File Nos. 33-9591
811-4880
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. 18 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 18 [X]
(Check appropriate box or boxes.)
DREYFUS PREMIER GNMA FUND
(formerly, 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, 1997 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, 1996 was filed on February 27,
1997.
DREYFUS 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 7, 28
5 Management of the Fund 8
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 28
7 Purchase of Securities Being Offered 9
8 Redemption or Repurchase 19
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-23
13 Investment Objectives and Policies B-2
14 Management of the Fund B-5
15 Control Persons and Principal B-9
Holders of Securities
16 Investment Advisory and Other B-9
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS 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-20
18 Capital Stock and Other Securities B-23
19 Purchase, Redemption and Pricing B-11, B-14
of Securities Being Offered
20 Tax Status *
21 Underwriters B-11
22 Calculations of Performance Data B-20
23 Financial Statements B-24
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-4
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-9
30 Location of Accounts and Records C-12
31 Management Services C-12
32 Undertakings C-12
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS PREMIER GNMA FUND
PROSPECTUS MAY 1, 1997
Registration Mark
Dreyfus Premier GNMA Fund (the "Fund") is an open-end,
diversified, management investment company, known as a mutual fund.
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 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, 1997,
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. The
Securities and Exchange Commission maintains a Web site
(http://www.sec.gov) that contains the Statement of Additional
Information, material incorporated by reference, and other information
regarding the Fund. For a free copy of the Statement of Additional
Information, 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.
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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.
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TABLE OF CONTENTS
Fee Table....................................... 3
Condensed Financial Information................. 4
Alternative Purchase Methods.................... 5
Description of the Fund......................... 7
Management of the Fund.......................... 8
How to Buy Shares............................... 9
Shareholder Services............................ 15
How to Redeem Shares............................ 19
Distribution Plan and Shareholder Services Plan. 24
Dividends, Distributions and Taxes.............. 25
Performance Information......................... 27
General Information............................. 28
Appendix........................................ 30
Page 2
<TABLE>
<CAPTION>
FEE TABLE
CLASS A CLASS B CLASS C
<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* 4.00% 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 ......................... .49% .50% .49%
Total Fund Operating Expenses........... 1.04% 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 $56/$16** $28/$18**
3 Years.................................. $77 $79/$49** $56
5 Years.................................. $100 $104/$84** $97
10 Years................................. $166 $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>
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The amounts listed in the example should not be considered as
representative 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%.
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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," "How
to Redeem Shares," and "Distribution Plan and Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table 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 data for a
share of beneficial interest outstanding, total investment return, ratios
to average net assets and other supplemental data for each year
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
Class A Shares
-----------------------------------------------------------------------------------------------------------
Year Ended DECEMBER 31,
-----------------------------------------------------------------------------------------------------------
PER SHARE DATA: 1987(1) 1988 1989 1990 1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <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 $14.66
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Investment Operations:
Investment income-net...... 1.28 1.35 1.36 1.32 1.20 1.10 .95 .88 .91 .88
Net realized and unrealized
gain (loss) on investments (.63) .40 .31 .10 .92 (.15) .24 (1.30) 1.12 (.29)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations............ .65 1.75 1.67 1.42 2.12 .95 1.19 (.42) 2.03 .59
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment
income-net... (1.28) (1.35) (1.36) (1.32) (1.20) (1.10) (.95) (.88) (.91) (.88)
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) (.88)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value,
end of year......... $13.87 $14.01 $14.28 $14.38 $15.30 $14.90 $14.84 $13.54 $14.66 $14.37
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(2) 5.14%(3) 12.96% 12.51% 10.57% 15.43% 6.50% 8.20% (2.91%) 15.43% 4.25%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets.... -- -- -- .08% .64% .71% .78% .94% 1.03% 1.04%
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% 6.17%
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% 267.22%
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 $111,267
(1)From January 29, 1987 (commencement of operations) to December 31, 1987.
(2)Exclusive of sales load.
(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 1996 1995(2) 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $14.98 $14.84 $13.55 $14.67 $14.48 $14.67
------- ------- ------- ------- ------- -------
Investment Operations:
Investment income-net........ .83 .80 .84 .81 .16 .77
Net realized and unrealized gain (loss)
on investments............... .16 (1.29) 1.12 (.29) .19 (.29)
------- ------- ------- ------- ------- -------
Total from Investment Operations .99 (.49) 1.96 .52 .35 .48
------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment income-net (.83) (.80) (.84) (.81) (.16) (.77)
Dividends from net realized gain
on investments............... (.30) -- -- -- -- --
------- ------- ------- ------- ------- -------
Total Distributions.......... (1.13) (.80) (.84) (.81) (.16) (.77)
------- ------- ------- ------- ------- -------
Net Asset Value, end of year. $14.84 $13.55 $14.67 $14.38 $14.67 $14.38
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(3)..... 7.03%(4) (3.39)% 14.83% 3.71% 11.47%(4) 3.44%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.30%(4) 1.51% 1.55% 1.55% 1.79%(4) 1.79%
Ratio of net investment income
to average net assets........ 5.38%(4) 5.61% 5.89% 5.65% 5.25%(4) 5.42%
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% 267.22% 349.24% 267.22%
Net Assets, end of year (000's omitted) $29,648 $35,710 $41,934 $39,833 $1 $17
(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.
</TABLE>
Further information about the Fund's performance is contained
in the Fund's 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."
