[Page]
Dreyfus
New York Insured
Tax Exempt
Bond Fund
Annual Report
December 31, 1996
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- ---------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus New York
Insured Tax Exempt Bond Fund. For its annual reporting period ended December 31,
1996, your Fund provided a total return of 2.12%.* Income dividends of
approximately $.543 per share exempt from Federal, State of New York and New
York City personal income taxes were paid. This is equivalent to an annualized
tax-free distribution rate per share of 4.73% for the same period.** Some income
may be subject to the Federal Alternative Minimum Tax (AMT) for certain
shareholders.
THE ECONOMY
Over the reporting period, the economy grew moderately, showing little
evidence of accelerating inflation despite the robust pace of new job creation
and the low unemployment rate. It was fear of accelerating inflation that
prompted a sharp rise in long-term interest rates earlier in the year: however,
by year-end, long-term rates had fallen by one half of one percent (50 basis
points) from last summer's peak. Contributing to the drop in rates was the
decision of the Open Market Committee of the Federal Reserve Board (the "Fed")
to leave short-term interest rates unchanged.
Inflation at the consumer level of the economy remains in the 3% range, which
has been accompanied by a comparably benign inflation picture at the production
level of the economy as well. The so-called "core" Producer Price Index (it
excludes the energy and food components because of their volatility) rose just
0.1% in November and a mere 0.6% for the previous 12 months. Producers appeared
to have little ability to pass on price increases to their customers, a reason
cited by the Fed as evidence of the lack of rising price inflation.
Despite the sanguine price environment, consumers remained wary spenders and
modest borrowers, and retail sales growth has been moderate. Nevertheless, the
renewed decline in mortgage rates spurred the housing market: existing home
sales in November increased for the first time in six months. New housing starts
also rose sharply, with the November increase the largest monthly rise since
July 1995. Job growth still appears to have underlying strength: monthly
increases in workers added to payrolls could also move higher. The recent
unemployment rate rose slightly, but still remained near a seven-year low.
Lending optimism to the prospect for continued economic growth was the report
from The Conference Board--a private research group--that its Index of Leading
Economic Indicators rose for the tenth consecutive month in November. An
increase in this index generally correlates with economic expansion over the
next three to twelve months. Manufacturing remained firm all year: both factory
orders and industrial production rose moderately. Despite this overall strength
in production, there were some signs of moderation at year-end. Inventories have
built up and orders for durable goods--those items intended to last three or
more years--declined.
Last year, high employment, low inflation and moderate
economic growth stayed the Fed's hand from raising interest rates. The
economy is now in the sixth year of this business cycle and we remain
alert to signs of the potential rekindling of inflationary pressures.
MARKET ENVIRONMENT
The past year turned out to be very volatile for the municipal bond market.
Initial concerns about a tightening of interest rates by the Fed was largely
responsible for the sharp run-up in bond yields during the first half of 1996.
After waffling during the summer, the bond markets staged a significant rally
late in the year as economic data proved to be less robust than initially
feared. In turn, market sentiment shifted: some economists who were predicting a
Fed tightening of interest rates reversed field by calling for a rate cut in
1997. However, as the new year commenced, strong employment and housing data
have once again caused many to reconsider their forecasts.
As your Fund's year concluded, some of the concerns regarding tax-exempt
securities waned. The outcome of the November elections met with a generally
favorable reaction in the market: a Democratic President and a Congress still
controlled by the Republicans provides the right balance to ensure that the
status quo is maintained. Furthermore, both the White House and the legislators
on Capital Hill are earnestly talking about balancing the budget and lowering
the capital gains tax rate. From the perspective of the municipal market, any
lingering concerns about major tax reform should finally be put to rest as it
appears that the American electorate failed to embrace the far-reaching tax
overhaul plans proposed by most of the Republican Presidential hopefuls.
The last year has produced far better returns for equity holders than bond
owners. When viewing the lofty levels attained by most stock market indexes, one
has to wonder whether the next twelve months will be as rewarding as the prior
ones. Certainly, the Chairman of the Federal Reserve Board has some concerns
about the current valuation levels in the stock market. Last month stocks
reacted negatively to remarks by Chairman Greenspan who cited the market's
"irrational exuberance." While the implications for the bond markets are
uncertain, at least some investors believe that any sell-off in stocks will spur
investors to shift more assets to municipal bonds.
THE PORTFOLIO
During the past year, the Fund's investment performance was a reflection of
maintaining a portfolio duration (8+ years) that was significantly longer than
the Lehman New York Index (7+ years). Performance lagged during the first half's
market decline, and rebounded strongly by outperforming the Index and its peers
during the second half rally. Furthermore, in view of the premium afforded by
the market for securities bearing good structure (i.e., call protection,
duration, liquidity and convexity), management has been adding these types of
bonds when appropriate.
