File No. 33-9591
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 16 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 16 [X]
(Check appropriate box or boxes.)
PREMIER GNMA FUND
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
----
X on May 1, 1996 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its
beneficial interest under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940. Registrant's Rule 24f-2
Notice for the fiscal year ended December 31, 1995 was filed on February 29,
1996.
PREMIER GNMA FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 6, 24
5 Management of the Fund 8
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 24
7 Purchase of Securities Being Offered 9
8 Redemption or Repurchase 17
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-21
13 Investment Objectives and Policies B-2
14 Management of the Fund B-5
15 Control Persons and Principal B-8
Holders of Securities
16 Investment Advisory and Other B-8
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
PREMIER GNMA FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-19
18 Capital Stock and Other Securities B-21
19 Purchase, Redemption and Pricing B-10, B-13,
of Securities Being Offered B-18
20 Tax Status *
21 Underwriters B-10
22 Calculations of Performance Data B-20
23 Financial Statements B-23
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-14
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
- -----------------------------------------------------------------------------
PREMIER GNMA FUND
PROSPECTUS MAY 1, 1996
(LION LOGO)
Registration Mark
- -----------------------------------------------------------------------------
Premier GNMA Fund (the "Fund") is an open-end, diversified,
management investment company, known as a mutual fund. The Fund's invest-
ment objective is to provide you with as high a level of current income as
is consistent with the preservation of capital by investing principally in
instruments issued by the Government National Mortgage Association.
By this Prospectus, the Fund is offering three Classes of
shares--Class A, Class B and Class C -- which are described herein. See
"Alternative Purchase Methods."
The Fund provides free redemption checks with respect to
Class A, which you can use in amounts of $500 or more for cash or to pay
bills. You continue to earn income on the amount of the check until it
clears. You can purchase or redeem all Classes of shares by telephone
using the TELETRANSFER Privilege.
The Dreyfus Corporation professionally manages the Fund's
portfolio.
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read and
retained for future reference.
The Statement of Additional Information, dated May 1, 1996,
which may be revised from time to time, provides a further discussion of
certain areas in this Prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. For a free
copy, write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or call 1-800-554-4611. When telephoning, ask for
Operator 144.
- -----------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
__________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
__________________________________________________________________________
TABLE OF CONTENTS
Fee Table....................................... 3
Condensed Financial Information................. 4
Alternative Purchase Methods.................... 5
Description of the Fund......................... 6
Management of the Fund.......................... 8
How to Buy Shares............................... 9
Shareholder Services............................ 13
How to Redeem Shares............................ 17
Distribution Plan and Shareholder Services Plan. 21
Dividends, Distributions and Taxes.............. 21
Performance Information......................... 23
General Information............................. 24
Appendix........................................ 26
Page 2
<TABLE>
<CAPTION>
FEE TABLE
CLASS A CLASS B CLASS C
_______ _______ ________
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................. 4.50% none none
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)....... none* 3.00% 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees......................... .55% .55% .55%
12b-1 Fees.............................. none .50% .75%
Other Expenses ......................... .48% .50% .49%
Total Fund Operating Expenses........... 1.03% 1.55% 1.79%
EXAMPLE
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) except where noted, redemption
at the end of each time period: CLASS A CLASS B CLASS C
________ ________ ________
1 Year................................... $ 55 $46/$16** $28/$18**
3 Years.................................. $ 76 $69/$49** $56
5 Years.................................. $ 99 $94/$84** $97
10 Years................................. $165 $158*** $211
* A contingent deferred sales charge of 1.00% may be assessed on
certain redemptions of Class A shares purchased without an initial sales
charge as part of an investment of $1 million or more.
** Assuming no redemption of shares.
*** Ten-year figure assumes conversion of Class B shares to Class A
shares at the end of the sixth year following the date of purchase.
</TABLE>
______________________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS REP-
RESPNTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5%
ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN
AN ACTUAL RETURN GREATER OR LESS THAN 5%.
______________________________________________________________________________
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. Long-term investors
in Class B or Class C shares could pay more in 12b-1 fees than the
economic equivalent of paying a front-end sales charge. The information
in the foregoing table does not reflect any fee waivers or expense
reimbursement arrangements that may be in effect. Certain Service
Agents (as defined below) may charge their clients direct fees for
effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Shares" and
"Distribution Plan and Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by
Ernst & Young LLP, the Fund's independent auditors, whose report thereon
appears in the Statement of Additional Information. Further financial
data and related notes are included in the Statement of Additional
Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance for a
share of beneficial interest outstanding, total investment return, ratios
to average net assets and other supplemental data for each period
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
CLASS A SHARES
----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------
PER SHARE DATA: 1987(1) 1988 1989 1990 1991 1992 1993 1994 1995
------ ----- ----- ------ ----- ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $14.50 $13.87 $14.01 $14.28 $14.38 $15.30 $14.90 $14.84 $13.54
------ ------- ------ ------- ------- ------ ------- ------- ------
INVESTMENT OPERATIONS:
Investment income-net 1.28 1.35 1.36 1.32 1.20 1.10 .95 .88 .91
Net realized and unrealized gain
(loss) on investments (.63) .40 .31 .10 .92 (.15) .24 (1.30) 1.12
------- ------- ------- ------ ------ ------ ------ ----- ----
TOTAL FROM INVESTMENT
OPERATIONS......... .65 1.75 1.67 1.42 2.12 .95 1.19 (.42) 2.03
------ ------ ------ ----- ---- ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net......... (1.28) (1.35) (1.36) (1.32) (1.20) (1.10) (.95) (.88) (.91)
Dividends from net realized gain
on investments..... __ (.26) (.04) __ __ (.25) (.30) -- --
------- ------- ------- ----- ------ ------- ------ ---- ----
TOTAL DISTRIBUTIONS (1.28) (1.61) (1.40) (1.32) (1.20) (1.35) (1.25) (.88) (.91)
------- ------- ------- ------ ----- ------ ------- ----- -----
Net asset value, end of year.... $13.87 14.01 $14.28 $14.38 $15.30 $14.90 $14.84 $13.54 $14.66
====== ======= ====== ======= ====== ====== ======= ===== ======
TOTAL INVESTMENT RETURN(2) 5.14%(3) 12.96% 12.51% 10.57% 15.43% 6.50% 8.20% (2.91%) 15.43%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets _ _ _ .08% .64% .71% .78% .94% 1.03%
Ratio of net investment income to average
net assets......... 9.86%(3) 9.28% 9.50% 9.28% 8.09% 7.23% 6.24% 6.20% 6.45%
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation...... 1.50%(3) 1.50% 1.50% 1.20% .52% .36% .22% .06% --
Portfolio Turnover Rate..... 64.18%(4) 2,089.62%(5)1,069.14%(5) 19.44% 36.90% 60.12% 274.95% 427.27% 349.24%
Net Assets, end of year (000's omitted)$7,265 $13,612 $30,068 $53,875 $113,434 $163,967 $197,239 $141,456 $134,545
(1) From January 29, 1987 (commencement of operations) to December 31, 1987.
(2) Exclusive of sales charge.
(3) Annualized.
(4) Not annualized.
(5) The high portfolio turnover rate arose due to the selling off of large
amounts of unsettled securities bought to take
advantage of favorable short-term market fluctuations.
</TABLE>
Page 4
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
------------------------- ---------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------
1993(1) 1994 1995 1995(2)
------- ----- ----- -------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period..... $14.98 $14.84 $13.55 $14.48
------ ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net.................... .83 .80 .84 .16
Net realized and unrealized gain (loss) on investments .16 (1.29) 1.12 .19
------- ------- ------ --------
TOTAL FROM INVESTMENT OPERATIONS......... .99 (.49) 1.96 .35
------- ------- ------- -----
DISTRIBUTIONS:
Dividends from investment income-net..... (.83) (.80) (.84) (.16)
Dividends from net realized gain on investments (.30) -- -- --
------- ------- ------- -------
TOTAL DISTRIBUTIONS...................... (1.13) (.80) (.84) (.16)
------- ------- -------- -------
Net Asset Value, end of period........... 14.84 $13.55 $14.67 $14.67
====== ===== ====== ========
TOTAL INVESTMENT RETURN(3)................. 7.03%(4) (3.39)% 14.83% 11.47%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. 1.30%(4) 1.51% 1.55% 1.79%(4)
Ratio of net investment income
to average net assets.................... 5.38%(4) 5.61% 5.89% 5.25%(4)
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation.................. .20%(4) .05% -- --
Portfolio Turnover Rate.................. 274.95% 427.27% 349.24% 349.24%
Net Assets, end of period (000's omitted) $29,648 $35,710 $41,934 $1
(1) From January 15, 1993 (commencement of initial offering) to December 31, 1993.
(2) From October 16, 1995 (commencement of initial offering) to December 31, 1995.
(3) Exclusive of sales load.
(4) Annualized.
(5) Not annualized.
</TABLE>
Further information about the Fund's performance is contained
in its annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
ALTERNATIVE PURCHASE METHODS
The Fund offers you three methods of purchasing Fund shares.
You may choose the Class of shares that best suits your needs, given the
amount of your purchase, the length of time you expect to hold your
shares and any other relevant circumstances. Each Fund share represents
an identical pro rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 4.50% of the public offering price
imposed at the time of purchase. The initial sales charge may be reduced
or waived for certain purchases. See "How to Buy Shares-Class A Shares."
These shares are subject to an annual service fee at the rate of .25 of
1% of the value of the average daily net assets of Class A. See
"Distribution Plan and Shareholder Services Plan-Shareholder Services
Plan."
Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 3% contingent deferred sales charge ("CDSC"), which
is assessed only if you redeem Class B shares within the first five years
of their purchase. See "How to Buy Shares-Class B Shares" and "How to
Redeem Shares-Contingent Deferred Sales Charge-Class B Shares." These
shares also are subject to an annual service fee at the rate of .25 of 1%
of the value of the average daily net assets of Class B. In addition,
Class B shares are subject to an annual distribution fee at the rate of
Page 5
.50 of 1% of the value of the average daily net assets of Class B. See
"Distribution Plan and Shareholder Services Plan." The distribution fee
paid by Class B will cause such Class to have a higher expense ratio and
to pay lower dividends than Class A. Approximately six years after the
date of purchase, Class B shares automatically will convert to Class A
shares, based on the relative net asset values for shares of each such
Class, and will no longer be subject to the distribution fee. Class B
shares that have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together with other
Class B shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares not
acquired through the reinvestment of dividends and distributions.
Class C shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class C shares are
subject to a 1% CDSC, which is assessed only if you redeem Class C shares
within one year of purchase. See "How to Buy Shares -- Class C Shares"
and "How to Redeem Shares -- Contingent Deferred Sales Charge -- Class C
Shares." These shares also are subject to an annual service fee at the
rate of .25 of 1%, and an annual distribution fee at the rate of .75 of
1%, of the value of the average daily net assets of Class C. See
"Distribution Plan and Shareholder Services Plan." The distribution fee
paid by Class C will cause such Class to have a higher expense ratio and
to pay lower dividends than Class A.
The decision as to which Class of shares is more beneficial
to you depends on the amount and intended length of time of your
investment. You should consider whether, during the anticipated life of
your investment in the Fund, the accumulated distribution fee and CDSC on
Class B or Class C shares would be less than the initial sales charge on
Class A shares purchased at the same time, and to what extent, if any,
such differential would be offset by the return of Class A. Additionally,
investors qualifying for reduced initial sales charges who expect to
maintain their investment for an extended period of time might consider
purchasing Class A shares because the accumulated continuing distribution
fees on Class B or Class C shares may exceed the initial sales charge on
Class A shares during the life of the investment. Finally, you should
consider the effect of the CDSC period and any conversion rights of the
Classes in the context of your own investment time frame. For example,
while Class C shares have a shorter CDSC period than Class B shares,
Class C shares do not have a conversion feature and, therefore, are
subject to an ongoing distribution fee. Thus, Class B shares may be more
attractive than Class C shares to investors with long term investment out-
looks. Generally, Class A shares may be more appropriate for investors who
invest $1,000,000 or more in Fund shares, and for investors who invest
between $250,000 and $999,999 in Fund shares with long term investment
outlooks. Class A shares will not be appropriate for investors who invest
less than $50,000 in Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you with as
high a level of current income as is consistent with the preservation of
capital. It cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of the Fund's outstanding voting shares. There can be
no assurance that the Fund's investment objective will be achieved.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at
least 65% of the value of its net assets (except when maintaining a
temporary defensive position) in "GNMA Certificates" (popularly called
"Ginnie Maes").
Page 6
Ginnie Maes are backed by the full faith and credit of the
United States. Ginnie Maes are mortgage-backed securities representing
part ownership of a pool of mortgage loans which are insured by the
Federal Housing Administration or Farmers' Home Administration or
guaranteed by the Veterans' Administration. The Fund invests in Ginnie
Maes only of the "fully modified pass-through" type which are guaranteed
as to timely payment of principal and interest by the Government National
Mortgage Association, a U.S. Government corporation. The Fund may
purchase Ginnie Maes on a forward commitment basis as described under
"Appendix - Investment Techniques - Forward Commitments."
The Fund may purchase other securities issued or guaranteed
by, or exchangeable for securities issued or guaranteed by, the U.S.
Government or issued by its agencies or instrumentalities that are backed
by the full faith and credit of the U.S. Government. For temporary
defensive purposes, the entire portfolio may be so invested. A security
guaranteed by the U.S. Government is guaranteed only as to principal and
interest, and there is no guarantee of the security's market value. The
value of Fund shares is not guaranteed.
Securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities include U.S. Treasury securities, which
differ in their interest rates, maturities and times of issuance.
Obligations issued or guaranteed by U.S. Government agencies and
instrumentalities that are supported by the full faith and credit of the
U.S. Treasury include those issued by the United States Maritime
Administration.
INVESTMENT CONSIDERATIONS AND RISKS
MORTGAGE-RELATED SECURITIES -- Although certain mortgage-related
securities are guaranteed by a third party or otherwise similarly
secured, the market value of the security, which may fluctuate, is not
secured. If a mortgage-related security is purchased at a premium, all or
part of the premium may be lost if there is a decline in the market value
of the security, whether resulting from changes in interest rates or
prepayments on the underlying mortgage collateral. As with other
interest-bearing securities, the prices of certain of these securities
are inversely affected by changes in interest rates. However, although
the value of a mortgage-related security may decline when interest rates
rise, the converse is not necessarily true, since in periods of declining
interest rates the mortgages underlying the security are more likely to
be prepaid. For this and other reasons, a mortgage-related security's
stated maturity may be shortened by unscheduled prepayments on the
underlying mortgages, and, therefore, it is not possible to predict
accurately the security's return to the Fund. Moreover, with respect to
stripped mortgage-backed securities, if the underlying mortgage
securities experience greater than anticipated prepayments of principal,
the Fund may fail to fully recoup its initial investment even if the
securities are rated in the highest rating category by a nationally
recognized statistical rating organization.
USE OF DERIVATIVES -- The Fund may invest in derivatives
("Derivatives"). These are financial instruments which derive their
value, at least in part, from the performance of an underlying asset,
index or interest rate. The Derivatives the Fund may use include
mortgage-related securities. While Derivatives can be used effectively in
furtherance of the Fund's investment objective, under certain conditions,
they can increase the volatility of the Fund's net asset value, can
decrease the liquidity of the Fund's portfolio and make more difficult
the accurate pricing of the Fund's portfolio. See "Appendix - Investment
Techniques-Use of Derivatives" below and Investment Objective and
Management Policies-Management Policies-Derivatives" in the Statement of
Additional Information.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are
made independently from those of other investment companies advised by
The Dreyfus Corporation. However, if such other investment companies
desire to invest in, or dispose of, the same securities as the Fund,
available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
Page 7
adversely affect the size of the position obtained for or disposed of by
the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200
Park Avenue, New York, New York 10166, was formed in 1947 and serves as
the Fund's investment adviser. The Dreyfus Corporation is a wholly-owned
subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of
Mellon Bank Corporation ("Mellon"). As of March 29, 1996, The Dreyfus
Corporation managed or administered approximately $82 billion in assets
for more than 1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the authority of the Fund's Board in accordance with
Massachusetts law. The Fund's primary portfolio manager is Garitt A.
Kono. He has held that position since September 1993 and has been
employed by The Dreyfus Corporation since September 1992. For more than
five years prior to joining The Dreyfus Corporation, Mr. Kono was
Vice-President_Fixed Income at The First Boston Corporation. The Fund's
other portfolio managers are identified in the Statement of Additional
Information. The Dreyfus Corporation also provides research services for
the Fund and other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the
Federal Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest
bank holding companies in the United States based on total assets.
Mellon's principal wholly-owned subsidiaries are Mellon Bank, N.A.,
Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
Company, Inc., AFCOCredit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $233 billion
in assets as of December 31, 1995, including approximately $81 billion in
proprietary mutual fund assets. As of December 31, 1995, Mellon, through
various subsidiaries, provided non-investment services, such as custodial
or administration services, for more than $786 billion in assets
including approximately $60 billion in mutual fund assets.
For the fiscal year ended December 31, 1995, the Fund paid
The Dreyfus Corporation a monthly management fee at the annual rate of
.55 of 1% of the value of the Fund's average daily net assets. From time
to time, The Dreyfus Corporation may waive receipt of its fees and/or
voluntarily assume certain expenses of the Fund, which would have the
effect of lowering the overall expense ratio of the Fund and increasing
yield to investors. The Fund will not pay The Dreyfus Corporation at a
later time for any amounts it may waive, nor will the Fund reimburse The
Dreyfus Corporation for any amounts it may assume.
In allocating brokerage transactions for the Fund, The
Dreyfus Corporation seeks to obtain the best execution of orders at the
most favorable net price. Subject to this determination, The Dreyfus
Corporation may consider, among other things, the receipt of research
services and/or the sale of shares of the Fund or other funds managed,
advised or administered by The Dreyfus Corporation as factors in the
selection of broker-dealers to execute portfolio transactions for the
Fund. See "Portfolio Transactions" in the Statement of Additional
Information.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the
Page 8
management fee paid by the Fund. The Fund's distributor may use part or
all of such payments to pay Service Agents in respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One Exchange Place,
Boston, Massachusetts 02109. The Distributor's ultimate parent is Boston
Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN - Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus Corporation,
P.O.Box 9671, Providence, Rhode Island 02940-9671, is the Fund's Transfer
and Dividend Disbursing Agent (the "Transfer Agent"). Mellon Bank, N.A.,
One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, is the Fund's
Custodian.
HOW TO BUY SHARES
GENERAL -- Fund shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals (collectively,
"Service Agents"), except that full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries, directors
of The Dreyfus Corporation, Board members of a fund advised by The
Dreyfus Corporation, including members of the Fund's Board, or the spouse
or minor child of any of the foregoing may purchase Class A shares
directly through the Distributor. Subsequent purchases may be sent
directly to the Transfer Agent or your Service Agent.