Page 5
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 4% contingent deferred sales charge ("CDSC"), which
is assessed if you redeem Class B shares within six years of 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 .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,
if any, 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 A and
Class B shares may be more attractive than Class C shares to investors
with long term investment outlooks.
Page 6
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
$100,000 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").
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. 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. 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.
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 mortgage-related
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
Page 7
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. During periods of rapidly rising interest
rates, prepayments of mortgage-related securities may occur at slower than
expected rates. Slower prepayments effectively may lengthen a
mortgage-related security's expected maturity which generally would cause
the value of such security to fluctuate more widely in response to changes
in interest rates. Were the prepayments on the Fund's mortgage-related
securities to decrease broadly, the Fund's effective duration, and thus
sensitivity to interest rate fluctuations, would increase.
USE OF DERIVATIVES -- The Fund may invest in derivatives
("Derivatives"). These are financial instruments which derive their
performance, 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 market
conditions, they can increase the volatility of the Fund's net asset
value, 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. If, however, 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
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 31, 1997, The Dreyfus
Corporation managed or administered approximately $82 billion in assets
for approximately 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 Michael Hoeh.
He has held that position since March 1997 and has been employed by The
Dreyfus Corporation since October 1996. Prior to joining The Dreyfus
Corporation, Mr. Hoeh was Vice President of Portfolio Management at Arm
Capital Advisors, Inc. From 1991 to 1994, Mr. Hoeh was Vice President in
the Risk Management division of Blackrock Financial Management. The
Fund's other portfolio managers are identified in the Statement of
Additional Information. The Dreyfus Corporation also provides research
services for the Fund
Page 8
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., AFCO Credit 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, 1996, including approximately $86 billion in
proprietary mutual fund assets. As of December 31, 1996, Mellon, through
various subsidiaries, provided non-investment services, such as custodial
or administration services, for more than $1.046 trillion in assets
including approximately $57 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 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, 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 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 60 State Street, 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
Page 9
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. 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
"The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments which are
mailed should be sent to Dreyfus Premier GNMA Fund, P.O. Box 6587,
Providence, Rhode Island 02940-6587. If you are opening a new account,
please enclose 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. For
Dreyfus retirement plan accounts, payments which are mailed 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 York,
together with the Fund's DDA #8900119322/Dreyfus Premier GNMA Fund, 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, and must indicate the Class of shares being
purchased. If your initial purchase of Fund shares is by wire, please
call 1-800-554-4611 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 infor-
Page 10
mation 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 of each Class 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 orders so
that they will be received by the Distributor or its designee before the
close of its business day. For certain institutions that have entered
into agreements with the Distributor,
Page 11
payment for the purchase of Fund shares may be transmitted, and must be
by the Transfer Agent, within three business days after the order is
placed. If such payment is not received within three business days after
the order is placed, the order may be canceled and the institution could
be held liable for resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the
amount invested through such dealers in Fund shares at net asset value by
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 $1,000,000 ("Eligible Benefit Plans"). Shares of funds
in the Dreyfus Family of Funds then held by Eligible Benefit Plans will
be aggregated to determine the fee payable. The Distributor 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.
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 one year of
purchase. The Distributor may pay Service Agents an amount up to 1% of
the net asset value of Class A shares purchased by their clients that are
subject to a CDSC. 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 them-
Page 12
selves 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 are offered at net asset value without a sales
load to employees participating in Eligible Benefit Plans. 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
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 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
Page 13
Corporation which are sold with a sales load, such as the Fund. 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 Dreyfus
Premier Family of Funds, shares of certain other funds advised by The
Dreyfus Corporation which are sold with a sales load 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 calling 1-800-554-4611 or,
if you are calling from overseas, call 516-794-5452.
Page 14
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 Class A, Class B or Class C shares of the Fund, 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 also are eligible for the Auto-Exchange
Privilege, Dividend Sweep and the Automatic Withdrawal Plan. To use this
service, you should consult your Service Agent or call 1-800-554-4611 to
determine if it is available and whether any conditions are imposed on
its use.
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 1-800-554-4611.
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
Exchange Privilege may be established for an existing account by written
request signed by all shareholders on the account, by a separate signed
Shareholder Services Form, available by calling 1-800-554-4611, or by
oral request from any of the authorized signatories on the account by
calling 1-800-554-4611. If you have established the Telephone Exchange
Privilege, you may telephone exchange instructions (including over The
Dreyfus TouchRegistration Mark automated telephone system) by calling
1-800-554-4611. 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 shareholder services and privileges, as applicable and
where available, will be automatically carried over to the fund into
which the exchange is
Page 15
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. 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 administrative 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 Dreyfus
Premier Family of Funds or certain other funds in the Dreyfus Family of
Funds of which you are a shareholder. 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 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 shares
at 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. 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 Dreyfus 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
Page 16
more information concerning this Privilege and the funds in the Dreyfus
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 1-800-554-4611. You may cancel your participation in this
Privilege or change the amount of purchase at any time by mailing written
notification to Dreyfus 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 1-800-554-4611. 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 Dreyfus 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 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"
Page 17
in the Statement of Additional Information. Dividend ACH permits 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 1-800-554-4611.
You may cancel these privileges by mailing written notification to
Dreyfus 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
1-800-554-4611. 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.