Looking forward, we will to continue to provide balance to the Fund by
including more securities that are well-structured, while at the same time
continuing to focus on tax-exempt income maximization. To a degree, the ability
to implement our strategy is constrained by the availability of qualified
insured issuance from the State of New York and its municipalities. While we
don't foresee any significant change in bond issuance for this year, there will
be opportunities; however, we need to be patient. We believe that this approach
will provide the best potential for maximizing market performance.
Very truly yours,
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
January 15, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the net asset value
per share at the end of the period, adjusted for any capital gain distributions.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund December 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS NEW YORK INSURED
TAX EXEMPT BOND FUND AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
[Exhibit A:
Dollars
$20,463
Lehman Brothers Municipal Bond Index*
$16,623
Dreyfus New York Insured Tax Exempt Bond Fund
*Source: Lehman Brothers]
Average Annual Total Returns
One Year Ended Five Years Ended From Inception (2/18/87)
December 31, 1996 December 31, 1996 to December 31, 1996
2.12% 5.82% 5.28%
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus New York Insured
Tax Exempt Bond Fund on 2/18/87 (Inception Date) to a $10,000 investment made in
the Lehman Brothers Municipal Bond Index on that date. For comparative purposes,
the value of the Index on 2/28/87 is used as the beginning value on 2/18/87. All
dividends and capital gain distributions are reinvested.
The Fund invests primarily in New York municipal securities, which are insured
as to the timely payment of principal and interest by recognized insurers of
municipal securities. The Fund's performance shown in the line graph takes into
account fees and expenses. Unlike the Fund, the Lehman Brothers Municipal Bond
Index is an unmanaged total return performance benchmark for the long-term,
investment-grade, geographically unrestricted tax exempt bond market, calculated
by using municipal bonds selected to be representative of the municipal market
overall; however, the bonds in the Index generally are not insured. The Index
does not take into account charges, fees and other expenses and is not limited
to investments principally in New York municipal obligations. These factors can
contribute to the Index potentially outperforming the Fund. Further information
relating to Fund performance, including expense reimbursements, if applicable,
is contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Investments December 31, 1996
Principal
Long-Term Municipal Investments--100.0% Amount Value
- ----------------------------------------------------------------------------- ------------ ----------
<S> <C> <C>
Albany Municipal Water Finance Authority, Water and Sewer System
Revenue, Refunding
5.50%, 12/1/2022 (Insured; FGIC)........................................ $ 1,000,000 $ 972,380
Clifton Park Water Authority, Water System Revenue, Refunding
5%, 10/1/2026 (Insured; FGIC)............................................. 3,865,000 3,491,950
Islip Resource Recovery Agency, RRR 6.125%, 7/1/2013 (Insured; AMBAC)........ 1,425,000 1,486,475
Metropolitan Transportation Authority, Revenue:
Commuter Facility (Grand Central Terminal) 5.70%, 7/1/2024 (Insured; FSA) (a) 6,500,000 6,502,340
(Dedicated Tax Fund) 5.25%, 4/1/2026 (Insured; MBIA)...................... 6,685,000 6,428,630
Transit Facility 6.50%, 7/1/2018 (Insured; FGIC).......................... 4,000,000 4,369,640
New York City 7.25%, 3/15/2018 (Insured; FSA)................................ 1,000,000 1,086,960
New York City Educational Construction Fund, Revenue
5.50%, 4/1/2026 (Insured; AMBAC).......................................... 1,320,000 1,300,055
New York City Municipal Water Finance Authority, Water and Sewer System Revenue
6.20%, 6/15/2021 (Insured; AMBAC)......................................... 2,000,000 2,101,460
New York City Transit Authority, Transit Facility Revenue
(Livingston Plaza Project) 6%, 1/1/2021 (Insured; FSA).................... 5,300,000 5,371,656
New York State Dormitory Authority:
LR:
(Municipal Health Facilities Improvement Program) 5.50%, 5/15/2024
(Insured; FSA)........................................................ 2,455,000 2,392,152
(State University Dormitory Facilities) Refunding 5.30%, 7/1/2024
(Insured; AMBAC)...................................................... 4,000,000 3,829,920
Revenue:
(City University):