When purchasing Fund shares, you must specify which Class is
being purchased. Share certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
Service Agents may receive different levels of compensation
for selling different Classes of shares. Management understands that some
Service Agents may impose certain conditions on their clients which are
different from those described in this Prospectus, and, to the extent
permitted by applicable regulatory authority, may charge their clients
direct fees which would be in addition to any amounts which might be
received under the Distribution Plan or Shareholder Services Plan. You
should consult your Service Agent in this regard.
The minimum initial investment is $1,000. Subsequent
investments must be at least $100. The initial investment must be
accompanied by the Account Application. The Fund reserves the right to
offer Fund shares without regard to minimum purchase requirements to
employees participating in certain qualified or non-qualified employee
benefit plans or other programs where contributions or account
information can be transmitted in a manner and form acceptable to the
Fund. The Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"Premier GNMA Fund," or, if for Dreyfus retirement plan accounts, to "The
Dreyfus Trust Company, Custodian." Payments to open new accounts which
are mailed should be sent to Premier GNMA Fund, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account
Application indicating which Class of shares is being purchased. For
subsequent investments, your Fund account number should appear on the
check and an investment slip should be enclosed and sent to Premier GNMA
Fund, P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement
plan accounts, both initial and subsequent investments should be sent to
The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode
Island 02940-6427. Neither initial nor subsequent investments should be
made by third party check.
Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or any
other bank having a correspondent bank in New York City. Immediately
available funds may be transmitted by wire to The Bank of New
Page 9
York, DDA #8900119322/Premier GNMA Fund-Class A shares, DDA#8900115033/
Premier GNMA Fund-Class B shares or DDA #8900279958/Premier GNMA Fund-
Class C shares, as the case may be, for purchase of Fund shares in your
name. The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Account Application and promptly
mail the Account Application to the Fund, as no redemptions will be
permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check
used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC
Asset BuilderRegistration Mark and the Government Direct Deposit
Privilege described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit
and will not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other domestic
financial institution that is an Automated Clearing House member. You
must direct the institution to transmit immediately available funds
through the Automated Clearing House to The Bank of New York with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and your Fund account number PRECEDED BY
THE DIGITS "1111."
Fund shares are sold on a continuous basis. Net asset value
per share is determined as of the close of trading on the floor of the
New York Stock Exchange (currently 4:00 p.m., New York time), on each day
the New York Stock Exchange is open for business. Net asset value per
share of each Class is computed by dividing the value of the Fund's net
assets represented by such Class (i.e., the value of its assets less
liabilities) by the total number of shares of such Class outstanding. The
Fund's investments are valued each business day by an independent pricing
service approved by the Fund's Board and are valued at fair value as
determined by the pricing service. The pricing service's procedures are
reviewed under the general supervision of the Fund's Board. For further
information regarding the methods employed in valuing Fund investments,
see "Determination of Net Asset Value" in the Statement of Additional
Information.
If an order is received in proper form by the Transfer Agent
by the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time) on any business day, Fund shares
will be purchased at the public offering price determined as of the close
of trading on the floor of the New York Stock Exchange on that day.
Otherwise, Fund shares will be purchased at the public offering price
determined as of the close of trading on the floor of the New York Stock
Exchange on the next business day, except where shares are purchased
through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by
the close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor or its designee by the
close of its business day (normally 5:15 p.m., New York time) will be
based on the public offering price per share determined as of the close
of trading on the floor of the New York Stock Exchange on that day.
Otherwise, the orders will be based on the next determined public
offering price. It is the dealer's responsibility to transmit
Page 10
orders so that they will be received by the Distributor or its designee
before the close of its business day.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Fund could
subject you to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").
CLASS A SHARES -- The public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
--------------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
-------------------- ---------------- ---------------- ---------------------------
<S> <C> <C> <C>
Less than $50,000......... 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more........ -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of
Class A shares purchased without an initial sales charge as part of an
investment of at least $1,000,000 and redeemed within two years after
purchase. The terms contained in the section of the Fund's Prospectus
entitled "How to Redeem Shares -- Contingent Deferred Sales Charge" (other
than the amount of the CDSC and time periods) are applicable to the Class
A shares subject to a CDSC. Letter of Intent and Right of Accumulation
apply to such purchases of Class A shares.
Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into an
agreement with the Distributor pertaining to the sale of Fund shares (or
which otherwise have a brokerage related or clearing arrangement with an
NASD member firm or other financial institution with respect to the sale
of Fund shares) may purchase Class A shares for themselves directly or
pursuant to an employee benefit plan or other program, or for their
spouses or minor children, at net asset value, provided that they have
furnished the Distributor with such information as it may request from
time to time in order to verify eligibility for this privilege. This
privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible
to purchase Class A shares at net asset value. In addition, Class A
shares are offered at net asset value to full-time or part-time employees
of The Dreyfus Corporation or any of its affiliates or subsidiaries,
directors of The Dreyfus Corporation, Board members of a fund advised by
The Dreyfus Corporation, including members of the Fund's Board, or the
spouse or minor child of any of the foregoing.
Class A shares will be offered at net asset value without a
sales load to employees participating in qualified or non-qualified
employee benefit plans or other programs where (i) the employers or
affiliated employers maintaining such plans or programs have a minimum of
250 employees eligible for participation in such plans or programs, or
(ii) such plan's or program's aggregate investment in the Dreyfus Family
of Funds or certain other products made available by the Distributor to
such plans or programs exceeds one million dollars ("Eligible Benefit
Plans"). Plan sponsors, administrators or trustees, as applicable, are
responsible for notifying the Distributor when the relevant requirement
is satisfied. The Distributor may pay dealers a fee of up to .5% of the
amount invested through such dealers in Class A shares at net asset value
by employees participating in Eligible Benefit Plans. All present
holdings of shares of funds in the Dreyfus Family of Funds by Eligible
Benefit Plans will be aggregated to determine the fee payable with
respect to each such purchase of Class A shares. The Distributor
Page 11
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from
the Fund, including past profits or any other source available to it.
Class A shares also may be purchased (including by exchange)
at net asset value without a sales load for Dreyfus-sponsored IRA
"Rollover Accounts" with the distribution proceeds from a qualified
retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided that, at
the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible
Benefit Plan and all or a portion of such plan's assets were invested in
funds in the Premier or Dreyfus Family of Funds or certain other products
made available by the Distributor to such plans, or (b) invested all of
its assets in certain funds in the Premier Family of Funds or the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans.
Class A shares may be purchased at net asset value through
certain broker-dealers and other financial institutions which have
entered into an agreement with the Distributor, which includes a
requirement that such shares be sold for the benefit of clients
participating in a "wrap account" or a similar program under which such
clients pay a fee to such broker-dealer or other financial institution.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, through a broker-dealer or other
financial institution with the proceeds from the redemption of shares of
a registered open-end management investment company not managed by
The Dreyfus Corporation or its affiliates. The purchase of Class A shares
of the Fund must be made within 60 days of such redemption and the
shareholder must have either (i) paid an initial sales charge or a
contingent deferred sales charge or (ii)been obligated to pay at any time
during the holding period, but did not actually pay on redemption, a
deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, by (i) qualified separate accounts
maintained by an insurance company pursuant to the laws of any State or
territory of the United States, (ii) a State, county or city or
instrumentality thereof, (iii) a charitable organization (as defined in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code") investing $50,000 or more in Fund shares, and (iv) a charitable
remainder trust (as defined in Section 501(c)(3) of the Code).
The dealer reallowance may be changed from time to time but
will remain the same for all dealers. The Distributor, at its expense,
may provide additional promotional incentives to dealers that sell shares
of funds advised by The Dreyfus Corporation which are sold with a sales
load, such as Class A shares. In some instances, those incentives may be
offered only to certain dealers who have sold or may sell significant
amounts of shares.
CLASS B SHARES -- The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on certain
redemptions of Class B shares as described under "How to Redeem Shares."
The Distributor compensates certain Service Agents for selling Class B
and Class C shares at the time of purchase from the Distributor's own
assets. The proceeds of the CDSC and the distribution fee, in part, are
used to defray these expenses.
CLASS C SHARES -- The public offering price for Class C shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on
redemptions of Class C shares made within the first year of purchase. See
"Class B Shares" above and "How to Redeem Shares."
RIGHT OF ACCUMULATION -- CLASS A SHARES -- Reduced sales loads apply
to any purchase of Class A shares, shares of other funds in the Premier
Family of Funds, shares of certain other funds advised by The Dreyfus
Corporation which are sold with a sales load
Page 12
and shares acquired by a previous exchange of such shares (hereinafter
referred to as "Eligible Funds"), by you and any related "purchaser" as
defined in the Statement of Additional Information, where the aggregate
investment, including such purchase, is $50,000 or more. If, for example,
you have previously purchased and still hold Class A shares of the Fund,
or of any other Eligible Fund or combination thereof, with an aggregate
current market value of $40,000 and subsequently purchase Class A shares
of the Fund or an Eligible Fund having a current value of $20,000, the
sales load applicable to the subsequent purchase would be reduced to 4% of
the offering price. All present holdings of Eligible Funds may be combined
to determine the current offering price of the aggregate investment in
ascertaining the sales load applicable to each subsequent purchase.
To qualify for reduced sales loads, at the time of a purchase
you or your Service Agent must notify the Distributor if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE -- You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may modify
or terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of shares by telephoning 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may
not be available to clients of certain Service Agents and some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus. You should consult your Service
Agent in this regard.
FUND EXCHANGES
Clients of certain Service Agents may purchase, in exchange
for shares of a Class, shares of the same Class of certain other funds
managed or administered by The Dreyfus Corporation, to the extent such
shares are offered for sale in your state of residence. These funds have
different investment objectives which may be of interest to you. You also
may exchange your Fund shares that are subject to a CDSC for shares of
Dreyfus Worldwide Dollar Money Market Fund, Inc. The shares so purchased
will be held in a special account created solely for this purpose
("Exchange Account"). Exchanges of shares from an Exchange Account only
can be made into certain other funds managed or administered by The
Dreyfus Corporation. No CDSC is charged when an investor exchanges into
an Exchange Account; however, the applicable CDSC will be imposed when
shares are redeemed from an Exchange Account or other applicable Fund
account. Upon redemption, the applicable CDSC will be calculated without
regard to the time such shares were held in an Exchange Account. See "How
to Redeem Shares." Redemption proceeds for Exchange Account shares are
paid by Federal wire or check only. Exchange Account shares are eligible
for the Auto-Exchange Privilege, Dividend Sweep and the Automatic
Withdrawal Plan. To use the Fund Exchanges service, you should consult
your Service Agent or call 1-800-645-6561 to determine if it is available
and whether any conditions are imposed on its use.
Page 13
To request an exchange, your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing
or by telephone. Before any exchange, you must obtain and should review a
copy of the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained by calling 1-800-645-6561.
Except in the case of personal retirement plans, the shares being
exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must
have a value of at least the minimum initial investment required for the
fund into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all shareholders automatically,
unless you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this Privilege. The Telephone Ex-
change Privilege may be established for an existing account by written
request, signed by all shareholders on the account, or by a separate
signed Shareholder Services Form,also available by calling 1-800-645-6561.
If you have established the Telephone Exchange Privilege, you may tele-
phone exchange instructions by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452. See "How to Redeem Shares_
Procedures." Upon an exchange into a new account, the following share-
holder services and privileges, as applicable and where available,
will be automatically carried over to the fund into which the exchange is
being made: Telephone Exchange Privilege, Check Redemption Privilege,
TELETRANSFER Privilege and the dividend/capital gain distribution option
(except for Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to exchanges of
Class A shares into funds sold with a sales load. No CDSC will be imposed
on Class B or Class C shares at the time of an exchange; however, Class B
or Class C shares acquired through an exchange will be subject to the
higher CDSC applicable to the exchanged or acquired shares. The CDSC
applicable on redemption of the acquired Class B or Class C shares will
be calculated from the date of the initial purchase of the Class B or
Class C shares exchanged, as the case may be. If you are exchanging Class
A shares into a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a reduced
sales load, if the shares you are exchanging were: (a) purchased with a
sales load, (b) acquired by a previous exchange from shares purchased
with a sales load, or (c) acquired through reinvestment of dividends or
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder
Services" in the Statement of Additional Information. No fees currently
are charged shareholders directly in connection with exchanges, although
the Fund reserves the right, upon not less than 60 days' written notice,
to charge shareholders a nominal fee in accordance with rules promulgated
by the Securities and Exchange Commission. The Fund reserves the right to
reject any exchange request in whole or in part. The availability of Fund
Exchanges may be modified or terminated at any time upon notice to
shareholders. See "Dividends, Distributions and Taxes."
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares
of the Fund, in shares of the same Class of other funds in the Premier
Family of Funds or certain other funds in the Dreyfus Family of Funds of
which you are currently an investor. The amount you designate, which can
be expressed either in terms of a specific dollar or share amount ($100
minimum), will be exchanged automatically on the first and/or fifteenth
of the month according to the schedule
Page 14
you have selected. Shares will be exchanged at the then-current net asset
value; however, a sales load may be charged with respect to exchanges of
Class A shares into funds sold with a sales load. No CDSC will be imposed
on Class B or Class C sharesat the time of an exchange; however, Class B
or Class C shares acquired through an exchange will be subject on
redemption to the higher CDSC applicable to the exchanged or acquired
shares. The CDSC applicable on redemption of the acquired Class B or Class
C shares will be calculated from the date of the initial purchase of the
Class B or Class C shares exchanged, as the case may be. See "Shareholder
Services" in the Statement of Additional Information. The right to
exercise this Privilege may be modified or cancelled by the Fund or the
Transfer Agent. You may modify or cancel your exercise of this Privilege
at any time by mailing written notification to Premier GNMA Fund, P.O.
Box 6587, Providence, Rhode Island 02940-6587. The Fund may charge a
service fee for the use of this Privilege. No such fee currently is
contemplated. For more information concerning this Privilege and the funds
in the Premier Family of Funds or the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain an Auto-Exchange Authorization
Form, please call toll free 1-800-645-6561. See "Dividends, Distributions
and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDER Registration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction) at
regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both days. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization
form with the Transfer Agent. You may obtain the necessary authorization
form by calling 1-800-645-6561. You may cancel your participation in this
Privilege or change the amount of purchase at any time by mailing written
notification to Premier GNMA Fund, P.O. Box 6587, Providence, Rhode
Island 02940-6587, or, if for Dreyfus retirement plan accounts, to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427, and the notification will be effective three business days
following receipt. The Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into
your Fund account. You may deposit as much of such payments as you elect.
To enroll in Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment
that you desire to include in this Privilege. The appropriate form may be
obtained from your Service Agent or by calling 1-800-645-6561. Death or
legal incapacity will terminate your participation in this Privilege. You
may elect at any time to terminate your participation by notifying in
writing the appropriate Federal agency. The Fund may terminate your
participation upon 30 days' notice to you.
DIVIDEND OPTIONS
Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of the same Class of another fund in the Premier Family of Funds
or the Dreyfus Family of Funds of which you are a shareholder. Shares of
the other fund will be purchased at the then-current net asset value;
however, a sales load may be charged with respect to investments in
shares of a fund sold with a sales load. If you are investing in a fund
that charges a sales load, you may qualify for share prices which
Page 15
do not include the sales load or which reflect a reduced sales load. If
you are investing in a fund that charges a CDSC, the shares purchased will
be subject on redemption to the CDSC, if any, applicable to the purchased
shares. See "Shareholder Services" in the Statement of Additional
Information. Dividend ACHpermits you to transfer electronically dividends
or dividends and capital gain distributions, if any, from the Fund to a
designated bank account. Only an account maintained at a domestic
financial institution which is an Automated Clearing House member may be
so designated. Banks may charge a fee for this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call toll free 1-800-645-6561.
You may cancel these privileges by mailing written notification to
Premier GNMA Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587.
Enrollment in or cancellation of these privileges is effective three
business days following receipt. These privileges are available only for
existing accounts and may not be used to open new accounts. Minimum
subsequent investments do not apply for Dividend Sweep. The Fund may
modify or terminate these privileges at any time or charge a service fee.
No such fee currently is contemplated. Shares held under Keogh Plans,
IRAs or other retirement plans are not eligible for Dividend Sweep.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which certificates have
been issued may not be redeemed through the Automatic Withdrawal Plan.
Class B or Class C shares withdrawn pursuant to the Automatic
Withdrawal Plan will be subject to any applicable CDSC. Purchases of
additional Class A shares where the sales load is imposed concurrently
with withdrawals of Class A shares generally are undesirable.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services
also are available. You can obtain details on the various plans by
calling the following numbers toll free: for Keogh Plans, please call
1-800-358-5566; for IRAs and IRA "Rollover Accounts," please call
1-800-645-6561; and for SEP-IRAs, 401(k) Salary Reduction Plans and
403(b)(7) Plans, please call 1-800-322-7880.
LETTER OF INTENT -- CLASS A SHARES
By signing a Letter of Intent form, which can be obtained by
calling 1-800-645-6561, you become eligible for the reduced sales load
applicable to the total number of Eligible Fund shares purchased in a
13-month period pursuant to the terms and conditions set forth in the
Letter of Intent. A minimum initial purchase of $5,000 is required. To
compute the applicable sales load, the offering price of shares you hold
(on the date of submission of the Letter of Intent) in any Eligible Fund
that may be used toward "Right of Accumulation" benefits described above
may be used as a credit toward completion of the Letter of Intent.
However, the reduced sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent.
The escrow will be released when you fulfill the terms of the Letter of
Intent by purchasing the specified amount. If your purchases qualify for
a further sales load reduction, the sales load will be adjusted to
reflect your total purchase at the end of 13 months. If total purchases
are less than the amount specified, you will be requested to remit an
amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If
such
Page 16
remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will
redeem an appropriate number of Class A shares held in escrow to realize
the difference. Signing a Letter of Intent does not bind you to purchase,
or the Fund to sell, the full amount indicated at the sales load in
effect at the time of signing, but you must complete the intended
purchase to obtain the reduced sales load. At the time you purchase Class
A shares, you must indicate your intention to do so under a Letter of
Intent. Purchases pursuant to a Letter of Intent will be made at the
then-current net asset value plus the applicable sales load in effect at
the time such Letter of Intent was executed.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value as described
below. If you hold Fund shares of more than one Class, any request for
redemption must specify the Class of shares being redeemed. If you fail
to specify the Class of shares to be redeemed or if you own fewer shares
of the Class than specified to be redeemed, the redemption request may be
delayed until the Transfer Agent receives further instructions from you
or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC)
when shares are redeemed. Service Agents may charge their clients a
nominal fee for effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with the
redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the Fund's then-current net
asset value.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption
request in proper form, except as provided by the rules of the Securities
and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH DREYFUS- AUTOMATIC ASSET
BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE
TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER
PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO
EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT
REQUESTS TO REDEEM SHARES PURSUANT TO THE TELETRANSFER PRIVILEGE, FOR A
PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT,
OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT
TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU
WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has received
your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 30 days' written notice if your account's net
asset value is $500 or less and remains so during the notice period.
