LETTER TO SHAREHOLDERS
Dear Shareholder:
As of December 31, 1994, the net asset value of Premier GNMA Fund was
$13.54 per share for Class A and $13.55 for Class B shares. The total return
of your Fund for the 12 months ended December 31, 1994 was -2.91% for Class A
shares and -3.39% for Class B shares.* Dividends paid from net investment
income for the year amounted to just over $.87 per share for Class A shares
and just over $.79 for Class B shares. The distribution rate for the year on
the Class A shares was 6.18% and 5.87% on the Class B shares.**
We have just completed a very disappointing year for fixed income
markets. As an example, the total return on the five-year Treasury note for
1994 was -4.284%. Going back as far as 1926, this is the worst total return
recorded for the five-year Treasury note.+ Over the past year, the Federal
Reserve Board tightened short-term interest rates six times. From the first
25-basis point tightening on February 4 until the last 1994 tightening on
November 15, the Federal Reserve increased short-term rates by a total of 250
basis points. As a result, the 30-year Treasury bond went from a yield of
6.36% on February 4, to an 8.13% yield on November 18 - a rate increase of
177 basis points.
Early on, we anticipated rising interest rates and kept your Fund's
duration (a measure of volatility expressed in years) shorter than the
market, as represented by the Lehman GNMA Index. While both your Fund and the
market suffered, the shorter durations helped your Fund slightly outperform
the market during the first half of 1994.
In years characterized by periods of high volatility and Federal Reserve
tightening, bond returns have often been negative. During 1984 and 1987 the
market sold off dramatically for over 20 weeks. Because we saw similarities
between those years and 1994, we believed somewhere around August and
September, that bonds were oversold. Put another way, we expected a rally. In
September and October, we extended your Fund's duration from approximately a
half year less than that of the Lehman GNMA Index to approximately a half
year longer. We did this by taking a 12% cash position and investing in
30-year Treasury bonds. However, the market deterioration which began in
early February continued through mid-November. The rally arrived later, and
lasted longer, than we expected. Consequently, while your Fund benefitted
from the rally, it underperformed the market for the second half and for the
year as a whole.
Going forward, we continue to anticipate some volatility in the market.
The current portfolio structure reflects what we would consider a neutral
posture. In other words, our durations are very close to the Lehman GNMA
Index (approximately .05 years longer). Whenever we believe that higher
coupon GNMAs represent value, and are appropriate for the Fund, we will seek
to add them to the portfolio.
At this writing, there is still a possibility of at least one more
Federal Reserve tightening. We currently believe the stringent Federal
Reserve policies will be effective in curbing domestic inflation. We further
believe that current developments in the fixed income markets should prove
rewarding over time.
We look forward to serving your future investment needs.
Sincerely,
(Garitt A. Kono Logo Signature)
Garitt A. Kono
Portfolio Manager
January 19, 1995
New York, N.Y.
* Total return represents the change during the period in a
hypothetical account with dividends reinvested, without taking into
account the maximum 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 shares.
** Distribution rate per share is based upon dividends per share paid
from net investment income during the period, 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 at the end of the period in the case of
Class B shares.
+ Source: Ibbotson Associates
PREMIER GNMA FUND DECEMBER 31, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER GNMA FUND
CLASS A SHARES AND THE LEHMAN BROTHERS GNMA INDEX
(Exhibit A)
*Source: Lehman Brothers
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
CLASS A CLASS B
- ------------------------------------------------------------ ---------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIOD ENDED 12/31/94 Sales Charge Sales Charge (4.5%) PERIOD ENDED 12/31/94 Redemption Redemption*
- --------------------- ---------------- ------------------ --------------------- ----------- ---------------------
<S> <C> <C> <C> <C> <C>
1 Year (2.91%) (7.28%) 1 Year (3.39%) (6.13%)
5 Years 7.39 6.40 From Inception (1/15/93)1.59 .22
From Inception (1/29/87) 8.44 7.82
</TABLE>
Past performance is not predictive of future performance. Share price and
investment return fluctuate and share price may be more or less than original
cost upon redemption. Performance for Class B shares will differ from the
results shown above due to the difference in charges and expenses charged to
that class.
The above graph compares a $10,000 investment made in Class A shares of
Premier GNMA Fund on 1/29/87 (Inception Date) to a $10,000 investment made in
the Lehman Brothers GNMA Index on that date. For comparative purposes the
value of the Index on 1/31/87 is used as the beginning value on 1/29/87. All
dividends and capital gain distributions are reinvested.
The Fund invests primarily in Ginnie Maes and its performance takes into
account the maximum initial sales charge on Class A shares and all other
applicable fees and expenses. Unlike the Fund, the Lehman Brothers GNMA Index
is an unmanaged total return performance benchmark for the GNMA market,
consisting of 15 and 30 year fixed rate securities backed by mortgage pools
of the Government National Mortgage Association. All issues have at least one
year to maturity and an outstanding par value of at least $100 million. The
Index does not take into account charges, fees and other expenses. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Condensed Financial Information section of
the Prospectus and elsewhere in this report.