6.30%, 7/1/2024 (Insured; AMBAC)...................................... 2,800,000 2,997,176
5.375%, 7/1/2025 (Insured; AMBAC)..................................... 5,000,000 4,837,300
Refunding 5.50%, 7/1/2016 (Insured; AMBAC)............................ 3,000,000 2,980,500
(Ellis Hospital Mortgage Project) 5.60%, 8/1/2025 (Insured; MBIA)....... 4,300,000 4,254,420
(Mental Health Services Facilities Improvement):
5.125%, 8/15/2021 (Insured; MBIA)..................................... 5,000,000 4,732,300
5.25%, 2/15/2011 (Insured; AMBAC) (b)................................. 5,005,000 4,902,147
(New York University) 6%, 7/1/2015 (Insured; FGIC)...................... 1,750,000 1,802,570
(Refunding - Ithaca College) 6.25%, 7/1/2021 (Insured; MBIA)............ 2,000,000 2,098,300
(Refunding - Mount Sinai School of Medicine)
6.75%, 7/1/2009 (Insured; MBIA)....................................... 3,000,000 3,294,900
(Saint John's University) 5.60%, 7/1/2016 (Insured; MBIA)............... 3,000,000 3,001,260
New York State Energy Research and Development Authority, Revenue:
Facilities:
(Con Edison Co. of New York Inc. Project):
6.375%, 12/1/2027 (Insured; MBIA)..................................... 5,000,000 5,242,950
6%, 3/15/2028 (Insured; MBIA)......................................... 11,000,000 11,137,280
</TABLE>
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Investments (continued) December 31, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
- ----------------------------------------------------------------------------- ------------ ----------
<S> <C> <C>
New York State Energy Research and Development Authority, Revenue (continued):
Gas Facilities (Refunding - Brooklyn Union Gas Co. Project)
5.50%, 1/1/2021 (Insured; MBIA)......................................... $ 2,000,000 $ 1,972,480
Pollution Control:
(New York State Electric and Gas Corp.)
5.95%, 12/1/2027 (Insured; MBIA)...................................... 2,000,000 2,019,840
(Refunding--Niagara Mohawk Power Corp.)
6.625%, 10/1/2013 (Insured; FGIC)..................................... 4,500,000 4,931,640
New York State Medical Care Facilities Finance Agency,
Revenue:
(Aurelia Osborn Fox Memorial Hospital) 6.50%, 11/1/2019 (Insured; FSA).. 3,000,000 3,225,360
(Hospital and Nursing Home)
6.125%, 2/15/2015 (Insured; MBIA)..................................... 4,000,000 4,193,360
(Mental Health Service Facilities Improvement):
6.25%, 8/15/2018 (Insured; AMBAC)..................................... 4,685,000 4,924,591
7.375%, 8/15/2019 (Insured; MBIA)..................................... 1,345,000 1,461,558
(Montefiore Medical Center) 6%, 2/15/2035 (Insured; AMBAC).............. 5,000,000 5,127,300
(Sisters of Charity Hospital) 6.625%, 11/1/2018 (Insured; AMBAC)........ 2,000,000 2,160,820
New York State Mortgage Agency, Revenue (Homeownership Mortgage)
6.45%, 10/1/2017 (Insured; MBIA).......................................... 1,000,000 1,056,580
New York State Thruway Authority, General Revenue
6%, 1/1/2025 (Insured; FGIC).............................................. 3,165,000 3,284,257
New York State Urban Development Corp., Revenue:
(Correctional Capital Facilities)
5.50%, 1/1/2025 (Insured; MBIA)......................................... 5,000,000 4,926,250
(Correctional Facilities) Refunding
5.50%, 1/1/2014 (Insured; FSA).......................................... 3,000,000 3,034,770
Port Authority of New York and New Jersey:
5.125%, 7/15/2014 (Insured; AMBAC)........................................ 2,245,000 2,176,505
6.25%, 1/15/2027 (Insured; AMBAC)......................................... 2,000,000 2,088,920
Triborough Bridge and Tunnel Authority, Special Obligation Refunding:
6%, 1/1/2015 (Insured; AMBAC)............................................. 4,000,000 4,127,800
6%, 1/1/2019 (Insured; MBIA).............................................. 2,000,000 2,035,120
Western Nassau County Water Authority, Water System Revenue
5.65%, 5/1/2026 (Insured; AMBAC).......................................... 1,550,000 1,544,358
------------
TOTAL INVESTMENTS (cost $139,337,513)........................................ $144,906,230
------------
------------
</TABLE>
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Summary of Abbreviations
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FSA Financial Security Assurance Insurance Corporation
RRR Resources Recovery Revenue
<CAPTION>
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- ------ -------- ---------------- ------------------
AAA Aaa AAA 100.0%
=======
</TABLE>
Notes to Statement of Investments:
- ---------------------------------------------------------------
(a) Wholly held by custodian as collateral for a delayed-delivery security.
