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 its annual reporting period ended January 31, 1996,
your Fund earned a total return, including bond price changes, interest
income and capital gain distributions, of 14.15% for Class A shares, 13.55%
for Class B shares and, from their inception on June 2, 1995, an aggregate
actual total return of 5.28% for Class C shares.* Income dividends, exempt
from Federal and State of California personal income taxes, of approximately
$.665 per share for Class A shares, $.599 per share for Class B shares and
$.374 for Class C shares were paid to shareholders.** This is equivalent to a
tax-free distribution rate per share of 4.80% for Class A shares, 4.52% for
Class B shares and 4.22% for Class C shares.***
THE ECONOMY
On January 31, the last day of the Fund's reporting period, the Federal
Reserve Board once again lowered the Federal Funds rate another quarter of a
point to 5.25%. The Federal Funds rate is the rate of interest that the
nation's banks charge each other for overnight loans and is a key benchmark
for all other short-term interest rates. The Federal Reserve also reduced the
Discount Rate, the rate that the Fed charges banks for loans, by a quarter of
a point to 5.0%. The reduction in interest rates was a continuation of the
easing monetary policy of the Fed, a stance that has prevailed since last
July.
Mounting evidence that economic growth has been slowing, combined with
favorable inflation reports, indicate that the threat of recession outweighs
near-term worries of a resurgence in price inflation. The Consumer Price
Index rose only 2.5% in 1995, the lowest rate in nearly a decade. It also
marked the fourth consecutive year that the CPI rose less than 3%. The
consumer sector of the economy was of increasing concern to economic policy
makers. The consumer sector comprises two-thirds of the nation's economic
activity, and retail sales reports in December revealed the worst holiday
season since the 1990-91 recession. Personal income growth remains sluggish.
The Conference Board, an independent business group, reported that the
Board's index of consumer confidence declined sharply in January as consumers
worried about Federal budget negotiations and the recent flurry of layoff
announcements by major corporations.
Industrial production is only moderate. Output of the nation's factories
crept up 0.1% in December. The annual rate of production slowed to 0.8% in
the fourth quarter of 1995, compared with 3.2% for the previous three months.
For the full calendar year, output rose 3.2%, little more than half the 5.9%
rate in 1994.
There are strong indications that inflation is under control. Until
mid-year 1995, fear of inflation was the overriding concern of the Federal
Reserve. Now the focus seems to have shifted to actions designed to avoid
recession. Since last July, the Fed has moved three times to lower interest
rates. If more signs of economic weakness emerge, short-term interest rates
may continue to be lowered.
MARKET ENVIRONMENT
Municipal bonds have benefited from a noteworthy bull market for the past
year. We believe the outlook remains favorable due to sluggishness in the
economy and little inflationary pressure. If these conditions continue, the
Federal Reserve Board may have reason to lower rates further which would be
positive for the bond market. Recently however, Fed Chairman Alan Greenspan
remarked that he believes the economy is growing at an acceptable level. The
market has taken this statement to mean
that no additional easing is on the horizon, and has reacted by lowering the
prices of fixed-income investments. The most positive common element in the
various market outlooks for long-term bonds is that inflation continues to be
subdued with few notable threats looming.
The continuing saga of the budget stalemate is an additional concern to
market participants and has contributed to the market's volatility. However,
if the President and Congress can reach an accord to achieve a balanced
budget, it would have strong positive ramifications for the fixed income
markets.
THE PORTFOLIO
During the year we have maintained a long duration in the Fund, which was
set early on in response to our perception of a slowing of the economy. Our
primary tasks this year focused on protection of principal, liquidity and the
distribution of a high level of tax exempt income to our shareholders. As the
year progressed, we attempted to move away from a fairly defensive posture to
a more aggressive one which emphasized purchasing discount coupon bonds. We
believe this was a logical offset to the many higher coupon premium bonds
previously held by the Fund.