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES -- A CDSC payable to the Distributor is imposed on any
redemption of Class B shares which reduces the current net asset value of
your Class B shares to an amount which is lower than the dollar amount of
all payments by you for the purchase of Class B shares of the Fund held
by you at the time of redemption. No CDSC will be imposed to the
Page 17
extent that the net asset value of the Class B shares redeemed does not
exceed (i) the current net asset value of Class B shares acquired through
reinvestment of dividends or capital gain distributions, plus (ii)
increases in the net asset value of Class B shares above the dollar
amount of all your payments for the purchase of Class B shares of the
Fund held by you at the time of redemption.
If the aggregate value of the Class B shares redeemed has
declined below their original cost as a result of the Fund's performance,
a CDSC may be applied to the then current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
<TABLE>
<CAPTION>
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
----------------- ------------------------
<S> <C> <C>
First.................................................... 3.00
Second................................................... 3.00
Third.................................................... 2.00
Fourth................................................... 2.00
Fifth.................................................... 1.00
Sixth.................................................... 0.00
</TABLE>
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and distributions; then of amounts representing the increase in
net asset value of Class B shares above the total amount of payments for
the purchase of Class B shares made during the preceding five years; then
of amounts representing the cost of shares purchased five years prior to
the redemption; and finally, of amounts representing the cost of shares
held for the longest period of time within the applicable five-year
period.
For example, assume an investor purchased 100 shares at $10
per share for a cost of $1,000. Subsequently, the shareholder acquired
five additional shares through dividend reinvestment. During the second
year after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the net asset value
had appreciated to $12 per share, the value of the investor's shares
would be $1,260 (105 shares at $12 per share). The CDSC would not be
applied to the value of the reinvested dividend shares and the amount
which represents appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate of 3%
(the applicable rate in the second year after purchase) for a total CDSC
of $7.20.
CLASS C SHARES -- A CDSC of 1% payable to the Distributor is imposed
on any redemption of Class C shares within one year of the date of
purchase. The basis for calculating the payment of any such CDSC will be
the method used in calculating the CDSC for Class B shares. See
"Contingent Deferred Sales Charge -- Class B Shares" above.
WAIVER OF CDSC -- The CDSC applicable to Class B and Class C shares
may be waived in connection with (a) redemptions made within one year
after the death or disability, as defined in Section 72(m)(7) of the
Code, of the shareholder, (b) redemptions by employees participating in
Eligible Benefit Plans, (c) redemptions as a result of a combination of
any investment company with the Fund by merger, acquisition of assets or
otherwise, and (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 701/2 in the case of
an IRA or Keogh plan or custodial account pursuant to Section 403(b) of
the Code. If
Page 18
the Fund's Board determines to discontinue the waiver of the CDSC, the
disclosure in the Fund's Prospectus will be revised appropriately. Any
Fund shares subject to a CDSC which were purchased prior to the termin-
ation of such waiver will have the CDSC waived as provided in the Fund's
Prospectus at the time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of
redemption you must notify the Transfer Agent or your Service Agent must
notify the Distributor. Any such qualification is subject to confirmation
of your entitlement.
PROCEDURES
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent, through the Check Redemption Privilege with respect to Class A
shares only, or the TELETRANSFER Privilege. If you are a client of a
Selected Dealer, you may redeem shares through the Selected Dealer. If
you have given your Service Agent authority to instruct the Transfer
Agent to redeem shares and to credit the proceeds of such redemptions to
a designated account at your Service Agent, you may redeem shares only in
this manner and in accordance with the regular redemption procedure
described below. If you wish to use the other redemption methods
described below, you must arrange with your Service Agent for delivery of
the required application(s) to the Transfer Agent. Other redemption
procedures may be in effect for clients of certain Service Agents and
institutions. The Fund makes available to certain large institutions the
ability to issue redemption instructions through compatible computer
facilities. The Fund reserves the right to refuse any request made by
telephone, including requests made shortly after a change of address, and
may limit the amount involved or the number of such requests. The Fund
may modify or terminate any redemption Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated. Shares for which certificates have been issued are not
eligible for the Check Redemption or TELETRANSFER Privilege.
Your redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised or
administered by The Dreyfus Corporation that are not available through
the Exchange Privilege. The applicable CDSC will be charged upon the
redemption of Class B or Class C shares. Your redemption proceeds will be
invested in shares of the other fund on the next business day. Before you
make such a request, you must obtain and should review a copy of the
current prospectus of the fund being purchased. Prospectuses may be
obtained by calling 1-800-645-6561. The prospectus will contain
information concerning minimum investment requirements and other
conditions that may apply to your purchase.
You may redeem Fund shares by telephone if you have checked
the appropriate box on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select the TELE-
TRANSFER redemption privilege or telephone exchange privilege (which is
granted automatically unless you refuse it), you authorize the Transfer
Agent to act on telephone instructions from any person representing
himself or herself to be you, or a representative of your Service Agent,
and reasonably believed by the Transfer Agent to be genuine. The Fund
will require the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions
are genuine and, if it does not follow such procedures, the Fund or the
Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market conditions, you
may experience difficulty in contacting the Transfer Agent by telephone
to request a TELETRANSFER redemption or an exchange of Fund shares. In
such cases, you should consider using the other redemption procedures
described herein. Use of these other redemption procedures may result in
your
Page 19
redemption request being processed at a later time than it would
have been if TELETRANSFER redemption had been used. During the delay, the
Fund's net asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may
redeem shares by written request mailed to Premier GNMA Fund, P.O. Box
6587, Providence, Rhode Island 02940-6587. Redemption requests must be
signed by each shareholder, including each owner of a joint account, and
each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers,
credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature Program,
the Securities Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please contact your Service Agent or call the
telephone number listed on the cover of this Prospectus.
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE -- CLASS A SHARES -- You may write
Redemption Checks drawn on your Fund account. Redemption Checks may be
made payable to the order of any person in the amount of $500 or more.
Potential fluctuations in the net asset value of Class A shares should be
considered in determining the amount of the check. Redemption Checks
should not be used to close your account. Redemption Checks are free, but
the Transfer Agent will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot honor the
Redemption Check due to insufficient funds or other valid reason. You
should date your Redemption Checks with the current date when you write
them. Please do not postdate your Redemption Checks. If you do, the
Transfer Agent will honor, upon presentment, even if presented before the
date of the check, all postdated Redemption Checks which are dated within
six months of presentment for payment, if they are otherwise in good
order. This Privilege will be terminated immediately, without notice,
with respect to any account which is, or becomes, subject to backup
withholding on redemptions (see "Dividends, Distributions and Taxes").
Any Redemption Check written on an account which has become subject to
backup withholding on redemptions will not be honored by the Transfer
Agent.
TELETRANSFER PRIVILEGE -- You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your
Fund account and your bank account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House
member may be designated. Redemption proceeds will be on deposit in your
account at an Automated Clearing House member bank ordinarily two days
after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the TELETRANS-
FER Privilege for transfer to their bank account not more than $250,000
within any 30-day period.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER redemption of shares by telephoning 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452. Shares of the
Fund held under Keogh Plans, IRAs or other retirement plans are not
eligible for this Privilege.
REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that
it is received by the Transfer Agent prior to the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York
Page 20
time), the redemption request will be effective on that day. If a
redemption request is received by the Transfer Agent after the close of
trading on the floor of the New York Stock Exchange, the redemption
request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited
to your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
In addition, the Distributor or its designee will accept
orders from Selected Dealers with which the Distributor has sales
agreements for the repurchase of shares held by shareholders. Repurchase
orders received by dealers by the close of trading on the floor of the
New York Stock Exchange on any business day and transmitted to the
Distributor or its designee prior to the close of its business day
(normally 5:15 p.m., New York time) are effected at the price determined
as of the close of trading on the floor of the New York Stock Exchange on
that day. Otherwise, the shares will be redeemed at the next determined
net asset value. It is the responsibility of the Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE -- CLASS A SHARES -- Upon written request, you
may reinvest up to the number of Class A shares you have redeemed, within
30 days of redemption, at the then-prevailing net asset value without a
sales load, or reinstate your account for the purpose of exercising the
Exchange Privilege. The Reinvestment Privilege may be exercised only
once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class B and Class C shares are subject to a Distribution Plan
and Class A, Class B and Class C shares are subject to a Shareholder
Services Plan.
DISTRIBUTION PLAN
Under the Distribution Plan, adopted pursuant to Rule 12b-1
under the 1940 Act, the Fund pays the Distributor for distributing the
Fund's Class B and Class C shares at an annual rate of .50 of 1% of the
value of the average daily net assets of Class B and .75 of 1% of the
value of the average daily net assets of Class C.
SHAREHOLDER SERVICES PLAN
Under the Shareholder Services Plan, the Fund pays the
Distributor for the provision of certain services to the holders of Class
A, Class B and Class C shares a fee at the annual rate of .25 of 1% of
the value of the average daily net assets of each such Class. 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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net
investment income on each day the New York Stock Exchange is open for
business. Fund shares begin earning income dividends on the day
immediately available funds ("Federal Funds" (monies of member banks
within the Federal Reserve System which are held on deposit at a Federal
Reserve Bank)) are received by the Transfer Agent in written or
telegraphic form. If a purchase order is not accompanied by remittance in
Federal Funds, there may be a delay between the time the purchase order
becomes effective and the time the shares purchased start earning
dividends. If your payment is not made in Federal Funds, it must be
converted into Federal Funds. This
Page 21
usually occurs within one business day of receipt of a bank wire and
within two business days of receipt of a check drawn on a member bank of
the Federal Reserve System. Checks drawn on banks which are not members of
the Federal Reserve System may take considerably longer to convert into
Federal Funds.
Dividends usually are paid on the last calendar day of each
month, and are automatically reinvested in additional shares of the Class
from which they were paid at net asset value without a sales load or, at
your option, paid in cash. The Fund's earnings for Saturdays, Sundays and
holidays are declared as dividends on the preceding business day. If you
redeem all shares in your account at any time during the month, all
dividends to which you are entitled will be paid to you along with the
proceeds of the redemption. If you are an omnibus accountholder and
indicate in a partial redemption request that a portion of any accrued
dividends to which such account is entitled belongs to an underlying
accountholder who has redeemed all shares in his or her account, such
portion of the accrued dividends will be paid to you along with the
proceeds of the redemption. Distributions from net realized securities
gains, if any, generally are declared and paid once a year, but the Fund
may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive dividends and distributions in cash or to reinvest in
additional shares at net asset value. All expenses are accrued daily and
deducted before declaration of dividends to investors. Dividends paid by
each Class will be calculated at the same time and in the same manner and
will be of the same amount, except that the expenses attributable solely
to a particular Class will be borne exclusively by such Class. Class B
and Class C shares will receive lower per share dividends than Class A
shares because of the higher expenses borne by the relevant Class. See
"Fee Table."
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund generally are taxable as
ordinary income, whether received in cash or reinvested in additional
shares. Distributions from net realized long-term securities gains of the
Fund generally are subject to Federal income tax as long-term capital
gains, regardless of how long shareholders have held their Fund shares
and whether such distributions are received in cash or reinvested in Fund
shares. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess
of 28%. No dividends or distributions will qualify for the dividends
received deduction allowable to certain U.S. corporations. Dividends and
distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate
of 30%, unless the investor claims the benefit of a lower rate specified
in a tax treaty. Distributions from net realized long-term securities
gains paid by the fund to a foreign investor as well as the proceeds of
any redemptions from a foreign investor's account, regardless of the
extent to which gain or loss may be realized, generally will not be
subject to U.S. nonresident withholding tax. However, such distributions
and redemption proceeds may be subject to backup withholding, as
described below, unless the foreign investor certifies his non-U.S.
residency status.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss.
Page 22
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will receive
periodic summaries of your account which will include information as to
dividends and distributions from securities gains, if any, paid during
the year.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares if you exchange your Class A shares
for shares of another fund advised by The Dreyfus Corporation within 91
days of purchase and such other fund reduces or eliminates its otherwise
applicable sales load for the purpose of the exchange. In this case, the
amount of the sales load charge for Class A shares, up to the amount of
the reduction of the sales load charged in the exchange, is not included
in the basis of such shares for purposes of computing gain or loss on the
exchange, and instead is added to the basis of the fund shares received
on the exchange.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains of the Fund and the
proceeds of any redemption, regardless of the extent to which gain or
loss may be realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with opening an
account is correct or that such shareholder has not received notice from
the IRS of being subject to backup withholding as a result of a failure
to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect
or if a shareholder has failed to properly report taxable dividend and
interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account, and may be
claimed as a credit on the record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified
for the fiscal year ended December 31, 1995 as a "regulated investment
company" under the Code. The Fund intends to continue to so qualify if
such qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income tax
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. The Fund is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax adviser regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of
shares may be calculated on several bases, including current yield,
average annual total return and/or total return. These total return
figures reflect changes in the price of the shares and assume that any
income dividends and/or capital gain distributions made by the Fund
during the measuring period were reinvested in shares of the same Class.
Class A total return figures include the maximum initial sales charge and
Class B and Class C total return figures include any applicable CDSC.
These figures also take into account any applicable service and
distribution fees. As a result, at any given time, the performance of
Class B and Class C should be expected to be lower than that of Class A.
Performance for each Class will be calculated separately.
Current yield refers to the Fund's annualized net investment
income per share over a 30-day period, expressed as a percentage of the
net asset value (or maximum offering price in the case of Class A) per
share at the end of the period. For purposes of calculating current
yield, the amount of net investment income per share during that 30 day
period, computed in accordance with regulatory requirements, is
compounded by assuming that it is reinvested at a constant rate over a
six-month period. An identical result is then assumed to have occurred
Page 23
during a second six-month period which, when added to the result for the
first six months, provides an "annualized" yield for an entire one-year
period. Calculations of the Fund's current yield may reflect absorbed
expenses pursuant to any undertaking that may be in effect. See
"Management of the Fund."
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to
the reinvestment of dividends and distributions during the period. The
return is expressed as a percentage rate which, if applied on a
compounded annual basis, would result in the redeemable value of the
investment at the end of the period. Advertisements of the Fund's
performance will include the Fund's average annual total return for one,
five and ten year periods, or for shorter periods depending upon the
length of time during which the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
net asset value (maximum offering price in the case of Class A) per share
at the beginning of the period. Advertisements may include the percentage
rate of total return or may include the value of a hypothetical
investment at the end of the period which assumes the application of the
percentage rate of total return. Total return also may be calculated by
using the net asset value per share at the beginning of the period
instead of the maximum offering price per share at the beginning of the
period for Class A shares or without giving effect to any applicable CDSC
at the end of the period for Class B or Class C shares. Calculations
based on the net asset value per share do not reflect the deduction of
the applicable sales charge on Class A shares, which, if reflected, would
reduce the performance quoted.
Performance will vary from time to time and past results are
not necessarily representative of future results. You should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including data from
Lipper Analytical Services, Inc., Morningstar, Inc., Bank Rate
Monitortrademark, N. Palm Beach, Fla. 33408, Moody's Bond Survey Bond
Index, Lehman Brothers Mortgage Backed Bond Index, Salomon Brothers
Corporate Bond Rate-of-Return Index, Bond Buyer's 20-Bond Index and
mortgage trade and other publications. In addition, data may be used in
comparing the difference in yields between Ginnie Maes and comparable
term Treasury Notes (which are direct obligations of the U.S.
Government).
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust
under the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust (the "Trust Agreement") dated
September 19, 1986, and commenced operations on January 29, 1987. The
Fund is authorized to issue an unlimited number of shares of beneficial
interest, par value $.001 per share. The Fund's shares are classified
into three classes - Class A, Class B and Class C. Each share has one vote
and shareholders will vote in the aggregate and not by class except as
otherwise required by law. Only holders of Class B or Class C shares, as
the case may be, will be entitled to vote on matters submitted to
shareholders pertaining to the Distribution Plan.
Page 24
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or
executed by the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Fund.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund
itself would be unable to meet its obligations, a possibility which manage
ment believes is remote. Upon payment of any liability incurred by the
Fund, the shareholder paying such liability will be entitled to reimburse-
ment from the general assets of the Fund. The Fund intends to conduct its
operations in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Fund. As discussed
under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings;
however, shareholders under certain circumstances may have the right to
call a meeting of shareholders for the purpose of voting to remove
Trustees.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by
writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144.
Page 25
APPENDIX
INVESTMENT TECHNIQUES
FORWARD ROLL TRANSACTIONS -- To enhance current income, the Fund may
enter into forward roll transactions with respect to mortgage-related
securities. In a forward roll transaction, the Fund sells a
mortgage-related security to a financial institution, such as a bank or
broker-dealer, and simultaneously agrees to purchase a similar security
from the institution at a later date at an agreed upon price. The
securities that are purchased will bear the same interest rate as those
sold, but generally will be collateralized by different pools of
mortgages with different prepayment histories than those sold. During the
period between the sale and purchase, the Fund will not be entitled to
receive interest and principal payments on the securities sold. Proceeds
of the sale typically will be invested in short-term instruments,
particularly repurchase agreements, and the income from these
investments, together with any additional fee income received on the sale
will generate income for the Fund exceeding the yield on the securities
sold. Forward roll transactions involve the risk that the market value of
the securities sold by the Fund may decline below the purchase price of
those securities. A segregated account of the Fund consisting of cash,
U.S. Government securities or other high quality liquid debt securities
at least equal to the amount of the repurchase price (including accrued
interest) will be established and maintained at the Fund's custodian
bank.
FORWARD COMMITMENTS -- The Fund may purchase Ginnie Maes and other
mortgage-related securities on a forward commitment or when-issued basis,
which means that delivery and payment take place a number of days after
the date of the commitment to purchase. The payment obligation and the
interest rate that will be received on a forward commitment or
when-issued security are fixed when the Fund enters into the commitment,
but the Fund does not make a payment until it receives delivery from the
counterparty. The Fund will commit to purchase such securities only with
the intention of actually acquiring the securities, but the Fund may sell
these securities before the settlement date if it is deemed advisable. A
segregated account of the Fund consisting of cash, cash equivalents or
U.S. Government securities or other high quality liquid debt securities
at least equal at all times to the amount of the commitments will be
established and maintained at the Fund's custodian bank.
LEVERAGE -- Leveraging exaggerates the effect on net asset value of
any increase or decrease in the market value of the Fund's portfolio.
Money borrowed for leveraging will be limited to 331/3% of the value of
the Fund's total assets. These borrowings would be subject to interest
costs which may or may not be recovered by appreciation of the securities
purchased; in certain cases, interest costs may exceed the return
received on the securities purchased.
The Fund may enter into reverse repurchase agreements with
banks, brokers or dealers. This form of borrowing involves the transfer
by the Fund of an underlying debt instrument in return for cash proceeds
based on a percentage of the value of the security. The Fund retains the
right to receive interest and principal payments on the security. At an
agreed upon future date, the Fund repurchases the security at principal
plus accrued interest. Except for these transactions, the Fund's
borrowings generally will be unsecured.
