PREMIER CALIFORNIA MUNICIPAL BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Premier California Municipal
Bond Fund for its fiscal year ended January 31, 1997 as shown in the
following table:
<TABLE>
Annualized
Total Return* Distribution Rate**
_______________ _____________________
<S> <C> <C>
Class A 3.31% 4.78%
Class B 2.79% 4.50%
Class C 2.67% 4.23%
</TABLE>
THE ECONOMY
The Federal Open Market Committee, the policy-making arm of the Federal
Reserve Board (the "Fed"), has left monetary policy unchanged since late
January, 1996, when it reduced both the Federal Funds target rate and the
Discount Rate. Despite the Open Market Committee's apparent satisfaction
regarding interest rate levels, long-term interest rates rose through midyear
in anticipation that the economy would overheat and bring a rekindling of
inflation: In fact, the opposite occurred. Throughout the year, the economy
alternately slowed and accelerated in a relatively narrow band, while
inflation remained subdued. The unemployment rate remained below 5.5% for
most of the year, while the growth in new jobs was robust (and worrisome,
since it seemed to indicate the economy was growing too fast). The tightening
labor market did not result in inflationary increases in wage rates, however,
since workers seemed more concerned with keeping their jobs rather than with
getting raises. For the full year 1996, the Employment Cost Index (a
statistical series closely followed by Federal Reserve Board Chairman
Greenspan) rose 2.9% and the Consumer Price Index rose by 3.3%. Evidently,
noninflationary wage increases were a key factor in the Fed's accommodative
monetary policy last year. Recent remarks by Chairman Greenspan have
indicated his awareness that the period of wage restraint may be ending,
particularly as the economy seemed to be again strengthening at the end of
the year.
Spurred by record exports and a late-year surge in industrial production,
the economy ended 1996 on a decidedly upbeat note. Fourth quarter gross
domestic product (GDP) rose at a 4.7% annual rate, significantly above
consensus estimates. Yet, as was the case for all of 1996, inflation remained
under control. The GDP price deflator increased at an annual rate of only
1.4%, the smallest rise for this broad measure of inflation in 30 years. With
the economy now in its sixth year of recovery, it is no surprise that
consumer attitude surveys show rising confidence. According to the Conference
Board, consumer confidence is at its highest level since the current economic
expansion began in March 1991. This consumer optimism was reflected
dramatically in the real estate market where sales of existing homes in 1996
rose above four million units for the first time.
Yet there are some factors that possess the potential to dampen economic
growth. Continued cautious consumer retail spending combined with modest
installment borrowing could result in inventory accumulation and a slowdown
in production. Last year, retail sales rose 4.4%, a moderate rate of
increase, particularly after adjusting for the 3.3% rate of inflation. On the
international front, the strength in the dollar could curb the demand for
U.S. goods abroad and slow U.S. factories' activity. Well worth watching in
the near term is the continued strong rate of growth in new jobs which,
when combined with a low unemployment rate, could result in workers' concerns
about job security being replaced by demand for wage increases. In turn, if
wage increases become inflationary, they could lead to a tightening in
monetary policy by the Open Market Committee.
MARKET ENVIRONMENT
Last year was a year marked by a relatively slow start during the first
half of the year followed by a rally which materialized during the second
half of the year. Specifically, long-term interest rates as measured by the
30-year U.S. Treasury bond stabilized around the 7% level in mid-October,
when the market established a new trading range and rallied to a 6.45% yield
at the end of the year. After a correction in January that lowered bond
prices and raised yields, the market has rebounded to test the 6.50% level
again.
The municipal market has also gone through a recent period of
stabilization during which the retail (or individual) investor became active,
strengthening the demand for municipal bonds. The more recent rally in fixed
income securities was built on the continued speculation that the Federal
Reserve Board's Open Market Committee could potentially ease credit in
response to weakening economic data, and the lack of new issue supply. The
new lower rates have not brought many issuers back into the municipal marketpl
ace yet.
During the fourth quarter, $10 billion in new supply had to be digested
by the tax-exempt market in two weeks, which caused municipal bond prices to
cheapen relative to taxables. The increase in yields reversed the trend of
outperformance by the municipal market that characterized 1996. At the close
of 1996, taxable bonds lost ground while municipal bonds held more of their
value, moving back to outperformance status.