Going forward, we expect to continue on this path to strive for a blended
balance within the portfolio. With inflation low, a sluggish but resilient
economy, and the Federal Reserve Board's outstanding track record to date, we
do not envision a dramatic end to the positive environment that has permitted
long-term investments to flourish. We therefore will continue to maintain a
fully-invested position with strong credit quality.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we greatly appreciate 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
February 15, 1996
New York, NY
* Total return includes the reinvestment of dividends and any capital
gains paid, without taking into consideration the initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders. Capital gains may be subject to state and local taxes.
Income may be subject to some state and local taxes for non-California
residents.
*** 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, adjusted for capital gain distributions. The distribution
rate per share for Class C shares is annualized..
PREMIER CALIFORNIA MUNICIPAL BOND FUND JANUARY 31, 1996
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:
$20,786
Lehman Brothers
Municipal Bond Index*
Dollars
$19,103
Premier California
Municipal Bond Fund
(Class A Shares)
*Source: Lehman Brothers]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
CLASS A SHARES CLASS B SHARES
___________________________________________________________ ___________________________________________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIOD ENDED 1/31/96 Sales Charge Sales Charge (4.5%) PERIOD ENDED 1/31/96 Redemption Redemption*
____________ ________ _________ ____________ ______ __________
<S> <C> <C> <C> <C> <C>
1 Year 14.15% 8.98% 1 Year 13.55% 10.55%
5 Year 8.41 7.41 From Inception (1/15/93) 7.19 6.62
From Inception (11/10/86) 7.80 7.26
</TABLE>
ACTUAL AGGREGATE TOTAL RETURNS
CLASS C SHARES
___________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
PERIOD ENDED 1/31/96 Redemption Redemption**
___________- ________ _________
From Inception (6/2/95) 5.28% 4.28%
Past performance is not predictive of future performance.
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 and Class C shares will vary from the
performance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in California municipal securities and its
performance shown in the line graph 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,
geographically unrestricted tax exempt bond market, calculated by using
municipal bonds selected to be representative of the municipal market
overall. The Index does not take into account charges, fees and other
expenses. Also, unlike the Fund which principally limits investments to
California municipal obligations, the Index is not State specific. These
factors can contribute to the Index potentially outperforming the Fund.
Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
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.
**Maximum contingent deferred sales charge for Class C shares is 1% within
one year of the date of purchase.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JANUARY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-92.6% AMOUNT VALUE
_______ _______
<S> <C> <C>
CALIFORNIA-86.5%
Anaheim Public Financing Authority, Tax Allocation Revenue
(Redevelopment Project Alpha) 6.45%, 12/28/2018 (Insured; MBIA)......... $ 4,000,000 $ 4,413,280
Antelope Valley Hospital District, Insured COP 7.30%, 1/1/2006.............. 2,400,000 2,576,376
California:
6.90%, 4/1/2005......................................................... 2,000,000 2,339,100
5.25%, 10/1/2011........................................................ 5,250,000 5,221,912
6.125%, 10/1/2011....................................................... 2,875,000 3,238,285
5.25%, 10/1/2018........................................................ 7,200,000 6,976,872
California Department of Water Resources, Revenue
(Central Valley Project) 4.75%, 12/1/2025............................... 3,120,000 2,810,184
California Educational Facilities Authority, Revenue, Refunding
(Saint Mary's College) 5%, 10/1/2012.................................... 4,000,000 3,752,120
California Health Facilities Financing Authority, Revenue
(Saint Francis Memorial Hospital) 5.875%, 11/1/2023..................... 4,500,000 4,555,170
