LETTER TO SHAREHOLDERS
Dear Shareholder:
It is with pleasure that we can report to you that for the six-month
period ended May 31, 1994, the Dreyfus Short-Intermediate Government Fund
produced an annualized distribution rate per share of 6.92%.* As always, the
Fund's net asset value is subject to change. Taking that into account, as
well as the reinvestment of income dividends and capital gain distributions,
your Fund produced a total return of -.83% for the same six-month period.**
The last six months have seen heightened volatility in the bond market.
The Federal Reserve Board has tightened several times, raising the Federal
Funds rate to 4.25%. As this letter is being written, the market is
reflecting another potential Fed tightening. There are several reasons for
this new outlook. First, the U.S. dollar has weakened considerably against
the Japanese yen and German deutsche mark. A weak dollar brings exacerbated
fears of inflation in two ways: import prices will go up, and domestic
manufacturers can raise their prices. (A good example would be auto
manufacturers: a weaker dollar would cause Toyotas to become more expensive,
thereby allowing Ford to raise their own prices and still be cheaper than
their foreign competitor.) Another concern is the current unemployment rate,
now at 6%. If job growth continues at its current pace, then we could see
labor costs increase.
We are cautious but not as pessimistic as the current market is
indicating. We are not of the opinion that the Fed will tighten just to
support the dollar. In fact, we think the Fed will wait until the results of
their recent tightening are evident in the economy. The Fed would like to
keep growth at 3%, not stop it. With that in mind, we think the next round of
tightening, if any, would occur later this summer or in early fall.
Although our outlook is constructive on the market, the portfolio has
been, and is currently, positioned very defensively. The Fund has been using
shorter maturity U.S. Treasury notes that represent good value. At this point
in time, we are not using any fixed-rate agency paper even though the spread
over Treasuries has become more attractive. We prefer to remain in
short-maturity, very liquid paper. One example of agency paper we have been
utilizing is agency floating-rate notes that reset weekly and pay quarterly.
(The U.S. Treasury has been contemplating issuing floating-rate securities,
but as of yet only agencies offer this type of security.) In the current
rising-rate environment, this has worked out very well. We are also keeping
a larger percentage than in the past in the overnight Repo market. This
allows us to extend quickly to catch any upside market moves, and remain
conservatively positioned in the down moves.
As always, we will be carefully reviewing the market as well as economic
conditions. When we estimate the timing to be correct, we will adjust the
structure of the Fund's portfolio. In this way, we aim to continue to provide
you with an attractive investment vehicle.
Very truly yours,
(Garitt A. Kono Signature Logo)
Garitt A. Kono
President
June 30, 1994
New York, N.Y.
* Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the net asset
value per share at the end of the period, adjusted for capital gain
distributions.
** Total return represents the change during the period in a hypothetical
account with dividends reinvested.
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
STATEMENT OF INVESTMENTS MAY 31, 1994 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES-91.3% AMOUNT VALUE
------------- -------------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES-11.4%
Federal Home Loan Banks, Consolidated Bonds,
5%, 4/7/1997............................................................ $ 10,000,000 (a) $ 9,806,250
Federal Home Loan Mortgage, Floating Rate Notes,
4.85%, 10/4/1996........................................................ 25,000,000 (b) 24,968,750
Federal National Mortgage Association, Floating Rate Notes,
4.85%, 1/25/1996........................................................ 25,000,000 (b) 25,015,000
-------------
TOTAL U.S. GOVERNMENT AGENCIES.............................................. 59,790,000
=============
U.S. TREASURY NOTES-79.9%
8 3/8%, 4/15/1995....................................................... 12,000,000 12,309,372
4 5/8%, 8/15/1995....................................................... 40,000,000 39,581,240
8 1/2%, 8/15/1995....................................................... 20,000,000 20,678,120
8 1/2%, 11/15/1995...................................................... 30,000,000 31,167,180
8 7/8%, 2/15/1996....................................................... 25,000,000 26,203,125
9 3/8%, 4/15/1996....................................................... 172,000,000 182,212,500
5 7/8%, 5/31/1996....................................................... 40,000,000 39,912,520
8 1/2%, 4/15/1997....................................................... 55,000,000 58,059,375
6 1/2%, 5/15/1997....................................................... 10,000,000 10,040,630
-------------
TOTAL U.S. TREASURY NOTES................................................... 420,164,062
=============
TOTAL BONDS AND NOTES
(cost $493,071,121)..................................................... $479,954,062
=============
SHORT-TERM INVESTMENTS-6.9%
REPURCHASE AGREEMENT;
Kidder, Peabody & Co., 4 1/4%
Dated 5/31/1994, due 6/1/1994 in the amount of $36,403,297
(fully collateralized by $36,500,000 U.S. Treasury Notes,
4 1/4% due 7/31/1994, value $36,956,250)
(cost $36,399,000)...................................................... $ 36,399,000 $ 36,399,000
=============
TOTAL INVESTMENTS
(cost $529,470,121)..................................................... 98.2% $516,353,062
====== =============
CASH AND RECEIVABLES (NET).................................................. 1.8% $ 9,610,109
====== =============
NET ASSETS.................................................................. 100.0% $525,963,171
====== =============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Interest rate changes to 5.65% on 4/7/1995, then 6.70% on 4/7/1996.
