loss) on investments............... .21 .36 .39 .94 (.80) .42
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS.... 1.10 1.18 1.19 1.71 (.08) .76
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net.. (.89) (.82) (.80) (.77) (.72) (.34)
Dividends from net realized
gain on investments................. - (.01) (.17) (.10) (.60) -
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS................. (.89) (.83) (.97) (.87) (1.32) (.34)
------- ------- ------- ------- ------- -------
Net asset value, end of period........ $12.23 $12.58 $12.80 $13.64 $12.24 $12.66
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (1)............... 9.45% 10.02% 9.78% 13.62% (4.34%) 12.50%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .11% .47% .65% .78% .90% .95%(2)
Ratio of net investment income to
average net assets.................. 7.19% 6.62% 6.30% 5.71% 5.72% 5.34%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager.. .91% .48% .28% .15% .02% -
Portfolio Turnover Rate............... 5.95% 10.29% 36.54% 26.69% 37.39% 51.60%(3)
Net Assets, end of period (000's Omitted) $166,095 $218,703 $224,555 $245,435 $191,939 $185,949
- -------------------------------
(1) Exclusive of sales load.
(2) Annualized.
(3) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
------------------------------------------------------ ----------------
YEAR ENDED JANUARY 31, SIX MONTHS ENDED PERIOD ENDED
------------------------------- JULY 31, 1995 JULY 31, 1995
PER SHARE DATA: 1993(1) 1994 1995 (UNAUDITED) (UNAUDITED)(2)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period........... $12.69 $12.81 $13.64 $12.25 $12.98
------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net........... .03 .69 .65 .30 .09
Net realized and unrealized gain
(loss) on investments........ .12 .93 (.79) .42 (.31)
------- ------- ------- ------- -------
TOTAL FROM
INVESTMENT OPERATIONS..... .15 1.62 (.14) .72 (.22)
------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from
investment income-net......... (.03) (.69) (.65) (.30) (.09)
Dividends from net realized
gain on investments........... - (.10) (.60) - -
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS........... (.03) (.79) (1.25) (.30) (.09)
------- ------- ------- ------- -------
Net asset value, end of period.. $12.81 $13.64 $12.25 $12.67 $12.67
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (3)......... 25.98%(4) 12.91% (4.77%) 11.96%(4) (1.66%)(5)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets............ 1.07%(4) 1.31% 1.42% 1.47%(4) 1.90%(4)
Ratio of net investment income to
average net assets............ 4.92%(4) 4.90% 5.17% 4.81%(4) 4.39%(4)
Decrease reflected in above
expense ratios due to
undertakings by the Manager .13%(4) .13% .02% - -
Portfolio Turnover Rate......... 36.54% 26.69% 37.39% 51.60%(5) 51.60%(5)
Net Assets, end of period
(000's Omitted)............... $325 $16,906 $18,981 $20,145 $1
- -----------------------------
(1) From January 15, 1993 (commencement of initial offering) to January 31, 1993.
(2) From June 2, 1995 (commencement of initial offering) to July 31, 1995.
(3) Exclusive of sales load.
(4) Annualized.
(5) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares. The Distributor, located at One Exchange Place, Boston, Massachusetts
02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a
provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc. The Dreyfus Corporation ("Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A.
The Fund offers Class A, Class B and Class C shares. Class A shares are
subject to a sales charge imposed at the time of purchase, 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 and Class C
shares are subject to a contingent deferred sales charge imposed at the time
of redemption on redemptions made within one year of purchase. Other
differences between the three 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 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. There was no expense reimbursement
for the six months ended July 31, 1995.
Dreyfus Service Corporation retained $737 during the six months ended
July 31, 1995 from commissions earned on sales of the Fund's shares.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Fund pays the Distributor for distributing the Fund's Class B and
Class C shares at an annual rate of .50 of 1% of the value of the average
daily net assets of Class B and .75 of 1% of the value of the average daily
net assets of Class C. During the period ended July 31, 1995, $49,520 was
charged to the Fund for the Class B shares and $1 was charged to the Fund for
the Class C shares.
(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, Class B and Class C 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 period ended July 31, 1995,
$239,352, $24,760 and $1 were charged to Class A, B and C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $158,544,794 and $162,809,953, respectively, for the six months
ended July 31, 1995, and consisted entirely of long-term and short-term
municipal investments.
At July 31, 1995, accumulated net unrealized appreciation on investments
was $3,598,626, consisting of $6,675,366 gross unrealized appreciation and
$3,076,740 gross unrealized depreciation.
At July 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
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER CALIFORNIA MUNICIPAL BOND FUND
We have reviewed the accompanying statement of assets and liabilities of
Premier California Municipal Bond Fund, including the statement of
investments, as of July 31, 1995, and the related statements of operations
and changes in net assets and financial highlights for the six month period
ended July 31, 1995. These financial statements and financial highlights are
the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements and financial highlights taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
January 31, 1995 and financial highlights for each of the five years in the
period ended January 31, 1995 and in our report dated March 7, 1995, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young Signature Logo)
New York, New York
(Dreyfus Logo)
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. 023/663SA957
(Dreyfus Logo)
Semi-Annual Report
Premier California
Municipal Bond Fund
July 31, 1995