Specifically in California, while in recent years the total amount of
bonds issued has been constant, the proportion of negotiated, long-maturity
bonds available for purchase by the Fund has declined. This condition has
helped enhance the value of many existing holdings and has encouraged a lower
cash position.
PORTFOLIO OVERVIEW
Since mid-year 1996 we have held steadfast in our decision to maintain a
somewhat aggressive position with the portfolio. During this period, the tone
of the municipal market was affected by uncertainty. We felt, however, that
attempting to predict market changes would be difficult at best. As a result,
we focused our efforts on balancing the portfolio with discount bonds to
counterbalance the income producing premium bonds already owned. This was
accomplished despite the somewhat limited availability of long-maturity,
liquid, discount bonds with good structural characteristics. Our investment
strategy included selling some current coupon bonds and near-term call dates,
which allowed the portfolio to take some profits, strengthened the overall
structure of the portfolio, and bolstered performance.
We will continue to manage the portfolio with an eye toward accomplishing
these goals as we enter 1997. The market is not currently offering any
concrete signs of its direction. In fact, it appears that the municipal
market will continue to be somewhat lackluster through the first quarter of
1997. We expect that competition for California bonds will continue to be
fueled by the multitude of national funds, as well as other California bond
funds.
Our primary tasks which will guide our portfolio management decisions are
to earn a high level of current income exempt from Federal and State of
California personal income taxes*** to the extent consistent with the
preservation of capital while at the same time maintaining high credit
quality. Included in this report is a series of detailed statements outlining
the portfolio's holdings and financial condition. We hope they are
informative. Please know that we greatly appreciate your continued confidence
in the portfolio and the Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
February 17, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, and does not take into consideration the maximum initial sales charge
in the case of Class A shares or the contingent deferred sales charge imposed
on redemptions in the case of Class B and Class C shares.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the maximum
offering price at the end of the period, in the Case of Class A shares or the
net asset value per share in the case of Class B and Class C shares, adjusted
for capital gain distributions.
*** Some investors may be subject to the Federal Alternative Minimum Tax.
Capital gains, if any, may be subject to Federal, state and local taxes.
Premier California Municipal Bond Fund January 31, 1997
[Exhibit A]
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
$20,603
Lehman Brothers
Municipal Bond Index*
Dollars
$18,799
Premier California
Municipal Bond Fund
(Class A Shares)
[Exhibit A]
*Source: Lehman Brothers
<TABLE>
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 1/31/97 Sales Charge Sales Charge (4.5%) Period Ended 1/31/97 Redemption Redemption*
_____________________ __________ ___________________ _____________________ ____________ ____________
<S> <C> <C> <C> <C> <C>
1 Year 3.31% (1.33)% 1 Year 2.79% (1.10)%
5 Years 7.07 6.09 From Inception (1/5/93) 6.08 5.67
10 Years 7.01 6.52
</TABLE>
<TABLE>
Class C Shares
_________________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 1/31/97 No Redemption Redemption**
______________________ _____________ _________________
<S> <C> <C>
1 Year 2.67% 1.70%
From Inception (6/2/95) 4.77 4.77
</TABLE>
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 1/31/87 to a $10,000 investment
made in the Lehman Brothers Municipal Bond Index on that date. 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 and is
not limited to investments principally in California municipal obligations.
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.
*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
** The maximum contingent deferred sales charge for Class C shares is 1%
for shares redeemed within one year of the date of purchase.
<TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JANUARY 31, 1997
Principal
Long-Term Municipal Investments_97.3% Amount Value
_____________ _____________
<S> <C> <C>
California_89.9%
Anaheim Public Financing Authority, Tax Allocation Revenue
(Redevelopment Project Alpha) 6.45%, 12/28/2018 (Insured; MBIA)......... $ 4,000,000 $ 4,311,840
Antelope Valley Hospital District, Insured COP 7.30%, 1/1/2006.............. 2,400,000 2,510,856
California:
5.25%, 10/1/2011........................................................ 5,250,000 5,167,890
6.125%, 10/1/2011....................................................... 2,875,000 3,131,392
5.25%, 10/1/2018........................................................ 7,200,000 6,820,632
California Educational Facilities Authority, Revenue, Refunding (Saint Mary's College)
5%, 10/1/2012........................................................... 4,000,000 3,721,920
California Health Facilities Financing Authority, Revenue
(Saint Francis Memorial Hospital) 5.875%, 11/1/2023..................... . 4,500,000 4,578,975
California Housing Finance Agency, Home Mortgage Revenue:
6.15%, 8/1/2016......................................................... 3,000,000 3,041,970
6.70%, 8/1/2025......................................................... 1,960,000 2,044,104
7.50%, 8/1/2029......................................................... 920,000 955,659
8%, 8/1/2029............................................................ 445,000 465,056
7.60%, 8/1/2030......................................................... 1,515,000 1,595,022
7.70%, 8/1/2030......................................................... 905,000 950,377
California Pollution Control Financing Authority, SWDR (North County Recycling
Center) 6.75%, 7/1/2011 (LOC; Union Bank of Switzerland) (a)............ 2,500,000 2,895,900
California Public Works Board, LR:
(Secretary of State):
6.50%, 12/1/2008...................................................... 1,400,000 1,585,080
6.75%, 12/1/2012 (Prerefunded 12/1/2002) (b).......................... 3,475,000 3,945,723
(University of California Projects) 5.50%, 6/1/2014..................... 8,000,000 7,928,800
Compton, COP, Refunding 7.50%, 8/1/2015 (LOC; Mitsui Trust and Banking) (a). 2,000,000 2,109,360
Contra Costa County, Water District Revenue 6%, 10/1/2011 (Insured; MBIA)... 1,475,000 1,552,762
Escondido Unified School District, Refunding 5.125%, 9/1/2015 (Insured; FGIC) 3,250,000 3,100,012
Eureka Public Financing Authority, Tax Allocation Revenue, Refunding
(Eureka Redevelopment Projects) 6.25%, 11/1/2011 (Insured; CGIC)........ 2,000,000 2,127,860
Fairfield, Water Revenue, Refunding 5.375%, 4/1/2017 (Insured; AMBAC)....... 9,250,000 8,907,657
Fontana Redevelopment Agency, Tax Allocation Revenue
(North Fontana Redevelopment Project) 7.25%, 9/1/2020................... 4,250,000 4,334,320
Fremont Unified School District, Alameda County 5.875%, 8/1/2016............ 2,000,000 2,040,220
Fresno, Sewer Revenue 5%, 9/1/2023 (Insured; MBIA).......................... 2,000,000 1,820,860
Los Angeles County Public Works Financing Authority, LR, Refunding 5.25%, 9/1/2015 1,565,000 1,513,558
Los Angeles Harbor Department, Revenue 6.25%, 8/1/2026 (Insured; MBIA)...... 2,320,000 2,421,593
Madera County, COP (Valley Children's Hospital):
6.25%, 3/15/2006 (Insured; MBIA)........................................ 2,250,000 2,455,583
6.50%, 3/15/2009 (Insured; MBIA)........................................ 3,370,000 3,790,812
Premier California Municipal Bond Fund
Statement of Investments (continued) January 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
California (continued)
Monrovia Redevelopment Agency, Tax Allocation, Refunding
(Central Redevelopment Project) 6.70%, 5/1/2021 (Insured; AMBAC)........ $ 2,000,000 $ 2,188,400
Mount Shasta, HR, COP (Mercy Medical Center)
7.25%, 7/1/2019 (Prerefunded 7/1/1999) (b).............................. 1,830,000 1,997,335
Nevada County, COP (Western Nevada Co. Solid Waste-McCourtney Road Landfill)
7.50%, 6/1/2021......................................................... 2,200,000 2,278,562
Northern California Power Agency, Public Power Revenue, Refunding
(Hydroelectric Project No. 1):
6.30%, 7/1/2018....................................................... 6,000,000 6,571,380
7.15%, 7/1/2024....................................................... 4,395,000 4,616,025