No CDSC with respect to Class B shares will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the
amounts withdrawn under the plan do not exceed on an annual basis 12% of
the account value at the time the shareholder elects to participate in
the Automatic Withdrawal Plan. Withdrawals with respect to Class B shares
under the Automatic Withdrawal Plan that exceed on an annual basis 12% of
the value of the shareholder's account will be subject to a CDSC on the
amounts exceeding 12% of the initial account value. Class C shares, and
Class A Shares to which a CDSC applies, that are 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; or 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 1-800-554-4611, 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
Page 18
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 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 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
BuilderRegistration Mark 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,
Page 19
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 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 for
Class B shares, except for Class B shares purchased by shareholders who
beneficially owned Class B shares on November 30, 1996:
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
----------------- ------------------------
First......................... 4.00
Second........................ 4.00
Third......................... 3.00
Fourth........................ 3.00
Fifth......................... 2.00
Sixth......................... 1.00
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The following table sets forth the rates of the CDSC for
Class B shares purchased by shareholders who beneficially owned Class B
shares on November 30, 1996:
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
----------------- ----------------------
First......................... 3.00
Second........................ 3.00
Third......................... 2.00
Fourth........................ 2.00
Fifth......................... 1.00
Sixth......................... 0.00
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 six years
(five years for shareholders beneficially owning Class B shares on
November 30, 1996): then of amounts representing the cost of shares
purchased six years (five years for shareholders beneficially owning
Class B shares on November 30, 1996) prior to the redemption; and
finally, of amounts representing the cost of shares held for the
longest period of time within the applicable six-year period (five-year
period for shareholders beneficially owning Class B shares on
November 30, 1996).
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 4%
(the applicable rate in the second year after purchase) for a total CDSC
of $9.60.
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 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, (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 and (e) redemptions
pursuant to the Automatic Withdrawal Plan, as described in the Fund's
Prospectus. If the Fund's Board determines to discontinue
Page 21
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 termination 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 Fund 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. 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 held under Keogh Plans, IRAs or other
retirement plans, and 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 1-800-554-4611. 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 TELETRANSFER
redemption privilege or telephone exchange privilege (which is granted
automatically unless you refuse it), you authorize the Transfer Agent to
act on telephone instructions (including over The Dreyfus TouchRegistration
Mark automated telephone system) 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.
Page 22
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 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 Dreyfus 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. If you hold shares in a Dreyfus-sponsored IRA account, you may be
permitted to make withdrawals from your IRA account using checks
furnished to you by The Dreyfus Trust Company. 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
Page 23
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 TELETRANSFER 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 calling 1-800-554-4611 or,
if you are calling from overseas, call 516-794-5452.
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
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 -- Upon written request, you may reinvest up
to the number of Class A or Class B shares you have redeemed, within 45
days of redemption, at the then-prevailing net asset value without a
sales load, or reinstate your account for the purpose of exercising Fund
Exchanges. Upon reinvestment, with respect to Class B shares, or Class A
shares if such shares were subject to a CDSC, the shareholder's account
will be credited with an amount equal to the CDSC previously paid upon
redemption of the Class A or Class B shares reinvested. 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.
Page 24
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 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 without a sales load. 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."
Page 25
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.
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 your Class A 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 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 share-
Page 26
holder'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, 1996 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
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 the Fund has operated.
Page 27
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. Before
April 1, 1997, the Fund's name was Premier GNMA Fund. 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.
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
Page 28
in which the Fund itself would be unable to meet its obligations, a
possibility which management believes is remote. Upon payment of any
liability incurred by the Fund, the shareholder paying such liability will
be entitled to reimbursement 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 29
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
permissible liquid assets 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 or sell Ginnie Maes and
other mortgage-related securities on a forward commitment or when-issued
basis or delayed delivery basis, which means that delivery and payment
take place a number of days after the date of the commitment to purchase
or sell the securities at a predetermined price and/or yield. Typically,
no interest accrues to the purchaser until the security is delivered.
When purchasing a security on a forward commitment basis, the Fund
assumes the rights and risks of ownership of the security, including the
risk of price and yield fluctuations, and takes such fluctuations into
account when determining its net asset value. Because the Fund is not
required to pay for these securities until the delivery date, these risks
are in addition to the risks associated with the Fund's other
investments. If the Fund is fully or almost fully invested when forward
commitment purchases are outstanding, such purchases may result in a form
of leverage. The Fund intends to engage in forward commitments to
increase its portfolio's financial exposure to the types of securities in
which it invests. Leveraging the portfolio in this manner will increase
the Fund's exposure to changes in interest rates and will increase the
volatility of its returns. A segregated account of the Fund consisting of
permissible liquid assets at least equal at all times to the amount of
the Fund's purchase commitments will be established and maintained at the
Fund's custodian bank. At no time will a Fund have more than 331\3% of
its assets committed to purchase securities on a forward commitment
basis.
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.
Page 30
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, or enter into, 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.
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.
Page 31
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 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.
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of
its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal
or contractual restrictions on resale, and certain mortgage-related
securities, such as collateralized mortgage obligations and stripped
mortgage-backed securities. As to these securities, the Fund is subject
to a risk that should the Fund desire to sell them when a ready buyer is
not available at a price the Fund deems representative of their value,
the value of the Fund's net assets could be adversely affected.
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.
Copy Rights1997 Dreyfus Service Corporation 027p050197
DREYFUS PREMIER GNMA FUND
CLASS A, CLASS B AND CLASS C SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1997
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Premier GNMA Fund (the "Fund"), dated May 1, 1997, 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-9
Purchase of Shares B-11
Distribution Plan and Shareholder Services Plan B-13
Redemption of Shares B-14
Shareholder Services B-16
Determination of Net Asset Value B-19
Dividends, Distributions and Taxes B-20
Portfolio Transactions B-20
Performance Information B-21
Information About the Fund B-23
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors B-23
Financial Statements B-24
Report of Independent Auditors B-33
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."