* Maximum contingent deferred sales charge for Class B shares is 3% and is
reduced to 0% after five years.
<TABLE>
<CAPTION>
PREMIER GNMA FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
PRINCIPAL
BONDS AND NOTES-95.9% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
MORTGAGE-BACKED CERTIFICATES-75.1%
Government National Mortgage Association I:
7 1/2%, 12/15/2007-11/15/2024........................................... $ 49,171,027 $ 45,990,539
8%, 6/15/2001-12/15/2017................................................ 28,520,712 27,938,367
8 1/2%, 11/1/2019-12/15/2024............................................ 26,055,899 25,656,722
9% (a).................................................................. 6,000,000 6,065,580
9%, 12/15/2009-5/15/2022................................................ 11,806,164 11,940,762
9 1/4%, 10/15/2023...................................................... 4,850,147 4,830,406
10%, 10/15/2016-10/15/2020.............................................. 1,833,927 1,933,070
10 1/2%, 2/15/2016-8/15/2019............................................ 780,329 834,952
11%, 2/15/2010-8/15/2019................................................ 3,563,845 3,886,800
11 1/2%, 1/15/2013...................................................... 230,303 257,651
--------------
129,334,849
--------------
Government National Mortgage Association II;
11%, 7/20/2013-10/20/2015............................................... 3,429,393 3,645,856
--------------
TOTAL MORTGAGE-BACKED CERTIFICATES.......................................... 132,980,705
--------------
U.S. TREASURY BONDS-7.9%
8%, 11/15/2021.......................................................... 14,000,000 14,059,066
--------------
U.S. TREASURY NOTES-12.9%
7 1/4%, 11/30/1996...................................................... 23,000,000 22,823,912
--------------
TOTAL BONDS AND NOTES
(cost $171,856,509)..................................................... $169,863,683
===============
SHORT-TERM INVESTMENTS-7.1%
U.S. TREASURY BILLS:
3.52%, 1/12/1995 (b).................................................... $ 2,224,000 $ 2,221,242
4%, 3/9/1995............................................................ 3,687,000 3,649,135
4 3/4%, 2/2/1995........................................................ 6,829,000 6,799,499
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $12,669,876)...................................................... $ 12,669,876
===============
TOTAL INVESTMENTS
(cost $184,526,385)..................................................... 103.0% $182,533,559
======== ==============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (3.0%) $ (5,367,379)
======== ==============
NET ASSETS ................................................................ 100.0% $177,166,180
======== ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Purchased on a when-issued basis.
(b) Held by the custodian in a segregated account for when-issued
securities purchased.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER GNMA FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $184,526,385)-see statement..................................... $182,533,559
Cash.................................................................... 1,029,422
Interest receivable..................................................... 1,215,012
Receivable for shares of Beneficial Interest subscribed................. 73,841
Prepaid expenses........................................................ 14,358
--------------
184,866,192
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 84,869
Due to Distributor...................................................... 53,913
Payable for investment securities purchased............................. 7,358,186
Payable for shares of Beneficial Interest redeemed...................... 75,834
Accrued expenses........................................................ 127,210 7,700,012
------------ --------------
NET ASSETS ................................................................ $177,166,180
==============
REPRESENTED BY:
Paid-in capital......................................................... $195,048,953
Accumulated net realized (loss) on investments.......................... (15,889,947)
Accumulated net unrealized (depreciation) on investments-Note 3......... (1,992,826)
--------------
NET ASSETS at value......................................................... $177,166,180
==============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 10,450,270
==============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 2,635,810
==============
NET ASSET VALUE per share:
Class A Shares
($141,455,742 / 10,450,270 shares).................................... $13.54
=======
Class B Shares
($35,710,438 / 2,635,810 shares)...................................... $13.55
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER GNMA FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 14,602,827
EXPENSES:
Management fee-Note 2(a).............................................. $ 1,124,608
Shareholder servicing costs-Note 2(c)................................. 716,605
Distribution fees (Class B Shares)-Note 2(b).......................... 177,334
Custodian fees........................................................ 71,683
Professional fees..................................................... 46,737
Registration fees..................................................... 45,631
Prospectus and shareholders' reports.................................. 20,497
Trustees' fees and expenses-Note 2(d)................................. 20,230
Miscellaneous......................................................... 22,071
--------------
2,245,396
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 120,163
--------------
TOTAL EXPENSES.................................................... 2,125,233
--------------
INVESTMENT INCOME-NET............................................. 12,477,594
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $(15,855,259)
Net unrealized (depreciation) on investments............................ (3,139,629)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (18,994,888)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (6,517,294)
==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER GNMA FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