California Housing Finance Agency, Home Mortgage Revenue:
6.70%, 8/1/2025......................................................... 2,000,000 2,074,040
7.50%, 8/1/2029......................................................... 1,135,000 1,188,390
8%, 8/1/2029............................................................ 525,000 556,852
7.60%, 8/1/2030......................................................... 1,605,000 1,703,467
7.70%, 8/1/2030......................................................... 1,200,000 1,272,072
California Pollution Control Financing Authority, SWDR (North County
Recycling
Center) 6.75%, 7/1/2011 (LOC; Union Bank of Switzerland) (a)............ 2,500,000 2,533,700
California Public Works Board, LR:
(Secretary of State):
6.75%, 12/1/2012...................................................... 3,475,000 3,805,855
6.50%, 12/1/2008 (b).................................................. 1,400,000 1,639,932
(University of California Projects) 5.50%, 6/1/2014..................... 8,000,000 8,003,920
California Statewide Communities Development Authority, COP, Revenue,
Refunding
(Pacific Homes) 5.90%, 4/1/2009......................................... 4,340,000 4,515,596
Compton, COP, Refunding 7.50%, 8/1/2015 (LOC; Mitsui Trust and Banking) (a). 2,000,000 2,135,060
Contra Costa County, Water District Revenue 6%, 10/1/2011 (Insured; MBIA) (b) 1,725,000 1,855,048
Escondido Unified School District, Refunding 5.125%, 9/1/2015 (Insured; FGIC) (c) 1,500,000 1,470,870
Eureka Public Financing Authority, Tax Allocation Revenue, Refunding
(Eureka Redevelopment Projects) 6.25%, 11/1/2011 (Insured; CGIC)........ 2,000,000 2,169,260
Fairfield, Water Revenue, Refunding 5.375%, 4/1/2017 (Insured; AMBAC) (c)... 5,250,000 5,253,675
Fontana Redevelopment Agency, Tax Allocation Revenue
(North Fontana Redevelopment Project) 7.25%, 9/1/2020................... 4,250,000 4,607,595
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue
Zero Coupon, 1/1/2030................................................... 40,000,000 4,660,400
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
CALIFORNIA (CONTINUED)
Long Beach, Harbor Revenue 5.25%, 5/15/2025 (Insured; MBIA)................. $ 3,000,000 $ 2,876,490
Los Angeles, Wastewater Systems Revenue
7.10%, 2/1/2021 (Insured; MBIA, Prerefunded 2/1/1999) (d)............... 2,200,000 2,447,984
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
5.25%, 7/1/2023 (Insured; AMBAC)........................................ 5,000,000 4,854,800
Los Angeles Harbor Department, Revenue 7.60%, 10/1/2018..................... 750,000 867,728
Madera County, COP (Valley Children's Hospital):
6.25%, 3/15/2006 (Insured; MBIA)........................................ 2,250,000 2,508,435
6.50%, 3/15/2009 (Insured; MBIA)........................................ 3,370,000 3,848,439
Menlo Park Community Development Agency, Tax Allocation, Refunding
(Las Pulgas Community Development Project) 6.55%, 10/1/2011 (Insured;
AMBAC).................................................................. 2,000,000 2,301,000
Monrovia Redevelopment Agency, Tax Allocation, Refunding
(Central Redevelopment Project) 6.70%, 5/1/2021 (Insured; AMBAC)........ 2,000,000 2,204,640
Mount Shasta, HR, COP (Mercy Medical Center)
7.25%, 7/1/2019 (Prerefunded 7/1/1999) (d).............................. 1,855,000 2,088,229
Nevada County, COP (Western Nevada Co. Solid Waste-McCourtney Road Landfill)
7.50%, 6/1/2021......................................................... 2,200,000 2,270,840
Northern California Power Agency, Public Power Revenue, Refunding
(Hydroelectric Project No. 1):
6.30%, 7/1/2018....................................................... 6,000,000 6,845,640
7.15%, 7/1/2024....................................................... 4,415,000 4,785,507
Orange County, Special Tax (Community Facilities District No. 87):
7.75%, 8/15/2014........................................................ 2,375,000 2,437,296
7.80%, 8/15/2015 (Prerefunded 8/15/2000) (d)............................ 2,000,000 2,337,780
Orange Cove, Irrigation District Revenue, COP
(Rehabilitation Project) 7.25%, 2/1/2012................................ 3,000,000 3,195,870
Pittsburg Public Financing Authority, Wastewater Revenue, Refunding
5.125%, 6/1/2015 (Insured; FGIC)........................................ 2,700,000 2,628,747