Portfolio Securities
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 investments, 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 permissible liquid assets 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, or enter into, 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 members 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 331/3% 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.
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,
Cognizant Corporation, a service provider of marketing information and
information technology, The Dun & Bradstreet Corporation, MCI
Communications Corporation, Mutual of America Life Insurance Company and
TLC Beatrice International Holdings, Inc. He is 63 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 54 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. He is also
Chairman of the Board of Noel Group, Inc., a venture capital company;
and a director of The Muscular Dystrophy Association, HealthPlan
Services Corporation, Belding Heminway, Inc., a manufacturer and
marketer of industrial threads and buttons, Curtis Industries, Inc., a
national distributor of security products, chemicals, and automotive and
other hardware, and Staffing Resources, Inc. For more than five years
prior to January 1995, 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. Mr. DiMartino is 53 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 and has published many articles on subjects in
the field of psychoanalysis. He is 64 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 and BEI Golembe, Inc. until 1989 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 77 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 54 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, 1996 were as follows:
Total
Compensation from
Aggregate Fund and Fund
Name of Board Compensation from Complex Paid to
Member Fund* Board Members
_____________ ________________ ________________
Clifford L. Alexander, Jr. $5,500 $ 82,436 (17)
Peggy C. Davis $5,500 $ 73,084 (15)
Joseph S. DiMartino $6,790 $517,075 (93)
Ernest Kafka $5,500 $ 69,584 (15)
Saul B. Klaman $5,500 $ 73,584 (15)
Nathan Leventhal $5,500 $ 71,084 (15)
___________________
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $854 for all Board members as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director 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. She is 39 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. He
is 32 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by the Manager. From March 1994 to November
1995, he was Vice President and Division Manager for First Data Investor
Services Group. From 1989 to 1994, he was Vice President, Assistant
Treasurer and Tax Director - Mutual Funds of The Boston Company, Inc.
He is 40 years old.
JOSEPH S. TOWER, III, Vice President and 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 34 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July 1994, she was
an Assistant Vice President and Client Manager for The Boston Company,
Inc. She is 32 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Director of
Strategic Client Initiatives for Funds Distributor, Inc. and an officer
of other investment companies advised or administered by the Manager.
From December 1989 through November 1996, he was employed by GE
Investments where he held various financial, business development and
compliance positions. He also served as Treasurer of the GE Funds and
as Director of the GE Investment Services. He is 35 years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor since September 1995 and an officer of other
investment companies advised or administered by the Manager. She is 26
years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston Company,
Inc. He is 27 years old.
MARK A. KARPE, Vice President and Assistant Secretary. Senior Paralegal of
the Distributor and an officer of other investment companies advised or
administered by the Manager. Prior to August 1993, he was employed by
an Associate Examiner at the National Association of Securities Dealers,
Inc. He 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 2, 1997.
The following entities owned of record 5% or more of the Fund's shares
outstanding as of April 2, 1997: Class A - BHC Securities, 2005 Market
Street, Philadelphia, PA 19103-7042 --7.4%: Class C - Premier Mutual Fund
Services, Inc., One Exchange Place, Boston, MA 02129-2809 -- 100%. 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. Shareholders of the Fund
approved the Agreement on August 3, 1994. The Agreement 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 17, 1996. 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 outstanding 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: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, 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; William T. Sandalls, Jr., Senior
Vice President and Chief Financial Officer; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President-Corporate
Communications; Mary Beth Leibig, Vice President-Human Resources; Jeffrey N.
Nachman, Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice
President-Information Services; and Mandell L. Berman, Burton C. Borgelt and
Frank V. Cahouet, 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
Michael Hoeh, Roger King, Kevin McClintock, Matt Olson 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 and 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: 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 attributable 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, Class B
and Class C shares are subject to an annual distribution fee and shares of
each Class are subject to an annual service 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, 1994, 1995 and 1996, the management fees payable
amounted to $1,124,608, $972,298 and $896,510, respectively. The management
fee payable for fiscal 1994 was reduced by $120,163 pursuant to an
undertaking in effect, resulting in a net fee paid to the Manager of
$1,004,445 in fiscal 1994.
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. No such deduction or payment was required for the fiscal year ended
December 31, 1996.
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 Dreyfus 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 to register as dealers
pursuant to state law.
For the fiscal year ended December 31, 1996, the Distributor retained
$3,787 from sales loads on Class A shares and $111,559 and $0, respectively,
from contingent deferred sales charges ("CDSC") on Class B and Class C
shares. For the fiscal year ended December 31, 1995, the Distributor
retained $11,152 from sales loads on Class A shares and $118,931 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. For the period August 24, 1994
through December 31, 1994, the Distributor retained $4,780 from 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, Dreyfus Service
Corporation, as the Fund's distributor during such periods, retained $23,891
from sales loads on Class A shares, and $64,196 from CDSCs on Class B 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 Fund's 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, 1996.
Class A Shares:
Net Asset Value per Share.......................$14.37
Per Share Sales Charge - 4.5% of offering price
(4.7% of net asset value per share)........ .68
Per Share Offering Price to the Public..........$15.05
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 only 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 the relevant Class of shares. The Fund's Board believes that
there is a reasonable likelihood that the Distribution Plan will benefit the
Fund and the 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 the
relevant Class of shares may bear for distribution pursuant to the
Distribution Plan without such shareholders' approval 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
17, 1996. As to each 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 the
outstanding shares of such Class.