--------------------------------
1993 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 12,508,104 $ 12,477,594
Net realized gain (loss) on investments................................. 4,539,185 (15,855,259)
Net unrealized (depreciation) on investments for the year............... (2,212,208) (3,139,629)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... 14,835,081 (6,517,294)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares........................................................ (11,694,890) (10,554,358)
Class B shares........................................................ (813,214) (1,923,236)
Net realized gain on investments:
Class A shares........................................................ (3,934,125) ---
Class B shares........................................................ (560,637) ---
-------------- --------------
TOTAL DIVIDENDS................................................... (17,002,866) (12,477,594)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 62,147,529 17,118,960
Class B shares........................................................ 30,451,001 14,080,674
Dividends reinvested:
Class A shares........................................................ 11,052,185 7,266,865
Class B shares........................................................ 968,162 1,207,098
Cost of shares redeemed:
Class A shares........................................................ (38,519,104) (64,284,402)
Class B shares........................................................ (1,011,574) (6,115,464)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS 65,088,199 (30,726,269)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 62,920,414 (49,721,157)
NET ASSETS:
Beginning of year....................................................... 163,966,923 226,887,337
-------------- --------------
End of year............................................................. $226,887,337 $177,166,180
============== ==============
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------------------------------------------------------------------
CLASS A CLASS B
--------------------------------- --------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
--------------------------------- --------------------------------
1993 1994 1993* 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 4,091,068 1,204,210 1,999,212 989,793
Shares issued for dividends reinvested. 734,937 516,077 64,715 85,980
Shares redeemed........................ (2,537,003) (4,564,951) (66,707) (437,183)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING............. 2,289,002 (2,844,664) 1,997,220 638,590
============== ============== ============== ==============
* From January 15, 1993 (commencement of initial offering) to December 31, 1993.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER GNMA 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 CLASS B
----------------------------------------------- ----------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------------------- ----------------
PER SHARE DATA: 1990 1991 1992 1993 1994 1993(1) 1994
------ ------ ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year...................... $14.28 $14.38 $15.30 $14.90 $14.84 $14.98 $14.84
------ ------ ------ ------ ------- ------ ------
INVESTMENT OPERATIONS:
Investment income-net................................... 1.32 1.20 1.10 .95 .88 .83 .80
Net realized and unrealized gain (loss)
on investments........................................ .10 .92 (.15) .24 (1.30) .16 (1.29)
------ ------ ------ ------ ------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS............................ 1.42 2.12 .95 1.19 (.42) .99 (.49)
------ ------ ------ ------ ------- ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.................... (1.32) (1.20) (1.10) (.95) (.88) (.83) (.80)
Dividends from net realized gain
on investments........................................ -- -- (.25) (.30) -- (.30) --
------ ------ ------ ------ ------- ------ ------
TOTAL DISTRIBUTIONS................................... (1.32) (1.20) (1.35) (1.25) (.88) (1.13) (.80)
------ ------ ------ ------ ------- ------ ------
Net asset value, end of year............................ $14.38 $15.30 $14.90 $14.84 $13.54 $14.84 $13.55
====== ====== ====== ====== ======= ====== ======
TOTAL INVESTMENT RETURN(2) 10.57% 15.43% 6.50% 8.20% (2.91%) 7.03%(3) (3.39%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. .08% .64% .71% .78% .94% 1.30%(3) 1.51%
Ratio of net investment income to average
net assets............................................ 9.28% 8.09% 7.23% 6.24% 6.20% 5.38%(3) 5.61%
Decrease reflected in above expense ratios due
to undertakings by the Manager........................ 1.20% .52% .36% .22% .06% .20%(3) .05%
Portfolio Turnover Rate................................. 19.44% 36.90% 60.12% 274.95% 427.27% 274.95% 427.27%
Net Assets, end of year (000's Omitted)................. $53,875 $113,434 $163,967 $197,239 $141,456 $29,648 $35,710
- ----------------------------
(1) From January 15, 1993 (commencement of initial offering) to December 31, 1993.
(2) Exclusive of sales load.
(3) Annualized.
See notes to financial statements.
</TABLE>
PREMIER GNMA FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the Distributor of the Fund's
shares. Dreyfus Service Corporation is a wholly-owned subsidiary of The
Dreyfus Corporation ("Manager"). Effective August 24, 1994, the Manager
became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
The Fund offers both Class A and Class B shares. Class A shares are subject
to a sales charge imposed at the time of purchase and Class B shares are
subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within five years of purchase. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding short-term
investments) 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 securities of comparable quality, coupon, maturity
and type; indications as to values from dealers; and general market
conditions. Short-term investments are carried at amortized cost, which
approximates value.
(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, including, where applicable, amortization of discount on short-term
investments, is recognized on the accrual basis.