Richmond Joint Powers Financing Authority, Revenue 7.25%, 5/15/2013......... 1,500,000 1,684,605
Riverside County, SFMR 7.80%, 5/1/2021 (Collateralized; GNMA)............... 1,250,000 1,612,438
Roseville, Special Tax (Community Facilities District No. 1) 7.70%, 9/1/2020 2,000,000 2,081,240
Sacramento County, Special Tax (Community Facilities District No. 1):
8.20%, 12/1/2010........................................................ 2,250,000 2,434,815
8.25%, 12/1/2020........................................................ 2,000,000 2,163,180
Sacramento Municipal Utility District, Electric Revenue 7.875%, 8/15/2016... 2,900,000 3,248,899
Sacramento Schools Insurance Authority, Revenue
(Workers Compensation Program) 5.75%, 6/1/2003.......................... 3,930,000 4,126,028
San Diego County Water Authority, Water Revenue, COP 5.607%, 4/23/2008 (b).. 4,000,000 4,223,680
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
CALIFORNIA (CONTINUED)
San Diego Public Facilities Financing Authority, Sewer Revenue
5%, 5/15/2015 (Insured; FGIC)........................................... $ 3,010,000 $ 2,906,787
San Joaquin Hills Transportation Corridor Agency, Toll Road Revenue
Zero Coupon, 1/1/2022................................................... 15,000,000 2,998,050
San Jose - Santa Clara Water Financing Authority, Sewer Revenue
5.375%, 11/15/2015 (Insured; FGIC)...................................... 1,125,000 1,124,899
Simi Valley, Single Family Residential Mortgage Revenue 7.625%, 8/1/2022 (e) 2,000,000 1,200,000
Southern California Rapid Transit District, COP
(Worker's Compensation Fund) 6%, 7/1/2010............................... 2,045,000 2,167,168
University of California, Revenue, Refunding (Multiple Purpose Projects):
5%, 9/1/2014 (Insured; AMBAC)........................................... 4,000,000 3,879,760
5%, 9/1/2023 (Insured; AMBAC)........................................... 8,500,000 8,020,600
Vista, MFHR (Vista Hacienda Project) 6.95%, 4/1/2017........................ 3,000,000 3,191,490
Waterford Public Financing Authority, Revenue 8.20%, 9/15/2020.............. 2,615,000 2,087,764
U.S. RELATED-6.1%
Puerto Rico Commonwealth Highway and Transportation Authority, Revenue
5.50%, 7/1/2013......................................................... 7,250,000 7,400,800
Puerto Rico Electric Power Authority, Power Revenue, Refunding 7.125%, 7/1/2014 2,000,000 2,181,900
Virgin Islands Water and Power Authority, Electric Systems Revenue 7.40%, 7/1/2011 3,000,000 3,260,550
_______
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $185,744,249)................... $195,823,109
=======
SHORT-TERM MUNICIPAL INVESTMENTS-7.4%
CALIFORNIA-6.4%
California Pollution Control Financing Authority, RRR, VRDN:
(Delano Project) 3.25% (LOC; ABN-Amro Bank) (a,f)....................... $ 4,600,000 $ 4,600,000
(Ultra Power-Rocklin):
3.90% (LOC; Bank of America National Trust and Savings Association) (a,f) 1,200,000 1,200,000
3.90% (LOC; Bank of America National Trust and Savings Association) (a,f) 1,800,000 1,800,000
Santa Clara Transportation District, Crossover Revenue, VRDN
3.75% (LOC; Sumitomo Bank) (a,f)........................................ 5,800,000 5,800,000
U.S. RELATED-1.0%
Puerto Rico Electric Power Authority, Power Revenue 3.24%, 7/1/2023 (g)..... 2,200,000 2,200,000
_______
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $15,600,000)...................................................... $ 15,600,000
=======
TOTAL INVESTMENTS-100.0%
(cost $201,344,249)..................................................... $211,423,109
=======
</TABLE>
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
CGIC Capital Guaranty Insurance Corporation Insurance Corporation
COP Certificate of Participation MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
GNMA Government National Mortgage Association SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Notes
LR Lease Revenue
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (H) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
_____ _____ __________ ____________
<S> <C> <C> <C>
AAA Aaa AAA 40.9%
AA Aa AA 4.5
A A A 32.5
BBB Baa BBB 8.8
D D D .6
F1 MIG1, VMIG1 & P1 SP1, A1 6.3
Not Rated (i) Not Rated (i) Not Rated (i) 6.4
____
100.0%
====
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Secured by letters of credit.