For the fiscal year ended December 31, 1996, the Fund paid the
Distributor $203,650 with respect to Class B, and $107 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 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 17, 1996. As to
each Class, 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, 1996, the Fund paid the
Distributor $305,644 with respect to Class A, $101,825 with respect to Class
B and $35 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") with respect to Class A
shares 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 pre
sented 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 TeleTransfer transaction
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 (which may
include non-marketable 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 might 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 other 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 (including over The Dreyfus Touchr
automated telephone system) 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 $2,500 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,
shares of the same Class of another fund in the the Dreyfus Premier Family of
Funds or of certain funds in 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 1-800-554-4611. 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 de
pleted. 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 automatically
their dividends or dividends and capital gain distributions, if any, from the
Fund in shares of the same Class of another fund in the Dreyfus Premier
Family of Funds or of certain funds in 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.
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, 1996 was 5.43%
for Class A, 5.16% for Class B and 4.97% 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 9.923 year periods
ended December 31, 1995 for Class A was (0.44%), 5.16% and 8.20%, respec
tively. The average annual total return for Class B for the 1 and 3.962 year
periods ended December 31, 1996 was 0.21% and 4.70%, respectively. The
average annual total return for the 1 and 1.211 year periods ended December
31, 1996 for Class C was 2.46% and 4.89%, respectively. 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, 1996 for Class A was 118.50%. Based on net
asset value per share, the total return for Class A was 128.74% 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,
1996 was 19.95%. Without giving effect to the applicable CDSC, total return
for Class B was 22.83% 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, 1996 was 5.95%. 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. For the fiscal year ended December 31, 1996, the Fund paid
the Transfer Agent $108,684.
Mellon Bank, N.A., (the "Custodian"), the Manager's parent, One Mellon
Bank Center, Pennsylvania 15258 acts as custodian of the Fund's investments.
Under a custody agreement with the Fund, the Custodian holds the Fund's
securities and keeps all necessary accounts and records. For its custody
services, the Custodian receives a monthly fee based on the market value of
the Fund's assets held in custody and receives certain securities
transactions charges. For the period May 29, 1996 (effective date of custody
agreement) through December 31, 1996, the Fund paid the Custodian $27,242.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, 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, 1996
Principal
Bonds and Notes-126.2% Amount Value
__________ ___________
<S> <C> <C>
Mortgage-Backed Securities-106.4%
Government National Mortgage Association I:
6 1/2% (a)................................................................ $ 9,500,000 $ 9,033,835
7 1/2% (a)................................................................ 9,500,000 9,479,195
7 1/2%, 8/15/2023 (b)..................................................... 7,521,582 7,566,185
7 1/2%, 3/15/2002-7/15/2023............................................... 15,638,835 15,824,909
8%, 2/15/2025 (b)......................................................... 2,366,460 2,424,864
8%, 4/15/2017-1/15/2022................................................... 1,343,653 1,383,752
8 1/2%, 10/15/2017-12/15/2022............................................. 5,962,436 6,216,823
9%, 4/15/2016-12/15/2022.................................................. 8,049,719 8,565,210
9 1/2%, 10/15/2016-1/15/2025.............................................. 8,952,688 9,731,310
10%, 10/15/2016-10/15/2020................................................ 1,040,354 1,147,313
10 1/2%, 2/15/2016-8/15/2019.............................................. 409,866 455,845
11%, 2/15/2010-8/15/2019.................................................. 2,275,636 2,542,836
11 1/2%, 1/15/2013........................................................ 111,238 122,466
____________
74,494,543
____________
Government National Mortgage Association II:
5% (a,c).................................................................. 3,500,000 3,412,500
5 1/2% (a,c).............................................................. 33,265,002 32,946,776
9%, 7/20/2025 (b)......................................................... 7,993,981 8,376,174
11%, 12/20/2013-10/20/2015................................................ 1,918,359 2,099,394
____________
46,834,844
____________
Government National Mortgage Association I,
Project Loan:
6 3/4% (a)................................................................ 4,210,000 4,075,785
7%, 1/15/2036 (b)......................................................... 2,617,122 2,550,856
7%, 4/15/2021............................................................. 990,305 964,924
7 1/4% (a)................................................................ 9,820,000 9,718,657
7 1/2% (a)................................................................ 3,481,900 3,504,741
7 1/2%, 10/15/2030-12/15/2031............................................. 13,533,903 13,585,957
9 1/4%, 10/15/2023........................................................ 4,779,522 5,109,596
____________
39,510,516
____________
Total Mortgage-Backed Securities............................................ 160,839,903
============
U.S. Treasury Notes-19.8%
5 3/4%, 12/31/1998 (b).................................................... 14,000,000 13,968,282
6 1/8%, 12/31/2001........................................................ 16,000,000 15,942,501
____________
Total U.S. Treasury Notes................................................... 29,910,783
============
TOTAL BONDS AND NOTES
(cost $189,735,431)....................................................... $190,750,686
============
PREMIER GNMA FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Short-Term Investments-21.8% Amount Value
____________ ____________
U.S. Treasury Bills:
4.98%, 3/6/1997 (b)....................................................... $ 31,953,000 $ 31,671,175
5.30%, 3/13/1997 (b)...................................................... 1,213,000 1,201,125
____________
TOTAL SHORT-TERM INVESTMENTS
(cost $32,872,300)........................................................ $ 32,872,300
============
TOTAL INVESTMENTS
(cost $222,607,731)....................................................... 148.0% $223,622,986
====== ============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (48.0%) $ (72,505,823)
====== ============
NET ASSETS.................................................................. 100.0% $151,117,163
====== ============
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.