USE OF DERIVATIVES -- The Fund may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations
and Risks -- Use of Derivatives." These instruments and certain related
risks are described more specifically under "Investment Objective and
Management Policies -- Management Policies -- Derivatives" in the
Statement of Additional Information.
Derivatives can be volatile and involve various types and
degrees of risk, depending upon the characteristics of the particular
Derivative and the portfolio as a whole. Derivatives permit the Fund to
increase or decrease the level of risk, or change the character of the
risk, to which its portfolio is exposed in much the same way as the Fund
can increase or decrease the level of risk, or change the character of
the risk, of its portfolio by making investments in specific securities.
Page 26
Derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on the Fund's
performance.
If the Fund invests in Derivatives at inappropriate times or
judges the market conditions incorrectly, such investments may lower the
Fund's return or result in a loss. The Fund also could experience losses
if it were unable to liquidate its position because of an illiquid
secondary market. The market for many Derivatives is, or suddenly can
become, illiquid. Changes in liquidity may result in significant, rapid
and unpredictable changes in the prices for Derivatives.
CERTAIN PORTFOLIO SECURITIES
MORTGAGE-RELATED SECURITIES -- Mortgage-related securities issued by
FNMA include FNMA Guaranteed Mortgage Pass-Through Certificates (also
known as "Fannie Maes") which are solely the obligations of FNMA and are
not backed by or entitled to the full faith and credit of the United
States, but are guaranteed as to timely payment of principal and interest
by FNMA. Mortgage-related securities issued by FHLMC include FHLMC
Mortgage Participation Certificates (also known as "Freddie Macs" or
"PCs"). Freddie Macs are not guaranteed by the United States and do not
constitute a debt or obligation of the United States. Freddie Macs
entitle the holder to timely payment of interest, which is guaranteed by
FHLMC. The FHLMC guarantees either ultimate collection or timely payment
of all principal payments on the underlying mortgage loans. When FHLMC
does not guarantee timely payment of principal, FHLMC may remit the
amount due on account of its guarantee of ultimate payment of principal
at any time after default on an underlying mortgage, but in no event
later than one year after it becomes payable.
Collateralized mortgage obligations, which include those
issued through real estate mortgage investment conduits or REMICs, are
debt securities that are structured to pay principal and interest based
on payments received on a pool of mortgage-related securities pledged to
secure the obligations. The issuers of collateralized mortgage
obligations typically do not have assets other than those pledged to
secure separately the obligations. Holders of these obligations must rely
principally on distributions on the underlying mortgage-related
securities and other collateral securing the obligations for payments of
principal and interest on the obligations. Typically, collateralized
mortgage obligations are collateralized by Ginnie Mae, Fannie Mae or
Freddie Mac Certificates, but also may be collateralized by whole loans
or private mortgage pass-through securities. Although the
mortgage-related securities securing these obligations may be subject to
a government guarantee or third-party support, the obligations are not so
guaranteed. Consequently, if the collateral securing the obligations is
insufficient to make payments on the obligations, a holder could sustain
a loss.
The Fund may invest in private mortgage pass-through
securities that are structured similarly to the Ginnie Mae, Fannie Mae
and Freddie Mac mortgage pass-through securities and are issued by
originators of, or investors in, mortgage loans. Private mortgage
pass-through securities usually are backed by a pool of conventional
fixed rate or adjustable rate mortgage loans. Since these securities
typically are not guaranteed by an entity having the credit status
of Ginnie Mae, Fannie Mae or Freddie Mac, such securities generally are
structured with one or more types of credit enhancement.
The Fund also may invest in stripped mortgage-backed
securities issued by agencies or instrumentalities of the United States
government, or by private originators of, or investors in, mortgage
loans, including savings and loan associations, mortgage banks,
commercial banks, investment banks and special purpose subsidiaries of
the foregoing. Stripped mortgage-backed securities usually are structured
with two classes that receive different proportions of interest and
principal distributions on a pool of mortgage-backed securities or whole
loans. A
Page 27
common type of stripped mortgage-backed security will have one
class receiving some of the interest and most of the principal from the
mortgage collateral, while the other class will receive most of the
interest and the remainder of the principal.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER
OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
027P050196
Page 28
PREMIER GNMA FUND
CLASS A, CLASS B AND CLASS C SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1996
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Premier GNMA Fund (the "Fund"), dated May 1, 1996, as it may be revised
from time to time. To obtain a copy of the Fund's Prospectus, please write
to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . B-5
Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . B-8
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . B-10
Distribution Plan and Shareholder Services Plan. . . . . . . . . . . B-12
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . B-13
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . B-15
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . B-18
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . B-19
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . B-19
Performance Information. . . . . . . . . . . . . . . . . . . . . . . B-20
Information About the Fund . . . . . . . . . . . . . . . . . . . . . B-21
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . B-22
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . B-23
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . B-32
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund" and "Appendix."
Ginnie Maes. Ginnie Maes are created by an "issuer," which is a
Federal Housing Administration ("FHA") approved mortgagee that also meets
criteria imposed by the Government National Mortgage Association ("GNMA").
The issuer assembles a pool of FHA, Farmers' Home Administration or
Veterans' Administration ("VA") insured or guaranteed mortgages which are
homogeneous as to interest rate, maturity and type of dwelling. Upon
application by the issuer, and after approval by GNMA of the pool, GNMA
provides its commitment to guarantee timely payment of principal and
interest on the Ginnie Maes backed by the mortgages included in the pool.
The Ginnie Maes, endorsed by GNMA, then are sold by the issuer through
securities dealers.
GNMA is authorized under the National Housing Act to guarantee timely
payment of principal and interest on Ginnie Maes. This guarantee is backed
by the full faith and credit of the United States. GNMA may borrow U.S.
Treasury funds to the extent needed to make payments under its guarantee.
When mortgages in the pool underlying a Ginnie Mae are prepaid by
mortgagors or by result of foreclosure, such principal payments are passed
through to the certificate holders. Accordingly, the life of the Ginnie Mae
is likely to be substantially shorter than the stated maturity of the
mortgages in the underlying pool. Because of such variation in prepayment
rates, it is not possible to predict the life of a particular Ginnie Mae,
but FHA statistics indicate that 25- to 30-year single family dwelling
mortgages have an average life of approximately 12 years. The majority of
Ginnie Maes are backed by mortgages of this type, and accordingly the
generally accepted practice treats Ginnie Maes as 30-year securities which
prepay fully in the 12th year.
Ginnie Maes bear a stated "coupon rate" which represents the effective
FHA-VA mortgage rate at the time of issuance, less 0.5%, which constitutes
GNMA's and the issuer's fees. For providing its guarantee, GNMA receives
an annual fee of 0.06% of the outstanding principal on certificates backed
by single family dwelling mortgages, and the issuer receives an annual fee
of 0.44% for assembling the pool and for passing through monthly payments
of interest and principal.
Payments to holders of Ginnie Maes consist of the monthly
distributions of interest and principal less GNMA's and the issuer's fees.
The actual yield to be earned by a holder of a Ginnie Mae is calculated by
dividing interest payments by the purchase price paid for the Ginnie Mae
(which may be at a premium or a discount from the face value of the
certificate). Monthly distributions of interest, as contrasted to
semi-annual distributions which are common for other fixed interest invest-
ments, have the effect of compounding and thereby raising the effective
annual yield earned on Ginnie Maes. Because of the variation in the life
of the pools of mortgages which back various Ginnie Maes, and because it is
impossible to anticipate the rate of interest at which future principal
payments may be reinvested, the actual yield earned from a portfolio of
Ginnie Maes will differ significantly from the yield estimated by using an
assumption of a 12-year life for each Ginnie Mae included in such a
portfolio as described above.
Management Policies
Leverage. For borrowings for investment purposes, the Investment
Company Act of 1940, as amended (the "1940 Act"), requires the Fund to
maintain continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. If the required coverage should decline as a result of market
fluctuations or other reasons, the Fund may be required to sell some of its
portfolio holdings within three days to reduce the amount of its borrowings
and restore the 300% asset coverage, even though it may be disadvantageous
from an investment standpoint to sell securities at that time. The Fund
also may be required to maintain minimum average balances in connection
with such borrowing or pay a commitment or other fee to maintain a line of
credit; either of these requirements would increase the cost of borrowing
over the stated interest rate. To the extent the Fund enters into a
reverse repurchase agreement, the Fund will maintain in a segregated
custodial account cash or U.S. Government securities or other high quality
liquid debt securities at least equal to the aggregate amount of its
reverse repurchase obligations, plus accrued interest, in certain cases, in
accordance with releases promulgated by the Securities and Exchange
Commission. The Securities and Exchange Commission views reverse
repurchase transactions as collateralized borrowings by the Fund.
Derivatives. The Fund may invest in Derivatives (as defined in the
Fund's Prospectus) for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Fund to invest
than "traditional" securities would.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated
with Derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter Derivatives. Therefore, each party to an over-
the-counter Derivative bears the risk that the counterparty will default.
Accordingly, the Manager will consider the creditworthiness of
counterparties to over-the-counter Derivatives in the same manner as it
would review the credit quality of a security to be purchased by the Fund.
Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only
investor with sufficient understanding of the Derivative to be interested
in bidding for it.
Forward Commitments. Ginnie Maes and other mortgage-related
securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest
rates. Securities purchased on a forward commitment or when-issued basis
may expose the Fund to risks because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued
basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a forward
commitment or when-issued basis when the Fund is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Fund's net assets and its net asset value per share.
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 9 as
fundamental policies, which cannot be changed without approval by the
holders of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting shares. Investment restriction number 10 is not a
fundamental policy and may be changed by vote of a majority of the Fund's
Board at any time. The Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other
equity securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds.
2. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets).
3. Sell securities short or purchase securities on margin or write
or purchase put or call options or combinations thereof.
4. Underwrite the securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
5. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests, provided that the Fund
may purchase Ginnie Maes without limitation.
6. Make loans to others except through the purchase of debt
obligations referred to in the Prospectus.
7. Invest more than 25% of its assets in securities of issuers in
any industry, provided that there shall be no limitation on the purchase of
Ginnie Maes or other securities issued, guaranteed or backed by the U.S.
Government, as described in the Prospectus.
8. Invest in companies for the purpose of exercising control.
9. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of that restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as
to their principal business occupations during at least the last five
years, are shown below. Each Board member who is deemed to be an "inter-
ested person" of the Fund, as defined in the 1940 Act, is indicated by an
asterisk.
Board Members of the Fund
CLIFFORD L. ALEXANDER, JR., Board Member. President of Alexander &
Associates, Inc., a management consulting firm. From 1977 to 1981,
Mr. Alexander served as Secretary of the Army and Chairman of the
Board of the Panama Canal Company, and from 1975 to 1977, he was a
member of the Washington, D.C. law firm of Verner, Liipfert, Bernhard,
McPherson and Alexander. He is a director of American Home Products
Corporation, The Dun & Bradstreet Corporation, MCI Communications
Corporation and Mutual of America Life Insurance Company. He is 62
years old and his address is 400 C Street, N.E., Washington, D.C.
20002.
PEGGY C. DAVIS, Board Member. Shad Professor of Law, New York University
School of Law. Professor Davis has been a member of the New York
University law faculty since 1983. Prior to that time, she served for
three years as a judge in the courts of New York State; was engaged
for eight years in the practice of law, working in both corporate and
non-profit sectors; and served for two years as a criminal justice
administrator in the government of the City of New York. She writes
and teaches in the fields of evidence, constitutional theory, family
law, social sciences and the law, legal process and professional
methodology and training. She is 53 years old and her address is c/o
New York University School of Law, 249 Sullivan Street, New York, New
York 10011.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until
August 24, 1994, the Fund's distributor. From August 1994 to December
31, 1994, he was a director of Mellon Bank Corporation. He is also
Chairman of the Board of Directors of Noel Group, Inc., a venture
capital company; a trustee of Bucknell University; and a director of
the Muscular Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway, Inc., a manufacturer and marketer of industrial
threads, specialty yarns and home furnishings and fabrics, Curtis
Industries, Inc., a national distributor of security products,
chemicals, and automotive and other hardware and Staffing Resources,
Inc. Mr. DiMartino is 52 years old and his address is 200 Park
Avenue, New York, New York 10166.
ERNEST KAFKA, Board Member. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. He is
Associate Clinical Professor of Psychiatry at Cornell Medical School.
For more than the past five years, Dr. Kafka has held numerous
administrative positions, including President of The New York
Psychoanalytic Society, and has published many articles on subjects in
the field of psychoanalysis. He is 63 years old and his address is 23
East 92nd Street, New York, New York 10128.
SAUL B. KLAMAN, Board Member. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of
the National Council of Savings Institutions until June 1985, Vice
Chairman of Golembe Associates Inc. until 1989 and Vice Chairman and
Chairman Emeritus of BEI Golembe, Inc. until November 1992. He also
served as an Economist to the Board of Governors of the Federal
Reserve System and on several Presidential Commissions, and has held
numerous consulting and advisory positions in the fields of economics
and housing finance. He is 76 years old and his address is 431-B
Dedham Street, The Gables, Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Board Member. President of Lincoln Center for the
Performing Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations
of New York City from September 1979 to March 1984, and Commissioner
of the Department of Housing Preservation and Development of New York
City from February 1978 to September 1979. Mr. Leventhal was an
associate and then a member of the New York law firm of Poletti
Freidin Prashker Feldman and Gartner from 1974 to 1978. He was
Commissioner of Rent and Housing Maintenance for New York City from
1972 to 1973. Mr. Leventhal serves as Chairman of Citizens Union, an
organization that strives to reform and modernize city and state
governments. He is 53 years old and his address is 70 Lincoln Center
Plaza, New York, New York 10023-6583.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Board members of the Fund who are not "interested persons" of the Fund, as
defined in the 1940 Act, will be selected and nominated by the Board
members who are not "interested persons" of the Fund.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Fund and by all other funds
in the Dreyfus Family of Funds for which such person is a Board member (the
number of which is set forth in parenthesis next to each Board member's
total compensation) for the fiscal year ended December 31, 1995 were as
follows:
<TABLE>
<CAPTION>
(5)
(3) Total
(2) Pension or (4) Compensation from
(1) Aggregate Retirement Benefits Estimated Annual Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
Member Fund* Fund's Expenses Retirement Board Members
_____________ ________________ _________________ _________________ ________________
<S> <C> <C> <C> <C>
Clifford L. Alexander, Jr. $5,500 none none $ 94,388 (17)
Peggy C. Davis $5,500 none none $ 81,636 (15)
Joseph S. DiMartino $6,790 none none $448,618 (93)
Ernest Kafka $5,500 none none $ 81,136 (15)
Saul B. Klaman $5,500 none none $ 81,886 (15)
Nathan Leventhal $5,500 none none $ 81,636 (15)
___________________
* Amount does not include reimbursed expenses for attending Board meetings, which amounted to $251 for all Board members
as a group.
</TABLE>
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Executive
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From December 1991
to July 1994, she was President and Chief Compliance Officer of Funds
Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray. He is 31 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September 1992
to August 1994, he was an attorney with the Board of Governors of the
Federal Reserve System. He is 31 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to August
1994, he was manager of the High Performance Fabric Division of
Springs Industries Inc. He is 34 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. She is 26 years
old.
JOSEPH S. TOWER, III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 33 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From 1984 to July 1994, he was Assistant
Vice President in the Mutual Fund Accounting Department of the
Manager. He is 60 years old.
MARGARET PARDO, Assistant Secretary. Legal Assistant with the Distributor
and an officer of other investment companies advised or administered
by the Manager. From June 1992 to April 1995, she was a Medical
Coordination Officer at ORBIS International. Prior to June 1992, she
worked as Program Coordinator at Physicians World Communications
Group. She is 27 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
The Fund's Board members and officers, as a group, owned less than 1%
of the Fund's shares of beneficial interest outstanding on April 11, 1996.
The following entities owned of record 5% or more of the Fund's shares
outstanding as of April 11, 1996: Class A - HBC Securities, 2005 Market
Street, Fl 1200, Philidelphia, PA 19103-7042 - 7.0%; Class C - U.S.
Clearing Corp. FBO 952-13525-19, 26 Broadway, New York, NY 10004-1703 -
94.0%; Premier Mutual Fund Services, Inc., 1 Exchange Pl, Boston, MA 02109-
2809 - 6.0%. No shareholder was known by the Fund to own of record or
beneficially 5% or more of the Fund's Class B shares. A shareholder who
owns, directly or indirectly, 25% or more of the Fund's outstanding voting
securities may be deemed to be a "control person" (as defined in the 1940
Act) of the Fund.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board or (ii) vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities
of the Fund, provided that in either event its continuance also is approved
by a majority of the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval. The
Agreement was approved by shareholders on August 3, 1994 and was last
approved by the Fund's Board, including a majority of the Board members who
are not "interested persons" (as defined in the 1940 Act) of any party to
the Agreement, at a meeting held on July 19, 1995. The Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by
vote of the holders of a majority of the Fund's shares, or, upon not less
than 90 days' notice, by the Manager. The Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer; Barbara E. Casey, Vice President-
Dreyfus Retirement Services; Diane M. Coffey, Vice President-Corporate
Communications; Elie M. Genadry, Vice President-Institutional Sales;
William F. Glavin, Jr., Vice President-Corporate Development; Mark N.
Jacobs, Vice President, General Counsel and Secretary; Mary Beth Leibig,
Vice President-Human Resources; Jeffrey N. Nachman, Vice President-Mutual
Fund Accounting; Andrew S. Wasser, Vice President-Information Services;
Maurice Bendrihem, Controller; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene
and Julian M. Smerling, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions and provides
the Fund with portfolio managers who are authorized by the Board members to
execute purchases and sales of securities. The Fund's portfolio managers
are Garitt A. Kono and Gerald E. Thunelius. The Manager also maintains a
research department with a professional staff of portfolio managers and
securities analysts who provide research services for the Fund as well as
for other funds advised by the Manager. All purchases and sales are
reported for the Board's review at the meeting subsequent to such
transactions.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include without limitation, the following:
without limitation, the following: taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining the Fund's existence, costs attri-
butable to investor services (including, without limitation, telephone and
personnel expenses), costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders, costs of shareholder reports and
meetings, and any extraordinary expenses. In addition, shares of each
Class are subject to an annual service fee and Class B and Class C shares
are subject to an annual distribution fee. See "Distribution Plan and
Shareholder Services Plan."