Orange County, Special Tax (Community Facilities District No. 87):
7.75%, 8/15/2014........................................................ 2,375,000 2,439,434
7.80%, 8/15/2015 (Prerefunded 8/15/2000) (b)............................ 2,000,000 2,254,760
Orange Cove, Irrigation District Revenue, COP (Rehabilitation Project)
7.25%, 2/1/2012 (Prerefunded 2/1/2001) (b).............................. 3,000,000 3,353,250
Richmond Joint Powers Financing Authority, Revenue
7.25%, 5/15/2013 (Prerefunded 5/15/2000) (b)............................ 1,500,000 1,655,685
Riverside County, SFMR 7.80%, 5/1/2021 (Collateralized; GNMA)............... 1,250,000 1,608,450
Roseville, Special Tax (Community Facilities District No. 1) 7.70%, 9/1/2020 2,000,000 2,069,560
Sacramento County, Special Tax (Community Facilities District No. 1):
8.20%, 12/1/2010........................................................ 2,250,000 2,428,358
8.25%, 12/1/2020........................................................ 2,000,000 2,139,320
San Diego County Water Authority, Water Revenue, COP 5.681%, 4/23/2008...... 4,000,000 4,185,880
San Diego Public Facilities Financing Authority, Sewer Revenue:
5%, 5/15/2015 (Insured; FGIC)........................................... 3,010,000 2,806,313
5%, 5/15/2020 (Insured; FGIC)........................................... 2,000,000 1,824,160
San Jose_Santa Clara Water Financing Authority, Sewer Revenue
5.375%, 11/15/2015 (Insured; FGIC)...................................... 1,125,000 1,104,041
Santa Rosa, Wastewater Revenue, Refunding (Wastewater Project)
5%, 9/1/2022 (Insured; FGIC)............................................ 4,500,000 4,103,730
Simi Valley, Single Family Residential Mortgage Revenue 7.625%, 8/1/2022 (c) 1,159,856 197,176
Southern California Rapid Transit District, COP (Worker's Compensation Fund)
6%, 7/1/2010............................................................ 2,045,000 2,135,471
University of California, Revenue:
Hospital_UC Davis Medical Center 5.75%, 7/1/2012 (Insured; AMBAC)....... 5,000,000 5,145,300
Refunding (Multiple Purpose Projects) 5%, 9/1/2023 (Insured; AMBAC)..... 8,500,000 7,578,345
Vista, MFHR (Vista Hacienda Project) 6.95%, 4/1/2017........................ 3,000,000 3,135,300
West Covina Redevelopment Agency, Community Facilities District, Special Tax
6%, 9/1/2022............................................................ 3,000,000 3,057,150
Premier California Municipal Bond Fund
Statement of Investments (continued) January 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
U.S. Related_7.4%
Puerto Rico Commonwealth Highway and Transportation Authority, Revenue
5.50%, 7/1/2013......................................................... $ 7,250,000 $ 7,395,363
Puerto Rico Electric Power Authority, Power Revenue, Refunding 7.125%, 7/1/2014 2,000,000 2,147,460
Virgin Islands Public Financing Authority Revenue, 7.30%, 10/1/2018......... 3,100,000 3,851,161
_____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $169,573,213)................... $176,093,162
============
Short-Term Municipal Investments_2.7%
California_2.0%
Chula Vista, Industrial Development Revenue, Refunding (San Diego Gas) VRDN 3.55% (d) $ 1,300,000 $ 1,300,000
Irvine Ranch Water District, Refunding, VRDN
3.70% (LOC; Bank of America Trust and Savings Association) (a,d)........ 2,200,000 2,200,000
U.S. Related_.7%
Puerto Rico Commonwealth Government Development Bank, VRDN 3.20% (d)........ 1,300,000 1,300,000
_____________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $4,800,000).................... $ 4,800,000
=============
TOTAL INVESTMENTS_100.0% (cost $174,373,213)................................ $180,893,162
=============
</TABLE>
<TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
Summary of Abbreviations
<S> <C> <C> <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
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing 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
</TABLE>
<TABLE>
Summary of Combined Ratings (Unaudited)
Fitch (e) or Moody's or Standard & Poor's Percentage of Value
____ __________ _________________ ______________________
<S> <C> <C> <C>
AAA Aaa AAA 54.9%
AA Aa AA 5.0
A A A 23.2
BBB Baa BBB 5.5
BB Ba BB 2.4
DDD D D .1
F1 MIG1, VMIG1 & P1 SP1, A1 2.7
Not Rated (f) Not Rated (f) Not Rated (f) 6.2
_______
100.0%
========
</TABLE>
Notes to Statement of Investments:
(a) Secured by letters of credit.