(c) Adjustable rate mortgage-interest rate subject to change
periodically.
See notes to financial statements.
PREMIER GNMA FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
Cost Value
____________ ____________
ASSETS: Investments in securities-See Statement of Investments $222,607,731 $223,622,986
Cash....................................... 232,974
Receivable for investment securities sold.. 33,912,403
Interest receivable........................ 887,145
Receivable for shares of Beneficial Interest subscribed 14,037
Prepaid expenses........................... 35,325
____________
258,704,870
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 101,239
Due to Distributor......................... 39,984
Payable for investment securities purchased 106,559,427
Payable for shares of Beneficial Interest redeemed 788,071
Accrued expenses........................... 98,986
____________
107,587,707
____________
NET ASSETS.................................................................. $151,117,163
============
REPRESENTED BY: Paid-in capital............................ $157,542,138
Accumulated net realized gain (loss) on investments (7,440,230)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4...................... 1,015,255
____________
NET ASSETS.................................................................. $151,117,163
============
NET ASSET VALUE PER SHARE
_________________________
Class A Class B Class C
____________ ___________ _____________
Net Assets.................................................. $111,267,360 $39,833,121 $16,682
Shares Outstanding.......................................... 7,742,344 2,769,266 1,160
NET ASSET VALUE PER SHARE................................... $14.37 $14.38 $14.38
======== ====== ======
See notes to financial statements.
PREMIER GNMA FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME
INCOME Interest Income............................ $11,741,130
EXPENSES: Management fee-Note 3(a)................... $ 896,510
Shareholder servicing costs-Note 3(c)...... 564,661
Distribution fees-Note 3(b)................ 203,757
Professional fees.......................... 53,041
Custodian fees-Note 3(c)................... 51,172
Registration fees.......................... 48,775
Trustees' fees and expenses-Note 3(d)...... 35,291
Prospectus and shareholders' reports....... 16,290
Miscellaneous.............................. 31,301
____________
Total Expenses......................... 1,900,798
____________
INVESTMENT INCOME-NET....................................................... 9,840,332
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 1,437,681
Net unrealized appreciation (depreciation) on investments (5,001,934)
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (3,564,253)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 6,276,079
============
See notes to financial statements.
PREMIER GNMA FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1996 December 31, 1995
_____________________ _____________________
OPERATIONS:
Investment income-net............................................... $ 9,840,332 $ 11,179,371
Net realized gain (loss) on investments............................. 1,437,681 6,055,099
Net unrealized appreciation (depreciation) on investments........... (5,001,934) 8,010,015
_____________________ _____________________
Net Increase (Decrease) in Net Assets Resulting from Operations 6,276,079 25,244,485
_____________________ _____________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares.................................................... (7,540,292) (8,886,343)
Class B shares.................................................... (2,299,266) (2,293,017)
Class C shares.................................................... (774) (11)
_____________________ _____________________
Total Dividends............................................... (9,840,332) (11,179,371)
_____________________ _____________________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.................................................... 14,387,058 16,093,996
Class B shares.................................................... 4,915,210 8,057,178
Class C shares.................................................... 16,094 1,000
Dividends reinvested:
Class A shares.................................................... 5,148,131 6,027,082
Class B shares.................................................... 1,540,231 1,439,805
Class C shares.................................................... 774 11
Cost of shares redeemed:
Class A shares.................................................... (40,109,763) (40,036,785)
Class B shares.................................................... (7,695,736) (6,333,160)
Class C shares.................................................... (1,004) __
_____________________ _____________________
Increase (Decrease) in Net Assets from Beneficial
Interest Transactions (21,799,005) (14,750,873)
_____________________ _____________________
Total Increase (Decrease) in Net Assets..................... (25,363,258) (685,759)
NET ASSETS:
Beginning of Period................................................. 176,480,421 177,166,180
_____________________ _____________________
End of Period....................................................... $151,117,163 $176,480,421
==================== ======================
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER GNMA FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
_____________________________________________
Year Ended Year Ended
December 31, 1996 December 31, 1995
___________________ ___________________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold.................................................... 1,005,176 1,144,697
Shares issued for dividends reinvested......................... 359,656 424,403
Shares redeemed................................................ (2,801,148) (2,840,710)
_________________ __________________
Net Increase (Decrease) in Shares Outstanding (1,436,316) (1,271,610)
================= ==================
Class B
________
Shares sold.................................................... 340,609 567,691
Shares issued for dividends reinvested......................... 107,520 101,147
Shares redeemed................................................ (537,054) (446,457)
_________________ __________________
Net Increase (Decrease) in Shares Outstanding (88,925) 222,381
================= ==================
Class C*
________
Shares sold.................................................... 1,107 69
Shares issued for dividends reinvested......................... 54 1
Shares redeemed................................................ (71) __
_________________ __________________
Net Increase (Decrease) in Shares Outstanding 1,090 70
================= ==================
*From October 16, 1995 (commencement of initial offering) to December 31,
1995.
</TABLE>
See notes to financial statements.
PREMIER GNMA FUND
FINANCIAL HIGHLIGHTS
Reference is made to pages 4 and 5 of the Fund's Prospectus
dated May 1, 1997.
See notes to financial statements.
PREMIER GNMA FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier GNMA Fund (the "Fund") is registered under the Investment Company
Act of 1940 ("Act") as a diversified open-end management investment company.