As compensation for the Manager's services to the Fund, the Fund has
agreed to pay the Manager a monthly management fee at the annual rate of
.55 of 1% of the value of the Fund's average daily net assets. For the
fiscal years ended December 31, 1993, 1994 and 1995, the management fees
payable amounted to $1,114,510, $1,124,608 and $972,298, respectively,
which amounts were reduced by $443,578, $120,163 and $0, respectively,
pursuant to various undertakings in effect in 1993 and 1994, resulting in
net fees paid to the Manager of $670,932 in fiscal 1993, $1,004,445 in
fiscal 1994 and $972,298 in fiscal 1995.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage fees, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the payment to be made
to the Manager under the Agreement, or the Manager will bear, such excess
expense to the extent required by state law. Such deduction or payment, if
any, will be estimated daily, and reconciled and effected or paid, as the
case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
The Distributor. The Distributor serves as the Fund's distributor on
a best efforts basis pursuant to an agreement dated August 24, 1994 which
is renewable annually. The Distributor also acts as distributor for the
other funds in the Premier Family of Funds, the Dreyfus Family of Funds and
for certain other investment companies. In some states, certain financial
institutions effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.
For the fiscal year ended December 31, 1995, the Distributor retained
$11,152 from the sales loads on Class A shares and $118,931 from contingent
deferred sales charges ("CDSC") on Class B shares. For the period August
24, 1994 through December 31, 1994, the Distributor retained $4,780 from
the sales loads on Class A shares and $66,561 from the CDSCs on Class B
shares. For the period from January 1, 1994 through August 23, 1994 and
for the fiscal year ended December 31, 1993, Dreyfus Service Corporation,
as the Fund's distributor during such periods, retained $23,891 and
$134,779, respectively, from sales loads on Class A shares, and $64,196 and
$17,379, respectively, from CDSCs on Class B shares. For the period from
October 13, 1995 (commencement of initial offering of Class C shares)
through December 31, 1995, no amount was retained from CDSCs on Class C
shares.
Sales Loads--Class A. The scale of sales loads applies to purchases
of Class A shares made by any "purchaser," which term includes an
individual and/or spouse purchasing securities for his, her or their own
account or for the account of any minor children, or a trustee or other
fiduciary purchasing securities for a single trust estate or a single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Internal Revenue Code of 1986, as amended (the "Code")), although more than
one beneficiary is involved; or a group of accounts established by or on
behalf of the employees of an employer or affiliated employers pursuant to
an employee benefit plan or other program (including accounts established
pursuant to Sections 403(b), 408(k), and 457 of the Code); or an organized
group which has been in existence for more than six months, provided that
it is not organized for the purpose of buying redeemable securities of a
registered investment company and provided that the purchases are made
through a central administration or a single dealer, or by other means
which result in economy of sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Class A shares. The example assumes a purchase of Class A
shares aggregating less than $50,000 subject to the schedule of sales
charges set forth in the Prospectus at a price based upon the net asset
value of the Class A shares on December 31, 1995.
<TABLE>
<CAPTION>
Class A Shares:
<S> <C> <C>
Net Asset Value per Share . . . . . . . . . . . . . . . . . . . . . . $14.66
Per Share Sales Charge - 4.5% of offering price
(4.7% of net asset value per share)
.69
______
Per Share Offering Price to the Public. . . . . . . . . . . . . . . . $15.35
======
</TABLE>
Using Federal Funds. Dreyfus Transfer, Inc., the Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt
to notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in
conversion into Federal Funds and may attempt to arrange for a better means
of transmitting the money. If the investor is a customer of a securities
dealer ("Selected Dealer") and his order to purchase Fund shares is paid
for other than in Federal Funds, the Selected Dealer, acting on behalf of
its customer, will complete the conversion into, or itself advance, Federal
Funds generally on the business day following receipt of the customer
order. The order is effective only when so converted and received by the
Transfer Agent. An order for the purchase of Fund shares placed by an
investor with sufficient Federal Funds or a cash balance in his brokerage
account with a Selected Dealer will become effective on the day that the
order, including Federal Funds, is received by the Transfer Agent.
TeleTransfer Privilege. TeleTransfer purchase orders may be made at
any time. Purchase orders received by 4:00 p.m., New York time, on any
business day that the Transfer Agent and the New York Stock Exchange are
open for business will be credited to the shareholder's Fund account on the
next bank business day following such purchase order. Purchase orders made
after 4:00 p.m., New York time, on any business day the Transfer Agent and
the New York Stock Exchange are open for business, or orders made on
Saturday, Sunday or any Fund Holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's
Fund Account on the second bank business day following such purchase order.
To qualify to use the TeleTransfer Privilege, the initial payment for
purchase of Fund shares must be drawn on, and redemption proceeds paid to,
the same bank and account as are designated on the Account Application or
Shareholder Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the request
must be in writing and signature-guaranteed. See "Redemption of
Shares--TeleTransfer Privilege."
Reopening an Account. Any investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year in which the account is closed or during the following
calendar year, provided the information on the old Account Application is
still applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Distribution Plan and Shareholder Services Plan."
Class B and Class C shares are subject to a Distribution Plan and
Class A, Class B and Class C shares are subject to a Shareholder Services
Plan.
Distribution Plan. Rule 12b-1 (the "Rule"), adopted by the Securities
and Exchange Commission under the 1940 Act, provides, among other things,
that an investment company may bear expenses of distributing its shares
only pursuant to a plan adopted in accordance with the Rule. The Fund's
Board has adopted such a plan (the "Distribution Plan") with respect to
Class B and Class C shares, pursuant to which the Fund pays the Distributor
for distributing Class B and Class C shares. The Fund's Board believes
that there is a reasonable likelihood that the Distribution Plan will
benefit the Fund and holders of Class B and Class C shares.
A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be
made to the Board for its review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of Class B and Class C shares may bear for distribution pursuant to
the Distribution Plan without the approval of such shareholders and that
other material amendments of the Distribution Plan must be approved by the
Board and by the Board members who are not "interested persons" (as defined
in the 1940 Act) of the Fund and have no direct or indirect financial
interest in the operation of the Distribution Plan or in any agreement
entered into in connection with the Distribution Plan, by vote cast in
person at a meeting called for the purpose of considering such amendments.
The Distribution Plan is subject to annual approval by such vote of the
Board members cast in person at a meeting called for the purpose of voting
on the Distribution Plan. The Distribution Plan was last so approved at a
meeting held on July 19, 1995. As to each such Class, the Distribution
Plan may be terminated at any time by vote of a majority of the Board
members who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Distribution Plan or in any
agreement entered into in connection with the Distribution Plan or by vote
of the holders of a majority of such Class of shares.
For the fiscal year ended December 31, 1995, the Fund paid the
Distributor $194,470 with respect to Class B, and $2 with respect to Class
C, under the Distribution Plan.
Shareholder Services Plan. The Fund has adopted a Shareholder
Services Plan, pursuant to which the Fund pays the Distributor for the
provision of certain services to the holders of Class A, Class B and Class
C shares. 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 such shareholder accounts. Under the Shareholder
Services Plan, the Distributor may make payments to certain financial
institutions (which may include banks), Selected Dealers and other
financial industry professionals (collectively, "Service Agents") in
respect of these services.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Board for its review. In addition, the Shareholder
Services Plan provides that material amendments must be approved by the
Fund's Board, and by the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Shareholder Services Plan or in
any agreements entered into in connection with the Shareholder Services
Plan, by vote of the Board members cast in person at a meeting called for
the purpose of considering such amendments. The Shareholder Services Plan
and related agreements are subject to annual approval by such vote of the
Board members cast in person at a meeting called for the purpose of voting
on the Shareholder Services Plan. The Shareholder Services Plan was last
so approved on July 19, 1995. As to each Class of shares, the Shareholder
Services Plan is terminable at any time by vote of a majority of the Board
members who are not "interested persons" and who have no direct or indirect
financial interest in the operation of the Shareholder Services Plan or in
any agreements entered into in connection with the Shareholder Services
Plan.
For the fiscal year ended December 31, 1995, the Fund paid the
Distributor $344,717 with respect to Class A, $97,235 with respect to Class
B and $1 with respect to Class C, under the Shareholder Services Plan.
REDEMPTION OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Shares."
Check Redemption Privilege--Class A. An investor may indicate on the
Account Application, Shareholder Services Form or by later written request
that the Fund provide Redemption Checks ("Checks") drawn on the investor's
Fund account. Checks will be sent only to the registered owner(s) of the
account and only to the address of record. The Account Application,
Shareholder Services Form or later written request must be manually signed
by the registered owner(s). Checks may be made payable to the order of any
person in an amount of $500 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent,
will cause the Fund to redeem a sufficient number of full and fractional
Class A shares in the investor's account to cover the amount of the Check.
Dividends are earned until the Check clears. After clearance, a copy of
the Check will be returned to the investor. Investors generally will be
subject to the same rules and regulations that apply to the checking
accounts, although election of this Privilege creates only a share-
holder-transfer agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption will
be effected through the Automated Clearing House ("ACH") system unless more
prompt transmittal specifically is requested. Redemption proceeds will be
on deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Shares--TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board reserves the right to make payments in whole or in part
in securities or other assets in case of an emergency or any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. In such event, the securities would be valued in
the same manner as the Fund's portfolio is valued. If the recipient sold
such securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Fund Exchanges. Class A, Class B and Class C shares of the Fund may
be exchanged for shares of the respective Class of certain other funds
advised or administered by the Manager. Shares of the same class of such
funds purchased by exchange will be purchased on the basis of relative net
asset value per share as follows:
A. Class A shares of funds purchased without a sales load may be
exchanged for Class A shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a sales load may
be exchanged without a sales load for Class A shares of other
funds sold without a sales load.
C. Class A shares of funds purchased with a sales load, Class A
shares of funds acquired by a previous exchange from Class A
shares purchased with a sales load, and additional Class A shares
acquired through reinvestment of dividends or distributions of any
such funds (collectively referred to herein as "Purchased Shares")
may be exchanged for Class A shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds
the maximum sales load that could have been imposed in connection
with the Purchased Shares (at the time the Purchased Shares were
acquired), without giving effect to any reduced loads, the
difference will be deducted.
D. Class B or Class C shares of any fund may be exchanged for the
same Class of shares of other funds without a sales load. Class B
or Class C shares of any fund exchanged for the same Class of
shares of another fund will be subject to the higher applicable
CDSC of the two exchanged funds and, for purposes of calculating
CDSC rates and conversion periods, will be deemed to have been
held since the date the Class B or Class C shares being exchanged
were initially purchased.
To accomplish an exchange under item C above, an investor's Service
Agent must notify the Transfer Agent of the investor's prior ownership of
such Class A shares and the investor's account number.
To request an exchange, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer
Agent to act on telephonic instructions from any person representing
himself or herself to be the investor or a representative of the investor's
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Telephone exchanges may be subject to limitations as to the amount involved
or the number of telephone exchanges permitted. Shares issued in
certificate form are not eligible for telephone exchange.
To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for shares of the same class of the fund into which the
exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs and IRAs
set up under a Simplified Employee Pension Plan ("SEP-IRAs") with only one
participant, the minimum initial investment is $750. To exchange shares
held in corporate plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, the minimum initial investment is $100 if the plan has at
least $1,000 invested among shares of the same Class of the funds in the
Dreyfus Family of Funds. To exchange shares held in personal retirement
plans, the shares exchanged must have a current value of at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for Class A, Class B or Class C shares of
the Fund, shares of the same Class of another fund in the Premier Family of
Funds or the Dreyfus Family of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value as described above under "Fund Exchanges." Enrollment in or
modification or cancellation of this Privilege is effective three business
days following notification by the investor. An investor will be notified
if his account falls below the amount designated to be exchanged under this
Privilege. In this case, an investor's account will fall to zero unless
additional investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA accounts,
but not from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Class B or Class C shares withdrawn pursuant to the Automatic Withdrawal
Plan will be subject to any applicable CDSC.
Dividend Sweep. Dividend Sweep allows investors to invest dividends
or dividends and capital gain distributions, if any, from the Fund in
shares of the same Class of another fund in the Premier Family of Funds or
the Dreyfus Family of Funds of which the investor is a shareholder. Shares
of the same Class of other funds purchased pursuant to this privilege will
be purchased on the basis of relative net asset value per share as follows:
A. Dividends and distributions paid with respect to Class A shares by
a fund may be invested without imposition of a sales load in
Class A shares of other funds that are offered without a sales
load.
B. Dividends and distributions paid with respect to Class A shares by
a fund which does not charge a sales load may be invested in
Class A shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Dividends and distributions paid with respect to Class A shares by
a fund which charges a sales load may be invested in Class A
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load charged by
the Fund from which dividends or distributions are being swept,
without giving effect to any reduced loads, the difference will be
deducted.
D. Dividends and distributions paid with respect to Class B or Class
C shares by a fund may be invested without imposition of any
applicable CDSC in the same Class of shares of other funds and the
relevant Class of shares of such other funds will be subject on
redemption to any applicable CDSC.
Corporate Pension, Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans including a 401(k) Salary Reduction Plan. In
addition, the Fund makes available Keogh Plans, IRAs, including SEP-IRAs
and IRA "Rollover Accounts," and 403(b)(7) Plans. Plan support services
also are available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Such purchases will be
effective when payments received by the Transfer Agent are converted into
Federal Funds. Purchases for these plans may not be made in advance of
receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans, and SEP-IRAs, with more than one participant, is
$1,000, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans, with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a non-
working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
each business day using available market quotations or at fair value as
determined by one or more independent pricing services (collectively, the
"Service") approved by the Fund's Board. The Service may use available
market quotations, employ electronic data processing techniques and/or a
matrix system to determine valuations. The Service's procedures are
reviewed by the Fund's officers under the general supervision of the Board.
Expenses and fees, including the management fee (reduced by the expense
limitation, if any) and fees pursuant to the Shareholder Services Plan and,
with respect to the Class B and Class C shares only, the Distribution Plan,
are accrued daily and are taken into account for the purpose of determining
the net asset value of the relevant Class of shares. Because of the
difference in operating expenses incurred by each Class, the per share net
asset value of each Class will differ.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Dividends from net investment income, together with distributions from
any realized short-term securities gains, generally are taxable as ordinary
income whether or not reinvested. Distributions from net realized
long-term capital gains generally are taxable as long-term capital gain to
a shareholder who is a citizen or resident of the United States, regardless
of the length of time the shareholder has held his shares.
Any dividend or distribution declared and paid shortly after an
investor's purchase may have the effect of reducing the net asset value of
his shares below the cost of his investment. Such a distribution would be
a return on investment in an economic sense although taxable as stated in
the Prospectus. In addition, the Code provides that if a shareholder has
not held his shares for more than six months and has received a capital
gains dividend with respect to such shares, any loss incurred on the sale
of such shares will be treated as long-term capital loss.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gains
realized from the sale or other disposition of certain market discount
bonds will be treated as ordinary income under Section 1276 of the Code.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to parties
acting as either principal or agent. Newly-issued securities ordinarily
are purchased directly from the issuer or from an underwriter; other
purchases and sales usually are placed with those dealers from which it
appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases and
sales, although the price paid usually includes an undisclosed compensation
to the dealer acting as agent. The prices paid to underwriters of
newly-issued securities usually include a concession paid by the issuer to
the underwriter, and purchases of after-market securities from dealers
ordinarily are executed at a price between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises, may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
The Fund anticipates that its annual portfolio turnover rate generally
will not exceed 100%, but the turnover rate will not be a limiting factor
when the Fund deems it desirable to sell or purchase securities.
Therefore, depending upon market conditions, the Fund's annual portfolio
turnover rate may exceed 100% in particular years. The Fund's portfolio
turnover rate during the fiscal years ended December 31, 1994 and 1995 was
427.27% and 349.24%, respectively. The Fund's portfolio turnover rate
increased during the fiscal years ended December 31, 1994 and 1995 as a
result of adjustments made to the coupon structure of certain of the Fund's
portfolio securities in order to avoid prepayments.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
Current yield for the 30-day period ended December 31, 1995 was 5.60%
for Class A, 5.36% for Class B and 5.13% for Class C. Current yield is
computed pursuant to a formula which operates, with respect to each Class,
as follows: the amount of the Fund's expenses with respect to such Class
accrued for the 30-day period (net of reimbursements) is subtracted from
the amount of the dividends and interest earned (computed in accordance
with regulatory requirements) by the Fund with respect to such Class during
the period. That result is then divided by the product of: (a) the
average daily number of shares outstanding during the period that were
entitled to receive dividends, and (b) the maximum offering price per share
in the case of Class A or the net asset value per share in the case of
Class B or Class C on the last day of the period less any undistributed
earned income per share reasonably expected to be declared as a dividend
shortly thereafter. The quotient is then added to 1, and that sum is
raised to the 6th power, after which 1 is subtracted. The current yield is
then arrived at by multiplying the result by 2.
The average annual total return for the 1, 5 and 8.923 year periods
ended December 31, 1995 for Class A was 10.22%, 7.30% and 8.65%, respec-
tively. The average annual total return for Class B for the 1 and 2.962
year periods ended December 31, 1995 was 11.83% and 5.29%, respectively.
The average annual total return for the period October 13, 1995
(commencement of initial offering of Class C) through December 31, 1995 for
Class C was 6.91%. Average annual total return is calculated by
determining the ending redeemable value of an investment purchased at net
asset value (maximum offering price in the case of Class A) per share with
a hypothetical $1,000 payment made at the beginning of the period (assuming
the reinvestment of dividends and distributions), dividing by the amount of
the initial investment, taking the "n"th root of the quotient (where "n" is
the number of years in the period) and subtracting 1 from the result. A
Class's average annual total return figures calculated in accordance with
such formula provides that in the case of Class A the maximum sales load
has been deducted from the hypothetical initial investment at the time of
purchase or in the case of Class B or Class C the maximum applicable CDSC
has been paid upon redemption at the end of the period.
The total return for the period January 29, 1987 (commencement of
operations) through December 31, 1995 for Class A was 109.59%. Based on
net asset value per share, the total return for Class A was 119.42% for
this period. The total return for Class B for the period from January 15,
1993 (commencement of initial offering of Class B shares) through December
31, 1995 was 16.48%. Without giving effect to the applicable CDSC, total
return for Class B was 18.44% for this period. The total return for Class
C for the period October 13, 1995 (commencement of initial offering of
Class C shares) through December 31, 1995 was 1.42%. Without giving effect
to the applicable CDSC, the total return for Class C was 2.42% for this
period. Total return is calculated by subtracting the amount of the Fund's
net asset value (maximum offering price in the case of Class A) per share
at the beginning of a stated period from the net asset value per share at
the end of the period (after giving effect to the reinvestment of dividends
and distributions during the period), and dividing the result by the
maximum offering price per share at the beginning of the period. Total
return also may be calculated based on the net asset value per share at the
beginning of the period instead of the maximum offering price per share at
the beginning of the period for Class A shares or without giving effect to
any applicable CDSC at the end of the period for Class B or Class C shares.
In such cases, the calculation would not reflect the deduction of the sales
load with respect to Class A shares or any applicable CDSC with respect to
Class B or Class C shares, which, if reflected, would reduce the
performance quoted.
From time to time, the Fund may compare its performance against
inflation with the performance of other instruments against inflation, such
as short-term Treasury bills (which are direct obligations of the U.S.