(b) 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.
(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 and 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>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1997
Cost Value
____________ ____________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $174,373,213 $180,893,162
Cash....................................... 472,142
Interest receivable........................ 2,992,308
Receivable for shares of Beneficial Interest subscribed 562,362
Prepaid expenses........................... 6,468
______________
184,926,442
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 85,998
Due to Distributor......................... 48,014
Payable for shares of Beneficial Interest redeemed 337,571
Accrued expenses........................... 54,770
______________
526,353
______________
NET ASSETS.................................................................. $184,400,089
==============
REPRESENTED BY: Paid-in capital............................ $178,260,196
Accumulated undistributed investment income_net181,948
Accumulated net realized gain (loss) on investments (562,004)
Accumulated net unrealized appreciation (depreciation)
....................... on investments_Note 3 6,519,949
______________
NET ASSETS.................................................................. $184,400,089
==============
</TABLE>
<TABLE>
NET ASSET VALUE PER SHARE
_________________________
Class A Class B Class C
________________ ____________ ____________
<S> <C> <C> <C>
Net Assets.................................................. $163,030,239 $20,340,892 $1,028,958
Shares Outstanding.......................................... 12,958,395 1,616,035 81,621
NET ASSET VALUE PER SHARE................................... $12.58 $12.59 $12.61
======= ======= ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1997
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $11,714,875
EXPENSES: Management fee_Note 2(a)................... $ 1,056,016
Shareholder servicing costs _Note 2(c)..... 579,587
Distribution fees_Note 2(b)................ 105,909
Professional fees.......................... 48,083
Trustees' fees and expenses_Note 2(d)...... 34,458
Custodian fees............................. 20,494
Prospectus and shareholders' reports....... 14,121
Registration fees.......................... 6,517
Miscellaneous.............................. 17,207
____________
Total Expenses....................... 1,882,392
____________
INVESTMENT INCOME_NET....................................................... 9,832,483
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 3:
Net realized gain (loss) on investments.... $ (566,869)
Net unrealized appreciation (depreciation) on investments (3,558,911)
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (4,125,780)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 5,706,703
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
January 31, 1997 January 31, 1996
_____________________ ___________________
<S> <C> <C>
OPERATIONS:
Investment income_net.................................................. $ 9,832,483 $ 10,837,216
Net realized gain (loss) on investments................................ (566,869) 6,212,253
Net unrealized appreciation (depreciation) on investments.............. (3,558,911) 10,659,485
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations...... 5,706,703 27,708,954
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A shares....................................................... (8,690,991) (9,879,785)
Class B shares....................................................... (946,983) (957,402)
Class C shares....................................................... (12,561) (29)
Net realized gain on investments:
Class A shares....................................................... (2,095,781) (4,193,091)
Class B shares....................................................... (255,409) (474,312)
Class C shares....................................................... (6,301) (23)
________________ ________________
Total Dividends...................................................... (12,008,026) (15,504,642)
________________ ________________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares....................................................... 8,651,433 7,850,834
Class B shares....................................................... 1,280,059 2,433,172
Class C shares....................................................... 1,027,540 1,000
Dividends reinvested:
Class A shares....................................................... 5,153,147 6,858,326
Class B shares....................................................... 814,039 978,162
Class C shares....................................................... 18,682 52
Cost of shares redeemed:
Class A shares....................................................... (30,300,379) (32,515,537)
Class B shares....................................................... (2,638,241) (2,012,025)
Class C shares....................................................... (22,854) ____
________________ ________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (16,016,574) (16,406,016)
________________ ________________
Total Increase (Decrease) in Net Assets.......................... (22,317,897) (4,201,704)
NET ASSETS:
Beginning of Period.................................................... 206,717,986 210,919,690
________________ ________________
End of Period.......................................................... $184,400,089 $206,717,986
=============== ================
UNDISTRIBUTED INVESTMENT INCOME_NET........................................ $ 181,948 $ ____
________________ ________________
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended Year Ended
January 31, 1997 January 31, 1996
________________ ________________
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold............................................................ 683,893 611,979
Shares issued for dividends reinvested................................. 410,136 534,099
Shares redeemed........................................................ (2,413,048) (2,546,673)
________________ ________________
Net Increase (Decrease) in Shares Outstanding (1,319,019) (1,400,595)
=============== ================
Class B
________
Shares sold............................................................ 101,503 191,459
Shares issued for dividends reinvested................................. 64,758 76,108
Shares redeemed........................................................ (209,533) (157,990)
________________ ________________
Net Increase (Decrease) in Shares Outstanding (43,272) 109,577
=============== ================
Class C*
________
Shares sold............................................................ 81,879 77
Shares issued for dividends reinvested................................. 1,482 4
Shares redeemed........................................................ (1,821) ____
________________ ________________
Net Increase (Decrease) in Shares Outstanding 81,540 81
=============== ================
* From June 2, 1995 (commencement of initial offering) to January 31, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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.