(b) Wholly held by the custodian in a segregated account as collateral
for when-issued securities.
(c) Purchased on a delayed delivery or when-issued basis.
(d) 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.
(e) Non-income producing security; interest payments in default.
(f) 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.
(g) Inverse floater security - the interest rate is subject to change
periodically.
(h) Fitch currently provides creditworthiness information for a limited
number of investments.
(i) 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 notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1996
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $201,344,249)-see statement..................................... $211,423,109
Cash.................................................................... 1,733,868
Interest receivable..................................................... 2,876,499
Receivable for shares of Beneficial Interest subscribed................. 14,321
Prepaid expenses........................................................ 6,790
_______
216,054,587
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 96,128
Due to Distributor...................................................... 52,761
Payable for investment securities purchased............................. 9,043,987
Payable for shares of Beneficial Interest redeemed...................... 84,051
Accrued expenses........................................................ 59,674 9,336,601
______ _______
NET ASSETS ................................................................ $206,717,986
=======
REPRESENTED BY:
Paid-in capital......................................................... $194,276,770
Accumulated undistributed net realized gain on investments.............. 2,362,356
Accumulated net unrealized appreciation on investments-Note 3........... 10,078,860
_______
NET ASSETS at value......................................................... $206,717,986
=======
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 14,277,414
=======
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 1,659,307
=======
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 81
=======
NET ASSET VALUE per share:
Class A Shares
($185,187,120 / 14,277,414 shares).................................... $12.97
=======
Class B Shares
($21,529,815 / 1,659,307 shares)...................................... $12.98
=======
Class C Shares
($1,051 / 81 shares).................................................. $12.98
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1996
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $12,901,785
EXPENSES:
Management fee-Note 2(a).............................................. $ 1,152,436
Shareholder servicing costs-Note 2(c)................................. 662,327
Distribution fees-Note 2(b)........................................... 102,037
Professional fees..................................................... 54,939
Trustees' fees and expenses-Note 2(d)................................. 35,811
Custodian fees........................................................ 24,327
Registration fees..................................................... 7,191
Prospectus and shareholders' reports.................................. 3,223
Miscellaneous......................................................... 22,278
______
TOTAL EXPENSES.................................................... 2,064,569
______
INVESTMENT INCOME-NET............................................. 10,837,216
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $ 6,212,253
Net unrealized appreciation on investments.............................. 10,659,485
______
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 16,871,738
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $27,708,954
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
________________________________
1995 1996
_______ _______
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 13,051,960 $ 10,837,216
Net realized gain on investments........................................ 1,759,018 6,212,253
Net unrealized appreciation (depreciation) on investments for the year.. (27,102,766) 10,659,485
_______ _______
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... (12,291,788) 27,708,954
_______ _______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares........................................................ (12,067,054) (9,879,785)
Class B shares........................................................ (984,906) (957,402)
Class C shares........................................................ _ (29)