The Fund's investment objective is to provide investors 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. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. ("Mellon").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an
unlimited number of $.001 par value shares in the following classes of
shares: Class A, Class B and Class C. Class A shares are subject to a sales
charge imposed at the time of purchase, Class B shares are subject to a
contingent deferred sales charge imposed at the time of redemption on
redemptions made within 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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding 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.
The Fund has an unused capital loss carryover of approximately $7,445,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1996. If not
applied, the carryover expires in fiscal 2002.
PREMIER GNMA FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ended December 31, 1996, the Fund did not
borrow under the line of credit.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .55 of 1% of the value
of the Fund's average daily net assets and is payable monthly.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Fund pays the Distributor for distributing the Fund's Class B and
Class C shares at an annual rate of .50 of 1% of the value of the average
daily net assets of Class B shares and .75 of 1% of the value of the average
daily net assets of Class C shares. During the period ended December 31,
1996, $203,650 was charged to the Fund for the Class B shares and $107 was
charged to the Fund for the Class C shares.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A, Class B and Class C shares for the provision of certain services.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents (a securities dealer, financial institution or other industry
professional) in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the period ended December 31,
1996, $305,644, $101,825 and $35 were charged to Class A, B and C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $108,684 during the period ended December 31, 1996.
Effective May 29, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. During the period ended
December 31, 1996, $27,242 was charged to Mellon pursuant to the custody
agreement.
(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 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the period
ended December 31, 1996, amounted to $445,918,587 and $414,312,666,
respectively.
At December 31, 1996, accumulated net unrealized appreciation on
investments was $1,015,255, consisting of $1,865,966 gross unrealized
appreciation and $850,711 gross unrealized depreciation.
At December 31, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER 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,
1996, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included verification by
examination of securities held by the custodian as of December 31, 1996 and
confirmation of securities not held by the custodian by correspondence with
others. 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, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
[Ernst & Young LLP signature logo]
New York, New York
February 7, 1997
DREYFUS 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 9 years in the period ended December 31, 1996.
Included in Part B of the Registration Statement:
Statement of Investments-- December 31, 1996.
Statement of Assets and Liabilities--December 31, 1996.
Statement of Operations-- year ended December 31, 1996.
Statement of Changes in Net Assets--for each of the years
ended December 31, 1995 and 1996.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors, dated
February 7, 1997.
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)(a) 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.
(1)(b) Amendment to Agreement and Declaration of Trust.
(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) Form of Custody Agreement with Mellon Bank, N.A. is incorporated by
reference to Exhibit 8(b) of Post-Effective Amendment No. 16 to the
Registration Statement on Form N-1A, filed on April 24, 1996.
(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.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(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 2, 1997
______________ _____________________________
Beneficial Interest
(Par value $.001)
Class A 3,700
Class B 1,663
Class C 1
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: 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.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
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
W. KEITH SMITH Chairman and Chief Executive Officer:
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***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director 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:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
World Balanced Fund++++;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****
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*;
Dreyfus America Fund+++;
World Balanced Fund++++;
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.
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*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
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
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
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 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 69, Route 'd'Esch,
L-1470 Luxembourg.
++++ The address of the business so indicated is 69, Route 'd'Esch,
L-2953 Luxembourg.
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 Funds, 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 Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Premier California Municipal Bond Fund
63) Dreyfus Premier Equity Funds, Inc.
64) Dreyfus Premier Global Investing, Inc.
65) Dreyfus Premier GNMA Fund
66) Dreyfus Premier Growth Fund, Inc.
67) Dreyfus Premier Insured Municipal Bond Fund
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Fund
72) Dreyfus S&P 500 Index Fund
73) Dreyfus Short-Intermediate Government Fund
74) Dreyfus Short-Intermediate Municipal Bond Fund
75) The Dreyfus Socially Responsible Growth Fund, Inc.
76) Dreyfus Stock Index Fund, Inc.
77) Dreyfus Tax Exempt Cash Management
78) The Dreyfus Third Century Fund, Inc.
79) Dreyfus Treasury Cash Management
80) Dreyfus Treasury Prime Cash Management
81) Dreyfus Variable Investment Fund
82) Dreyfus Worldwide Dollar Money Market Fund, Inc.
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market 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.
One Mellon Bank Center
Pittsburgh, Pennsylvania 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 Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares 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 29th day of April, 1997.
DREYFUS 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 4/29/97
___________________________ Officer)
Marie E. Connolly
/s/Joseph F. Tower, III* Assistant Treasurer (Principal 4/29/97
___________________________ Accounting and Financial Officer)
Joseph F. Tower, III
/s/Clifford L. Alexander, Jr.* Trustee 4/29/97
___________________________
Clifford L. Alexander, Jr.
/s/Peggy C. Davis* Trustee 4/29/97
____________________________
Peggy C. Davis
/s/Joseph S. DiMartino* Trustee 4/29/97
____________________________
Joseph S. DiMartino
/s/Ernst Kafka* Trustee 4/29/97
____________________________
Ernst Kafka
/s/Saul B. Klaman* Trustee 4/29/97
____________________________
Saul B. Klaman
/s/Nathan Leventhal* Trustee 4/29/97
____________________________
Nathan Leventhal
*BY: /s/
----------------------
Elizabeth A. Keeley,
Attorney-in-Fact
INDEX OF EXHIBITS
ITEM
(1)(b) Amendment to Agreement and Declaration of Trust
(11) Consent of Independent Auditors
(17) Financial Data Schedule
(24)(b) Power of Attorney
Certificate of Assistant Secretary
PREMIER GNMA FUND
ARTICLES OF AMENDMENT
Premier GNMA Fund, a business trust formed by an
Agreement and Declaration of Trust dated September 19, 1986
pursuant to the laws of The Commonwealth of Massachusetts (the
"Trust"), hereby certifies to the Secretary of State of The
Commonwealth of Massachusetts that:
FIRST: The Agreement and Declaration of Trust of the
Trust is hereby amended by striking out Article I, Section 1 and
inserting in lieu thereof the following:
"Section 1. Name. This Trust shall be
known as 'Dreyfus Premier GNMA Fund.'"