<TABLE>
Class A Shares
______________________________________________________________
Year Ended January 31,
_______________________________________________________________
PER SHARE DATA: 1997 1996 1995 1994 1993
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $12.97 $12.24 $13.64 $12.80 $12.58
________ ________ ________ ________ ________
Investment Operations:
Investment income_net........................ .65 .67 .72 .77 .80
Net realized and unrealized gain (loss)
on investments............................. (.24) 1.02 (.80) .94 .39
________ ________ ________ ________ ________
Total from Investment Operations............. .41 1.69 (.08) 1.71 1.19
________ ________ ________ ________ ________
Distributions:
Dividends from investment income_net......... (.64) (.67) (.72) (.77) (.80)
Dividends from net realized gain on investments (.16) (.29) (.60) (.10) (.17)
________ ________ ________ ________ ________
Total Distributions.......................... (.80) (.96) (1.32) (.87) (.97)
________ ________ ________ ________ ________
Net asset value, end of period............... $12.58 $12.97 $12.24 $13.64 $12.80
======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN*......................... 3.31% 14.15% (4.34%) 13.62% 9.78%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .92% .93% .90% .78% .65%
Ratio of net investment income
to average net assets...................... 5.18% 5.22% 5.72% 5.71% 6.30%
Decrease reflected in above expense ratios
due to undertakings by the Manager......... _ _ .02% .15% .28%
Portfolio Turnover Rate...................... 39.76% 92.42% 37.39% 26.69% 36.54%
Net Assets, end of period (000's Omitted).... $ 163,030 $185,187 $191,939 $245,435 $224,555
* Exclusive of sales load.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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>
Class B Shares
________________________________________________________________
Year Ended January 31,
________________________________________________________________
PER SHARE DATA: 1997 1996 1995 1994 1993(1)
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $12.98 $12.25 $13.64 $12.81 $12.69
________ ________ ________ ________ ________
Investment Operations:
Investment income_net........................ .59 .60 .65 .69 .03
Net realized and unrealized gain (loss)
on investments............................. (.25) 1.02 (.79) .93 .12
________ ________ ________ ________ ________
Total from Investment Operations............. .34 1.62 (.14) 1.62 .15
________ ________ ________ ________ ________
Distributions:
Dividends from investment income_net......... (.57) (.60) (.65) (.69) (.03)
Dividends from net realized gain on investments (.16) (.29) (.60) (.10) ._
________ ________ ________ ________ ________
Total Distributions.......................... (.73) (.89) (1.25) (.79) (.03)
________ ________ ________ ________ ________
Net asset value, end of period............... $12.59 $12.98 $12.25 $13.64 $12.81
======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN(2)....................... 2.79% 13.55% (4.77%) 12.91% 25.98%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.44% 1.45% 1.42% 1.31% 1.07%(3)
Ratio of net investment income
to average net assets...................... 4.66% 4.69% 5.17% 4.90% 4.92%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager......... ._ ._ .02% .13% .13%(3)
Portfolio Turnover Rate...................... 39.76% 92.42% 37.39% 26.69% 36.54%
Net Assets, end of period (000's Omitted).... $20,341 $21,530 $18,981 $16,906 $325
(1) From January 15, 1993 (commencement of initial offering) to January 31, 1993.
(2) Exclusive of sales load.