Net realized gain on investments:
Class A shares........................................................ (1,316,480) (4,193,091)
Class B shares........................................................ (128,731) (474,312)
Class C shares........................................................ _ (23)
_______ _______
TOTAL DIVIDENDS................................................... (14,497,171) (15,504,642)
_______ _______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 12,980,330 7,850,834
Class B shares........................................................ 6,515,990 2,433,172
Class C shares........................................................ _ 1,000
Dividends reinvested:
Class A shares........................................................ 6,079,502 6,858,326
Class B shares........................................................ 709,931 978,162
Class C shares........................................................ _ 52
Cost of shares redeemed:
Class A shares........................................................ (47,805,009) (32,515,537)
Class B shares........................................................ (3,113,197) (2,012,025)
_______ _______
(DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS........................................... (24,632,453) (16,406,016)
_______ _______
TOTAL (DECREASE) IN NET ASSETS.............................. (51,421,412) (4,201,704)
NET ASSETS:
Beginning of year....................................................... 262,341,102 210,919,690
_______ _______
End of year............................................................. $210,919,690 $206,717,986
======= =======
</TABLE>
<TABLE>
<CAPTION>
SHARES
________________________________________________________________________________
CLASS A CLASS B CLASS C
_____________________________ _____________________________ _______
YEAR ENDED JANUARY 31, YEAR ENDED JANUARY 31, YEAR ENDED
_____________________________ _____________________________
JANUARY 31,
CAPITAL SHARE TRANSACTIONS: 1995 1996 1995 1996 1996*
_______ _______ ________ _______ ________
<S> <C> <C> <C> <C> <C>
Shares sold............. 1,040,833 611,979 506,103 191,459 77
Shares issued for dividends
reinvested............ 489,182 534,099 57,245 76,108 4
Shares redeemed......... (3,847,929) (2,546,673) (252,804) (157,990) _
_______ _______ ________ _______ ________
NET INCREASE (DECREASE)
IN SHARES
`OUTSTANDING...... (2,317,914) (1,400,595) 310,544 109,577 81
======= ======= ======== ======= ========
*From June 2, 1995 (commencement of initial offering) to January 31,
1996.
See 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 year indicated. This
information has been derived from the Fund's financial statements.
CLASS A SHARES
____________________________________________________________
YEAR ENDED JANUARY 31,
____________________________________________________________
PER SHARE DATA: 1992 1993 1994 1995 1996
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $12.23 $12.58 $12.80 $13.64 $12.24
____ ____ ____ ____ ____
INVESTMENT OPERATIONS:
Investment income-net........................ .82 .80 .77 .72 .67
Net realized and unrealized gain (loss)
on investments............................. .36 .39 .94 (.80) 1.02
____ ____ ____ ____ ____
TOTAL FROM INVESTMENT OPERATIONS........... 1.18 1.19 1.71 (.08) 1.69
____ ____ ____ ____ ____
DISTRIBUTIONS:
Dividends from investment income-net......... (.82) (.80) (.77) (.72) (.67)
Dividends from net realized gain on investments (.01) (.17) (.10) (.60) (.29)
____ ____ ____ ____ ____
TOTAL DISTRIBUTIONS........................ (.83) (.97) (.87) (1.32) (.96)
____ ____ ____ ____ ____
Net asset value, end of year................. $12.58 $12.80 $13.64 $12.24 $12.97
==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN*......................... 10.02% 9.78% 13.62% (4.34%) 14.15%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .47% .65% .78% .90% .93%
Ratio of net investment income to average net assets 6.62% 6.30% 5.71% 5.72% 5.22%
Decrease reflected in above expense ratios due to
undertakings by the Manager................ .48% .28% .15% .02% -
Portfolio Turnover Rate...................... 10.29% 36.54% 26.69% 37.39% 92.42%
Net Assets, end of year (000's Omitted)...... $218,703 $224,555 $245,435 $191,939 $185,187
*Exclusive of sales load.
See notes to financial statements.
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<TABLE>
<CAPTION>
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 year indicated. This
information has been derived from the Fund's financial statements.