(b) Purchased on a delayed-delivery basis.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) At December 31, 1996, 32.6% of the Fund's net assets are insured by AMBAC
and 40.5% are insured by MBIA.
See notes to financial statements.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Assets and Liabilities December 31, 1996
Cost Value
____________ ______________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement
of Investments............................... $139,337,513 $144,906,230
Interest receivable.............................. 3,025,755
Prepaid expenses................................. 6,200
-------------
147,938,185
-------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 105,333
Due to Distributor............................... 1,892
Cash overdraft due to Custodian.................. 50,845
Payable for investment securities purchased...... 4,885,381
Accrued expenses................................. 57,944
-------------
5,101,395
-------------
NET ASSETS..................................................................... $142,836,790
=============
REPRESENTED BY: Paid-in capital.................................. $136,981,707
Accumulated net realized gain (loss) on investments 286,366
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3.......................... 5,568,717
-------------
NET ASSETS..................................................................... $142,836,790
=============
SHARES OUTSTANDING.............................................................. 12,763,234
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
NET ASSET VALUE, offering and redemption price per share--Note 2(d)............. $11.19
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Operations Year Ended December 31, 1996
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income.................................. $ 8,578,204
EXPENSES: Management fee--Note 2(a)......................... $ 885,380
Shareholder servicing costs--Note 2(b)............ 450,583
Professional fees................................ 49,726
Trustees' fees and expenses--Note 2(c)............ 39,736
Prospectus and shareholders' reports--Note 2(b).. 18,167
Custodian fees................................... 15,915
Registration fees................................ 3,605
Miscellaneous.................................... 46,883
-----------
Total Expenses.............................. 1,509,995
Less--reimbursement of prospectus costs--Note 2(b). (4,707)
-----------
Net Expenses................................ 1,505,288
------------
INVESTMENT INCOME--NET.......................................................... 7,072,916
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments ........ $2,411,129
Net unrealized appreciation (depreciation)
on investments................................. (6,635,014)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ (4,223,885)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $ 2,849,031
============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1996 December 31, 1995
----------------- -----------------
OPERATIONS:
<S> <C> <C>
Investment income--net....................................................... $ 7,072,916 $ 8,156,194
Net realized gain (loss) on investments..................................... 2,411,129 1,438,863
Net unrealized appreciation (depreciation) on investments................... (6,635,014) 12,855,137
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations......... 2,849,031 22,450,194
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net....................................................... (7,116,252) (8,136,141)
Net realized gain on investments............................................ (2,263,119) --
------------- -------------
Total Dividends......................................................... (9,379,371) (8,136,141)
------------- -------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold............................................... 48,175,210 30,674,114
Dividends reinvested........................................................ 6,350,869 5,477,142
Cost of shares redeemed..................................................... (62,476,356) (44,843,810)
------------- -------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions. (7,950,277) (8,692,554)
------------- -------------
Total Increase (Decrease) in Net Assets............................... (14,480,617) 5,621,499
NET ASSETS:
Beginning of Period......................................................... 157,317,407 151,695,908
------------- -------------
End of Period............................................................... $142,836,790 $157,317,407
============= =============
Undistributed investment income--net........................................... -- $ 43,336
------------- -------------
Shares Shares
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................. 4,290,801 2,730,812
Shares issued for dividends reinvested...................................... 564,570 484,599
Shares redeemed............................................................. (5,561,459) (3,979,102)
------------- -------------
Net Increase (Decrease) in Shares Outstanding........................... (706,088) (763,691)
============= =============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- -----------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------------------
PER SHARE DATA: 1996 1995 1994 1993 1992
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............... $11.68 $10.66 $12.04 $11.60 $11.33
------- ------ ------ ------ ------
Investment Operations:
Investment income--net.............................. .54 .59 .60 .60 .63
Net realized and unrealized gain (loss)
on investments.................................. (.31) 1.02 (1.39) .66 .31
------- ------ ------ ------ ------
Total from Investment Operations................... .23 1.61 (.79) 1.26 .94
------- ------ ------ ------ ------
Distributions:
Dividends from investment income--net............... (.54) (.59) (.59) (.60) (.63)
Dividends from net realized gain on investments.... (.18) -- -- (.22) (.04)
------- ------ ------ ------ ------
Total Distributions................................ (.72) (.59) (.59) (.82) (.67)
------- ------ ------ ------ ------
Net asset value, end of period..................... $11.19 $11.68 $10.66 $12.04 $11.60
======= ====== ====== ====== ======
TOTAL INVESTMENT RETURN............................... 2.12% 15.38% (6.62%) 11.08% 8.55%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ 1.02% .99% .98% .96% .90%
Ratio of net investment income
to average net assets........................... 4.78% 5.20% 5.31% 5.01% 5.49%
Decrease reflected in above expense ratios
due to undertakings by the Manager.............. -- -- .01% .02% .11%
Portfolio Turnover Rate............................ 84.24% 31.13% 12.79% 19.89% 16.12%
Net Assets, end of period (000's Omitted).......... $142,837 $157,317 $151,696 $198,257 $180,326
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus New York Insured Tax Exempt Bond Fund (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company. The Fund's investment objective is to provide
investors with as high a level of current income exempt from Federal, New York
State and New York City income taxes as is consistent with the preservation of
capital. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual
Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales load.