Government) and FDIC-insured bank money market accounts. In addition,
advertising for the Fund may indicate that investors may consider
diversifying their investment portfolios in order to seek protection of the
value of their assets against inflation.
From time to time, Fund advertisements may include statistical data or
general discussions about the growth and development of Dreyfus Retirement
Services (in terms of new customers, assets under management, market share,
etc.) and its presence in the defined contribution plan market.
From time to time, advertising material for the Fund may include
biographical information relating to its portfolio managers and may refer
to, or include commentary by a portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Shares have no preemptive or subscription rights and are
freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the
Fund, the Transfer Agent arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications
between shareholders and the Fund and the payment of dividends and
distributions payable by the Fund. For these services, the Transfer Agent
receives a monthly fee computed on the basis of the number of shareholder
accounts it maintains for the Fund during the month, and is reimbursed for
certain out-of-pocket expenses. Mellon Bank, N.A., 1 Mellon Bank Center,
PA 15258 is the Fund's custodian. Neither the Transfer Agent nor Mellon
Bank, N.A. has any part in determining the investment policies of the Fund
or which securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
<TABLE>
<CAPTION>
Premier GNMA Fund
Statement of Investments December 31, 1995
Principal
Bonds and Notes-92.4% Amount Value
_______ _______
<S> <C> <C>
Mortgage-Backed Securities-83.3%
Government National Mortgage Association I:
7% (a).................................................................. $ 10,000,000 $ 10,112,500
7%, 6/15/2008-12/15/2023................................................ 33,415,009 33,902,552
7 1/2% (a).............................................................. 20,000,000 20,687,400
7 1/2%, 2/15/2022-11/15/2024............................................ 22,929,717 23,620,716
8%, 5/15/2017-10/15/2024................................................ 8,373,579 8,736,645
8 1/2%, 11/1/2019-3/15/2025............................................. 14,036,826 14,767,564
9%, 4/15/2016-12/15/2022................................................ 10,272,314 10,948,271
9 1/2%, 10/15/2016-1/15/2025............................................ 9,683,202 10,448,304
10%, 10/15/2016-10/15/2020.............................................. 1,405,107 1,548,730
10 1/2%, 2/15/2016-8/15/2019............................................ 581,995 648,140
11%, 2/15/2010-8/15/2019................................................ 2,950,279 3,322,287
11 1/2%, 1/15/2013...................................................... 225,586 250,540
---------
138,993,649
---------
Government National Mortgage Association II;
11%, 7/20/2013-10/20/2015............................................... 2,619,337 2,891,093
---------
Government National Mortgage Association I,
Project Loan;
9 1/4%, 10/15/2023...................................................... 4,816,504 5,115,994
---------
Total Mortgage-Backed Securities............................................ 147,000,736
=======
U.S. Treasury Notes_9.1%
6 1/2%, 8/15/2005 (b)................................................... 15,000,000 15,996,090
=======
TOTAL BONDS AND NOTES
(cost $156,979,637)..................................................... $162,996,826
=======
Premier GNMA Fund
Statement of Investments (continued) December 31, 1995
Principal
Short-Term Investments_24.5% Amount Value
_______ _______
U.S. Treasury Bills:
5.33%, 1/4/1996......................................................... $ 5,759,000 $ 5,757,157
6.86%, 1/11/1996........................................................ 1,977,000 1,973,896
5.46%, 1/25/1996........................................................ 413,000 411,670
5.34%, 2/29/1996........................................................ 614,000 609,125
6.08%, 3/7/1996 (b)..................................................... 16,000,000 15,852,800
6.08%, 3/7/1996......................................................... 18,883,000 18,709,277
---------
TOTAL SHORT-TERM INVESTMENTS
(cost $43,313,925)...................................................... $ 43,313,925
========
TOTAL INVESTMENTS
(cost $200,293,562)..................................................... 116.9% $206,310,751
===== ========
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (16.9%) $ (29,830,330)
===== ========
NET ASSETS ........................................................... 100.0% $176,480,421
===== ========
Notes to Statement of Investments:
(a) Purchased on a forward commitment basis.
(b) Held by the custodian in a segregated account as collateral for securities purchased on a forward commitment basis.
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
Premier GNMA Fund
Statement of Assets and Liabilities December 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $200,293,562)-see statement..................................... $206,310,751
Interest receivable..................................................... 1,238,543
Receivable for shares of Beneficial Interest subscribed................. 136,316
Prepaid expenses........................................................ 12,162
_______
207,697,772
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 80,593
Due to Distributor...................................................... 56,626
Due to Custodian........................................................ 152,359
Payable for investment securities purchased............................. 30,791,615
Payable for shares of Beneficial Interest redeemed...................... 8,876
Accrued expenses........................................................ 127,282 31,217,351
______ _______
NET ASSETS ................................................................ $176,480,421
=======
REPRESENTED BY:
Paid-in capital......................................................... $179,341,143
Accumulated net realized (loss) on investments.......................... (8,877,911)
Accumulated net unrealized appreciation on investments_Note 3........... 6,017,189
_______
NET ASSETS at value......................................................... $176,480,421
=======
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 9,178,660
=======
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 2,858,191
=======
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 70
=======
NET ASSET VALUE per share:
Class A Shares
($134,545,047 / 9,178,660 shares)..................................... $14.66
=======
Class B Shares
($41,934,347 / 2,858,191 shares)...................................... $14.67
=======
Class C Shares
($1,027/ 70 shares)................................................... $14.67
=======
See notes to financial statements.
Premier GNMA Fund
Statement of Operations year ended December 31, 1995
INVESTMENT INCOME:
Interest Income......................................................... $13,207,081
Expenses:
Management fee-Note 2(a).............................................. $ 972,298
Shareholder servicing costs-Note 2(c)................................. 635,476
Distribution fees-Note 2(b)........................................... 194,472
Custodian fees........................................................ 66,171
Professional fees..................................................... 58,725
Registration fees..................................................... 37,208
Trustees' fees and expenses-Note 2(d)................................. 35,165
Prospectus and shareholders' reports.................................. 9,350
Miscellaneous......................................................... 18,845
_____
Total Expenses.................................................... 2,027,710
______
INVESTMENT INCOME-NET............................................. 11,179,371
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $6,055,099
Net unrealized appreciation on investments.............................. 8,010,015
_____
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 14,065,114
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $25,244,485
======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
Premier GNMA Fund
Statement of Changes in Net Assets
Year Ended December 31,
________________________________
1994 1995
_______ ______
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 12,477,594 $ 11,179,371
Net realized gain (loss) on investments................................. (15,855,259) 6,055,099
Net unrealized appreciation (depreciation) on investments for the year.. (3,139,629) 8,010,015
_______ _______
Net Increase (Decrease) In Net Assets Resulting From Operations... (6,517,294) 25,244,485
_______ _______
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (10,554,358) (8,886,343)
Class B shares........................................................ (1,923,236) (2,293,017)
Class C shares........................................................ __ (11)
_______ _______
Total Dividends................................................... (12,477,594) (11,179,371)
_______ _______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 17,118,960 16,093,996
Class B shares........................................................ 14,080,674 8,057,178
Class C shares........................................................ -- 1,000
Dividends reinvested:
Class A shares........................................................ 7,266,865 6,027,082
Class B shares........................................................ 1,207,098 1,439,805
Class C shares........................................................ __ 11
Cost of shares redeemed:
Class A shares........................................................ (64,284,402) (40,036,785)
Class B shares........................................................ (6,115,464) (6,333,160)
_______ _______
(Decrease) In Net Assets From Beneficial Interest Transactions.... (30,726,269) (14,750,873)
_______ _______
Total (Decrease) In Net Assets.................................. (49,721,157) (685,759)
NET ASSETS:
Beginning of year..................................................... 226,887,337 177,166,180
_______ _______
End of year........................................................... $177,166,180 $176,480,421
======= =======
</TABLE>
<TABLE>
<CAPTION>
Shares
-------------------------------------------------------------------------------
Class A Class B Class C
---------------------------- ---------------------------- ----------
Year Ended December 31, Year Ended December 31, Year Ended
---------------------------- ---------------------------- December 31,
CAPITAL SHARE TRANSACTIONS: 1994 1995 1994 1995 1995*
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Shares sold............. 1,204,210 1,144,697 989,793 567,691 69
Shares issued for dividends
reinvested............ 516,077 424,403 85,980 101,147 1
Shares redeemed......... (4,564,951) (2,840,710) (437,183) (446,457) __
_______ _______ _______ _______ _______
Net Increase (Decrease)
In Shares
Outstanding..... (2,844,664) (1,271,610) 638,590 222,381 70
======= ======= ======= ======= =======
*From October 16, 1995 (commencement of operations) to December 31, 1995.
</TABLE>
See notes to financial statements.
Premier GNMA Fund
Financial Highlights
Reference is made to page 4 of the Fund's Prospectus dated May 1, 1996.
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. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares. The Distributor, located at One Exchange Place, Boston, Massachusetts
02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a
provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc. The Dreyfus Corporation ("Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A.
The Fund offers Class A, Class B and Class C shares. Class A shares are
subject to a sales charge imposed at the time of purchase, Class B shares are
subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within five years of purchase and Class C
shares are subject to a contingent deferred sales charge imposed at the time
of redemption on redemptions made within one year of purchase. Other
differences between the three Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(a) Portfolio valuation: The Fund's investments (excluding U.S.
Government obligations and 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. Investments in U.S. Government obligations are
valued at the mean between quoted bid and asked prices. 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.
Premier GNMA Fund
NOTES TO FINANCIAL STATEMENTS (continued)
The Fund has an unused capital loss carryover of approximately $8,882,000
available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
December 31, 1995. If not applied, the carryover expires in fiscal 2002.
In connection with the adoption of Statement of Position 93-2
("Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies"),
the Fund has reclassified $956,937 from accumulated net realized loss on
investments to paid-in capital. Results of operations and net assets were not
effected by this reclassification.
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 (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
December 31, 1995.
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 $9,707 for the period from
December 1, 1995 through December 31, 1995.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $5,925 during the year ended December 31, 1995 from commissions
earned on sales of the Fund's Class A 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 year ended December 31, 1995,
$194,470 was charged to the Fund for the Class B shares and $2 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 year ended December 31, 1995,
$344,717, $97,235 and $1 were charged to Class A, B and C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
Premier GNMA 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 (including paydowns) of
investment securities, excluding short-term securities, during the year ended
December 31, 1995, amounted to $556,749,458 and $577,517,770, respectively.
At December 31, 1995, accumulated net unrealized appreciation on
investments was $6,017,189, consisting of $6,026,570 gross unrealized
appreciation and $9,381 gross unrealized depreciation.
At December 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
Premier 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,
1995, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1995 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier GNMA Fund at December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
[Ernst and Young LLP signature logo]
New York, New York
February 14, 1996
PREMIER GNMA FUND
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information for the period from January
29, 1987 (commencement of operations) to December 31, 1987
and for each of the 8 years in the period ended December 31,
1995.
Included in Part B of the Registration Statement:
Statement of Investments-- December 31, 1995.
Statement of Assets and Liabilities-- December 31, 1995.
Statement of Operations-- year ended December 31, 1995.
Statement of Changes in Net Assets--for each of the
years ended December 31, 1994 and 1995.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors, dated
February 14, 1996.
All Schedules and other financial statement information, for which provision
is made in the applicable accounting regulations of the Securities and
Exchange Commission, are either omitted because they are not required under
the related instructions, they are inapplicable, or the required information
is presented in the financial statements or notes thereto which are included
in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Registrant's Amended and Restated Agreement and Declaration of
Trust is incorporated by reference to Exhibit (1) of Post-
Effective Amendment No. 15 to the Registration Statement on Form
N-1A, filed on October 10, 1995.
(2) Registrant's By-Laws, as amended, are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 12 to the Registration
Statement on Form N-1A, filed on April 15, 1994.
(5) Management Agreement is incorporated by reference to Exhibit (5)
of Post-Effective Amendment No. 13 to the Registration Statement
on Form N-1A, filed on March 1, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 13 to the Registration
Statement on Form N-1A, filed on March 1, 1995.
(6)(b) Forms of Service Agreement are incorporated by reference to
Exhibit (6)(b) of Post-Effective Amendment No. 15 to the
Registration Statement on Form N-1A, filed on October 10, 1995.
(8)(a) Registrant's Custody Agreement is incorporated by reference to
Exhibit (8)(a) of Post-Effective Amendment No. 15 to the
Registration Statement on Form N-1A, filed on October 10, 1995.
(8)(b) Form of Custody Agreement with Mellon Bank, N.A.
(9) Shareholder Services Plan is incorporated by reference to Exhibit
(9) of Post-Effective Amendment No. 15 to the Registration
Statement on Form N-1A, filed on October 10, 1995.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Post-Effective Amendment No. 15 to
the Registration Statement on Form N-1A, filed on October 10,
1995.
(11) Consent of Independent Auditors.
(15) Distribution Plan is incorporated by reference to Exhibit (15) of
Post-Effective Amendment No. 15 to the Registration Statement on
Form N-1A, filed on October 10, 1995.
(16) Schedules of Computation of Performance are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A, filed on March 1, 1995.
(17) Financial Data Schedule.
(18) Rule 18f-3 Plan is incorporated by reference to Exhibit (18) of
Post-Effective Amendment No. 15 to the Registration Statement on
Form N-1A, filed on October 10, 1995.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney of the Trustees and officers are
incorporated by reference to Other Exhibits (a) of Post-
Effective Amendment No. 13 to the Registration Statement
on Form N-1A, filed on March 1, 1995.
(b) Certificate of Secretary is incorporated by reference to
other Exhibits (b) of Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A, filed on March
1, 1995.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of April 11, 1996
______________ _____________________________
Beneficial Interest
(Par value $.001)
Class A 4,492
Class B 1,853
Class C 3
Item 27. Indemnification
_______ _______________
Reference is made to Article VIII of the Registrant's Amended and
Restated Declaration of Trust incorporated by reference to Exhibit
(1) of Post-Effective Amendment No. 15 to the Registration
Statement on Form N-1A, filed on October 10, 1995. The application
of these provisions is limited by Article 10 of the Registrant's
By-Laws, as amended, incorporated by reference to Exhibit (2) of
Post-Effective Amendment No. 12 to the Registration Statement on
Form N-1A, filed on April 15, 1994, and by the following
undertaking set forth in the rules promulgated by the Securities
and Exchange Commission:
Item 27. Indemnification (continued)
_______ _______________
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the
event that a claim for indemnification is against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
trustee, officer or controlling person of the registrant in the successful
defense of any such action, suit or proceeding) is asserted by such trustee,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in such Act and will be governed by the
final adjudication of such issue.
Reference is also made to the Distribution Agreement incorporated
by reference to Exhibit (6)(a) of Post-Effective Amendment No. 13
to the Registration Statement on Form N-1A, filed on March 1, 1995.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser and manager for sponsored investment
companies registered under the Investment Company Act of 1940
and as an investment adviser to institutional and individual
accounts. Dreyfus also serves as sub-investment adviser to
and/or administrator of other investment companies. Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus,
serves primarily as a registered broker-dealer of shares of
investment companies sponsored by Dreyfus and of other
investment companies for which Dreyfus acts as investment
adviser, sub-investment adviser or administrator. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation****;
Mellon Bank, N.A.****
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and Member of the Executive
Committee of Avnet, Inc.**
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund
JULIAN M. SMERLING None
Director
HOWARD STEIN Chairman of the Board:
Chairman of the Board and Dreyfus Acquisition Corporation*;
Chief Executive Officer The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++;
The Dreyfus Fund International
Limited+++++;
World Balanced Fund+++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of the Board The Boston Company*****;
Vice Chairman of the Board:
Mellon Bank Corporation****;
Mellon Bank, N.A.****;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation****;
Operating Officer The Boston Company*****;
and a Director Deputy Director:
Mellon Trust****;
Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****;
President:
Boston Safe Deposit and Trust
Company*****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive
Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.***;
Director:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company*****;
Laurel Capital Advisors****;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.****;
Boston Safe Deposit and Trust
Company*****;
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company++;
and a Director Chairman of the Board and Chief Operating
Officer:
Major Trading Corporation*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903
Director:
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization, Inc.***;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
BARBARA E. CASEY President:
Vice President- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.*****
Dreyfus Service Corporation*
DIANE M. COFFEY None
Vice President-
Corporate Communications
ELIE M. GENADRY President:
Vice President- Institutional Services Division of
Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of
Dreyfus Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Vice President:
The Dreyfus Trust Company++
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
MARK N. JACOBS Vice President, Secretary and Director:
Vice President- Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation****
Services
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
Dreyfus Service Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit Corporation*;
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation+
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 131 Second Street,
Lewes, Delaware 19958.
**** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston Place,
Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80
Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Capital Value Fund, Inc.
14) Dreyfus Cash Management
15) Dreyfus Cash Management Plus, Inc.
16) Dreyfus Connecticut Intermediate Municipal Bond Fund
17) Dreyfus Connecticut Municipal Money Market Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) The Dreyfus Fund Incorporated
22) Dreyfus Global Bond Fund, Inc.
23) Dreyfus Global Growth Fund
24) Dreyfus GNMA Fund, Inc.
25) Dreyfus Government Cash Management
26) Dreyfus Growth and Income Fund, Inc.
27) Dreyfus Growth and Value Funds, Inc.
28) Dreyfus Growth Opportunity Fund, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Equity Fund, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) The Dreyfus/Laurel Investment Series
38) Dreyfus Life and Annuity Index Fund, Inc.
39) Dreyfus LifeTime Portfolios, Inc.
40) Dreyfus Liquid Assets, Inc.
41) Dreyfus Massachusetts Intermediate Municipal Bond Fund
42) Dreyfus Massachusetts Municipal Money Market Fund
43) Dreyfus Massachusetts Tax Exempt Bond Fund
44) Dreyfus Michigan Municipal Money Market Fund, Inc.
45) Dreyfus Money Market Instruments, Inc.
46) Dreyfus Municipal Bond Fund, Inc.
47) Dreyfus Municipal Cash Management Plus
48) Dreyfus Municipal Money Market Fund, Inc.
49) Dreyfus New Jersey Intermediate Municipal Bond Fund
50) Dreyfus New Jersey Municipal Bond Fund, Inc.
51) Dreyfus New Jersey Municipal Money Market Fund, Inc.
52) Dreyfus New Leaders Fund, Inc.
53) Dreyfus New York Insured Tax Exempt Bond Fund
54) Dreyfus New York Municipal Cash Management
55) Dreyfus New York Tax Exempt Bond Fund, Inc.
56) Dreyfus New York Tax Exempt Intermediate Bond Fund
57) Dreyfus New York Tax Exempt Money Market Fund
58) Dreyfus Ohio Municipal Money Market Fund, Inc.