CLASS B SHARES CLASS C SHARES
___________________________________________________ ______________
YEAR ENDED
YEAR ENDED JANUARY 31, JANUARY 31,
___________________________________________________ ______________
PER SHARE DATA: 1993(1) 1994 1995 1996 1996(2)
____ ____ ____ ____ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $12.69 $12.81 $13.64 $12.25 $12.98
______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net........................ .03 .69 .65 .60 .37
Net realized and unrealized gain (loss) on investments .12 .93 (.79) 1.02 .29
______ ______ ______ ______ ______
TOTAL FROM INVESTMENT OPERATIONS........... .15 1.62 (.14) 1.62 .66
______ ______ ______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net......... (.03) (.69) (.65) (.60) (.37)
Dividends from net realized gain on investments .- (.10) (.60) (.29) (.29)
______ ______ ______ ______ ______
TOTAL DISTRIBUTIONS........................ (.03) (.79) (1.25) (.89) (.66)
______ ______ ______ ______ ______
Net asset value, end of year................. $12.81 $13.64 $12.25 $12.98 $12.98
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN (3)...................... 25.98%(4) 12.91% (4.77%) 13.55% 7.90%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.07%(4) 1.31% 1.42% 1.45% 4.42%(4)
Ratio of net investment income to average
net assets................................. 4.92%(4) 4.90% 5.17% 4.69% 4.31%(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% 92.42% 92.42%
Net Assets, end of year (000's Omitted)...... $325 $16,906 $18,981 $21,530 $1
(1) From January 15, 1993 (commencement of initial offering) to January 31, 1993.
(2) From June 2, 1995 (commencement of initial offering) to January 31, 1996.
(3) Exclusive of sales load.
(4) Annualized.
See notes to financial statements.
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PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier California Municipal Bond Fund (the "Fund") is registered under
the Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company. The Fund's investment objective is to maximize
current income exempt from Federal and, where applicable, from State personal
income taxes to the extent consistent with the preservation of capital. The
Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank. N.A.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. 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
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 (excluding distribution
expenses and certain expenses as described above) exceed 21\2% of the first
$30 million, 2% of the next $70 million and 11\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
year ended January 31, 1996.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of the Manager, under a transfer agency agreement
for providing personnel and facilities to perform transfer agency services
for the Fund. Such compensation amounted to $11,891 for the period from
December 1, 1995 through January 31, 1996.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $11,623 during the year ended January 31, 1996 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 shares and .75 of 1% of the value of the average
daily net assets of Class C shares. For the period ended January 31, 1996,
$102,032 was charged to the Fund for the Class B shares and $5 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 the provision of certain services.
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 January 31, 1996,
$472,817, $51,016 and $2 were charged to Class A, B and C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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,
excluding short-term securities, during the year ended January 31, 1996
amounted to $188,136,590 and $215,416,205, respectively.
At January 31, 1996, accumulated net unrealized appreciation on
investments was $10,078,860, consisting of $11,535,635 gross unrealized
appreciation and $1,456,775 gross unrealized depreciation.
At January 31, 1996, 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, 1996, 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, 1996 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, 1996, 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 and Young LLP signature logo]
New York, New York
March 5, 1996
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, 1996.
-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 $.0510 per share as a long-term capital gain
distribution paid on September 29, 1995. The Fund also designates $.0546 per
share as a long-term capital gain distribution of the $.2421 per share paid
on December 6, 1995.
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 1996 calendar year
on Form 1099-DIV which will be mailed by January 31, 1997.
[Dreyfus lion "d" 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
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 023/613/663AR9601
[Dreyfus logo]
Annual Report
Premier California
Municipal Bond Fund
January 31, 1996
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:
______________________________________________________
| | | PREMIER |
| | | CALIFORNIA |
| PERIOD | LEHMAN BROTHERS| 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 |
| 1/31/96 | 20,786 | 19,103 |
|-----------------------------------------------------|
* Source: Lehman Brothers