(b) Variable rate security-interest rate subject to periodic change.
See independent accountants' review report and notes to financial statements.
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1994 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $529,470,121)-see statement..................................... $516,353,062
Cash.................................................................... 5,639,535
Interest receivable..................................................... 4,973,805
Receivable for shares of Beneficial Interest subscribed................. 505,379
Prepaid expenses........................................................ 57,871
=============
527,529,652
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 154,055
Payable for shares of Beneficial Interest redeemed...................... 1,321,864
Accrued expenses........................................................ 90,562 1,566,481
---------- -------------
NET ASSETS ................................................................ $525,963,171
=============
REPRESENTED BY:
Paid-in capital......................................................... $555,957,042
Accumulated net realized capital losses and distributions in excess of
net realized gain on investments-Note 1(c)............................ (16,876,812)
Accumulated net unrealized (depreciation) on investments-Note 3......... (13,117,059)
-------------
NET ASSETS at value applicable to 48,162,557 outstanding shares of
Beneficial Interest, equivalent to $10.92 per share
(unlimited number of $.001 par value shares authorized)................. $525,963,171
=============
See independent accountants' review report and notes to financial statements.
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED MAY 31, 1994 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $19,779,426
EXPENSES:
Management fee-Note 2(a).............................................. $ 1,372,222
Shareholder servicing costs-Note 2(b)................................. 613,997
Custodian fees........................................................ 33,627
Registration fees..................................................... 25,484
Professional fees..................................................... 24,476
Trustees' fees and expenses-Note 2(c)................................. 17,353
Prospectus and shareholders' reports.................................. 8,358
Miscellaneous......................................................... 4,944
-------------
2,100,461
Less-reduction in management fee due to undertakings-Note 2(a)........ 940,558
-------------
TOTAL EXPENSES.................................................... 1,159,903
------------
INVESTMENT INCOME-NET............................................. 18,619,523
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $(16,647,769)
Net unrealized (depreciation) on investments............................ (6,918,168)
-------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (23,565,937)
-------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (4,946,414)
=============
See independent accountants' review report and notes to financial statements.
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
NOVEMBER 30, MAY 31, 1994
1993 (UNAUDITED)
-------------- --------------
OPERATIONS:
Investment income-net.................................................. $ 29,742,773 $ 18,619,523
Net realized gain (loss) on investments................................ 2,780,519 (16,647,769)
Net unrealized (depreciation) on investments for the period............ (643,062) (6,918,168)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...... 31,880,230 (4,946,414)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income-net............................................. (29,742,773) (18,619,523)
From net realized gain on investments.................................. (8,173,840) (2,638,189)
In excess of net realized gain on investments.......................... - (229,043)
-------------- --------------
TOTAL DIVIDENDS...................................................... (37,916,613) (21,486,755)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold.......................................... 493,879,194 256,910,681
Dividends reinvested................................................... 34,098,394 18,610,972
Cost of shares redeemed................................................ (304,044,477) (274,668,457)
-------------- --------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS......... 223,933,111 853,196
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.......................... 217,896,728 (25,579,973)
NET ASSETS:
Beginning of period.................................................... 333,646,416 551,543,144
-------------- --------------
End of period.......................................................... $551,543,144 $525,963,171
============== ==============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 42,662,841 22,903,268
Shares issued for dividends reinvested................................. 2,960,503 1,663,084
Shares redeemed........................................................ (26,274,874) (24,570,056)
-------------- --------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING........................ 19,348,470 (3,704)
============== ==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT 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.
YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED
------------------------------------------------------- MAY 31, 1994
PER SHARE DATA: 1989 1990 1991 1992 1993 (UNAUDITED)
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............. $11.10 $11.24 $11.23 $11.71 $11.58 $11.45
------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net............................ 1.02 .99 .85 .82 .78 .38
Net realized and unrealized gain (loss)
on investments................................. .14 (.01) .47 .09 .14 (.47)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS............... 1.16 .98 1.32 .91 .92 (.09)
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net............. (1.02) (.99) (.84) (.83) (.78) (.38)
Dividends from net realized gain on
investments.................................... -- -- -- (.21) (.27) (.06)
Dividends in excess of net realized gain on
investments.................................... -- -- -- -- -- --
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS............................ (1.02) (.99) (.84) (1.04) (1.05) (.44)
------- ------- ------- ------- ------- -------
Net asset value, end of period................... $11.24 $11.23 $11.71 $11.58 $11.45 $10.92
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 10.99% 9.20% 12.25% 8.05% 8.29% (1.66%)(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- -- .49% .35% .40% .42%(1)
Ratio of net investment income to average
net assets..................................... 9.24% 8.90% 7.41% 7.00% 6.75% 6.78%(1)
Decrease reflected in above expense ratios due to
undertakings by the Manager.................... 1.05% .92% .30% .42% .35% .34%(1)
Portfolio Turnover Rate.......................... 17.39% 25.46% 131.69% 225.52% 317.00% 316.67%(2)
Net Assets, end of period (000's Omitted)........ $ 31,970 $ 63,419 $144,215 $333,646 $551,543 $525,963
- ---------------
(1) Annualized.
(2) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the exclusive distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor
is a wholly-owned subsidiary of The Dreyfus Corporation ("Manager").
(A) PORTFOLIO VALUATION: The Fund's investments (excluding short-term
investments) are valued each business day by an independent pricing service
("Service") approved by the Board of Trustees. Investments for which quoted
bid prices are readily available and are representative of the bid side of
the market in the judgment of the Service are valued at the mean between the
quoted bid prices (as obtained by the Service from dealers in such
securities) and asked prices (as calculated by the Service based upon its
evaluation of the market for such securities). Other investments are carried
at fair value as determined by the Service, based on methods which include
consideration of: yields or prices of securities of comparable quality,
coupon, maturity and type; indications as to values from dealers; and general
market conditions. Short-term investments are carried at amortized cost,
which approximates value.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income including, where applicable, amortization of discount on investments
is recognized on the accrual basis.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(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.
Dividends in excess of net realized gain on investments for financial
statement purposes result primarily from losses from security transacations
during the year ended November 30, 1993 which are treated for Federal income
tax purposes as arising in fiscal 1994.
(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 applicable provisions
of the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income taxes.
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .50 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage and
extraordinary expenses, exceed 1 1/2% of the average value of the Fund's net
assets for any full fiscal year. However, the Manager had undertaken from
December 1, 1993 through May 5, 1994 to reduce the management fee paid by the
Fund, to the extent that the Fund's aggregate expenses (excluding certain
expenses as described above) exceeded specified annual percentages of the
Fund's average daily net assets. The Manager has currently undertaken from
May 6, 1994 to waive receipt of the management fee payable to it by the Fund
in excess of an annual rate of .20 of 1% of the average daily value of the
Fund's net assets. The reduction in management fee, pursuant to the
undertakings, amounted to $940,558 for the six months ended May 31, 1994.
The Manager may modify the expense limitation percentages from time to
time, provided that the resulting expense reimbursement would not be less
than the amount required pursuant to the Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
the Distributor an amount not to exceed an annual rate of .25 of 1% of the
value of the Fund's average daily net assets for servicing shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. During the six months ended May 31,
1994, the Fund was charged an aggregate of $431,149 pursuant to the
Shareholder Services Plan.
(C) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each trustee
who is not an "affiliated person" receives an annual fee of $4,000 and an
attendance fee of $500 per meeting.
(D) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of the Manager
with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number
of contingencies, including receipt of certain regulatory approvals and
approvals of the stockholders of the Manager and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's
shareholders before completion of the merger. Proxy materials, approved by
the Fund's Board, recently have been mailed to Fund shareholders.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
other than short-term securities, during the six months ended May 31, 1994,
amounted to $1,644,324,590 and $1,670,976,096, respectively.
At May 31, 1994, accumulated net unrealized depreciation on investments
was $13,117,059, consisting of $17,198 gross unrealized appreciation and
$13,134,257 gross unrealized depreciation.
At May 31, 1994, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
REVIEW REPORT OF ERNST & YOUNG, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Short-Intermediate Government Fund, including the statement of
investments, as of May 31, 1994, and the related statements of operations and
changes in net assets and financial highlights for the six month period ended
May 31, 1994. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
November 30, 1993 and financial highlights for each of the five years in the
period ended November 30, 1993 and in our report dated January 7, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
New York, New York
July 6, 1994
(Dreyfus Logo)
Short-Intermediate
Government
Fund
Semi-Annual
Report
May 31, 1994
(Dreyfus Lion-"D" Logo)
DREYFUS SHORT-INTERMEDIATE
GOVERNMENT FUND
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
DISTRIBUTOR
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 542SA945
Registration Mark