SECOND: The amendment to the Agreement and
Declaration of Trust herein made was duly approved at a meeting
of the Trustees of the Trust on January 8, 1997 pursuant to
Article IX, Section 8 of the Agreement and Declaration of Trust.
IN WITNESS WHEREOF, Premier GNMA Fund has caused these
Articles to be filed in its name and on its behalf by its
Trustees.
PREMIER GNMA FUND
By:
Joseph S. DiMartino, Trustee
By:
Clifford L. Alexander, Jr., Trustee
By:
Peggy C. Davis, Trustee
By:
Ernest Kafka, Trustee
By:
Saul B. Klaman, Trustee
By:
Nathan Leventhal, Trustee
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 8th day of January, 1997, before me personally
appeared the above-named Trustees of the Trust, to me known, and
known to me to be the persons described in and who executed the
foregoing instrument, and who duly acknowledged to me that they
had executed the same.
Notary Public
(..continued)
- -3-
361936.01
361936
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 7, 1997, in this Registration Statement (Form N-1A 33-9591)
of Dreyfus Premier GNMA Fund.
ERNST & YOUNG LLP
New York, New York
April 25, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000804171
<NAME> PREMIER GNMA FUND
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 222608
<INVESTMENTS-AT-VALUE> 223623
<RECEIVABLES> 34814
<ASSETS-OTHER> 268
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 258705
<PAYABLE-FOR-SECURITIES> 106560
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1028
<TOTAL-LIABILITIES> 107588
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 157542
<SHARES-COMMON-STOCK> 7743
<SHARES-COMMON-PRIOR> 9179
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7440)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1015
<NET-ASSETS> 111267
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 11741
<OTHER-INCOME> 0
<EXPENSES-NET> 1901
<NET-INVESTMENT-INCOME> 9840
<REALIZED-GAINS-CURRENT> 1438
<APPREC-INCREASE-CURRENT> (5002)
<NET-CHANGE-FROM-OPS> 6276
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7540)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1005
<NUMBER-OF-SHARES-REDEEMED> (2801)
<SHARES-REINVESTED> 360
<NET-CHANGE-IN-ASSETS> (25363)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (8878)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 897
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1901
<AVERAGE-NET-ASSETS> 122258
<PER-SHARE-NAV-BEGIN> 14.66
<PER-SHARE-NII> .88
<PER-SHARE-GAIN-APPREC> (.29)
<PER-SHARE-DIVIDEND> (.88)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.37
<EXPENSE-RATIO> .010
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Item 24.(b)
Other Exhibits (a)
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Elizabeth A. Keeley,
Marie E. Connolly, Richard W. Ingram, Mark A. Karpe and John E. Pelletier and
each of them, with full power to act without the other, his or her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all
amendments to the Registration Statement of Dreyfus Premier GNMA Fund
(including post-effective amendments and amendments thereto), and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, fund power and authority to do and perform
each and every act and thing ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
/s/Clifford L. Alexander, Jr. April 28, 1997
- --------------------------------
Clifford L. Alexander, Jr.
/s/Peggy C. Davis April 28, 1997
- --------------------------------
Peggy C. Davis
/s/Joseph S. DiMartino April 28, 1997
- --------------------------------
Joseph S. DiMartino
/s/Ernst Kafka April 28, 1997
- --------------------------------
Ernst Kafka
/s/Saul B. Klaman April 28, 1997
- --------------------------------
Saul B. Klaman
/s/Nathan Leventhal April 28, 1997
- --------------------------------
Nathan Leventhal
ITEM 24.(b)
OTHER EXHIBIT (b)
DREYFUS PREMIER GNMA FUND
Certificate of Assistant Secretary
The undersigned, Elizabeth A. Keeley, Vice President and Assistant
Secretary of Dreyfus Premier GNMA Fund (the "Fund"), hereby certifies that
set forth below is a copy of the resolution adopted by the Fund's Board
authorizing the signing by Elizabeth A. Keeley, Marie E. Connolly, Richard W.
Ingram, Mark A. Karpe and John Pelletier on behalf of the proper officers of
the Fund pursuant to a power of attorney:
RESOLVED, that the Registration Statement and any
and all amendments and supplements thereto, may be signed
by any one of Elizabeth A. Keeley, Marie E. Connolly,
Richard W. Ingram, Mark A. Karpe and John Pelletier as
the attorney-in-fact for the proper officers of the Fund,
with full power of substitution and resubstitution; and
that the appointment of each of such persons as such
attorney-in-fact hereby is authorized and approved; and
that such attorneys-in-fact, and each of them, shall have
full power and authority to do and perform each and every
act and thing requisite and necessary to be done in
connection with such Registration Statement and any and
all amendments and supplements thereto, as fully to all
intents and purposes as the officer, for whom he or she
is acting as attorney-in-fact, might or could do in
person.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Fund on April 28, 1997.
-----------------------
Elizabeth A. Keeley
Vice President and
Assistant Secretary