(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, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately
$10,221,000 available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to December 31,
1994. The carryover does not include net realized securities losses from
November 1, 1994 through December 31, 1994 which are treated, for Federal
income tax purposes, as arising in fiscal 1995. If not applied, the carryover
expires in fiscal 2002.
PREMIER GNMA FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 year. The most stringent state
expense limitation applicable to the Fund presently requires reimbursement of
expenses in any full year that such expenses (exclusive of distribution
expenses and certain expenses as described above) exceed 2 1/2% of the first
$30 million, 2% of the next $70 million and 1 1/2% of the excess over $100
million of the average value of the Fund's net assets in accordance with
California "blue sky" regulations. However, the Manager had undertaken from
January 1, 1994 through June 30, 1994, to waive receipt of the management fee
payable to it by the Fund in excess of an annual rate of .45 of 1% of the
average daily value of the Fund's net assets, and thereafter, had undertaken
from July 1, 1994 through July 14, 1994 to reduce the management fee paid by
the Fund, to the extent that the Fund's aggregate expenses, excluding
(certain expenses as described above) exceeded specified annual percentages
of the Fund's average daily net assets. The reduction in management fee,
pursuant to the undertakings, amounted to $120,163 for the year ended
December 31, 1994.
Dreyfus Service Corporation retained $23,891 during the year ended
December 31, 1994 from commissions earned on sales of the Fund's Class A
shares.
Prior to August 24, 1994, Dreyfus Service Corporation retained $64,196
from contingent deferred sales charges imposed upon redemptions of the Fund's
Class B shares.
(B) On August 3, 1994, the Fund's shareholders approved a revised
Distribution Plan with respect to Class B shares only (the "Class B
Distribution Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the
Class B Distribution Plan, effective August 24, 1994, the Fund pays the
Distributor for distributing the Fund's Class B shares at an annual rate of
.50 of 1% of the value of the average daily net assets of Class B shares.
Prior to August 24, 1994, the Distribution Plan ("prior Class B
Distribution Plan") provided that the Fund pay Dreyfus Service Corporation at
an annual rate of .50 of 1% of the value of the Fund's Class B shares average
daily net assets, for the costs and expenses in connection with advertising,
marketing and distributing the Fund's Class B shares. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's Class B shares owned by clients of the Service Agent.
During the year ended December 31, 1994, $66,374 was charged to the Fund
pursuant to the Class B Distribution Plan and $110,960 was charged to the
Fund pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor,
at an annual rate of .25 of 1% of the value of the average daily net assets
of Class A and Class B shares for servicing shareholder accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. From January 1, 1994 to August 23,
1994, $290,028 and $55,480 were charged to Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
December 31, 1994, $135,819 and $33,187 were charged to Class A and Class B
shares, respectively, by the Distributor pursuant to the Shareholder Services
Plan.
PREMIER GNMA FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) Prior to August 24, 1994, certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each trustee who is not an "affiliated person"
receives an annual fee of $2,500 and an attendance fee of $500 per meeting.
Prior to May 1, 1994, the annual fee was $1,000 and prior to April 20, 1994,
an attendance fee was not paid.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the year ended
December 31, 1994, amounted to $765,714,535 and $789,798,361, respectively.
At December 31, 1994, accumulated net unrealized depreciation on
investments was $1,992,826, consisting of $318,141 gross unrealized
appreciation and $2,310,967 gross unrealized depreciation.
At December 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER GNMA FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER GNMA FUND
We have audited the accompanying statement of assets and liabilities of
Premier GNMA Fund, including the statement of investments, as of December 31,
1994, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1994 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 GNMA Fund at December 31, 1994, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
(Ernst & Young LLP Signature Logo)
New York, New York
February 8, 1995
ANNUAL REPORT
PREMIER GNMA FUND
DECEMBER 31, 1994
PREMIER GNMA FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 027/614AR9412
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER GNMA FUND CLASS A SHARES AND THE
LEHMAN BROTHERS GNMA INDEX
EXHIBIT A:
____________________________________________________
| | | |
| | LEHMAN BROTHERS | PREMIER |
| PERIOD | GNMA | GNMA FUND, |
| | INDEX * | (CLASS A SHARES)|
|----------- | ------------------ | ----------------|
| 1/29/87 | 10,000 | 9,552 |
| 12/31/87 | 10,298 | 10,006 |
| 12/31/88 | 11,205 | 11,302 |
| 12/31/89 | 12,963 | 12,716 |
| 12/31/90 | 14,333 | 14,060 |
| 12/31/91 | 16,633 | 16,229 |
| 12/31/92 | 17,866 | 17,284 |
| 12/31/93 | 19,041 | 18,701 |
| 12/31/94 | 18,755 | 18,158 |
|---------------------------------------------------|
*Source: Lehman Brothers