59) Dreyfus 100% U.S. Treasury Intermediate Term Fund
60) Dreyfus 100% U.S. Treasury Long Term Fund
61) Dreyfus 100% U.S. Treasury Money Market Fund
62) Dreyfus 100% U.S. Treasury Short Term Fund
63) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
64) Dreyfus Pennsylvania Municipal Money Market Fund
65) Dreyfus Short-Intermediate Government Fund
66) Dreyfus Short-Intermediate Municipal Bond Fund
67) Dreyfus Investment Grade Bond Funds, Inc.
68) The Dreyfus Socially Responsible Growth Fund, Inc.
69) Dreyfus Strategic Income
70) Dreyfus Strategic Investing
71) Dreyfus Tax Exempt Cash Management
72) The Dreyfus Third Century Fund, Inc.
73) Dreyfus Treasury Cash Management
74) Dreyfus Treasury Prime Cash Management
75) Dreyfus Variable Investment Fund
76) Dreyfus-Wilshire Target Funds, Inc.
77) Dreyfus Worldwide Dollar Money Market Fund, Inc.
78) General California Municipal Bond Fund, Inc.
79) General California Municipal Money Market Fund
80) General Government Securities Money Market Fund, Inc.
81) General Money Market Fund, Inc.
82) General Municipal Bond Fund, Inc.
83) General Municipal Money Market Fund, Inc.
84) General New York Municipal Bond Fund, Inc.
85) General New York Municipal Money Market Fund
87) Peoples Index Fund, Inc.
88) Peoples S&P MidCap Index Fund, Inc.
89) Premier Insured Municipal Bond Fund
90) Premier California Municipal Bond Fund
91) Premier Equity Funds, Inc.
92) Premier Global Investing, Inc.
93) Premier GNMA Fund
94) Premier Growth Fund, Inc.
95) Premier Municipal Bond Fund
96) Premier New York Municipal Bond Fund
97) Premier State Municipal Bond Fund
98) Premier Strategic Growth Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Assistant
and Chief Financial Officer Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Frederick C. Dey++ Senior Vice President Vice President
and Assistant
Treasurer
Eric B. Fischman++ Vice President and Associate Vice President
General Counsel and Assistant
Secretary
Paul Prescott+ Vice President None
Elizabeth Bachman++ Assistant Vice President Vice President
and Assistant
Secretary
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer Assistant
Treasurer
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. Mellon Bank, N.A.
1 Mellon Bank Center
Pittsburgh, PA 15258
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested
in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 24th day of April, 1996.
PREMIER GNMA FUND
BY: /s/Marie E. Connolly*
Marie E. Connolly, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
Signatures Title Date
___________________________ ______________________________ ___________
/s/Marie E. Connolly* President (Principal Executive 4/24/96
______________________________ Officer)
Marie E. Connolly
/s/Joseph F. Tower, III* Assistant Treasurer (Principal 4/24/96
______________________________ Accounting and Financial Officer)
Joseph F. Tower, III
/s/Clifford L. Alexander, Jr.* Trustee 4/24/96
______________________________
Clifford L. Alexander, Jr.
/s/Peggy C. Davis* Trustee 4/24/96
______________________________
Peggy C. Davis
/s/Joseph S. DiMartino* Trustee 4/24/96
______________________________
Joseph S. DiMartino
/s/Ernst Kafka* Trustee 4/24/96
______________________________
Ernst Kafka
/s/Saul B. Klaman* Trustee 4/24/96
______________________________
Saul B. Klaman
/s/Nathan Leventhal* Trustee 4/24/96
______________________________
Nathan Leventhal
*BY: __________________________
Eric B. Fischman,
Attorney-in-Fact
INDEX OF EXHIBITS
ITEM
(8)(b) Form of Custody Agreement with Mellon Bank, N.A.
(11) Consent of Independent Auditors
(17) Financial Data Schedule
DRAFT
CUSTODY AGREEMENT
AGREEMENT dated as of May 29, 1996 between Premier GNMA Fund, a
business trust organized under the laws of the State of Massachusetts
(the "Fund"), having its principal office and place of business at
200 Park Avenue, New York, NY 10166, and Mellon Bank, N.A., (the
"Custodian"), a national banking association with its principal place of
business at One Mellon Bank Center, Pittsburgh, PA 15258.
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
(a) "Affiliated Person" shall have the meaning of the term within
Section 2(a)3 of the 1940 Act.
(b) "Authorized Person" shall mean those persons duly authorized by
the Board of [Directors/Trustees] of the Fund to give Oral Instructions and
Written Instructions on behalf of the Fund and listed in the certification
annexed hereto as Appendix A or such other certification as may be received
by the Custodian from time to time.
(c) "Book-Entry System" shall mean the Federal Reserve/Treasury book-
entry system for United States and federal agency Securities, its
successor or successors and its nominee or nominees, in which the Custodian
is hereby specifically authorized and instructed on a continuous and on-going
basis to deposit all Securities eligible for deposit therein, and to utilize
the Book-Entry System to the extent possible in connection with its
performance hereunder.
(d) "Business Day" shall mean each day on which the Fund is required
to determine its net asset value, and any other day on which the Securities
and Exchange Commission may require the Fund to be open for business.
(e) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be given
to the Custodian, which is actually received by the Custodian and signed on
behalf of the Fund by any two Authorized Persons or any two officers thereof.
(f) "Master Trust Agreement" shall mean the Amended and Restated
Agreement and Declaration of Trust of the Fund dated XXXXXXXXXXXXXXXX as the
same may be amended from time to time.
(g) "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission under
Section 17(a) of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, in which the Custodian
is hereby specifically authorized and instructed on a continuous and on-going
basis to deposit all Securities eligible for deposit therein, and to utilize
the Book-Entry System to the extent possible in connection with its
performance hereunder. The term "Depository" shall further mean and include
any other person to be named in a Certificate authorized to act as a
depository under the 1940 Act, its successor or successors and its nominee
or nominees.
(h) "Money Market Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to interest and
principal by the government of the United States or agencies or
instrumentalities thereof ("U.S. government securities"), commercial paper,
bank certificates of deposit, bankers' acceptances and short-term corporate
obligations, where the purchase or sale of such securities normally requires
settlement in federal funds on the same day as such purchase or sale, and
repurchase and reverse repurchase agreements with respect to any of the
foregoing types of securities and bank time deposits.
(i) "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from a person reasonably believed by the Custodian
to be an Authorized Person.
(j) "Prospectus" shall mean the Fund's current prospectus and
statement of additional information relating to the registration of the
Fund's Shares under the Securities Act of 1933, as amended.
(k) "Shares" shall mean all or any part of each class of Beneficial
Interest of the Fund listed in the Certificate annexed hereto as Appendix B,
as it may be amended from time to time, which from time to time are authorized
and/or issued by the Fund.
(l) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and other
securities, commodities interests and investments from time to time owned
by the Fund.
(m) "Transfer Agent" shall mean the person which performs the
transfer agent, dividend disbursing agent and shareholder servicing agent
functions for the Fund.
(n) "Written Instructions" shall mean a written communication actually
received by the Custodian from a person reasonably believed by the Custodian
to be an Authorized Person by any system, including, without limitation,
electronic transmissions, facsimile and telex, whereby the receiver of such
communication is able to verify by codes or otherwise with a reasonable
degree of certainty the authenticity of the sender of such communication.
(o) The "1940 Act" refers to the Investment Company Act of 1940, and
the Rules and Regulations thereunder, all as amended from time to time.
2. Appointment of Custodian.
(a) The Fund hereby constitutes and appoints the Custodian as
custodian of all the Securities and monies at the time owned by or in the
possession of the Fund during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
3. Compensation.
(a) The Fund will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule A and incorporated herein. Such Fee
Schedule does not include out-of-pocket disbursements of the Custodian for
which the Custodian shall be entitled to bill separately. Out-of-pocket
disbursements shall consist of the items specified in the Schedule of Out-of-
pocket charges annexed hereto as Schedule B and incorporated herein, which
schedule may be modified by the Custodian upon not less than thirty days
prior written notice to the Fund.
(b) Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule A of this Agreement a revised Fee Schedule,
dated and signed by an Authorized Officer or authorized representative of
each party hereto.
(c) The Custodian will bill the Fund as soon as practicable after the
end of each calendar month, and said billings will be detailed in accordance
with Schedule A, as amended from time to time. The Fund will promptly pay
to the Custodian the amount of such billing. The Custodian may charge against
any monies held on behalf of the Fund pursuant to this Agreement such
compensation and disbursements incurred by the Custodian in the performance
of its duties pursuant to this Agreement. The Custodian shall also be
entitled to charge against any money held on behalf of the Fund pursuant to
this Agreement the amount of any loss, damage, liability or expense incurred
with respect to the Fund, including counsel fees, for which it shall be
entitled to reimbursement under the provisions of this Agreement.
4. Custody of Cash and Securities.
(a) Receipt and Holding of Assets.
The Fund will deliver or cause to be delivered to the Custodian or its
permitted Sub-Custodians all Securities and monies owned by it at any time
during the period of this Agreement. The Custodian will not be responsible
for such Securities and monies until actually received by it. The Fund shall
instruct the Custodian from time to time in its sole discretion, by means of
Written Instructions, or, in connection with the purchase or sale of Money
Market Securities, by means of Oral Instructions confirmed in writing in
accordance with Section 11(h) hereof or Written Instructions, as to the
manner in which and in what amounts Securities and monies are to be deposited
on behalf of the Fund in the Book-Entry System or the Depository. Securities
and monies of the Fund deposited in the Book-Entry System or the Depository
will be represented in accounts which include only assets held by the
Custodian for customers, including but not limited to accounts for which the
Custodian acts in a fiduciary or representative capacity.
(b) Accounts and Disbursements. The Custodian shall establish and
maintain a separate account for the Fund and shall credit to the separate
account all monies received by it for the account of such Fund and shall
disburse the same only:
1. In payment for Securities purchased for the Fund, as
provided in Section 5 hereof;
2. In payment of dividends or distributions with respect to
the Shares, as provided in Section 7 hereof;
3. In payment of original issue or other taxes with respect to
the Shares, as provided in Section 8 hereof;
4. In payment for Shares which have been redeemed by the Fund,
as provided in Section 8 hereof;
5. Pursuant to a Certificate setting forth the name and
address of the person to whom the payment is to be made, the amount to be paid
and the purpose for which payment is to be made, provided that in the event of
disbursements pursuant to this Sub-section 4(b)(5), the Fund shall indemnify
and hold the Custodian harmless from any claims or losses arising out of such
disbursements in reliance on such Certificate; or
6. In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the Fund, as provided in
Sections 3 and 11(i).
(c) Confirmation and Statements. Promptly after the close of business
on each day, the Custodian shall furnish the Fund with confirmations and a
summary of all transfers to or from the account of the Fund during said day.
Where securities purchased by the Fund are in a fungible bulk of securities
registered in the name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Depository or the Book-Entry System,
the Custodian shall by book entry or otherwise identify the quantity of those
securities belonging to the Fund. At least monthly, the Custodian shall
furnish the Fund with a detailed statement of the Securities and monies held
for the Fund under this Agreement.
(d) Registration of Securities and Physical Separation. All
Securities held for the Fund which are issued or issuable only in bearer form,
except such Securities as are held in the Book-Entry System, shall be held by
the Custodian in that form; all other Securities held for the Fund may be
registered in the name of the Fund, in the name of the Custodian, in the name
of any duly appointed registered nominee of the Custodian as the Custodian
may from time to time determine, or in the name of the Book-Entry System or
the Depository or their successor or successors, or their nominee or
nominees. The Fund reserves the right to instruct the Custodian as to the
method of registration and safekeeping of the Securities. The Fund agrees
to furnish to the Custodian appropriate instruments to enable the Custodian
to hold or deliver in proper form for transfer, or to register in the name
of its registered nominee or in the name of the Book-Entry System or the
Depository, any Securities which it may hold for the account of the Fund and
which may from time to time be registered in the name of the Fund. The
Custodian shall hold all such Securities specifically allocated to the Fund
which are not held in the Book-Entry System or the Depository in a separate
account for the Fund in the name of the Fund physically segregated at all
times from those of any other person or persons.
(e) Segregated Accounts. Upon receipt of a Certificate the Custodian
will establish segregated accounts on behalf of the Fund to hold liquid or
other assets as it shall be directed by a Certificate and shall increase or
decrease the assets in such segregated accounts only as it shall be directed
by subsequent Certificate.
(f) Collection of Income and Other Matters Affecting Securities.
Unless otherwise instructed to the contrary by a Certificate, the Custodian
by itself, or through the use of the Book-Entry System or the Depository with
respect to Securities therein deposited, shall with respect to all Securities
held for the Fund in accordance with this Agreement:
1. Collect all income due or payable;
2. Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, retired or otherwise
become payable. Notwithstanding the foregoing, the Custodian only shall have
such responsibility to the Fund for Securities which are called if either (i)
the Custodian received a written notice of such call; or (ii) notice of such
call appears in one or more of the publications listed in Appendix C annexed
hereto, which may be amended at any time by the Custodian upon five (5)
Business Days prior notification to the Fund;
3. Surrender Securities in temporary form for definitive
Securities;
4. Execute any necessary declarations or certificates of
ownership under the Federal income tax laws or the laws or regulations of any
other taxing authority now or hereafter in effect; and
5. Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of
the Fund all rights and similar Securities issued with respect to any
Securities held by the Custodian hereunder for the Fund.
(g) Delivery of Securities and Evidence of Authority. Upon receipt of
a Certificate, the Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
1. Execute and deliver or cause to be executed and delivered
to such persons as may be designated in such Certificate, proxies, consents,
authorizations, and any other instruments whereby the authority of the Fund
as owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for
the Fund in exchange for other Securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;
3. Deliver or cause to be delivered any Securities held for
the Fund to any protective committee, reorganization committee or other person
in connection with the reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation, and receive and hold
under the terms of this Agreement in the separate account for the Fund such
certificates of deposit, interim receipts or other instruments or documents
as may be issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of the
assets specifically allocated to the separate account of the Fund and take
such other steps as shall be stated in a Certificate to be for the purpose
of effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund;
5. Deliver Securities upon the receipt of payment in
connection
with any repurchase agreement related to such Securities entered into by the
Fund;
6. Deliver Securities owned by the Fund to the issuer thereof
or its agent when such Securities are called or otherwise become payable.
Notwithstanding the foregoing, the Custodian shall have no responsibility for
monitoring or ascertaining any call, redemption or retirement dates with
respect to put bonds which are owned by the Fund and held by the Custodian
or its nominees. Nor shall the Custodian have any responsibility or
liability to the Fund for any loss by the Fund for any missed payments or
other defaults resulting therefrom; unless the Custodian received timely
notification from the Fund specifying the time, place and manner for the
presentment of any such put bond owned by the Fund and held by the Custodian
or its nominee. The Custodian shall not be responsible and assumes no
liability to the Fund for the accuracy or completeness of any notification
the Custodian may furnish to the Fund with respect to put bonds
7. Deliver Securities for delivery in connection with any
loans of Securities made by the Fund but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian and the Fund
which may be in the form of cash or U.S. government securities or a letter
of credit;
8. Deliver Securities for delivery as security in connection
with any borrowings by the Fund requiring a pledge of Fund assets, but only
against receipt of amounts borrowed;
9. Deliver Securities upon receipt of a Certificate from the
Fund for delivery to the Transfer Agent or to the holders of Shares in
connection with distributions in kind, as may be described from time to time in
the Fund's Prospectus, in satisfaction of requests by holders of Shares for
repurchase or redemption;
10. Deliver Securities as collateral in connection with short
sales by the Fund of common stock for which the Fund owns the stock or owns
preferred stocks or debt securities convertible or exchangeable, without
payment or further consideration, into shares of the common stock sold short;
11. Deliver Securities for any purpose expressly permitted by
and in accordance with procedures described in the Fund's Prospectus; and
12. Deliver Securities for any other proper business purpose,
but only upon receipt of, in addition to Written Instructions, a certified copy
of a resolution of the Board of Directors signed by an Authorized Person and
certified by the Secretary of the Fund, specifying the Securities to be
delivered, setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper business purpose, and naming the person
or persons to whom delivery of such Securities shall be made.
(h) Endorsement and Collection of Checks, Etc. The Custodian is
hereby authorized to endorse and collect all checks, drafts or other orders for
the payment of money received by the Custodian for the account of the Fund.
5. Purchase and Sale of Investments of the Fund.
(a) Promptly after each purchase of Securities for the Fund, the Fund
shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate; and (ii)
with respect to each purchase of Money Market Securities, either a Written
Instruction or Oral Instruction, in either case specifying with respect to
each purchase: (1) the name of the issuer and the title of the Securities;
(2) the number of shares or the principal amount purchased and accrued
interest, if any; (3) the date of purchase and settlement; (4) the purchase
price per unit; (5) the total amount payable upon such purchase; (6) the name
of the person from whom or the broker through whom the purchase was made, if
any; and (7) whether or not such purchase is to be settled through the Book-
Entry System or the Depository. The Custodian shall receive the Securities
purchased by or for the Fund and upon receipt of Securities shall pay out of
the monies held for the account of the Fund the total amount payable upon
such purchase, provided that the same conforms to the total amount payable
as set forth in such Certificate, Written or Oral Instruction.
(b) Promptly after each sale of Securities of the Fund, the Fund shall
deliver to the Custodian (i) with respect to each sale of Securities which
are not Money Market Securities, a Certificate, and (ii) with respect to each
sale of Money Market Securities, either Written Instruction or Oral
Instructions, in either case specifying with respect to such sale: (1) the
name of the issuer and the title of the Securities; (2) the number of shares
or principal amount sold, and accrued interest, if any; (3) the date of sale;
(4) the sale price per unit; (5) the total amount payable to the Fund upon
such sale; (6) the name of the broker through whom or the person to whom the
sale was made; and (7) whether or not such sale is to be settled through the
Book-Entry System or the Depository. The Custodian shall deliver or cause
to be delivered the Securities to the broker or other person designated by
the Fund upon receipt of the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable to the Fund as
set forth in such Certificate, Written or Oral Instruction. Subject to the
foregoing, the Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in Securities.
6. Lending of Securities.
If the Fund is permitted by the terms of the Master Trust
Agreement and as disclosed in its Prospectus to lend securities, within
24 hours after each loan of Securities, the Fund shall deliver to the Custodian
a Certificate specifying with respect to each such loan: (a) the name of the
issuer and the title of the Securities; (b) the number of shares or the
principal amount loaned; (c) the date of loan and delivery; (d) the total
amount to be delivered to the Custodian, and specifically allocated against
the loan of the Securities, including the amount of cash collateral and the
premium, if any, separately identified; and (e) the name of the broker, dealer
or financial institution to which the loan was made.