(3) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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>
Class C Shares
____________________________
Year Ended January 31,
____________________________
PER SHARE DATA: 1997 1996(1)
________ ________
<S> <C> <C>
Net asset value, beginning of period.................................... $12.98 $12.98
________ ________
Investment Operations:
Investment income_net................................................... .54 .37
Net realized and unrealized gain (loss)
on investments........................................................ (.21) .29
________ ________
Total from Investment Operations........................................ .33 .66
________ ________
Distributions:
Dividends from investment income_net.................................... (.54) (.37)
Dividends from net realized gain on investments......................... (.16) (.29)
________ ________
Total Distributions..................................................... (.70) (.66)
________ ________
Net asset value, end of period.......................................... $12.61 $12.98
======== ==========
TOTAL INVESTMENT RETURN(2).................................................. 2.67% 7.90%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................. 1.77% 4.42%(3)
Ratio of net investment income
to average net assets................................................. 4.33% 4.31%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager.................................... _ _
Portfolio Turnover Rate................................................. 39.76% 92.42%
Net Assets, end of period (000's Omitted)............................... $1,029 $1
(1) From June 2, 1995 (commencement of initial offering) to January 31, 1996.
(2) Exclusive of sales load.
(3) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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 diversified, open-end
management investment company. The Fund's investment objective is to maximize
current income exempt from Federal and State of California 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.
On October 31, 1996, the Board of Trustees approved, subject to approval
by the shareholders of the California Series (the "Series") of Premier
Insured Municipal Bond Fund, an Agreement and Plan of Reorganization
providing for the transfer of all or substantially all of the Series' assets
and liabilities to the Fund in a tax free exchange of shares of Beneficial
Interest of the Fund at net asset value and the assumption of stated
liabilities (the "Exchange"). The Series' Special Meeting of shareholders on
February 27, 1997 was adjourned to a later date so that further solicitation
of votes could occur.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an
unlimited number of $.001 par value shares in the following classes of
shares: Class A, Class B and Class C. 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 six years of purchase (five years for shareholders
beneficially owning Class B shares on November 30, 1996) 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 classes include the services offered to and the expenses borne by
each class and certain voting rights.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(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.
Premier California Municipal Bond Fund
NOTES TO FINANCIAL STATEMENTS (continued)
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, 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.
The Fund has an unused capital loss carryover of approximately $461,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to January 31, 1997. The
carryover does not include net realized securities losses from November 1,
1996 through January 31, 1997, which are treated, for Federal income tax
purposes as arising in fiscal 1998. If not applied, the carryover expires in
fiscal 2005.
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 value
of the Fund's average daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $2,272 during the period ended January 31, 1997 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. During the period ended January 31, 1997,
$103,726 was charged to the Fund for the Class B shares and $2,183 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 (a securities dealer, financial institution or other industry
professional) in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the period ended January 31,
1997, $427,417, $51,863 and $727 were charged to Class A, B and C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
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 $67,419 during the period ended January 31, 1997.
(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.
Premier California Municipal Bond Fund
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3_Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended January 31, 1997
amounted to $74,526,774 and $90,179,818, respectively.
At January 31, 1997, accumulated net unrealized appreciation on
investments was $6,519,949, consisting of $8,108,372 gross unrealized
appreciation and $1,588,423 gross unrealized depreciation.
At January 31, 1997, 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, 1997, 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 financial statements and financial highlights. Our procedures included
confirmation of securities owned as of January 31, 1997 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, 1997, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
[Ernst & Young signature logo]
New York, New York
March 3, 1997
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended January 31, 1997:
_ 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 $.0708 per share as a long-term capital gain
distribution of the $.1562 per share paid on September 27, 1996.
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 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
[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.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. PCCAR971
[Dreyfus logo]
Annual Report
Premier California
Municipal Bond Fund
January 31, 1997
Registration Mark
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
LEHMAN CALIFORNIA
PERIOD BROTHERS MUNICIPAL
MUNICIPAL BOND FUND
BOND INDEX * (CLASS A SHARES)
1/31/87 10,000 9,549
1/31/88 10,205 9,396
1/31/89 11,080 10,291
1/31/90 11,970 11,095
1/31/91 13,076 12,144
1/31/92 14,502 13,360
1/31/93 15,928 14,666
1/31/94 17,881 16,664
1/31/95 17,245 15,941
1/31/96 19,840 18,196
1/31/97 20,603 18,799
* Source: Lehman Brothers