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 are valued each business day
by an independent pricing service ("Service") approved by the Board of Trustees.
Investments for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of the Service are
valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .60 of 1% of the value of the
Fund's average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses, exclusive of taxes,
brokerage, interest on
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
borrowings and extraordinary expenses, exceed 1 1/2% of the value of the Fund's
average daily net assets, the Fund may deduct from the payments to be made to
the Manager, or the Manager will bear such excess expense. There was no expense
reimbursement for the period ended December 31, 1996.
(B) Under the Service Plan (the "Plan") adopted pursuant to Rule 12b-1 under
the Act, the Fund (a) reimburses the Distributor for payments to certain Service
Agents (a securities dealer, financial institution or other industry
professional) for distributing the Fund's shares and servicing shareholder
accounts ("Servicing") and (b) pays the Manager, Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager, or any affiliate (collectively,
"Dreyfus") for advertising and marketing relating to the Fund and Servicing, at
an aggregate annual rate of .25 of 1% of the value of the Fund's average daily
net assets. Both the Distributor and Dreyfus may pay Service Agents a fee in
respect of the Fund's shares owned by shareholders with whom the Service Agent
has a Servicing relationship or for whom the Service Agent is the dealer or
holder of record. Both the Distributor and Dreyfus determine the amounts to be
paid to Service Agents to which it will make payments and the basis on which
such payments are made. The Plan also separately provides for the Fund to bear
the costs of preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs associated with
implementing and operating the Plan, not to exceed the greater of $100,000 or
.005 of 1% of the value of the Fund's average daily net assets for any full
year. During the period ended December 31, 1996, $373,615 was charged to the
Fund pursuant to the Plan, of which $4,707 was reimbursed by the Manager.
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 $53,059 during the period ended December 31, 1996.
(C) 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 $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Trustee Emeritus receives 50% of such compensation.
(D) A 1% redemption fee is charged on certain redemptions of Fund shares
(including redemptions through the use of the Exchange Privilege) where the
shares being redeemed were issued subsequent to a specified effective date and
the redemption or exchange occurs within a fifteen day period following the date
of issuance.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1996
amounted to $120,399,444 and $131,360,126, respectively.
At December 31, 1996, accumulated net unrealized appreciation on investments
was $5,568,717, consisting of $5,836,958 gross unrealized appreciation and
$268,241 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).
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- ---------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Trustees
Dreyfus New York Insured Tax Exempt Bond Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus New York Insured Tax Exempt Bond 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 confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus New York Insured Tax Exempt Bond 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
New York, New York
January 31, 1997
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
- -----------------------------------------------------------------------------
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended December 31, 1996:
--all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are New
York residents, New York State and New York City personal income taxes), and
--the Fund hereby designates $.1669 per share as a long-term capital gain
distribution of the $.1676 per share paid on December 5, 1996. The Fund also
designates $.0105 per share paid as a long-term capital gain distribution
paid on August 8, 1996.
As required by Federal tax law rules, shareholders will receive notification
of their portion of the Fund's taxable ordinary dividends and capital gain
distributions paid for the 1996 calendar year on Form 1099-DIV which will be
mailed by January 31, 1997.
<PAGE>
Dreyfus New York Insured
Tax Exempt Bond Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 577AR9612
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
PERIOD LEHMAN BROTHERS DREYFUS NEW YORK
MUNICIPAL INSURED TAX EXEMPT
BOND INDEX* BOND FUND
2/18/87 10,000 10,000
12/31/87 9,805 8,643
12/31/88 10,802 9,622
12/31/89 11,967 10,464
12/31/90 12,839 11,082
12/31/91 14,398 12,530
12/31/92 15,668 13,601
12/31/93 17,592 15,108
12/31/94 16,683 14,108
12/31/95 19,595 16,278
12/31/96 20,463 16,623
*Source: Lehman Brothers