Promptly after each termination of a loan of Securities, the Fund
shall deliver to the Custodian a Certificate specifying with respect to each
such loan termination and return of Securities: (a) the name of the issuer
and the title of the Securities to be returned; (b) the number of shares or
the principal amount to be returned; (c) the date of termination; (d) the
total amount to be delivered by the Custodian (including the cash collateral
for such Securities minus any offsetting credits as described in said
Certificate); and (e) the name of the broker, dealer or financial institution
from which the Securities will be returned. The Custodian shall receive all
Securities returned from the broker, dealer or financial institution to which
such Securities were loaned and upon receipt thereof shall pay the total
amount payable upon such return of Securities as set forth in the
Certificate. Securities returned to the Custodian shall be held as they were
prior to such loan.
7. Payment of Dividends or Distributions.
(a) The Fund shall furnish to the Custodian a Certificate specifying
the date of payment of any dividend or distribution, and the total amount
payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such Certificate, the
Custodian shall pay out the total amount payable to the Transfer Agent of the
Fund.
8. Sale and Redemption of Shares of the Fund.
(a) Whenever the Fund shall sell any Shares, or whenever any shares
are redeemed, the Fund shall deliver or cause to be delivered to the Custodian
a Written Instruction from the Transfer Agent duly specifying:
1. The net amount of money to be received by the Custodian,
where the sale of such Shares exceeds redemption; and
2. The net amount of money to be paid for such Shares, where
redemptions exceed purchases.
The Custodian understands and agrees that Written Instructions may
be furnished subsequent to the purchase of Shares and that the information
contained therein will be derived from the sales of Shares as reported to the
Fund by the Transfer Agent.
(b) Upon receipt of money from the Transfer Agent, the Custodian shall
credit such money to the separate account of the Fund.
(c) Upon issuance of any Shares in accordance with the foregoing
provisions of this Section 8, the Custodian shall pay all original issue or
other taxes required to be paid in connection with such issuance upon the
receipt of a Written Instruction specifying the amount to be paid.
(d) Upon receipt from the Transfer Agent of Written Instructions
setting forth the net amount of money to be paid for Shares received by the
Transfer Agent for redemption, the Custodian shall make payment to the
Transfer Agent of such net amount.
9. Indebtedness.
(a) The Fund will cause to be delivered to the Custodian by any bank
(excluding the Custodian) from which the Fund borrows money for investment
or for temporary administrative or emergency purposes using Securities as
collateral for such borrowings, a notice or undertaking in the form currently
employed by any such bank setting forth the amount which such bank will loan
to the Fund against delivery of a stated amount of collateral. The Fund
shall promptly deliver to the Custodian a Certificate stating with respect
to each such borrowing: (1) the name of the bank; (2) the amount and terms
of the borrowing, which may be set forth by incorporating by reference an
attached promissory note, duly endorsed by the Fund, or other loan agreement;
(3) the time and date, if known, on which the loan is to be entered into (the
"borrowing date"); (4) the date on which the loan becomes due and payable;
(5) the total amount payable to the Fund on the borrowing date; (6) the
market value of Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular Securities; and (7) a statement that such
loan is in conformance with the 1940 Act and the Fund's Prospectus.
(b) Upon receipt of the Certificate referred to in subparagraph (a)
above, the Custodian shall deliver on the borrowing date the specified
collateral and the executed promissory note, if any, against delivery by the
lending bank of the total amount of the loan payable, provided that the same
conforms to the total amount payable as set forth in the Certificate. The
Custodian may, at the option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights therein given
the lending bank by virtue of any promissory note or loan agreement. The
Custodian shall deliver as additional collateral in the manner directed by
the Fund from time to time such Securities as may be specified in the
Certificate to collateralize further any transaction described in this
Section 9. The Fund shall cause all Securities released from collateral
status to be returned directly to the Custodian, and the Custodian shall
receive from time to time such return of collateral as may be tendered to it.
In the event that the Fund fails to specify in the Certificate all of the
information required by this Section 9, the Custodian shall not be under any
obligation to deliver any Securities. Collateral returned to the Custodian
shall be held hereunder as it was prior to being used as collateral.
10. Persons Having Access to Assets of the Fund.
(a) No trustee or agent of the Fund, and no officer, director,
employee or agent of the Fund's investment adviser, of any sub-investment
adviser of the Fund, or of the Fund's administrator, shall have physical
access to the assets of the Fund held by the Custodian or be authorized or
permitted to withdraw any investments of the Fund, nor shall the Custodian
deliver any assets of the Fund to any such person. No officer, director,
employee or agent of the Custodian who holds any similar position with the
Fund's investment adviser, with any sub-investment adviser of the Fund or with
the Fund's administrator shall have access to the assets of the Fund.
(b) Nothing in this Section 10 shall prohibit any duly authorized
officer, employee or agent of the Fund, or any duly authorized officer,
director, employee or agent of the investment adviser, of any sub-investment
adviser of the Fund or of the Fund's administrator, from giving Oral
Instructions or Written Instructions to the Custodian or executing a
Certificate so long as it does not result in delivery of or access to assets
of the Fund prohibited by paragraph (a) of this Section 10.
11. Concerning the Custodian.
(a) Standard of Conduct. Notwithstanding any other provision of this
Agreement, neither the Custodian nor its nominee shall be liable for any loss
or damage, including counsel fees, resulting from its action or omission to
act or otherwise, except for any such loss or damage arising out of the
negligence, misfeasance or willful misconduct of the Custodian or any of its
employees, Sub-Custodians or agents. The Custodian may, with respect to
questions of law, apply for and obtain the advice and opinion of counsel to
the Fund or of its own counsel, at the expense of the Fund, and shall be
fully protected with respect to anything done or omitted by it in good faith
in conformity with such advice or opinion. The Custodian shall not be liable
to the Fund for any loss or damage resulting from the use of the Book-Entry
System or the Depository, except to the extent such loss or damage arises by
reason of any negligence, misfeasance or willful misconduct on the part of
the Custodian or any of its employees or agents.
(b) Limit of Duties. Without limiting the generality of the
foregoing, the Custodian shall be under no duty or obligation to inquire
into, and shall not be liable for:
1. The validity of the issue of any Securities purchased by
the Fund, the legality of the purchase thereof, or the propriety of the amount
paid therefor;
2. The legality of the sale of any Securities by the Fund or
the propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of the Fund;
6. The legality of any borrowing for temporary or emergency
administrative purposes.
(c) No Liability Until Receipt. The Custodian shall not be liable
for, or considered to be the Custodian of, any money, whether or not represented
by any check, draft, or other instrument for the payment of money, received
by it on behalf of the Fund until the Custodian actually receives and
collects such money directly or by the final crediting of the account
representing the Fund's interest in the Book-Entry System or the Depository.
(d) Amounts Due from Transfer Agent. The Custodian shall not be
under any duty or obligation to take action to effect collection of any amount
due to the Fund from the Transfer Agent nor to take any action to effect payment
or distribution by the Transfer Agent of any amount paid by the Custodian to
the Transfer Agent in accordance with this Agreement.
(e) Collection Where Payment Refused. The Custodian shall not be
under any duty or obligation to take action to effect collection of any amount,
if the Securities upon which such amount is payable are in default, or if
payment is refused after due demand or presentation, unless and until (a) it
shall be directed to take such action by a Certificate and (b) it shall be
assured to its satisfaction of reimbursement of its costs and expenses in
connection with any such action.
(f) Appointment of Agents and Sub-Custodians. The Custodian may
appoint one or more banking institutions, including but not limited to
banking institutions located in foreign countries, to act as Depository or
Depositories or as Sub-Custodian or as Sub-Custodians of Securities and
monies at any time owned by the Fund. The Custodian shall use reasonable
care in selecting a Depository and/or Sub-Custodian located in a country
other than the United States ("Foreign Sub-Custodian"), which selection shall
be in accordance with the requirements of Rule 17f-5 under the 1940 Act, and
shall oversee the maintenance of any Securities or monies of the Fund by any
Foreign Sub-Custodian. In addition, the Custodian shall hold the Fund
harmless from, and indemnify the Fund against, any loss, action, claim,
demand, expense and proceeding, including counsel fees, that occurs as a
result of the failure of any Foreign Sub-Custodian or Depository to exercise
reasonable care with respect to the safekeeping of Securities and monies of
the Fund. Notwithstanding the generality of the foregoing, however, the
Custodian shall not be liable for any losses resulting from the general risk
of investing or holding Securities and monies in a particular country,
including, but not limited to, losses resulting from nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other similar act or event
beyond the Custodian's control.
(g) No Duty to Ascertain Authority. The Custodian shall not be under
any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund are such as may properly be held by
the Fund under the provisions of the [Articles of Incorporation/Master Trust
Agreement] and the Prospectus.
(h) Reliance on Certificates and Instructions. The Custodian shall be
entitled to rely upon any Certificate, notice or other instrument in writing
received by the Custodian and reasonably believed by the Custodian to be
genuine and to be signed by an officer or Authorized Person of the Fund. The
Custodian shall be entitled to rely upon any Written Instructions or Oral
Instructions actually received by the Custodian pursuant to the applicable
Sections of this Agreement and reasonably believed by the Custodian to be
genuine and to be given by an Authorized Person. The Fund agrees to forward
to the Custodian Written Instructions from an Authorized Person confirming
such Oral Instructions in such manner so that such Written Instructions are
received by the Custodian, whether by hand delivery, telex or otherwise, by
the close of business on the same day that such Oral Instructions are given
to the Custodian. The Fund agrees that the fact that such confirming
instructions are not received by the Custodian shall in no way affect the
validity of the transactions or enforceability of the transactions hereby
authorized by the Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in acting upon Oral Instructions given to the Custodian
hereunder concerning such transactions provided such instructions reasonably
appear to have been received from a duly Authorized Person.
(i) Overdraft Facility and Security for Payment. In the event that the
Custodian is directed by Written Instruction (or Oral Instructions confirmed
in writing in accordance with Section 11(h) hereof) to make any payment or
transfer of monies on behalf of the Fund for which there would be, at the
close of business on the date of such payment or transfer, insufficient
monies held by the Custodian on behalf of the Fund, the Custodian may, in its
sole discretion, provide an overdraft (an "Overdraft") to the Fund in an
amount sufficient to allow the completion of such payment or transfer. Any
Overdraft provided hereunder: (a) shall be payable on the next Business Day,
unless otherwise agreed by the Fund and the Custodian; and (b) shall accrue
interest from the date of the Overdraft to the date of payment in full by the
Fund at a rate agreed upon in writing, from time to time, by the Custodian
and the Fund. The Custodian and the Fund acknowledge that the purpose of
such Overdraft is to temporarily finance the purchase of Securities for
prompt delivery in accordance with the terms hereof, to meet unanticipated
or unusual redemption, to allow the settlement of foreign exchange contracts
or to meet other emergency expenses not reasonably foreseeable by the Fund.
The Custodian shall promptly notify the Fund in writing (an "Overdraft
Notice") of any Overdraft by facsimile transmission or in such other manner
as the Fund and the Custodian may agree in writing. To secure payment of any
Overdraft, the Fund hereby grants to the Custodian a continuing security
interest in and right of setoff against the Securities and cash in the Fund's
account from time to time in the full amount of such Overdraft. Should the
Fund fail to pay promptly any amounts owed hereunder, the Custodian shall be
entitled to use available cash in the Fund's account and to liquidate
Securities in the account as is necessary to meet the Fund's obligations
under the Overdraft. In any such case, and without limiting the foregoing,
the Custodian shall be entitled to take such other actions(s) or exercise
such other options, powers and rights as the Custodian now or hereafter has
as a secured creditor under the Pennsylvania Uniform Commercial Code or any
other applicable law.
(j) Inspection of Books and Records. The books and records of the
Custodian shall be open to inspection and audit at reasonable times by
officers and auditors employed by the Fund and by the appropriate employees
of the Securities and Exchange Commission.
The Custodian shall provide the Fund with any report obtained by
the Custodian on the system of internal accounting control of the Book-Entry
System or the Depository and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from time to time.
12. Term and Termination.
(a) This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in effect thereafter until
such time as this Agreement may be terminated in accordance with the
provisions hereof.
(b) Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than 60 days after the date of receipt
of such notice. In the event such notice is given by the Fund, it shall be
accompanied by a certified vote of the Board of [Directors/Trustees] of the
Fund, electing to terminate this Agreement and designating a successor
custodian or custodians, which shall be a person qualified to so act under
the 1940 Act.
In the event such notice is given by the Custodian, the Fund
shall, on or before the termination date, deliver to the Custodian a certified
vote of the Board of [Directors/Trustees] of the Fund, designating a successor
custodian or custodians. In the absence of such designation by the Fund, the
Custodian may designate a successor custodian, which shall be a person
qualified to so act under the 1940 Act. If the Fund fails to designate a
successor custodian, the Fund shall upon the date specified in the notice of
termination of this Agreement and upon the delivery by the Custodian of all
Securities (other than Securities held in the Book-Entry System which cannot
be delivered to the Fund) and monies then owned by the Fund, be deemed to be
its own custodian and the Custodian shall thereby be relieved of all duties
and responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System which cannot be delivered
to the Fund.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 12, this Agreement shall terminate to the extent specified in such
notice, and the Custodian shall upon receipt of a notice of acceptance by the
successor custodian on that date deliver directly to the successor custodian
all Securities and monies then held by the Custodian on behalf of the Fund,
after deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled.
13. Limitation of Liability.
The Fund and the Custodian agree that the obligations of the Fund
under this Agreement shall not be binding upon any of the Directors,
shareholders, nominees, officers, employees or agents, whether past, present
or future, of the Fund, individually, but are binding only upon the assets
and property of the Fund, as provided in the Articles of Incorporation. The
execution and delivery of this Agreement have been authorized by the
Directors of the Fund, and signed by an authorized officer of the Fund,
acting as such, and neither such authorization by such Directors nor such
execution and delivery by such officer shall be deemed to have been made by
any of them or any shareholder of the Fund individually or to impose any
liability on any of them or any shareholder of the Fund personally, but shall
bind only the assets and property of the Fund as provided in the Articles of
Incorporation.
14. Miscellaneous.
(a) Annexed hereto as Appendix A is a certification signed by the
Secretary of the Fund setting forth the names and the signatures of the
present Authorized Persons. The Fund agrees to furnish to the Custodian a
new certification in similar form in the event that any such present
Authorized Person ceases to be such an Authorized Person or in the event that
other or additional Authorized Persons are elected or appointed. Until such
new certification shall be received, the Custodian shall be fully protected
in acting under the provisions of this Agreement upon Oral Instructions or
signatures of the present Authorized Persons as set forth in the last
delivered certification.
(b) Annexed hereto as Appendix B is a certification signed by the
Secretary of the Fund setting forth the names and the signatures of the
present officers of the Fund. The Fund agrees to furnish to the Custodian
a new certification in similar form in the event any such present officer
ceases to be an officer of the Fund or in the event that other or additional
officers are elected or appointed. Until such new certification shall be
received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon the signature of an officer as set forth
in the last delivered certification.
(c) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently given
if addressed to the Custodian and mailed or delivered to it at its offices
at One Mellon Bank Center, Pittsburgh, PA 15258 or at such other place as
the Custodian may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund, shall be sufficiently given if
addressed to the Fund and mailed or delivered to it at its offices at 200 Park
Avenue, New York, NY 10166 or at such other place as the Fund may from time to
time designate in writing.
(e) This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality as
this Agreement, (i) authorized, or ratified and approved by a vote of the
Board of Directors of the Fund, including a majority of the members of the
Board of Directors of the Fund who are not "interested persons" of the Fund
(as defined in the 1940 Act), or (ii) authorized, or ratified and approved
by such other procedures as may be permitted or required by the 1940 Act.
(f) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund without the
written consent of the Custodian, or by the Custodian without the written
consent of the Fund authorized or approved by a vote of the Board of
Directors of the Fund. Nothing in this Agreement shall give or be construed
to give or confer upon any third party any rights hereunder.
(g) The Fund represents that a copy of the Articles of Incorporation
is on file with the Secretary of the State of Maryland.
(h) This Agreement shall be construed in accordance with the laws of
the Commonwealth of Pennsylvania.
(i) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
(j) This agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective representatives duly authorized as of the
day and year first above written.
PREMIER GNMA FUND, INC.
By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
APPENDIX A
XXXXXXXXXXXXXXXX, the Secretary, of Premier GNMA Fund, a business trust
organized under the laws of the State of Massachusetts (the "Fund"), do hereby
certify that:
The following individuals have been duly authorized as Authorized
Persons to give Oral Instructions and Written Instructions on behalf of
the Fund and the specimen signatures set forth opposite their respective
names are their true and correct signatures:
Name Signature
Thomas Durante
Anna Mancini
Mary Kate Macchia
Paul Goerke
Andrea O'Sullivan
Secretary
Dated:
APPENDIX B
PREMIER GNMA FUND
CUSTODY AGREEMENT
I, _________________, Vice President, and I, ________________,
Secretary of ______________________________, a business trust organized and
existing under the laws of the State of Massachusetts (the "Fund"), do hereby
certify that the only series of shares of the Fund issued and/or
authorized by the Fund as of the date of this Custody Agreement are shares
of Beneficial Interest, $.001 par value.
APPENDIX C
The following are designated publications for purposes of Section 4
(f) 2:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
SCHEDULE A
BOSTON SAFE DEPOSIT AND TRUST COMPANY
CUSTODY FEE SCHEDULE
A. Domestic Safekeeping:
B. PLUS $5/security holding charge per month
C. PLUS Transaction charges:
DTC eligible $
Non-DTC eligible $
Fed Book Entry $
Options $
Futures $
GNMA Paydowns $
Repo - depository $
- non-deposit $
Physical - Govt $
Physical - Corp/Muni $
Commercial Paper $
Euro-CDs (London) $
BOSTON SAFE DEPOSIT AND TRUST COMPANY
GLOBAL CUSTODY FEE SCHEDULE
A. Global Safekeeping:
Group I Assets BP
Group II Assets
First $50 million BP
Next $50 million BP
Next $200 million BP
Excess BP
Group III Assets BP
Group IV Assets BP
Group V Assets BP
Group VI Assets BP
B. PLUS Transaction Charges:
Group I Transactions $
Group II Transactions $
Group III Transactions $
Group IV Transactions $
Group V Transactions $
Group VI Transactions $
* Third Party F/X $
COUNTRY GROUPS
Group I Group II Group III Group IV Group V Group VI
Japan Euroclear Austria Australia Brazil Mexico
Cedel Canada Belgium Denmark Spain
Germany Luxembourg Finland Sweden
Netherlands France Greece
New Zealand Hong Kong Indonesia
Switzerland Ireland Jordan
Italy Philippines
Malaysia Turkey
Norway Venezuela
Pakistan Argentina
Peru
Poland
Portugal
Shanghai
Shenzen
Singapore
Thailand
United Kingdom
Uruguay
SCHEDULE B
The Fund will pay to the Custodian as soon as possible after the end
of each month all out-of-pocket expenses reasonably incurred in connection
with the assets of the Fund.
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the use of our report
dated February 14, 1996, in this Registration Statement (Form N-1A 33-9591)
of Premier GNMA Fund.
ERNST & YOUNG LLP
New York, New York
April 23, 1996
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